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How Zumanomics is crashing your retirement

Why only 2% of South Africans can look forward to a care-free retirement.

Retirement planning is at best a very precarious exercise for most people.

It entails the calculation of a financial target at retirement date and invariably relies on various assumptions which includes inflation, investment growth, contributions, costs and expenses as well as retirement date.

Most financial planning includes an assumption that the investment vehicles selected to reach the financial target will grow, net of expenses, at between 2% and 4% per year faster than the inflation rate.

I have never seen or done a retirement plan with an assumption that the growth of investments will be less than inflation. That, after all, will require a change of strategy and the search for alternative investment vehicles to achieve the expected return, wouldn’t it?

Historically these projected investment returns have, by and large, beaten or equaled the inflation rate over most periods of time. There might have been a year or two, as a consequence of sharp dislocations in markets, that the inflation-plus targets have not been achieved but subsequent years of inflation-beating growth have managed to push the returns over any five-year period back into positive territory.

I attended a seminar a while ago where the speaker indicated that there has only been one five-year period  in the last 50 years where the returns where less than inflation, and this was in the period following the Rubicon-speech of former South African leader of PW Botha.

Most South Africans saving for retirement mostly have two primary sources of inflation-beating assets to fund it: the one is their traditional saving instruments linked to the JSE, namely pension and provident funds, retirement annuities and stock market portfolios. The other, of course, is their investment in residential property, either as a primary residence or as a second or third income producing property.

Under pressure

As things currently stand, both these sources of capital growth and income are under immense pressure to deliver inflation-beating growth.

The reality is that over nine years now residential property prices on average have not grown an iota against inflation (down 23% in real terms) while the JSE is now under water (against inflation)  over one, two and three years and barely positive over four. With the current outlook on the market, I do not see a sudden upward turn in company earnings and prices on the JSE soon.

Added to this, the expected rental incomes on buy-to-let properties have also plummeted in recent years, all adding up to a fairly bleak scenario for everyday investors planning their retirement.

Retirement planning in shreds

In short: whatever you thought your retirement capital was going to look like five or even ten years ago, has been blown out of the water. 

The retirement prospects for most middle-class South Africans have been downgraded by a combination of the sideways movement in the residential property market as well as the below-inflation returns earned by their retirement funds over the last three years and soon to be four years.

Most people planning a retirement are now facing a decline of anything between 20% and 30% in the expected retirement capital they were banking on.

The retirement crisis has just become much more severe and, for many people already looking forward to an underfunded retirement, much financial pain and suffering awaits if they continue to disregard their current status quo.

SA’s financial institutions love to throw around the statistic that only “6% of all South Africans will be able to retire care-free and with the same living standard pre-retirement”. This is patent rubbish and according to my calculation, that number is closer to 2% of the overall population.

The source of that 6% was an investment book called Making money made simple, written by Australian Noel Whittaker in 1992, which I re-wrote for the South African market and, much to my surprise, became a best-selling book in that year. 

Whittaker was using statistics relating to Australian retirees, a materially wealthier country on average than South Africa.

Returns on the JSE

The returns on the JSE over the last one, two and three years are now deep under the water when compared to the inflation rate. It’s not much better for the average retirement fund, despite the fact that they are allowed to invest up to 25% of their capital offshore. The offshore returns have not been high enough to offset the low returns on the local market.

As a proxy for the returns of pension funds, I have used the average returns of the Asisa SA multi-asset (high-equity) portfolios for the average pension/provident/retirement annuity and preservation fund.

This shows that this sector has returned 1.1% over one year (CPI 5.2%) and  4.4% pa (CPI 5.3%) over three years.

The outlook for the JSE does not look that rosy either. The proposals contained in the newly-released Mining Charter last week will lead to a flood of money out of this sector.

Read: The new Mining Charter is populism on steriods

The JSE in recent times has also become something of a one-trick pony: namely Naspers. Naspers is now a discounted proxy to invest in a Chinese internet company Tencent and has a trailing PE of over 100. Naspers at current values makes up almost 20% of the total market capitalisation of the JSE.

Residential property prices still declining

Average residential property prices have not recovered in real terms, i.e. after inflation, since the collapse of the market in 2008/9. According to the latest FNB property barometer average prices are now down 23% when the inflation rate is taken into consideration over the same period of time.

