Publish Date: 07/03/2019
The best time to start investing is now. Whether it’s R100, R500 or more each month, the money you invest today will give you financial freedom in your future. There are several wealth building short term investment options available in South Africa, but don’t let the complexity put you off. You don’t have to be an expert to invest your money. What you need is the commitment to get started.
Deal with debt first
One of the first things to do before you start investing is to pay off your short-term debt. What you pay in interest rates on debt is usually very high, so think of all the money you could save if you cleared your debt. Credit card interest rates are also usually very high, but you could make this work to your advantage by using your credit card as a savings vehicle. Read more: How to use your credit card wisely
Make compound interest work for you
By investing as early as possible, you can enjoy the benefits of compound interest. This quote from Benjamin Franklin will help you understand compound interest: “Money makes money. And the money that makes money, makes more money.”
Let’s say you invest R1000 this year and it earns a 10% return. That means at the end of the year, you’re left with R1100. Even if you left that amount in your account and couldn’t invest any further money the next year, the figure would still grow. Because you (wisely) left your money in your account, you would still earn your 10% return and that would mean an extra R110 in your bank account. Your money earned money.
The longer you invest your money in a particular investment vehicle, the greater your compound interest gains will be.
Understand your options
When it comes to investments in South Africa, there are so many options. There are investment solutions from banks, retirement funds, unit trusts, stock market investments, Stokvels, shares, Kruger Rands, Bitcoin, property and so much more. You could even “invest” by putting extra money into your home loan – the amount you save on interest could be significant.
It’s important to diversify your portfolio and not to put all your money in one investment or one institution. Look for the best returns at as low a risk as possible. The most important piece of advice, however, is to seek the advice of a trusted financial advisor. Avoid “too good to be true” investments and make sure your investments are regulated by the Financial Services Board.
African Bank short-term investment and long-term investment options
African Bank’s various investment options cater for different budgets. Whether you’re a beginner investor with a small budget or a seasoned investor with years of savings behind you, we have a solution for you.
About African Bank
Our mission is to be a successful Retail Bank offering a wide range of products and services to the consumers of South Africa. The people who work for African Bank represent the diverse population of South Africa; therefore we are a reflection of you, of all South Africans. We seek to provide value - more than our consumers expect of us. We promise to live our purpose 'humanity through banking' in all that we do and we are confident that we can, because 'We are You'.