× Fact! Joining this forum will make you a happier person! - Register for FREE


Advice needed about property and general debt reduction
#1
I need some advice on a current opportunity available to me.

Our situation is that we have roughly R300k debt excluding our house. We are considering selling our house as my company will pay for rental accommodation closer to my current project. The project's remaining duration is 27 months. The rental accommodation would be in a much better area than where we are currently living. We should make about R300k off the sale of our house.

The idea is that we settle all our debt. We would have an extra R15k per month after all our usual monthly expenses. ie, school fees, fuel, food, insurances, etc.

The plan is to save for 2 years and buy in the same area/suburb in which the rental accommodation would be. If we get a buyer soon, potential savings could be R360k (24 x R15k) excluding bonuses. This would be used as a deposit towards the new house.

I think the main benefit would be reducing the interest payable on our existing debt.

#2
So what's the question? Whether this is a good idea or not?

Yes it is. No debt, free rent, less travel time (reduced fuel and maintenance costs).

The only thing you need to make sure of is that you save as much as possible over the next two years and not let the extra money filter into daily expenses to maintain a higher lifestyle. Debit orders/auto payments are your friend.
IQ Test

#3
I'll start up a few new threads as soon as we have sold our property to discuss investment options.

I will follow the investment guide for some tips. Keeping in mind my short term investment strategy would only be for 2 years.

My plan is as follows: First R50k into Emergency fund (R10k savings account, R40k 32 day Money Market account)
Thereafter R3000 per month into TFSA, R8000 per month into ETF's, R2000 per month into stocks, R2000 per month into cryptocurrencies. Any remaining disposable income into the savings account.

#4
Good idea to pay off ALL debt. It will be like a new start for you guys. Just remember that most investments, eg. stock, are long term investments, meaning 3+ years. If you lucky, you will make money in the 2 years, but it is not a given. The more conservative you invest, the more likely you will make money, but at a lower rate.

Remember that the money you put into your TFSA is good, but if you take it out, you can't top up the TFSA again to your max of R500k.

Remember to close all your accounts that you paid off...so that the invitation it not there anymore to make debt again.

#5
(03-23-2017, 07:22 AM)marco79 Wrote: I'll start up a few new threads as soon as we have sold our property to discuss investment options.

I will follow the investment guide for some tips. Keeping in mind my short term investment strategy would only be for 2 years.

My plan is as follows: First R50k into Emergency fund (R10k savings account, R40k 32 day Money Market account)
Thereafter R3000 per month into TFSA, R8000 per month into ETF's, R2000 per month into stocks, R2000 per month into cryptocurrencies. Any remaining disposable income into the savings account.

*R2750 pm into TFSA unless you are making up for missed months that year.

Unit Trusts are another option to look at together with ETF investments. Stanlib's All Star one, for example, is like an umbrella for multiple unit trusts.

Don't forget about RA or pension fund either. The tax break you get you can reinvest.
IQ Test

#6
I was thinking about the TFSA a little. I might decrease the payments to R1000 per month. This will not be used when our deposit is needed.

#7
(03-23-2017, 08:19 AM)Hamster Wrote: *R2750 pm into TFSA unless you are making up for missed months that year.

Unit Trusts are another option to look at together with ETF investments. Stanlib's All Star one, for example, is like an umbrella for multiple unit trusts.

Don't forget about RA or pension fund either. The tax break you get you can reinvest.

I haven't contributed to my TFSA yet this year.

I will have a look at Stanlib's All Star.

I am currently contributing 15% towards a provident fund via my employer.

#8
(03-22-2017, 04:45 PM)marco79 Wrote: I need some advice on a current opportunity available to me.

Our situation is that we have roughly R300k debt excluding our house. We are considering selling our house as my company will pay for rental accommodation closer to my current project. The project's remaining duration is 27 months. The rental accommodation would be in a much better area than where we are currently living. We should make about R300k off the sale of our house.

The idea is that we settle all our debt. We would have an extra R15k per month after all our usual monthly expenses. ie, school fees, fuel, food, insurances, etc.

The plan is to save for 2 years and buy in the same area/suburb in which the rental accommodation would be. If we get a buyer soon, potential savings could be R360k (24 x R15k) excluding bonuses. This would be used as a deposit towards the new house.

I think the main benefit would be reducing the interest payable on our existing debt.





Hey man I am a financial advisor for discovery 
Currently I can do a full financial needs analysis 
It is free and my manager and I will come and meet you if you are in jhb .if u are keen for this please contact me so I can call you? 

#9

Speechless!
IQ Test

#10
Just a quick update.

We have an offer on our house for slightly more than anticipated.

Over the last few months I have reduced my cellphone contracts by R1000 per month. DSTV only down by about R300. From Premium plus to Compact basic.

I have been looking at the rental market in my current area. There are a few flats ranging from R300k to R400k and an oversupply of people looking for rentals in the R3k to R4k bracket. I'm considering the option of buying 1 or 2 of these properties end 2018.






Users browsing this thread: 1 Guest(s)

Color Skins

Change Color:

Background Patterns:

Background Images:

Main Options: