In this second instalment of my Holiday Show Load, we are not nearly so clever. We tried to push through as many questions as we could, but you know how chatty we get!

This is the Double Jenny episode, which delights me no end. We discussed some of the things Jenny the First can do to choose the right ETF for her. If you find yourself in a similar position, you can find some more tips on making this choice by reading the below articles: 

Comparing ETFs: Costs

Comparing ETFs: Asset classes

Comparing ETFs: Methodology

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Maryanne

If I check on the ETFSA site the TER for my Sygnia ETF is .6 &.8 % pa.

When I look at my statement I pay TER & management which is more like 1% . When I asked why so much for a passive fund I was told  DBX charged the same. 

Margaret

SARS want to know your net gain/loss as well as your capital gain/loss. Could you explain the difference between these?

I have a TFSA with Sygnia and Allan Gray. The Syngia IT3 gives me interest, dividends and capital gain/loss. The Allan Gray. Gives me net return, interest, dividends and capital gain/loss. 

Allan Gray had this explanatory note that they owned the underlying investments, so the tax implications accrue to Allan Gray. Given the whole point of TFSA is that you don't have tax implications. Can you explain what's going on here? 

Jenny

I recently opened a brokerage account and bought a couple of ETFs.  I’m a newbie and need a little advice on my portfolio.

I bought: 

• Satrix MSCI world
• The Satrix S&P 500
• The Satrix Nasdaq 100
• Ahsburton Global 1200
• Sygnia msci US
• Sygnia 4th industrial rev 

I am invested in property in South Africa and am looking for global exposure.

I was just wondering if it’s wise to put money into all these different ETFs of which some are very similar.

Would it be better to cut down and rather put more money into one? 

What should I do going forward with the ones I have? 

I invested in tax-free savings account. I’d like to open a normal investment account soon, but I’m not sure how many ETFs to choose?

Jenny

I will be receiving some inheritance in the near future - R3m.

I feel a responsibility to look after it and make it grow and not blow it on a bad investment. 

I am 44 and I have a bond on my home of R1.5m. 

I don’t necessarily have to pay my bond off with my inheritance as I rent it out, so I can deduct the interest from my rental income for tax savings. 

I am invested in property in SA so would like international exposure. Do you think I can invest it all in two or three ETFs like the Satrix s+p 500 and msci world. Would this be a good idea or do you have any other ideas on what I could do?

Santosh

From my experience, this can be accomplished via direct dividend paying shares, or buying a Dividend ETF like the Satrix DIVI.

The other is to buy mutual funds that pay income on a bi-annual or quarterly basis. These will pay different amounts depending on what's invested and hopefully will cover all expenses during the course of a year.

At a 5.5% typical bond fund yield, around R4.4M is needed in capital and if we assume 20% goes in tax, we'd need R5.45M to be comfortable. 

I'm not accounting for inflation as I'm assuming the capital will never be touched, so it will move "up" hopefully with the underlying unit price. I'm further assuming that the "Cents per unit" paid will increase with time and thus account somewhat for inflation (I know this is a risky bet!)

Do you agree ?

What would be your suggestions for the best funds to use for this purpose, excluding property.

If RSA goes to junk, the yields will increase, which will mean a good regular return if bonds are used as an investment and as the prices will fall, one can buy more bonds for an even larger "income".

IF this is true, why invest in anything else but bonds?  Am I correct in the above thinking, or am I being too simplistic.

We discuss income ETFs here.

Mona

Since listening to your show my wife and I have seriously been looking at some financial options. My wife currently has R1.8m in a 32 day call account earning R10 000 interest per month. 

We know this is not the best option, but our financial advisor from Standard Bank has told us to give notice and he will invest it offshore rather. Is there a better option? What would you say is a conservative fund to do this with for a period of 10 + years?

Katie from summertownpictures.com

I have heard your cries about fees, and decided to act. I have a TFSA with FNB. I decided to call them up and ask for my EAC for my Tax Free Shares Account. 

The consultant was unaware of what the EAC was and sent me a tax certificate. Sensing some disgruntlement, she got hold of someone higher up in the food chain and he told me my account costs R20 a month and gave a vague brokerage fee.

This took roughly an hour over the phone. 

And this is not the EAC expressed as a percentage as per ASISA standard requirements. Am I right? After explaining this to him, he told me he could manually work the EAC out for me.

