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Your collectables should gather value, not dust
In this, the last instalment in our Scrapbook Series, we discuss what are called alternative or hard investments or collectables. As we report, this is an area of investments where novices can easily end up being sold a lemon.
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Earn an income from loans to the property market
You may not be aware that you can get into the business of lending money in the property market. A participation mortgage bond enables you to earn an income from the interest that participation bond schemes charge borrowers who want to develop property or finance property transactions.
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Do your homework before investing in a property syndicate
Property syndications have become popular investment vehicles, despite their huge risks relative to other types of property investments. We look at the factors you should consider before going into a property syndication.
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Earn an income from property without the hassle
If you want to invest in property without the hassle of finding a tenant, collecting rentals, dealing with body corporates and other problems, an investment in listed property could be the answer. We report on the investment options within the listed property sector.
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Type of ownership affects your rights and obligations
Your budget and lifestyle are not the only factors you need to consider when deciding on the type of property you want to buy. Buying a freestanding house or a flat will determine your ownership rights and whether you have any obligations to a homeowners’ association or a body corporate.
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Pay up and pay again when you buy property
The purchase price of a property is not the only cost associated with buying
a property. You also have to fork out substantial amounts to have the property transferred into your name and to register a mortgage bond. Once the property is transferred into your name, you have to pay for municipal services and to maintain your property.
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You'll need a loan if you want to own your home
Buying a property is probably your single most expensive purchase. As it is unlikely that you will have sufficient cash to cover the full purchase price, you will probably need a home loan. We look at how home loans work and how you can cut the costs attached to borrowing money.
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A home can be a sweet investment
When you buy a property in which to live, you provide for your accommodation and invest in the property market. In the first of a series of articles on home ownership, we look closely at the offer to purchase.
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Freedom of investment choice may have its price
Linked investment products give you, the individual investor, the freedom to manage a portfolio of investments under the umbrella of one product and the ability to outsource the investment decisions to the experts. There are, however, problems in the linked product industry. We look at the pros and cons of investing through linked products.
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Investing your money with the 'best of the best'
In a world of bewildering investment choices, multi-management enables you - via a single product - to have your money managed by asset managers who have been selected because they have a track record of providing superior performance in a specific market sector or asset class. However, you need to weigh up the pros and cons of multi-management before you invest.
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It may pay to hedge your bets in volatile markets
In volatile markets, the advantages of investing in hedge funds are often emphasised. But investments in hedge funds are not for everyone and you should understand how hedge funds work and the risks you are taking when you invest in them.
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Three ways to invest interest-earning funds
There are not one, but three, ways in which you can invest indirectly in the wholesale money market. Part 57 of our Scrapbook Series explains the workings of money market bank accounts, money market unit trust funds and money market life products.
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How to directly access foreign investments
Rand-denominated unit trust funds are only one way to diversify your investments globally. Another way is to invest directly in a fund domiciled in a foreign country. Although investing directly involves more effort on your part, its main advantage is that it gives you a hedge against the rand. This is part 56 in our Scrapbook Series.
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Expose your rand to world of investments
Diversification is a basic principle of good investing. Rand-denominated unit trust funds provide you with a hassle-free way to spread your risk by giving you exposure to offshore markets, economic sectors and companies. This is Part 55 in our Scrapbook Series.
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Putting your eggs in various baskets
A major hazard of investing is pinning all your hopes on one asset class, and then taking a major knock when that class hits the bottom of its performance cycle. Asset allocation funds spread your money across the asset classes, in order to minimise your potential losses and maximise the potential gains from whichever assets are performing well. This is Part 54 in our Scrapbook Series.
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Putting your eggs in various baskets
A major hazard of investing is pinning all your hopes on one asset class, and then taking a major knock when that class hits the bottom of its performance cycle. Asset allocation funds spread your money across the asset classes, in order to minimise your potential losses and maximise the potential gains from whichever assets are performing well. This article is Part 54 in our Scrapbook Series.
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Funds that offer diversity and an income
Almost everyone needs some fixed interest investments, such as income and bond unit trust funds. These funds are less risky than equity funds and you can use them to generate an income or to diversify your investments. This is Part 53 in our Scrapbook Series.
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Targeting market sectors to produce superior returns
Specialist equity unit trusts aim to provide you with returns based on the performance of particular sectors of the equity market. However, there are also risks to specialising in one sector or a certain type of share. We look at the different kinds of specialist unit trust funds available and who should - and should not - invest in them. This article is Part 52 in our Scrapbook Series.
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Get exposure to all sectors of the market
If you've never invested on the stock market before and don't have the knowledge or time to research which shares to invest in, general equity unit trusts are a good start. They are diversified, less volatile than other equity funds and, over the long term, equities almost always out-perform other asset classes. This article is Part 51 in our Scrapbook Series.
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Low-cost way to access a world of investments
Unit trust funds enable you to invest in a wide range of shares, bonds and other assets using relatively small amounts of money. We explain the advantages of unit trusts and how you can invest in them. This article is Part 50 in our Scrapbook Series.
