Tax is probably the only thing I managed to get right about my finances when I first started working. I had no idea what was going on, but I was sufficiently scared of the government to pay someone else to deal with it. The R800 rebate I got that year might as well have been a million bucks. I didn’t understand at the time why I was getting the money, but I was happy to roll with it.

If you’ve never filled out a tax return form, this is the tax year to start. If you’re worried that you left it too long and SARS might take your things, pay someone to help you. A small fee paid to a tax professional is worth your peace of mind.

Whether you like it or not, tax is much part of your financial planning as inflation and bank fees. You can hate it, but you still have to do it. Spend a little time on it and you’ll probably come to enjoy becoming efficient at it.

If you’d prefer some guidance, we’ve heard great things about Tax Tim.             

Win of the week: Zakithi from The Fat Wallet Community. Our community wizard Kay asked, “What's the one thing you did this week you're proud of or that made life better?”

Zakithi said, “I am planning +preparing weekly menus for my family. More time with my kids+relaxing 😍”

Nico wants to know when to call it quits.

I bought some Warren Buffet and an Emperor International Baskets through Easy Equities.

I have learned not to make assumptions like, if the bundle is called Warren Buffet, it should perform more or less like the namesake.

I’m trying to be patient in my investments, but these two bundles are falling fast! I can’t take it anymore! Warren Buffet is down 18.64% and Emperor down 13.83%.

When can I admit I made a mistake, cut my losses and try again, or should I close my eyes and stick it out (please don’t tell me the second one).

Liam wants to know our reasoning behind investing our RA rebates in tax-free savings vehicles.

I have noticed that you talk a lot about investing into RAs and then taking your tax rebate and investing this in your tax free savings account. I find this an interesting concept, I have always worked on the basis of investing the rebate in the RA and thus effectively compounding the tax rebate as I will get a further rebate on that. Could you please explain the logic behind investing the rebate in tax free savings rather, I am very new to tax free savings and have not given enough thought to how to best utilise them.

Gerhard

I've opened TFSAs for my three-year-old twins and I would like to add the maximum to

their TFSA before the end of Feb 2019.

I was thinking (and pls confirm if you agree):

• 1/3 - Satrix 40 ETF
• 1/3 - Ashburton 1200
• 1/3 - Sygnia Itrix Global Property ETF (or better REIT/Property ETF)

Dominic is about to get some money.

I am 25 years old and just entered the working world. I have an emergency fund in place in a flexible Capitec account and no debt. I try to live as cheaply as possible (but sticking to the structuring your paycheck suggestions is hard at my income level and age). I have been actively saving and have a provident fund at work that I contribute the maximum towards.

I am about to inherit some money from a trust that will be maturing that I estimate will be around R325 000.00.

I don’t have a RA yet but I am thinking about going for the 10x one after doing some research and listening to your debates about it.

I would like to move my emergency fund into a 32 day notice at another bank as Capitec doesn’t offer them - probably FNB as I would get around 6.65% on it which is second best from my research without having the hassle of the Nedbank (6.75%) private bankers trying to convince me to bank with them.

I haven’t got a tax free savings account and I’ve only recently started scratching the surface of this idea of ETFs and tax free accounts and what not.

At my age what would you recommend I do with this money? I suspect in due course over the next 2-5 years I will be looking at things like paying for a wedding and buying a house (even though everyone says this is a bad idea, I haven’t quite made up my own mind about it so I would like to keep my options open).

Education is a tough nut to crack. It’s an investment, to be sure, but just like any other investment, the rewards need to outweigh the risks. Unlike other investments, however, risk and reward are extremely difficult to measure in education. Private school kids could be doing better later in life because of their education or because they come from wealthy families that have access to everything from better nutrition to more free time.

Parents will spare no expense to give their kids whatever they can to ensure their future success. Does that mean private schooling should be the goal for every parent, no matter the cost? I’m not convinced.

In this episode, Simon and I try to put our childlessness to good use to try and answer whether a single kid’s education should cost more than R100,000 per year.

Our discussion was prompted by this excellent question from Edwin:

I have three wonderful children and very high expectations that they will have better opportunities in life than I did. This I suppose is a normal aspiration for any parent.

Is it worth spending large sums of cash to get my children premium private school education? The most expensive boarding schools cost over R200k per year and the premium day education can set one back about R100k per year. All figures per child! In the public system one can get away with costs that range between 50-70% less than this per child.

