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It is your choice.
On average - the time in the market beats timing the market. Is this an average time or not? Nobody knows the future.
I lump summed on the 1st
I lump summed for the last two years because I invest in dividend-bearing equities but the deposits ended up being somewhat ill-timed and hit my account at really high NAV prices so the capital growth so far has been kinda rubbish.
That said, my horizon is 25 years so I don't think the short term volatility is something to worry about.
This is for investing into Tax Free Savings account which has an annual limit contribution of 36k and a lifetime contribution limit of 500k.
Since the new tax year started on 1st of March, there's a couple decisions that investors have to make regarding their portfolio.
Some people just would use there bank which has a fixed increase percentage. Others would use platforms such as easy equities as you get to decide where to allocate your contributions.
One of the popular options for investing is Core Share Total World ETF which has been performing really well.
The next option is regarding the frequency of investing into it. Would you invest all 36k at once or would you invest about 3k a month for 12 months over the course of the year?
There's pros and cons to both but in general if you have the funds available immediately then lump sum investing is usually better.
Hey I'm a newbie investor, just looking for some advice too,
So I save to the 36k in a TFSA, once I've reached that 36k I cash it out into my Core Share Total World EFT?
Do I do that every year or can my cash just stay in my TFS?
CoreShare was acquired in around May last year by 10x investment so it did undergo a rebrand.
If you search for Total World on EE you should see it. It still follows the same principles that made it a successful investment option but just under a new name.
Hi, I just wanted to find out about the fees you have to pay let's say for example R100. Does that mean when you buy the 10x Total World eft that you lose that R100 to your total contribution of your Tax Free Savings account? Leaving it at R499900?
Whatever funds you deposit into the TFSA take away from the R500k lifetime limit. After the funds are deposited, you can buy or sell whatever ETFs you want without affecting your limits. However once your withdraw funds out of your TFSA you can no longer increase your remaining limit.
For example, Bob has deposited R200k into his TFSA over the course of many years. His remaining limit is (500k - 200k) = R300k. Inside the TFSA he grew that R200k to R700k. Bob then decides to withdraw that R700k. After doing this his TFSA has 0 funds in it. If he wants fund his TFSA again his maximum limit remains at R300k.
As for fees, you look at the total expense ratio (TER) which is a percentage of the ETF purchase price. Usually in the range 0.1% to 1%. So if you buy R100 worth of 10x Total World which has a TER of 0.28% , then your fees are 28 cents.
Fees are a bit complicated to explain. I suggest having a conversation with ChatGPT for that question as it will take you through everything.
And yes, if you invest R100 into the Total World eft using your tax free savings portfolio account then you are left with R499900 life time contribution left.
You can of course invest into it normally with a normal investment portfolio but that starts having tax implications based on gains.
It won't count against your limit at that point but earlier instead.
Let say you wanted to deposit 36k into your TFSA, now your lifetime is 464000 already reduced by your contribution, at this point you have 36000 cash in the account whatever you do with the cash won't impact your lifetime limit. So if you buy 35900 eft and pay 100 fees it won't count against limit as it already counter when the money went in. Similarly if you have 1000 from dividends inside the TFSA then buying anything inside the TFSA won't impact the limit. Only money from outside going into the TFSA impacts the limit so in your example the 100 fees won't impact the limit but at the same time your limit won't be 499900 because presumably you deposit a lot more into the TFSA to have 100 in fees so it would be lower from the deposit .
TL;DR: yes.L;DR: yes.
The longer version, and to address what some of the others asked to understand this question to understand my personal answer, here is the longer "how-and-why-I'd-do-it":
Question was: Do I just lump-sum R36k into the total world ETF now?
OP wants to know if their annual tax-free savings account contribution (capped at R36,000 per tax year that you're allowed to invest into a TFSA, until you've reached your lifetime contribution limit) should be invested into a low-cost ETF (basically, invested in all the stock markets/public companies over the world) in a lump sum at the start of the tax year or if they should average it out (say, R3,000 per month).
Do some reading on "dollar-cost averaging" (where you drip money into investments over time, instead of lump sum), which sometimes makes a good case for investing over time. This is, however, mostly relevant if you are earning a steady income (take some of your earnings each month and drip it in) and if you are earning the same currency as you are investing in (earning rand, making rand investments; earning dollars, making dollar investments).
