A great investment on your doorstep…

A great place to save in the short term is your home access bond. With home loans around 10% by saving extra in your bond you effectively get this rate as a return on your money.

Why? Well because the bank calculates the interest owed from the average balance in your bond during the month. It then takes the interest from your monthly installment and allocates what is left behind to paying off your loan. The higher your balance the less interest you pay and the more is allocated.

When assessing an investment you need to consider the following:

Risk – the possibility of losing capital

Return – the yield of the investment over time. This could be interest from cash deposits or bonds, rental income from property or dividends from shares.

Liquidity – how freely are the funds available?

Costs – the charges applied to the investment. Mainly the fund manager, the administrator and the advisor.

Tax – taxes are applied to the various returns as well as capital gains tax when you sell the investment.

When taking all these aspects into account it becomes obvious that the access bond is by far the most effective vehicle in the short term. Especially while interest rates are on the up.

In this cycle shares and property and bonds tend to fall while interest bearing accounts tend to rise.

Where can you currently get 10% tax free return without risk or costs and your money is immediately available to you? Some may argue that the other assets are more effective over the long term.

However, for the foreseeable future it is difficult to find an investment which can yield a net 10% return. Your access bond is a worthwhile place to save your hard earned money.

Listen to the audio below for more information...

Read more from Paul Roelofse at www.investforlife.co.za


Recommended

by THE NEWSROOM
Read More
‘With the kind of job I have, I need to be at church regularly’ – Herman Mashaba

‘With the kind of job I have, I need to be at church regularly’ – Herman Mashaba

In this profile interview, Mayor Herman Mashaba talks about the painful nature of politics, and life growing up in a village.

Certified financial planner explains the magic behind the number 72

Certified financial planner explains the magic behind the number 72

‘Buying something at a price today, it falls tomorrow, then it’s up the next day - that’s not investing, that’s speculating.'

Medical doctor unpacks how to successfully have ‘The birds and the bees’ talk

Medical doctor unpacks how to successfully have ‘The birds and the bees’ talk

‘It’s often in that initial reaction that we set the tone for future engagement with children.' - Doctor Tlaleng Mofokeng

[WATCH] The yummy mummy’s guide to surviving the first week back at school

[WATCH] The yummy mummy’s guide to surviving the first week back at school

In the food feature, Anna Trapido talks about the Leopard Deli's readymade meals, and why they're perfect for back to school lunch

Certified Financial Planner shares his 30/30/40 rule for financial planning

Certified Financial Planner shares his 30/30/40 rule for financial planning

Certified Financial Planner Paul Roelofse says that following his formula will ensure financial independence and relief debt free.

‘When is our Government going to wake up and grow our sector’ – Mfundi Vundla

‘When is our Government going to wake up and grow our sector’ – Mfundi Vundla

Executive Producer of Morula Pictures Mfundi Vundla chats about his life growing up, the Generations 16 Saga and community work.

Popular articles
How Free State's Ace Magashule's family linked to Gupta companies #GuptaLeaks

How Free State's Ace Magashule's family linked to Gupta companies #GuptaLeaks

Revelations published today show how the premier's sons and Free State govt appear heavily involved in the Gupta-owned companies.

Who is Advocate Tembeka Ngcukaitobi?

Who is Advocate Tembeka Ngcukaitobi?

The EFF lawyer stole the show during the state capture report court battle.

'The university degree is dead'

'The university degree is dead'

Flux Trends founder Dion Chang gives five reasons why he believes getting a degree is past its sell by date.

3 easy questions could bag you R2000!

3 easy questions could bag you R2000!

WIN R2000! But only if you can prove you're a whiz of the MTN Biz Quiz by answering the following three questions...

Blesserfinder: Matching you with a sugar daddy near you

Blesserfinder: Matching you with a sugar daddy near you

Is social trend Blesserfinder, where girls are allegedly matching up with rich 'benefactors' in exchange for sex, a real thing?

5 ways the NSFAS funding model will change in 2017

5 ways the NSFAS funding model will change in 2017

The National Student Financial Aid Scheme (NSFAS) will pilot a new funding model in 2017. NSFAS chairperson Sizwe Nxasana explains.