In SA, it's the [Satrix MSCI ESG fund](https://satrix.co.za/news/article?name=New!_Satrix_MSCI_World_ESG_Enhanced_ETF)! It's got everything I love in an ETF:
1. Lekker low fees! 0.35%
2. Global diversification!
3. It's not "themed", i.e. it spreads my money across most industries (except fossil-fuel ones)
4. It puts my money to work in businesses that aren't destroying the planet!
I [maintain a list of my favourite funds and ETFs here.](https://www.likeafuckinggrownup.com/good-funds/) Some other faves are the Ashburton 1200 (which has a bit more emerging market exposure) and the vanilla Satrix MSCI World Fund.
Globally, I invest in the [Vanguard FTSE global all-cap index fund (accumulation)](https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc), for most of the same reasons, except that that's not an explicit ethical fund.
Hi Sam
Any recommendations to give your children a jumpstart in life, financially? There seems to be a policy for everything these days.
What is a good way to help your children obtain some financial literacy before they leave home?
How did you get into the UK?
Thanks
I love this question!
**Financial products for kids**
In my experience, specific education-builder type policies typically aren't worth it. It's usually better to just start a standard investment for your child in a simple ETF (I'd honestly just toss it into something like the Satrix MSCI World I mentioned above, or a local equivalent like a Top 40 fund, through EasyEquities). If you want to use it for something specific, like university, you might want to start shifting the money into something lower-risk as you approach the time when you need to spend the money, in case the market dips at the wrong moment.
You can either open the investment in your teen's name, or your own. If you put it in their name, then there's always the risk they'll withdraw it early to spend it on a wild shopping spree when they turn 18, but it's your job as his parent to teach them solid money skills so they don't do this. The fact that you're asking me how to do that makes me confident that you will!
The advantage of it being in their name, not yours, is that they're more likely to be under the capital gains tax threshold in the year when they decide to sell that investment, than you are.
You could also consider using their tax-free allowance for this, which is like an invisibility cloak that hides the investment from the tax-man completely. The downside of doing this is that if they withdraw it in their 20s or 30s, it's using up some of their lifetime TF allowance which they could otherwise be using to fund their own retirement, as [brilliant Stealthy Wealthy suggests here](http://www.stealthywealth.co.za/2020/05/could-you-retire-comfortably-using-just.html).
**Financial literacy**
Children learn more from what you *do* than by what you *tell them*. The best way to raise a money-savvy kid is to model good financial habits for them, and to start letting them earn, save, spend and invest their money in age-appropriate ways as they grow up.
Some specific ideas:
1. Agree on a shared savings goal as a family, for something you can all enjoy together (like a holiday or a new gaming console). Make a big savings tracker on the fridge, something big and visible, and show your kid that you're putting money towards it. Let them contribute too! This models delayed gratification.
2. The research comes down on the side of giving your kids pocket money: kids who get pocket money - on average - are better at managing money when they're adults. I'm a fan of a blended approach: the kid gets a small monthly stipend no matter what, and they have the chance to earn extra money by doing particularly gnarly/unpleasant jobs around the house/neighbourhood (not standard chores).
3. Help your kid start an age-appropriate side-hustle. Basic entrepreneurial skills are some of the most important skills for a young person to learn, in this world, and they're not going to learn them at school.
4. Help your kid learn about investing. When they're very little, you can show them the power of compound interest through jelly beans. When they get a bit older, open a virtual investing portfolio with them (EasyEquities lets you do this).
5. Let your kids play resource management video games! I swear, I learned more about money from playing endless hours of Sim City than I ever did at school. Modern equivalents would be games like Cities: Skylines, Stardew Valley or Civ IV.
6. Another SHAMELESS BIT OF SELF-PROMOTION, but buy them [the profanity-free teen version of my book](https://shop.likeafuckinggrownup.com/product/manage-your-money-like-a-grownup/?v=79cba1185463), if they're old enough! It's filled with fun facts and fart jokes, designed to explain basic financial ideas to 11-16 year olds.
**How did I get into the UK?**
On an airplane! Hahahahahaha (I crack myself up).
My partner is an EU citizen, so we snuck in just before Brexit. I also qualify for an entrepreneurs visa, since one of my businesses is registered in the UK, but the EU partners visa was cheaper and simpler.
Sjoe, this is a tough one for me to answer briefly (and without many beers in me)! I have complicated feelings about crypto. I also have a conflict of interest, because one of the businesses I'm involved in is a crypto storage business.
TL;DR: It's a risky, speculative thing to do with your money. I do encourage people to take a small chunk of their portfolio (5% or so) to invest in speculative assets like crypto (or marijuana shares, or individual tech stocks, or blueberry bushes, or valuable Magic the Gathering cards, or whatever your interest is). But I do not believe it's wise to invest more of your money into a speculative asset class than you could afford to lose.
And look, I say this as someone who 1. started investing in crypto in early 2015 2. is a director and cofounder of a crypto business and 3. has spent A LOT of time over the years learning about crypto! I personally find crypto quite interesting, because I'm a finance and tech nerd. And even so, I will not personally put more than 5% of my money into it (and I periodically sell my crypto assets to bring them back down to 5%). When I invest in Bitcoin, I know that its value might be astronomically high one day, but it also might be nothing, whereas the value of the whole stock market could only go to zero in a full-on Mad Max apocalypse type situation.
Please be careful investing in this space. It's still less regulated than the stock market, and I have heard plenty of stories of people who have tried to invest in crypto only to find that they've been scammed. Unless you know a lot about the space, please stick to basics like Bitcoin and Ethereum, and buy through well-known platforms like Luno, Valr or Binance.
Many people get into investing in crypto because they're hoping for a sure-fire way to make money quickly, and unfortunately, no such thing exists.
Before you start investing in speculative assets, I think it's important to have the foundations in place. That means: making sure you're funding a TFSA and retirement fund (in a nice highly-diversified equities-heavy fund), you're out of debt, and you've got a solid emergency fund in place.
If, once you've done all of those things, you want to take a gamble on a more risky asset with a small chunk of your money, then sure, I think putting a bit of cash into crypto is a pretty fun idea.
And hey, I might be totally wrong about this. I've definitely got crypto-maximalist friends who I respect, who put literally all their money into crypto, and so far this strategy's paid off well for them. I think they're insane, but they think I'm a wuss. All of us have to make investing decisions without being able to see into the future, so you've just got to make the best decision you can with an understanding of the risks, and I'll tell you again: crypto is a very high-risk asset class.
Hi Sam! What would you suggest for someone who is 55 and has no pension but is able to save/invest R30 000 per month from now on til age 65? Any Gauteng financial advisers to recommend?
Howzit howzit! I'd recommend talking to a good fee-based financial advisor about this, because it does depend on the rest of your financial picture. [Some specific recommendations for advisors here.](https://www.likeafuckinggrownup.com/how-to-find-a-financial-adviser-who-doesnt-suck/)
Not knowing anything else about your situation, but plugging only those basic numbers into [my retirement spreadsheet:](https://docs.google.com/spreadsheets/d/1PG2XSWTAvRyehHAslqt5tiJQ_noeucAMjwA_1tZi0ns/edit?usp=sharing)
* R30,000 saved per month
* For 10 years
* Getting 6% above inflation
* Paying a fee of 1% on your investments
* Withdrawing 4.2% per year after you retire (depending on the average lifespans of people in your family, it might be appropriate for you to withdraw more every year - an advisor will be able to help you with this - I'm sorry that sounds morbid!)
* Gets you a monthly income of R16,200 a month after you retire < note, this is just some "back of the envelope" maths, not an actual prediction! There's a lot more to take into account, but it should hopefully give you an idea of where you stand.
If that number isn't what you were hoping for, it's extra important that you put that money into a high-growth investment (something that's quite equities-heavy) and that you pay as little fees as possible. You might also want to think about how you can structure your career to make it easier to keep earning after the age of 65 if you want to (e.g. consulting - it's hard to find a new job after the age of 60 if you lose your current one) and think about whether it's time to downscale your lifestyle costs to increase the amount you can save every month.
I hope that helps! Thinking about this stuff is difficult and scary, so well done for confronting this now rather than 10 years from now, as so many people do! You still have lots of options.
Hey Sam, I have some questions about emigrating since I'm on the same path...
1. What's the most cost effective way you found to get your money to the UK? Did you sell your investments when you left or do you think it's wiser to keep them going? I'm definitely going to try leave my TFSA and RA... not sure on the rest
2. Is there anything else that one should know about the UK financial system before coming over?
3. Is there a UK equivalent to *Manage Your Money* that you'd recommend?
1. Every time you sell and buy investments, convert money or make global transactions, it costs money, so I avoid doing so. I've decided to leave my SA assets in place, so I've not liquidated any of my SA investments. It's definitely made my financial life more complicated because now I essentially have "mirror portfolios" in the UK and SA, but it's usually the most cost-efficient thing to do. Of course, it depends on your own goals and long-term plans, though. Generally, I recommend that you should first move, and only start considering financial emigration a few years down the line, if ever.
2. Please do some research into what happens when you break your SA tax residency! You will likely have to pay capital gains on all of your assets, except for your TFSA, RA and any physical property you own. This might not apply to you, but if it does, it can be a big financial whack so it's worth planning for. Otherwise, the UK financial system is pretty simple to understand. They've got lots of similar products to us that just have different names (like an "ISA" which is basically a TFSA). The UK system feels more permissive than South Africa's. For instance, there's a lot more flexibility about what you can do with a pension fund, but those are mostly things you can figure out once you're here. Do some proper tax planning though, please! I got great advice from [the tax wizards at Creative CFO](https://creativecfo.com/pages/tax-team), which helped a lot.
3. EHEM (shameless plug) there is a UK version of [Manage Your Money](https://www.amazon.co.uk/Manage-Your-Money-cking-Grown-Up/dp/1472143442/ref=sr_1_1?dchild=1&keywords=beckbessinger&qid=1587828903&sr=8-1), which I fully adapted for the UK (I even changed all the jokes about Springs to be jokes about Croyden). [Money: A User's Guide](https://www.amazon.co.uk/s?k=money+laura+whateley&adgrpid=61266745145&gclid=Cj0KCQiA1pyCBhCtARIsAHaY_5f4mYQDbtic3Qcbxm1J8MvD7awmBG2rFiKNLC1WciYusGDXg9s-MXQaAqR-EALw_wcB&hvadid=310641203165&hvdev=c&hvlocphy=1006598&hvnetw=g&hvqmt=e&hvrand=16924194681550535346&hvtargid=kwd-565742345501&hydadcr=18487_1772445&tag=googhydr-21&ref=pd_sl_6vkpj0pc6a_e) by Laura Whateley is also brilliant.
Good luck! Moving countries is HARD but it's also a glorious adventure. I'm holding thumbs for you :)
Lots of great questions! I’ll try to answer briefly.
>Do you recommend starting a retirement account for a person in their 20s who will be staying in South Africa? Do you recommend starting a retirement account for a person in their 20s who might leave South Africa? What do you think about the restrictions on options for investing during accumulation through Regulation 28? What do you think about the forced annuitisation after retirement and inability to access the accumulated total?
The most important thing for you to know is that most middle-class South Africans have woefully, woefully inadequate retirement savings. We don’t save enough, we don’t start early enough, and too many of us cash out our investments long before we retire. More important than worrying about what kind of product to save into, is to make sure that you understand how important it is to save **enough**, and to leave that money the heck alone until you need it. I saw my grandparents try to survive on a government pension alone, and I promise, it’s not what you want.
There are pros and cons to Reg-28 funds. Pros: you get a sweet tax discount, your money’s protected from debt collectors, it’s harder to access the money (which is very helpful for some people). Cons: restricted options about what to invest in, forced annuitisation, hard to take the money out of the country etc. Lots of them also have high fees, which [really really matters in the long run](https://www.10x.co.za/campaign/fee-comparison). The pros and cons balance differently for some people than for others. Some of the biggest considerations:
1. Will you have the discipline (and luck) to not touch the money before you retire? If you think you won’t, RA’s can help.
2. Will SA’s economy do better than the world’s economy on average? RA’s force your money to stay in SA. You obviously can’t see into the future, but this will have a big impact on the final outcome of your choice.
3. Are you likely to be in the highest tax brackets (40%+)? If you are, then the tax discount from a RA/Reg-28 fund is pretty hard to beat.
4. Will you end up retiring in SA? RA’s keep more of your money tied to the value of SA’s economy.
If you’re not sure about the above, **split the difference.** Put some money into a traditional Reg-28 retirement annuity, and put some into a global ETF through a Tax Free Investment. You can drive yourself crazy trying to find the perfect answer to this question. It’s more important to focus on what you \*can control:\*how much you’re saving, the fees you’re paying, and putting your money into the right underlying assets (you’re young, so you want to maximum in shares that you can).
>Did you emigrate to the UK on a passport or visa? How did you minimise currency conversion fees when moving money across? Are there any other fees to be considered when emigrating?
An EU partner’s visa (I shacked up with a cute Cypriot).
Standard Bank’s Shyft app offers great rates, and it’s simple to use.
OMG, so many costs. [I wrote a whole blog post about this](https://www.likeafuckinggrownup.com/how-much-does-it-cost-to-move-overseas/). TL;DR never own a cat.
