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How to plan for a dreadful retirement

Regulation 28 is costing you 10% per annum.
Many people seem to think that their property will somehow be the exception to the rule and magically produce a return greater than inflation over the longer term. Picture: Moneyweb

Read: Allan Gray responds to Magnus Heystek

Most, if not all, retirement planning books I’ve read (or even written myself) have good outcomes in the title. It stands to reason. Why would you buy a book that tells you how to plan for a dreadful retirement?

If you won’t buy or read such a book, why then are most people still doing exactly that in their retirement planning, but somehow expect to see a different outcome? 

And why then are people still lending out their ears to people who keep on advocating (peddling would be a better term) for the same old investment strategies that have not worked for many years now. In the case of residential property, it’s now 10 years of no growth and in the case of retirement funds, it is soon coming up to five years of no growth. As far as retirement funds, returns have not kept pace with inflation over five years and soon, seven years.

Let’s take the residential property market for instance. For years I have been warning about the stagnant performance of the local housing market, only recently joined by fellow Moneyweb columnist Hilton Tarrant who started scratching under the surface of the published statistics on the housing market.

Read: Property market reality-check in five charts

Expect negative house price growth to 2020

The first article in my buy-to-regret series back in 2014 caused an uproar from the property-loving fraternity. It also resulted in me appearing on some TV programme on eNews where I was verbally assaulted by some property spokesperson who described buy-to-rent as a way of fast-tracking to wealth and financial independence. Maybe we should have that debate again, some four years later.

The most recent edition of Financial Mail carries a thorough analysis of the residential property market (‘Housing Sales Tumble’). Yet the perennially optimistic spokespeople keep on with the same old mantra, “Buy now before the next upturn” (Samuel Seeff, chairman of Seeff Properties). My inbox almost daily fills up with various kinds of investments schemes, all proclaiming residential property to be on the verge of an upturn and that those who delay will pay the price.

Well, I’m not buying it and I’m recommending that readers – those who still haven’t been burnt by the residential property market – stay away for a while longer. 

Yet, time after time, I still see people who, at retirement or pre-retirement, insist on buying ‘one or two apartments’ to provide an income for them in retirement.

They normally take this advice from the property agent who has no further interest or responsibility in what happens to the ‘investment’ after it has been purchased. The euphoria with this income-producing strategy normally lasts about five years when the cumulative effect of declining rentals (in real terms) and rising rates and taxes (in real terms) start eating away at your care-free retirement income.

Rates and taxes funding ANC cadres

Rates and taxes have become another way for cadre-deployed ANC members to take control of the financial spigots known as municipalities. Many parts of our country have been laid to waste by wholesale looting and theft by ANC-controlled councils, who have diverted funds collected from much-needed infrastructure maintenance to wages, salaries and very expensive motor cars for the Wabenzi. Your property and mine, dear reader, pays the price for the unfolding disaster at municipal level around the country, with the exception (mercifully) of the Western Cape.

Yet so many people seem to think that their property will somehow be the exception to the rule and magically produce a return greater than inflation over the longer term. We are all in the same boat, dear readers.

Many years ago I found myself in a debate on Radio 702 with someone who was trying to convince listeners that investing in a couple of apartments in Hillbrow and Berea would be a great investment, at a time when the regeneration of the inner-city of Johannesburg was all the rage.

Today these properties have virtually no value and while they might produce an income of sorts, it is almost impossible to sell properties in these areas. So much for that retirement strategy.

The outlook for the residential property market is also clouded by uncertainty created by the ANC’s new policy initiative to expropriate land with compensation, despite what Cyril Ramaphosa has said. This will and is having an effect on property prices, yet to be fully reflected in the official numbers. That will come soon enough. Many property owners, including myself, simply cannot sell their houses. So if it doesn’t move, you cannot measure it.