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The workings of warrants and options
Warrants and options, like futures, are derivatives that derive their value from an underlying product, such as a share. This article is Part 49 in our Scrapbook Series.
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Betting on future profits
Trading in futures is risky because it can result in losses that far exceed your investment. Fund managers use futures to "hedge" against risk of a change in the price of a commodity or a share. In Part 48 of our Scrapbook Series, we explain how they work.
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How to receive low-risk returns from property
A property unit trust (PUT) is a portfolio of investment-grade properties that provides rental income and capital appreciation. PUTs are a simple way for you to invest in property and receive low-risk returns. This article is Part 47 in our Scrapbook Series.
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An affordable, low-risk way to invest on the JSE
If you favour a transparent, low-cost investment, exchange traded funds are a safe bet. They enable you to invest in a single listed security that provides you with a diversified investment in the top-performing companies on the JSE.
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How small investors on the JSE can hold a diversified portfolio
Investment trust companies, which are listed companies that invest in other companies, were a popular way for small investors to put together a diversified portfolio. But pooled investments, such as unit trusts, have largely replaced investment trust companies. However, as we explain, there is another way in which small direct investors can have a diversified portfolio.
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Share investments: cutting the jargon
When you invest on the stock market, you are likely to encounter a fair bit of jargon used by people such as stockbrokers. We define some of the more common terms you may hear.
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How to read the share price pages
The share pages of newspapers carry a great deal of information, and once you understand the layout you will be able to follow the performance of shares that interest you.
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How to buy and sell shares
For most people, buying and selling of shares conjures up images of a seemingly chaotic trading floor full of people all shouting at once. But the "open outcry" system has been replaced by an electronic one, and you have to go to the market through a registered stockbroker, who can also advise you on which shares to buy or sell.
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All about investing in the share market
Actively investing in stocks is not as complicated or as expensive as it may seem. But it is not without its risks or its costs.
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Don't forget to pack a travel insurance policy
Travel insurance is a must when going abroad, but often the cover falls short of expectations.
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Vehicle insurance reduces your financial risk
Even if you're the most cautious of motorists, you are at great financial risk if you drive an uninsured vehicle. After all, accidents - even if you're not to blame - do happen, and then there's South Africa's high rate of car theft. We explain the ins and outs of vehicle insurance.
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Protect your home and all that is in it
As a homeowner, you need two types of insurance to protect yourself against the unexpected. Homeowner's insurance covers the structure of your property, while household insurance covers your possessions.
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Ensure you understand your insurance
Short-term insurance not only gives you peace of mind, it also offers you protection over your possessions, from your house and car to your personal belongings. But in order to benefit from this protection, you need to understand how insurance works and the extent of your cover.
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Be careful where you place your trust
Trusts can enable you to rule from the grave, but you need to be very careful how you structure them.
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How to go about planning your estate
Having a will is vital, but it is just one part of estate planning. You should also ensure that you have enough cash in your estate to meet your liabilities and pay estate duty, without compromising your dependants.
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Your cover should fit your needs
Comparing medical schemes with health insurance is a bit like comparing apples with oranges. While both are designed to finance your healthcare expenses, they do so in different ways, and one product may be more suita ...
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Keeping an eye on your healthcare costs
As healthcare costs continue to spiral, medical schemes are turning to managed care programmes to cut costs and keep benefits affordable. We explain what these managed care programmes entail and how they affect you, the medical scheme member.
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Understand all your medical scheme options
To get the most out of your medical scheme, you need to understand the difference between all the options on offer - and choose one that is suitable to your needs and circumstances.
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How Medical Schemes Act protects members
The law that governs your medical scheme - the Medical Schemes Act - is designed to, among other things, give you access to medical cover, and ensure that your scheme is always in a position to pay your claims. We outline all you should know about the Act.
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How to limit the pain of medical bills
Few people go through life without being ill - and we may fall victim to life-threatening accidents or diseases. Unless you are very wealthy, you should consider joining a medical scheme to provide for the high costs of medical care. We explain the basics of how a medical scheme works.
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All you need to know about living annuities
When you buy a pension, particularly a living annuity, you need to have your wits about you. Living annuities are not for everyone and have been massively mis-sold in South Africa in recent years. We explain how living annuities work.
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Make an informed choice when you buy an annuity
When you retire and you have been a member of a defined contribution fund, defined benefit pension fund or a retirement annuity fund, you are legally bound to use two-thirds of the capital to buy an annuity (a monthly pension). We explain guaranteed annuity options and how they work.
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Group schemes make life cover more affordable
There are significant advantages to having group life assurance, but these also depend largely on the type of retirement scheme to which you belong. We explain all you need to know about group cover.
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Your retirement savings are worth preserving
If you change jobs, and you can't defer your pension or transfer your retirement benefits to another employer-sponsored fund, you can protect your benefits by transferring them to a preservation fund. We explain how these funds work.
