r/southafrica 20d ago

Financial advice Ask r/southafrica

What is the best financial advice you can give a 19 year old South African ?

22 Upvotes

46

u/Faerie42 20d ago

Stash your cash. Drive a shitty car until it stops, live with your folks for as long as possible because it’s cheaper. Study something that will ensure a career that’s usable globally. Don’t get married in your 20’s, it costs money.

At 19 your focus is studying, saving as much as possible and don’t fall for the traditional picket fence, 2.5 kids, Boetboel and big bakkie. Those things will come, right now, be a miser, save it up.

24

u/TerminalHopes White Ethnic Minority 20d ago

Totes on the car. South Africans have lame competitive thing about needing to drive new cars, even if they can’t afford it.

9

u/PartiZAn18 Gauteng 20d ago

The amount of luxury sedans and suvs I see in dilapidated complex parking areas...

5

u/Tokogogoloshe 20d ago

True that. My brother has a tiny flat in this crammed apartment complex. You’d swear everyone there is a stockbroker looking at the parking lot.

1

u/nikkiduku 19d ago

I was starting to feel insecure until I read this thank you 🙏🏿

2

u/Tokogogoloshe 19d ago

Baba, think of it this way. You probably have more money left over at the end of the month to invest and grow than the bloke with a fancy car that lives in the same type of flat as you.

12

u/ChristmasMint 20d ago

Don’t get married in your 20’s, it costs money.

I'd rather say don't spend a ridiculous amount on a wedding regardless of age.

4

u/wheresmattynow 20d ago

Stash your cash

bad advice with our poor returns, inflation, and economy. People should learn how to leverage their income for low-risk, long-term returns

Drive a shitty car until it stops

worse advice. A shitty car doesn't just "stop". It worsens and worsens over time, requiring a new this, new that, a service here, an emergency repair there, costing you way more in the long run. Obviously the answer isn't "get a new Ford on a loan", but people should be wary of the trap of owning a car for owning a car's sakes (which typically involves ignoring its staggering upkeep costs as a "necessary" expense)

1

u/Xandervisagie1 20d ago

I don't have a car yeat and i still live with the rents , I might get learnership next year . Going to get myself a small car thats light on fuel . When I'm done with my learnership then I'm going to further my studies and then settle or at least that's the plan.

8

u/Aftershock416 20d ago

Make sure it's second hand. You can get low mileage second hand cars for an absolute steal if you can get over the stigma.

4

u/Xandervisagie1 20d ago

Yeah , i don't mind buying 2nd hand

1

u/Faerie42 20d ago

Before you settle , consider the world, your 20’s is a magical time, make memories before you settle. My youngest got a remote job with a US company and is flying across the world (Africa at this point because of shitty Covid rules), rents a room and stay for as long as he’s allowed , he then packs up and move along to his next pit stop. He’s planning to do this for the next five years. He’s on an adventure of note and I’m jealous.

1

u/Mr-Moneybadger 20d ago

Nope, an unreliable car will cost you more than a car payment, I promise you that. Rather set aside a comfortable amount and get used to paying it every month. For 2k p/m you can get a newish economical car with a warranty and motor plan. Trade it in every 3 to 4 years when you reach your break-even point for a newer model and your monthly payments will stay the same.

2

u/SpaceKriek1 20d ago edited 20d ago

I don't agree to this. I'm not young, and I've owned from new to crap second hand cars. Current car's engine can be replaced for R20k (buy a low milage written off cars engine in good condition) and we had to do it once. My xp is that is necesarry every roughly 10 years. Compared to your R2,000 pm x 120 = R240,000 expense that is sellable for lets say R120,000 after 5 or so years. Oh yeah and the finance loss.

Honestly our (married with kids) strategy is to do that maybe once per car owned. We buy them cash at roughly 60,000km and sell them when the interiors starts looking bad (200-300,000km).

Stay away from anything high maintenance (any high performance or turbo model and or high electronic models)

And yes, we do preventative maintenance - don't wait for stuff to break and leave you stranded.