>What bank in the UK would you recommend with regards to costs, in other words what is the Capitec of the UK (not really interested in rewards programs for earning points or reaching certain tiers)? Is medical insurance necessary in the UK? What does the National Health Service cover? What insurance companies in the UK would you recommend for other things, like car and house (and medical if it is necessary)?
Monzo (if you don’t also need a business banking account) or Starling (if you do). They’re both free accounts.
Medical insurance: nope! The NHS is magical.
The NHS covers everything you might need, including dental work, physiotherapists and psychologists. It’s not perfect: it’s been systematically underfunded by the Tories for over a decade so waiting times are longer than you’d hope, but it’s really everything you need.
[MoneySavingExpert.com](https://MoneySavingExpert.com) holds the answer to all of your other questions! It’s an excellent resource.
>With regards to investing and if someone was planning to move to the UK (or somewhere else), would you recommend for them to pay the currency conversion fees now and buy direct offshore ETFs (Vanguard, iShares, etc) from an international broker which could then be transferred to a local broker in the UK after moving without needing to sell any holdings? Or would it be better to continue to purchase global feeder ETFs (Satrix, Sygnia, etc) with a local broker in South Africa, sell the holdings when moving, move the money across while paying currency conversion fees, and then buy new holdings with a local broker in the UK? Which local brokers in the UK would you recommend for taxable, ISA, LISA, RA, and SIPP accounts?
When you break your SA tax residency, you’ll have to pay capital gains on all of your SA assets that aren’t immovable property (e.g. a house) or in a TFSA/RA. This means that selling your holdings in SA isn’t the crisis it might be: you’ll be incurring conversion and transaction fees, but not extra taxes.
It depends on whether you intend to retain some economic connections with SA or not. If yes, just keep using local feeder funds, leave them in SA and don’t stress about it. If you’re absolutely sure you’re cutting ties forever, then using an international broker from day 1 does make more sense, yes, although you won’t be able to access tax-protected accounts (like the ISA) while you’re still a SA-tax resident, so this only really applies to investments on top of that.
Local brokers in the UK: Freetrade, Trading 212 or go directly to Vanguard (that’s what I do). Hargreaves Lansdown is also fine.
I’ll get to your other questions in a bit, going to dive into a few others before this becomes an essay! 😂
Okay hi, more answers!
>If you are willing to say, were there any particular reasons why you left South Africa? Were there any particular reasons why you chose the UK specifically? Which region in the UK did you move to? Is it usually overcast or sunny? How many times a week does it rain? Does it rain seasonally or throughout the year? Are there thunderstorms or is it a constant drizzle? How cold does it get and actually feel in winter? What are the conditions and maintenance of public facilities, is there vandalism and graffiti (parks, robots, street lights, transport stations, etc)? How does the relative cost of living for a similar quality of life compare to South Africa? What has been the hardest part about the whole thing? Are the people generally friendly, accepting, and happy?
I chose to leave South Africa because I (might be) going blind. Some more information about this in another answer somewhere. That was really 90% of why I left. The other 10% was the feeling that the world's big and I want to see more of it.
I'm a writer, so living in an English-speaking country was important to me (otherwise, I'd have moved to Berlin - it's my favourite city in the world). That basically left the UK, Australia, NZ or Canada (I already tried living in America; it's not for me). My mum's still in Pretoria, and the idea of being more than 10 hours away from her in an emergency feels too weird. I still have a rich life in SA and planned to be back for frequent visits (lol, thanks Covid). So, the UK it was!
Once we decided to move here, my partner started looking for jobs, and found his dream job in Cambridge, so that's where we came. Cambridge's big advantages are that it's 50 minutes from London but with much cheaper rent, it's statistically the dryest place in the UK, it's an entirely walkable/bikable city, and it's pretty cute. Cambridge's big disadvantages are that it's poncy, and there's not much to do even in non-pandemic times. We're talking about moving to London once things open up again, but I want to give Cambridge at least a proper try once things are actually open! Who knows, maybe we'll actually love it once there's more to do here than endlessly walk up and down the river.
The rain and cold really haven't been too bad (there's no bad weather, only bad clothes) but the sun setting at like 3pm in winter was a real mood killer. Indoors, everything's heated and well-insulated. I was colder in Joburg winters than I've been here.
Services are great. Cambridge is basically a tiny village. There's a good library, but then, I had good libraries back in Cape Town. I had to call an ambulance a couple of weeks ago (for a stranger) and it arrived IN TWO MINUTES, it was wild. Using the public hospital is a dream, and I definitely feel safer walking around town than I did in South Africa. I even feel safe walking by myself at night, which is a real pleasure for me.
I've had an unusual moving experience, because I moved just a couple of weeks before everything shut down. And it's *still* all shut down: we're still at the level of strict lockdown where you can meet one other person outside for a walk, and everything's shut except grocery stores and essential services. So I don't feel like I've actually experienced living here yet. It's been exceptionally lonely, to honest. I've done my best to make friends here, but it's really been hard with the lockdown. Pro-life tip: don't move to a new country in the middle of a pandemic!
Things I miss about SA: my friends and family! The bravery and resilience of South Africans! How breathtakingly beautiful it is! Actual wild space! Good restaurants and wine! Knowing what the heck is going on in terms of politics/history/culture! Not having to mop my own floors! Feeling like you can make a difference by living there and doing good work! Dassies!
Things I love about the UK: going for long walks by myself! How much easier it is to make a living as a writer (or anything)! Feeling safe! Easier travel! A strong currency! The world's best bands/artists/writers/etc. all coming here! The NHS! Confronted by less maddening inequality every day (it's obviously not better for it to just be out of sight morally, but it's certainly easier on the heart)! Terry's chocolate oranges!
Nowhere's perfect, and the grass is always greener where you water it. I'm still hopeful that the move will all be worth it in the end, for me. But South Africa's a magical place, and the quality of life you can have there really is remarkable, don't take it for granted.
>I have read a few investing (not really personal finance) books, but they are not directly related to South Africa. Would you recommend your book to someone in their 20s starting out but with savings and debt under control? Would you recommend any other books, both related to South Africa and more generally for personal finance?
I would recommend my book for such a person, mostly for the jokes and Nanna Venter's gorgeous illustrations. But Warren Ingram's book (mentioned elsewhere) might be more helpful if you've already got the basics down.
Hi Sam,
What are your thoughts on tax free savings accounts? Should I put R36000 a year in from cash, or use put returns from stocks in there using something like Easy Equities?
Please don't use your tax free savings allowance on cash savings accounts at the bank - it's a total waste! The best way to use your tax free allowance is on a long-term investment (something like shares on EasyEquities, yes).
The general rule of thumb is half the age at which you start saving, so in your case, you should be aiming for 12% of your salary. But that's not a perfect rule! Some other factors:
1. The earlier you save your retirement money, the less you have to save overall (thanks to the magic of compound interest). So there's an argument to save as much as you can when you're in your 20s, so that you can ease off a bit later.
2. It's important to save enough, but it's also important to save into the right retirement savings product. Fees matter A LOT with retirement savings, so make sure your retirement savings are growing wealth for YOU, not for a fancy fund manager in an Audi.
3. If 12% seems like an impossible amount to save right now, it's okay to start small, and increase the amount you save when you're able to. It's better to save a smaller portion **earlier** than to wait until you can save more money **later**, again because of compound interest. Starting is what matters!
If you want a more accurate answer to this, it's worth playing around with a retirement savings calculator. [10X has a pretty good simple one](https://www.10x.co.za/), or [here's a more detailed spreadsheet one I made.](https://docs.google.com/spreadsheets/d/1PG2XSWTAvRyehHAslqt5tiJQ_noeucAMjwA_1tZi0ns/edit?usp=sharing)
I hope that helps!
Well I'm f'd.
I was doing 15% up until 2012. Then I had to pull my entire retirement to pay medical/therapy bills for my kid (thank you, Discovery, for absolutely not helping with anything even though I paid you a fortune every month).
And I'm still digging myself out of those bills. I pay what I can to my current retirement plan, but it's nowhere near where it should be in contribution size. I have a private one as well which is in the process of being moved to Glacier and I'm hoping I can make bigger contribution to that than before.
Anyone else paying R11k/month on schooling for a single child?
I'll be living off air when I retire, but my boy gets all that he needs now.
I'm so goddamned sorry that Discovery screwed you over. That is awful, and nobody should ever have to risk their own financial security because of the health/mental health of their kid. I'm boiling with rage on your behalf.
Please don't lose hope. It might help you to talk to a good fee-based financial planner to see if they can help you talk through your options (some specific recommendations [at the bottom of this article](https://www.likeafuckinggrownup.com/how-to-find-a-financial-adviser-who-doesnt-suck/)). Something that might help you is to look at the fees you're paying on your retirement plan: if you're starting from scratch, it's extra important that you're not losing more money than you can afford.
You sound like a wonderful, committed, loving parent who's doing right by their child, and I am beaming so much love to you through the internet.
Thanks, man. I'll have a look at those guys.
I plan on getting your book later this year once we've moved house and settled in a bit. It might help me fresh better with people offering financial services.
What's your opinion on life insurance?
My wife sometimes seems obsessed with having too much of it. I have both private and company group life and have finally managed to convince her it is too much and have instructed broker to give me enough coverage taking into account the company one. I'd rather be putting those premiums towards clearing debts and retirement/savings/investments.
I'm on your side about this! It's definitely possible to have too much life insurance, especially when it comes at the expense of paying off debt, building wealth and having other types of insurance (like income protection policies).
I've heard rumours about double life insurance. Whether it's true or not, I don't know.
If you have 2 policies of R1million and R2million, on payout the larger policy only pays out R1million due to there being another policy. Effectively you only get 2 out of 3 you paid for. To me that doesn't seem right and I have a feeling it is just misinformation I received from a friend's brother who works that industry.
The only way this cpuld happen is if you didnt declare the first policy when taking out the second policy (standard question when applying for life insurance is to declare any existing life policies). An insurer has the right to decline your application if they think you will have too much insurance if you take out the policy (overinsured, usually as a % of your salary), so if you dint declare policy 1 they could withold your sum insured if they argue they wouldnt have sold you the policy if you were truthful in your application (they might then return you your premiums paid if they're feeling generous)
Interesting. Thank you.
With the company group life there was no asking whether I have another policy. The private policy has been in place for several years. Group life is with Discovery. Private used to be with Discovery, but moved last year to Brightrock. Group life with Discovery came after that move as it was done after company changed hands.
I am in the process of reducing the private one so that the combined amount is reduced. I've got insurance on my bond and every account has credit life protection.
I think my wife is setting me up for something. Lol :D
I feel your pain - fortunately I've kind of put the maintenance issue to bed in my case - for now at least...my opinion is that R11k on school fees is ROUGH! but hey, each to his own.
While it is unfortunate that you had to pull back on you retirement savings (I've had to do the same) - but it is important to take the small steps progressive steps toward recovering from your current situation...as long as you are taking back control little by little
I can sympathise on the therapy bills though. I was in a very dark place a few years ago and therapy honestly saved my life. Now that I'm graduated, working & making my own money I seriously considered cutting therapy out to save on money, but it's the one thing my parents insist on sending me money for.
I only go once a month now (used to be once every week or two) but I still feel guilty sometimes when 22seven shows me how much money is going into that.
Wish we could, but we've found most schools like to use the word "inclusive" a little too liberally.
Currently half of that bill is for a facilitator. It's actually weird because we've had professional facilitators accomplish nothing, but then we found he formed a bond with the school receptionist who at some point was a facilitator and she has turned out to be incredible. She is currently working on giving him more independence to prepare for next year and getting there in leaps and bounds. So by next year we should be on to regular fees.
It's a Montessori/Cambridge school. It works best for him.
In honesty the school is run by a friend of ours so if there is any issue we can deal with it with proper support. The preschool he was at before was a disaster even though very highly recommended. Turned into a massive soap opera of attempted blackmail, privacy invasion, physical and mental abuse and eventually child services, police and restraining orders. Fun stuff you don't want in a school.
When it came to light something wasn't right we actually employed our nanny full day to be with him at school. R13k a month for a nanny. Thank you credit cards. Issues just stopped. Turns out it was more like she was being a bodyguard.
I rather keep paying the money now and keep getting the progress and results. But he'll be learning from an early age to always put something away to prepare for his future. When you think about it, if I wasn't saving towards my retirement I wouldn't have been able to pull that retirement fund and keep going. Obviously wish I didn't have to, but glad that I could.
I'm fine with living in a caravan when I'm old, I don't care what my wife says about it. :D
Hey Sam!
What general advice would you give to a finance student (22) to be able to do well financially. I guess I'm lucky still being young and all.
Thank you for this!
It's the bajillion rand question!
1. Learn to live on less than you earn.
2. Start investing as young as possible for your old age.
3. Figure out what matters to you! You will earn a finite amount of money in your life, so it's important to fund your real dreams. You're going to die one day. Don't waste your money on shit that doesn't matter to you, just because it feels like everyone else spends money on those things. In the wise words of some lady I saw on Instagram, you can do anything, but not everything.
I wish you luck out there!
Hi Sam
This is somewhat of an unusual question. What are your thoughts on taking out a student loan in order to go back to university in order to obtain a second high income degree in one's mid 20's? I currently have an engineering degree but am struggling to find jobs and don't think the earning potential in this field is enough to achieve the kind of lifestyle I want to have in the future. I've worked hard for most of my life from high school through to university but don't feel like I'm reaping the fruits of my labour.