How to save for your retirement

Let’s start with investors over the age of 55 who have some money locked up in a retirement annuity (RA) or preservation fund, both entities controlled by Regulation 28, which limits your offshore exposure to 30% of the investment. At age 55 you can and should consider maturing your RAs and/or even your preservations funds. Who says getting older doesn’t come with all least some benefits?

Here my advice is blunt and to the point: Mature your RAs and preservation funds, take out whatever cash you can get and move what remains into a living annuity. Returns over the last five to seven years have been abysmal, ranging from between 2 and 6% gross per annum. I spent some time on the websites of our largest three insurance companies over the weekend and most of the various funds/portfolios were returning the same, below-inflation returns.

And yet, year after year, the investment industry in the weeks and months heading toward the end of February fires up its massive advertising campaigns, urging investors to put new money into these defective products. The big sales hook is the so-called tax savings you can make. This is only partly true.

What is the point of putting money into an investment product that has not beaten inflation for periods now of up to seven years, on the basis that you can reduce your tax now? What is often missed is that you are merely postponing taxes as, one day, as sure as the sun shines, you will be taxed on the income you draw from either a living annuity or a guaranteed one.

How much Regulation 28 is costing investors is inadvertently revealed by the returns on certain 100% offshore retirement annuities, those set up by investors before a crackdown by National Treasury on these options. Some years ago investors could still invest 100% offshore in an RA by making use of the overall offshore allowance of the investment company. This was changed, for reasons I do not know, so that investors are now restricted in terms of their offshore exposure at product level.

There is a lucky group of RA investors who have been earning around 14% per annum over the last five years, according to the Liberty Life website, as compared to returns of between 3 and 6% on the Reg28 offshore portfolios – almost 10% better than the Reg28 funds on the whole.

If ever you want actual proof of what Reg28 is doing to investment returns, here it is, in a real-life example: more than 10% per annum over five years and possibly more.

And I don’t see this changing.

If you are over 55 and still want to make contributions into an RA (for tax reasons), mature the single premium RA in the first week of the next tax year and move the capital 100% into an offshore living annuity. First establish whether the investment platform allows a 100% offshore allocation. This is vitally important. If it doesn’t offer 100% offshore exposure, find another one that does.

In December 2017 I pointed out that investment giant Allan Gray had imposed a maximum limit of 25% offshore exposure within its living annuities. There could not have been a worse time for investors retiring to have an offshore restriction on their retirement capital. Since then the rand has weakened by more than 20%, the JSE is down 15% for the year while offshore investment returns are between 15 and 20%.

To me, the decision by Allan Gray was deeply cynical and driven by its own commercial interests. You see, for a large investment firm, its offshore allowance is a valuable asset. Why go and make it available to existing investors if you can go and sell it to new investors and hence increase your assets under management and profits.

I understand that Allan Gray has since increased its offshore allowance to 60% of portfolio value, but I still want the freedom to have 100% of assets abroad, should this be appropriate.

And finally, I tried to establish from Asisa (the Association for Savings and Investment South Africa) how much money is invested in Reg28 funds, but was told they don’t keep track of these numbers. I suspect there must be hundreds of billions of rands invested in these poorly-performing funds. What worries me is that there are options investors can and should consider to save for their retirement, especially if they are older than 55, but they are deliberately kept in the dark by the investment industry.

So if you want your retirement to have any chance of being ‘carefree’ and ‘happy’ I suggest you urgently move what you can away from Reg28 funds in order to get a better chance of growing your retirement capital. Your current investment strategy of residential property and Reg28 controlled pension funds is not going to end up well.

The views and opinions shared in this article belong to their author, cannot be construed as financial advice, and do not necessarily mirror the views and opinions of Moneyweb.

Magnus Heystek is investment strategist at Brenthurst Wealth. He can be reached at magnus@heystek.co.za for ideas and suggestions.

Please consider contributing as little as R20 in appreciation of our quality independent financial journalism.