Is it worth throwing everything at getting the kids this premium experience? Or maybe just get them an education that’s good enough with a focus on getting into a University rather? The opportunity cost vs saving and investment is high.

I attended one of these premium establishments and having it on my CV means it has opened a lot of doors and served me well. However, some of my classmates are in jail. One became a bank robber.

Just not sure. Is it worth it?

Win of the week is Tshembi.

I have been listening since September 2018 and you have inspired me to get started on my financial freedom journey.I’ve always wanted to be an investor, but it was hard to find the right information and I was always scared of losing money. Listening to your show has given me confidence and I have gained knowledge on different types of investments products.

I like sharing the information with my younger brother, because I don't want him to be left behind. Thank you for making it easy for me to learn and to be able to teach others. The  OUTstanding money series of articles has really helped me.

For my birthday last year I decided to buy myself assets (Ashburton top40 & Ashburton MidCap ETFs with FNB Tax free shares account) instead of a gift. I’m so proud of myself for taking the first step to my financial freedom.

However I have an Easy Equities account and I’d like to move my FNB TFSA to EasyEquities because its cheaper and you always talk about it in the show. I also want to be able to buy Ashburton Global 1200 ETF to get the international market exposure and since i'm just starting out i think this is the best ETF to choose.

1. Will I be taxed for Ashburton Global 1200 ETF on a TFSA since it gives the international market exposure?
2. How do I go about transferring my TFSA from FNB to Easy Equities?

Helen also wanted to know about moving her TFSA from Capitec to EE.

Nico took out a policy to pay for his kids’ education and made a terrible discovery regarding his fees. He took out a Classic Saver Endowment Plan with Clientéle. He received his annual fee increase notification.

Now that I know what to look for (thanks to your podcast) I saw that my fees are around 5.5%. I bought this policy 12 years ago through IFA, but about a year ago asked them to remove the IFA franchise fee of R65 and deposit that amount into the account as well (now directly from Clientele).

I would like to have your input on the following.

1.       My son will be in GR 11 next year (2019). Is it wise to move the money to an ETF now or should I keep the policy running?
2.       If I must move the money, which funds would you suggest, keeping in mind the short time span until I will need it.
3.       If I move, will the fees I save make a noticeable impact on the end amount?
4.       I have an account with Easy Equities. Should I rather deposit extra money in that and leave the police as is?

Donal needs to make a decision about his kids’ studies.

I'm an Irish citizen who is now a Permanent Resident, married with kids and a homeowner (well actually I'm a bond owner!). I have a very decent job, a healthy pension plan and both my wife and I max out our TFSA allowances (thanks to you guys!). I'm approx 15-25 years from retirement depending on how patient I am and/or how rich I become in the meantime.

I have concerns about my kids’ future prospects, especially when it comes to tertiary education. I'm planning for the worst case scenario that they have to go overseas for University. That brings the possibility that my wife and I may decide to move with them.

I have been looking at starting to send some cash to Ireland on a monthly basis for investment for the next 15+ years so that we have a nest-egg for that possibility. Of course it's also a handy way of diversifying my current investment portfolio. I still hold an Irish bank account so I can easily use that account as my base for such an investment.

My wife recently resigned from her job and started working with a new company. Her provident fund has now become available.

I did get one of those light bulb moments and thought to myself - what a wonderful instant Irish nest egg this would be!! How cool would it be to just whack this lump sum over to my Irish account and invest it in an ETF so I don't have to worry my little head about sending monthly amounts over to Ireland for the next shitload of months!

Am I crazy to even consider this or is it a good idea? I know there are a million and one different variables at play here which makes it such a difficult decision. For starters we would lose approximately R100,000 to tax if we were to withdraw the fund now. I know I would also be liable to pay CGT to SARS on any foreign investment growth. But the possibility of having an instant emergency fund available overseas is a nagging temptation that I can't get out of my head.

Nakedi is 25, just completed her degree and got a three-year internship. She’s starting her career with some student debt in the bag. She needs help on planning her future. She has student debt from the National Student Financial Aid Scheme (NSFAS).

I did the math on my salary and expected expenses which leaves me in the red which is something I don’t want.

