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Friday, 2 September 2016

Examining My Current Investments

Great for frying ants. 
At the beginning of 2016 I took a conscious decision that I did not want to go down the "normal" path of working a 40 hour week for 40 years and then hoping there would be enough money for retirement. I wanted something more than that. I wanted to retire early, but also know that I would have enough money to look after myself and my family. I was putting together an early retirement plan, and one of the things I needed to know, in order to run the calculations, was how much my current investments were worth.

So I sat down and thought of all the investment products I had, and then made an effort to go and check their balances, and then tally them all up. I did this exercise at the beginning of 2016, so the results below are representative of my investments at the end of 2015.

Pension Preservation Funds

Current Stealthy Wealth looks back at Past Stealthy Wealth and smiles proudly at him. You see I have moved jobs a couple of times, and this often resulted in me not being able to continue with the pension fund I was contributing to at the previous employer - either because the new employer did not have their own pension plan, or, the new employer used a different provider. I am glad Past Stealthy Wealth was smart enough to not cash out the money in the pension fund, but instead he moved it over to a preservation fund where it will continue to lay back on it's deck chair and chill - but hopefully not chill too much, it needs to grow!

I have two preservation funds from two previous jobs (they are with the same preservation fund provider - I wish they could combine them, but anyways...) I retrieved the balance at the end of 2015 and found that they were worth R295k.

Pension and Provident Fund

My current employer has it's employees contributing to both a pension and a provident fund. Of course I cringe when I look at the fees and the investment allocations into the various Unit Trusts. Yuck! But there is nothing I can do, so I simply bend over and take it.

My wife is also contributing to her employers pension plan.

When I checked the balances at the end of 2015 we had a total of R149k in our pension plans.

Share Trading Accounts

I started DIY investing around 5 years ago when I realised that I could pretty much do what all the big Unit Trusts were doing (and do it better and cheaper than them). I set up a share account with a bank that I will not name, in case they smack me with their white flag on a dark blue background. At the time they had the cheapest and best suited offering for my needs - no Easy Equities back then you see. However I look at them now and realise they are very expensive - and they have been jacking up their fees quite aggressively over the past few years. Unfortunately I still keep this account due to legacy reasons and wishing to keep these investments in a separate portfolio, but I have long stopped contributing new money to the account.

I then also have shares and ETF's with Easy Equities, and so does my wife.

I checked the totals in each of these accounts and added them up - at the end of 2015 they were worth R213k.

Company Shares

My employer has a really nifty share matching plan. Basically they allow the employees to allocate up to 5% of their salary every month towards the share matching plan. Then, at various points in the year, the company uses that money to buy you shares. And then - and this is the really cool part - if you stay with the company for a number of years, the company will match whatever shares you bought - irrelevant of the price.

So, if for example, I took this option and bought 100 shares at R10 each (=R1000 for those of you who cannot do simple arithmetic :-P). Then after a certain number of years the company will give me another 100 shares. But if the share price happens to increase to say R20 a share, the company will give me 100 x R20 = R2000 worth of shares. Of course my original 100 shares are now also worth R2000, so I end up with R4000 worth of shares even though I only invested R1000. Of course, as always, the matched shares will be taxed. *Sigh* But this is still a pretty sweet deal.

Something drastic would need to happen to the company for me not to make a return on the investment (even if the share price halves, the matched shares will mean I come out even). In my view the company I work for is pretty solid, with a worldwide presence, in an industry that is not going anywhere in a hurry. So naturally I am using this option and allocating some of my salary towards it.

I am very fortunate that my company has this option, but of course I need to be willing to make the investment - it is quite disappointing to see how many of my fellow employees are not willing to give up even 1% of their salary for this...

At the end of 2015 I had a quick look see how this plan was going and found that I had about R32k worth of my company's shares.


As you already know, I am a big fan of these. Both my wife and I have one. My only regret is I did not manage to allocate the full R30k each last year, and instead put some money towards the other share accounts - rookie mistake. I am working hard to assign the full allocation this year - but that again may prove a challenge as we needed some funds for the purchase of Stealthville.

I checked my wife and my TFSA accounts at the end of 2015, and they were worth around R28k

Our Total Current Investments

Now that I had all the available balances I could total our investments and see where we stood.

Preservation FundsR295k
Pension and Provident FundsR149k
Share Trading AccountsR213k
Company SharesR32k


A total of R717k - I will be honest, and call me greedy, but when I did this calculation I was hoping for more. But it just shows that often there is a perception that our retirement savings are going according to plan and will be enough. But if you don't check it out, you will never actually know!

It was also worthwhile for me to calculate this total because, even though it was a little short of what I was hoping to have, at least now I had a starting point for the plan I was going to put together for world domination early retirement.

Note that I have also built in a little safety factor - I did not value our rental apartment in Sandton as part of our current investments.. Even though it does form part of our investment portfolio, we will probably sell it sometime in the future and use the proceeds to settle our current primary residence bond - so it probably will not form part of our early retirement lumpsum in the end.

I plan on revisiting this value every year and then checking that everything is going to plan so I can make adjustments if necessary. But more about that in a later post...

Till next time, Stay Stealthy!

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