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.

26 Jun 2013


My own home is a modest house but what I hope is a warm and welcoming home. There are a few things that I never compromise on in my house, and they mostly have to do with the interiors and maintenance.
Home inflation and my own home - image
When we were in our late twenties (yes we were already married before thirty) we bought our first freestanding house. This was an exciting move from an apartment. It felt like a dream, really. So much land (1300 square metre land), a swimming pool, a huge garden flat, an orchard at the back with various fruit trees, lemon and lime trees everywhere in the front garden plus a few rose bushes we grew. We could fit ten cars inside our gate easily. And I loved our sit-in kitchen.

We quickly got so overwhelmed with the cost of maintaining this giant. Remember that at this point we had never needed nor owned a spade, let alone a lawn mower. We couldn't afford a gardener and a pool guy. We realised that we had no use for the big granny flat and never thought we could rent it out. The orchard needed some work like weeding, mowing, pruning, etc. Doing that was very difficult because we had no proper tools. The swimming pool needed too much maintenance too and its pump was not working. We bought a lot of stuff to keep the place in shape but quickly gave up on it and moved to a townhouse. We were just not ready to take on such a huge responsibility.

Townhouse life was great. Most people complain about Home Owners Association (HOA) fees and rules. Rules are always annoying when one doesn't understand the logic behind them. The costs associated with owning a freestanding, full title house seem higher than the levies to me. I also include the time factor as a cost here, should I choose to perform those tasks myself. First of all, in the sectional title setting one owns only the interior of the house, with right of usage to the common property like garden, patio and garage, etc. No, you don't own those. I wrote about differences between full title and sectional title here. Paying a thousand rands plus in levies was just worth it to us. No mowing of lawns, and no worrying about the breaking driveways either. All we were doing was planting pretty flowers in a small garden. We missed our fruit trees desperately and managed to get a lemon tree for the kitchen side garden. Every Tuesday, garden services were there, without fail. Listening to the lawnmower and edge trimmer whilst in bed felt like sheer luxury. Life was pretty good. The automated outsourcing was beautiful.

Moving from there was to be to a similar set up. We needed a bigger space as kids were growing. Whilst some say its riskier to live in an estate, like I mentioned in the post here, I feel more at peace in my small house within the gated community. Off course we had this itch to get a huge garden again because we are South Africans. Every time we thought of why we need a bigger house and garden, we realised that it was not for good reasons. The challenge was when I visited my friends with huge gardens and swimming pools, and huge entertainment areas. So I went back to search for my own home a year or so back. And then two things happened.

One: I watched too much "Country House Rescue" on the home channel. How expensive it is to take care of a big home. Kids get to inherit this responsibility, as they want to keep these mansions within the family. I know, I cant afford such luxurious homes, but still... Images of the past, when I did a stint of real estate agency flashed back. I got into huge South African homes that took a staff of four to take care of. I still think its crazy to have ten garages.
Two: Then one blogger wrote about how horridly uncomfortable most huge houses look inside. The guy went to the extent of pasting two bedrooms from a huge house and one from a house half the size. His argument is that, the size of the house is some form of a show off for most people, which sucks the funds off the owners that they can't make the interiors comfortable. I've always questioned the 6 or more en-suite kind of houses for small families because I suspect that some bathrooms are never used for the whole year. It could be my jealousy talking.

This is me settling in my very humble home with pride. I will never compromise on a comfortable interior space in my own home. Forget the size of the house, I want a warm house in winter and cool one in summer. I cannot justify nor afford heating a ten bedroom mansion.

23 Jun 2013


Thanks Gerald for an email on property investing in South Africa. 
Hi! Sorry, I have no idea what your name is despite going though your site with
eyes wide open.

I've been thinking of starting up a blog quite soon on personal finance and
found yours quite inspiring. I'm also interested in property and have
recently purchased an off plan apartment in a good area as my first

I'm currently based in Johannesburg and was curious about your outlook on property in South Africa, what you think will happen to the property prices in SA should our esteemed government continue on their current course and in general, the future of SA in the property market (such as saturation and overvaluation of
property in JHB). Don't really know where you're based but wouldn't mind
just talking about prospects and possible investment vehicles.

Thanks for the stimulating blog, really enjoyed the information and your
general openness regarding finances!
Sorry Gerald, I blog almost anonymously. I have tried to give myself a name Sisa, which is shortened blog name. I am looking forward to following your blog. I haven't met many South African personal finance bloggers. I also congratulate you on your apartment. The area will always be important.

The economic part of your question is easier to answer because we can always consult our statistics and bank indices. Below is the house price index by the FNB. It shows some 5% growth in house prices in nominal terms.
FNB Average Price Inflation - property investing in South Africa
However, in real terms, the price inflation was in the negatives (-0.6%). Well, since I suspect that you are planning to hold onto your property for a while, you shouldn't be shaken by that. Over time, SA property values have had an upward trend. The challenges are on tenant issues, maintenance costs and home owners association fees. Rental rates usually follow the value trends. I have noticed with my own properties that there is no shortage of tenants. I think that has a lot to do with the National Credit Act and Regulations (NCA and NCR). Most people don't qualify for homeloans and are forced to rent. Its important to note that this high quantity of tenants is not necessarily of a high quality. There is a lot of dodgy tenants out there.

[ Let me point out that when adding commercial property in this picture, we attained 15.2% total return in 2012, according to SAPOA/IPD South Africa Annual Property Index. This is commercial property, which has started to improve to its per-recession returns. Meanwhile, listed property recorded more than 20% returns last year.]

The one fact is that real estate investing is never passive. It takes a bit of work from you, whether you have a property manager or not. You actively look out for your investment. Make sure your apartment is of high value, well maintained, well insured, well looked after, rental rate is just right, etc. You have to make it your business and pay attention.

Another important fact is that, your investment is not liquid. You cant act quick and dispose of your investment when things go wrong. This is every investor's fear. I have thought about selling everything several times but got back to the choice of sticking it out. Its mainly because real estate is a passion to me. But the risks will always be there. One reason I have kept going is the power of leverage which is unique with real estate investing. If one can build wealth using the bank's money, it makes it very attractive.

Looking at the political climate: BIG sigh. An optimist in me thinks that our investments are safe. But in reality, we don't know. I sometimes think paying up my properties was not very wise. I now carry the risk alone. It would be better to carry it with another party, like the bank. But I must say the net income is much better without the mortgages.

Other Investment Vehicles for South Africans
I had to work towards DIVERSIFICATION to reduce the impact of risk. I intensified on my stocks, which I must say was scary earlier on in my life. I encourage people to start with index funds like satrix to start warming up to the idea of stocks. Check their website ( My very young son has some SatrixIndi stocks. The past year saw that particular fund grow by 39%. That's a great deal.

I am hopefully adding some bonds by the end of 2013 or beginning 2014 too. This is low risk and therefore lower return. The interest rates we enjoy in SA are not seen in most countries. I know when we factor inflation, those rates are in the negative in some cases. I also stash my cash in the money market.

Nedbank's Just Invest that I use is at 4.65% at the moment. That's the money market kind of account. All SA banks have the money market account.

Some people invest in coins, gold, fine arts, etc. I never got into those but  some people claim to get high appreciation from them. Whatever I collect is not for investment purposes. I never even factor my household goods like furniture and art in my net worth.


Ever since we became a crazy family, we have been living on 50 percent of our income or below. Before getting impressed know this... it was never planned. This was because of my real estate craze. We just had to pay two mortgages at any given time. Usually me with a smaller one and Mr with a bigger one. Or him with a smaller one and a car and me with a bigger one. Money was quite tight earlier on because of that. Strangely, I cant remember us having an argument about money ever. We were very aware of where our money was going, which helped. I did buy more stuff than I need but there was not much money hanging around for more of that. More than 50% of our income was tied in investments.
living on 50 percent of your income - image
We are not special in any way. We are an ordinary family of four just like most families. Think about it 50 percent of your income is probably all you need to survive too. If you can be honest with yourself, take out all the debt payments, and take a fresh look at your monthly income, you are likely to be shocked. Your 50% or more could be eaten by debt and its interest. Lets look at a hypothetical middle class budget or spending pattern:
Homeloan R10000
Cars R15000
Fuel & Car Maintenance R5000
Food R4000
School  Fees R5000
Consumer Accounts R3000
Credit Card R2000
Personal Loan R1500
Dining out & Leisure R1200

