Hardly a year passes with regulation 28 products, and their associated returns, ever coming into the spotlight for some criticism.

They definitely aren't my favourite, but there is definitely an investment case for privileged in a highly unequal society like SA
"I hate Reg 28 investment products, but not enough to give up the juicy tax rebate I get, so I'll just keep complaining about the allocations and the bad returns" most Reg 28 detractors.
The returns on r28 funds hardly lie in the fund performance, but rather in the price you paid for the product. Simply put, the higher your marginal tax bracket, the better the price u get, and therefore, your REAL returns should be calculated from that contribution base
Here's a simple illustration:
The people who benefit most from reg28 are not the people it is designed for. The lower yr income, the lesser yr desire to actually be invested in a pension product because the "reward" is low. Yr money starts compound from a much lower base than a person on a higher tax bracket
If R28 products are THAT bad, buy your freedom and invest your capital as you see fit... Put your money where your mouth is! 😅

Although I doubt that it will be enough to walk away from that juicy rebate😝

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More from @MoneyRehab_

25 Nov
The places you go, the times you go, your actions at that place. The people you hang around, drinking & driving, driving in the rain, driving at night, exceeding the speed limit, jogging, things u post & say, your diet & exercise habits. The list goes on. They all contain risk
We often wake up to horrible stomach-churning headlines where sometimes, some risk management could have resulted in an entirely different outcome

Of course,there is always a level of risk that cannot be eliminated. This is called systematic risk, and will always be present.
Any risk more than that, you would be in a better position managing and mitigating. You want to be intentional. The more intentional you are, the less likely you are to be surprised.
Read 4 tweets
25 Nov
Exercise managing your risks. In your life, work, finances, investments. The management of risk is often ignored, yet crucial if you are 2 obtain outcomes anywhere close to what u desire, with a bit more certainty, as opposed to luck

Had a conversation with a colleague yesterday
They travelled in a shuttle to the year end function. She said "what if the worst happened? An accident. With the entire department in one vehicle". Really got me thinking about how as humans we generally tend to take things for granted.
Humans are not designed to understand risk and unless you get into the habit of exercising risk management, it's easy to make statements like "anything can happen anywhere", or always expecting positive outcomes from any actions you take
Read 4 tweets
24 Nov
The true test of any investment strategy is whether you remain true to your strategy regardless of the environment you are investing in.
The tricky thing about any tax advantaged account(retirement funds and TFSAs) is that you often have to bend from your true strategy to take full advantage of the tax benefits, so it's basically crossroad after crossroad after crossroad.
Reminds me of the saying "the measure determines the behaviour"

Makes it easy when you have enough investment moola to max out your allowance contributions while continuing to invest in your discretionary account.
Read 5 tweets
13 Feb
Cellphone contracts vs prepaid

Most of the dissatisfation with cellphone contracts comes from a lack of alignment between the contract package and the user's usage patterns.

Taking a certain contract only because that's the one that gives u the phone u want....🚩🚩🚩


Cellphone companies sell airtime packages first, everything else secondary.

Providers are all about securing a stable and predictable income stream, and are willing to offer discounted packages as a trade-off.... You can make this work to your advantage

Being on prepaid gives u control flexibility over your spending, but the trade-off is that you pay more for whatever you consume. Over time, you end up spending more than you would within a contract (holding usage constant). And you have to foot the device cost upfront
Read 8 tweets
17 May 20
Active & Passive income X FIRE

(A thread)

Active income:
Direct compensation that an individual receives for services rendered. Comes in the form of salary, wages, tips, commissions, etc.

E.g. your 9 to 5 job

Passive income: Income that does not come from actively rendering a service
E.g. Dividends, interest earned from savings

Passive income to 1 person can b active income to another, & vice versa
E.g a store employee earns an active income while the shareholders earns passively
Sm activities/Investments/incomes r a hybrid of active & passive income

-A singer records an album, later earns passively from sales & royalties
-An actively managed Investment Portfolio
-Rental income - owner engages in maintenance, repairs & upgrades, if not outsourced
Read 8 tweets
4 Mar 20
ETF101 - Always read the Minimum Disclosure Documents(MDD). They tell you what companies countries and sectors make up the ETF.

If you are thinking of adding a new ETF to your portfolio, compare that with what you already have, and see if adding the new ETF adds any real value..
Example 1: ETF issuers
The main issuers have global ETFs that track the "MSCI World Index", therefore holding more than 1 of the following offers no benefit (diversification or otherwise)
1nvest MSCI World
Satrix MSCI World
Sygnia Itrix MSCI World

Just pick 1 and buy more of it
Example 2: S&P 500
All the following track the "S&P 500 index"
Sygnia Itrix S&P 500
Satrix S&P 500
CoreShares S&P 500
1nvest S&P 500

Again, no real benefit to holding more than 1 of the above.
Just pick 1 and buy more of that preferred ETF
Read 9 tweets

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