I am a fashion consigner and I source and sell vintage to retro clothes via markets and my blog. The other day – while sorting out the clothes that I had sourced for that purpose – I realised that there must be other ways to accumulate wealth besides being a fashion entrepreneur.
Hey…look, I absolutely love what I do but I LOVE money MORE so I took on the challenge and decided to research what other LEGAL means are available to young people in pursuit of a sound financial life…like, starting now.
I remember reading a finance article by my former editor-in-chief (during my stint at UJ Observer) turned freelance writer, Ms Paballo Rampa on the money-web website.
One of the key points that she stressed was the ability to BUDGET and she even remarked that one should “have a clear plan of what [they] to do with [their] salary and always need put 10% of it in a savings account.” She added that you should “draw up a list of your expenses and income(s). If the difference is a positive amount, then you can use it to spoil yourself during that month. If it’s negative, go back to the drawing board and see where you can cut costs. Most of us get too excited on pay day, so much so that we cannot think straight! For this reason, draw up your budget days before you get paid and stick to it. Discipline is the word!”
Indeed, I fully agree with her. I surfed the net further in order to find more tips on how to amass wealth as a young person and these are the ones that I would actually try:
- Open a savings account
If you don’t have a bank account yet, then start researching each and every bank and find out which one would have the best rates to accommodate you. The other strategy would be to focus on smaller banks because they tend to offer higher interest rates than their bigger counterparts.
- Buy Bonds
According to the South African Retail Savings Bonds: they are an agency that “gives a proper financial planning and budgeting service”. Their website also states that the National Treasury had introduced the “RSA Retail Bonds” to help promote a saving culture. These bonds are a safe and risk-free investment opportunity.
The beauty of these bonds is that there are absolutely no fees that you will incur and the costs are payable through investing in the scheme. There are two products offered by the South African Retails savings bonds: the inflation linked RSA Retail Savings Bonds and the fixed rate RSA Retail Savings Bond.
It is important to note that one can invest a minimum of a thousand rand (R1000) and you are allowed to withdraw from your investment before its maturity date. But, if you do, there will be a penalty to be paid.
There are two open-window periods during which you can withdraw your money before the stipulated date: after twelve months and within the first year. These withdrawal periods are can occur under extraordinary circumstances. For example if one of your family members suddenly dies and money is needed (I am sure this is an extraordinary circumstance as I just made did up).
One can purchase these bonds via:
-Their website: www.rsaretailbonds.gov.za or by posting/hand delivering the application form to the National Treasury’s offices in Pretoria (240 Madiba street)
-Via telephonic application (I am not sure that I would be patient with this process)
-At your nearest Pick and Pay stores and/ or any branch of the post office.
- Buying shares
A lot of young people (and that pretty much includes me too) know the word “shares” but they have no idea on how to go about acquiring them and understanding how they work. So – as I was researching, in order to try to get an easy explanation to this debacle – I came across a Maya Fisher – French article that was published in the City Press (4/06/2013).
In her article, she had remarked that it is very crucial for one to really familiarise themselves with [a] Country’s companies before buying shares and investing. Fisher-French also stressed that it is of the utmost importance to indentify what kind of investor you are in order to build a long–term share portfolio. Therefore:
Invest in household names with good track record and are considered in many parts of society as the country’s top 20 companies. This is because these companies have a lot of information available about them in the public due to their transparency, as an investor it will make it easy for you to choose what shares offer the best value in that moment. Some of those companies include: MTN, Anglo American, Sasol and so forth.
If you find yourself wanting a challenge, you can also go for those so-called “medium sized” or growing companies seeing as a lot of investors think that they would attract clusters of people looking to buy their shares. These growing companies would offer an alternative to the top 20 companies.
When referring to the medium sized companies, I am talking about companies like Pick and Pay, Shoprite, Vodacom, Mr Price, Tiger brands and so forth. These companies can offer more growth potential in the future. These companies offer an opportunity to save up extra funds and add to your portfolio every few months by buying shares outside the largest 20 biggest companies.
As a beginner in this field, it is important to seek further information regarding this matter. Beginners who want to buy shares should check out these outlets/ service providers for the best online brokerage firms as they would guide you a clear indication on what shares are better suited for you.
You can contact your bank and enquire how to go about acquiring the desired shares as well as what benefits and disadvantages are attached to each option because every banking service provides different packages/options for acquiring them.
It is of the utmost importance to enquire about each and every step in order to understand and make an informed decision at the end of the day.
For example: I bank with First National Bank (FNB), so I have checked out their website www.fnb.co.za/share-investing and they gave a breakdown of everything I wanted to know. Therefore I will have to check out my budget and choose what will be suitable for me.
When I was given the challenge to find out on other legal means of accumulating wealth, I was like…what the hell? But then again I love challenges and surprisingly I learned a lot during my research. Now I am better positioned to make informed decision regarding the health of my finances. And I am hoping that you are inspired to follow suit and be financially free. And remember there is always support from different financial institutions including the government.
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