What is Money?
Money is any object that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context.
The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a standard of deferred payment.
Where Can I Invest My Money In South Africa
1. Exchange Traded Funds (ETFs):
Exchange Traded Funds, or ETFs, are investment funds that trade on stock exchanges like individual stocks. They are an excellent option for beginner investors as they provide diversification, low costs, and ease of use.
ETFs typically track a market index, such as the FTSE/JSE Top 40 Index, providing exposure to a broad range of stocks. They offer a simple and cost-effective way to invest in a diversified portfolio without having to select individual stocks.
2. Tax-Free Savings Accounts (TFSA):
Tax-Free Savings Accounts, or TFSA, are investment accounts that allow you to invest in a wide range of investment options, such as stocks, bonds, and cash, without paying taxes on the returns.
TFSA is an attractive option for beginner investors as it provides tax-free growth, making it a great way to save for long-term goals, such as retirement or buying a home. Contributions to TFSA are subject to annual limits set by the South African Revenue Service (SARS), so it’s important to be aware of these limits when investing.
3. Fixed Deposits:
Fixed deposits are a type of investment offered by banks and other financial institutions that provide a fixed return over a set period of time. They are considered a relatively safe investment as they offer a guaranteed return, making them suitable for beginner investors who are risk-averse.
Fixed deposits typically have a fixed term, such as 3 months, 6 months, or 12 months, and the interest rates vary depending on the term and the financial institution. It’s important to shop around and compare different fixed deposit options to find the best rates and terms for your investment.
4. Real Estate:
Real estate can be a lucrative investment option for beginner investors in South Africa. Property prices in certain areas of the country have shown consistent growth over time, and rental properties can provide a steady stream of rental income.
However, investing in real estate requires careful research and planning, including understanding the local property market, property management, and financing options. It’s important to conduct thorough due diligence and seek professional advice when investing in real estate.
5. Retirement Annuities:
Retirement annuities are long-term investment products designed to provide a source of income during retirement. They offer tax advantages, as contributions to retirement annuities are tax-deductible, and the returns are tax-free until retirement.
Retirement annuities are typically invested in a diversified portfolio of assets, such as stocks, bonds, and cash, and provide a disciplined approach to saving for retirement. It’s important to choose a reputable financial institution and understand the fees and charges associated with retirement annuities before investing.
6. Government Bonds:
These bonds are issued by the South African government to raise capital for various projects and initiatives. They are considered a safe investment option as they are backed by the government’s creditworthiness.
They offer fixed interest payments over a set period of time and can be a good option for beginner investors who are looking for relatively low-risk investments. It’s important to understand the risks, terms, and conditions of government bonds before investing, and consult with a financial professional if needed.
7. Unit Trusts:
Unit trusts are investment funds that pool money from multiple investors and invest in a diversified portfolio of assets, such as stocks, bonds, and property. They are managed by professional fund managers and offer a convenient way for beginner investors to gain exposure to different asset classes.
Unit trusts offer various risk profiles, from conservative to aggressive, allowing investors to choose an investment strategy that aligns with their risk tolerance and financial goals.
It’s important to carefully research and compare different unit trusts, including their fees, performance history, and investment strategy, before investing.
Can I invest money and get a monthly income in South Africa?
If you’re looking for an investment that provides an income, Liberty offers a number of different monthly income products. You invest a lump sum amount and then receive a series of guaranteed monthly income payments for a specific period.
How much do I need to start investing in South Africa?
Investing in a unit trust is easy because unit trust managers purchase assets (like shares) on your behalf. Our investment minimums are affordable and start from as little as R250 per month or a once-off amount of R2 000.