1.       NSFAS is quite reasonable when it comes to repayments and interest (at 80% of the repo rate), unlike a bank. Now should paying off my loan be top priority or start saving to build up my asset base?
2.       The job requires that I have a car, which means more debt. I may do the work without a car for the first few months but as time goes by I will need it. In my current financial position it’s highly unlikely that I would qualify for car finance, so how do I go about building a good credit record without drowning in debt?

• Don’t make the mistake I made here. Go second-hand immediately.

3.       The job is in the corporate world which means formal wear, which means I have to go shopping.  Since my cash resources are limited I thought of getting a clothing account which means more debt, your thoughts?

• Look up capsule wardrobes and put one together from second-hand clothes.

4.       To avoid further costs I will staying at home but the house is in bad conditions so it will need major renovations which will require more money. Should I save up this or incur more debt?

• A friend told me recently the best thing about staying in your own place is that you decide when you want to do things. Unless there’s a structural issue like a leaky roof or a burst pipe, this can wait.

5.       Both parents are unemployed which means I must chip in to help around the house.

• Have a discussion with your folks about their expenses now and agree what you’ll give them, instead of just giving money whenever. It makes it much easier to keep control of the money you have left. Since you live with them, just think of this as rent.

6.       Lastly, every now and then everybody likes to go on a holiday, how do I save for this and still be able to invest for the long term.
7. Any book recommendations on investing and personal finance, because there are thousands of books if not millions on the topic.

• Manage Your Money Like a Fucking Grownup, by Sam Beckbessinger

Brian wants to know how his advanced voluntary contributions will be taxed.

Advanced voluntary contributions is when you make additional contributions to your pension fund at work.

How will advanced voluntary contributions paid into my defined contribution pension fund be treated in my tax breakdown once I retire?

I expect to retire in 24 months. About ¼ of his pension fund is made up of AV contributions. If I cash in the allowed one third at retirement in full, will the AVC (which was after tax contribution) be tax free in this allowance?

Ben is turning 30. He thinks it’s time to be a money ninja.

I had an epiphany over the holiday in needing to take better charge of my finances. I came across your site and then the podcast which is amazing, thank you so much!

I'm trying to work through about one episode per day properly with notes etc. but still have a loooooooong way to go.

I've done the "normal" thing up until now, as I haven't had a clue how any of this works. I have two voluntary investments, one with PSG and one with STANLIB, an RA with STANLIB, and a joint company with high school friends where we contribute monthly and pool that into something or other at Allan Gray.

I'm sitting with excess money in my savings account (over and above my emergency fund) that I need to decide what to do with. Of that I'll probably do the R33 000 into an easy equities TFSA and go with the Ashburton 1200 for now (one ETF only to monitor and figure out like you suggested in episode 91). I'll probably monitor that and when I'm more comfortable invest a similar amount elsewhere through easy equities.

What's annoying me at this point are the fees on the managed investments.

Do I keep either of these? As I see it I have four options:

• Keep both these investments and see how things are going forward, in terms of markets and my literacy, and take it from there;
• Move the PSG funds over to the STANLIB account for now where the fees aren't as much, and monitor as above;
• Move the PSG funds over to the easyEquities platform where I can manage them myself, or
• Drop both of these investments and reinvest elsewhere.

Always Abundant has a great question about dividend ETFs.

I have never taken the time to understand dividend-focused ETFs e.g. Coreshares Dividend Aristocrats ETF.

However, since the dividends in a TFSA are not subject to DWT, I wonder if they would then have a greater impact on making a TFSA more profitable overall? If so, how much of it is too much i.e should it replace your General Equity ETF?

He also wants to know how the rand depreciates against the dollar.

I've heard people mention an accepted overall rate of depreciation of the ZAR against USD over x years in the future. I don't recall the details so if you know it please share? Is this known with certainty that is must happen? Or is there an equal chance that it could go the other way too?

Nadia has a question about the nationalisation of the Reserve Bank.

Could you please how investments would be affected? I have a RA and Unit Trust with 10x. I also have a Tax free savings with Easy Equity. If government takes over everything, what does this mean for these investments? Should we all be taking our money overseas instead or will it be safe?  

I also have a fixed deposit at Capitec and savings at FNB and I know these will probably be vulnerable but I'm not too clued up on how things would go if the reserve bank was nationalized. Any clarity and advice from you guys would be super amazing!

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