Investment ?

[Rafael]

Bear in mind that on that level of income there will probably be NO tax payable - under the minimum level.

correct

[Pap_sak]

I think the state pension is around R1400 p/m these days. Had something similar with my M/L - she has less capital but a paid of house and one of her daughters living there - so probably in a slightly better situation for now. Of course having you pension money in a bank account really is a problem - you capital is just being eroded yearly. Being a healthy 69 - she could possibly have 20 years of life yet.

My M/L was getting around 6% from the bank - I said we could open a equities account (easyequities.co.za has no monthly fees and low trade costs) and then I would buy listed property and high dividend paying shares - around 50%/50% - you could easily get a 6% return PLUS get a decent capital return over the long term. Not only that, but on the whole dividends generally grow at around 10% a year so you will out strip inflation and actually have a bit more to spend every year.

I said I would guarantee her 6% as well as her capital after 5 years - basically to put her mind at ease but really, you not buying capital growth, you looking for dividend growth so fluctuations in the market do not effect you at all. The offer is still on the table but has not been taken up - it seems she would rather take advice from the first person that picks up the phone at the local ABSA. I asked her to at least look at Coronation, Foord and Alan Grey - people that know a bit more about it.

Just my 10c - I am retired (age 42) and have all my money in invested in the stock market and live of dividends - works well.

Getting an 8% initial yield would be a bit of a stretch - the bulk would be small cap REITS - I prefer to spread the money between a few companies and a few sectors - 6% would be a better initial yield - 10 companies @ R30K each - would also include R30K in the tax free saving account for this year and next and not pay the 15% dividend tax.

[Houses4Rent]

I am retired (age 42) and have all my money in invested in the stock market and live of dividends - works well.

Well done fro that. However, Robert Kiyosaki and Gordon McKay both exited the stock market totally. They see some big crash coming up. I hope you will be able to stay retired if that happens. I personally put pretty much all into global residential property.

[Pap_sak]

Well done fro that. However, Robert Kiyosaki and Gordon McKay both exited the stock market totally. They see some big crash coming up. I hope you will be able to stay retired if that happens. I personally put pretty much all into global residential property.

Although I will not pretend that I do not like capital (as in share) growth - as I have no interest is selling my shares, the actual share price means nothing to me. In 2008, when share prices tanked, companies still made money and still paid dividends - often increasing them. I do avoid cyclical sectors like building and resources. Economic slowdowns and rescissions will effect me to a point - as will rand depreciations but I am quite well hedged and might actually be better off if the rand tanks.

All I really care about is that the dividend growth beats inflation - and even there I have started to measure MY inflation every 6 months.

[Phil Cooper]

You can NEVER lose money of the stock market crashes - unless you sell your shares at the time.

Wait it out, and they will (eventually) come back plus more.

As the rich investor says - Buy when the market is down, sell when up (or hold)!