Personal Finance Newsletter - latest Issue

The first seven months of 2018 have been miserable for South African investors. The local stock market has given back some of the gains that it made in the second half of last year, listed property has been sharply negative, and bond returns have been volatile.

77-year-old former stockbroker and debt counsellor Fanie Grove has spent most of his life in financial services, but what he saw as a debt counsellor turned him against credit forever.

Far-reaching tax law changes to curb the avoidance of estate duty may have created the impression that trusts are no longer relevant.

Key upcoming tax submission dates

The growth in the weighted average national rentals for residential property has halved from a year ago and, as of June 2018, is at just 3.27%. A year ago, according to the PayProp SA Rental Index for the second quarter of 2018, this figure was 6.76%.

South Africa has been rocked by a series of corporate scandals that have sent the share prices of former blue-chip companies like Steinhoff and EOH plummeting from their previous stratospheric highs. Investors who bought shares in these companies since January 2017 would have lost roughly 98% and 80% of their money respectively.

Without even knowing you, I’d be willing to bet that most, if not all, of the New Year’s resolutions that you made at the beginning of the year didn’t materialise. There’s no point agonising over that—it’s what happens to most people—but you can do something about it. At any given moment, you have a choice. A choice to do better. A choice to change. A choice to grow up—especially when it comes to managing your finances.

Most individual taxpayers tend to only check their tax certificates (IRP5s) when something goes wrong after submitting their annual tax returns.

Table 4.5 - Personal income tax rates and bracket adjustments

Most millenials entered the workforce during and after the global recession of the late 2000s and early 2010s, which means they had to navigate a tougher global economic environment than previous generations—one of high inflation and unemployment, social and political unrest, and low economic growth.

Getting exposure to property is no longer only about picking any number of the more traditional, or vanilla diversified funds listed on the JSE—with portfolios spanning retail, office, and industrial assets, your choices can be as niched as you prefer. In recent years, investors have seen a greater degree of specialisation, with a number of real estate investment trusts (REITs) or funds with very specific portfolios coming to the market.

Tower Property Fund, the developer and owner of the popular Cape Quarter Precinct in De Waterkant in Cape Town, is selling parking bays in a development in Napier Street for R570 000 each (including VAT). The development, which comprises 16 apartments along with two floors of retail space, will have 140 parking bays for sale. This means potential gross proceeds of R80 million. A cavernous basement parking lot was built under Napier Street as part of the development on the north-western side of the Cape Quarter.

SA’s mining industry’s real GDP is smaller than it was in 1994. The financial services industry, in contrast, has grown its GDP nearly 170% over the same period. The Minerals Council of SA recently reported that barely a quarter of gold mines are making profits under current conditions.