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Tax Free Savings Investment

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Not applicable
I would like to ask you guys on some advice about the Tax free savings accounts that have been introduced this year. Now I know how they work, and what government is trying to achieve with this vehicle, but I am unsure of who exactly something like this benefits the most. I am for example an honors year university student (22 years old) under the tax threshold (currently). I have a moderate to high risk appetite. So according to my understanding, to get the most benefit out of it would be to annually contribute the max of R30000.00 and not touch it. You would do this annually until you meet the R500000.00 (thus 17 years). I am well prepared to do this, and I will still have money left over to trade in normal equities, but I am wondering if this is worthwhile for someone with my investor characteristics? I am basically asking if I could do better elsewhere? Any advice would be much appreciated.
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Super Contributor
Ask yourself what your R500000 -ZAR- scenario will be worth in 17 years time?
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Super Contributor
? "I have a moderate to high risk appetite.", at 22 you should double up on everthing, repeatedly.
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telling someone its ok to take risks, go wild and who cares if you lose money because your young its just not good advise.
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Super Contributor
I am taking my Tax Free Opportunity here. Have opened two accounts for my daughters too. They are 3 and 1. I am not going to try to predict what the rand will be worth in 17 years time, but I am buying the offshore ETF options - DBX US and DBX Euro at the moment. Maybe next year I'll look at something else. Not every investement or trading decision you make is going to be right. But I think that tax free opportunity here, if the JSE plays ball, could be worthwhile for my two girls. Rule of 72 says at 15% value doubles every 5 years, so with compounding your 30K a year, could be worth a fair amount in 17 years time. Compound that to 30 years and who knows.

I'm not going to suggest the other side....
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Not applicable
Using the 30k cap, and 500k lifetime allowance
15% CAGR return means after:
05y: 210k (from 150k contrib)
10y: 625k (from 300k contrib)
17y: 1,984k (from 500k contrib)
20y: 3,010k (from 500k contrib)

You would save 13% on whichever return, as its only CGT that you miss out on.
This result assumes you get a continual growth of 15% every year.

R3,010k is worth 650k in todays money assuming 8% inflation
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Super Contributor
i think at your age the tax free option is a no brainer and if you can afford to do this consistently for 17 Years then go for it-based on my experience over the last 17 years if you can find a property etf then the idea that capital growth and distributions are tax free is very attractive-based on the past doubling your money every 5 years looks possible but obviously is not guaranteeed.the real bonus for me is that if needed you can take from this pot and it is tax free income-trust me that is a great prize to works towards and can suppliment you in your life and in retirement-of course your growth will rely on investment returns and the choice(s) you make-good luck with that-Unfortunately this opportunity comes too late for me personaly but I will encourage my children to take this up if they can find the money
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Super Contributor
i think at your age the tax free option is a no brainer and if you can afford to do this consistently for 17 Years then go for it-based on my experience over the last 17 years if you can find a property etf then the idea that capital growth and distributions are tax free is very attractive-based on the past doubling your money every 5 years looks possible but obviously is not guaranteeed.the real bonus for me is that if needed you can take from this pot and it is tax free income-trust me that is a great prize to works towards and can suppliment you in your life and in retirement-of course your growth will rely on investment returns and the choice(s) you make-good luck with that-Unfortunately this opportunity comes too late for me personaly but I will encourage my children to take this up if they can find the money
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Super Contributor
i think at your age the tax free option is a no brainer and if you can afford to do this consistently for 17 Years then go for it-based on my experience over the last 17 years if you can find a property etf then the idea that capital growth and distributions are tax free is very attractive-based on the past doubling your money every 5 years looks possible but obviously is not guaranteeed.the real bonus for me is that if needed you can take from this pot and it is tax free income-trust me that is a great prize to works towards and can suppliment you in your life and in retirement-of course your growth will rely on investment returns and the choice(s) you make-good luck with that-Unfortunately this opportunity comes too late for me personaly but I will encourage my children to take this up if they can find the money
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Super Contributor
If you put R30000-00 into a TFSA today does it mean you can't buy again until 14 Dec 2016 or can you buy again from 1 January 2016 ie. a new calendar year?
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Not applicable
Works on the tax year to tax year if I understand it correctly
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Super Contributor
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Super Contributor
And in $? (usa not banana rep zim)
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Valued Contributor
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