COMMENTS   38

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As an American, I have always liked your writings. Even when you and Bruce Cameron were dueling it out back in the day. I am amazed as well and teach people that they want to sell you life cover AND a retirement annuities. SO, if you want money DIE or RETIRE! You young people have marriage, children, school fees, clothes, divorce etc… It’s all coming down the road you are unprepared for. So learn about your money and become debt free as fast as possible. DR. Debt.
Keep up the good work Magnus

…..well put

And….doubt first the big “life” institutions who promise a glorious sunset retirement in their hands….it doesn’t happen

They have paid themselves handsomely on your contributions year in, year out with no lost sleep when your RA returns a pittance

Since January 2018 till now i have lost R100k in the stanlib property income fund. Do i leave it there or get out now and if i do where do i invest ti recoup my losses?

You say get debt free ? I have a question. I just sold a 50% stake in a commercial property. Do I use the capital to pay of the loan or leverage the remaining 50% on a bond and rather invest the capital ?
Much appreciated

I recently also sold a property , and the question of investing the proceeds or paying off debt arose . Paying off debt is reducing risk , whereas investing is taking on risk of market declines , whilst hoping to outperform cash performance over time .
If you have an investment time horizon of 5 to 7 years , i would invest , if not pay off debt . I used 50 % to pay off debt and invested the balance off shore . Good luck .

Why no information on those earning 14% p.a. over the last 5 years?

Magnus writes some good stuff but then dangerously mixes in “last years winner narrative” (short-term, retrospective) with some fear-mongering (SA is Zimbabwe).

he’s allowed to be bearish but please discern his good advice (e.g. diversify globally & insurance-based investment products are terrible) from his bad advice (SA bear market will continue forever). consider some facts to balance out the panic:

1) Global equities haven’t done well, only the US has done well in isolation – strip the US out of the ACWI index and the reruns are flat for everyone else (Europe et al). SA’s weakness is only partially due to local issues ..much is the broad-brush of global trade (nothing we have control over).

2) reg28 balanced funds *Outperformed* global balanced funds over the last 20 years by a huge 300 – 400 basis points out-performance (annualized over 20 years ..you do the math).

3) A passive global balanced fund, *gross of fess*, underperforms an active reg 28 fund *net of fess* ..I literally can’t be more favorable to Magnus and still his narrative doesn’t work over any period > 5 years. RA’s are, by design, vehicles for >5 years.

4) A Global balanced fund didn’t keep up with SA inflation (giving you a negative real return) for longer than a decade (June 2001 to June 2013).

I respect his right to be bearish and I agree with what he implies; buying an RA assumes the economy will still exist when you retire. But for him to suggest reg28 is somehow irresponsible is not correct – investors can easily get both reg28 and pure global funds (and choose the combination of each). The fact that SA gov restrict offshore allowance for pensions/RA’s is quite normal for an emerging market that doesn’t want to enhance currency volatility [think of the gov pension fund flooding currency markets with ZAR sell orders – this counteracts monetary policy].

Magnus needs the SA bear market (and ZAR depreciation) to continue in order to be right. I wonder what he will say if the SA market turns? Or, if his US equities slow down from their run (currently the longest bull market in recorded history)

If you want a picture of the housing market just look at the graph of Growthpoint – down 11% since 2012. No growth in 7 years. The rest of the listed property sector is in a much worse condition. It tells us that the consumer is under severe financial pressure. The consumer is bled dry with administered costs like electricity and rates and taxes. The redistribution policies of the ANC forces Eskom and municipalities to overpay for inefficient and corrupt BEE projects. Eventually it is the property owner who funds the lavish lifestyle of the BEE contractors. They don’t even have to expropriate your assets without compensation, they merely expropriate the value and earnings of your property without compensation. You can keep the title-deed, while the ANC siphons off the value.

Honest people are held captive by the law. The law pins us down so the ANC can fleece us, while they personally act in total disregard for the same law. This government is a zamma-zamma that changed the law to legalize the “illegal mining” of the value of our properties.

