You need a TFSA and here is the only place you should get one

Moving GoalpostsOnce upon a time when I was young and stupid I had the idea that it would be nice to have a large house on an expensive property so I could impress my friends, show off to people I didn’t know and win the love of Keira Knightley who would one day walk past gasping in my awesomeness before rushing inside and switching her outfit for Nutella.

A short while later the golf club near where we used to stay decided to become a golf estate, and I jumped on the opportunity to buy a stand there. I wanted a boundary stand rather than one on the golf course edge. There were three reasons for this. Firstly I have a friend who lives on the edge of a golf course, and he needs to replace a window at least once a month, and that would affect my allergy to housework so it just wouldn’t do. Then of course it’s cheaper to be on the fence than on the course, and I do love a good deal, and finally as I lived on the same street, I knew that the area on the other side of the fence was earmarked to be a permanent greenbelt, and it was going to be stocked with game.

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It’s not time to make a change

What if we don't change at all ... and something magical just happens?Sorry Mr Cat Stevens, but life’s too short and boring not to make any changes, and so I’ve decide it’s time to shake things up a little and see if I can improve my lifestyle, and also my investments.

To begin with, I’ve bought a new car! Well new to me. It was second hand of course, I’m not an idiot you know. And yes I know there wasn’t anything really wrong with my old one, but I’ve always wanted a 4×4 that I could take camping, particularly after the campervan trip we went on last year, so when I saw this one with the built in roof tent I just had to have it. Well worth the R350k I think, especially since I managed to get a below prime car loan.

There is one problem though, it doesn’t really fit into our complex underground parking lot with that tent on top, so the wife and I have decided to bite the bullet and buy a house. Yes I know I said I’d never own another house, but we’ve wanted a garden for our dogs for some time now, clearly I can’t keep parking on the Landcruiser campervanstreet, and the bond rate has just been lowered by 0.25%, so I’d better buy now before the house prices start shooting up.

We could probably get by with a small 1 bed, but for the first time ever I’ll be splitting the costs with someone else, which means we can get so much more house for the same payment I had with my last one. I’ve worked and saved really hard for so long now, so why not splurge a little, I deserve it. And anyway, houses are good investments after all.

Another big change I’ve implemented since Cyril took over is to bring my money back into SA. With all the good news that’s streaming in at the moment, the South African economy can only prosper going forward. The exchange rate isn’t the best for dollar to Rand conversions at the moment, but wait till you see what happens when we undoubtedly hit 5% growth in the near future.

Of course I’m not keeping my money in cash, it will be invested. Thanks to this research from MoneyWeb’s Patrick Cairns I’ve decided to split my money among the best performing funds over a 10 year period, all of which have beaten the index, and considering the 10 year timeframe that’s a result I can trust. 25% of it went into the ABSA Property Equity Fund. They’ve been the top performer in SA over the last 10 years and have convincingly beaten the market with returns of 17.75%! That’s truly amazing, a few more years of that performance and I’ll be totally sitting pretty, I can’t wait.

To diversify, I also put 25% into the next best, the Coronation Industrial Fund which did 16.35%, and another 25% into the third best, the Discovery Flexible Property Fund which did 15.49%. That means I have at least three fund managers backed by large companies who hire only the most intelligent minds in the country and make them work countless overtime hours just to make me money.

You might be wondering where the last 25% is going? Well I’ve decided to take a calculated risk. You see most people know that there are only ever going to be 21 million Bitcoins in circulation, but what many people don’t realise is that 4 million of them have actually been lost forever, leaving us with a maximum of just 17 million. With 7 billion people on the planet, even if everyone decides to buy a fraction of a bitcoin, they’re sure to shoot up in value significantly. I’ve looked at a number of technical indicators, and everything seems to line up with us being on the cusp of a big bull run.

Bitcoin to the moon

If the above chart doesn’t convince you, you can rest assured that crypto is so much more than just a fad. I’m a software developer, so I know how clever the technology is behind it, and with them priced at about a third of their all time high it’ll be almost impossible to lose money. An added bonus is the decentralised nature of the technology, which means that even if we end up with another Zuma in this country, they won’t be able to touch me on my bitcoins.

Don’t let the FUD (Fear, Uncertainty, and Doubt) get to you, bitcoin has lost more than half it’s value many times before and each time it’s just rocketed back up again and then on to spectacular new highs. Buy and HODL until we go to the moon!

Oh and since you’re here, happy April fools day!

