PAYING THE HOMELOAN FASTER

Latest reader's comment is on paying the homeloan faster.

I am so inspired by your blog. I have just bought a small house and from
reading your blog I now see that me and the bank can bond for a lot less
years if I take control of my finances. I need advice though, but I will save
that for another day. Thank you for putting all this out there."
Ncumisa, South Africa.

 Thank you and pleasure Ncumisa. I share this because I love it. I love it when people get out of debt and start building wealth.

And yes, you may pay up your bond faster. I received a call yesterday from someone who wants to pay up her home in just 5 years. From the calculation we realised that it can take her just below R17,000 to pay up her R800,000 home in 5 years. Well that depends on the interest rates that an individual is charged by their bank.

What people fail to realise is that, even R500 extra on their homeloan payments eats on the capital amount and makes a huge difference.

My advise to you would be

• Start small with what you have;
• Start now not next year;
• Stay consistent... every month, every year, every quarter... just keep moving;
• Plan an escalation. It may be 10% increase on your extra payments.

You may also do a lump sum payment from your annual bonus if you are lucky enough to have one of those. Every little bit helps in paying the homeloan faster.

Thanks again for your comment.
All the best in your financial freedom path.

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INVESTING IN YOUR 20S

Investing in your 20s and paying up debts by an actor:

Hey there!
I'm a 22 year old, South African actress. No wheels, still living with the parents. And I can't afford my acting lifestyle i.e going to auditions, and living off one freelance job to the next. So I took the broad leap of faith and got myself a "proper" job, well in this case its just a well paying job. I've always been a planner. So I've set a goal so that I can save up enough for wheels. But I'm afraid that my growing living costs are going to come and bite me in the behind when all this is done. My question is:
Where can I invest so that I can attain my goal to buy my vehicle cash and not live on nothing once my steady jobs sees its end? 
Also when is a right time/age to start investing in property, as I see your blogs favouring the returns of such an asset.
Like I know I didn't choose the worlds best career but I want to be able to enjoy my acting without dying of starvation, and don't want to spend my life sponging off of my parent's.
Regards
-Concerned 20 year old actress.

Hi B
Its good that you have supportive parents at the time of need. I also like that you don't want to take advantage of their kindness. Regarding your questions:
1. I would advise my 22 year old self to look into the ETFs. Its such a nice high return type of investment and a foot in the JSE door. It works very well for my son. Please refer to the article on the Exchange Traded Funds.
2. The time and age is always right to start investing in any sector. What can stop you is not qualifying for a homeloan/ bond because of the strict National Credit Act law. If you do qualify for a loan I think you can start immediately. Just buy in a good area with good jobs. You need paying tenants.

All the best with your investment endeavours.

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SIDE INCOME

Side income from writing:

Under a heading "Side Income I have a small income from my online writings." How do you get income from writing? I love writing and every penny will help.

 There are a lot of ways that one can make extra income. I wont dwell on them because your question is on writing income. What you are reading right now is my blog and one of the ways I publish my work. This blog doesn't make much for me in terms of income. I do however write on other topics and monetise my work and get some income from it.

All my work is published and sold online. If I had time, I would probably freelance too. I would write for online and offline media like magazines. I don't have the time. Maybe a few articles a month at the most would do.

I must add that my writing side income has gone down since I came back to work. I used to write an article or two most days when I worked from home. I enjoyed it. Writing relaxes me. Strange but very true. Hope you use your own skill and hobby to make money and build your wealth.

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DIVIDEND INVESTING IN SOUTH AFRICA

Question on Dividend Investing in South Africa.
I will soon give an update on what is happening in my life after being a housewife slash full time everything else but office work. I will be answering all outstanding questions tomorrow. Hope that will be possible as I will not be working. I am nicely well adjusted now too and I feel tired of having a job again. I will try not to be scarce anymore.

Reader's mail:

I read your article on this dividend investing. I have been looking at this also for a long time, also as a passive income option, but have not started for the following reason.
To make this worth your while, you really have to buy a large amount of dividend shares. What does your investigations tell you?

 Thanks for your question F. Indeed, one needs tons of high dividend shares to make a sizeable dividend income in South Africa. We just don't have high enough dividends. But what makes the whole idea difficult to work is the fact that, most high dividend stocks/ shares are low growth. The most I have done on dividends is R15,000 per year. And that was when I kept the focus on it. But my shares were limited in general.

We also have high dividend exchange traded funds (SatrixDivi), which is out performed on growth by other ETF sectors like Satrix40 over a period of 5 years.

You may see how modest the growth of the dividend investment compared to the top 40 stocks in satrix in the graph below.

I will look into practical calculations of when Dividend Investing in South Africa is worth it. It will obviously depend on the amount of money that one has in stocks.

Thanks again for your visit. For any questions, feel free to click on the contact us or Ask Us button above.

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