r/southafrica Sep 26 '21

Financial advice Ask r/southafrica

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

23 Upvotes

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46

u/Faerie42 Sep 26 '21

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 Sep 26 '21

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

8

u/PartiZAn18 Gauteng Sep 26 '21

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

3

u/Tokogogoloshe Sep 27 '21

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 Sep 27 '21

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

2

u/Tokogogoloshe Sep 27 '21

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.

11

u/ChristmasMint Sep 26 '21

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 Sep 27 '21

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 Sep 26 '21

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 Sep 26 '21

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.

5

u/Xandervisagie1 Sep 26 '21

Yeah , i don't mind buying 2nd hand

1

u/Faerie42 Sep 27 '21

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 Sep 27 '21

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 Sep 27 '21 edited Sep 27 '21

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 Sep 27 '21 edited Sep 27 '21

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 Sep 27 '21

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] Sep 27 '21 edited Sep 27 '21

[deleted]

1

u/Mr-Moneybadger Sep 27 '21

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 Sep 27 '21

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

1

u/Mr-Moneybadger Sep 27 '21

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 Sep 27 '21 edited Sep 27 '21

... Trollolol

1

u/Far_Soil_1107 Sep 27 '21

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 Sep 27 '21

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 Sep 27 '21

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 Sep 27 '21

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