Thanks for dropping by Safe Investing South Africa. I am on a journey to build wealth my way. For any questions or comments, feel free to contact me.

14 Feb 2013


A sad reality is that most holders don't even know what the real cost of credit cards are. Some have an idea but don't think much of the amount they pay to rent the card. I don't have a credit card because I don't have a real need for it. I have loyalty cards and consumer store cards that are interest free for 6 months and have no monthly fees. I feel a credit card is too expensive to own. I am talking about the monthly charges and not interest here. The Mr got a call from FNB offering him a credit card just the other day. Off course they mentioned the nice eBucks rewards, which are undoubtedly amazing. The quote came back with the detailed figures, lets take a look:

the real cost of credit cards
Monthly fee of R50 for his card,
R11.25 per month for an extra card for me,
Mr and my petrol card: R11.25 X 2,
Total charges per month R83.75
That's a hefty R1005 per year without a possible interest.
Say for interest sake you miss the payments of this fee and your bank charges you 20% per annum interest rate (it may be more than 20%).  In that case you would be billed R1092.57 after 12 months.

This is before you even swipe the thing. I know, most of people are thinking that R83 is nothing to write a blog post about. I also understand that those lovely people live in the "real" world of wasting money on a daily basis. R83 is a well put together meal on a table in an orphanage for all kids. It is also a good chunk of money if stashed in a unit trust or index fund. Lets say you decide to stash R83 per month in your index fund or in stocks and rake a good 12% per annum for 10 years. You will close with R19,093.21 in the 10 years period, with R9,133.21 of it earned in interest. That is if the monthly contribution is not increased yearly. This R9,133.21 is what your credit card is actually costing you in fees. Except, its higher because the fees go up annually. Shouldn't the real cost of credit cards in South Africa scare you? It probably should.

Off course the Mr said "Thanks but no thanks". He is with a free Virgin Money credit card. Any kind of a fee will interfere with our goals to give to the less privileged, pay up our mortgage, buy the next car cash, and grow our net worth. So mister credit card, thanks but no thanks we'll pass.

3 Feb 2013

Monthly Spending and Budget Report-January 2013

To those new in this blog, I track my spending every month. My goal for 2013 is to spend 60% and invest 40% of our income in order for me (and hubby) to retire comfortably in our early 40s.

I am so excited about 2013. I now track the whole household spending. I also reduced our target to investing 40% of our income. I think we can do far better but we have a HUGE relocation that we need to embark on around mid year. Getting into the new house, painting, fixing, renovating, etc. 40 % is not bad too.
Do you remember how taxing December was, with close to R40k gobbled by my small online business?

Our January 2013 monthly spending and budget report:

Real Estate 17%
This is nicely toned down. I love it. 25% wouldn't be bad.
Salary 82% 62% This is a new category.
Interest/ Dividends 1% 5% Our emergency fund has been reduced. Interest will be low. But we expect dividends to fill the gap..
Online Income 0.3% 0% I will get three months worth this month. I received a fat cheque and deposited it in January.It takes about 6 weeks to be cleared, I was told.
Other 0% 0%
One thing that makes me unhappy is that the interest on my Emergency Fund is 4.65%, which is below the inflation rate. I took some money to the stocks in January.

Real Estate 13% 12%
Transportation 1% -%
Online 0% 65%
Internet/ Phones 0.4% 1%
Consumer 10% 2% We had one of those expensive mini holidays.
Withdrawals&Fees 6% 0%
Giving 10% 18% This should be at around 10-12%.
RA, Unit Trusts, Investments 3% 5% Fixed for unit trusts and the rest of small investments. Some of which I regret.
Net Income (Left to Invest) 62% -2% Great start, 62% not spent!!! We paid all of it to our homeloan. Our debt-free days are fast approaching. I no longer top my Just Invest (Nedbank) interest up.
We lived on 38% of our income in January (comparing to 102% in December). Our Net Worth grew by about R105K in January. I wish this was sustainable. The unit trusts did quite well and so did the general JSE. If R105K was our average, we would be sure to hit our R1M net worth growth by year end.

  1. MAIN GOAL: net worth grown by at least 25%.-- 2% January.
  2. BUDGETING: invest at least 40% of income.-- 62% January.  
  3. EMERGENCY FUND: 3 months worth of living expenses.-- DONE.
  4. GIVING: give of more than 10% of income.--DONE.
  5. REAL ESTATE: Construct at least 4 flats/ increase the rental income by 30% .-- not yet.
  6. MORTGAGE: Pay up our home .-- not yet.
  7. STOCKS AND DIVIDENDS: Get at least R12,000 in dividends.-- not yet.
  8. EXTRA INCOME: Online income to R8000 per month by December 2013.-- +/-R4500 January.