Certain sections of the market are also threatening to show nominal declines, especially in towns and provinces that are badly mismanaged or find themselves under administration. The collapse in the infrastructure in many towns and even smaller cities are having a detrimental effect on property prices. 

As previously pointed out, I often travel through our countryside and visit many towns and cities en route. I make a point of turning off the highways in order to drive through the suburbs and what I increasingly experience is nothing short of a dramatic collapse in former pristine suburbia.

I was in Kimberley recently and again I drove a couple of blocks north of the city centre. What I saw were mansions, harking back to former glorious days, in rack and ruin. You do not see a For Sale sign in these areas anymore. It would be pointless; there simply are no buyers anymore.

This scenario is repeated across many little and not-so-little towns in most parts of South Africa.

The retirement planning trajectory of countless South Africans in times gone past was that the appreciation of their primary residence played a major role in filling the gap for a shortfall in conventional retirement planning.

Home-owners relied on that handy price-spurt in the last five or ten years before retirement to boost their retirement capital. In many cases one’s home was a substantial asset that could be sold in order to downscale and move to a smaller residence or retirement complex. Not so any more.


Another favourite retirement strategy, which reached a crescendo in 2007, was the buying of second and third properties for rental. In 2007, just before the property bubble burst, almost 25% of all property purchases in SA were in order to re-let. I have twice written about this on Moneyweb. Many investors saw this as a surefire strategy to create an income stream in retirement. Money was freely available with banks literally throwing money at wannabe rental tycoons. It was not uncommon for people to get bonds from a wide number of banks. Fortunately, this has been largely stopped by the National Credit Act of 2007.

Here too these retirement plans are going up in smoke. Rental growth is lagging far behind the inflation rate as tenants are simply not able or willing to accept inflation-adjusted rental increases year after year.

Increase your rental too much and the tenant simply packs up and rents somewhere else.

I have a rental property were the gross rental is not much higher than five years ago, but my costs in the form of rates and taxes and maintenance has doubled. Most people I speak to with rental properties have had a similar experience: costs up but rentals sideways or down.

And then there is the increasing tendency of tenants  paying late or simply not paying at all….

The latest residential rental survey from Tenant Profile Network (TPN) shows that on average only 65% of tenants nationwide paid on time. The rest either pay late, or not the full rental or not at all. And this trend is getting worse.

Imagine investing your money in an institution where you only receive 65% of your dividends or interest income, with the rest (if it all ) paid at some uncertain time in the future. Or having to argue with the issuer of the investment that you are legally entitled to the promised interest or debt.

Right now I have two members of my immediate family battling with tenants who have simply stopped paying their rent and refuse to move out, relying on the PEI Act to provide them with free housing. And in both cases these family members are paying the bonds, rates and taxes and water and lights.

According to TPN, the percentage of national tenants paying on time has declined from 73% in 2011 to 66% in the first quarter of this year. About 25% pay after a period of grace while almost 7% just don’t pay. Full stop. Period.

Growth in rentals has also come to a shuddering halt, with the exception of the Western Cape. Rental growth in the Western Cape is still above 12% year-on-year while the average is 4.7%. There is still some life in Gauteng with rental growth averaging 5.7%, but this is still below the inflation rate.

If one strips out the strong rental growth of the Western Cape, it is quite easy to conclude that the rental growth in the seven other provinces is flat and in some cases, hugely negative in nominal terms. For those readers who have not read The Bluffer’s Guide to Economics, nominal declines means prices are falling in rand terms.

Mismanagement of the economy

It would be churlish and unfair to blame all of the above on Zuma and the disastrous economic mismanagement by the ANC. Zuma and the ANC are not to blame for the Great Financial Crash of 2008/9, but have most certainly played a central role in the subsequent economic decline which has led us to being downgraded, for all practical purposes now in junk or soon-to-be junk territory.

This is a homemade economic collapse. With the exception of tiny Iceland (population 300 000) are we the only modern industrialised country in the world currently in a recession? There are other countries in recession and they include Venezuela, Equador, Zimbabwe and South Sudan. Boy, are we in exclusive company now….

