The Fat Wallet Show with Kristia van Heerden

Podcast: Quality of life vs saving

In Latest, The Fat Wallet by Kristia van Heerden

I blame the advertising industry for the idea that living a good life is somehow related to money. Much as I make my living thinking and talking about money, money for its own sake is pretty useless. Back in the bad old debt days, I tried to use money to make me happy. That not only landed me in trouble, it also didn’t work.

When a friend sent me the Guardian article I talk about in this week’s episode, I had bad money days flashbacks. As Kay pointed out in the community group, the woman’s language usage is very telling. I remember saying things like, “I think it costs”, “I guess it sets me back”.

What bothers me most about this article is how this woman hasn’t made any choices about what she wants her money to do. She’s living someone else’s idea of a great life. I know it’s not an easy balance to strike, but a little thought can go a long way.

Fried recently had a health scare which got him thinking about this balance too.

I had a terminal illness scare recently. During that time, I really thought a lot about finances, about leaving money for loved ones and my daughter’s future.

If I died today, I know that my wife and daughter will be financially safe because of my life insurance policy (thank you SANLAM broker-man), the same thing if I don’t die but can’t work and earn an income anymore.

What stuck in my mind is that if I died today, I haven’t yet lived. No one plans to die, yet everyone does, and most, sooner than expected. Like you, I’d also like to live to 130, but we probably won’t. It’s very important to live during your breathing-time. And to do this while building a small fortune to carry you through retirement? How do you balance this?!

Clean swearing bleeped out show is below.

Win of the week: Darryn, who wants to be a good uncle.

My sister lives in the uk. They have three little boys. I don’t want to spend money on toys and amazon gifts and wanted to do a TFSA for them. They are unlikely to move back to SA. Are there any companies or banks that do this overseas (uk specific) and what methods would one go through? Any other advice on these type of matters?

Chris is 24 and needs to choose between an RA and a TFSA.

If I have R2500 to invest should I be maxing out a TFSA or putting money into an RA? And is only contributing to an RA when I’m 30 crazy? Generally more conservative over a 30 year period and generally more expensive than an Ashburton 1200. Iit seems like money in an ETF is the answer.  Is this a dangerous thought to only start putting money into an RA once I’m 30 – if I’m still contributing to a discretionary investment?

Do the tax implications of share incentive schemes leave you in a dangerous cash flow position?

If you earn R600 000 and your employer offers you R500 000 worth of share incentives vesting in 3 years’ time.

You have a long term view on the company and wouldn’t want to cash in for at least a couple years after the vesting period.

Effectively in 3 years’ time you are going to have to cough up extra (roughly) R150 000 in cash to SARS, but you are going not going to have any extra cash to show for your bonus?

That would probably force the majority of people to sell their shares as soon as they vest just to cover this?

Sheila shared an anecdote about bonuses gone wrong on The Fat Wallet Community on Facebook.

In UK in early 1960s, Dad expected his discretionary birthday annual bonus .. the Company had a financial bad year and they cancelled. Guess who cancelled Summer Holidays that year. Still a bitter memory as I had bragged at school that we were going to Spain. I’ve never banked on a bonus or commission in my life though .. lesson learned.

Frank considers himself reasonably financially literate, but he needs help.

I have been managing my money from a young age using what I have read and learned to guide me.

I got RAs, Preservation funds, Provident funds, share portfolios, tax free savings, paid off house, an emergency fund etc

I have done all the spreadsheets, calculated future value on the growth of my portfolio and what I believe to need to live when I retire.

I’m worried that I will be blindsided later in life, because of a knowledge gap, or not truly understanding tax treatments, error in my calculation which will result in a gap at retirement. I have 25 years to retirement and now seems to be a good time to do a proper evaluation of my position.

When looking for a truly independent advisor that aren’t aligned to product providers and will have my best interests at heart, I am battling to find one and don’t know where to look, as the internet is failing me.

I am clear what I need from them.

Review my plan and calculations and tell me if I’m on the right track. Need Reassurance

Not sell me a product, if I’m short something tell me and source it.

What is the real tax implication of what I’m doing, so that I’m not surprised at retirement

And start a conversation about options of how would I structure my investments at retirement

Any advice you can give me to find an advisor would be great, better if you could give a set of names of people in Johannesburg that I could approach. Or if there is an alternative that I haven’t considered that may help me answer my questions.

Matthew has an excellent question about buy-it-for-life shares.

In the last minute of episode 117 you say that you should hold and never sell.

How do you actually realize or extract the money from the portfolio?

If you never sell, your money is just a figure on paper?

So when do you actually make the money from your investments?

