The Fat Wallet Show with Kristia van Heerden

Podcast: Is this the right type of investment for me?

In Latest, The Fat Wallet by Kristia van Heerden

Growing up, investments weren’t often a topic of conversation. Even so, I knew that people got rich from property. I don’t ever remember someone telling me this outright. I knew for sure we weren’t the people getting rich. Still, it’s just one of those “universal truths” I absorbed as a kid.

Looking back, I realise it’s because I grew up during a property boom and a lot of people really did get rich from property. Share investments weren’t accessible or easy to understand. Financial products were sold by unscrupulous insurers who gorged themselves on the hard-earned cash of their clients. The vast majority of the population were excluded from the financial system. Property was a great way to accumulate assets and build wealth under these circumstances.

That is no longer true. The market has changed. Legislation has changed. Easier, cheaper, less risky ways of building assets are now available to everyone with a proof of residence and identification. Property is suddenly one of many ways to get rich.

In this episode, Simon and I discuss the role non-share investments can play in your portfolio. We think through two listener questions – one around S12J companies, the other, property.

Garth wants to know what we think about venture capital investments.

Since I started listening I have opened an account with Easy Equities. I’ve set up a budget, started with a financial plan, and invested in ETFs & normal shares.

My question is around Venture Capital Companies. Is it wise to buy Private equity, and get the tax relief? Or is it only for high income individuals? There is a lock in period of 5 years I see as well. This is similar to the MTN BEE shares bought a couple of years back.

I am trying to diversify my portfolio and looking at all avenues to spread the risk with the bulk being in Shares/ETF’s of course.

Ros has a property investment success story.

I bought my first home – a small 3-bed townhouse in which I still live – in 1999 for R180,000 – got a loan from my dad and paid him off (including interest which he did charge me!) in two years. Then I bought a rental property in the same complex for R370,000 (including all costs of purchase) in 2004 – got a bond for R280,000 which I paid off within 3 years. I then bought a second rental property (mistake!) for R707,000 (incl. all costs) in late 2013 for which I liquidated some Satrix Top 40 and accessed the remaining capital in the existing bond, which I decided to pay off at the end of 2017. I’ve left the bond open and use it as my emergency fund or to help with short-term cashflow issues if a client pays me late (I’m a freelancer).

The rental income that I get from the two properties means I hardly have to work at all to cover my monthly expenses.

But with the property market currently where it is, I do agree with you that it makes no sense to buy an investment property today. The first rental property has seen capital growth of around 127% over 14 years (approx 9% pa), and then there’s all of the rental income. The second property has seen capital growth of around 13% over 4 years. The two properties are of similar size in the same complex, so the difference is purely down to timing – the first was bought when property values were still going through a high-growth phase, the second when property growth had plateaued out.

We talk about this excellent JSE Power Hour presentation by Magnus de Wet in this episode. 

Jonathan made the best case I ever heard for not swearing on the podcast. So good, in fact, that I’m actually considering it.

Personally I don’t mind that you swear. I understand the need for creative and relaxed expression on the podcasts, which is breath of fresh air compared to radio shows.

The only problem is that it excludes mothers who have children in their cars. Yes, there are some dads that take their kids to school but invariably it’s the mom.

The result is that mothers don’t end up as being financially literate in the household. As a husband, I can’t get my wife to listen to your podcast because she won’t listen to the swearing. As a household, we have shared decision-making. It’s very difficult to convince my wife to listen because driving in the car is probably the only time she has to listen to the podcast.

I would very much like to improve the financial literacy of moms, especially stay-at-home moms (my wife by the way is a professional and still works) but alas, she is excluded from your otherwise excellent podcast.

I could even suggest that you take a poll in which you ask your listeners whose wives won’t listen to the podcast because of the swearing and thus you could gauge from your listeners themselves.

If we are to create gender equality in financial literacy, let’s get more women involved.

  • I take the point on kids in the car.
  • I disagree with the view that women are more offended by the swearing than men. In fact, every email we’ve ever received about swearing has been from a man.
  • That said, I’d love to hear from you on this. This show is about inclusion, which, ironically, is why we swear in the first place. We want to feel comfortable ourselves, and we want our users to feel comfortable.

Richardt let us know about a very cool tool for Sygnia investors.

Sygnia has this excel sheet which allows you to select all the funds you like on the first tab for a Reg 28 compliant investment, and then once you click Generate, on the second tab it will show you the complete breakdown of fees and total asset class allocation!

It has been updated following the budget speech.

  • It’s very cool. It includes the actual rand amounts too, so you’re not just working with a percentage.
  • If you contact customer service they send it to you.


Nicole is following up on the tax issue on global funds in tax-free savings.

You made a comment on having global funds in your tax free savings account.

The issue is that you pay dividend tax on dividends issued in the countries where the shares are held. The tax gets deducted from your dividends before they’re paid out to you or reinvested. If you receive dividends in a TFSA, you don’t pay local DWT, but you can’t avoid the international tax.

I have the Ashburton global 1200 and the sygnia 4th industrial revolution in mine and I’m trying to figure out if these would result in the problem you identified.

When I received local top 40 dividends last week, my offshore dividends were a line item. I hold these outside of my TFSA and I noticed that I paid local DWT on those. That’s also a line item in my statement. What we’re trying to work out is if there’s an offshore tax that was already deducted and not included as a line item in my statement. Getting an answer to this question is proving to be really hard.  

Jacques has a question about his retirement tax break.

Is the  27.5% on the total pay you receive, i.e monthly salary + overtime + bonus + ……

or is it my basic cash salary before all those extras only?

My company contributes 15% of my BASIC salary (+ my 7.5%). If SARS gives us a tax break on 27.5% on total salary, that means my current contribution is much less than the “22.5%” shown on my payslip.

If I could spare enough to save the full 27.5% of my total earnings, what do I do with the extra money? Retirement annuity or Tax Free Savings account? Is there something else? HR seems to be unsure about increasing my contribution deducted directly from my pay.

Denzil wrote us in episode 94 about his Liberty RA. We made a fire under him. He also has a question about moving TFSAs.

I decided it’s time to kick these guys to the curb.

I’ve started the process to transfer my RA from Liberty into my 10X RA.

The FA was not too pleased and tried all the tricks in the book. He even then asked me who I’m moving to.

I informed him about 10X. He had no idea who they were!! I even told him about this a year ago, so much for keeping tabs on the disruptors!!

I’ve also started the process to withdraw my the other investment from them. I’ll be maxing out my Easy Eq TFSA for the year. 50% to my Emergency fund (taking it to my comfortable 6 month level). The rest will go into my Trading Easy Eq account. Again, crazy FA not happy, and has all excuses. So all is good and here’s to my money actually now growing(well lets hope so!!!).

When you transfer a TFSA from one account to another TFSA Provider, do the contributions count in the year I added them, or does a transfer count for this years R33k cap?

Gerhard knows he missed the boat to win the book, but he wanted to contribute his mind-blowing financial fact anyway.

The single biggest tip I have on finances: never ever buy anything that someone is trying to sell you.

If you didn’t initiate contact the answer is always no, no matter how awesome the deal.

Saves you from being overcome by superior salesmanship and buying something you didn’t want all the way to being scammed.

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

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