Business confidence is back to 2009 levels while consumer confidence, already at 15-year lows, is set to fall even further in the wake of the midnight firing of Pravin Gordhan and the subsequent downgrades by the big three ratings agencies.

* Moneyweb and Brenthurst Wealth are currently holding the annual SA Quo Vadis series of investment seminars. The next seminar takes place in Stellenbosch on June 21. Bookings can be made here. For more information go to


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“relating to Australian retirees, a materially wealthier country on average than South Africa” – gosh that’s a nice compliment – BUT aussie retirees face other issues like where next to travel (we long way away from most places), where to invest excess funds with rates so low. so please its not all champagne downunder

Robbie, sorry to hear of your issues down under. How about showing a dash of loyalty …nice returns over here e.g. some income funds (but please don’t travel this far!) Cheers mate.

Or when to write their next irritating comment on South African news sites. Must be so boring down there

Consider this:
The lowest tax rate is 18%.
Some RA Income Funds returns are approx. 9%+pa.
If someone contributes into such an RA fund, the tax saving of 18% is the 1st year’s return( it is actually more since the contribution is monthly).
The return the next year on the contribution is approx. 9%( 50% above inflation).
The higher up the tax bracket, the higher the return.
This would have less risk and a greater chance of beating inflation than simply investing in volatile stock markets.

RA’s are a dead loss – ask the baby boomers. Trust you are using real “achieved” growth figures and not some salesman’s pitch of what you can expect – salesmen are notorious for painting rosy pictures, and when you get to retirement you find you are surrounded by a desert of wealth
But hey you pays your money and you reaps your rewards

Agreed Graham, unfortunately it’s a “all roads lead to Rome” scenario, no second guessing where your RA money is invested anyway!!

@grahamcr… old school life insurance RAs are a dead loss indeed, given that you refer to baby boomers you must mean those types of RAs. Are you still Telkom landline only because living in the pre 2000s? RAs have advanced as have telephony, learn the difference. With unit trust RAs the only limitation is Regulation 28, otherwise you can be invested in any SA or Foreign Feeder Fund unit trusts. So as bherman pointed out, you already have a tax advantage (cash in your pocket either monthly or when doing SARS efiling), which you can then also invest as and where you want. No salesman pitch told me this, my own research and thinking did that, and I’m not in that industry, I’m in IT.

@Snowy… my RAs are mostly 50% in top 60 companies in SA (by market capitalization), 25% overseas, 20% into SA listed property and then about 5% in bonds, the last which might have a smidgen of exposure to SA government and SOE bonds. Is that what your guess was?

@supersunbird – what you fail to appreciate is that in the late 70’s and early 80’s the RA’s that were on offer was via the insurance industry were exceedingly limiting in where the funds could be invested and penalties for opting out into the new breed of RA’s was prohibitive. Further on extending the conversion (to Living Annuity) from 55 to 60 years resulted in a 5% fee increase. Taking the internal rate of return on the RA over its life (I took the Living Annuity at age 60 when the RA became convertible) it amount to 5.4% – hardly a creditable when CPI was at + 7.4% averaged over the same period. You say you are in IT – magnificent – look up some of the old IT people and speak to them about cobol coding and the likes. You see you are born into an era where significant strides have been with financial instruments (and IT) but your are locked into the era that had financial products relative to that era. Maybe one day when you achieve my age you will look at the products you purchased for your retirement and question why you accepted those products – and the answer will be starring you in the face – that’s all that was available.
Here’s another challenge (if you are older than 40) speak to your parents about their investment opportunities when they started work and then tell me again what a hot shot you really are. In answer to you question yes I do have a landline, and I have fibre, but linked to a desk top computer, a big CPU 2 screens and a printer and I get by.

As my first sentence infers, I know all about those evil diabolical products of hell from big green and those with the hands holding the sphere and lets not talk about the one promising financial liberty and I full well understand how they sucked, the polar opposite of what they promised, and that’s why I approach it all with my eyes wide open (I know and learn from hearing and reading about the older generations experiences) and I know fully well the liberty and mountains of info that the internet provides.