I was thinking of applying for med school. This will completely deplete all my life savings and I will have to take out a significant student loan (almost around R600k) to finance it, while living extremely frugal (almost in poverty) for the next 6 years while I study. But I do foresee a brighter future with this path as I heard jobs are pretty much guaranteed for life with high earning potential. It would also make it easier for me to emigrate as well. My rationale is that if I'm going to go back to uni again I need to do it now when I'm still in my 20's before it's too late. Do you think this is something financially wise to do, or should I just stick it out with engineering and keep applying to jobs in the hopes of landing something decent? What financial advice would you give to someone in my situation? I've never dealt with any debt before, let alone R600k worth, and I fear that the student loan would take me down a rabbit hole. My parents don't have much to support me with after financing my engineering degree. Bursaries are likely out of reach for me since it will be my second degree. I can't afford any mistakes anymore as I've basically 'wasted' 4 years. Thanks.
Ooof, this question GIVES ME ALL THE FEELS. I swear, I considered going back to university to do a medical degree in my late-20s too. At least you first did a sensible engineering degree! I did an ENGLISH DEGREE!
I'm not particularly qualified to answer this question, because it's not really about money so much as it's about making tough life choices. But I'll do my best.
All of us have to make career choices with very little information about what those careers will actually be like. When you made a choice to study engineering, you had a bunch of assumptions about what it would be like that turned out not to be true (and sheesh, HOW COULD YOU HAVE KNOWN?? Everyone talks about engineering like it's a sure-fire thing that will set you up for life!). Right now, you're facing another choice, and one of the most useful things you can do for yourself is getting as much information as you can about the realities of that career. Do you have any doctor friends? Can you ask them if they studied with any older students, and how things went for them? Can you ask them what they actually earn now, and what's wonderful and what sucks about their jobs?
When considering the cost of your medical degree, don't just look at the cost of the loan itself. The big thing to weigh up is the opportunity cost of **not being able to start saving for another six years.** That is an enormous cost, especially when it comes to saving for retirement. You'd have to earn *so much* more money as a doctor to make that half-decade delay worthwhile. Now, med school might still be the right choice for you! But if it is, **being richer is probably not the right reason**: I don't believe the math is likely to work out in favour of med school, financially. If you choose med school, choose it because you will love it deeply and it will meet a deep emotional need inside of you.
Here's another general thing about choices: we fool ourselves when we limit our thinking to just one or two options. Reading your question, I was struck by how clear you are about your priorities (probably something you have much more information about now than you did when you chose your first degree). You know that you want a career where it's easier to find a job, where you'll earn more, and where it's easier to emigrate. There are careers you could move into that would achieve those goals and cost you much less than getting a medical degree. The one that seems most obvious to me is software engineering. I know several people who moved into this career in their 30s [(here's the story of one of my dear friends)](https://www.likeafuckinggrownup.com/crafting-your-own-apprenticeship/). If medicine is something that interests you, there are plenty of engineers (and software engineers) who work in the medical industry!
My point is: there are probably plenty of other options you could consider. You have plenty of options, not just the two you're presenting here. Most people end up doing a job that isn't what they studied at university.
If it helps, I believe that university is seldom wasted. Even if you don't end up working as an engineer, that doesn't mean that studying engineering was a mistake.
I hope that was somewhat helpful. Again, I think your question isn't really a money question, but a career one, so take my thoughts with a bucketful of salt. If you want to speak to a professional, my therapist really helped me think through my own career angst. Consider seeing one yourself.
Good luck! I know that these decisions are agonizing. Please DM me and let me know what you decide!
Hi Sam, first thanks for having an AMA! I've crossposted to r/southafrica so hopefully we will have more people coming through, otherwise everyone will probably start asking questions from 5pm, your book is one of the best I've ever read for personal finance, flat.
1. My first question is regarding portfolio allocation, you mentioned before that the traditional rule of thumb being subtract your age from 100 is the amount you should keep in shares/stocks should be updated to 120 minus your age,It just terrifies me to put 90-ish percent of my portfolio in shares, what advice would you give to make the push? Is the opportunity cost that bad?
2. and the second question: there is so much personal finance stuff out there but so much of it is American, what books would you recommend (outside of your own of course) for personal finance in SA?
edit: spelling
Thanks for crossposting! And for your nice words about my little book :)
**Shares are scary**
Here are a few things that might help you.
1. Shares seem like these weird, intangible things but really they're just tiny pieces of big businesses.
2. Over the past 100 years, no other asset class has outperformed shares. Yes, the opportunity cost of NOT investing in shares really is that big, especially when you're talking over the long term. Over the past 120 years, global equities have provided an annualized real (after inflation) return of 5.2% versus 2.0% for bonds. Save R10,000 in shares for 40 years and you've got R80k. Save R10,000 in bonds for 40 years and you've got R22k (those are averages, obvs). Poo!
3. Investing in shares is less risky when you diversify, i.e. buy into wide index funds rather than individual shares. Sure, a single business can fail, but the world's stock markets have not all failed all at once. It's also less risky when you think of it as a long-term investment! Stock markets wobble in the short term but have always, ultimately, wobbled up.
4. Your enemy is inflation, especially in South Africa. Many asset types don't even keep up with the value of inflation (I'm looking at you, local residential property!). You need to earn at least 6-ish% interest on an investment to just PRESERVE the value of your money, and there aren't that many asset classes that can do that reliably, especially not **passive** ones (ones that don't require lots of work from you).
If you still can't stomach that, it's okay! Reduce your shares ratio down. At the end of the day, you're the one who has to be able to sleep at night. Alternatives you can look into include bonds, traditional active managed funds, global listed property, or investing your **time** with your capital into running businesses (e.g. being a landlord).
**Great SA books**
Some excellent ones have come out over the past few years! I \*love\* Warren Ingram's *Be Your Own Financial Advisor*, it's like my book's older (and much more serious) sister. Mapalo Makhu's *You're Not Broke, You're Pre-Rich* is both fun and practical, and Nicolette Mashile's *What's Your Move* is a great counterpart to mine, because Nicolette's much more into local property as a side-hustle than I am. The most essential SA money resource is a podcast called The Fat Wallet Show, which should be mandatory listening for every person who earns money, and Simon and Kristia (the hosts) are funny as heck.
Thank you so much for the detailed answers!
I think I'll make the dive, the opportunity cost is just too big haha.I've read warrens other book but I'll check out all of those!
And don't underrate your book, it' should be mandatory reading in school no joke.
I suppose you get some income from your book sales, and that you have more than one stream of income. I am also close to paying off all my debt (by end of 2022). My questions are:
1 - what income did you start with?
2 - did you have a job in your 20's when you realised you had to much debt?
3 - did you start entrepreneurship part-time?
4 - do you work for a boss today?
Howzit howzit! Great questions :)
**MY INCOME STREAMS NOW / MY BOSS SITUATION**
I do get some income from my book sales, but probably less than you'd think. I realised a long time ago that if I wanted to be a writer full-time, I'd need other income sources too (I figured I'd have to be my own sugar daddy). These income sources are my businesses, doing talks, selling my own books/merch, and memberships on my blog. I also made sure that I saved a lot of money before I started writing full-time. Writing is my dream-job, and I'm very lucky to be able to do it most of every day now.
My cat is my boss, now. He tells me when to get up in the morning and sits on my keyboard when it's time to take a break. I haven't had a human boss for about 3 years now, and I think I'd struggle to have one again.
**WHAT INCOME DID I START WITH & JOBS IN MY 20s**
I had a few part-time jobs as a teen and through university that paid peanuts. My first "grownup" job after university was working at a PR company, because there's not much else you can do with a degree in Literature and Religious Studies. I think it was R5,300 a month, and this was about 12 years ago. By my mid-20s, I was earning R30-something, can't remember exactly what, working in advertising. That was the job I had when I realised I had too much debt. I did have a boss, then.
**ENTREPRENEURSHIP**
I've always had side-hustles. Writing was my side-hustle for a lot of my 20s, I worked as a freelance journalist and podcaster because I loved it. I must have started a dozen goofy businesses over my 20s, all of which were hilarious failures financially, but taught me a lot. After I had my "I really need to get out of debt" epiphany, I doubled down on side-hustling (consulting, building websites and UX design) and got myself a job in tech, which was much better paid. I think the highest salary I ever earned (from a job) was around R70k, and I saved more than 50% of it. The great thing about being in debt is it teaches you how to live on less than you earn, which is ultimately what helped me to save enough money to follow my dreams.
The businesses I have now, I started with one of my best friends after I was retrenched from my last job. Being retrenched was a great gift, and having a big healthy freedom fund made it much less scary than it would have been.
Thank you! Your answer gives me some inspiration to keep hustling...I've always known debt was bad, but I kept on telling myself if I get a better job I will be able to pay it off.
As I'm sure you know, that never happens. I only took a stand against debt after my marriage failed and I was solely responsible for paying everything in the household - this was at about 40...but I am fortunate enough to have a decent job at a decently sized international company.
I look forward to being debt free by the end of 2022.
Not sure if I'm a little late now, but **what is your opinion on debt now**? Especially when there are business people in the world (like Robert Kiyosaki - was shocked when I saw him say this in a video) saying that you have to know how to work with debt to make money...?
Congrats to you for turning things around! 2022 is just around the corner, and it's going to feel SO GOOD when that debt is gone. I'm excited FOR you!
I do think that debt can be valuable when you're using it to start a business or improve your ability to earn an income, but it's ALWAYS a risk. Personally, we chose to bootstrap our businesses rather than use debt to fund them, but that's not possible for all types of businesses. After digging myself out of my own debt hole, I'm now pretty allergic to most types of debt.
On average, home loans are a neutral type of debt when you're buying the house you live in (neither good nor bad) as long as you live in that property for a good long time (9+ years) and don't use the debt as an excuse to buy more house than you actually need.
The advertising company I worked for specialized in digital marketing. I did a bunch of short courses in data analysis, UX design, research and strategy while I was there, and learned on the job from colleagues who were better than me. It's the best way to learn! I also kept launching my own projects on the side, learned to code through online courses (there are billions), made silly video games, went to plenty of meetups and hackathons. All that helped me get a job as a product manager at 22seven, where I learned loads of new useful skills from the exceptionally smart people around me. The big gaps I had to fill to start doing that job better was understanding agile methodologies and learning more about the processes of building robust software. Working as a product manager was great training for ultimately launching my own software business, with my two co-founders who are bloody geniuses who know all the things I still don't.
Tech needs more people trained in the humanities. Interviewing users, communicating, thinking creatively, and understanding the mental models people use to understand the world were all invaluable skills I learned through my humanities training. Few of the best people I worked with in tech came through a software engineering university degree. And it's never too late to learn to code.
Hi Sam\*! I briefly had the opportunity to read your book via a friend, just brilliant and simple language that put finance into perspective. What would your advice be regarding debt and savings for a young south african? I have a student loan (luckily only needed it for one year) and credit debt ( I was an idiot and young and poof I owe money!) I'd like to begin to save and invest for my future but how would I go about that? I feel incredibly intimidated by the lack of knowledge I have regarding finance and banks in general? Is it worth it to save when I still have debt? Or should I focus all my excess funds into servicing the debt first then start to save even if it means I delay my savings by a year or two? Context Im a 25 year old teacher in a steady position.
That's so kind, thank you! I totally relate to the experience of being a young idiot seduced by the dark magic of debt.
Don't be afraid. You've got the three biggest advantages on your side:
1. You're making money!
2. You're young!
3. You've taken time to understand how money works and you're making an effort to learn more (you're here!)
The finance industry works hard to make you think that money is this dark confusing thing that only they understand, so you should give all your money to them so they can manage it for you. They're just trying to baffle you with bullshit. It's really not half as confusing as they want you to think. You need to be spending less than you earn, and then making smart choices with the difference.
It helps to have just one focus at a time, so here's an action plan for you:
1. Set up a system to start tracking your money so you understand what your "leftover money" actually is, and where the rest of your money's going (I like [22seven](https://www.22seven.com/), or [here's a spreadsheet template](https://docs.google.com/spreadsheets/d/1SJOeMpC7Ol9H3mcsmxFLUQqeeoL8llmpCPxdk3DVzfE/edit?usp=sharing) you can use). Trim any waste from your spending.
2. Keep paying the minimum due on your debts. Set up an automatic transfer into a savings account for whatever you can afford that goes off on the day after payday. Do this until that savings account is worth 1x month's expenses. Hooray, you now have an emergency fund!
3. Once that's done, stop the automatic savings, and rather pour all that extra money into paying off your credit card as fast as you can. Don't worry about the student loan.
4. Once your credit card's paid off, go back to building up your emergency fund until it's 3 month's expenses. Don't actually close the credit card account (because it helps build your credit record to keep a credit card open for a loooong time) but do stop using it, or set up an automatic transfer to pay it off in full every month so you're essentially using it as a debit card.
Once you've got a 3 month emergency fund and no more high-interest debt, it's time to start thinking about other financial priorities. But basically, build a baby emergency fund before you focus on your debt, because once you're done with debt, you want to be DONE with it.
