Pay less dividend tax by doing this one thing

I’d like to make sure I can pay the most amount of taxes possible. I love knowing that I’m partly responsible for paying for weddings, buying coal mines and financing a really interesting news channel with completely unbiased views. It’s the best.

Said nobody ever.

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Should I stay or should I go now… to a cheaper fund?

Fees, fees and hidden feesDear Investor Challenge,

Even complete fools know that you have to max out your tax free savings account every year. I’ve been doing that for three years now, and I’ve got about 96 000 money babies working for me tax free in my lovely cheap brokerage account! It’s all sitting in the DBX world ETF, but now Satrix have launched their World Developed Markets ETF which gives me the same exposure for MUCH less cost.

To me it makes sense that I should jump into them right away, but Kristia from just one lap says I need to first give it careful consideration. I think she’s quite a smartie pants, but since I’m not, I have no idea what that consideration is.

One thing to note is that I plan to withdraw everything in 15 years when I retire overseas. What should I do? Spend some of the R96 000 to change to a cheaper fund, or hang on to the DBX for the next decade and a half?

Dora the future explorer

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You still invest in South Africa? Hehehe, for what, hehehe?

Considering organised crime

Personally I’d recommend government, they never go to jail

This is not going to be a cheerful topic. We’re in a recession at the moment and there’s very little laughter around. The (no.) 1 person who is laughing isn’t helping cheer us up either. The mood in the country is miserable, David Shapiro from Sasfin Securities says the country is at the lowest level he’s ever seen. There are posts all over the forum complaining about how poor the JSE’s performance has been this year:

“This is a bad bad year…”

“Wow, ArcelorMittal @ R5 level and Lonmin @ R10 Level, Nice ANC nice …”

“It’s mind boggling. Almost as if there’s a committee somewhere who try come up with the most damaging own goals around.”

“Pretty damn sad that an inflation ETF is in the top 6 of the investor challenge. This must be the worst year so far for the challenge.”

“Zuma, Gigaba, PP Busisiwe Mkhwebane and Zwane are competing on who can destroy the SA markets the most. SA market up 1,9% since January while the emerging market index is up 17%”

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EXPOSED: #InvestorChallengeLeaks What Patrick spends in an average month

I do my own stuntsYes it’ll all be revealed soon, but first a story.

In 2009 I had a work trip to Rome. Happily I have a very good friend George who lives in Rome, and I usually stay with him when I’m there. He’s also a keen cyclist like myself, and has a few bikes we use to explore the ancient city using pedal power. I love it.

On this evening, I was due to meet a number of colleagues on their first trip to the city. As I’d been there quite a few times before I offered to show them around, and we agreed to meet that night at the Colosseum metro station. Yes, literally across the road from that great monument is a rather dingy underground station.

As George lived a couple of kilometers away, I decided to cycle in, but just before I could leave another good friend I hadn’t seen in a while arrived, so I had to stay a while and catch up. Eventually I left with only 5 minutes to do 3 kilometers. “Easy” I said while flexing my quadriceps, grabbing the bike and hitting the road.

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How to achieve financial independance

Dear Investor Challenge

I love my job, it’s easily the best thing since the slow motion running scenes on Baywatch. I love the oPamela Anderson Runningffice politics and the free food I get during the endless hours of meetings discussing nothing in particular, and the hours spent behind my desk trying to find the balance between actual productivity and complete boredom.

I’m just scared that eventually I’ll have too much money and won’t need to go in to work every day. Once my wife sees that, she’ll definitely want me to retire, and that will mean I’ll go from being the big man at the office, to replacing her handbag yorkie taking instructions, all day long.

My days will then be spent getting dragged around Mr Price Home trying to decide which of the two identical shades of blue towels would best match our guest bathroom, and cleaning my perfectly disorganised garage so that it has space for the treadmill my wife has recently developed an allergy to.

All this while being called Schmoopie is already too much, but it will also almost certainly mean I won’t be able to get drunk at the annual Christmas party, and flirt with my inappropriately young secretary.

Is there any way I can avoid this disastrous chain of events from becoming a reality?

Schmoopie

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What is the average South African’s biggest expense?

Jeeves bring me my cat foodYes that’s the question folks. What does the average (middle class) South African spend the most money on?

