Investing your money is key to future success
Becoming financially savvy is never a bad idea – and the younger you start the richer the potential rewards, as Vasti Visser discovers
CONCEPTS like investing and financial security may seem daunting to the youth and something to aim for and achieve only later in life.
But investing from a young age can deliver surprising benefits. Just ask Ian MacLean, a young man from Port Elizabeth who, thanks to some clever investments, was able to buy his first property before the age of 25.
MacLean was just 20 when he began investing to fast-track his dream of being financially independent.
“I looked for a way to have my money earn enough so I would no longer have to work in order to enjoy my desired lifestyle,” MacLean, an NMMU graduate with an honours in accounting, now in his first year of articles at PricewaterhouseCoopers, said.
Though he is still some years away from this goal, MacLean’s forays into investing have already borne fruit.
At the start of his investment career, MacLean put a down payment on his very first property. In just four years he earned enough from his investments to pay off the down payment on his townhouse in Lorraine.
MacLean confessed that, like many young people, he used to be a slave to trends, always seeking the next best thing such as the latest flat-screen TV or Apple product.
But, by taking the decision to put his hard-earned cash into investments instead, he has had to learn to relinquish the desire to constantly upgrade. “I’m definitely sacrificing some fun today for more fun tomorrow,” he said.
MacLean’s advice to first-time investors is to thoroughly research any company of interest – look beyond the figures and consider the future of the company. And he sees unit trusts as the best option for first-time investors.
“A great thing about unit trusts is one can invest in them from as little as R300 per month,” MacLean added.
When to get started? “Start yesterday!” he urged. “Don’t wait until the time is ‘right’ – the time is now.”
The difference between investing smart when you’re young versus waiting until you’re older, MacLean says, is that, providing you’ve made sensible investments from a young age and, with the added benefit of compound interest, you can decide as young as 35 whether or not to continue working.
MacLean still makes use of unit trusts, along with ETFs (exchangetraded funds), as his long-term investment of choice. He is patiently waiting until the time is right for him to move his capital from the unit trusts to individual shares.
He has succeeded in paying off 90% of the bond on his house. MacLean says he is in no rush to pay off the remaining 10% as he prefers to keep this money safely in shares.
MacLean is currently attempting to form a property group with his friends and colleagues whereby those who cannot afford to invest in property alone can pool their funds and purchase their first property together.
In order for first-time investors to succeed, MacLean suggests they both speak to a professional adviser and do their own research, as “only you have your own best interests at heart”.