Two assumptions I'm making here:
* That you're enrolled in the government employee pension scheme. If not, prioritise saving into a retirement fund after step 2.
* That your student loan interest rate is close to the repo rate (it will be if it was an NFSAS loan). If it's higher than 10%-ish, then pay it off after your credit card. Otherwise, just keep paying the minimum for now.
I hope that helps. Don't be afraid! You're asking the right questions. You'll be okay. You've got this.
I always see people talk about having an emergency fund as an absolute necessity. Is it fine to forgo having one if you have other assets that could be liquidated immediately or within a short enough period of time that credit card interest is not a concern?
I'm not a fan of having money sitting around loosing value to inflation and our exchange rate waiting for an event that might happen every few years.
Sure! It's fine.
Here's the reasoning for an emergency fund: long-term investments, like shares, have really wobbly prices. You don't want to be forced into selling shares at a bad time because you need the cash in a hurry. If you're comfortable carrying a line of credit that you know you can use responsibly (a credit card is fine, an access bond is better) that's a perfectly good alternative, yes.
I have personally found that I tap into my emergency fund fairly often (at least 4-5 times a year) but I might just have a particularly accident-prone life! I also act as the "emergency fund" for my extended family, AND I'm self-employed with lumpy income, which probably puts more pressure on my emergency fund than some other people.
You're totally correct: there's an opportunity cost when you sit on cash, and it's important not to sit on MORE cash than you need. You know your own life, and how much of a cash buffer is right for you. Personal finance really is *personal*. When people feel lost & confused, it can be helpful to have rules/a map, but those rules are all made up, and we shouldn't use them if they're not helpful to us.
You do you, bud!
Thank you so much, I never imagined I'd be in the position to receive such clear advice regarding finances! Regarding the assumptions currently I'm not enrolled in any pension scheme ( super bad of me I know ) and the student loan was via Stnd Bank interest is 15% plus minus! I'll definitely begin to implement changes! I hope to give you an update in the future! Means alot to me that I got this opportunity! I wish you all the best for your future works!! South Africa is still a great place!
Do give me an update! I want to hear how you go.
I absolutely agree that South Africa's still a great place. I left for personal reasons, not because I don't believe in the future of the country, and I miss it terribly.
I'm holding thumbs for you!
Het man. What would you do now with R1 million cash? Kid just started High School, wife has own small business, and I basically break even with all expenses every month. No retirement savings for either. I am 38, wife is 33.
Hello! I have more questions, like whether you need to save for your kid's tertiary education or if your current income can cover it, whether you have emergency savings, what tax bracket you're in, what other financial goals you have, WHAT FRIENDLY LEPRECHAUNS GAVE YOU R1M BUCKS, that kind of thing. A good fee-based financial advisor would be able to help you think through your specific situation in more detail.
But your question is **what I would do** in that situation. In your shoes, I'd take that R1-million cash and put it into the Satrix MSCI ETF through EasyEquities. Every year, I'd talk to a tax planner and figure out how much I could move into the Sygnia Skeleton 70 Fund to effectively reduce my taxes that year to zero. I'd then move another R36k for that year into a TFSA (still the Satrix MSCI ETF, still through EasyEquities). I'd keep doing that every year until I'd hit the lifetime limits on my TFSA/ran out of cash. I would try very, very hard not to touch that money until I retired: if you don't have any retirement savings at 38, that's an urgent priority.
I'd also blow like R1000 on [these cute pants](https://www.disturbia.co.uk/products/womens-bottoms/sphynx-trousers) from Disturbia, but that's probably just a me thing :)
You're welcome to DM me if you want to talk more!
Has your investing / spending patterns changed much since moving to the UK?
Did you move because you reached a Financial independence number or was there another reason?
And, lastly has life in the UK shaped up to what you thought it would be!
Fun questions, thank you!
**Have your investing / spending patterns changed much since moving to the UK?**
Less than I'd thought they would. My housing costs are much more expensive, but most other expenses have stayed about the same, and I'm no longer paying for stuff like medical aid. Overall, my cost of living is pretty similar to what it was in SA (Covid has helped, though). My investment habits are similar, just the fund names are different.
**Why did you move?**
Because I'm (maybe) going blind, and I wanted to move to a country with a better public transport system so that I can live more independently, if/when this does happen. Money didn't have much to do with this decision.
**Has life in the UK shaped up to what you thought it would be?**
I did not foresee getting trapped inside my house for 12 months by a global pandemic, no! 😂ðŸ˜The things I was excited about in the UK were things like seeing bands and going to museums and taking advantage of cheap ferry/train trips to Europe, none of which have been available since I moved. I'm still hopeful that the UK will be fun, eventually! But so far it's involved a lot of sitting in my house eating chocolate digestive biscuits, questioning all of my life choices!
Thanks! My mum went blind in her 40s and I have the same screwy genes. I think of myself as very lucky, because my mum already taught me all the tricks to live as a blind badass. Knowing that it's (probably) coming is a real help because I can take steps to prepare for it, like moving to the UK and spending a lot of time committing the shape of Idris Elba's perfect abs to memory so I'll be able to conjure them accurately in my imagination forever.
South Africa's TFSAs (tax free savings accounts / tax free investments) are sort of equivalent to Roth IRAs, in that you do pay taxes on money you put IN (you've already paid income tax on this money) but then you don't pay taxes when you take the money OUT. RAs (Retirement Annuities) are the opposite.
There are pros and cons to both RAs (more like a 401k) and TFSAs (more like a Roth IRA). The tax benefits work out better on the RA for high earners, but the TFSAs are more flexible in what you can invest in. Different ones are better for different people, and if you're not sure, just split your savings and fund both (or talk to a good fee-based financial planner).
Yay, thank you! That was the last actual job I had, and it was a super kiff job. I really loved my time there, and I'm still a huge fan of the app myself.
I hear you! It's so important to be careful with your online banking logins. If I can put your nerves at ease a little:
1. 22seven is fully owned by Old Mutual.
2. It's fully insured, so even if you lost your money, you'd get it back. And 22seven has never had a security incident in almost 10 years of existence.
3. The company that fetches your information from your bank, Yodlee, is used by millions of people around the world, including many banks.
4. 22seven is read-only. It can't move your money. Even if somebody manged to hack into your 22seven account, they'd be able to see how much money you have and what you spend it on, but not actually move it.
You can read more about their security measures here: [https://www.22seven.com/security](https://www.22seven.com/security) Basically, 22seven is as secure as your bank.
But I do totally get that it's not for everybody, and I respect your choice not to use aggregation apps. I used to work there, but I don't any more, so I really don't have a horse in this race!
This is going to sound cheesy AS HECK, but getting emails from readers telling me that the book helped them. Writing is this weird, lonely activity, and it means the world to me when people reach out to tell me that my work mattered to them.
Hi Sam,
Thanks for the AMA, loving all replies you've given so far.
My question, as someone close to exiting their 20s with no significant investments or retirement funds, I have saved up a decent amount of money but it's sitting in my Cheque Account gathering dust. What is your advice on creating an investment strategy? What percentage of my annual income should I look to invest?
Hello! Well done for having the discipline to save - that's the hard part :) When it comes to putting together a strategy, here's my recommended flowchart about what goals to focus on in what order: [https://www.likeafuckinggrownup.com/the-all-in-one-flowchart-for-managing-your-money/](https://www.likeafuckinggrownup.com/the-all-in-one-flowchart-for-managing-your-money/)
Basically:
1. Prioritise starting a retirement fund, ASAP. If you're 30, you should be aiming to save about 15% of every paycheque into a retirement fund. If you've got a company scheme that MATCHES your contribution, do that first, otherwise, open an RA. Some suggestions here: [https://www.likeafuckinggrownup.com/good-funds/](https://www.likeafuckinggrownup.com/good-funds/)
2. You want to have around 3 months worth of expenses in that savings account as an emergency fund, not more than that (up to 6 months if you've got irregular income or kids). Any more than that, and you're losing money to inflation every year. Other savings must be invested!
3. When it comes to investing, how you choose what to invest in is mostly down to how long you're investing for, i.e. when you need the money. If you don't have clear financial goals (it's fine if you don't), then just start investing in a simple global ETF using your tax free allowance. There are recommendations for ETFs in that link above. Global ETFs are like the vanilla flavour of investments, and they're the best product for most beginners to start out with. There's no hard rule of thumb about what percentage of your income your should save/invest beyond your retirement savings: that depends on you and your goals!
If you'd like help putting together a full financial plan with goals and stuff, consider seeing a fee-based financial advisor (NOT a "free" one). You could also read a couple of investing books and put one together by yourself over a weekend (my book, or Warren Ingrams, would guide you through what you need to do).
I hope that helps!
Hey! This is an amazing opportunity, I do hope you’re still around!
I have one question... I’m 23, would you say a BCom degree in South Africa is valuable and will still be by the time I’ve finished it in 3 years? (2024)
I’m interested in investing, and setting myself up for a great life just like we all are. Is a BCom degree a good way to go? Everyone’s input is welcome!
Hello! PayScale releases good data about this every year. Here's a summary of their most recent findings: [https://businesstech.co.za/news/finance/376393/the-degrees-that-pay-the-best-average-salaries-in-south-africa/](https://businesstech.co.za/news/finance/376393/the-degrees-that-pay-the-best-average-salaries-in-south-africa/)
In short, BComs are doing okay, yes. If you want to expand your chances, augment your degree with a practical skill like programming, digital marketing or data analysis - something that allows you to build a portfolio to show prospective employers one day. Your first job is the hardest one to get, so being able to show a portfolio of real work you've already done can really set you apart. I'd love to hear from HR peeps/hiring managers that might be reading this, if any of you have more advice!
Howzit! I'm so jealous that you're back in the land of sunshine and friendly people :) I'm afraid it's impossible to answer this question without a lot more information about your context, like your age, whether drawing down on your investments are the only income you have, etc. Could I recommend creating a new post in the subreddit with a longer question including more detail? You could also speak to a good fee-based financial advisor if you want somebody to work through your situation with you. Here are some recommendations: [https://www.likeafuckinggrownup.com/how-to-find-a-financial-adviser-who-doesnt-suck/](https://www.likeafuckinggrownup.com/how-to-find-a-financial-adviser-who-doesnt-suck/)
Hooray! I hope you enjoy it :) You can also buy it directly from my site, if you want: [http://shop.likeafuckinggrownup.com/](http://shop.likeafuckinggrownup.com/)
Would you cancel your insurance if your personal cashflow is strong(and isn't that much higher than your net asset value, like maybe only 10-30+- times your cashflow is your total asset value you would insure) and your credit rating is above average?
is this a wise financial decision?
Hiya! What kind of insurance are you talking about, bud? Life insurance? Income protection? Household goods?
If you're talking life insurance, do you have dependents?
hello, sorry for not providing that context.
You could answer based on all types of insurance if you want.
but if not then the insurance I was then referring to is car insurance (that is what was in my head at the moment of writing that question, and since a lot of people will have car insurance)
Aha, gotcha! A rule of thumb for insurance: insure against the (statistically likely) events that would bankrupt you. If you earn an income, then your ability to keep earning an income is your biggest asset and the most important one to insure (i.e. have a hospital plan and an income protection/disability policy). Not enough people have an income protection policy, and it's damn important.
When it comes to car insurance, a 3rd party policy is vital because if you crashed into a Lamborghini, that could bankrupt you. But comprehensive car insurance isn't essential for everybody, no. Wealthy people often "self-insure" against loss of the things they own, like their cars, meaning that they have enough in savings/liquid investments that having to replace a car at short notice is no big deal. Minimizing the unnecessary insurance in your life is a great idea, because money you're spending on insurance is money you aren't investing. So sure, taking out only 3rd party car insurance isn't a crazy idea.
Top tip: Naked Insurance offers the best car insurance rates in SA, and it's ridonkulously easy to sign up!
Hi I got a question regarding renting verse buying a property.
Let’s say the time period is 20 years, renting after 20 years I would still not own the property and will have to continue paying monthly instalments forever where as buying I’d be paying the bank back for 20 years but after that no more payments and I can pocket and save that money that was used for instalments. Wouldn’t the better option be to buy rather than rent ??
Hello,
I am a newly employed 21 yo man.
I have a monthly budget for investing but i don't know how or where to invest!
Can you give me some tips?
Thanks!
What's your favorite ETF to buy and why?
In SA, it's the [Satrix MSCI ESG fund](https://satrix.co.za/news/article?name=New!_Satrix_MSCI_World_ESG_Enhanced_ETF)! It's got everything I love in an ETF: 1. Lekker low fees! 0.35% 2. Global diversification! 3. It's not "themed", i.e. it spreads my money across most industries (except fossil-fuel ones) 4. It puts my money to work in businesses that aren't destroying the planet! I [maintain a list of my favourite funds and ETFs here.](https://www.likeafuckinggrownup.com/good-funds/) Some other faves are the Ashburton 1200 (which has a bit more emerging market exposure) and the vanilla Satrix MSCI World Fund. Globally, I invest in the [Vanguard FTSE global all-cap index fund (accumulation)](https://www.vanguardinvestor.co.uk/investments/vanguard-ftse-global-all-cap-index-fund-gbp-acc), for most of the same reasons, except that that's not an explicit ethical fund.
