Tips for affordable investing

Many of us understand the importance of investing for a secure future. Even short-term investments provide a pathway to financial freedom. However, it's not always affordable and we have to prioritise our day-to-day and month-to-month expenses.

But, should this stop you from planning for your future?

It really shouldn't, and the best way to start investing without jeopardising your short-term goals and not feeling guilty is to have a plan and consider affordable investment options.

Let's have a look at how you can start your investment journey.

Come up with a plan

Do you know why you want to invest your money? Having solid reasons as to why you want to grow your money will help motivate you and deter the temptation to spend. While planning, try to set some investment goals. If it's your first time investing, then your goals don't have to be major. It can be as simple as saving up for an emergency fund, or buying a new house, or simply making your money grow. This helps you choose the right investment product.

Invest in a tax-free product

It makes sense to go tax-free if you're looking for an affordable option that makes your money grow. Today tax-free investment accounts are common as people recognise the need for an affordable investment. In fact, the government introduced the tax-free investment option back in 2015 to encourage people to invest and save their money! Remember, it's ok to start small. You can start by investing up to R36 000 a year, but focus on your budget and not what's 'popular'. At African Bank, you can invest from as little as R50 and up to R36 000 a year, or a total of R500 000 in your life. So, yes, it is possible to invest affordably and still see results.

Don't cash in your pension fund

Does your employer provide you with a pension fund? If yes, try to keep your money in this fund. In other words, don't withdraw the money under any circumstances. If you start a new job, rather transfer the money into your new employer's fund. This is an easy way to save money and resist the temptation to withdraw and spend your hard-earned investment.

Next steps…

Now that you've got the basics and your money has started growing, think about how you'd like to further diversify your investments.  A Fixed Deposit is ideal if you have money available to invest and that you're certain you won't need in the near future. Remember to always consider your current situation and future plans when deciding on an investment product.


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