r/PersonalFinanceZA • u/ElegantManager5316 • 2d ago
Investing Advise on investing and saving
Last night I got a job as Process Engineer at mine in north west. My starting base salary will be R150 000 per month which represents a increase of almost R100 000 per month. I currently also have about R287 000 in my savings accounts I was thinking of saving R60 000 per month so I can start maybe a pharmacy or whatever logical business that comes to me. My monthly expenses will be really low as the job comes with accommodation, meals ,phone ,laptop and a company vehicle .So I was wondering how I could go about investing my money in smart way into a practical business that can generate good passive income and also how does one go about acquiring business loan if needed.
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u/Consistent-Annual268 2d ago edited 4h ago
I'll allow this question as it isn't the typical "how to get started". But PLEASE read the wiki before you plunge all your funds into a business venture. You might be much better off simply putting your money into passive index funds for the next 10 years and retiring with R20m+ in the bank after a decade. If you start a business you might hit it big or you might lose everything.
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u/nicodium 5h ago
Would you really feel safe having R20m+ in EE or SatrixNow? With their non existing customer service it feels like having money in Luno or Bimance. Call me old school, but I like earning with rent income through my absa cash invest tracker at a safe 8.25% guaranteed and instantly available.
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u/SLR_ZA 1d ago
Hello fellow process engineer.
Your take home should be in the range of R98k pm but maybe less depending on how the benefits are structured.
Your expenses are low, you can save more than R60k pm now while you are able to.
Your marginal tax rate is 41%, meaning you should really consider the pension/RA route to lower your tax and invest more.
Read the wiki for the basics of emergency fund, TFSA, RA and post tax investment.
Don't go running after random and unaligned businesses like a pharmacy, it is very far from passive and being on a remote mine in company housing is not a place to try sort out your businesses problems from.
The real passive incomes are investments in equity, bonds and accounts. They don't phone you are midnight because something broke, or run out of money because a supplier can't deliver stock you paid for, or shut because an employee quit.
Some personal experience here mining projects can shut down and even seniors can be made redundant. It is tough to find an equivalent job geographically and new projects or expansions may not align with your timeframe of needing the new job . Be cash and investment flush to ride out the commodity cycles.
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u/ShonOwar86 1d ago
RA and a TFSA, stay away from financial
Advisors, you can use the easy equities platform, invest in some ETFs, top 40 S&P 500 etc. Invest long term, have an emergency fund that you can access easily and then have the rest in a low risk high interest savings account.Do a lot if research, especially from the advice given to you on Redit. Including mine.
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u/GenericBroker 1d ago
Wow
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u/Physical-Valuable982 14h ago
First it was the 24-year-old earning 54k, now this!!!! Haibo, what am I doing wrong? I should have done those STEM subjects!!!
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u/CartographerWeary690 1d ago
I would recommend the same on basics.
Retirement vehicles like pension or RA, and then maximum on TFSA.
I would caution you against investing hard into starting a business off the bat. Not saying you shouldnt do it at all, but I would put it off for a while to ensure you really research what it takes. Investing in a business and starting one is not quite the same thing. It is not a passive income if youre the one driving it.
The job market at the moment is also quite volatile, so consider that this income might not be guaranteed for years to come.
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u/olderthanbefore 1d ago
As a process engineer in Cape Town with very few mines nearby, you lucky dog!
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u/DoomGuybtw 1d ago
Yes what you need now is debt and a vague business idea unaligned to your interests and skills... /s
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u/Greatlistener12u 1d ago
Honestly get some insurance for unemployment. Unless you are working at a gold mine, unemployment might happen, so plan for the worst and hope for the best.
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u/Senior-Bad-7540 2h ago
Max out TFSA, Optimise RA contributions and enjoy the rest.
There’s no need for you to spend all your money paying interest for a business loan on a most likely failing business. You have a stable job, don’t try to buy yourself an unstable job (business)
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u/IvanBadenH 1d ago
Are you an Industrial Engineer by training?
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u/ElegantManager5316 1d ago
Chemical Engineer
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u/habitual-duck 1d ago
Experience?
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u/ElegantManager5316 1d ago
9 years since qualification
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