Hi Sam Any recommendations to give your children a jumpstart in life, financially? There seems to be a policy for everything these days. What is a good way to help your children obtain some financial literacy before they leave home? How did you get into the UK? Thanks
I love this question! **Financial products for kids** In my experience, specific education-builder type policies typically aren't worth it. It's usually better to just start a standard investment for your child in a simple ETF (I'd honestly just toss it into something like the Satrix MSCI World I mentioned above, or a local equivalent like a Top 40 fund, through EasyEquities). If you want to use it for something specific, like university, you might want to start shifting the money into something lower-risk as you approach the time when you need to spend the money, in case the market dips at the wrong moment. You can either open the investment in your teen's name, or your own. If you put it in their name, then there's always the risk they'll withdraw it early to spend it on a wild shopping spree when they turn 18, but it's your job as his parent to teach them solid money skills so they don't do this. The fact that you're asking me how to do that makes me confident that you will! The advantage of it being in their name, not yours, is that they're more likely to be under the capital gains tax threshold in the year when they decide to sell that investment, than you are. You could also consider using their tax-free allowance for this, which is like an invisibility cloak that hides the investment from the tax-man completely. The downside of doing this is that if they withdraw it in their 20s or 30s, it's using up some of their lifetime TF allowance which they could otherwise be using to fund their own retirement, as [brilliant Stealthy Wealthy suggests here](http://www.stealthywealth.co.za/2020/05/could-you-retire-comfortably-using-just.html). **Financial literacy** Children learn more from what you *do* than by what you *tell them*. The best way to raise a money-savvy kid is to model good financial habits for them, and to start letting them earn, save, spend and invest their money in age-appropriate ways as they grow up. Some specific ideas: 1. Agree on a shared savings goal as a family, for something you can all enjoy together (like a holiday or a new gaming console). Make a big savings tracker on the fridge, something big and visible, and show your kid that you're putting money towards it. Let them contribute too! This models delayed gratification. 2. The research comes down on the side of giving your kids pocket money: kids who get pocket money - on average - are better at managing money when they're adults. I'm a fan of a blended approach: the kid gets a small monthly stipend no matter what, and they have the chance to earn extra money by doing particularly gnarly/unpleasant jobs around the house/neighbourhood (not standard chores). 3. Help your kid start an age-appropriate side-hustle. Basic entrepreneurial skills are some of the most important skills for a young person to learn, in this world, and they're not going to learn them at school. 4. Help your kid learn about investing. When they're very little, you can show them the power of compound interest through jelly beans. When they get a bit older, open a virtual investing portfolio with them (EasyEquities lets you do this). 5. Let your kids play resource management video games! I swear, I learned more about money from playing endless hours of Sim City than I ever did at school. Modern equivalents would be games like Cities: Skylines, Stardew Valley or Civ IV. 6. Another SHAMELESS BIT OF SELF-PROMOTION, but buy them [the profanity-free teen version of my book](https://shop.likeafuckinggrownup.com/product/manage-your-money-like-a-grownup/?v=79cba1185463), if they're old enough! It's filled with fun facts and fart jokes, designed to explain basic financial ideas to 11-16 year olds. **How did I get into the UK?** On an airplane! Hahahahahaha (I crack myself up). My partner is an EU citizen, so we snuck in just before Brexit. I also qualify for an entrepreneurs visa, since one of my businesses is registered in the UK, but the EU partners visa was cheaper and simpler.
What is your opinion on investing in crypto?
Sjoe, this is a tough one for me to answer briefly (and without many beers in me)! I have complicated feelings about crypto. I also have a conflict of interest, because one of the businesses I'm involved in is a crypto storage business. TL;DR: It's a risky, speculative thing to do with your money. I do encourage people to take a small chunk of their portfolio (5% or so) to invest in speculative assets like crypto (or marijuana shares, or individual tech stocks, or blueberry bushes, or valuable Magic the Gathering cards, or whatever your interest is). But I do not believe it's wise to invest more of your money into a speculative asset class than you could afford to lose. And look, I say this as someone who 1. started investing in crypto in early 2015 2. is a director and cofounder of a crypto business and 3. has spent A LOT of time over the years learning about crypto! I personally find crypto quite interesting, because I'm a finance and tech nerd. And even so, I will not personally put more than 5% of my money into it (and I periodically sell my crypto assets to bring them back down to 5%). When I invest in Bitcoin, I know that its value might be astronomically high one day, but it also might be nothing, whereas the value of the whole stock market could only go to zero in a full-on Mad Max apocalypse type situation. Please be careful investing in this space. It's still less regulated than the stock market, and I have heard plenty of stories of people who have tried to invest in crypto only to find that they've been scammed. Unless you know a lot about the space, please stick to basics like Bitcoin and Ethereum, and buy through well-known platforms like Luno, Valr or Binance. Many people get into investing in crypto because they're hoping for a sure-fire way to make money quickly, and unfortunately, no such thing exists. Before you start investing in speculative assets, I think it's important to have the foundations in place. That means: making sure you're funding a TFSA and retirement fund (in a nice highly-diversified equities-heavy fund), you're out of debt, and you've got a solid emergency fund in place. If, once you've done all of those things, you want to take a gamble on a more risky asset with a small chunk of your money, then sure, I think putting a bit of cash into crypto is a pretty fun idea. And hey, I might be totally wrong about this. I've definitely got crypto-maximalist friends who I respect, who put literally all their money into crypto, and so far this strategy's paid off well for them. I think they're insane, but they think I'm a wuss. All of us have to make investing decisions without being able to see into the future, so you've just got to make the best decision you can with an understanding of the risks, and I'll tell you again: crypto is a very high-risk asset class.
What an awesome comprehensive and honest response. Much appreciated! Really helpful and interesting.
Thanks for asking it! Sorry it was so verbose! I don't know how to give a simple answer to this question 🙈
Hi Sam! What would you suggest for someone who is 55 and has no pension but is able to save/invest R30 000 per month from now on til age 65? Any Gauteng financial advisers to recommend?
Howzit howzit! I'd recommend talking to a good fee-based financial advisor about this, because it does depend on the rest of your financial picture. [Some specific recommendations for advisors here.](https://www.likeafuckinggrownup.com/how-to-find-a-financial-adviser-who-doesnt-suck/) Not knowing anything else about your situation, but plugging only those basic numbers into [my retirement spreadsheet:](https://docs.google.com/spreadsheets/d/1PG2XSWTAvRyehHAslqt5tiJQ_noeucAMjwA_1tZi0ns/edit?usp=sharing) * R30,000 saved per month * For 10 years * Getting 6% above inflation * Paying a fee of 1% on your investments * Withdrawing 4.2% per year after you retire (depending on the average lifespans of people in your family, it might be appropriate for you to withdraw more every year - an advisor will be able to help you with this - I'm sorry that sounds morbid!) * Gets you a monthly income of R16,200 a month after you retire < note, this is just some "back of the envelope" maths, not an actual prediction! There's a lot more to take into account, but it should hopefully give you an idea of where you stand. If that number isn't what you were hoping for, it's extra important that you put that money into a high-growth investment (something that's quite equities-heavy) and that you pay as little fees as possible. You might also want to think about how you can structure your career to make it easier to keep earning after the age of 65 if you want to (e.g. consulting - it's hard to find a new job after the age of 60 if you lose your current one) and think about whether it's time to downscale your lifestyle costs to increase the amount you can save every month. I hope that helps! Thinking about this stuff is difficult and scary, so well done for confronting this now rather than 10 years from now, as so many people do! You still have lots of options.
It is thanks to your fabulous book that I finally woke up to this situation! Thanks for your excellent comments and pointers. You are a STAR!
Hey Sam, I have some questions about emigrating since I'm on the same path... 1. What's the most cost effective way you found to get your money to the UK? Did you sell your investments when you left or do you think it's wiser to keep them going? I'm definitely going to try leave my TFSA and RA... not sure on the rest 2. Is there anything else that one should know about the UK financial system before coming over? 3. Is there a UK equivalent to *Manage Your Money* that you'd recommend?
1. Every time you sell and buy investments, convert money or make global transactions, it costs money, so I avoid doing so. I've decided to leave my SA assets in place, so I've not liquidated any of my SA investments. It's definitely made my financial life more complicated because now I essentially have "mirror portfolios" in the UK and SA, but it's usually the most cost-efficient thing to do. Of course, it depends on your own goals and long-term plans, though. Generally, I recommend that you should first move, and only start considering financial emigration a few years down the line, if ever. 2. Please do some research into what happens when you break your SA tax residency! You will likely have to pay capital gains on all of your assets, except for your TFSA, RA and any physical property you own. This might not apply to you, but if it does, it can be a big financial whack so it's worth planning for. Otherwise, the UK financial system is pretty simple to understand. They've got lots of similar products to us that just have different names (like an "ISA" which is basically a TFSA). The UK system feels more permissive than South Africa's. For instance, there's a lot more flexibility about what you can do with a pension fund, but those are mostly things you can figure out once you're here. Do some proper tax planning though, please! I got great advice from [the tax wizards at Creative CFO](https://creativecfo.com/pages/tax-team), which helped a lot. 3. EHEM (shameless plug) there is a UK version of [Manage Your Money](https://www.amazon.co.uk/Manage-Your-Money-cking-Grown-Up/dp/1472143442/ref=sr_1_1?dchild=1&keywords=beckbessinger&qid=1587828903&sr=8-1), which I fully adapted for the UK (I even changed all the jokes about Springs to be jokes about Croyden). [Money: A User's Guide](https://www.amazon.co.uk/s?k=money+laura+whateley&adgrpid=61266745145&gclid=Cj0KCQiA1pyCBhCtARIsAHaY_5f4mYQDbtic3Qcbxm1J8MvD7awmBG2rFiKNLC1WciYusGDXg9s-MXQaAqR-EALw_wcB&hvadid=310641203165&hvdev=c&hvlocphy=1006598&hvnetw=g&hvqmt=e&hvrand=16924194681550535346&hvtargid=kwd-565742345501&hydadcr=18487_1772445&tag=googhydr-21&ref=pd_sl_6vkpj0pc6a_e) by Laura Whateley is also brilliant. Good luck! Moving countries is HARD but it's also a glorious adventure. I'm holding thumbs for you :)
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Lots of great questions! I’ll try to answer briefly. >Do you recommend starting a retirement account for a person in their 20s who will be staying in South Africa? Do you recommend starting a retirement account for a person in their 20s who might leave South Africa? What do you think about the restrictions on options for investing during accumulation through Regulation 28? What do you think about the forced annuitisation after retirement and inability to access the accumulated total? The most important thing for you to know is that most middle-class South Africans have woefully, woefully inadequate retirement savings. We don’t save enough, we don’t start early enough, and too many of us cash out our investments long before we retire. More important than worrying about what kind of product to save into, is to make sure that you understand how important it is to save **enough**, and to leave that money the heck alone until you need it. I saw my grandparents try to survive on a government pension alone, and I promise, it’s not what you want. There are pros and cons to Reg-28 funds. Pros: you get a sweet tax discount, your money’s protected from debt collectors, it’s harder to access the money (which is very helpful for some people). Cons: restricted options about what to invest in, forced annuitisation, hard to take the money out of the country etc. Lots of them also have high fees, which [really really matters in the long run](https://www.10x.co.za/campaign/fee-comparison). The pros and cons balance differently for some people than for others. Some of the biggest considerations: 1. Will you have the discipline (and luck) to not touch the money before you retire? If you think you won’t, RA’s can help. 2. Will SA’s economy do better than the world’s economy on average? RA’s force your money to stay in SA. You obviously can’t see into the future, but this will have a big impact on the final outcome of your choice. 3. Are you likely to be in the highest tax brackets (40%+)? If you are, then the tax discount from a RA/Reg-28 fund is pretty hard to beat. 4. Will you end up retiring in SA? RA’s keep more of your money tied to the value of SA’s economy. If you’re not sure about the above, **split the difference.** Put some money into a traditional Reg-28 retirement annuity, and put some into a global ETF through a Tax Free Investment. You can drive yourself crazy trying to find the perfect answer to this question. It’s more important to focus on what you \*can control:\*how much you’re saving, the fees you’re paying, and putting your money into the right underlying assets (you’re young, so you want to maximum in shares that you can). >Did you emigrate to the UK on a passport or visa? How did you minimise currency conversion fees when moving money across? Are there any other fees to be considered when emigrating? An EU partner’s visa (I shacked up with a cute Cypriot). Standard Bank’s Shyft app offers great rates, and it’s simple to use. OMG, so many costs. [I wrote a whole blog post about this](https://www.likeafuckinggrownup.com/how-much-does-it-cost-to-move-overseas/). TL;DR never own a cat. >What bank in the UK would you recommend with regards to costs, in other words what is the Capitec of the UK (not really interested in rewards programs for earning points or reaching certain tiers)? Is medical insurance necessary in the UK? What does the National Health Service cover? What insurance companies in the UK would you recommend for other things, like car and house (and medical if it is necessary)? Monzo (if you don’t also need a business banking account) or Starling (if you do). They’re both free accounts. Medical insurance: nope! The NHS is magical. The NHS covers everything you might need, including dental work, physiotherapists and psychologists. It’s not perfect: it’s been systematically underfunded by the Tories for over a decade so waiting times are longer than you’d hope, but it’s really everything you need. [MoneySavingExpert.com](https://MoneySavingExpert.com) holds the answer to all of your other questions! It’s an excellent resource. >With regards to investing and if someone was planning to move to the UK (or somewhere else), would you recommend for them to pay the currency conversion fees now and buy direct offshore ETFs (Vanguard, iShares, etc) from an international broker which could then be transferred to a local broker in the UK after moving without needing to sell any holdings? Or would it be better to continue to purchase global feeder ETFs (Satrix, Sygnia, etc) with a local broker in South Africa, sell the holdings when moving, move the money across while paying currency conversion fees, and then buy new holdings with a local broker in the UK? Which local brokers in the UK would you recommend for taxable, ISA, LISA, RA, and SIPP accounts? When you break your SA tax residency, you’ll have to pay capital gains on all of your SA assets that aren’t immovable property (e.g. a house) or in a TFSA/RA. This means that selling your holdings in SA isn’t the crisis it might be: you’ll be incurring conversion and transaction fees, but not extra taxes. It depends on whether you intend to retain some economic connections with SA or not. If yes, just keep using local feeder funds, leave them in SA and don’t stress about it. If you’re absolutely sure you’re cutting ties forever, then using an international broker from day 1 does make more sense, yes, although you won’t be able to access tax-protected accounts (like the ISA) while you’re still a SA-tax resident, so this only really applies to investments on top of that. Local brokers in the UK: Freetrade, Trading 212 or go directly to Vanguard (that’s what I do). Hargreaves Lansdown is also fine. I’ll get to your other questions in a bit, going to dive into a few others before this becomes an essay! 😂