They call it The Freedom Charter, but in reality it is the manifesto of slavery. When the government, and the politically connected reap the benefits of our labour, we are nothing but glorified slaves.

“Although we had been warned by some of the greatest political thinkers of the nineteenth century, by Tocqueville and Lord Acton, that socialism means slavery, we have steadily moved in the direction of socialism.”
― Friedrich Hayek, The Road to Serfdom

Well that all depends if you look at GRT’s price of 1900c in Jan 2012 or if you bought at the peak of 2012 (2774c). If I bought in January I am ahead by 26% without including their dividend (approx 7% pa) over that period, Stats hey Sensei?

Sensei, excellent comment. As consumers we aren’t surviving, we are drowning. Ever since the Rental Board had been scrapped by this corrupt Government, the lessees have no recourse and is also being fleeced by the Landlord. The private sector is not and never will never receive the same year on year percentage salary increases as corrupt government/municipality employees and the landlords are incapable of understanding this. As a consumer I can state for a fact that Magnus Heystek is 100% correct that the property market is not going to recover before 2020 if at all as S.A. post-haste moving towards rubbish status.

If you invest now , do not make a single lump sum investment , the markets are expensive now and the risk of further declines are high . I would phase in my investment over an 8 to 12 month period , with equal monthly payments to reduce this risk . I am not an advisor , only burnt my fingers but not phasing in my investment .

Decades ago I was told or read “never invest in any product of an insurance company, buy their shares”. Still seems to be good advice?

Unfortunately that would not apply with Liberty!

I have earned north of 30% on my money this year but you won’t see this in Reg28.

And once again he got the facts wrong. Maximum offshore exposure in an Allan Gray Living annuity is 60%. Just wondering if you get something as simple as offshore limit wrong, how can I trust the rest of the info . . .

My in-laws both have living annuities with Allan Gray. My mom in law was invested 100% in the Old Mutual Global Equity Fund and was requested to bring down the exposure to no more than 60% offshore. She refused and warned that any attempt to re-balance her living annuity would result in a transfer of funds to PSG. They left her alone. My father in law, however, had a spread between a few funds (he wanted to diversify) and was bullied into reducing his exposure to 25%. He has since transferred his living annuity to PSG and now has 100% global exposure via the Old Mutual Global Equity Fund.

AG are fast becoming a bunch of cowboys.

SA great for yield investments (cash, bonds and pref), for your local living costs. Equities, it depends. For index/passive investing it is difficult to beat the benefits of US indices on TER, trading costs etc, whilst local shares have 1 benefit – you can buy equities with attractive divi yields.

Again, it’s all part of diversifying and capital preservation. Also a far larger impact in the short term is from the amount you’re investing as opposed to chasing returns.

I did mention that Allan Gray has since upped its offshore allowance to 60%. This was somehow lost in the editing process. Why not 100%. Investec and Momentum offer investors 100% exposure….

Magnus once again thank you for the great article. In recent times Allan Gray has been giving preference to retirement and living annuity investments over discretionary investments, of course subject to the 30% and 60% limits mentioned. The latter being self-imposed I guess due to the popularity of their multi-manager platform.

There is a lot of discussion by foreign commentators on Bloomberg that they are not yet ready to invest in emerging markets. Is there anyone that can guess as to when the wheel may turn? I’ve come to realize that in the process of retiring timing may be everything.

Allan Gray sent out very clear communication (I got several emails explaining this as an Allan Gray investor myself) as to why they limited allocations to offshore feeder funds. They have reached capacity on their life license. I doubt very much that it would benefit them in any way to limit this intentionally and it seems odd to suggest they would. Something against Allan Gray Magnus??

Yes they have a limit of 40% and are currently able to allow their customers up to 60% based on investment patterns. This may be different for different managers but they all face the 40% hurdle as far as I know.

While I agree with some of Magnus’ sentiments, there is a large element of fear-mongering in these articles with selective use of statistics and returns figures.

