If you haveany questions on any of the numbers I will be happy to answer them in exchange for a
Inflation Rates and Investment Returns in South Africa
If you would like to know more about how I got to these numbers you can check out the post on Inflation Rates and Investment Returns in South Africa, House Price Growth in South Africa and Investing in Listed Property.| South Africa Inflation Rate (May 2016) | 6.28% |
| Investment Returns From Equities (May 2016) | 15.28% |
| Investment Returns From Listed Property (Nov 2016) | 16.28% |
| Investment Returns From Bonds (Global) (May 2016) | 9.78% |
| Investment Returns From Bonds (Local) (May 2016) | 7.78% |
| Investment Returns From Cash (May 2016) | 6.28% |
| House Price Growth in South Africa (June 2016) | 6.88% |
Equities is definitely where it's at, and I will be allocating my investments accordingly!
Rules Of Thumb
Using the investment returns of equities from above, I have put together a table showing what an investment of Rx/month will get you after a certain number of years in today's money. You can find more information on this in the Investment Rules of Thumb post. Use these factors as a quick cut to estimate what your monthly investment will be worth.
| After 5 Years | After 10 Years | After 15 Years | |
| Rx/month | 75x | 190x | 360x |
(For example R100/month gets you R7500 after 5 years, R19 000 after 10 years and R36 000 after 15 years).
The Point of All Return
The Point of all Return is how long it will take before an investment of Rx/month will be large enough so that you can draw down Rx/month for the rest of your life. To calculate this value I used the equity returns from above, together with the 4% rule for retirement.
The Point of All Return = 13 Years and 4 Months
(For example, if you invest R100/month, then after 13 years and 3 months you will be in a position to draw R100/month for the rest of your life and your money will never run out).