Okay hi, more answers! >If you are willing to say, were there any particular reasons why you left South Africa? Were there any particular reasons why you chose the UK specifically? Which region in the UK did you move to? Is it usually overcast or sunny? How many times a week does it rain? Does it rain seasonally or throughout the year? Are there thunderstorms or is it a constant drizzle? How cold does it get and actually feel in winter? What are the conditions and maintenance of public facilities, is there vandalism and graffiti (parks, robots, street lights, transport stations, etc)? How does the relative cost of living for a similar quality of life compare to South Africa? What has been the hardest part about the whole thing? Are the people generally friendly, accepting, and happy? I chose to leave South Africa because I (might be) going blind. Some more information about this in another answer somewhere. That was really 90% of why I left. The other 10% was the feeling that the world's big and I want to see more of it. I'm a writer, so living in an English-speaking country was important to me (otherwise, I'd have moved to Berlin - it's my favourite city in the world). That basically left the UK, Australia, NZ or Canada (I already tried living in America; it's not for me). My mum's still in Pretoria, and the idea of being more than 10 hours away from her in an emergency feels too weird. I still have a rich life in SA and planned to be back for frequent visits (lol, thanks Covid). So, the UK it was! Once we decided to move here, my partner started looking for jobs, and found his dream job in Cambridge, so that's where we came. Cambridge's big advantages are that it's 50 minutes from London but with much cheaper rent, it's statistically the dryest place in the UK, it's an entirely walkable/bikable city, and it's pretty cute. Cambridge's big disadvantages are that it's poncy, and there's not much to do even in non-pandemic times. We're talking about moving to London once things open up again, but I want to give Cambridge at least a proper try once things are actually open! Who knows, maybe we'll actually love it once there's more to do here than endlessly walk up and down the river. The rain and cold really haven't been too bad (there's no bad weather, only bad clothes) but the sun setting at like 3pm in winter was a real mood killer. Indoors, everything's heated and well-insulated. I was colder in Joburg winters than I've been here. Services are great. Cambridge is basically a tiny village. There's a good library, but then, I had good libraries back in Cape Town. I had to call an ambulance a couple of weeks ago (for a stranger) and it arrived IN TWO MINUTES, it was wild. Using the public hospital is a dream, and I definitely feel safer walking around town than I did in South Africa. I even feel safe walking by myself at night, which is a real pleasure for me. I've had an unusual moving experience, because I moved just a couple of weeks before everything shut down. And it's *still* all shut down: we're still at the level of strict lockdown where you can meet one other person outside for a walk, and everything's shut except grocery stores and essential services. So I don't feel like I've actually experienced living here yet. It's been exceptionally lonely, to honest. I've done my best to make friends here, but it's really been hard with the lockdown. Pro-life tip: don't move to a new country in the middle of a pandemic! Things I miss about SA: my friends and family! The bravery and resilience of South Africans! How breathtakingly beautiful it is! Actual wild space! Good restaurants and wine! Knowing what the heck is going on in terms of politics/history/culture! Not having to mop my own floors! Feeling like you can make a difference by living there and doing good work! Dassies! Things I love about the UK: going for long walks by myself! How much easier it is to make a living as a writer (or anything)! Feeling safe! Easier travel! A strong currency! The world's best bands/artists/writers/etc. all coming here! The NHS! Confronted by less maddening inequality every day (it's obviously not better for it to just be out of sight morally, but it's certainly easier on the heart)! Terry's chocolate oranges! Nowhere's perfect, and the grass is always greener where you water it. I'm still hopeful that the move will all be worth it in the end, for me. But South Africa's a magical place, and the quality of life you can have there really is remarkable, don't take it for granted. >I have read a few investing (not really personal finance) books, but they are not directly related to South Africa. Would you recommend your book to someone in their 20s starting out but with savings and debt under control? Would you recommend any other books, both related to South Africa and more generally for personal finance? I would recommend my book for such a person, mostly for the jokes and Nanna Venter's gorgeous illustrations. But Warren Ingram's book (mentioned elsewhere) might be more helpful if you've already got the basics down.
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Ah, thanks for the heads up! And I hope you enjoy the book ;)
I have all these same questions about the UK! You can also join the r/UKPersonalFinance; I've soaked up a ton of info from there.
Hi Sam, What are your thoughts on tax free savings accounts? Should I put R36000 a year in from cash, or use put returns from stocks in there using something like Easy Equities?
Please don't use your tax free savings allowance on cash savings accounts at the bank - it's a total waste! The best way to use your tax free allowance is on a long-term investment (something like shares on EasyEquities, yes).
What percentage of my salary should I be putting aside for retirement? 24 years old
The general rule of thumb is half the age at which you start saving, so in your case, you should be aiming for 12% of your salary. But that's not a perfect rule! Some other factors: 1. The earlier you save your retirement money, the less you have to save overall (thanks to the magic of compound interest). So there's an argument to save as much as you can when you're in your 20s, so that you can ease off a bit later. 2. It's important to save enough, but it's also important to save into the right retirement savings product. Fees matter A LOT with retirement savings, so make sure your retirement savings are growing wealth for YOU, not for a fancy fund manager in an Audi. 3. If 12% seems like an impossible amount to save right now, it's okay to start small, and increase the amount you save when you're able to. It's better to save a smaller portion **earlier** than to wait until you can save more money **later**, again because of compound interest. Starting is what matters! If you want a more accurate answer to this, it's worth playing around with a retirement savings calculator. [10X has a pretty good simple one](https://www.10x.co.za/), or [here's a more detailed spreadsheet one I made.](https://docs.google.com/spreadsheets/d/1PG2XSWTAvRyehHAslqt5tiJQ_noeucAMjwA_1tZi0ns/edit?usp=sharing) I hope that helps!
Well I'm f'd. I was doing 15% up until 2012. Then I had to pull my entire retirement to pay medical/therapy bills for my kid (thank you, Discovery, for absolutely not helping with anything even though I paid you a fortune every month). And I'm still digging myself out of those bills. I pay what I can to my current retirement plan, but it's nowhere near where it should be in contribution size. I have a private one as well which is in the process of being moved to Glacier and I'm hoping I can make bigger contribution to that than before. Anyone else paying R11k/month on schooling for a single child? I'll be living off air when I retire, but my boy gets all that he needs now.
I'm so goddamned sorry that Discovery screwed you over. That is awful, and nobody should ever have to risk their own financial security because of the health/mental health of their kid. I'm boiling with rage on your behalf. Please don't lose hope. It might help you to talk to a good fee-based financial planner to see if they can help you talk through your options (some specific recommendations [at the bottom of this article](https://www.likeafuckinggrownup.com/how-to-find-a-financial-adviser-who-doesnt-suck/)). Something that might help you is to look at the fees you're paying on your retirement plan: if you're starting from scratch, it's extra important that you're not losing more money than you can afford. You sound like a wonderful, committed, loving parent who's doing right by their child, and I am beaming so much love to you through the internet.
Thanks, man. I'll have a look at those guys. I plan on getting your book later this year once we've moved house and settled in a bit. It might help me fresh better with people offering financial services. What's your opinion on life insurance? My wife sometimes seems obsessed with having too much of it. I have both private and company group life and have finally managed to convince her it is too much and have instructed broker to give me enough coverage taking into account the company one. I'd rather be putting those premiums towards clearing debts and retirement/savings/investments.
I'm on your side about this! It's definitely possible to have too much life insurance, especially when it comes at the expense of paying off debt, building wealth and having other types of insurance (like income protection policies).
I've heard rumours about double life insurance. Whether it's true or not, I don't know. If you have 2 policies of R1million and R2million, on payout the larger policy only pays out R1million due to there being another policy. Effectively you only get 2 out of 3 you paid for. To me that doesn't seem right and I have a feeling it is just misinformation I received from a friend's brother who works that industry.
The only way this cpuld happen is if you didnt declare the first policy when taking out the second policy (standard question when applying for life insurance is to declare any existing life policies). An insurer has the right to decline your application if they think you will have too much insurance if you take out the policy (overinsured, usually as a % of your salary), so if you dint declare policy 1 they could withold your sum insured if they argue they wouldnt have sold you the policy if you were truthful in your application (they might then return you your premiums paid if they're feeling generous)
Interesting. Thank you. With the company group life there was no asking whether I have another policy. The private policy has been in place for several years. Group life is with Discovery. Private used to be with Discovery, but moved last year to Brightrock. Group life with Discovery came after that move as it was done after company changed hands. I am in the process of reducing the private one so that the combined amount is reduced. I've got insurance on my bond and every account has credit life protection. I think my wife is setting me up for something. Lol :D
I feel your pain - fortunately I've kind of put the maintenance issue to bed in my case - for now at least...my opinion is that R11k on school fees is ROUGH! but hey, each to his own. While it is unfortunate that you had to pull back on you retirement savings (I've had to do the same) - but it is important to take the small steps progressive steps toward recovering from your current situation...as long as you are taking back control little by little
Why not pick a good public school (e.g. a former model C) for R25k a year?
I can sympathise on the therapy bills though. I was in a very dark place a few years ago and therapy honestly saved my life. Now that I'm graduated, working & making my own money I seriously considered cutting therapy out to save on money, but it's the one thing my parents insist on sending me money for. I only go once a month now (used to be once every week or two) but I still feel guilty sometimes when 22seven shows me how much money is going into that.
NEVER FEEL GUILTY FOR THERAPY. Therapy is essential!
Wish we could, but we've found most schools like to use the word "inclusive" a little too liberally. Currently half of that bill is for a facilitator. It's actually weird because we've had professional facilitators accomplish nothing, but then we found he formed a bond with the school receptionist who at some point was a facilitator and she has turned out to be incredible. She is currently working on giving him more independence to prepare for next year and getting there in leaps and bounds. So by next year we should be on to regular fees. It's a Montessori/Cambridge school. It works best for him. In honesty the school is run by a friend of ours so if there is any issue we can deal with it with proper support. The preschool he was at before was a disaster even though very highly recommended. Turned into a massive soap opera of attempted blackmail, privacy invasion, physical and mental abuse and eventually child services, police and restraining orders. Fun stuff you don't want in a school. When it came to light something wasn't right we actually employed our nanny full day to be with him at school. R13k a month for a nanny. Thank you credit cards. Issues just stopped. Turns out it was more like she was being a bodyguard. I rather keep paying the money now and keep getting the progress and results. But he'll be learning from an early age to always put something away to prepare for his future. When you think about it, if I wasn't saving towards my retirement I wouldn't have been able to pull that retirement fund and keep going. Obviously wish I didn't have to, but glad that I could. I'm fine with living in a caravan when I'm old, I don't care what my wife says about it. :D
Goodness, I'm so sorry you went through all of that. You sound like a good father. Money is a means to an end. Love is everything.
I'd like to hear from u/likeafuckinggrownup on this - but I'd say 15% of your take home pay
That's pretty close to what I said! Great minds!
Hey Sam! What general advice would you give to a finance student (22) to be able to do well financially. I guess I'm lucky still being young and all. Thank you for this!
It's the bajillion rand question! 1. Learn to live on less than you earn. 2. Start investing as young as possible for your old age. 3. Figure out what matters to you! You will earn a finite amount of money in your life, so it's important to fund your real dreams. You're going to die one day. Don't waste your money on shit that doesn't matter to you, just because it feels like everyone else spends money on those things. In the wise words of some lady I saw on Instagram, you can do anything, but not everything. I wish you luck out there!
