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Thread: Invest or Start a Business

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    Diamond Member HR Solutions's Avatar
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    Invest or Start a Business

    If a person has a sum of money presently in South Africa - what would be the best option ? Should they invest the money in the best possible interest bearing account or invest in a business or start a new business ? If so what business ?
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    Diamond Member Justloadit's Avatar
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    Any cash investment is bound to devalue with time, simply because of the exchange rate and inflation rate being far greater than the interest earned.
    The currency lost almost 50% in the last 15months, yet they say that inflation is at 6%. When ever you purchase any goods, the prices have increased between 30 and 50%, so that if you had R100K at the beginning of last year, and received, even 10% interest for the year, you would have had a compound amount of R110K. However what you could buy a Kruger Rand for R14K last year January, now costs just over R20K. So you do the maths.

    Investing into a business may also be risky, as it does have its issue. Property may be a better option, however you must watch it constantly if being rented to ensure that the returns are always there.

    To be quite frank about the situation, I would also like to know where to invest some money.
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    Diamond Member HR Solutions's Avatar
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    So on the gold question and separate to the above - buy Kruger rands or not ? About 2 years ago I bought a few limited edition Mandela Rivonua 10 coins and I know they are worth more now

    But this is investing - what about a business ??
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    Diamond Member Justloadit's Avatar
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    I believe that Kruger Rands should be part of an investment portfolio, not the only one. From what I have deduced, is that the Kruger Rand maintains their buying value, but do not grow the original investment.

    The business , well, it depends on what tickles your internal interest........
    I have always believed that if you do get involved in any business, you must be able to run that business when things go south. If you can not do this, then it may cause the business to close down and your investment gets lost. Of course this only applies to small and medium business.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
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    The business , well, it depends on what tickles your internal interest........
    I have always believed that if you do get involved in any business, you must be able to run that business when things go south. If you can not do this, then it may cause the business to close down and your investment gets lost. Of course this only applies to small and medium business.
    Yes I agree - You also can't just invest and sit back. It is a very difficult one, but I am really keen to look at getting involved in a second business. I think in todays time and economy you cannot have all your eggs in one basket. The food industry isn't really attractive at all. Importing something is also an idea.
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    These are the questions everyone is asking.

    It depends on what risk you want to take.

    In the bank your money gets gradually inflated away.

    In business you can lose more than what you put in, but make it big if you succeed.

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    I think taking a risk is part of it - you have to have your eyes wide open in a business and with past experience hopefully you can eliminate certain problem areas and build another good business.
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    Site Caretaker Dave A's Avatar
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    To my mind, the first level of an "invest vs start a business" decision is participation.
    If you are not going to actively participate (even if it is only at non-executive director level), I reckon eliminate "start a business" as an option.
    The trouble with opportunity is it normally comes dressed up as work.

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    Quote Originally Posted by Dave A View Post
    To my mind, the first level of an "invest vs start a business" decision is participation.
    If you are not going to actively participate (even if it is only at non-executive director level), I reckon eliminate "start a business" as an option.
    Yes I do agree with that, unless I could get something else to operate out of the same offices .....
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    I think the answer will largely depend on which business you eventually decide to invest in. I can't see how any other traditional investment could hope to compete with a successful business venture.

    The big challenge is of course to find a good business idea. Once you find that the decision will be much easier. Until then you will have to settle for a "normal" investment of sorts.

    Its not so much which is better, its when to invest in a business. Of course the when most often never arrives. My 2c.

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