My complaint was escalated, and this is the response: "I have gone back and requested some information from our Product manager regarding EAC on Tax Free Share accounts. He has advised me that this would apply to the Tax Free Unit trust accounts and not the Tax Free Share accounts as EAC is specific for providers that are ASISA members like unit trust providers. FNB Share Investing is not an ASISA member and therefore not required to provide clients with a EAC of their product."

Does that sound right to you guys? Based on this I shall be moving my TFSA to Sygnia PRONTO. See ya later FNB.

Franko

I started working at the age of 21 and started investing into an RA through some crap that was sold to me. 

After a few years I stopped contributing to it and left it. I have since changed jobs twice and have been working for a wonderful company for nine years now. 

This company contributes to a provident fund on my behalf and has been doing ok. About two years ago I started to really think about my retirement. 

I tracked down my old RA and moved to a new rip off scheme and started to contribute to it again. After reading some books I realised the fees are mad and moved it again to Sygnia and got rid of my “advisor”. I only contribute R600.00 to the RA as my main focus is my TFSA.

 After the move and my new lower fees I started doing some more research. I had no idea how TFSAs worked.  

I thought it was like a savings account at the bank that you can save money at a low interest rate and pay no tax on it. I dug deeper and found out I was so wrong. 

I opened an account with Satrix and started investing into the S&P500 and trying really hard to contribute the max amount each year. Listening to your podcast I think I need to diversify even more. 

I want to invest in either the Ashburton 1200 or the MSCI world index fund. But what do I do with my S&P500 investment? I know selling it will reduce my overall tax saving years from now and the amount already contributed cannot be contributed again in another fund. Do I leave it and stop the contributions to open the new TFSA or do I sell and move on?

My S&P500 investment has been doing really well and if I am correct, the S&P500 is at an all-time high or close to it. If I do continue investing in it, do I buy now at this high or do I wait a while to see what it does?

Jamie

• I have an emergency fund (6 months expenses) - In an account earning 7.2%
• I contribute to an RA through my Financial Advisor with Stanlib and am quite happy with the asset allocation. My contribution is currently only 5% of my gross salary.
• I currently have a very small equities portfolio which is currently doing terribly :(
• I have a Unit Trust with Investec (Equity Fund Class R) - I do not contribute to monthly. 
• I have a TFSA which I have maxed out for the last 2 years in the following ETFs:
  • Sygnia MSCI World - 35%
  • CoreShares SciBeta M-FI - 35%
  • CoreShares PropTrax Ten - 20%
  • Ashburton Global 1200 - 10%

I am currently sitting on R1m cash (after CGT) due to the sale of shares in a company I was involved in. This money is sitting in my bank account earning 7.2% until I decide where to invest it.

• How do you feel about my weighting and choices for the TFSA? Should I be contributing more to the Global 1200 - I hear you speaking about this a lot?
• Should I be contributing more to my RA?
• Where should my R1m be invested considering all of the above? I would like to have some cash available for the odd splurge if needed ;). 
• Would it be wise to keep some money in cash to then use to max out my TFSA at the beginning of each year without having to contribute from my salary?

In honour of my long-awaited holiday, we spent two shows doing nothing but answering questions. This is the first. 

Don’t forget we’ll be at the JSE in Cape Town for a live recording of The Fat Wallet Show on 31 October. 

Win of the week: Jonathan

The fees are a little confusing, because the quote has three different fee tables, all represented in a slightly different way. Depending on who you are, this is either super transparent, or designed to confuse - or both. 

I learned three things. 

One, Sygnia allows investors a lot of flexibility, so you can really build your own portfolio. You can build your RA portfolio to align exactly with your investment strategy (reg 28 compliant, of course).

Two, Sygnia is really cheap, and fees are fucking confusing. Sygnia quote an annual fee as low as 0.36 inclusive (!!) but then show an effective annual fee of 0.52% year one, 0.46% year two in the same document (still good but wtf). The EAC seems to be the "what you're actually charged" amount.

The 0.52% EAC is basically the lowest I could get with the available Sygnia products. The main "downside" is that international equity is all SP500 and not true global spread - because the SP500 ETF is almost 0.5% cheaper that the MSCI world!

The biggest issue for me is because of market movement, there is really no way of realistically 'checking' what you are being charged, so you really just have to trust the provider, which I hate, because the quoted fees are always so absurdly vague (all providers!).

Third, RAs don't have to provide less returns that the rest of your portfolio! 