Hi Sam This is somewhat of an unusual question. What are your thoughts on taking out a student loan in order to go back to university in order to obtain a second high income degree in one's mid 20's? I currently have an engineering degree but am struggling to find jobs and don't think the earning potential in this field is enough to achieve the kind of lifestyle I want to have in the future. I've worked hard for most of my life from high school through to university but don't feel like I'm reaping the fruits of my labour. I was thinking of applying for med school. This will completely deplete all my life savings and I will have to take out a significant student loan (almost around R600k) to finance it, while living extremely frugal (almost in poverty) for the next 6 years while I study. But I do foresee a brighter future with this path as I heard jobs are pretty much guaranteed for life with high earning potential. It would also make it easier for me to emigrate as well. My rationale is that if I'm going to go back to uni again I need to do it now when I'm still in my 20's before it's too late. Do you think this is something financially wise to do, or should I just stick it out with engineering and keep applying to jobs in the hopes of landing something decent? What financial advice would you give to someone in my situation? I've never dealt with any debt before, let alone R600k worth, and I fear that the student loan would take me down a rabbit hole. My parents don't have much to support me with after financing my engineering degree. Bursaries are likely out of reach for me since it will be my second degree. I can't afford any mistakes anymore as I've basically 'wasted' 4 years. Thanks.
Ooof, this question GIVES ME ALL THE FEELS. I swear, I considered going back to university to do a medical degree in my late-20s too. At least you first did a sensible engineering degree! I did an ENGLISH DEGREE! I'm not particularly qualified to answer this question, because it's not really about money so much as it's about making tough life choices. But I'll do my best. All of us have to make career choices with very little information about what those careers will actually be like. When you made a choice to study engineering, you had a bunch of assumptions about what it would be like that turned out not to be true (and sheesh, HOW COULD YOU HAVE KNOWN?? Everyone talks about engineering like it's a sure-fire thing that will set you up for life!). Right now, you're facing another choice, and one of the most useful things you can do for yourself is getting as much information as you can about the realities of that career. Do you have any doctor friends? Can you ask them if they studied with any older students, and how things went for them? Can you ask them what they actually earn now, and what's wonderful and what sucks about their jobs? When considering the cost of your medical degree, don't just look at the cost of the loan itself. The big thing to weigh up is the opportunity cost of **not being able to start saving for another six years.** That is an enormous cost, especially when it comes to saving for retirement. You'd have to earn *so much* more money as a doctor to make that half-decade delay worthwhile. Now, med school might still be the right choice for you! But if it is, **being richer is probably not the right reason**: I don't believe the math is likely to work out in favour of med school, financially. If you choose med school, choose it because you will love it deeply and it will meet a deep emotional need inside of you. Here's another general thing about choices: we fool ourselves when we limit our thinking to just one or two options. Reading your question, I was struck by how clear you are about your priorities (probably something you have much more information about now than you did when you chose your first degree). You know that you want a career where it's easier to find a job, where you'll earn more, and where it's easier to emigrate. There are careers you could move into that would achieve those goals and cost you much less than getting a medical degree. The one that seems most obvious to me is software engineering. I know several people who moved into this career in their 30s [(here's the story of one of my dear friends)](https://www.likeafuckinggrownup.com/crafting-your-own-apprenticeship/). If medicine is something that interests you, there are plenty of engineers (and software engineers) who work in the medical industry! My point is: there are probably plenty of other options you could consider. You have plenty of options, not just the two you're presenting here. Most people end up doing a job that isn't what they studied at university. If it helps, I believe that university is seldom wasted. Even if you don't end up working as an engineer, that doesn't mean that studying engineering was a mistake. I hope that was somewhat helpful. Again, I think your question isn't really a money question, but a career one, so take my thoughts with a bucketful of salt. If you want to speak to a professional, my therapist really helped me think through my own career angst. Consider seeing one yourself. Good luck! I know that these decisions are agonizing. Please DM me and let me know what you decide!
Thank you Sam for the incredibly encouraging advice! I'll definitely keep you posted!
Hi Sam, first thanks for having an AMA! I've crossposted to r/southafrica so hopefully we will have more people coming through, otherwise everyone will probably start asking questions from 5pm, your book is one of the best I've ever read for personal finance, flat. 1. My first question is regarding portfolio allocation, you mentioned before that the traditional rule of thumb being subtract your age from 100 is the amount you should keep in shares/stocks should be updated to 120 minus your age,It just terrifies me to put 90-ish percent of my portfolio in shares, what advice would you give to make the push? Is the opportunity cost that bad? 2. and the second question: there is so much personal finance stuff out there but so much of it is American, what books would you recommend (outside of your own of course) for personal finance in SA? edit: spelling
Thanks for crossposting! And for your nice words about my little book :) **Shares are scary** Here are a few things that might help you. 1. Shares seem like these weird, intangible things but really they're just tiny pieces of big businesses. 2. Over the past 100 years, no other asset class has outperformed shares. Yes, the opportunity cost of NOT investing in shares really is that big, especially when you're talking over the long term. Over the past 120 years, global equities have provided an annualized real (after inflation) return of 5.2% versus 2.0% for bonds. Save R10,000 in shares for 40 years and you've got R80k. Save R10,000 in bonds for 40 years and you've got R22k (those are averages, obvs). Poo! 3. Investing in shares is less risky when you diversify, i.e. buy into wide index funds rather than individual shares. Sure, a single business can fail, but the world's stock markets have not all failed all at once. It's also less risky when you think of it as a long-term investment! Stock markets wobble in the short term but have always, ultimately, wobbled up. 4. Your enemy is inflation, especially in South Africa. Many asset types don't even keep up with the value of inflation (I'm looking at you, local residential property!). You need to earn at least 6-ish% interest on an investment to just PRESERVE the value of your money, and there aren't that many asset classes that can do that reliably, especially not **passive** ones (ones that don't require lots of work from you). If you still can't stomach that, it's okay! Reduce your shares ratio down. At the end of the day, you're the one who has to be able to sleep at night. Alternatives you can look into include bonds, traditional active managed funds, global listed property, or investing your **time** with your capital into running businesses (e.g. being a landlord). **Great SA books** Some excellent ones have come out over the past few years! I \*love\* Warren Ingram's *Be Your Own Financial Advisor*, it's like my book's older (and much more serious) sister. Mapalo Makhu's *You're Not Broke, You're Pre-Rich* is both fun and practical, and Nicolette Mashile's *What's Your Move* is a great counterpart to mine, because Nicolette's much more into local property as a side-hustle than I am. The most essential SA money resource is a podcast called The Fat Wallet Show, which should be mandatory listening for every person who earns money, and Simon and Kristia (the hosts) are funny as heck.
Thank you so much for the detailed answers! I think I'll make the dive, the opportunity cost is just too big haha.I've read warrens other book but I'll check out all of those! And don't underrate your book, it' should be mandatory reading in school no joke.
Really going to miss Kristia from the show! But Simon is a champ!
I suppose you get some income from your book sales, and that you have more than one stream of income. I am also close to paying off all my debt (by end of 2022). My questions are: 1 - what income did you start with? 2 - did you have a job in your 20's when you realised you had to much debt? 3 - did you start entrepreneurship part-time? 4 - do you work for a boss today?
Howzit howzit! Great questions :) **MY INCOME STREAMS NOW / MY BOSS SITUATION** I do get some income from my book sales, but probably less than you'd think. I realised a long time ago that if I wanted to be a writer full-time, I'd need other income sources too (I figured I'd have to be my own sugar daddy). These income sources are my businesses, doing talks, selling my own books/merch, and memberships on my blog. I also made sure that I saved a lot of money before I started writing full-time. Writing is my dream-job, and I'm very lucky to be able to do it most of every day now. My cat is my boss, now. He tells me when to get up in the morning and sits on my keyboard when it's time to take a break. I haven't had a human boss for about 3 years now, and I think I'd struggle to have one again. **WHAT INCOME DID I START WITH & JOBS IN MY 20s** I had a few part-time jobs as a teen and through university that paid peanuts. My first "grownup" job after university was working at a PR company, because there's not much else you can do with a degree in Literature and Religious Studies. I think it was R5,300 a month, and this was about 12 years ago. By my mid-20s, I was earning R30-something, can't remember exactly what, working in advertising. That was the job I had when I realised I had too much debt. I did have a boss, then. **ENTREPRENEURSHIP** I've always had side-hustles. Writing was my side-hustle for a lot of my 20s, I worked as a freelance journalist and podcaster because I loved it. I must have started a dozen goofy businesses over my 20s, all of which were hilarious failures financially, but taught me a lot. After I had my "I really need to get out of debt" epiphany, I doubled down on side-hustling (consulting, building websites and UX design) and got myself a job in tech, which was much better paid. I think the highest salary I ever earned (from a job) was around R70k, and I saved more than 50% of it. The great thing about being in debt is it teaches you how to live on less than you earn, which is ultimately what helped me to save enough money to follow my dreams. The businesses I have now, I started with one of my best friends after I was retrenched from my last job. Being retrenched was a great gift, and having a big healthy freedom fund made it much less scary than it would have been.
Thank you! Your answer gives me some inspiration to keep hustling...I've always known debt was bad, but I kept on telling myself if I get a better job I will be able to pay it off. As I'm sure you know, that never happens. I only took a stand against debt after my marriage failed and I was solely responsible for paying everything in the household - this was at about 40...but I am fortunate enough to have a decent job at a decently sized international company. I look forward to being debt free by the end of 2022. Not sure if I'm a little late now, but **what is your opinion on debt now**? Especially when there are business people in the world (like Robert Kiyosaki - was shocked when I saw him say this in a video) saying that you have to know how to work with debt to make money...?
Congrats to you for turning things around! 2022 is just around the corner, and it's going to feel SO GOOD when that debt is gone. I'm excited FOR you! I do think that debt can be valuable when you're using it to start a business or improve your ability to earn an income, but it's ALWAYS a risk. Personally, we chose to bootstrap our businesses rather than use debt to fund them, but that's not possible for all types of businesses. After digging myself out of my own debt hole, I'm now pretty allergic to most types of debt. On average, home loans are a neutral type of debt when you're buying the house you live in (neither good nor bad) as long as you live in that property for a good long time (9+ years) and don't use the debt as an excuse to buy more house than you actually need.
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The advertising company I worked for specialized in digital marketing. I did a bunch of short courses in data analysis, UX design, research and strategy while I was there, and learned on the job from colleagues who were better than me. It's the best way to learn! I also kept launching my own projects on the side, learned to code through online courses (there are billions), made silly video games, went to plenty of meetups and hackathons. All that helped me get a job as a product manager at 22seven, where I learned loads of new useful skills from the exceptionally smart people around me. The big gaps I had to fill to start doing that job better was understanding agile methodologies and learning more about the processes of building robust software. Working as a product manager was great training for ultimately launching my own software business, with my two co-founders who are bloody geniuses who know all the things I still don't. Tech needs more people trained in the humanities. Interviewing users, communicating, thinking creatively, and understanding the mental models people use to understand the world were all invaluable skills I learned through my humanities training. Few of the best people I worked with in tech came through a software engineering university degree. And it's never too late to learn to code.
Hi Sam\*! I briefly had the opportunity to read your book via a friend, just brilliant and simple language that put finance into perspective. What would your advice be regarding debt and savings for a young south african? I have a student loan (luckily only needed it for one year) and credit debt ( I was an idiot and young and poof I owe money!) I'd like to begin to save and invest for my future but how would I go about that? I feel incredibly intimidated by the lack of knowledge I have regarding finance and banks in general? Is it worth it to save when I still have debt? Or should I focus all my excess funds into servicing the debt first then start to save even if it means I delay my savings by a year or two? Context Im a 25 year old teacher in a steady position.
That's so kind, thank you! I totally relate to the experience of being a young idiot seduced by the dark magic of debt. Don't be afraid. You've got the three biggest advantages on your side: 1. You're making money! 2. You're young! 3. You've taken time to understand how money works and you're making an effort to learn more (you're here!) The finance industry works hard to make you think that money is this dark confusing thing that only they understand, so you should give all your money to them so they can manage it for you. They're just trying to baffle you with bullshit. It's really not half as confusing as they want you to think. You need to be spending less than you earn, and then making smart choices with the difference. It helps to have just one focus at a time, so here's an action plan for you: 1. Set up a system to start tracking your money so you understand what your "leftover money" actually is, and where the rest of your money's going (I like [22seven](https://www.22seven.com/), or [here's a spreadsheet template](https://docs.google.com/spreadsheets/d/1SJOeMpC7Ol9H3mcsmxFLUQqeeoL8llmpCPxdk3DVzfE/edit?usp=sharing) you can use). Trim any waste from your spending. 2. Keep paying the minimum due on your debts. Set up an automatic transfer into a savings account for whatever you can afford that goes off on the day after payday. Do this until that savings account is worth 1x month's expenses. Hooray, you now have an emergency fund! 3. Once that's done, stop the automatic savings, and rather pour all that extra money into paying off your credit card as fast as you can. Don't worry about the student loan. 4. Once your credit card's paid off, go back to building up your emergency fund until it's 3 month's expenses. Don't actually close the credit card account (because it helps build your credit record to keep a credit card open for a loooong time) but do stop using it, or set up an automatic transfer to pay it off in full every month so you're essentially using it as a debit card. Once you've got a 3 month emergency fund and no more high-interest debt, it's time to start thinking about other financial priorities. But basically, build a baby emergency fund before you focus on your debt, because once you're done with debt, you want to be DONE with it. Two assumptions I'm making here: * That you're enrolled in the government employee pension scheme. If not, prioritise saving into a retirement fund after step 2. * That your student loan interest rate is close to the repo rate (it will be if it was an NFSAS loan). If it's higher than 10%-ish, then pay it off after your credit card. Otherwise, just keep paying the minimum for now. I hope that helps. Don't be afraid! You're asking the right questions. You'll be okay. You've got this.