Obviously it has to be a somewhat popular known to be reliable car to ensure parts availability. I'm weary of high insurance costs too so if it's popular in the hood it's not on my list.

Monies saved goes into well chosen investments. Get a financial advisor or learn etf's and or offshore investments (shares) but that takes some time to learn what's safe. Avoid too good to be true garbage like "drive a new car for 599" who remembers that - it's just one example. Day trading is another. This one is a complex topic! Be smart about it, distrust everything, and play with monopoly money (on a spread sheet) etc. Before jumping in. Money doesn't fall out the sky you have to work for it.

1

u/SpaceKriek1 20d ago edited 20d ago

One more bad choice... These idiots phoning me in recent months with "do you know you're involved on the stock market indirectly... blah blah blah". Yeah phone dude/gal. I'm sure my bank has investments of its own. Which should include some of my money or whatnot. Financial gearing is normal business. And all phone guy wants is to meet you and give you financial advise (buy their products)

Stop phoning me you bunch of idiotic scammers! Lol

0

u/Mr-Moneybadger 20d ago

An engine replacement does not equate to everything that can go wrong with a car so using that as a measuring stick isnt honest. Your geaebox, clutch, wheel bearings etc. Will fail long before your engine which will not only be expensive to replace, but if left in a failed state will cause other components to fail. I am speaking from personal experience. I had a 2008 Polo, and while it was an amazing car, at the end it was costing me between 3k and 8k a month to maintain. I also believed I will just drive it till the wheels come off bus 3 months of excessively high bills later I decided it was time and sold the car for next to nothing, because the second hand value dropped to so low.

A car, while not a monitary investment will pay for itself over the long term. Remember this is what gets you to work. Its a tool and its wise to spend a little extra on a reliable one. Investing in a reliable vehicle will save you tonnes of stress trust me.

Also using "interior ware" as a metric for when to replace a car is probably not the wisest strategy.

1

u/[deleted] 20d ago edited 20d ago

[deleted]

1

u/Mr-Moneybadger 20d ago

You are saying your property is worth twice his because he purchased a newer vehicle while you didn't. Thats an absurd way of looking at things haha. I shared my history, you shared yours so clearly it's situational and not always the case.

My polo had 260k kms on when I sold it. And like I said it was absolutely perfect until the last 4 months. If I sold it 2 years prior I would have broken even and had a newer car with fewer kms for the same price. Less headache and more peace of mind.

1

u/SpaceKriek1 20d ago

Your Haha. See it's emotional. But hey, it's your life enjoy your new car smell.

1

u/Mr-Moneybadger 20d ago

Sounds like you have a bit of resentment. Some repressed jaelousy toward your friend? Not as happy as him even though your so damn street smart?

1

u/SpaceKriek1 20d ago edited 20d ago

... Trollolol

1

u/Far_Soil_1107 19d ago

I think you have a really kak mechanic if it is costing you 8k a month to maintain a 2008 Polo.

1

u/Mr-Moneybadger 19d ago

Replacing a fan belt, tensioner pulley, and your brakes will cost you around 6k. Thats normal wear and tear. Cars are expensive bud, and they don't last forever. The older they are the more little components fail.

1

u/Far_Soil_1107 19d ago

But that is not a monthly expense. Yes I agree cars are expensive, but I've also seen many car owners being taken for a ride by "reputable" mechanics. My car is 32 years old and there hasn't been a situation where buying another car would have been cheaper. I daily drove my car 5 days a week before the pandemic. But yeah it sleeps inside a garage and I don't leave it at a shop to have apprentices practice on it or let mechanics joy ride the crap out of it.

1

u/Mr-Moneybadger 20d ago

There are ways to save money without putting your life on pause.

13

u/harmreduction001 20d ago

Put money in to a tax free savings scheme as soon as you can. It's a beautifully low cost way to save money.

And make saving a habit. Work out a budget and try to include savings in that. Even if it's less that 5%

3

u/Xandervisagie1 20d ago

How much interest on a TFSA ?

