I have R225k. What’s the best way to utilise and maximise my capital?

I'm 21 and thinking of buying an investment property in the next three to five years.

I am 21 years old and am looking for some advice. I have invested about R57 000 since May 2020 and my investment portfolio currently sits at R75 000. This is a combination of two-thirds equities and about one-third in tax-free savings ETFs. I have about R100 000 in a savings account and R50 000 in a fixed deposit savings account.

I am thinking of buying an investment property in the next three to five years. What would be the next logical steps to:

  1. Utilise my money better; and
  2. Maximise my capital?

(Ps. I am working full time and living with my parents, so I can be exposed to high risk).

  Profile         Mail

Well done on being able to save a substantial amount of money at a relatively young age. You are certainly ahead of the curve in terms of planning and implementing a strategy to generate long term wealth.

Please note that the recommendations here are based on limited information. I would encourage you to engage in a more comprehensive discussion with a qualified financial planner in order to better understand the options that are available to you as well as the associated risk.

Your question is broken up into two parts. The first part is around utilising the money better or structuring it in an appropriate way. The second part revolves around maximising the capital or maximising the return.

Utilising my money better

Your investments are spilt between three savings vehicles with 33% of the money invested in growth assets whilst the remaining 67% is invested in interest-bearing accounts.

Unfortunately, fixed deposits and retail banking “savings accounts” are yielding very low levels of interest which in some cases are below the reported rate of inflation.

This suggests that you should consider alternatives to fixed deposits or savings accounts.

Traditionally speaking, multi-asset low equity funds or “stable funds” have a recommended investment time frame of three years whilst traditional multi-asset high equity funds or “balanced funds” have a recommended investment time frame of five years. Based on your questions, one should have a detailed discussion around risk-return expectations and asset allocation in order for you to make an informed decision.

Based on your comment regarding exposure to a high degree of risk, I would infer that an appropriate risk profile for your investments may be along the lines of balanced worldwide multi-asset flexible funds. Note that the appropriate time frame for these funds is five to seven years.

Maximising my capital

As suggested, you may want to consider using balanced worldwide multi-asset flexible funds in place of low yielding savings and fixed deposits. I would caution against taking on any more risk than this given your investment time frame.

Purchasing a property

Whilst continuing to accumulate money in order to purchase a property, I would recommend that you talk to people who own investment properties as well as estate agents regarding the things to look out for and consider when purchasing an investment property. Also, consider using an attorney to draft a rental agreement rather than sourcing a generic rental agreement document. It could prove to be an invaluable decision in the event of a dispute.

This article is an interesting read for anyone who is looking to purchase a property.

I wish you all the best in your financial journey and as a future property owner.


Was this answer by Jesse helpful?


Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.


Buy Ethereum now. Disclaimer: Not investment advice this is just my opinion. Consult a financial adviser for professional advice and earn pathetic returns.

He wants to invest. Not “gamble”.

Best advice. Buy diversify.

50% Bitcoin
40% Ethereum
5% Dogecoin

I turned 200k into 1.5 million. A R10 000 Dogecoin is now R130 000.

I took some out and paid off my debts and now I buy more every chance I get.

The next 10 years are crypto season. Buy and hold.

*not financial advice I am not a financial advisor* but if I was there would be a lot more millionaires

At your age consider a gamble. You will learn a great deal.
1. Find a business venture or in the current language a side hustle
2. Approach a broker and ask if they will trade the hell out of it for you.
3. Cryptocurrency trading

Sounds like you already have it figured out

Hopefully you first ensure that your parents have no house or other debt :/

I agree with BallinDVersace…when you managed to accumulate R225K at the age of 21 (when most kids are busy with varsity/technicon studies, with hardly a chance to save so much)…you already figured it out how to earn & accumulate money.

Hope this R225K is not partial through illicit gains(!)…in that case, please contact the SARS dept that deals with HNWIs in order to regularise your tax affairs.

Or, if that money is ‘initial help’ from a wealthy parent, I hope they declared their Donations.

Otherwise, from a business point of view, why ‘invest’? IF you have entrepreneurial abilities, why hand over funds to other like-minded businesses (in a ETF or unit trust fund). It only spreads the concentration-risk to other entrepreneurs, by a fund manager.
Buy-to-let property, yes, is one way to start one’s life on a good track. Or identify a business venture and put your love & dedication to it.
(You can ask any super-wealthy captain of industry, they never attained their wealth in one steady upwards-sloping line on a graph…it was back and forth, and starting over many times, learning through one’s own mistakes.

Yes, to ‘invest’ (i.e. giving funds to other entrepreneurs) will instill financial discipline, but returns are not going to shoot the lights out. Do your buy-to-let real estate if you want….here you’ll learn about ROI with certain size/price-range of property, and location.

And rather get a good Accountant/lawyer/tax consultant on your side, than getting advice from a commission-earning SALES person. Since the latter earn so well, or better, become one yourself, and make earning Comm your career 😉

First of all, I am not a financial advisor either. You are way ahead of your peers. Let us accept that.

As you have said, you can take on risk. I would in that case increase my risk in equities, whether it is SA equities or foreign equities, or both. Preferably both.

Put 10% of all your earnings away each month. First pay yourself and then anything else.

Stay away from clothing accounts.

In your shoes, I would definitely put some of my investment into Crypto – not necessary Bitcoin. Say 10%.

On certain fixed deposits, you can still beat the “official” inflation rate. It is however interest bearing, on which, at your age, only the first R23800 is exempt from income tax.

Attempt to put your money in dividend paying shares. Currently only paying 20% dividend withholding tax.

Consider an RA. You can save up to 27.5% of your Gross income, or taxable income, whichever is the largest, up to R350000 – I doubt whether your income (taxable or gross) will beat the R1272727 per annum threshold – that is when you can deduct the full R350000 from your income tax. Many people will tell you that an RA is a bad idea, because you will be taxes on your annuities eventually – which is true. However, taking time value of money into account, you will be saving on “expensive money” – the tax refund – now, while you’ll be taxed on “cheaper money” later.

End of comments.




Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.

Follow us:

Search Articles:
Click a Company: