So your stokvel wants to invest this festive season? We have previously discussed how stokvels should invest their money to avoid going back to the drawing board in January.
We detail ideas on how these groups can take advantage of investment opportunities to invest their savings.
Saving money is one step to the matter, but what is important is the need to realise that saving is only a step towards achieving long-term investment success.
Here are considerations that will allow for a successful investment plan:
l How much money does the group want to invest?
We believe a group, for example, that has R100000, should probably consider investing 20% minimum in an investment that has higher growth than money market deposits, which earn very low returns.
l How long does the group want to invest the money?
This is a key issue which will give guidance on which investment solutions will be appropriate. The longer the investment time horizon, the better the chances of making more returns, for example, using a higher equity fund.
lHow long does the group want to invest the money?
This is a key issue that will give guidance on which investment solutions will be appropriate. The longer the investment time horizon, the better the chances of making more returns, for example, using a higher equity fund.
l Does the group want to do monthly contributions?
This is useful and gives the opportunity to increase the total return on the investment via compounding. So in essence the group could put 20% of their monthly contributions into the investment.
lWhat is the purpose of the investment?
The group must, perhaps most importantly, have a solid reason for their investment. They all need to agree on this reason, and commit to a long-term approach.
Reasons can include, investing to buy businesses, going on holiday, helping with ad hoc expenses for members, such as weddings, death expenses for example among group members and immediate family.
The group also has to draw up an investment policy guide, (Inkunzi Wealth Group can give guidance here).
The group must make sure they create room for quarterly updates on the investment, so that members will be properly informed.
These considerations will make sure that groups enjoy long-term growth that can reach 17% per year on high equity funds, compared with about 6% on average for most money market funds.
Should the stokvels want more information, they can call 087-160-0018, or e-mail invest@iwgsa.co.za
Best ways stokvels can invest
So your stokvel wants to invest this festive season? We have previously discussed how stokvels should invest their money to avoid going back to the drawing board in January.
We detail ideas on how these groups can take advantage of investment opportunities to invest their savings.
Saving money is one step to the matter, but what is important is the need to realise that saving is only a step towards achieving long-term investment success.
Here are considerations that will allow for a successful investment plan:
l How much money does the group want to invest?
We believe a group, for example, that has R100000, should probably consider investing 20% minimum in an investment that has higher growth than money market deposits, which earn very low returns.
l How long does the group want to invest the money?
This is a key issue which will give guidance on which investment solutions will be appropriate. The longer the investment time horizon, the better the chances of making more returns, for example, using a higher equity fund.
lHow long does the group want to invest the money?
This is a key issue that will give guidance on which investment solutions will be appropriate. The longer the investment time horizon, the better the chances of making more returns, for example, using a higher equity fund.
l Does the group want to do monthly contributions?
This is useful and gives the opportunity to increase the total return on the investment via compounding. So in essence the group could put 20% of their monthly contributions into the investment.
lWhat is the purpose of the investment?
The group must, perhaps most importantly, have a solid reason for their investment. They all need to agree on this reason, and commit to a long-term approach.
Reasons can include, investing to buy businesses, going on holiday, helping with ad hoc expenses for members, such as weddings, death expenses for example among group members and immediate family.
The group also has to draw up an investment policy guide, (Inkunzi Wealth Group can give guidance here).
The group must make sure they create room for quarterly updates on the investment, so that members will be properly informed.
These considerations will make sure that groups enjoy long-term growth that can reach 17% per year on high equity funds, compared with about 6% on average for most money market funds.
Should the stokvels want more information, they can call 087-160-0018, or e-mail invest@iwgsa.co.za
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