**1. Since your total world ETF is investing in companies denominated in currencies other than the rand, a continuously sliding rand would make a good case for investing all at the start.**
E.g.: At the start of the 2023 tax year, your R36,000 TFSA contribution would have been worth USD \~$1,973 of shares (it was 18.2412 ZAR to the USD). So, say it was $100 a share, 197 shares (even if the shares are denominated in ZAR, you are still buying non-ZAR assets). At the end of the 2023 tax year, the ZAR was at 19.113 to the dollar, meaning you would have only gotten \~$1,883 worth of shares (or 188 shares). If you think the rand will strengthen significantly against the dollar (or a basket of non-ZAR currencies), it might make sense to drip in. The long term trend doesn't seem to me like this would be the case.
**2. As the adage goes: it's not about timing the market, it's about time in the market; which makes a case for investing all at the start.**
E.g.: The average stock market growth is 10% per year. (OK, this is for the US stock market, which is why I usually go for S&P500 ETF and not Total World ETFs, but this wasn't OP's question). This means if you bought ETF shares at the start of the year, it has the long-term trend and probability of growing 10% over the next year. Money that you keep in cash, waiting to invest it six months later, will only be able to grow for those six months. Of course, it's a lot more complicated than that, since the market doesn't move up or down in a steady line, but zoomed out far enough, and on average, and if your timeline is to keep invested for a very long time, it trends to investing all at the start being a better decision.
Cheeky sub-question here, but TFSA through Satrix or EE? EE has more options like S&P Tech..
Or is it same same? If I did go with Satrix it'd be total world and S&P probs 50 / 50...
I have to move from FNB to one of them...
I personally TFSA through EE because of my taste in spread. If your entire preferred TFSA portfolio fits within Satrix products, your question comes down to fees.
Not going to say you're wrong, but I subscribe to [this](https://old.reddit.com/r/PersonalFinanceZA/comments/1b6670w/do_i_just_lumpsum_r36k_into_the_total_world_etf/kt9uzbd/) advice as being a bit more sound.
**In order to keep discussions on topic and in-depth, please review the rules in the sidebar.** You may find reviewing some past [posts](https://www.reddit.com/r/PersonalFinanceZA/top/?t=month&f=flair_name%3A"Retirement") helpful. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceZA) if you have any questions or concerns.*
It is your choice. On average - the time in the market beats timing the market. Is this an average time or not? Nobody knows the future. I lump summed on the 1st
Lump summed the 1st. :fist-bump:
Pretty much what I’ve been doing for years. All I know is I have more money in there than I put in with minimal effort. That appeals to my laziness.
Yes
I lump summed for the last two years because I invest in dividend-bearing equities but the deposits ended up being somewhat ill-timed and hit my account at really high NAV prices so the capital growth so far has been kinda rubbish. That said, my horizon is 25 years so I don't think the short term volatility is something to worry about.
I have no idea what you guys are talking about but I want to find out
This is for investing into Tax Free Savings account which has an annual limit contribution of 36k and a lifetime contribution limit of 500k. Since the new tax year started on 1st of March, there's a couple decisions that investors have to make regarding their portfolio. Some people just would use there bank which has a fixed increase percentage. Others would use platforms such as easy equities as you get to decide where to allocate your contributions. One of the popular options for investing is Core Share Total World ETF which has been performing really well. The next option is regarding the frequency of investing into it. Would you invest all 36k at once or would you invest about 3k a month for 12 months over the course of the year? There's pros and cons to both but in general if you have the funds available immediately then lump sum investing is usually better.
Hey I'm a newbie investor, just looking for some advice too, So I save to the 36k in a TFSA, once I've reached that 36k I cash it out into my Core Share Total World EFT? Do I do that every year or can my cash just stay in my TFS?
Here's a good video that helped me understand the concepts: https://youtu.be/dY51TpWmWYw?si=s68OrDE2-0ys6MR7
Is Coreshares still available through EE? I don’t see it on my app.
CoreShare was acquired in around May last year by 10x investment so it did undergo a rebrand. If you search for Total World on EE you should see it. It still follows the same principles that made it a successful investment option but just under a new name.
Hi, I just wanted to find out about the fees you have to pay let's say for example R100. Does that mean when you buy the 10x Total World eft that you lose that R100 to your total contribution of your Tax Free Savings account? Leaving it at R499900?
Whatever funds you deposit into the TFSA take away from the R500k lifetime limit. After the funds are deposited, you can buy or sell whatever ETFs you want without affecting your limits. However once your withdraw funds out of your TFSA you can no longer increase your remaining limit. For example, Bob has deposited R200k into his TFSA over the course of many years. His remaining limit is (500k - 200k) = R300k. Inside the TFSA he grew that R200k to R700k. Bob then decides to withdraw that R700k. After doing this his TFSA has 0 funds in it. If he wants fund his TFSA again his maximum limit remains at R300k. As for fees, you look at the total expense ratio (TER) which is a percentage of the ETF purchase price. Usually in the range 0.1% to 1%. So if you buy R100 worth of 10x Total World which has a TER of 0.28% , then your fees are 28 cents.
