Podcast: How to invest BIG money

Kristia van Heerden Latest, The Fat Wallet

Those of us slowly building a portfolio every month accept our investments will be determined by our overall strategy. This strategy would include our ultimate financial goal, plans around asset allocation, diversification, tax planning and future drawdown management. We understand we have to consider these variables throughout our portfolio, including our retirement products. New money coming in goes towards old strategies. It’s boring, but effective.

Those who just came into a large amount of money are subjected to a terror to which the rest of us are immune. Where is this money supposed to go? The bigger the amount of money, the more flimsy former investment strategies seem. Oddly, new investors with only tiny amounts of money to invest seem to experience a lot of the same anxieties. At the extremes these decisions feel very large indeed.

The one difference between making a choice about your first investment and the biggest investment lies in tax planning. Your first challenge is to hang on to as much of that money as possible. From there we’re sad to say it all comes down to your strategy. What do you want this money to achieve? Which products are most likely to get you there?

The bleeped show is below:


I sold shares in a small private company.  I now have to decide what to do with it and to invest it wisely for the future. I am 50 years old and married with two 8 year old twin daughters (having waited for kids for 20 years!). 

I have current income streams and do not have to use any of the capital to supplement income.  We are renting and own a plot hat has been paid for in full.  I need to decide to build a house now on the plot or invest the share money in a diversified portfolio for strong capital growth in the 15 years to come before retirement at say 65. I have an RA currently invested in a portfolio of shares. 

I looked at Simon’s portfolio. I like his allocation of shares to “Death do us Part”, Second Tier, ETF and Tax Free groupings.  I read about the “Ashburton Global 1200 ETF” (ASHGEQ) fund that Simon proposes and the low fees of Outvest.  

I need to decide how to structure the capital as the current levels of some share prices may present a once in life-time opportunity for me to buy low PEs (e.g Firstrand, etc.). I am willing to move the RA from Sanlam Private Wealth to Outvest.  I need to get Tax Free Investment accounts for the kids, my wife (perhaps all 4 of us) and also invest more into my wife’s RA (very small and also willing to move that to Outvest).

I can afford to be aggressive and have no debts. I am however scared of my own emotions whilst trading so I want to follow a long-term passive strategy and not trade for the short term (speculate).  I have opened a brokerage account, but have not purchased any shares or instruments yet.

Win of the week: Albert

In podcast episode number 169, I had asked whether you would set up a Patreon. The rationale given for not having one seemed sensible at the time. Nonetheless, since August last year, following your sound advice regarding financial planning and cost management in general, I have saved quite a bit more than I would have otherwise. 

For the most part, this means I do contribute more to my savings and investments, but I have also been growing a side savings account, for your benefit. Attached to this email is a Takealot Voucher, spend however you wish. I would recommend allocating it towards chuckles and bubbles, because I enjoy the somewhat more chaotic tipsy episodes, but you know it’s a free world, I know there may well be more pressing matters at hand.

I am glad to have an emergency fund, and am currently parking my Covid-19 shut in lifestyle savings into a Tyme bank account. I currently have just over 8 months’ worth of expenses in cash, but perhaps it would be prudent to be in a similar situation to Simon, by having the maximum allowable tax-free amount on the balance sheet.

Ordinarily I would like to carry on contributing to Tyme, but their savings limit per customer sits at R100 000, a number I will reach shortly if WFH continues. It seems that the ultra-competitive bank savings account offerings from last year have all but shriveled up. The most competitive 32-day account is African Bank’s with a 5.85% per annum. This bothered me, as I know that the New Funds Traci ETF yields about 7.4%. 

I would like to know what the cost implications would be for the ETF, as it would sit in my discretionary brokerage account. I know I would be paying Brokerage commission, the Investor Protection Levy and VAT on costs every time I increase my savings or cash out, but what are the tax implications?

As this is a total return ETF, I would not get paid the interest into my account as this would be re-invested into the ETF. Presumably I would have to sit down and spreadsheet the actual interest earned for that tax year. 

