A regular listener of The Money Show called in with the following question:
"My 60-year-old mother recently sold a property for R1.2 million.
She is deregistered for tax and doesn’t owe the bank any money.
She recently bought a Land Rover for which she still owes about R700 000.
She wants to add the money to her retirement savings, but doesn’t know where to put it in order to get the best growth.
Should she pay off the Land Rover or invest it and, if so, where is best place considering her age and the tax implications?"
Scroll down for quotes from the audio below in which Galileo Capital Financial Advisor Warren Ingram gives an answer. He also answered a number of other calls you may be interested in.
What is a 60-year-old doing buying a R700 000 vehicle on debt? That’s terrible! Really not a good idea.— Warren Ingram, Galileo Capital Financial Advisor
It’s worth putting R30 000 every year into a Tax Free Savings Account with an allocation in listed property.— Warren Ingram, Galileo Capital Financial Advisor
I would more likely look at unit trusts rather than exchange traded funds.— Warren Ingram, Galileo Capital Financial Advisor
What’s the interest rate on the car? If it’s around 9% or 10% then pay off the debt.— Warren Ingram, Galileo Capital Financial Advisor
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