Their house? No but it’s a good guess. Houses are expensive, but this expense can cost you more than your house.

Beer? Boerewors? Biltong? No it’s not one of the 3 B’s either.

The wife? Hopefully not…
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Can you make more money?

Mandela - Money won't create success the freedom to make it willSpeed up your time to financial independence by simply making more money, what a revolutionary idea!

No I’m not here to sell you on some crazy pyramid scheme, in fact I’m going to recommend you completely forget anything related to pyramid schemes or multi-level marketing (MLM) exists, because well researched evidence points to the fact that 99% of participants involved in MLMs lose money. Even if you don’t you’re almost certainly going to annoy your family, and alienate your friends, just don’t do it. Starting one can be very profitable though if you don’t mind the risk of jail time, like this smart lady who managed to convince thousands of people to buy a cheese making kit earning her €145 million…

No, none of that rubbish, just an honest way to earn a few extra Rand so that you have more to save and invest. But first I’ll start off with a statement. It’s far easier to save more than it is to make more. That’s why whenever someone asks how they can get their finances in order, I always recommend they look at the burn side of their budget rather than the earn. It’s something you have complete control over, and in most cases is filled with excess, waste and debt repayments. There’s bound to be some low hanging fruit, so most people can find money to save somewhere. My wife did that last year, and though I still can’t figure out how, she managed to out-save me without even trying. We figured this out weeks ago, and I still get almost daily reminders…

But sometimes trimming the budget isn’t enough to get ahead, and you just need to earn more.

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You bought a new car and 4 other signs that tell everyone you’re bad at maths

1) You’re bad at maths because you bought a new car

Quite a few of my friends read my blog. Some of them like Wendy* are even on board with the whole save enough to retire really young idea, but maths isn’t her forte as the following conversation should show:

Wendy: Can you believe Bill* just bought that big BMW*. So stupid, he makes less than I do. What do you think it cost?
Patrick: Well it was about 2 years old, so it’s probably worth around R300 000.Be like Bill, buy used cars.
Wendy: R300 000! I’d never spend that on a used car. I’d much rather get a new one for that price. What an idiot.
Patrick: Well the minute you drove out of the showroom in a new R300k car you’d lose R60 000. After one year of owning it your total loss would be around R90 000. After a year of owning his used car, Bill would only lose R30 000.

Conversations like that often have a lot of uncomfortable silence following them, especially when Ms want to be frugal bought a brand new (though much cheaper) Kia a few months back.

*Names and even cars have been changed. I’ve learnt my lesson on using even relatively similar examples before.

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How much to save each day to retire with R10 Million

Teaching for moneyDear Investor Challenge,

I’d like to be rich one day. Properly rich, not just the “If you have a roof over your head and food in the fridge you’re richer than most of the world” rich, but actually very wealthy. A millionaire just won’t cut it, I’m aiming for a huge stash of cash. R10 million should do quite nicely.

I’m in Matric at the moment, and I have a part time job waiting tables on weekends. I make a fortune there, at least a couple of hundred a shift…

Next year I’m starting a teaching degree. I know it doesn’t pay well, but it really is what I want to do. The reasonable hours and long holidays are also going to be a bonus too.

So what are my chances of getting to R10 million with the totally shameful teachers salary I’m expecting to earn one day?

Teach to be

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The fantastically simple rule of 300

Dear Investor Challenge,Early retirement plan

This work thing can be a royal pain in the ass sometimes. People are supposed to listen to me, but I really get no respect. When I wanted to sign a new deal with the Russians, my accountant stopped me. He did the same thing when I asked him to fund my girlfriends travel company, now she’s all upset with me too. Then a couple of months back I was told that I’d have to pay for my swimming pool and farmyard, even after they were all promised to me as perks for a job well done, it’s totally ridiculous!

Now last week my three best friends decided to leave my business. I’m going to miss them so much, they were always so generous, and then just the other day, even the youngsters around here said they want me out. It just feels like everyone around here hates me. There’s really no reason for me to stay here anymore, which brings me to the point in this letter.

How much money do I need to have saved up and invested before I’m good to go? I really don’t want to come up short and have to try live on that measly excuse for a state pension we have.

Mr Anonymous

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