Reflecting on investments

So we’ve launched the year, done our annual financial goals and budgets. Now I’m going to dig deeper and look at all my investments with a critical eye to reflect on whether I need to change anything. I have a few investments that take up about 20% of my income; it’s a lot of money so I think it’s time to check if they are the right investments.

This is what I have, and my plan for each investment:

Retirement Annuity: (which is arguably not the best investment, but when I was 26 years old it seemed like I was doing the right thing). I’m sort of stuck with this one – it may not be a wise investment, but stopping it is even less wise (I think).
Short-term savings at Nedbank (32-day notice account): this is my fund for a new car in four years’ time, and a 50th birthday island holiday in five years’ time. I like this, it makes me feel secure that we have a plan and are saving towards it.

I’ll keep this;

Tertiary education fund for my kids: R650 a month into ETFs. It’s not huge but it will give us a bit of a fund to cushion the harsh reality of tertiary fees. Fortunately, I have at least another 10 years to contribute to this, so it is growing slowly but steadily.
Extra money into the bond each month: I like to put a minimum of 20% extra every month, with the aim of having the bond paid up in seven or so years – in time to start paying high school fees. At the moment I am putting more than 20% extra every month. So I think this is the area where I need to be making some changes – who knew one could over-invest in one’s home!

I’m suspecting that instead of over-investing in the house (what do they say about not putting all your eggs in one basket?) I should rather explore investing in more ETFs. Yip I think I need to do this.

And something I don’t have (well there are many things I don’t have, but let’s just focus on one for now):

A pension fund through work which I am now exploring: perhaps that is where some of my money, currently going into the bond, should go?

Right, I have some clear actions: firstly, work with our HR department to see if the pension scheme is a good investment. Secondly, I will only invest an extra 20% in the bond, and the difference can be invested elsewhere – either the pension scheme or monthly ETFs.

In my next column I am going to reflect back on ‘the lessons I learnt from my mother’ and check in on how well, or not, I am practicing them.

Donna