My question is whether the last option is a good shout, or whether such a large component of global property is not a good idea for some reason. Which would you do? Which would Simon do?

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The bleeped version is here.

Stephen

REIT dividends: There are still those quite insistent that REIT dividends qualify for the interest exemption. They do not. I'm not in the biz of arguing, but for clarity this is the situation as per the tax legislation.

Ria

I can finally call it mine, 3 years after I signed the OTP, and 2 years later than it should have been transferred to my name. 

During this time all my savings went into a MM account with the idea to put a big lump sum towards the repayment. After the monthly bond repayment, levies, rates & everything else, I still make about R900 p/m off it (I rent it out) which I set aside for maintenance etc.

I save about R8000 p/m, and my outstanding loan is about R1m. Do I:

1)      Put everything towards repaying my bond ASAP? (Apart from my 33k p/a for TFSA)

2)      Invest everything in ETFs and let the rental income continue to pay off the bond?

3)      Go halfsies – 4k p/m into the bond and 4k p/m into ETFs

Dave

I have been amazed by the consistency of your message. I think the only two things that have changed are DBX World is now the Ashburton 1200 and your attitude to tax changed from pay tax, to try only pay tax once.

After all 162 podcasts, I have the following points/questions lingering:

• Why haven't you two moved to Durban?
• A lot of people are worried when they die that their dependents will be left stranded while the estate is sorted. First thing is that some life insurances pay an advance (maybe 10%) and another option is to set up regular payments to another account in their name to cover key expenses. Set it up now. Be ahead, for when accounts are frozen.
• With the TFSA for children - it is not binary. Try give 1-2 full years, ask friends and family rather to pay towards that than buy another toy for the toy box. This gives them 18 years to internalise the compound effect, something that took me 15 years after I understood the maths. It also gives a real discussion point about money. It still leaves 90% of the allowance (which could change) for the child.
• Last point is that how people think of risk bother me. They say something is risky (or aggressive), but risk has time and context factors - for example, cash is riskier than investments over time.

Anyway, thanks for being awesome and helping me catch-up on the SA Financial Scene.

Dr Dan

I am, at times, a government employee and they, when I can't choose not to, contribute to a GEPF (Government Employee Pension Fund) on my behalf. 

I’m in the process of getting hold of my current pension statement. I assume that the maximum 27.5% contribution is the combined total that goes into my GEPF as well as the amount that I contribute to my own RA?

ps: Why is it called 'Just one lap' I'm sure you get asked frequently but I haven't heard the answer yet

Jens

Just a reminder, to COMPLETELY read any updates of your Insurance contract.

I started with a new company in 2017.  I only read the 2018 update superficially, and then got a surprise when I read the 2019 update.

My father in law’s car, which was insured on my policy, had the name of the owner changed from his mane to my name (without any communication by the Insurance Company - in 2018 or  2019). When this was queried with the Insurer, they stated that only vehicles that I owned could be insured and was informed that my father in law’s car was therefore not insured in the two-year period (luckily there were no claims!).  Still trying to get this issue fully resolved by the insurer after two months.

Errol

We now are avid ETF investors which are awesome for my wife and our future. We are 45 years old so have a 20-year investment plan in place in terms of ETF investing. On top of our existing RAs and pension funds

We have bout R10,000 worth of ETFs in Ashburton and Satrix 40 etc through EasyEquities.

What if the website shuts down or the company goes under. What happens to the money I invested in and how would I get access to it should something like that ever happen?

I don't want to ask them directly for fear of a biased answer.

Dave

0) get professional advice. Use the following as a prompt to unpack some of the issues. I’m a professional, but not in tax or finance. I have spent several years living & working in the USA on a work permit/ visa and submitting tax returns in both countries.

1) to answer Simon - it is possible to have dual- SA citizenship

I think there might be a requirement to inform / request permission SA Dept Home Affairs when applying for citizenship of another country.

2) when Dirk got his USA green card, he went fully onto the US tax books. The IRS taxes US citizens on global income. 

Any TFSA held in his name in SA, while not taxed in SA would probably be assessed for tax in the USA. There is a double-taxation agreement between SA & USA but I can’t see any tax advantage to a person who has tax residency elsewhere (health warning: I’m an engineer, not a tax specialist).

3) there are a number of SARS criteria for triggering tax residency in South Africa based on the period of time spent in SA. 

To keep it simple - Dirk should limit time in country to 90 days or less per tax year to avoid being tax resident in SA.

