Did you know that only 3% of South Africans can retire comfortably?
That’s quite a shocking statistic!
You see, with health care technology improving people are simply living longer.
It might seem quite obvious, but it’s something a lot of South Africans are barely even aware of.
When it comes to living longer, the need to a well planned retirement becomes even more important!
That’s why to be a part of that elusive 3% there are five things specific things, that as a first time investor, you cannot afford to ignore.
Today I’m going to reveal them to you…
How not to be part of the 97% of South Africans that do not retire comfortably…
If you want to build your own investment portfolio, but have no idea where to start, there are five specific investment vehicles you should be looking at:
Cash: This is a money market instrument and has the lowest risk. This is basically actual cash held in a bank or a money market account, and you can expect anywhere between 4-5% growth on any monies invested.
Bonds: Defined as an instrument of indebtedness of the bond issuer to the holders. Government or corporate bonds are available to you as an investor and you can expect returns in the range of 7.2% over a year.
Property: This can fall under private property or listed property. When you invest in private property you purchase a home/building with the goal to lease it out for rental income and for the property to increase in value. Listed property is investing in the stocks of property companies that develop or manage other properties. Last year’s return from this type of investment yielded 27%!
Equity: These are stocks in listed companies that are exchange traded. They include small, mid and large cap companies. You can expect an average return of 14% from money invested in equities.
Alternative Investments: This is a broad term and offers you a variety of different types of non-traditional assets that wouldn’t be found in a standard investment portfolio (like the types of asset classes I’ve mentioned above). Examples of alternative investments are derivatives such as Contract for Differences.
How diversifying your risk can put you on the path to a comfortable retirement
How far you are from retirement will determine how much of each of the above assets you should be holding. So for example if you’re 30 years old and saving to retire at 65 you’ll have a bigger portion of your savings in equity, rather than cash. If you were closer to retirement you’d be less exposed to higher risk assets (as you’d be more risk adverse).
Remember, it’s all about spending time in the market rather than trying to time it. The earlier you start contributing the longer you have for your money to work for you.
So, to start your very own portfolio you need to make sure you’re holding each of these five assets.
If you’re not entirely sure how much of each you should be holding, and which specific bonds, equities and property investments you should be in, why not get in touch with me and I’ll help you kick-start your very first investment portfolio?
Private Client Trader | Vunani Private Clients
011 384 2922