My real point was that you are not on 56k dial up anymore over a Telkom copper line (ADSL only came out in 2002 if I recall), you are on nice blazing fast fibre, so don’t let your opinion of those old insurance RAs just make you advise us youngins that RAs are from the devil. These unit trusts ones are very flexible and can be very low cost and you can invest direct without any money siphoning Financial Advisors and keep updates online quite easily and submit online instructions and you can invest in almost any unit trusts availably (within those Regulation 28 limits of course). You get a tax benefit (and that’s on 27.5% of your income these days, not 15% on a specific type of income). I get my tax benefit on the RA monthly from my employer (and then the employer retirement fund one too as is the usual), one could also wait to get it efiling time, and I invest that extra I get back in a foreign feeder fund unit trust, but I could invest it anywhere I wanted.

Oh, and I’m 38.

@supersunbird – I hear what you say, the reality is that we are from different era’s and the offerings from those RA’s were distinctly different and quite simply the old order RA’s have not and will never deliver on their promises. This has dire consequences for those who availed themselves of these instruments because they will not retire with a usable nest egg. So I shall remain critical of RA’s per my era, and maybe when you get to my age and the youth of that era reflect on your RA’s may also comment on their lack of flexibility or that they are a rip off especially if they add very little to your wealth in your retirement years


Just to go off on a bit of a tangent. I’m very interested in investments and having a career in this field.

Problem- I’m not quite sure what you guys do exactly, out what you studied, or where you work.

I spend hours on the comments section and my interest in what’s being discussed is on the increase. Sure, I get lost a little when its too technical, so I’m just wondering how I can full in the gaps.

What do I study? Where? What are my options.

I realise this is a bit strange but is like to one day become knowledgeable enough to post an informed comment.

Maggie mentioned the WC and a poor local market, so Gemini, off you go!

Just pulling your leg.

The Us market was flat from 2000 to 2010, remember, then it doubled, but given our politics and their way of thinking and doing, I battle to see how our market will at some stage recover convincingly.

Confidence is the problem for many years now. How will that just suddenly come right? Even if Ramaphosa wins, he can’t just do things his way, the broader masses thinks differently and they will limit him.

Ha ha….yeah, was waiting for Gemini to launch his usual attack at Mags.

CJ, even if Cyril comes into power, hes no panacea.

Nothing short of a sycophant, that sways easily to line his own pockets [ supported Zuma when it was viable/his stance on E-Tolls etc ]

Unfortunately, Cyril is not much better than the rest [ possibly by a percentage….but not enough to turn SA around ]

for most of us our small business are our “pension security ” the current messed up economy created by incompetent people are slowly killing these businesses.


Getting harder and harder to run your own business these days …..

I bought a flat in the south of Cape Town in 2008. It has been anything but a buy to regret.

Based on the sale price of other identical flats in the complex, the value of the property is now 2.5 times what I paid for it.

The income on the property is what would be double the cost of the bond, but the bond is paid off already.

I’m not complaining.

Ah but have you factored in ZAR depreciation, CGT and transfer duty?

No he hasn’t, that’s why he is not complaining yet.

…… Insurance
…… Municipal Rates (linked to the real property valuation)
…… Ongoing repairs & maintenance
…… Rental Agents commissions
…… Legal fees
…… etc

Shhh…please keep quiet about the CGT issue. Don’t tell TheSpark yet.

(One way to avoid CGT is not to trigger it by selling & keep renting for income. But then there’s CGT upon death in your estate, although the exemption will be higher). With flexible unit trusts / ETF’s / gold coins / alternative investments (…lets leave crypto-currencies out of the picture), one can at least take profit annually on the better-performing investments by selling high, and use the R40K annual CGT exclusion, and “buy low” elsewhere, etc. Can’t do that with real estate that easy / costlier. Property in a family trust will peg the value of estate at lower value, but trusts also lost much of it’s shine since it’s taxed at 45% marginal rate on income.

Perhaps donate property to kids, and use the R100K annual donation limit, set up with a loan-account, to reduce estate duty one day.

Not shooting down real estate as a good retirement investment….rental income always been a great inflation hedge. But beware the C.G.T… will come for you ONCE…and will come HARD.

And CGT rate is getting increased in 5% increments every 2 years I think? Satrted at 25% and now sits at 40%?