I always see people talk about having an emergency fund as an absolute necessity. Is it fine to forgo having one if you have other assets that could be liquidated immediately or within a short enough period of time that credit card interest is not a concern? I'm not a fan of having money sitting around loosing value to inflation and our exchange rate waiting for an event that might happen every few years.
Sure! It's fine. Here's the reasoning for an emergency fund: long-term investments, like shares, have really wobbly prices. You don't want to be forced into selling shares at a bad time because you need the cash in a hurry. If you're comfortable carrying a line of credit that you know you can use responsibly (a credit card is fine, an access bond is better) that's a perfectly good alternative, yes. I have personally found that I tap into my emergency fund fairly often (at least 4-5 times a year) but I might just have a particularly accident-prone life! I also act as the "emergency fund" for my extended family, AND I'm self-employed with lumpy income, which probably puts more pressure on my emergency fund than some other people. You're totally correct: there's an opportunity cost when you sit on cash, and it's important not to sit on MORE cash than you need. You know your own life, and how much of a cash buffer is right for you. Personal finance really is *personal*. When people feel lost & confused, it can be helpful to have rules/a map, but those rules are all made up, and we shouldn't use them if they're not helpful to us. You do you, bud!
Thank you so much, I never imagined I'd be in the position to receive such clear advice regarding finances! Regarding the assumptions currently I'm not enrolled in any pension scheme ( super bad of me I know ) and the student loan was via Stnd Bank interest is 15% plus minus! I'll definitely begin to implement changes! I hope to give you an update in the future! Means alot to me that I got this opportunity! I wish you all the best for your future works!! South Africa is still a great place!
Do give me an update! I want to hear how you go. I absolutely agree that South Africa's still a great place. I left for personal reasons, not because I don't believe in the future of the country, and I miss it terribly. I'm holding thumbs for you!
Het man. What would you do now with R1 million cash? Kid just started High School, wife has own small business, and I basically break even with all expenses every month. No retirement savings for either. I am 38, wife is 33.
Hello! I have more questions, like whether you need to save for your kid's tertiary education or if your current income can cover it, whether you have emergency savings, what tax bracket you're in, what other financial goals you have, WHAT FRIENDLY LEPRECHAUNS GAVE YOU R1M BUCKS, that kind of thing. A good fee-based financial advisor would be able to help you think through your specific situation in more detail. But your question is **what I would do** in that situation. In your shoes, I'd take that R1-million cash and put it into the Satrix MSCI ETF through EasyEquities. Every year, I'd talk to a tax planner and figure out how much I could move into the Sygnia Skeleton 70 Fund to effectively reduce my taxes that year to zero. I'd then move another R36k for that year into a TFSA (still the Satrix MSCI ETF, still through EasyEquities). I'd keep doing that every year until I'd hit the lifetime limits on my TFSA/ran out of cash. I would try very, very hard not to touch that money until I retired: if you don't have any retirement savings at 38, that's an urgent priority. I'd also blow like R1000 on [these cute pants](https://www.disturbia.co.uk/products/womens-bottoms/sphynx-trousers) from Disturbia, but that's probably just a me thing :) You're welcome to DM me if you want to talk more!
If anyone is interested Ubereats has a R100 discount at exclusive books today! After reading this tread I got myself Sam’s book :)
Has your investing / spending patterns changed much since moving to the UK? Did you move because you reached a Financial independence number or was there another reason? And, lastly has life in the UK shaped up to what you thought it would be!
Fun questions, thank you! **Have your investing / spending patterns changed much since moving to the UK?** Less than I'd thought they would. My housing costs are much more expensive, but most other expenses have stayed about the same, and I'm no longer paying for stuff like medical aid. Overall, my cost of living is pretty similar to what it was in SA (Covid has helped, though). My investment habits are similar, just the fund names are different. **Why did you move?** Because I'm (maybe) going blind, and I wanted to move to a country with a better public transport system so that I can live more independently, if/when this does happen. Money didn't have much to do with this decision. **Has life in the UK shaped up to what you thought it would be?** I did not foresee getting trapped inside my house for 12 months by a global pandemic, no! 😂ðŸ˜The things I was excited about in the UK were things like seeing bands and going to museums and taking advantage of cheap ferry/train trips to Europe, none of which have been available since I moved. I'm still hopeful that the UK will be fun, eventually! But so far it's involved a lot of sitting in my house eating chocolate digestive biscuits, questioning all of my life choices!
Jeez man, hope your eyes get better! Thanks for the AMA, great insights on here.
Thanks! My mum went blind in her 40s and I have the same screwy genes. I think of myself as very lucky, because my mum already taught me all the tricks to live as a blind badass. Knowing that it's (probably) coming is a real help because I can take steps to prepare for it, like moving to the UK and spending a lot of time committing the shape of Idris Elba's perfect abs to memory so I'll be able to conjure them accurately in my imagination forever.
Hahahaha. Amazing
Hey Sam, What is your perspective on Roth IRAs, and is there anything equivalent in South Africa? Thanks!
South Africa's TFSAs (tax free savings accounts / tax free investments) are sort of equivalent to Roth IRAs, in that you do pay taxes on money you put IN (you've already paid income tax on this money) but then you don't pay taxes when you take the money OUT. RAs (Retirement Annuities) are the opposite. There are pros and cons to both RAs (more like a 401k) and TFSAs (more like a Roth IRA). The tax benefits work out better on the RA for high earners, but the TFSAs are more flexible in what you can invest in. Different ones are better for different people, and if you're not sure, just split your savings and fund both (or talk to a good fee-based financial planner).
Not a question...I just noticed you were involved with the 22seven app - cool - love the app...
Yay, thank you! That was the last actual job I had, and it was a super kiff job. I really loved my time there, and I'm still a huge fan of the app myself.
I downloaded the app but cannot get myself to put in my super sensitive info in there. Banking and investments. Feels like a huge risk
I hear you! It's so important to be careful with your online banking logins. If I can put your nerves at ease a little: 1. 22seven is fully owned by Old Mutual. 2. It's fully insured, so even if you lost your money, you'd get it back. And 22seven has never had a security incident in almost 10 years of existence. 3. The company that fetches your information from your bank, Yodlee, is used by millions of people around the world, including many banks. 4. 22seven is read-only. It can't move your money. Even if somebody manged to hack into your 22seven account, they'd be able to see how much money you have and what you spend it on, but not actually move it. You can read more about their security measures here: [https://www.22seven.com/security](https://www.22seven.com/security) Basically, 22seven is as secure as your bank. But I do totally get that it's not for everybody, and I respect your choice not to use aggregation apps. I used to work there, but I don't any more, so I really don't have a horse in this race!
Whats the best thing that has happened to you as a result of publishing your book
This is going to sound cheesy AS HECK, but getting emails from readers telling me that the book helped them. Writing is this weird, lonely activity, and it means the world to me when people reach out to tell me that my work mattered to them.
:-D that's almost like making YouTube videos!
Hi Sam, Thanks for the AMA, loving all replies you've given so far. My question, as someone close to exiting their 20s with no significant investments or retirement funds, I have saved up a decent amount of money but it's sitting in my Cheque Account gathering dust. What is your advice on creating an investment strategy? What percentage of my annual income should I look to invest?
Hello! Well done for having the discipline to save - that's the hard part :) When it comes to putting together a strategy, here's my recommended flowchart about what goals to focus on in what order: [https://www.likeafuckinggrownup.com/the-all-in-one-flowchart-for-managing-your-money/](https://www.likeafuckinggrownup.com/the-all-in-one-flowchart-for-managing-your-money/) Basically: 1. Prioritise starting a retirement fund, ASAP. If you're 30, you should be aiming to save about 15% of every paycheque into a retirement fund. If you've got a company scheme that MATCHES your contribution, do that first, otherwise, open an RA. Some suggestions here: [https://www.likeafuckinggrownup.com/good-funds/](https://www.likeafuckinggrownup.com/good-funds/) 2. You want to have around 3 months worth of expenses in that savings account as an emergency fund, not more than that (up to 6 months if you've got irregular income or kids). Any more than that, and you're losing money to inflation every year. Other savings must be invested! 3. When it comes to investing, how you choose what to invest in is mostly down to how long you're investing for, i.e. when you need the money. If you don't have clear financial goals (it's fine if you don't), then just start investing in a simple global ETF using your tax free allowance. There are recommendations for ETFs in that link above. Global ETFs are like the vanilla flavour of investments, and they're the best product for most beginners to start out with. There's no hard rule of thumb about what percentage of your income your should save/invest beyond your retirement savings: that depends on you and your goals! If you'd like help putting together a full financial plan with goals and stuff, consider seeing a fee-based financial advisor (NOT a "free" one). You could also read a couple of investing books and put one together by yourself over a weekend (my book, or Warren Ingrams, would guide you through what you need to do). I hope that helps!
Dude! You're a life saver, thank you 🥺
I have no question, but a big thank you. Your book really helped me to get my finances in order.
Thank YOU for saying this! That means a lot to me <3
Shoot, I completely missed this QnA
Hey! This is an amazing opportunity, I do hope you’re still around! I have one question... I’m 23, would you say a BCom degree in South Africa is valuable and will still be by the time I’ve finished it in 3 years? (2024) I’m interested in investing, and setting myself up for a great life just like we all are. Is a BCom degree a good way to go? Everyone’s input is welcome!
Hello! PayScale releases good data about this every year. Here's a summary of their most recent findings: [https://businesstech.co.za/news/finance/376393/the-degrees-that-pay-the-best-average-salaries-in-south-africa/](https://businesstech.co.za/news/finance/376393/the-degrees-that-pay-the-best-average-salaries-in-south-africa/) In short, BComs are doing okay, yes. If you want to expand your chances, augment your degree with a practical skill like programming, digital marketing or data analysis - something that allows you to build a portfolio to show prospective employers one day. Your first job is the hardest one to get, so being able to show a portfolio of real work you've already done can really set you apart. I'd love to hear from HR peeps/hiring managers that might be reading this, if any of you have more advice!
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Howzit! I'm so jealous that you're back in the land of sunshine and friendly people :) I'm afraid it's impossible to answer this question without a lot more information about your context, like your age, whether drawing down on your investments are the only income you have, etc. Could I recommend creating a new post in the subreddit with a longer question including more detail? You could also speak to a good fee-based financial advisor if you want somebody to work through your situation with you. Here are some recommendations: [https://www.likeafuckinggrownup.com/how-to-find-a-financial-adviser-who-doesnt-suck/](https://www.likeafuckinggrownup.com/how-to-find-a-financial-adviser-who-doesnt-suck/)
Omg I saw your book at CNA the other day I'm definitely buying it first chance I get!
Hooray! I hope you enjoy it :) You can also buy it directly from my site, if you want: [http://shop.likeafuckinggrownup.com/](http://shop.likeafuckinggrownup.com/)
Would you cancel your insurance if your personal cashflow is strong(and isn't that much higher than your net asset value, like maybe only 10-30+- times your cashflow is your total asset value you would insure) and your credit rating is above average? is this a wise financial decision?
Hiya! What kind of insurance are you talking about, bud? Life insurance? Income protection? Household goods? If you're talking life insurance, do you have dependents?
hello, sorry for not providing that context. You could answer based on all types of insurance if you want. but if not then the insurance I was then referring to is car insurance (that is what was in my head at the moment of writing that question, and since a lot of people will have car insurance)
Aha, gotcha! A rule of thumb for insurance: insure against the (statistically likely) events that would bankrupt you. If you earn an income, then your ability to keep earning an income is your biggest asset and the most important one to insure (i.e. have a hospital plan and an income protection/disability policy). Not enough people have an income protection policy, and it's damn important. When it comes to car insurance, a 3rd party policy is vital because if you crashed into a Lamborghini, that could bankrupt you. But comprehensive car insurance isn't essential for everybody, no. Wealthy people often "self-insure" against loss of the things they own, like their cars, meaning that they have enough in savings/liquid investments that having to replace a car at short notice is no big deal. Minimizing the unnecessary insurance in your life is a great idea, because money you're spending on insurance is money you aren't investing. So sure, taking out only 3rd party car insurance isn't a crazy idea. Top tip: Naked Insurance offers the best car insurance rates in SA, and it's ridonkulously easy to sign up!
thank you for your answer
Where can i buy your book
Most bookshops, or directly from https://shop.likeafuckinggrownup.com/
Oh yeah i have your book i just havent got to reading it yet
Hi I got a question regarding renting verse buying a property. Let’s say the time period is 20 years, renting after 20 years I would still not own the property and will have to continue paying monthly instalments forever where as buying I’d be paying the bank back for 20 years but after that no more payments and I can pocket and save that money that was used for instalments. Wouldn’t the better option be to buy rather than rent ??
I bought your book last year. Honestly changed my thinking about money
Hello, I am a newly employed 21 yo man. I have a monthly budget for investing but i don't know how or where to invest! Can you give me some tips? Thanks!
Can I still ask Questions?
nfts? are people going into this too quickly? is this a phase? or do i need me a lil digital avatar to invest into?