An achievable way to save for goals

FOR SOUTH Africans who have been missing out on the opportunities presented by stokvels for more than a century, Neo Mohlatlole advises that the first step to establishing their own stokvel is to identify like-minded people, such as friends or family, to join with.

“Perhaps a group of married friends with one or two children each may want to get together and raise money to fund an item or items they all want.”

Mohlatlole says kitchen appliances can be used as an example.

Once this goal is identified, the members of the stokvel will start making contribu- tions towards purchasing the items.

“Come December, everyone can split the money to buy their fridge or other household appliances.”

Although, like this example and grocery stockvels, most run on a 12- month cycle, stokvels can also be operated on rotational cycles where, every month or two months, one member of the group buys their appliance or item.

The stokvel can work on any cycle its members choose.

For property purchases, Mohlatlole uses the example of a stokvel buying property for between R50 000 and R80 000 in the Joburg CBD, and letting it. He says members may find, at the end of the year, that the stokvel has R180 000. Then can then use that money to invest in another property.

“People who live in the rural areas and want to move to the city will move into those places.

“Their rent, minus fees that need to be paid, such as levies or agent costs, will then be distributed each month to the members.”

While some stokvels may stop at one property, most will continue to buy, perhaps apartments on the same floors in the same buildings, until they eventually own the buildings, Mohlatlole says.