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You can't beat RAs for tax benefits and versatility
A retirement annuity is an attractive investment vehicle for the build up of retirement savings, mainly because of its versatility and tax efficiency.
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Umbrella funds enjoy less protection
More and more employers are using umbrella retirement funds to manage the pension benefits of their staff, but as a member of such a fund you must make sure that your employer is looking after your interests.
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Pros and cons of defined contribution providents
Retirement fund choices can be confusing. This week we explain how defined contribution provident funds work and how they compare with other retirement fund choices.
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Defined contribution pensions aim higher
Defined contribution pensions aim higher
Retirement fund choices can be confusing. Bruce Cameron looks at defined contribution pension funds as one of the choices you can use to build up retirement savings.
A defined contribution pension fund (also ...
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Defined benefit funds an endangered species
Retirement fund choices may confuse you. Today we explore defined benefit funds, with pointers on their pros and cons. The next two articles in our Scrapbook series will feature defined contribution pension funds and defined contribution provident funds.
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All you need to know about funeral assurance
Funeral assurance is the only affordable way for millions of South Africans to be sure that they or their relatives will be given a decent funeral. As a result, funeral assurance is the most commonly bought form of life assurance in South Africa, but it is not without its problems.
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Matured policies: you don't have to take the money
It certainly is tempting to take the money when your life assurance policy matures. But, as we explain, there are ways of putting a matured policy to work so that you reap even more rewards.
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Endow your nest egg with an investment policy
Investment or endowment policies have become one of the major savings vehicles for ordinary South Africans. We explain what you need to know about life assurance investment products.
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How to protect your loved ones from debt
Credit life assurance ensures that your debts don't haunt your dependants after you die. However, as we explain, you must guard against being talked into buying assurance you do not need.
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How to be sure you are properly covered
The purpose of life assurance against death and/or disability is not to make your dependants wealthy, but to ensure that both you and your dependants can maintain a certain standard of living. We explain how you can calculate how much assurance you need.
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Beware: disability cover can trip you up
Disability assurance is one of the most complex and disputed areas of life assurance. We guide you through the key factors you must consider when taking out disability cover.
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How to structure your life assurance policy
You can buy life assurance against death and/or disability that covers different periods of time. We explain the difference between whole of life policies and term policies.
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Cut your losses instead of surrendering
Cancelling or switching a life assurance policy can have significant disadvantages for you. We explain the impact of cancelling a policy and the alternatives you should consider.
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What to expect from a life assurance contract
One of the most important aspects of life assurance is that it is contractual. If you fail to meet your commitments you, and more particularly your dependants, may face financial hardship. Part 12 of our Scrapbook series explains the contractual nature of life assurance.
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Protect loved ones from the risks in life
Assurance is a critical part of your financial planning. These policies protect you against the financial risks you face in life. We explain the basics of life assurance.
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A mortgage will get you home and dry
For most people, your home is your biggest investment - and your biggest debt. So, it is critical that you understand the ins and outs - and are prepared for all the costs.
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How to get on the road to owning a car
Financing a car can be as stressful as driving in peak hour traffic. You need to have your wits about you so that you take the route that's best for you.
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The lowdown on loans and overdrafts
Loans may be a form of bridging finance to pay for items you need now, but for which you do not have ready cash. However, using loans to cover your living expenses will land you deep in debt. We report on personal loans and overdrafts.
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ATM banking saves you time - and saves you money
Automated teller machines (ATMs) are nothing new, but not all cardholders make full use of all the facilities that ATMs offer. Due to ignorance or technophobia, many clients still opt for more cumbersome and costly methods of banking.
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A creditworthy means of payment - if you use it wisely
Credit cards offer you a convenient method of payment, but mounting interest charges on outstanding monthly balances can land you deep in debt.
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Cheque out what current accounts offer
Current or cheque accounts provide you with a one-stop facility for managing your finances. They allow you to make payments in a variety of ways, from cheques to ATM cards. In the fifth article in our Scrapbook Series, we explain what you need to know about cheque accounts.
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Savings accounts that you can bank on
Savings, fixed/term or notice deposit accounts offer consumers the simplest ways to save money in the bank. But, in order to make the most of any account, you need to understand it, the conditions attached to it and how it differs from other products like it offered by other banks. In the fourth article in the Scrapbook Series, we take a back-to-basics look at all you need to know about saving money in the bank.
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All you need to know about a needs analysis
A financial needs analysis is the cornerstone of your financial plan. Unless you have established your needs and goals, your plan will be flawed.
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Your defences against scams, bad service
Part two of our new Scrapbook series continues the focus on the laws and regulations that protect you as a consumer of financial services and products.
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How the law protects you, the investor
Five years ago we published the first popular Scrapbook Series - more than 50 articles explaining the ins and outs of every financial product available on the market. Today, we launch a new, updated and expanded Scrapbook Series that will explain the basics of every financial product and service - from bank savings accounts through to new-generation life assurance products. But before we go into the products and services, you need to know something about the laws and regulations under which they...
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