investing considerations 

If you invest yourself there are a few things to consider:

1.  Compounding is truly the 8th wonder of the world, and the key to success.  Invest money for the long term, and if possible re-invest your distributions.  Even a small investment will grow to a big number given enough time. So if you want to be wealth, save young and save often.

2. Just because you choose not to buy shares doesn't mean you should start investing in some form now. Whether it is SATRIX, or a fixed deposit, start compounding!

3. You need to read, and think about financial information. You need to start building an understanding of how the economy works, how business's work.

4. A student once came to me to discuss investing, and we chatted and he said, "I want to have an understanding like you, how do I get there?" I find this funny as it has taken me years to get to where I am.  Ever heard the comment that it takes 10 000 hours to become an expert?  So don't expect to be a finance guru overnight. Hence it is a lifestyle or a philosophy. Doing it part time takes up time and gives you little value.  So either make it part of your day or invest in a passive investment.

5. Who are you going to use as your broker?  The vast majority of people use their banks, but there are others and the costs vary as well as the fees!  What is most important is understanding what information you need, because different platforms have different services and costs. 

6. Where do I get information to make informed decisions? Probably the hardest part of investing is getting the information you want.  I find the easiest way is to read and talk to people. The issue is what you read doesn't seem to help.....That's just because you don't get the big picture yet and where this fits in. Hopefully the blog "insights you can't buy" is a start.

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Myths and facts

Earning more means you'll be wealthier

This I find this funny, earning more means you could be more wealthy, if you use the money to create wealth. Also you are only looking at financial wealth, what about time with friends and family, or exploring, creating or learning? Earning more for less time is more wealth. Earning more and working more is trading wealth in life for money.

Unit trusts

Going to be 100% honest here, unit trusts have a place, as they invest on behalf of people who either don't have the knowledge or time to manage their investment.  A large portion of finance theory shows that passive investments outperforms actively management funds.

By passive investment I mean an index fund. I.e. SATRIX, SWIX or DBX.  Unit trust are actively managed investments.  

I would suggest if you are not going to put a lot of effort into understanding different investment options is is probably best to just buy a passive investment instead of unit trusts.

Unit trusts again

If you spend a bit of time looking at options. Here are some of my thoughts.

A big investment house is the last place I would go. You want a smaller investment house with the lowest fees, and a decent track record. There is a big advantage when a fund is smaller! Also with the fees compounding 0.5% or 1% for 20/30 years is a massive difference.

Read the fund fact sheets and examine the funds fee structure. Check the benchmark. What a lot of funds tend to do is NOT give you a comparison with their peers, and rather just use a random benchmark. Ideally you want to invest in a fund that performs well compared to their peers.

You need a lot of money to invest

This is also a myth as the cost of investing has come down drastically and you could invest as little as you would like on some platforms.  It does differ depending on your broker. I have helped people set up accounts and make money with a couple of hundred rand.

It is easy to make money

Well statistics would tell us that the vast majority of people lose money when investing, and there are many reasons. There is risk with everything so I would not be being honest if I didn't tell you this.

Insights from time on the market→