If he does become tax resident in SA, then SARS will want a share of US income & he will have to rely on the double-taxation agreement to limit total tax. 

FYI While US tax rates on income tax are lower than in SA, but US tax payers also pay social security tax and might also pay state taxes.

4) the 180 days that Simon refers to is for SA tax residents who meet several requirements to be exempt from paying SA income tax on income earned offshore. This will be capped at R1m in the next tax year FY2020 & makes working in low / no tax regimes (like the Middle East) less attractive to SA tax residents working overseas. It will no doubt prompt some of them to do a financial emigration from SA.

FYI: The issue of tax residency is in tax law one of intent and does not require financial emigration. Financial emigration is a SARB exchange control process that also results in the person ceasing to be tax resident in SA. 

Brendon

My wife and I max out our tax free savings account every year and currently invest roughly 50% of our monthly income into a range of bonds, dividend ETFs, property ETFs and international ETFs.

We are both 38 years old and have had the idea of emigration on our minds for several years. Although we haven't yet taken the leap and don't immediately plan to do so, it is nevertheless something we would consider.

My wife has an RA which she contributes minimally to in comparison to the rest of our joint investments. I don't have an RA. The reason neither of us are very focused on RA's is because if I’m not mistaken, we would be heavily penalised for closing the accounts early to emigrate.

So I have two questions:

What kind of penalties would we be looking at for closing an RA early and withdrawing the funds if we were to one day emigrate?

Would it be worthwhile (even considering any penalties) for me to open an RA since my wife already has one and for us to both start contributing 27.5% to each of them. Alternatively we would continue with the ETFs which we can withdraw any time.

In the end, emigration is not a definite plan but rather something that we are open to and have therefore not focused on RA's up to this point.

John

The cost of MWeb unthrottled, uncapped Fibre has now dropped to R399 down from R899 last month for a 10meg line.

The catch however, is they dont drop the price unless you specifically phone in an request the new package.

If you’re a regular listener, you already know your emergency fund is the most important thing in your financial life. It’s boring, yes, but crucial. You should protect the assets you have with insurance. For as long as you’re earning an income, you are your most important asset, so dread disease and disability cover is a big deal. 

Once those two elements are in place, where you go next becomes more complicated. We think everyone should have tax-free investment account. If you’re a salary-earning tax-payer, taking advantage of the tax breaks offered in retirement products is a good idea. 

In this episode, we get five versions of the same question: which investment option is better in the long run?

We come up with the following check-list of questions to help you decide:

• Where can the money stay invested the longest? 
  • Time is a powerful ally in investing. The longer you can leave your money to compound, the better.
• Is the money guaranteed?
  • This ties in to how long you can afford to stay invested. If you need the money in the short term, you want to put it where the outcome is guaranteed.
• Is there a limit to the up-side?
  • Once again, this comes down to time. The market can go up forever, whereas a fixed rate or guaranteed product can only deliver what was promised, nothing more.
• Is it the most tax-efficient route?
  • When you’re talking investments and time, your risks are inflation and tax - both of which will affect you whether you are aware of it or not. The sole purpose of investing is to counteract the effects of inflation. That just leaves tax.
• What is the opportunity cost?
  • The very act of putting your money into one vehicle means choosing against all the other vehicles. What is that choice costing you?
• Are you considering all the moving parts?
  • When it comes to offshore investing, are you thinking of the currency move and the market move? When it comes to asset allocation, are you accounting for your retirement savings allocations too?
• Are you taking your money out of the country at a high rate?
  • We tend to move money offshore when the rand crashes, which means we’re taking money out at a high rate. Money should be taken offshore when the rand is strong. 

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Win of the week: Candice

My “work husband” recommended the show. This was roughly around the time I found out I was pregnant. I mostly started listening out of fear, but since then we’ve paid our debt and started an emergency fund.

Is it advisable to max out our daughter’s TFSA annually and just deposit bits and pieces to our TFSA?  Or should we spread our contribution equally across all three?   

We will only draw from her TFSA in 20 years, if we need to for studies. If not, we’ll hand it over to her for her 21st.

I have a company ra with the green company, but we’re going to start contributing to a 10X RA as well.   

We don’t want to be financial burdens on our daughter when we’re older. We want her to have enough money available to not have to take student loans etc and get a helping hand at starting life. I just want to know we are on the right track. 

Herman wrote an algorithm. The results are in an article called “The ideal pre-retirement allocation mix” on justonelap.com.

