If I had R1,000 per month to save, where would I invest it?

Well if I could purchase my own home, I would deposit this R1,000 every month into my access bond.

Because;

1. I will effectively save R989,255 over 20 years at an average interest rate of 12%
2. I will also pay off my home in 15 instead of 20  years (statistically most move homes every 7 to 9 years)
3. I will get a tax free interest return on the R1,000 investment (cannot pay tax on a loan)
4. This is a tax friendly investment (R1,500,000 Capital Gains Tax deduction on your own residence in South Africa in 2010)
5. I will get a better bank interest rate (better than money market, government and corporate bonds)
6. My residential property should grow roughly at the rate of inflation and I should get good capital growth on my property (property is a great hedge against high inflation – Zimbabwe is a case in point)
7. The investment is low risk (property cycles rebound and it is not easy to steal it)
8. My personal interest in my property means it will be well looked after – I am my best tenant
9. I use the power of leveraging to get the best Return on my Investment (ROI) by using the banks money
10. The equity growth plus interest rate plus leverage advantage means this asset class will outperform 95% of other classes

Clive Bydawell is a registered Financial Advisor