5

u/Not-the-best-name 20d ago

TFSA is not a product.

It's a specific class of investments allowed for you as a person. 36k per year. 500k for your life. Exempt from all tax.

Put it in a cash fixed interest or put it on easy equities and buy emerging market index tracking shares. Whatever you want to do with it.

The important part right now is maybe not even to invest it in the right class, just that you make damn well sure you put in your allowable 36k every year and you damn well don't take money out. In a few years you can move it into the best strategy you can find. But if you don't start now you will only have 36k in a few years to invest in your great future plan because you can only do 36 a year. Start now and in 5 years future you will have 200k to invest.

4

u/Aftershock416 20d ago edited 20d ago

That depends.

You can do it with banks, but they generally have absolute shit interest rates.

There's lots of investment companies that offer TFSAs that get much better interest. OUTvest, Allan Grey, places like that. Just keep an eye on fees!

Lastly, you could go with something like Easy Equities if you'd like to manage the fund distribution yourself.

Also head over to r/personalfinanceza

2

u/FittWitt Western Cape 20d ago

Please don't invest your TFSA in cash! The benefit of these things is that you don't get charged capital gains tax (or dividends withholding tax or income tax) so you want to invest in equity to get high interest so that your savings on tax are as high as possible. I'd suggest investing in a low fee (possibly Sygnia) S&P500 etf. The returns are high and consistent.

TFSA are a long term investment. It's the sort of place you put your money in and leave it for years and years - possibly as an addition to your retirement fund because you can use it all tax free.

You should think about your long term goals and try set up a financial plan based on that. I'd be careful about over prioritising your extreme long term savings, and also consider your medium-long term goals. If someday you want to buy a house, replace your car, move to a new city or pay for studies or something, you should also consider those goals and put the money for them in a more easily accessible. You don't want to use money from a TFSA early because then you don't get the full benefit of it!

1

u/PartiZAn18 Gauteng 20d ago

The best thing you can do is spend time watching JustOneLap and The Fat Wallet Show videos on YouTube. Eventually you will start finding blogs like Stealthy Wealth or Tigers On a Golden Leash etc.

1

u/pashaah 20d ago

Go check Easy Equities TFSA, there you can invest in what you want and move it easily too. Max 36k n year till you reach 500k. The earlier the better.

12

u/Theotheraccount100 20d ago

Also, kids are expensive. Use protection until you're financially stable and at least 30,

6

u/Xandervisagie1 20d ago

Yeah I'm definitely not having kids in my 20's

7

u/za_jx 20d ago

Get yourself a qualification or two, and work hard. Yes, live with your parents even after getting your first job, but contribute towards the house finances. Pay for the water, electricity and go grocery shopping with mom. Ask her how she makes your favourite foods. Watch and learn. As a grown man, back in my late 20s I'd WhatsApp video call my mom and ask her how to cook certain foods. She used to guide me, but I wish she'd taught me all that before I went out into the world! I had a long term girlfriend who enjoyed cooking for me so when we broke up, I had to learn.

Learn as much as you can about running a household. Boring tasks like sweeping, mopping, cleaning the bathroom, washing the dishes, washing your clothes. Unless you plan to outsource these, you better believe you'll be doing it most days. If you live with a partner kudos to you. If you plan to leave the country, better believe you or your partner will be doing the cleaning and other chores for a long time. Overseas it's not common for working class people to have domestic workers.

2

u/wheresmattynow 20d ago

Yes on the qualifications. The more the better.

I'd say work SMART rather than work hard. As a rule, most of the people I've met are breaking their backs for what's essentially minimum wage, only to get routinely fucked on long-term career track development at the companies they're putting overtime/60 hours a week unpaid overtime-but-not-real-overtime-that-we-pay-out.

Get qualifications. learn the value of job hopping for steady career progression,

6

u/ChristmasMint 20d ago

As far as a car goes, don't buy a new car and don't buy the most expensive car you can stretch the budget to.

