Before you invest, get the basics right. Certain money matters need to be sorted out in the present before you invest for the future.
Before investing, consider the following:
1 Clear expensive debt. If you have credit card debt or store cards charging high interest, focus on paying those off first. There are very few investments that will beat the interest you pay on debt, so get it out of the way first.
2 Build an emergency fund. Aim for 1–3 months of groceries and rent in a separate savings account before you start investing.
3 Start saving for retirement. Retirement may feel far off, but the sooner you start, the more time your money has to grow. Even small monthly amounts add up. Plus, retirement contributions help you pay less tax.
Here are the main investment options available to most young South Africans:
1 Your banking app
Many banks offer savings and money market accounts and sometimes access to shares, unit trusts or exchange-traded funds (ETFs). These are convenient and familiar, but your choices are limited.
2 Online investment platforms
Platforms like EasyEquities make investing, well, easier. They allow you to invest small amounts and offer access to shares, ETFs, retirement annuities (RAs), tax-free savings accounts (TFSAs), and even offshore investments in USD or cryptocurrency. They host investment products from a variety of local and global asset managers. Make sure you understand the risks associated with investing in USD or cryptocurrency. These asset classes can be subject to significant valuation fluctuations due to their inherent nature.
3 Investing directly with an asset manager
You can also invest directly with an asset manager via their website or online platform. This usually means choosing a unit trust or a passive fund that is managed on your behalf. These options are often simpler, but you are generally limited to that provider’s products.
Always compare fees
There is no shortage of investment products, and choosing one can feel like standing in front of the toothpaste shelf at the supermarket — so much choice, and many options look very similar.
For example, most balanced unit trusts or ETF funds aim to do the same thing: grow your money over the long term while spreading risk across different asset classes. Because they operate within similar rules, their long-term performance often ends up in the same range.
That’s why costs matter. Most investments have a product, a platform and a transaction or trading fee. Make sure to compare the fees between similar products.
Start small, learn safely, and build confidence
If you’re nervous about starting, that’s normal. A good step is to practice before using real money. EasyEquities has a demo account where you can learn how investing works and to build a portfolio without any financial risk.
You can also sign up for the JSE virtual trading game to learn how to trade in single shares.
Participants test their skills through a simulated trading programme where performance is tracked – there are prizes for the best performing portfolios. You can use the platform without participating in the competition.
If the above sounds like gibberish to you, or if you have a lot of money to invest, contact a financial advisor. They can help you understand investments as well as give an overview of your financial journey.
Further reading
5 things about investing
How to invest: from a financial advisor to DIY
Saving vs Investing
The stock exchange is for everybody
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