So the longer these property geniuses sit on their properties, the harder this is going to bite them.

The biggest issue is not the return on investment or how badly the economy is doing, it is actually people not putting enough into retirement on a monthly basis. If you want to retire by 65 you NEED to put 15% away every month.

And if you want to retire decently, 20%. And very comfortably, try to hit that 27.5% of income tax benefit maximum.

‘supersunbird’ and ‘Bruce’ wrote “I also disagree”

In fact, both of you are wrong !

Because you both presupposition that the R100k pm guy is living ‘beyond his means’

No – and the reason is if for example 50% of the guy’s R100k pm is also servicing a portfolio of mortgages too, he’s gonna come out with a way bigger portfolio to retire off than the other guy.

On top of this, say the R100k guy is also acquiring antiques/art/gold/classic cars and other hard asset investment acquisitions as part of a diversified portfolio to further add to his retirement with his monthly income.

The reality is, over time you wont even be able to COMPARE the accumulated wealth between the R100k pm guy, and the R30k pm guy, as the sheer mass of wealth accumulated by the wealthy guy will dwarf the poorer guy…!

Again, like i previously stated, wealth depends on so many factors – but dont just jump to the conclusion that someone earning a lot automatically wastes their money [ there is a obvious reason that the old maxim states “the rich get richer” ]

Realitybites, can’t come change the rules now, now he is suddenly “putting away” (investing), as you put it, 50%, not 5%, and of course he will thus be much better off than the 30k guy.

Supersunbird wrote ” can’t come change the rules now”

Im not.

How many ppl really classify buying expensive cars etc as investing ???


They dont – but it depends on how shrewdly the R100k earner spends his money……right ? [ I made a 2000% profit return on a piece of art I bought many years ago…but ppl gave me a strange look back then when I originally bought it and thought it was a waste of money……now I can buy a house in equivalent value with that return ]

Friends of mine have made similar returns on classic cars

But they saving WAY less than your recommended ‘20%” of their salary, and instead spending it as described above

So, as you can see, this doesnt hold water.

And this goes back and ties in with my original comment : When it comes to investing, there are so many factors involved and everything is a case by case basis

There is no ‘ one size fits all”, and any investor/financial advisor worth their salt will tell you that

I agree MoneyChief. We as S’Africans seem to prefer to live “for now” and choose to live the “high life”. Many of us are slaves to consumerism, and victims of many successful marketing strategies…we eat out of their hands & buy what we want to have…not need.
(..I’m going to generalize, but the middle class in SA methinks still lives better than our compatriots in Europe/USA/Asia, with our larger properties, servants, 2+ cars per family. Luxury German cars are “common”place, etc. Have become car snobs, for one. We almost live like kings in a 3rd world country. Go and visit India for example, and one realises even our SA’s poorest are are better off than the poorest in vast India). S’Africans, as overweight as many of us are…count me in…live well. Am NOT saying it’s not tough…

It’s true then, the problem being the % or amount of our income we set aside for retirement, with inflation-beating returns of a somewhat lesser issue…

I think you are largely right, though it can be difficult to directly compare “middle class” from an SA perspective into developed world nations.

I would estimate that first world middle class would generally spend much less % of their income on cars than Seffricans but that’s largely because houses cost more but also because the car culture isn’t as strong. Significant pension contributions are often compulsory (like Australia’s superannuation system) which also help build up assets.

The reckoning comes at retirement time when the first world house (and likely pension) are worth a lot more than the Seffrican’s. Im sure this is largely why there seems to be much more inherited wealth in first world middle classes than SA. Most of my non-SA mates fairly regularly get substantial 5 or even 6-figure inheritances (in $) which provide deposits, house-extensions etc. Perhaps Im from the wrong side of the tracks in SA, but this seemed almost unknown.

ZAR depreciation doesnt factor here [ buy in Rands/sell in Rands ]

But CGT/Transfer Duty and other hidden costs def are negative factors

15% of WHAT ?????!!!!!

You need to understand figures first: everything is relative

So, someone putting away only 5% of R100k nett every month is still going to do WAY better than someone doing 15% of R30k nett p m

So many other factors too – how they structure these savings…….which investments vehicles they use….etc etc

The permutations are off the charts here, and beyond the scope of this forum.