The assumption is that we have a two income family with two kids earning a combined R45,000 after deductions and medical insurance. See how they spend R46,7k from their R45k income. It happens all the time because this couple is sinking every month without bothering to take note. Look at what is actually debt in their budget. 10000+15000+3000+2000+1500=R31500. That's the whole 70% of their income on servicing debt. That should be craziness in anyone’s standards.
Many people argue that one can’t live without debt because they need a car and a house. That’s not true but for the sake of this example we will entertain that. How about getting a modest 3 bedroom townhouse and reduce that mortgage to R8000 per month and buy two used smaller but safe cars at R8000 per month for both.  Even better, save a higher deposit and slash that car payment to R5000 for both. Nothing stops them from driving their cars for longer whilst they save for the next car. This sanity of relying on banks to finance one's existence is very expensive. South African interest rates are too high. They are great for saving and horrid for spending. I often wonder why people still choose to pay interest on their credit cards.

Try living on 50 percent of your income. Its easier than you think. Automate your investments and savings and see how easy it is to adjust living on the other half. 

Have a great week. Happy investing!

21 Jun 2013

Monthly Spending and Budget Report-May 2013

To those new in this blog, This is my personal finance journal where I track my monthly spending. My goal for 2013 is to spend 60% and invest 40% of our income to help me (and hubby) to retire comfortably in our early 40s.

Like I mentioned last month, the costs of the renovations reflect in May expenditure. We lived above 100% of our income in April. Yes, we had a shortage. The bulk of our money went to the renovations. Meaning, its an investment rather than consumption. We are back on track with 21% expenditure. We had to squeeze ourselves to pay up the mortgage off course. Its been a tough year.

Our May 2013 monthly spending and budget report:

Real Estate9%
Target is 25% .
Personal Income 86% 56% We are working on growing other income streams to bring this lower.
Interest/ Dividends 1% 6% Our emergency fund interest.
Online Income 5% 0%
Other 0% 0%
Interest on my Emergency Fund is 4.65%, which is below the inflation rate.

Real Estate 10% 10% Still due to renovations.
Transportation 0% 0%
Online 0% 4%
Internet/ Phones 1% 1%
Consumer 4% 6% Includes food
Credit Card, Cash & Fees 2% 1%
Giving 3% 3% This should be at around 10-12%. It will even out during the scholarship payment months.
Life Insurance 1% 1% Fixed
Invested 79% 51% We paid most of it into our homeloan. I no longer top my Just Invest (Nedbank) savings up.
We lived on just above 20% of our income in May (comparing to 134% in April). Our Net Worth grew well.

  1. MAIN GOAL: net worth growth by at least 25%.-- 16% so far.
  2. BUDGETING: invest at least 40% of income.-- 48% so far.  
  3. EMERGENCY FUND: 3 months worth of living expenses.-- DONE.
  4. GIVING: give of more than 10% of income.--5% so far.
  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.-- +/-R3700 April.

4 Jun 2013


Paying the homeloan quicker is not necessary, not even economically sound but satisfying. 6 short years ago we were knee deep between two bonds. Oh well, it was not that bad. The second property was a rental one and our investment property was working together to kill the principal amount. But those were not easy times.
Paying the homeloan quicker
Fast forward to today, my bank statement reads, R2678. Meaning that, for the very first time in 12 years I have no bond, almost. I've been referring to my mortgage as my ONLY debt and from month end I will be debt free. Before throwing a congratulations my way, be rest assured, this will definitely not be for very long. I will definitely be creating some profitable debt in a few months. I just want to savour the moment and enjoy the feeling just a bit.

What this means is that I will have just a bit more disposable income because there will be no money taken by the bank from my account. I feel extremely blessed. We will also be able to pay more attention to other investments.

Remember I am one of those people who are against paying the homeloan quicker than required. I got over that and when the Mr was on my case about killing this debt I was game. Its not very easy taking savings to put into a bond. I don't know if I will do it ever again, or even if I would advise someone to it. But the feeling of being debt free is priceless. Even if its for 6 months or less. I may even take my family on a holiday, get some proper "debt free" closet boost and go earlier for my spa treatment.

Our Journey to Paying the Homeloan Quicker
If you are interested to know how we did it, here's how. We took our savings and dropped a huge percentage into the bond. We then added extra payments towards the mortgage every month. Extra payments were probably the hardest because it was quite a large amount. We also got extra strict on expenditure. I keep telling people that I can do with a bit of frugality. I really am not frugal. My main thing is creating extra income. It doesn't even have to be passive income. I am happier when I am a bit more productive than an average Joe...err Jane.