Nico-Ben

It seems the market is currently going down. At the moment my Satrix 40 is at a loss.  This does not bother me as this is a long term investment. In one of your podcasts, you said this should be seen as the JSE is having a sale, just like a retail store might have a sale. This  makes perfect sense. 

I was planning to put the rental income into the bond, and top up my TFSA balance in February.  Looking at the prices dropping, it also seems like I should consistently buy the Satrix 40 in the TFIA. 

Which course of action would you suggest?  I get it that we cannot predict the market from now to February, and that is too short term to really expect any real profit.

Guido

After maxing out my tax free savings I'm not sure whether I should carry on saving in a global vanilla etf like Ashburton 1200 or something like the 10x high equity fund.

Should I invest in both or am I overexposed as the 10x fund invests in the satrix msci world as well. I am 40 years old and looking for long-term growth. I prefer a global etf at the moment as S.A equity is not doing much. The 10x high equity fund has 50% local equity but otherwise is nicely diversified. Which one should theoretically give the better return in the long run?

Gerhard

I currently maintain a 50/50 split between international and local investments. Every month I use the new money to try and keep it in balance. Hopefully it's 20+ years before I need to touch any of this money. 

Recently I stumbled across Galileo Capital's YouTube channel. One thing Warren Ingram keeps mentioning is the "fair value" of the USD to Rand. He feels it's at about  R13.90 to the dollar. One should only move money offshore when we are below this level. This includes buying the international ETFs on our local market.

Should I just ignore the USD/Rand and keep buying international every month?

Or, does one keep the money earmarked for international in cash, and wait for the Rand to strengthen back to those levels?

Andy

I now own three properties in Cape Town. 

I live in one (paid off, but lets ignore this lifestyle asset) and 2 investment properties. 

Paid R800k for the first flat and I’m renting it out for R7800, which covered the bond repayments and the levies and rates.

I ended up settling the bond with a lump sum. I used the bond to pay "cash" for the 3rd flat.
I now have bond debt of about R600k (on the first investment property) which I’m smashing with my monthly salary savings and rental income from my 1st investment property. 

The third flat hasn't got a tenant yet as I bought it off plan.

I do have market exposure and the necessities covered. Example:

• I currently have that Liberty evolve product that tracks the top 40, which I will move into simple Satrix top 40 shortly.
• I also have some individual stocks which are taking a hammering. Mainly speculations on my part. I’m slowly moving away from individual stocks but they are so ridiculously cheap now that I refuse to sell them..
• TFSA is maxed (missed one year becasue im an idiot)
• Emergency fund is adequate.

Do I start filling up my Standard Bank OST account with my favourite ETFs or do I smash the bond and then fill up on ETFs?

Albert

I stumbled across your podcast while trying to find out why the yield of the Satrix MSCI World Equity Feeder Fund Unit Trust was less (by a few hundred rands) than the yield of the Satrix MSCI World Equity Feeder ETF in my TFSA over a period of two years. 

On a simple TER basis the Unit Trust version of the same product was 0.63 more expensive. At first this didn’t seem too bad, until I started running the mathematics with a few assumptions and looking at the lost return over time. Naturally this infuriated me beyond belief.

Since then, I’ve been working my way through your library while going through all of my expenses, investment activity, insurance and pension funding. 

Being in my early 30’s, I have some investment groans about poor investment choices in my 20’s like:

• buying a new car in my first year of permanent employment
• transferring my previous company’s provident fund savings to a preservation fund which has a TER of 3.2%, 
• investing into equities via Unit Trusts without an emergency fund and occasionally dipping into the capital to fund emergencies. 

That said, I currently don’t have debt, have always contributed as much as possible to my employer’s retirement fund and am grateful to have some savings and enjoyed some treasured memories of overseas vacations.

You have both inspired the following change in my personal life:

1.       I have penned a life plan and investment strategy;
2.       I have set up an emergency fund which will increase over time (thanks Tyme);
3.       I have reconsidered my luxurious expenditure (mostly eating out far too often as I live in JHB), and increased my monthly savings rate from 30% to 35%;
4.       Launched a crusade against fees in my personal life:
   1.       Short & Long-Term Insurance premiums,
   2.       Moving from an Asset Manager platform to a Stockbroker (Goodbye expensive Unit Trusts),
   3.       My RA’s and preservation fund (this move is still ongoing),
5.       Drafted a will, and
6.       Placed a mandatory review of my finances firmly in my 2020 calendar.