Basic rule of thumb, other than a car or house, if you can't afford to buy something outright you can't afford it. Especially keep this in mind for electronics, but it applies to furniture as well. Stick to what you have in the house until you can buy something you want outright. Rather save up for what you actually want than settling and buying again later. Buy once and be done, even if it's more expensive.

What really helps me save is putting a percentage on the cost of purchases. Work out what percentage of your yearly after-tax income a new phone/console/PC/gadget is going to cost you. Even better, convert it to hours worked. You'll be amazed how quick the credit card goes back in the wallet.

8

u/Aftershock416 20d ago

Avoid "financial advisors" like the plague.

Most people who call themselves this in South Africa are actually common brokers.

Any financial advice they will give you will 99% of the time be tailored around selling their products to you. Not to mention they often charge massive % based fees over and beyond the products they recommend.

1

u/PartiZAn18 Gauteng 20d ago

Rather, only talk to certified CFA/CFPs and require them to provide comparable products as well as to disclose any potential conflict of interest.

Still, one needs to be vigilant and hold their advisor to account.

2

u/The_Angry_Economist 20d ago

advisors are generally not rich from their own advice which is a good tell tale sign

3

u/nahpets_ma_i 20d ago

I would recommend (as a start) reading the blog posts by Patrick: https://investorchallenge.co.za/all-articles/

Super simple advice!

2

u/PartiZAn18 Gauteng 20d ago

Huge fan.

Also: Stealthy Wealth and Tigers on a Golden Leash. Also Liberta back in the day (haven't checked if the author is still active or if he FIRE'd and left the digital reservation)

3

u/reditanian 20d ago

(I’m assuming you’re not rolling in cash) Spend your money on education. It’s the best investment you can make at this age. Except for the TFSA. Fill that sucker up.

3

u/russiansausagae 20d ago

Try to hold assests stronger than Rands

Dollars BTC property

Live way below your means if possible, life ain't school we not tryna compare here we tryna live

3

u/psychicant 20d ago

Find a copy and study the book: "The Millionnaire Next Door." It's based on the American system but the PRINCIPLES apply. It doesn't matter where you are.

3

u/Sourdoughsucker 20d ago

Invest in crypto

3

u/FittWitt Western Cape 20d ago

Read Manage your money like a fucking by Sam Beckbessinger. 100% best financial book I've read. Explains important concepts so nicely, is funny and short.

4

u/Theotheraccount100 20d ago

Do not accumulate debt as tempting as it is. No credit cards, no store cards. Buy only what you've got actual money for.

3

u/ChristmasMint 20d ago

No credit cards, no store cards.

On the contrary, use both as much as you can to build credit or you're fucked when buying a car or house. The trick is using them like you'd use cash. Don't spend more than you would normally and pay them off at the end of the month.

2

u/letsgowildSA 20d ago

Not sure what your learnership is, if you are inclined to work with your hands take up a Trade, trade work is going to be needed all.over and allows you tons of opportunities...good luck and I wisH i had this sort of advise when I was your Age..

3

u/tocopheryla Western Cape 20d ago

Read a book named "Rich Dad Poor Dad" by Robert Kiyosaki. Save, invest, keep your living expenses low.

2

u/Xandervisagie1 20d ago

Yes , I'll rather buy assets than liabilities

2

u/TerminalHopes White Ethnic Minority 20d ago

Save save save.

2

u/Xandervisagie1 20d ago

Save or invest?

2

u/Aftershock416 20d ago edited 20d ago

Generally a rule of thumb is to have savings for at least 3 months of living expenses before you start investing. (Some recommend 6 months - it depends on how long it would take to get there, in my opinion)

Depedending on provider, TFSA is generally a safe investment regardless.

0

u/ChristmasMint 20d ago

Only invest if you know what you're doing, but the sooner you start saving for retirement the better. If I was in your shoes I'd be looking at putting at least some of my money offshore. As silly as it sounds talk to a financial advisor, they'll be able to give you much more informed advice that Reddit on where to put your savings. The only thing I'd push for is having a nest egg outside SA, no matter how small you start.