What Next
High on the agenda is getting a bigger investment. It could be a commercial property or something more passive. The Mr thinks I can maybe have a store or something. I think waking up to go to the shop every morning is not something I would enjoy. A few days a week maybe but not daily. Some things are just not for everyone. I would much rather have an online business. But being in SA, online businesses are not as big as in the western economies. Whenever I make some move, you'll be the first to know.

What have you been up to? Are you winning your own financial battles? What is your take on paying the homeloan quicker than your mortgage term?

3 Jun 2013


What an amazing facebook inbox I got from someone I never met. Teaching kids about money is never easy, I guess.
Except I started quite early that my son thought of it as a game. You get money, save some, use a little and be happy. When he turned 10 I taught him about the JSE and Satrix and he thought is a great idea to try that. But then, when he gets a R10 note he asks me to throw it in the stocks. He is yet to get a grasp of this. But I am very impressed with him. Naturally, I shared this story with women and mothers in one forum of people who don't want their kids to fall on the same financial disaster trap. One mother was kind enough to give me feedback as follows:

Hi SISA, I am so grateful for all your financial advise on teaching kids about money, its value and how to save it. I was owing my 14 year old son R200 for house chores and I decided to open an account for him at Nedbank. I put R100 into an investment account and another R100 into a savings account for him. I went ahead and told him that even R20 saved in his bank account will help towards his Varsity time savings and for buying stuff for himself later on. Thanks you very much for that wisdom.
 I love getting such feedback. When I started teaching my own child about personal finance I explained the value of compound interest. It changed how he looks at money forever. One mistake we make is underestimating the intelligence of a 4 year old. I also gave my son a reason to save. He was talking about owning a car at the time. I told him that he can save some of his money to buy his own car when he turns 18. That was a challenge and you don't dare a 4 year old boy.

His Satrix Indi has been doing extremely well. Its been a few months. I think three or slightly less. And my boy raked between 6 and 8% growth in this short space of time. Even when the JSE caught some flu, his index fund was just shaken a bit.

The best way to teach kids about money is leading by example. Be what you want to see in your kids. If you teach them that expensive and fashionable clothing makes a person, they will grow with that. If you, yourself throw money around and try to impress your peers, you are setting your son for a personal finance failure. Its never too late to start with children. They are like sponges and ready to absorb everything that comes their way. Keep the topic interesting and give rewards.

For every rand my boy saves he gets a rand from his mama. The more he saves the higher the match. He is quite lucky to get money gifts from family and our friends for his birthday. He saves most of it. It helps that he is such a cheap boy.

In your own house, are you teaching kids about money? What do you do to encourage your kids, grand-kids, nieces or nephews to save? 

1 Jun 2013


I don’t know where to start. My life is quite hectic. We lived in the construction site for two weeks. After leaving the construction site slash townhouse being renovated it was all dust and no kitchen, no second bathroom and no shower frame. But I had to leave the good but slow handyman behind sweating it. It took me too many trials to finally get a trustworthy handyman. I feel very blessed.
Shower during renovations
 The kitchen design looks amazing. The kitchen company is delivering the wood today. And they promised to have the kitchen working on Wednesday. I just cant wait. Everything is done through the email exchange and whatsapp at this point. Photos, more photos, then approval, then more stuff that we forgot to buy. It never ends.
Shower during renovations

Some people ask why I go all out with finishes in the rental property. I understand their concerns because this is the very property that the poorly managed tenants trashed. But all my properties have to be at a certain standard. My property investment business is my true passion and the reflection of myself. I am not going to put tenants in a place I can’t live in myself. And that has paid dividends. I haven’t had much vacancies and had mostly long term tenants. On the plus side, my rental income will get a boost.
New kitchen for rental unit
Now that I am more relaxed in a dust free house, I am managing the renovations digitally. Its not ideal but I have lots of other stuff to do. Besides, I missed my stove and oven so badly. I am not good with dining out. This is the kitchen design I want for the rental unit. The kitchen company delivered the wood in the townhouse yesterday already. They will fit it next week. I just cant wait to go visit the place by mid June. Everything looks perfect from the photos taken by my sister and handyman.

Thats it people. Thats what I've been up to.
PS. We probably have finished paying up our only mortgage and our ONLY debt. Ecstatic doesn't even begin to describe how I feel.