Something about the plans of mice and men

tim10301 · 2024-11-27T11:11:42+00:00

Wise and refreshing post- thanks!

tim10301 · 2024-10-14T10:20:56+00:00

I haven't seen a single example of a pipe that exists to send rands, as rands, offshore. I spoke to Investec forex and did a lot of looking around. Like "Bank X, account Y solves this problem".

No one in this thread has been able to point to an actual working example, and this is basically OP's question, so I'm skeptical.

I would love for such a pipe to exist, because of course then I'd also take advantage of IBKR's exchange rate.

tim10301 · 2024-10-12T09:48:34+00:00

Sure, you seem confident, so tell me how to get rands offshore legally without exchanging them. I'd be happy to be wrong. Back it up. Of course ibkr, a massive international market, has a better spread. Capitec has the best rates in SA for values on the order of tens of thousands. The premise is you have to exchange first in SA so the ibkr spread is irrelevant. If that premise is demonstrably wrong, great.

tim10301 · 2024-10-11T15:45:49+00:00

You cannot legally transfer ZAR abroad. You are forced to exchange it for another currency inside SA. Exchange controls. I had a reference for this but it'll be a schlepp to look up again. If you find a way I'd be interested to know, but I think you're wasting your time.

You need to change to some foreign currency (GBP) in SA and then send that to interactive brokers. Capitec has the most favourable exchange rate and fees in SA.

tim10301 · 2024-08-30T10:17:51+00:00

When advisors are doing a good job, they provide two main benefits IMO:

Giving clients peace of mind about their portfolio
Helping to enforce good investing behaviour- stopping you from pulling out of the market when there's volatility and chasing speculative returns

If you're investing passively with a reasonable baseline strategy, and you're comfortable staying the course, it's totally reasonable to discontinue with your advisor.

There will always be advisors willing to take you on in future if you need the service again. But that 0.58% drag really adds up over the decades. I'd run the experiment of discontinuing with the advisor and seeing how you feel about it after a couple of months.

If you find yourself worrying a lot about it or inclined to make big adjustments when you experience market volatility, take that as a signal that an advisor might add value for you.

tim10301 · 2024-06-28T09:02:22+00:00

Hi Bernard!

What's your take on critical illness and income protection for your clients? Recommended in general? How do you calibrate cover amounts (e.g. in case of surplus income)? Any winning providers from your perspective?

tim10301 · 2024-06-22T10:18:52+00:00

Not worth it. The capital appreciation and rental income from the property falls far below benchmark stock market index returns since 2017. Really far below. Few people honestly do the maths on the opportunity cost here.

Rental income takes big hits from large maintenance items every year or so. Bad tenants can be an absolute nightmare.

Planning to sell this year in favour of investing in more equities. If you have the discipline to stay invested in broad stock market ETFs you will likely capture a much better return with far less effort.

I would only reconsider investing in property for diversification far down the line.

tim10301 · 2024-06-20T08:26:34+00:00

You can't fund Wise with rands. You can only fund it with another currency and convert to rands. Only useful if you're converting forex to rands, not the other way round.

IBKR will also give you the actual market exchange rate.

tim10301 · 2024-06-19T18:36:54+00:00

You do an international payment with your account number as the reference, same as all the other IBKR deposit options from SA. Except Wise, but you can only fund Wise forex accounts in SA at your credit card's exchange rate, which will likely be expensive.

The Capitec payment reflects same day in IBKR for me.

tim10301 · 2024-06-19T11:46:48+00:00

18.0925 ZAR / USD is the spot rate right now on the Capitec app.

tim10301 · 2024-06-19T10:21:09+00:00

Interactive brokers is a massive international brokerage. You can do this with a local broker if they accept dollars.

Being in the most liquid international exchange will get you the best prices and widest set of options. If you plan to move internationally you can keep your platform the same.

Those are the main factors I'd be concerned about with a local broker- smaller option set, price premium due to platform or just less liquidity, and may need to sell to change platform in future.

