You haven't been compounding, which makes interest earned slightly better at something like 12.6 pa. Remeber every day you're earning a fraction of that interest and it gets added to your capital on a daily basis. So we're looking at -0.4% we're losing to inflation. Now say we use a company as our investment vehicle. Then we're paying 28% to the tax man. (If we investing as individuals I'd split the investment with my partner so benefit from the R19,000 tax exemption on interest for individuals that you forgot about. That would reduce our tax liability by R38,000) 28% of 126,000 is 35,280 leaving us with R1,090,720 in the bank. Inflation takes its toll leaving us with R960,720. A GUARANTEED REAL LOSS of R39,280 or about 4%. We're entering a bear market. Europe and America are facing Recession! In these circumstances we cannot GUARANTEE that the market will match inflation let alone remain positive. In a bear market everyone looses and the winner is the one that looses the least! It's my opinion, based on the global economy and South Africa's position in it, that in the medium term we'll see much lower share prices than we currently have and that we'll be able to buy shares at discounted prices rather than at fair value. And at discounted prices we'll be able to buy much more shares despite our guaranteed real loss of buying power.