What percentage of your investments should be offshore?

Dear Investor Challenge,

The guy running my country seems a little daft. He once said that showers cure aids, and thinks that the African continent is so large all the others can fit inside it. I’ve seen him on TV trying to pronounce a not so big number, and while my 5 year old seems to be able to do this quite well in pre-school, this guy took four attempts, and I think one of them included an eleventy.

Now I really don’t have too much of an issue with stupid people, in fact Arnold Schwarzenegger remained one of my favourite movie stars, even after he said that he thinks gay marriage should be between a man and a woman.

The bigger issue for me when dealing with the #1 man of missing marbles, is that when he stuffs up, I lose a lot of money. This is something I don’t like very much. It’s better than losing a limb to carnivorous ants of course, but only just.

I’d like to take some of my assets offshore, somewhere safe from such stupidity. How much should I invest offshore? And any tips on where?

Thanks,

Ivan Tout

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The cheesecake powered cash printing machine

Giant cheesecakeI have a machine that prints money. It’s legal too, and operates on nothing more than cheesecake. That’s right, nothing but pure cheesecake. I have two others that operate on a combination of cheesecake and a teeny tiny amount of electricity. My brother has two of these, and I’m buying one for my wife now too so we can use ours together. These machines are really quite common, I’ve been trying to get Orca to buy one that would run on beer, since he often has a surplus of that 🙂

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A newbie’s guide to investing on the JSE

LemmingsMy favourite computer game as a child (yes we had computers back then, much to my son’s disbelief) was Lemmings. In this game you’d have to rescue these humanoid lemmings who were too stupid to do anything else except follow their leader to their doom. Sounds pretty much like our government at the moment doesn’t it?

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7 Financial products so bad they should be an April fools joke!

The most useless sign everIt’s April fools day, but since I’m still upset that I fell for two of them (Heyneke Meyer returning as springbok coach and myBroadBand launching uncapped fibre for R99 a month) I thought I’d spare you any more stupid practical jokes.

Instead, I’m offering you an antidote to the madness. A kind of an unApril fools joke. I’m going to list out the top seven financial products so dumb, we should all be wishing they were practical jokes instead of reality. So let’s count them down:
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Should you be dollar cost averaging?

You've just won second place in a beauty contest

Yes, well done you uber foxy person you, you now have an extra R1.2 million to invest. This is such a common problem, I thought we should address how to handle it. Firstly, I would like to advise against spending it all on hookers and cocaine like this overly honest guy would do. Sure it’s fun, but how much of that month will you actually remember, and after you’ve lost your job, wife and the bridge of your nose, life might just suck a little afterwards. Ideally you’ll invest your winnings, but should you do it all at once, or should you spread out putting it in investments over a year or more?

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You don’t earn nearly as much as you think you do!

Where did my salary go?When I was 24 I thought I’d made the big league. Thanks to a bit of luck and thanks to having F-You money, I ended up in a contracting position where I was earning R160 an hour. That meant I made R28k per month since I worked about 176 hours a month on average. This is a pretty good salary today, but 13 years ago to a 24 year old who was still pedaling his bicycle to class and eating vetkoek for lunch just over two years previously it was an astronomical amount of money. More than double what my last salary was before I took my extended F-You holiday. So what does a 24 year old earning such a large sum of money do with all of it? Invest it? Not a chance, I bought myself an Audi.
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Only idiots still own Unit Trusts

Fund managers

Fund managers

OK hands up, who still owns unit trusts? My goodness there are a lot of you on that side of the screen. Unfortunately there’s one on this side of the screen too. And another in the family, hi mom! We’re all a bunch of idiots. Great big foolish money hating idiots. I’m a completely self taught idiot. Nobody does that anymore, we all use coaches and gurus called financial advisers to guide us into idiocy. Before I graduated to idiocy I only used to save and not invest, so I was a moron then. One day soon I plan to leave idiocy behind and move on to madness. Madness is the Cum Laude of intelligence.

So why is it that I’m calling us a um, what is the collective noun for idiots? If we were American I’d vote for a trump of idiots, but since we live in  Mzansi maybe it should be a malema of idiots, or perhaps a kraal of idiots. Back on track now, why do I think that ETFs are the holy grail and that unit trusts are the financial equivalent of a Kardashian? Well there are two main reasons I dislike unit trusts, and as someone who gets weird satisfaction in pointing out my current and former reasons for idiocy, I’m going to elaborate on both. Continue reading

The actual cost of NOT providing free education

Garden boy to vetFees must fall, yes #feesmustfall! I actually planned this month’s blog post on a play on words regarding investment fees which must fall, over University fees which (also) must fall, but to be quite honest the University fees falling probably has as big if not a bigger impact on us than investment fees, so I’ve bumped that post on to another time.

So, let’s look at what the impact is of the whole University fee issue. You see, the students are rightly upset that they have to pay far too much in University fees. The government on the other hand is saying there just isn’t money to give free tuition, and they right, it’s pretty hard to find money when you’re throwing so much of it away on things we really don’t need, like the arms deal, nuclear power stations and of course Nkaaaanndla.

I know I’ve said it before, but for some reason it just seems that governments don’t understand basic finance. Firstly you need to make sure you spend less than you earn, and then you need to invest some of the difference. It’s my belief that the #feesmustfall movement is simply the governments lack of understanding around making an investment in it’s future. Delaying gratification now for huge rewards in future is ground zero for investing.

As you might already know, I like numbers, so let’s look at an example:

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It’s all about the timing… Or is it?

In August, my beautiful new wife and I eloped to Paris to have a combo wedding and honeymoon. It was just the two of us, so we didn’t have to worry about what colour the napkins should be. We also didn’t have to worry that mad uncle Eric would drink too much and try join the band, or that someone would knock over the ridiculously ostentatious wedding cake. I was also fairly confident that I wouldn’t end up in a runaway bride skit, because I’m not Richard Gere!

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Can you de-complicate personal finance?

Dear investor Challenge,

Why are your posts always so damn complicated. You keep posting numbers and graphs, but I’m not a numbers girl, unless of course you’re cute in which case my number is 555… Why don’t you come out with some financial advice for dummies like me? I want finance de-complicated.

The names Blonde, Jane Blonde.

Good call miss Blonde. You know, I think this whole industry is built around making people believe finances are only for accounting nerds, or worse, actuaries, but to be quite honest, there’s nothing complicated about it at all. In fact, I’m pretty certain that all the experts and snake oil salesman specifically designed it as a giant smoke screen to keep you thinking it’s complicated so they can keep their high paying jobs, six figure bonuses and holiday homes in Umhlanga, all thanks to the money they take from us while we’re not paying attention. Mark my words, the only interest the majority of financial product sales people have in your wealth, is in how much of it they can transfer to themselves as fees for a service probably badly rendered.

Ignore them. Everything you need to know is so simple anyone can take control of it. So here it is, the three most important rules of personal finance: Continue reading