Readers write

2011-11-26 09:30

I need a good fund manager

George asks:

Could you please advise me on where I must go or who to call if I want to invest on the JSE or unit trusts with a good fund manager.

Maya replies:

There are so many choices out there it makes it difficult to select a fund. You also need to make sure that you are investing according to your needs and timeframe. A financial adviser can help you with this.

If you are looking to start a monthly savings investment and you want to invest for five years, then an equity unit trust or exchange traded fund is a good starting point. Most of them start with a minimum monthly contribution of R300.

Personally, I invest in the exchange traded fund Satrix Rafi (www.satrix.co.za) but there are also good fund managers like Allan Gray, Coronation and Investec who do not charge any upfront fees if you go directly.

These fund managers have consistently performed well and should deliver acceptable returns over the longer term.

The best income from my pension


Robert asks:

I will soon have a lump sum investment of R380 000 and am thinking along the lines of putting it into a fixed deposit for five years.

The idea is to use the interest to supplement my pension so that the capital is not affected.

It seems that this would be my best option either through Nedbank or Investec who appear to offer the best rates.

Maya replies:

You should also consider the RSA Retail Bond. On a five-year deposit it offers 8% and they also have a restart option.

So if interest rates increase, you can restart your investment and take advantage of the higher rate.

Just keep in mind that the income you will receive from the money will depreciate in line with inflation.

For example, if you receive R22 800 interest income a year, by the fifth year with inflation running at 6%, that R22 800 will only be able to buy you R14 820 worth of goods.

So you need to try and not draw down the full interest and allow the capital to grow so that it can provide a higher income the following year.

Where do I start with my debts?


Jeffrey asks:


Where can I find a debt counsellor?


Maya replies:


Although we have written about the benefits of debt counselling over

debt administration, it is not necessarily your starting point.


There are costs involved as well as limitations on access to credit.

Debt counselling is a last resort. The first step is to speak to your

bank – they have units to help customers work out repayment plans.


A solution they may be able to offer is to consolidate all your debts so

that you only have one loan to repay. However, they can only do this if

you can afford to repay the loan and if you do go the debt

consolidation route, it can only be successful if you do not take on

further debt.


Never use debt consolidation to take on additional debt; after all, it is the first step to debt rehabilitation.


If your bank is unable to help, call the National Debt Mediation Association on 0861 11 6362.


The association will help you to see if you can find ways to deal with your creditors before going the debt counselling route.


And finally, if debt counselling is your only option, go to the website

for the association of debt counsellors (www.dcasa.co.za) to get a full

list of accredited debt counsellors.



Do I qualify for a second bond?

Disebo asks:

I would like to venture into the property market next year. I will be getting my share of R15 000 from a stokvel which I will put up as deposit for a house.

My plan is to rent out the house. My concern, however, is that we bought a house in 2007 worth R550 000 and the instalment is at R3 600 although I fixed mine at R4 500. What are the legal implications since this will be my second bond?

Maya replies:

According to Kevin Joubert at FNB, there is no legal reason that will prevent you from taking out a second mortgage.

However, he makes the point that the bank will not consider the rental income as part of your affordability – meaning you have to be able to service the loan on your existing income.

A good idea is to speak to your bank and find out if they would lend to you on that basis.

The bank will also require a 10% deposit. Currently, your stokvel amount would only give you a deposit on a R150 000 property which is not really feasible.

Have you considered speaking to the other members of your stokvel about going into a property investment together?

You would be able to combine your money for the deposit.

It seems that this would be my best option either through Nedbank or Investec who appear to offer the best rates.

FREE ADVICE

The Financial Planning Institute of Southern Africa is hosting a consumer clinic, supported by the SA Savings Institute as part of their festive season campaign.

They will provide you with an opportunity to get free financial advice and guidance from highly qualified Certified Financial Planner® professionals.

They will also answer your questions about debt, retirement, investment, taxes, insurance and bonds.

The advice will be offered free of charge and the planning institute will not hand out business cards or try and sell you financial products or services.

The consumer clinic will be held in Joburg as follows:

Day: Wednesday

Time: 5pm-10pm

Venue: Randpark Club in Randpark

» Go to www.fpi.co.za for free online registration or call 086 1000 374.
 
Walk-ins are also welcome

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