Finweek English Edition - - MONEY -


ad­di­tional in­come as money that falls out­side of their tra­di­tional in­come, and can be spent freely. But, says Jac­ques van Heer­den, head: re­tail bank, trans­ac­tional and in­vest­ments at Stan­dard Bank, in­vest­ing your bonus wisely not only re­duces stress, but it can pay hand­some div­i­dends if used to pay off your debt.


Set­tle re­tail ac­counts. Ac­counts are a ma­jor drain on per­sonal fi­nances. Buy­ing a new out­fit or jew­ellery may bring joy, but hav­ing to pay for it ev­ery month can soon take the shine off the bling.

In­vest­ing to beat in­fla­tion. You could con­sider i nvest­ing your wind­fall to grow your wealth, or you could con­sider putting it into a long-term in­vest­ment port­fo­lio, such as a unit trust, which is an ideal way to grow your money and build wealth.

For ex­am­ple, if you buy a unit trust worth R10 000 and earn a 9% an­nual re­turn over three years, you will have grown your money by R2 950. By i nvest­ing t he orig­i­nal R10 000 for five years, you will earn R5 386. And if you con­tinue to hold your in­vest­ment for 1 0 years, with­out adding a cent, you would earn in­ter­est of R13 674.

I nvest i n a re­tire­ment plan i f you don’t al­ready have one. It will give you peace of mind know­ing that you can re­tire com­fort­ably in the fu­ture. If you get an an­nual i ncrease along with your ex­tra in­come, use the in­crease to add to this in­vest­ment ev­ery month.

You may t hi nk t hat s avi ng about R500 a month may not be worth i t , but i f you i nvest R500 a month for five years at a re­turn of 9% and an es­ca­la­tion of 5% per an­num, you will have saved R41 200. In ad­di­tion, your R1 0 000 wi l l have grown t o R15 386.

I nvest­ing i n your ed­u­ca­tion. What­ever i ndustry or ser vi ce you’re in, changes and de­vel­op­ments are hap­pen­ing at a sig­nif­i­cant speed; if you don’t con­tin­u­ally ed­u­cate your­self, you may be left be­hind. Don’t wait for your em­ployer to of­fer train­ing, go out and do it on your own ac­count and reap the fi­nan­cial re­wards that come with it.

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