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Garry Coady's avatar

Hi Carla I certainly like the work you are doing unfortunately this type of advice was not around in my twenties the done thing was invest in RA's and company pensions. I am now 60 and in the last 5 years I have been seriously looking at my retirement funding which despite never withdrawing any of my provident funds when changing jobs I find my savings are inadequate. If I dont seriously save in the next 5 years I would have to work much longer. There are a few mistakes I made. In my 20-40 I only invested in company provident funds and often with very conservative portfolio risk as most funds through companies have fixed options that cater for everyone. In my 40s I started investing in property as the leverage made sense by using the banks money to fund property. I invested a Million in a Holiday rental home in Mozambique which has created positive cash flows that were used to fund shortfalls in other 2 bed townhouses in SA. I have 7 of the properties today and most of them will be fully paid in the next 5 years before retirement. For 10 years I almost stopped investing in provident funds as I became self-employed in a company where I could dictate my rules for retirement funding. During those 10 years i invested only R3000 per month on retirement believing my property portfolio would bring in the balance of retirement funds. Unfortunately, through conservative influences and people like Harry Dent predicting a major financial collapse my investments were in stable funds not yielding high returns. Also in the stage of life 40 to 50 there are many expenses unique to parents in SA that is private schooling and university which prevent you from having significant funds for retirement savings. Now I am in a position where I have to save 35 to 40% of my gross income in RA's to get close to my financial goals for retirement. I invest in RA's for the tax saving as I can reduce my income in retirement and draw additional income in my wife's name through the property investments in the trust thus reducing income tax. I am in the 45% tax bracket so every cent I invest in RA is funded by tax deductions of 45% up to the R350k limit. In addition, both my wife and I have tax free accounts invested in the stock market and I contribute additional investments in my wife's name into a brokerage account for other stock market investments. A mistake I made with this was investing in companies initially some very successful and others not so successful I am not investing in ETF's but across a number of sectors like property, high yield bonds, s&p 500 Euro stocks as I think USA is on a knife edge (just my opinion), gold mining, silver and recently some bitcoin. I agree with you if your young go for the S&P 500 and world etf but as you get closer to retirement bring in some elements of property and precious metals. Your videos are great wish you were around in my early years I have encourages my children to subscribe to your channel it is all the things I wish I had the knowledge to teach them when they were still at home now, they are spread over the world.

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Nicci Cox's avatar

Thanks for this Carla. I am assuming that when you calculate your monthly living costs you exclude what you are investing now as by the time you reach this number you will no longer need to keep doing this?

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