Investing is putting money aside with the eventual goal of accumulating capital with interest, but most importantly, investment is not limited to money. This eventual goal can be achieved in various ways, and today I will discuss some of the less common options.
Nothing like fine wine and good fashion.
If you have a knack for fashion, you are going to love the idea of investing your time and money into developing, and or discovering vintage items. You will also be pleased to know that nothing matures as well as a bottle of fine wine. If the grapes harvested in a year are tastier, you might just consider stocking up a few bottles of those, and the market will reward you.
Don’t let your money be a victim of inflation.
Open a bank account! Avoid keeping money in a piggy bank/under your mattress when the bank is willing to pay you for keeping your money with them. I’ve noticed that TYME BANK and CAPITEC have some good interest rates. I would suggest that you set a fixed amount to be added into your account every month. After all, interest on a bigger amount means more interest for you. If you lack discipline, you might want to consider setting a debit order from a current account to a savings plan account. Also, do not be afraid of having more than one account. Do your research as to which bank best caters for your needs.
Make use of the money market! I’ve never seen returns look so sexy. At STANDARD BANK you need a minimum of R20 000 to open a money market call investment account, and you get to enjoy 3.30% monthly interest (nominal). This is approximately R660. The best part is the flexibility of this account, you can save and withdraw as it suits you, without any penalties. Capital is guaranteed!!! Now what have you got to lose? You are at a risk of earning 0 interest, but perhaps that’s a risk you might want to take.
Stokvel never been better
How can you achieve the above goal if you are a student, or you earn less than R20 000pm? Perhaps the answer is the longstanding, tried and tested, saving option: STOKVEL. The reason I have not listed it as an investment option is because when you take into account the time value of money, the stokvel is not all that attractive. It would serve a good option if you could earn good interest returns from it. If 4 people each contributed R5000, the minimum requirement amount of R20 000 will be available to open a money market account, and perhaps let it earn interest on interest until such a time to withdraw.
INVEST! SAVE! INVEST!
The most important factor about investing is getting more money than you put in, hence the need for interest rates to be greater than inflation rate.
This brings me to the next point of things you should AVOID doing as an ‘investor’. Lending people money is a common way of saving money for later use. At the very least you could be earning 5% p.a. interest for saving money at the bank.
Whichever investment route you take, consistency is key, but you to make that first step. Make use our weekly blog posts, as well as other content to sharpen your financial literacy as you strive towards financial freedom. Follow us on Instagram and Linkedin for updates, and join us next week for our Intstagram Live on investment avenues.
Author: Lerato Nxasane