Should an emergency arise, and I need to sell some units, would I be required to pay SARS capital gains tax on the interest earned as well? Your 2019 article about it on J1L also pondered the same question, so I wondered whether you had already received a response from one of the magical tax elves.

Old Mutual offers the ability to save in one of its money market unit trusts which also tracks the STeFI, it comes linked to a transactional bank account. It is a unit trust, so it has a higher TER, but if it eliminates capital gains tax, the other exchange costs and the added admin around tax year end by giving me an account statement for the unit trust, I would be willing to give up 0.1% of the yield difference between it and the Traci.

I would like to travel overseas after I get jabbed with a Covid vaccine. I have put money aside in a separate goal save. I get quite queasy when looking at ZAR exchange rates and what they may do between now and when I wish to travel, so I looked into SA based dollar/euro denominated accounts. Their interest rates on these are about as exciting as a finding a fly in one’s soup. Would it be better to save for travel expenditure in dollars/euros in a hedge against a rand drop, or is it better to save in rands and suck up the volatility for the next 12 – 18 months for this purpose? I’m thinking of splitting the difference 50/50.


So question on Market Value Adjusters: Are they bullshit? I suspect that they are. My wife is moving her RA from the big mean green machine to Sygnia. She received a notification that an MVA has been applied to her RA to transfer and that it will reduce the amount that she is expecting by 5%. Is this just a way to keep people from transferring, or another penalty that’s added on top?

I sort of understand what an MVA is: save from the good years to prop up the bad–but why add this extra “bonus” to a financial asset? To me it sounds like a turd wrapped in a sparkly bonus wrapper that just hides how bad active managers treat customers.


I have 20% of my Tax free investment and ETF portfolios dedicated to CSPROP and STXPRO, but every month when I buy these, I feel I might be throwing my money down the drain. Should I keep buying property ETFs as part of my TFIA and ETF portfolios or am I better to just hold what I have for a few years and not buy more every month? Should I drop my 20% allocation to 10% or less?


Having just opened a Tax Free account, I’m ready to jump in with my entire 36k. 

I know Simon’s advocated in the past for putting it all in at once, but has the current situation changed that approach at all?

With my RA pretty much maxed out for last tax year, and this year looking to do the same, should I still be weighting my TF more to international markets? Or is it the case that since the rand is very weak against these markets that I’ll be doing myself a disservice in buying now? 

I am 25 so as an investment I plan to leave (probably till retirement) it may not be do or die, either way I would like to make an informed decision. Is perhaps this year the year to focus locally with my investment and then return to my international focus with my TFSA at a later stage? Uncertain of how to proceed during this shaky and tumultuous moment.

What do you recommend one does with an emergency lump sum of around 250k? I was surprised to see my Depositor Plus account with Absa having lowered interest rates as of April 2020. I was wondering whether you can recommend a few accounts or platforms to look at during this time now that interest rates are fluctuating?

How would one start investing in the UK/&/Europe if one has a bank account in the UK, but no national insurance number? I occasionally get paid into that account by European clients and was thinking of using that channel to invest offshore, paying any applicable tax through my local accounts. Let me know if you have service providers you would recommend for something like this as well please.


I listened to “Five concepts that will make you rich“. Simon mentioned in passing if you committed to your R33k annually (at that time) one could have as much as R25 million in 25 year’s time. 

How is this possible? My understanding is that your earnings are calculated on the amount it was initially bought and hence it is not really compounded except for the dividends that will be reinvested.  Should one sell their ETFs and re-buy them annually to compound it?

This is a question about how shares make money. We wrote an article about that here

The Fat Wallet Show with Kristia van HeerdenThe Fat Wallet Show is a no-nonsense personal finance and investment podcast hosted by Kristia van Heerden and Simon Brown. Every week we answer questions by a growing audience of finance enthusiasts. Submit your pressing money and investment questions to ask@justonelap.com.

Subscribe on iTunes

The Fat Wallet Show

Meet the Just One Lap team at these live events

Subscribe to the Just One Lap weekly newsletter here