I get asked all the time if it’s better to make your tax-free contributions in one lump sum payment, or monthly over the year.
My answer has always been that lump sum is better simple because it means your money is invested for longer and markets tend to move higher.
Then a recent email from Ninety One confirmed what I’ve always been saying.
Of course you may not have the lump sum on the first day of the new tax year and truthfully the difference is small. But every cent counts so if you can, get in earlier rather than later.
Another important point.
February is the end of the tax year for individuals and hence reg28 and tax-free contributions reset in March. For those of you planning on a last minute contribution this month, please don’t actually leave it until the last minute.
Money takes time to move around and many funds have deadlines ahead of the least day of the month. So sooner rather than later.
ETF blog
At Just One Lap, we are big fans of passive investment using ETFs. In this weekly blog, we discuss ETFs on the local market and the factors you need to consider when choosing an ETF. If you have wondered how one ETF differs from another, this is where you can find out. We explain which index each ETF tracks, what type of portfolio could benefit from holding each ETF, and how the costs will affect your bottom line.