Maths 101 plse guys !

Disagree.The guy earning 100k is only putting away R500 per month more than the guy earning 30k.Surely the guy who can live on 30k now has a much better chance in retirement than the guy who can only put away 5% even when netting 100k.

I also disagree. The guy saving 5% will NOT be able to maintain his 100k pm lifestyle when he retires, not even half that lifestyle, he will have to do serious scaling back. He would probably be able to maintain a lifestyle that a smidgen better than the 15% of R30k pm guy will in retirement, but that’s it.

How’s that for Maths 101?

If he had been smart he would have lived a 72.5k pm lifestyle and probably be able to “retire” (be financially free) early at age 55 and still be very comfortable throughout retirement.

The WC (Cape Town in particular) property bubble will soon burst.

Zille has 18 months left till she is put out to pasture after her Twitter decable which has rightfully decimated black support for the DA.

The City has run out of water, and water restrictions will become permanent due to over-population and climate change.

All residents are required to use 100 litres of water per day. Great quality of life, after blowing R6 Million on your matchbox apartment with a (non-guaranteed) view of the ocean.

The traffic is in permanent gridlock and set to become worse the explosion in number of vehicles and topographical limitations (mountains/sea).

All the mugs still buying into this overbought market are coming in late in the day, and will see their own behinds when SA soonachieves full junk status and interest rates go up, and up, and up…

Doom and Gloom!!!

This is a very disappointing article, the last thing SA needs with the challenges we have.. the last thing SA or any country needs, period.

Thanks to the Aussie for giving some perspective to the fact that there will always be new challenges that require new age solutions. If it was not for you everyone will be jumping ship because of this article only to find that every country has its own problems.

.. JSE has been performing in excess of 16% p.a since 2001 until 2014 barring 2002, 2008 and 2011.. in 2015 it was at 5.1%

Even the Brazilian national football team cannot be perpetual number one. Change will always happen.

What needs to be done, I believe, is to go back to the drawing board, and the voting stations, and learn new ways of doing things in the 21st century to find new solutions to new challenges.

That is how change is dealt with.. not by preaching doom and gloom. I THINK.

Not 100% correct. In my opinion those Saffas who benefited from goverment systems probably face the same ‘challenges’ some of the wealthier Aussies face, whilst those in Saffa townships (who got left behind) faces the same challenges many Aussies in suburbs like Dandenong, Broadmeadows, Elizabeth, Fairfield, Ingleburn and many rural Aussie towns face like unemployment, poverty, suicide, drugs, alcohol, teenage pregnancies, drunken violence and many others. Good luck with your fake understanding of Aussie. It’s not all that rosy – many will tell you that – you can ignore it at your peril.

ahh yes, the inevitable search for yield… this is a global phenomenon.

In times like this, you need to save & invest more, not chase up the risk curve for more yield. Also balance shares with income assets.

Interesting that our CPI is higher, but equities not compensating for it. I would think over the long-term that if consumers pay more you would see the increase in earnings somewhere, say from food retailers?

Is all the CPI increase in Government-based “services” that we cannot invest in?

Interesting that Magnus dates the 6% “myth” (that 6% of people will have financial independence at retirement) from an Aussie book in 1992. That’s quite interesting because I was given that figure in 1977 when I worked for Cyril Ginsburg in Cape Town. The source was Old Mutual research. So its been around for a long long time and since the then I have seen figures of 26% and many others. The base needs defining otherwise its just the usual problem in financial services that anything said in an authoritative manner is accepted without question.

Clearly most people don’t save enough. The whole issue of retirement preparation is bedeviled by a lack of solid standards and a plethora of not very useful opinions. Planning done using assumptions that have no validity beyond representing somebody’ wish list can never mean much.

Inflation is a major element but seeing that most of the standard models don’t understand or appreciate the lethal consequences the public are short changed with poor plans.

At last somebody refuting the 6% figure always trotted by the financial sector but I think 2% is still too high.The retirees of today are much better savers than their children and grandchildren so how future generations living to 100 are going to retire God only knows!

SAffers haven’t figured out yet that is austerity by the regime.

