savings accounts

But when my kids ask me where thier money is for thier education, I will drive them to Sandbaai and show them the beach house .....

LOL - RM, you are hilarious!

We were also looking into a satrix (my spelling might be off) for the kids and putting money into that.

Fortunately DH is a bit more on the ball with these things, I tend to fog over and drool comes out of the left corner of my mouth when ever we start to speak to anyone about finances and our future. I seriously just cloud over and I start to focus on the pretty pen I am holding and no longer listen to the sound of the voices.

This weekend we say a house that we saw last weekend and decided that it was one of those "deals for a steal" - as DH says we are not looking for a house, we are looking for a killer deal.

So we think we saw a killer deal, put in a ridiculous offer, but at the end of the day the idea of investing money for the kids has just shot out the window - for this year. If the offer is accepted, that will be where any/all our money will be going this year.

<this is not our primary home, it is an investment, that we can rent out and so on>

But that being said we will also have to shelve any ideas of improved car, bread, jam, you know that sort of thing.

But when my kids ask me where thier money is for thier education, I will drive them to Sandbaai and show them the beach house .....

Hi Claudia,
Well on the one hand retail bonds are a great way for private individuals to get access to fixed income investments cheaply. So yes they are a great place to invest money. Much better than a savings account. Bear in mind that you will pay tax on the interest at the rate of the investors income tax rate (I.e. Same rate as your salary). So not really an issue for James

But, bear in mind your bond payments are linked to the prime interest rate. Which is going to go up in the next year or two. However when you buy a retail bond at say 7% you are locking in that 7% interest rate over the term of your investment. So if interest rates rise and you home loan goes to 11%, you're still locked into your investment at 7%. Furthermore you may actually lose money if interest rates rise than expected as the capital value on your retail bond investment with fall.

In a nutshell - look at your financial position. If you have more debt than you are comfortable with then pay some off. Failing that you want a roughly 60/40 split between shares and interst instruments and property. More equity if you're younger, less as you grow older. Bit there are a whole bunch of other bits that interlock and should be managed by a professional. I would def advice you to chat to someone. Maybe at your bank? then they can review your debt setup and reveiw you other investments and you financial standing as a whole.

on a stndalone basis, assuming james has no debt or other investments a prudential balanced unit trust should give you a balanced and managed investment option

1st timer what do you think about retail bonds?

We've been pumping money into out bond, but thats our "draw" for all other debt (eg my hubbys new car was paid for via our access bond, plus we've done some major renovations and have more planned in the next few months (not looking forward to the mess again))

I was also hoping to maybe do something like what mandy mentioned... We have a money tin and when its full put it into a savings of some kind.. My dad suggested putting it into a 32 day account until we hit a nice amount and then getting retail bonds (2 years/5 years) because of their much higher interest yeild (currently we pay 9% on our bond, and reatil bonds earn 7? That money will be ear marked for James? I would love to get your thoughts.... I just feel that its forcing us to put money towards him, instead of thinking oh but that will be for him (and then it never works out that way)

Excellent Mandz, love your idea. we have a 'Good Girl & "Good Boy" Jar. Each time the kids do what they are asked without moaning what they are expected to do at home they get a little bit of money that goes in the jar. Usually like R5 or so. But when they disobey requests and don't co-operate they know they will lose a coin. Obviously they behave quite well and so the jar fills up but then they get to use it to spend on something. We should be putting it into a savings account. We do have Unit trusts for them though.

Thanks 1st Timer...Let me know how it goes

Mandz I think that is a brilliant idea! Going to do that too.