A simple search on the internet would reveal that the returns of many Reg. 28 compliant pension funds are still in excess of 10% p.a. over 5 years (to end September) and over 12% p.a. over 7 years. Net of fees. These are independently-managed local government pension funds whose information is available online. Possibly more applicable to the typicaly investor, the average Reg. 28 balanced fund (institutional) is just above 8% for 5 years and close to 12% for 7 years. These are gross of fees numbers and include funds from large and small firms (e.g. Allan Gray, Abax, Prudential, SIM etc.)

While returns are lower that many have come to expect, I would hardly call them ABYSMAL. All except one year returns remain well above inflation.

An interesting read if not to remind ourselves that we need to keep our head when all those around you are losing theirs…

As for Reg 28 costing you 10% in returns compared to a statement made on a life company’s website doesn’t give one much confident in the statement. Needless to mention who the life company is…

With regards to residential property as a means of rental income I would say that it tends not to be for everyone which is not to say that it doesn’t work very well for some. Personally it’s not for me. In an economy that hasn’t grown for an extended period rental income would naturally decrease and it comes at a time when taxes are going up. This definitely creates doubt over its value as a means of generating a source of income or growing one’s wealth. The context of where we are in our economic cycle must be considered. As to the value of residential property going forward, who knows? The bottom line is that it comes with risk and that should not be understated!

The Reg 28 limitations are in my opinion not in the best interest of investors. There is an argument that it was done to limit risk in pension portfolios however risk is relative and having 70% of your portfolio in South African assets bonds, property and JSE listed companies as your “universe of possibilities” is a risk.

The Reg 28 system is fundamentally flawed. We went through a period of approximately 2 years where the rand strengthened which hurt offshore investors in the short term over that period, especially if they were taking an income from that offshore based investment. Balanced worldwide flexible funds are arguably a very good compromise whereby risk is managed with no asset allocation limits.

I do wonder if there are any advisers who would feel comfortable telling a 55 year old investor to retire from their RA and invest the capital (either all or the majority) offshore. If the investment where to take a substantial fall in value the adviser would likely be held out to account to the regulator in the event of a complaint. Remember that currency movements can exaggerate losses in value over and above the underlying assets. There is risk to taking binary decisions where there is a requirement for a balanced approach. I myself would rather have 100% of my capital invested offshore however that’s not appropriate for what I would assume to be the majority of investors (particularly retired investors).

As for Allan Gray’s restrictions on their platform, they are required to have limits. I would imagine that it would be more profitable for Allan Gray to not have to impose any restrictions on their platform. The Allan Gray/Orbis Global Fund of Funds was closed to new investors for some time due to restrictions imposed on them. Let’s not digress from the real issue which is regulatory restrictions.

Reg 28 funds have under performed for some time now. This prolonged period of low growth/low returns has been drawn out for longer than most people would have expected. It has been a difficult period for a number of contextual reasons that have accumulated into a perfect storm. This needs to be understood in context as I’m sure Magnus knows. I read an article that put this period of under performance into perspective by analyzing the returns on the JSE over the past 30 years and clearly this period has been one of the toughest periods for an average investor over those 30 years.

Keep your head while all those around you are losing theirs. Simply put keep a level head particularly while emotional decisions are being made by those around you. I’m sure we will see lots of “guaranteed products” being sold to angry and frustrated investors.

This is why it’s important to have enough capital in retirement so that it can sustain you through years of famine. If you don’t have enough capital saved up then you are at risk of making emotional decisions to squeeze out returns during difficult periods.

Hopefully Reg 28 will be overhauled in the near future as it’s not serving the investor in its current form.

Yip Magnus has done it again if one look at the responses to his article and the content of the responses. However if one look at the return of the various asset classes over 15 and 20 years of the local Rand dominated local equity and asset allocation funds compared to foreign rand domiciled funds there are very small differences. The returns vary between 14% and 20% per year over the two periods(Micropal 082018). Not to bad for this doomsday country of ours.