Just because we don’t get much freebies from the regime, they take extreme amounts of tax for what we earn.

“Average residential property prices have not recovered in real terms, i.e. after inflation, since the collapse of the market in 2008/9. According to the latest FNB property barometer average prices are now down 23% when the inflation rate is taken into consideration over the same period of time”.

Not in Cape Town Magnus! I mean I have been living here for almost 6 years and the prices just keep going up!! A 2 bedroom apartment/home for over R2 million sometimes almost R3 mil? Myself and so many of my friends who are working professionals, under age 30 are considering moving either back home, or to JHB. Property prices are too much here for us potential first time buyers. I have a friend renting a 2 bedroom for almost R9 000 per month!! And the deposit? 2 months rent!! Absolute bonkers!! But at these prices we will be renting for life.

It’s a no-brainer really…..salaries are about 20 to 30% more in Gauteng than Cape Town, and properties far more affordable.

Rather than paying off someone else’s bond by renting (or giving bragging rights to landlords with “no worries”), buy your own place in Gauteng.

And you will have less traffic and no water restrictions as a bonus…

But property owners are still making a loss.

R3m property but receiving what in rent. R11k, R12k a month? To break even on your bond alone the rental needs to be R30k a month.

That’s the problem with Cape Town. A member of my family recently did some prospectus on new house being built in Stellenbosch. They listing price was R3m but rental was only R21k per month.

Property prices in Cape Town are a bubble waiting to burst..

M, just saw your post.

Yup, agree……I dont know if ppl can actually do basic math anymore.

The returns are kak for any newcomers into the WC prop market.

Sure, the early adopters are smiling.

But that ship has sailed.

I dont necessarily agree that its a bubble that will burst…but the returns are sh*t

Ms Guggenheim, do the math !!

So, you say 2 bedroom apt is around R9k pm in rent hey ?

Wow, thats a lot.

But, wait, that 2 bedroom apt you say costs R3m to buy ?

Now, get out a calculator and tell me the ROE.

Still great ??

So perhaps buy and let out in Gauteng and rent a place to live in Capetown?

I would rather have the truth than some sugar coated platitude that Alles sal regkom….

After reading this column I decided “Scr@w that!”. I’ve already lost substantial amounts on shares on the JSE. I thus went and bought myself bitcoins!
For one, it sure as hell cannot be more risky than investing your money on the SA stock exchange!

…could be an increasingly lucrative hacking paradise for criminals? Safety in numbers I assume. Bitcoin fascinates many of us, but at what (security) risk? Comment from any IT experts out there…?

Oh yes it can be more risky. No diversification. The problem is not where you are investing, it’s with your method…

Timmo, where did you buy from ?

Have been trying to buy but every exchange I look into seems RIDDLED with problems.

I love crypto, but its very cowboy out there

And did you buy using fiat ?…..Rand or $ etc ?

You can use Luno to buy (registration and identification required). Its an SA exchange. Use to be BitX back in the day. Ice3 is way to low on the volume for me. I buy on Luno in BTC and send it to my Bittrex or Poloniex account. From there, with BTC, you can buy other “coins” or sell them.

Note, prices do differ between exchanges, one exchange might be 2400 USD and another 2600 USD for one BTC. Luno is often out of sync with the USD markets, purely due to demands being different – and maybe SA guys take a bit of time to catch up on USD trading drops. (So time your stuff!) To invest directly on a USD/EU based crypto exchange is a bit more difficult (not going to go into details).

You can always invest in mining hardware or online mining contracts and transfer the rewards to your wallet (which you created somewhere). Make sure your read up on exchanges and transfer fees/rates/commissions etc. Fees differ between exchanges like instant buy/sell or placing orders etc. Understanding them can help reduce cost.

Another thing… Don’t just look at bitcoin. There is many other coins that have VERY good backing and won’t go “away” easily. Do your research though and understand the market and volatility.. Understand why the coin is created and what future it can hold. Also don’t use your whole life savings on your first entry into the market.
Baby steps..

Surely you can see it IS more risky? Cryto currencies can’t earn dividends so the rising prices are just a bubble caused by more “investors” continually entering the market simply because they in turn expect the price to keep on rising.

End of comments.



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