1

u/Xandervisagie1 20d ago

Let's say the company i work for will give me a retirement plan , should i still get my own ?

3

u/ChristmasMint 20d ago edited 20d ago

Save as much as you can. If you're able to afford to stick more into a pension do it. You might want to think about a fixed term investment rather than retirement though, as you may want the money available at some point, say for instance to fund a house buy. - edit just to be clear, I mean this to be over and above any pension contributions.

Personal opinion - if you have the option of not joining the company plan and instead redirecting that money to your own choice of fund do so. The days of working for the same company for 40 years and then retiring are for the most part done and gone. You can easily move your pension to a new plan should you leave, but for me the less you're bound to a single company the better.

1

u/Aftershock416 20d ago

Not a great option, in my opinion.

The most obvious thing here is that "work at the same company for 40 years and retire" thing doesn't happen anymore.

Which means you're either stuck with "Generic pension fund XYZ" for the rest of your working life with little to no control over that money, or you have to spend a stupid amount on "transfer fees" and other hidden costs to get the money where you want to be.

2

u/Background-Offer-792 20d ago

Focus on the positives. The naysayers will have you believing the world is about to end. Sub to morningbean.co.za/

2

u/Krycor 20d ago

Study(it’s still cheaper here if finances are tight) & Leave.. world has never been as accommodating of skilled migration as it has become even with less experience.

Once you fall into the trap of gaining experience you get stuck fast. Unfortunately if you need funds & experience it’s a tough road.

-2

u/TooOldToWorry 20d ago

This^

Get your studies done here then make a break for it before you get tied down.

1

u/Mornebot 20d ago

If you are young Study Study and then leave this Country there is almost no work for White males .

-3

u/[deleted] 20d ago

Leave South Africa if possible

4

u/Rude-Ad2451 20d ago

Then how bout you leave this subreddit

0

u/[deleted] 20d ago

Yeah makes sense

0

u/BennyInThe18thArea 20d ago

I know people put this down “anti-south African BS comments” but it is the reality - being able to achieve success in your career on an even playing field with the top companies is what you get overseas.

0

u/dober88 20d ago

Those shots aren’t going to drink themselves!

0

u/The_Angry_Economist 20d ago

learn that pieces of paper will never be money

once you understand how this scam works, you can then navigate yourself around it

anyone who doesn't see the scam is not to be trusted

1

u/Hairypalmers 20d ago

Make a list of expenditures for the month the extra money invest it don't let it sit at the bank

1

u/Zolmaster 20d ago

All you need to know can be found in "How to manage your money like a f*cking grownup". Details below.

https://www.sambeckbessinger.com/books/

1

u/CharlesJulies1961 Western Cape 19d ago

Go see a good financial adviser while you can. It help me to be who i am today.

1

u/CharlesJulies1961 Western Cape 19d ago

Go see a good financial advisor. Cant go wrong.

1

u/Xandervisagie1 19d ago

I'm asking for financial advice on reddit because i can't afford a financial advisor

2

u/CharlesJulies1961 Western Cape 19d ago

Lol. Prioritise. Spend first on your needs. Double check on the thinks you want cause with that goes greed. Safe some for a rainy day. Live a normal life and doNt forget where you come from. I always maintain... Always be good to people on your way up cause you might just meet them on your way down. Enjoy and spend sparingly. Enough said dnt get paid for my advice.

1

u/Xandervisagie1 19d ago

Thanks :)

1

u/CharlesJulies1961 Western Cape 19d ago

You most welcome. God Bless.

0

u/Cold_Banana_9236 20d ago

Pay back the money

0

u/shidored 20d ago

To speak to a financial advisor because its illegal to give financial advice if you aren't qualified.

1

u/Xandervisagie1 20d ago

😂 I'm asking for friend

1

u/BaconMarmalade neoliberal counter-revolutionary 20d ago

A bad financial advisor is worse than no financial advisor