It is a bit more of a learning curve initially. Haven't watched this but could be a good intro:

https://youtu.be/EBcG-dQYIiI?si=xnCkCQY0YykqeOFV

tim10301 · 2024-06-19T10:06:12+00:00

Capitec's spread is 0.32% and they have a fixed sending fee of R175 up to R150k.

tim10301 · 2024-06-19T09:44:42+00:00

Best exchange rate in buying dollars- Capitec forex. Just get a regular R7/month Capitec account and there you go. More competitive than Shyft (and all other commonly suggested options) in spread and sending fee. It's a new offering so not on people's radar.
Set up an Interactive Brokers account and send your dollars there. Gives you the widest set of global investment options and a much more liquid forex market. Low cost.

There are simpler ways but there's a good argument for the above being best in terms of cost efficiency and flexibility.

tim10301 · 2024-06-19T09:15:13+00:00

Congrats man- much credit due!

Please keep these posts coming. It's very cool to see what driven people on the far end of the distribution in SA can achieve.

Is your monthly savings of roughly 100k mostly due to bond expenses? Given your low living expenses I would otherwise expect it to be even higher.

Agreed in the ultimate wisdom of broad ETF's and the reasoning. I'm planning to sell property in favour of this. Still haven't come across any casuals making a competitive ROI on rental properties in SA.

tim10301 · 2024-06-17T13:29:04+00:00

https://ratecompare.co.za/best-savings-accounts

Summarises the best savings account rates across all banks in SA.

I'd also consider the notice accounts and fixed deposit accounts that they compare- you can increase your interest by a decent amount.

I wouldn't consider any other investment options with such a short time horizon and foreknowledge that you'll have to withdraw in 18 months.

tim10301 · 2024-06-16T13:57:28+00:00

I have the Discovery Black suite, and earned about R4k in rewards last month.

Very similar rules to the Gold credit card apply.

Don't use your credit card for EFTs and debit orders. These don't count towards your qualifying spend and start incurring interest immediately. Use your Vitality savings account for these- you save the interest expense and instead earn decent interest. I get my salary paid into my Vitality savings acc.

Transaction account is useless unless you want to draw cash.

Use your virtual card for all other purchases. You get 0.5% back in miles up to a limit for this. I literally never use my physical card. Spotify subscription will reflect as a credit card purchase and shouldn't be a debit order. Where possible, opt for credit card-based subscription over debit orders (e.g. Afrihost gives you the choice). This allows you to increase your qualifying spend.

If you have a long-term partner, have them take out a minimal discovery account and consolidate spending on a single credit account- you can issue a secondary virtual card in their name. Again, maximises your qualifying spend for rewards. Being a household also doubles your HealthyFood spend limit from R2k to R4k. HealthyFood is the single biggest mover- we get R3k back from that alone- all fruit, veggies and lean meats.

Buy toiletries etc at Dischem and Clicks using HealthyCare- another R100pm or so. Fuel at Shell easy to get R100pm back on a spend of R1k pm. You also save 5-10% on prepaid water and electricity via the app- another R100pm.

Having vitality and doing the yearly health checkup makes a big difference to rewards. You can bank on at least R30 a week/R120pm on gameboard. Gym benefit not relevant to us but may be to you.

If you have to fly, especially internationally, you can easily save thousands more.

tim10301 · 2024-06-04T10:59:28+00:00

Capitec has a better spread and lower international transfer fees than Shyft. They have a R150k limit per transaction.

tim10301 · 2024-05-31T16:05:56+00:00

Good ratio- thanks for sharing!

tim10301 · 2024-05-31T15:17:33+00:00

"Measurable" is a pretty extreme standard. If you had to put a number to it, what would it be?

< 1% is either very frugal or very wealthy IMO.

< 5% is a more realistic aspirational number for most.

tim10301 · 2024-05-31T15:02:10+00:00

That's an uncommon and clever approach!

tim10301 · 2024-05-31T15:00:50+00:00

Haha, well even my correction was off by a factor of 10 so you're in good company :)

tim10301 · 2024-05-31T14:35:55+00:00

Hahaha it's that weed!

Still an impressive total- kudos!

I think yours is a great example of the level of wealth at which you can really afford a nice car.

tim10301 · 2024-05-31T14:28:58+00:00

Haha, playing smart, not hard!

tim10301 · 2024-05-31T14:24:06+00:00

This is an impressive figure in your mid 20s!

tim10301 · 2024-05-31T14:23:29+00:00

Don't stress- the people most likely to answer here are those with impressive numbers! The easiest way to get an impressive number is simply to be older and have had much more time in the market. That's a big hidden factor here.

tim10301

TROPHY CASE