Those periods are not relevant. It is what has happened recently (1 to 3 years) that is relevant.

Why? Because the INDIVIDUALS managing the funds change. Zuma inspired looting is now imbedded in the dna of so many people. CR has changed nothing; he has in fact exacerbated the problem by appointing as a finance minister, the architect of our failed labour laws. Add to that increasing race based employment and promotion policies in the private sector. What you get is a cesspool of talent in many asset management firms in SA.

So going FORWARD we are in a very bad place as investors and retirees.

Invest with asset managers where the investing is done by offshore investment professionals not locals. Sure there can be some huge foulups offshore too but the risk will be lower as no BBB-EEE and raced based AA. Merit applies.

The property market had no chance with so many wealthier people emigrating and ever increasing municipal bills. Re-distribution without compensation won’t help either. There’s very opposings views regarding the global % of a portfolio. Many advisors reckon that the JSE is on its way up and should outperform over the next 5 years. Guess local asset managers won’t recommend that investors take 100% of their funds out of the country.

I looked at my 10x RA today and I noticed that I lost everything except the money I put in!!

Even with ‘tax efficiency’ it makes no financial sense to put money into the RA. This is beyond disturbing at there is no way in hell one can outrun inflation with this vehicle!

So I am 29 and have been contributing to an RA at liberty and been paying income protect since I was 23. Is this a dumb move and how do I make a better move? I want to retire but I have been getting all kinds of “theories” on how to do this properly. Not sure what to do anymore. If investing offshore is the best option, how do I get started and what do I do with the money I currently already have in an RA? Also, is there a way for me to monitor the growth on my RA?

PJP cannot tell you how to save but no doubt saving is good. If you want to analyse numbers and intend staying in South Africa open an account on the Allan Gray Platform. Main benefits:

1. Caters for all investment vehicle types
2. Offers access to different unit trust managers with lower fee classes.
3. Very good reporting
4. Data is easily exportable to Excel for different types of analysis.

Only way to do better is to buy shares directly or go directly offshore.

mmmm…stay in cash….watch how Magnus’s offshore markets tank ….then buy and please don’t take all your funds offshore.

When do you want to invest in residential property? After 10 years of zero growth or after 10 years of 15% plus returns?
Same thing happened from about 1982 to 1994, 12 year bear market, but 1995 to 2007 was 12 decent years for property.
No bull or bear market lasts forever.

Speaking from personal experience, as someone who has been house-hunting in JHB for the last 18 months or so, I can tell that people ARE buying property but typically only in certain areas and at certain prices. The houses for 4-5 million and up are less likely to sell but townhouses for around R2m with 3 beds in good areas, with a bit of garden, a decent amount of space and reasonable levies are like hen’s teeth and accordingly do sell quickly. So not all property is a dead duck, the same common sense provisos still apply. I will say that levies are out of control and are a massive stumbling block. I would love someone to explain to me why they have become so crazy high.

Well my rates and taxes are super cheap here in Limpopo.
BUT

I only have water 80% of the time, and our power goes off every 2-3 weeks for a day “For maintenance purposes”

But nothing a 5000L Jojo tank and a nice Solar setup can’t fix 🙂
Both of which I have and can not imagine living without.

Buying a house here is great if its just something you want to live in, and don’t plan on re-selling in the near-mid term future, capital appreciation is seriously bad, but hey, I have a 3 Bedroom house with 2000m2 yard granny flat the works for R900K, in 2 years time (I have been living in it for 1) my bond will average the same amount as the rent I paid for my flat.

Some rock solid advice from an idiot:

Take your greatest asset by far(Yourself) and move it to an environment where there is far less risk and quality of life is better for all! Use what you have to invest in this goal. Be honest with yourself and realise “no pain, no gain”. Those who need a little extra motivation I have a tale!

