The Fat Wallet Show with Kristia van Heerden

Podcast: When should I care about performance?

In Latest, The Fat Wallet by Kristia van Heerden

Sometimes we say you should move your investments, sometimes we tell you to stay invested no matter what. This week, we receive two questions about moving investments. We use them as examples to discuss when it’s a good idea to cut your losses and move on and when you should hold tight and wait for the market to recover.

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I have RAs two with Old Mutual.

I contribute R1,500 a month to one, increasing by 10% a year.

I transferred the RA from my previous job to the other one, so it was just one payment.

I tried to work out the growth using Stealthy’s formula. If I did my calculations correctly, they are not doing well, unless I don’t understand the results.

The lump sum one grew by 7.7% pa. The other one was even worse, over 177 months, only returned 3.9%.

Are they doing terribly? I know they would have been affected by the stock markets not growing a lot the last few years.  I have been thinking about moving, but there will be a huge penalty.


I just received the EAC for my two policies, the once-off one is 4.1% p/a. The one I pay in monthly, the 1st year, the EAC was 17.5%! Year 2 was 7.9%, from now until I retire  its 4% pa.

I’m just waiting for them to let me know the penalty for moving.

I can’t believe it! 17.5% and this was an advisor my gran used and trusted so my mom and I used him too.

Clean beeped show is as below.


Recently I started taking control of my own investments. After being invested in unit trust at major brokers for years, the growth and dividends were not satisfying.

I now invested funds in smaller amounts in units trusts, more in a TFSA and the rest in ETF. After listening to a few of your podcasts and studying a few blogs, I have diversified accordingly.

Can you advise if my current portfolio of ETFs are the right choices or if I’m duplicating any:

– STX40



– STX500



– Standard Bank Rhodium ETF

– Standard Bank Palladium ETF

I also bought equity shares via EasyEquities in Discovery and Shoprite.

Lastly you spoke about Bond ETFs. Any recommendation to which one will be suitable with a portfolio like mine?


And if I haven’t said it to you and the team recently, a HUGE big thank you for this blog. I have learnt so much since signing up.

Truthfully, for the first time in, like, FOREVER, I feel as if I am on top of my finances and finally working towards getting down debt and building wealth.

I read your blog whenever it comes out, I try attend the Power Hours when I can, they are gold to meet and hear the experts in person, and dare I say it, but the dream of financial freedom is attainable. Which is saying something, as I seriously inherited some bat shit crazy, nonsensical, hysterical money mythology from my poor parents.

So thank you for all the effort to host the Power Hours, the effort to write and research and to share all the info with me. Li’l old me is making sense of this money stuff, finally!


How are some defensive stocks, ‘defensive’, if they are also sensitive to interest rates, for example, banks, utilities, and real estate? And also possibly stock market volatility?

Cait has a relative who gets an irregular income from running a preschool. They’re trying to work out how to calculate the 27.5% they should put towards her RA. She pays the expenses of the school and uses what is left over for her expenses.


  1. I have no obligation to save for my kids’ retirement. As far as I am concerned, it is their life, which means it’s theirs to mess up or succeed with.

I’d much rather give them the education they need to succeed and make sure they never have to look after my wife and I financially. If these priorities are ticked and I have some cash left, I’ll pay for them and their spouses and children to go on family holidays with us. What’s left when I drop dead, will go to my grandkids’ education.

Give your children the best shield and sword and send them off to slay their own dragons. I think you take a big risk on future interest rates, to rely on a possible student loan while saving for their retirement. The only place I see use for a TFS account for kids, is for saving birthday money they get from uncles and aunts.

  1. Say you borrow money at 10% per year, and you invest it and get a super 13% return. If your income tax is 30% you will be left with zero minus any costs involved including vat. What am I missing? Can you deduct the 10% interest on the mortgage loan from tax? I don’t think SARS will fall for :” I use this mortgage loan to earn an income on the stock-market.” This will only work if you are making money by renting out the bonded property.
  2. If the people have R100 and government have R100 and the GDP increases, government prints more money. So if the inflation is 4% it means government will print R8, which is 4% of the total R200.

So the end result is government has R108 and the people have R100 but the R100 can buy 4% less than the year before.

This is why government bonds can always keep track with inflation.

Do I understand this correctly?


I am a bit surprised that no mention has been made of the EURO STOXX 50 Index listed as the SYGNIA ITRIX EUROSTOXX50 here in South Africa. This index fund was recommended to me by a German stockbroker friend who has had 40-years experience at the Dusseldorf Stock Exchange. In his portfolio the Euro Stoxx 50 comprises of 85% of his portfolio the rest DAX and DOW JONES and cash.

Lorin wants to know if we can recommend a wealth mentor.

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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