YOUNG pro­fes­sional

Financial Mail - Investors Monthly - - Cover Story -

Jabu, 34, is on the man­age­ment fast track in a large broad­cast­ing com­pany.

He earned R1,6m last tax year and his wife, Trudi, an ac­counts clerk at a franchising firm, earns R20,000 a month. They are mar­ried in com­mu­nity of property.

Jabu’s only in­vest­ment is his com­pany pen­sion scheme, to which he has con­trib­uted for five years. Trudi has no sav­ings and nei­ther of them has wills. They rent a house in Morn­ing­side.

The young cou­ple lived a care­free, ex­trav­a­gant life­style un­til they learnt that Trudi is preg­nant. Jabu also took fright at the new higher in­come tax bracket at 45%. They have de­cided to start chan­nelling all ex­cess cash into in­vest­ments with a pri­or­ity be­ing a qual­ity ed­u­ca­tion for their child and buy­ing a house.

Jabu re­cently bought a new Range Rover and owes R550,000 on it, which has a book value of R650,000. He loves it and is re­luc­tant to sell but con­cedes he might have to. They owe R90,000 on Trudi’s VW Golf.

By cut­ting ex­cess ex­pen­di­ture, they be­lieve they can af­ford a bond for a new house of about R15,000 a month, but they have no cash for a deposit.

They also want to put some­thing ex­tra into an ed­u­ca­tion fund for their child, and plan to have an­other as soon as pos­si­ble.

They ad­mit they know lit­tle about mar­kets and in­vest­ing and need ad­vice on the way for­ward.

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