I took a drive to Bulawayo not too long ago and my heart bled to see old pensioners trapped with nothing and a city in a time warp. The old live off handouts, they thought everything would come right in the country, there pensions were stolen. They have sold everything they have long ago to survive. A elderly husband and wife live in the back outbuilding of a property with the kind permission of the owner. A prize possession is a crisp one dollar note. Health care is very straight forward….you sick….you die. You drive around in the old suburbs and think of times past when things were far different.

Sometimes it is just too late to wait for things to come right.

I am surprised Moneyweb allows the publication of such irrationally written articles that hide behind the facade of professional investment advice.

I was recently at a foreign exchange conference where many ordinary helpless South Africans had lost millions by trying to time the currency and taking bulks of money offshore at the worst times (think Nenegate, Pravin Gordhan firing). These times ‘coincided’ coincidentally with previous Magnus Heystek articles.

Instead of making emotional statements about the past 4 years (which is very normal in a market cycle), we can look at some facts:

Last 15 years:
JSE All-Share in ZAR: 15.5% p.a.
JSE SA Listed property in ZAR: 17.8% p.a.
MSCI World Index in ZAR: 11.33% p.a.

Last 10 years:
JSE All-Share in ZAR: 13.2% per annum
JSE SA Listed property in ZAR: 14.66% per annum
MSCI World Index in ZAR: 10.4% per annum

Magnus also states that ‘As far as retirement funds, returns have not kept pace with inflation over five years and soon, seven years.’
Past 7 years, as of 22 October 2018:
Allan Gray Balanced Fund 11.77% per annum
CPI 5.45% per annum

Wow, these retirement funds are really struggling seem to be struggling to beat inflation. Just the 6.3% real return over the past 7 years. How will we survive?

It is important to have context when making investment decisions. The Chinese stock market is down -22% this year. The US markets are the most expensive they have ever been.

Please don’t be irrational like Magnus. Think hard before you make any emotional decisions that can ruin for your financial standing for the long-term.

Well said. There are facts then there are articles written by Mr Heystek

Hey Magnus,

You should give your guys some tips for the Brenthurst BCI Worldwide Flexible Fund of Funds.

Currently 8.54% of the assets are local (as per the fund fact sheet 30 September) with the rest of the of the assets offshore.

Currently the Brenthurst BCI Worldwide Flexible Fund of Funds is down by -0.78% for the last year (22 October 2017 – 22 October 2018) compared the the MSCI World Index in ZAR is up by 7.79% (22 October 2017 – 22 October 2018).

So yes take your money offshore, but rather stick in a index tracker then a Brenthurst BCI Worldwide Flexible Fund of Funds who is gonna charge you 2.36% anyway.

Always good lessons to learn in these articles.

I’ve been following a post, where a woman was looking for accommodation, after being evicted from the house they were renting. She named the landlord and, without knowing both sides of the story, Facebook “lawyers” made assumptions and expressed legal opinions, based on a one-liner. The evicted person later admitted that the rental had been in arrears but said that she had settled it.

I chipped in with my tuppence.
“Someone on this forum must know Mrs Abrahams, so let her know that she is being mentioned, so she can respond. Audi alterem partem – listen to the other party.”

I have heard my fair share about tenants from hell, and stories about rent not being paid for years, short-payments, municipal accounts, where the contract stated that the user should pay, not being paid, and a multitude of other complaints. Not forgetting malicious damage to property, where the damages by the tenant is 50 – 100 times the “one-month in advance” breakage deposit. You let your R800000 property to someone for R8000 a month, and when the tenant leaves, the repairs and maintenance costs are R50000 minimum. If I were a property owner, I would request 3 months’ rental in advance, as well as a breakage deposit or collateral valued at 5% of the property’s value.

You need a place? Show me R64K or go sleep at a shelter. I cannot pay for your errors.!!! By the way, electricity, water and building insurance expenses are for the tenant’s account.

Faizel 16.10.2018

End of comments.

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