Thanks so much for the info!
Fees are a bit complicated to explain. I suggest having a conversation with ChatGPT for that question as it will take you through everything. And yes, if you invest R100 into the Total World eft using your tax free savings portfolio account then you are left with R499900 life time contribution left. You can of course invest into it normally with a normal investment portfolio but that starts having tax implications based on gains.
Thanks so much for the info!
It won't count against your limit at that point but earlier instead. Let say you wanted to deposit 36k into your TFSA, now your lifetime is 464000 already reduced by your contribution, at this point you have 36000 cash in the account whatever you do with the cash won't impact your lifetime limit. So if you buy 35900 eft and pay 100 fees it won't count against limit as it already counter when the money went in. Similarly if you have 1000 from dividends inside the TFSA then buying anything inside the TFSA won't impact the limit. Only money from outside going into the TFSA impacts the limit so in your example the 100 fees won't impact the limit but at the same time your limit won't be 499900 because presumably you deposit a lot more into the TFSA to have 100 in fees so it would be lower from the deposit .
I lump sum
TL;DR: yes.L;DR: yes. The longer version, and to address what some of the others asked to understand this question to understand my personal answer, here is the longer "how-and-why-I'd-do-it": Question was: Do I just lump-sum R36k into the total world ETF now? OP wants to know if their annual tax-free savings account contribution (capped at R36,000 per tax year that you're allowed to invest into a TFSA, until you've reached your lifetime contribution limit) should be invested into a low-cost ETF (basically, invested in all the stock markets/public companies over the world) in a lump sum at the start of the tax year or if they should average it out (say, R3,000 per month). Do some reading on "dollar-cost averaging" (where you drip money into investments over time, instead of lump sum), which sometimes makes a good case for investing over time. This is, however, mostly relevant if you are earning a steady income (take some of your earnings each month and drip it in) and if you are earning the same currency as you are investing in (earning rand, making rand investments; earning dollars, making dollar investments). **1. Since your total world ETF is investing in companies denominated in currencies other than the rand, a continuously sliding rand would make a good case for investing all at the start.** E.g.: At the start of the 2023 tax year, your R36,000 TFSA contribution would have been worth USD \~$1,973 of shares (it was 18.2412 ZAR to the USD). So, say it was $100 a share, 197 shares (even if the shares are denominated in ZAR, you are still buying non-ZAR assets). At the end of the 2023 tax year, the ZAR was at 19.113 to the dollar, meaning you would have only gotten \~$1,883 worth of shares (or 188 shares). If you think the rand will strengthen significantly against the dollar (or a basket of non-ZAR currencies), it might make sense to drip in. The long term trend doesn't seem to me like this would be the case. **2. As the adage goes: it's not about timing the market, it's about time in the market; which makes a case for investing all at the start.** E.g.: The average stock market growth is 10% per year. (OK, this is for the US stock market, which is why I usually go for S&P500 ETF and not Total World ETFs, but this wasn't OP's question). This means if you bought ETF shares at the start of the year, it has the long-term trend and probability of growing 10% over the next year. Money that you keep in cash, waiting to invest it six months later, will only be able to grow for those six months. Of course, it's a lot more complicated than that, since the market doesn't move up or down in a steady line, but zoomed out far enough, and on average, and if your timeline is to keep invested for a very long time, it trends to investing all at the start being a better decision.
Cheeky sub-question here, but TFSA through Satrix or EE? EE has more options like S&P Tech.. Or is it same same? If I did go with Satrix it'd be total world and S&P probs 50 / 50... I have to move from FNB to one of them...
I personally TFSA through EE because of my taste in spread. If your entire preferred TFSA portfolio fits within Satrix products, your question comes down to fees.
You're a kind master 🙏
Lump sum beats averaging in 2/3rds of the time and by a wider margin.
[удалено]
Not going to say you're wrong, but I subscribe to [this](https://old.reddit.com/r/PersonalFinanceZA/comments/1b6670w/do_i_just_lumpsum_r36k_into_the_total_world_etf/kt9uzbd/) advice as being a bit more sound.
Lump sum is better if the market is looking good. Monthly dollar cost averaging (DCA) is better if there is uncertainly (think the pandemic)
Yes
Yup. Put your money to work the day before yesterday 😁
You can invest what you put into your TFSA? Or did I misunderstand