We haven’t heard from Sabatha in a while, and now he’s back with an excellent answer to a question we received a long time ago. We spoke about Greg moving his RA in episode 118.

The explanation for Sanlam’s waiting period doesn’t make sense.  However, the waiting period may be valid if the investment was by debit order. With most banks, an investor can unilaterally reverse a debit order within 30 days.  Thereafter, you need the cooperation of the receiving entity.

When you decide to move your RA, don’t forget to cancel the debit order instruction.  You might think it’s a given, but it’s not. Sanlam will transfer your RA AND continue with the debit order investment as if nothing has changed!  Buggers.

Anonymous has been appointed the executor of their grandparents’ estate, which is in a trust. They really want to do a good job of it.

After episode 118 on inheritance I was reminded that my uncle and I are the executors of my grandparents’ estate, which is in a trust.

It’s not a lot of money and there’s a good few people between aunts and uncles and cousins, so no unexpected R3mil coming our way. That said, I’d still like to do it right and I don’t know where to begin?


This Ashburton Global 1200 ETF is the bomb. In my days of TFSA investing, I’ve never picked a selection of ETFs very successfully, but since your ‘One ETF to Rule them all’… show 85 I sold all the ‘fluff’ ETFs that I knew nothing about, and swapped it for the Global. Since then, it’s up almost 20%… INSANE!

I finally see a profit margin on my EasyEquities account, and have a portfolio that’s beating inflation.

I’m busy reading Sam’s book Manage your Money like a Fucking Grownup – and it’s amazing, but I wanted to run something by you to find out what would happen…

If South Africa’s economy DID tank (think, Venezuela)… and I had a large portion of my savings in my TFSA… and it was in the Global 1200… because it’s a local index, would that be affected by an economic collapse? Or because its invested in global stocks, would it be protected… and what would it do if it was protected (like… would it go up by a bunch)?

José wants to know if there are marijuana shares or ETFs we can invest in from South Africa. He mailed after the concourt ruling that it’s legal to smoke and grow pot at home. But remember it was possible to invest in these shares before it was legal here.

Robyn is in a tight spot with her family.

I listened to your 108th episode and when the supporting family topic came up, I had tears streaming down my face. I come from a single parent family, and I am 31. My 2 siblings are 12 and 14 years older than I am. My mom recently had strokes and can no longer work and my brother has simply turned his back on any responsibility.

My sister earns a pittance and lives with my mom and relied heavily on my mom to feed, clothe and house her. My mom also made the fatal mistake of cashing in her entire provident fund over a decade ago and spent it on clothes, gifts, furniture, etc, so she survives now on her tiny SASSA pension.

All the responsibility falls into my lap. I don’t have that many dreams, but because of my poverty-stricken childhood, my main focuses are to have children and raise them in a financially sound household, and to build security and comfort for myself and family (ie: not to feed the cycle of poverty).

Now I am paying for a hospital plan for my mom each month of R1607 and I need to keep cash on hand because they’re in a position where disaster is a regular thing. I agreed to put away R1000 per month into a Capitec savings account and if they need it, they have to justify why, etc before I simply hand over the cash (they have always been poor, and are the opposite of me – I tend to never spend anything on myself, whereas they go crazy on luxuries and then can’t pay rent).

My husband and I already pay R600 into our access bond each month (which is also serving as our emergency fund, which is still FAR from our goal). I plan to downgrade my medical aid to a hospital plan and pocket the savings of R500 and add that to the access bond (thanks Stealthy Wealth!), and now I am wondering if my family’s R1000 pm should also go in there? I figure that if I’m going to be sacrificing this cash in future, I may as well make it work in my favour while I can. Is there such a thing as over-saving in an access bond? Are there real risks to this? Also, can I include saving for my family as part of my spending/saving ratio, or am I fooling myself by doing this?

Liefie has reached retirement age and now wants to take some money offshore.

I am over 55 and I receive capital and interest monthly from the sale of my business and should receive it for the next 3.5 years.  So paying tax on the interest.

I am still saving in case I live to 90 plus.  

I want to do a lump sum payment into an RA for tax efficiency. I want it to be invested 100% offshore so it will have to be a living annuity and I will draw down 2%. (I have transferred my life savings in RAs to S&P 500 through Momentum).

I can’t contribute directly into a living annuity, it has to go to a “normal” RA and then transferred(!). During the previous tax year I almost had my head explode in frustration to get this done.  It was easy to make an RA contribution to 10X, but 10X doesn’t cater for ancients like me to do what I have described above. So I then had to transfer from 10X to Momentum to get into a living annuity invested offshore.  

So far this year I have postponed doing anything about it.  Do you know about a streamlined route to do this? Is it a bad idea?

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