The Question:

Given the amount of money I ought to have saved this year thanks to your sage advise (far better than any financial advisor I’ve met), I would like to send through a bottle of Veuve Clicquot. Then I took a look at the price of those particular bubbles, and surmised that it is beyond what I am prepared to pay for quite a while. Would it be possible for you to set up a Patreon or something? I wouldn’t mind kicking a few rands your way on a monthly basis to keep the show running.

Alexander

From listening to your podcast and speaking with friends and family, I would like to avoid credit. But I am also cognisant of the fact that I’d most likely have to incur at least some debt for a house one day. 

The Standard Bank consultants informed me that building up a credit score starting now would make applying for future loans easier and that I’d possibly get lower interest rates.

• Would building a positive credit history (by using credit, instead of my normal cash, and paying it off in 30 days with that exact cash that I would have used) actually allow me to negotiate for better loans in the future?
• How important is having a credit score in reality?
• Does your asset base (i.e. my investments) influence your credit score? Surely having built up an asset base would count for more than having a positive credit history, or am I wrong?

Do you have any general tips/advice for how I can start planning/structuring my life to minimise my future debt and living costs? At this stage in my life I’m very flexible regarding where I decide to work, buy a house and so on.

Chris

On the Sygnia website they claim to charge an admin feed of 0.2% on Sygnia ETFs and 0.4% on other ETFs.

Since my ETFs are all from other service providers, the 0.4% admin fee would apply + the TER of the ETF itself. (e.g. Satrix World = 0.4% admin + 0.35% TER = 0.75%).

However, on the Sygnia RA platform, there is a tool for calculating EAC fees which gives a slightly different output. It states my current EAC fees are 0.89%.

On my quarterly statement, it gives a table of each ETF, with the respective TER and management fee applied. The management fee ranges from 0.1% to 0.3%, which is quite reasonable. However this does not tie up with the EAC quoted on the online platform.

I'm a bit stumped. 

The way I see it, worst case I am paying 0.89%, which is in range of the 10x fee of 0.9% so this is acceptable. The fee appears to go down to 0.61% over time which would then make it

cheaper than 10x.

I should also mention that you do occasionally have to rebalance the portfolio to remain Reg 28 compliant. Sygnia charges a 0.1% brokerage fee for these transactions

Ross

I have my money back home in a brokerage and savings account. I would like to invest my overseas earnings into something without converting back to Rands. Preferably into USD, EU or GBP. What options would you suggest? Are there any multi currency account banks that accept sign up without residency? 

This week, Ben inspires us to delve into how ETF units are priced. A recent presentation of our favourite five concepts made me realise how far removed share prices are from the companies whose shares we buy. After the initial public offering (IPO), what happens to the share price can be entirely unrelated to the business. 

When we talk about how ETF units are priced, we refer to the net asset value (NAV) or the “fair price” of the ETF. However, NAV in ETFs have nothing to do with the NAV of the companies represented in the ETF. This is confusing, no?

In this episode, we use our price-weighted index as an example to illustrate how ETF units are priced. We talk about how much of the pricing model is science, how much is whimsy and where ETF issuers actually make their money.

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Ben

When is it a good time to sell an ETF? On EE it seems that you can only use a market order and sell at the particular unit price at that point in time. They have no option for a limit order. Would you say this is a major issue, in that you are forced to take the price right then.  

Is it better to wait and buy at an opportune time each month as opposed to a monthly debit order that will buy at a unit-price that may be suboptimal?

How often is an ETF re-priced? Is this only done once a day at a particular time?

Win of the week: Richard

I upgraded the service plan to a maintenance plan so I was covered, which cost R10k for 5 years. Worth it.

I noticed that during services they didn’t seem to do much. Oil change here and there, maybe a spark plug. I got the feeling it was built to cost them nothing to service for five years.

Then the service plan expired. To extend it for a year was R15k. So five years for R10k and 1 year for R15k? That seems weird.

I didn’t extend and paid for my next service. A couple months ago I noticed it was using a lot of oil. Like 1 to 4 pints per refuel. Asked them to check a few things out.

That’s on a car with 73000km on it. They added almost a rand per km.  If I saved R1,000 per month it would take me five years to pay it off. That’s more than the fuel bill over the same period. That’s a great addition to my child’s school fees. Or a nice holiday. Or a nice anything that will leave me with something better than what I had a year ago.