Your investment, financial, and business insurance questions answered

Question: As a first-time mom keen to secure my child's future, I'm looking for advice on the most effective savings and investment options to consider. I need to save for his education and eventually purchase a home. Could you recommend the best strategies or accounts to help me build this goal? Carina van Rooyen, Wealth Manager, PSG Wealth, Pretoria-Oos / Pretoria East

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Answer: Imagine planting two seeds today - one destined to grow and become your child’s education fund, the other to form the financial foundation of your future home.

With patience and the right financial soil, both can flourish and grow.

Here is how I would recommend cultivating each goal:

An early start to fund your child’s future education:

Tax-free investment accounts

A fantastic start to saving for your child’s education would be to start contributing towards a tax-free investment account in their own name.

A tax-free investment account allows tax-free growth on interest, dividends, and capital gains over time.

You may contribute up to R 36 000 per annum (a total of R500 000 over the investor's lifetime) to these tax-efficient investment vehicles.

A wide range of funds are available to choose from, suiting each investor's needs, investment time horizon, and profile. The real power lies in remaining invested for the long term and maximising the benefits associated with tax-free compound growth over time.

Unit trust investment accounts

In addition, you may also invest in a unit trust fund held within a voluntary investment portfolio for funds you have available in excess of the maximum annual contribution allowed in a tax-free investment.

For long-term educational goals, equity or balanced unit trusts offer stronger growth potential.

Providers like PSG Wealth provide flexibility and clarity — allowing you to invest monthly or as a lump sum - depending on whether you need shortterm stability or long-term growth.

Select short-term, high-interest vehicles for your home deposit: Short to medium-term goals, such as saving for a deposit to purchase a property, require an investment strategy that offers liquidity and stability.