And just to be clear:

  • Spending large sums of your money on transport (purchase, interest, insurance, depreciation, fuel etc.) is a surefire way to stay broke.
  • House prices have barely increased at over inflation for all of the recorded history. Unless you can see the future and can buy in an area that’s undervalued and due for growth which isn’t already priced in, you’d be far better of just renting. Money wise at least, there may be other factors involved in the decision of course.
  • By the time you think it’s a good time to move money into a different economy to get some growth it’s already too late. Even if SA does outstandingly well in future, it’s probably already priced in.
  • The latest active vs passive scorecard from S&P is out, over the last 5 years 93.2% of active funds underperformed compared to the index. Good luck to you if you think you can pick one of the 6.8% of funds that outperformed, don’t be an idiot.
  • Go ahead and “invest” in bitcoin, but please make sure you diversify adequately into beanie babies and tulips.

How long did it take you to realise it was a joke?

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My favourite travel hacking tips

Volcano fumes

The best experiences aren’t usually the most comfortable

I love a good holiday, doesn’t everyone? Traveling is the drug of choice for my wife and I, and between our work and pleasure trips we sure do get around. Last year I went to 10 different countries, while my wife went to 9.

Half of my trips, and two thirds of my wife’s were for work, but if you’re thinking that means we didn’t have to skimp on costs you’d be wrong.

Unlike my suit wearing friends who seem to have bottomless expense accounts, I get given a daily sum of money depending on the city I’m going to. If I spend more than that it comes out of my own pocket, but if I manage to live on just a portion, the rest stays in my bank account, and I get to add it to my regular investments at month end.

I do pretty well too, I’ve never used more than half my allowance, and thanks to all the travel hacking I try to do I often spend less than 25%.

For private trips travel hacking is a must. We always aim to maximize enjoyment for the minimum costs. We don’t hold back on experiences, for example we happily paid R1600 each to climb the Villarica Volcano, but wouldn’t dream of spending that amount on a hotel room.

Sharing is caring, so here’s a great big list of travel hacks we use regularly.

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Exposed! My utterly extravagant spending in 2017

It's budget reconciliation time

It’s budget reconciliation time

For far too long I’ve been spending with wanton abandon and not even caring enough to add up the numbers. How could I be setting such a terrible example to all the millions of readers who don’t make their way to my blog. This is going to to change. Starting from now there will be an annual post where I air the dirty laundry of my multitude of credit card receipts.

So now to go and break tradition with seemingly every other blog post I read lately, I’ll actually get straight to the point and just pop the numbers out. None of this read my life story before you get to the delicious recipe, or navigate past all the annoying subscription popups before I actually get to see a number on the page. No, just no!

My spending is right here:

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The top 7 things I learnt about money in 2017

Welcome to 2018, it’s a new year with new opportunities. Sadly Donald Trump is still the president of the USA, and in South Africa, we still have President Gupta at the helm but hopefully that will all change soon.

When looking ahead to a new year I always like to consider what I learnt in the last, so here are my top 7 money lessons from last year:

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How much difference would it make driving a luxury car vs a cheaper car

Once upon a time there were two boys living in the vibrant city of Johannesburg. The boys were best friends, and did everything together.

Unlike the last time I compared two very similar people these two boys were similar in practically every way. They were both sporty, very smart and both just obtained tech degrees. There was just one difference, Chris absolutely loved cars, while Mike thought they were only fun on his PlayStation.

Now this story is going to have a lot of numbers in it, and as it takes place over a working lifetime, we need to deal with the inflation problem. There are two ways to do this.

  1. The hard way, which means you have to constantly convert back and forth between today’s money and the inflated money. This is a lot of work, and you often end up with numbers which can’t be understood; or
  2. The easy way, to simply take inflation out of the picture. This means you don’t count it in price increases over time, but you also don’t count it in investment returns. It makes the calculations much easier for me, and should make the numbers more meaningful for you. A complete win win for once!

On to the story.

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This couple is retiring at 36 and 46, here’s how they did it

Day tripping near Ubud, Bali

Like many people nearing the end of their working career, Andre and Lisa can’t wait to travel the world when they retire next year. Unlike most though, they won’t be enjoying any pensioner discounts along the way. That’s because Andre will be just 46 years old, and Lisa practically a teenager at 36!

When most people hear this they generally assume that the couple have either inherited money, got a BEE deal, or lived a totally dull life and never left the house so they wouldn’t spend any money. But this couple have had none of that luck, and as you’ll see a little further on and in the slideshow at the bottom of this post, they most definitely haven’t spent their time sitting at home eating beans and rice by candlelight.

Of course I had plenty of questions for them, and thankfully Andre was kind enough to answer, and boy did he answer well.

You’ll want to read this interview!


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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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