investment options for your money

AS CONSUMERS we save very little and invest even less. Most of us know about the importance of saving, but investing is equally important.

AS CONSUMERS we save very little and invest even less. Most of us know about the importance of saving, but investing is equally important.

We should be saving and investing at least 15 percent of our salary every month to protect ourselves against things such as losing a job, unexpected expenses, and of course for retirement.

Consumer Line spoke to Sizwe Ndebele of STANLIB who said it was wise to pay monthly expenses and debts first, and then look at saving or investing.

He said saving at the beginning of the months helps to keep you disciplined. "waiting until the end could mean you have nothing left to save."

Ndebele said saving involves putting money away for things that you can't afford right now or in the short term.

Most consumers save via a bank savings account where they earn a relatively low amount of interest on the money saved. This is because they are putting money away for a short period, so there is no time for growth, he said.

Ndebele said investing is all about making your money grow by putting it away for 5 years or more.

"The longer you invest your money, the more interest and growth you earn on it, and the more opportunity to build your wealth," said Ndebele.

Consumers can invest their money with specialist investment, companies who are experts in investing.

Here are the options to invest your money:

Money market funds: investing in money itself. The investment company will collect your savings, together with other people's, and invest it in a range of different products with different terms to maturity (timings) and interest rates, to get you the best return (profit) on your money.

Unit trusts: the investment company takes your money and puts it together with lots of other people's money to buy different investment units (so, you buy a 'unit' of the total investment). Your money could be invested in the stock exchange in equities (shares) or bonds.

The advantage of investing in unit trusts is that your money is easily accessible and you can invest monthly or annually.

Depending on the investment company and type of unit trust you choose, you can invest from as little as R40 a month or slightly more on a yearly basis.

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