10 Best Investments In South Africa For Beginners 2020

If you put your money in the right place, it is possible to turn R1000 into R10,000 fairly quickly.

When starting out, making high returns can be easy. However, as your wealth grows naturally your returns will begin to decline. (Since you’re starting out, let’s not worry about that for now.)

Are you ready to invest your money for the first time?

If yes you’ll be happy to know that there are plenty of options at your disposal. Just remember that investing can be a little dangerous. Therefore, you have to make sure that you’re playing your cards right. The best way to do that is by choosing safer and more reliable investments. And by never investing money you’re not willing to lose.

With this guide, I’m going to cover the 10 of the best investments in South Africa for beginners:

Investment:Starting Out Amount:Potential ROI (Return On Investment) Per Annum:Learn More:
Trading CardsFew hundred rands110%VIEW
Mandela CoinsFew hundred rands5,500%VIEW
Silver KrugerrandsCouple of thousand rands11.8%VIEW
AntiquesCouple of thousand randsHeavily dependsVIEW
Stocks on the JSECouple of thousand rands4.79% to 10%VIEW
BondsCouple of thousand rands5% to 6%VIEW
AnnuityCouple of thousand rands3.27% to 5.5%VIEW
Gold KrugerrandsR15,000+8%VIEW
Commodities (Raw Materials)R15,000+Heavily dependsVIEW
PropertyR50,000+10.4%VIEW
Table shows 10 best investments in South Africa for beginners.

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Keep reading to learn more about each type of investment, what kind of return you can expect, and the best place to get started.

01. Trading Cards [Few hundred bucks]

Do you want to buy something inexpensive and hold onto it for a little while to make some money? If so, you should think about buying and trading South African sport trading cards.

Average return on investment:

Finding an average ROI on trading cards was diffcult because there are so many different types of trading cards that all vary with popularity. However I did find this article discussing how they avergae 110% per annum.

How to get started:

There are many different types of trading cards; however, Rugby trading cards tend to be the most valuable since the sport is so popular in South Africa.

If you’re able to get a few rare cards, there’s a good chance that you’re going to make a good return on your initial investment. Another way can get started is on bidorbuy. Buy a few of your favorite cards using the bidorbuy platform, hold on to them for a few years, and then try to sell them again for more money.

Video shows how you can flip sports cards. We don’t have eBay in South Africa, however, use BidorBuy instead.

02. Buy Some Mandela Coins [Few hundred to a couple of thousand Rands]

Another way to invest your money is by buying Mandela coins. Over the years, these coins have grown significantly in value. In fact, they’re worth more today than ever before.

If you’re going to get into this type of investment, just please make sure that you know as much as possible about them and their respective values. As far as I’m aware only graded and minted Mandela coins are more valuable than their face value.

Average return on investment:

There are many different types of proof mandela coins, however to give you an idea, between 2000 to 2007, the Mandela MS-64 increased in value by 38,557%. Which is a whopping 5,500% per annum [SOURCE]. This growth obviously isn’t very sustainable, however it’s still considerable especially since it’s only a 7 year period.

How to get started:

The most common place you can pick up a few Mandela coins is buying it off bidorbuy. As always though just make sure you use a reputable seller so that you don’t get scammed.

03. Silver Krugerrands [Couple of thousand rands]

Can’t afford gold Krugerrands? If the answer is yes, you should consider buying silver Krugerrands. At around R250 per ounce as I write this, they’re definitely cheaper, and they’re potentially going to make you a lot of money in the long run.

When buying precious metals it’s not exactly a quick flip investment. This will allow the price to increase and ensure you’re able to make money in the long run. See it as a retirement fund.

Average return on investment:

Since silver krugerrands follow the value of silver closely, it will have a similar return on investment. That said, from 1982 to 2011, silver has increased in value by 11.8% per annum [SOURCE].

How to get started:

If you would like to get your hands on some Silver Kruggerrands then the best place to buy them is either:

  • Through FNB (First National Bank) if you bank with them. If you buy your coins through FNB won’t need to have the coins in your hands, which is ideal if you’re purchasing large amounts for investment purposes. They will hold the coins for you until you’re ready to sell.
  • If you’re buying a smaller amount and you would like to physically have the silver Krugerrand coins in your hands, then I would recommend ordering them online through jmbullion.com.
  • Another option you have is bidorbuy. Just make sure you buy from a reputable buyer to avoid getting scammed.

04. Antiques Can Offer High Returns [Couple of thousand Rands]

South Africa is an old country full of antiques. And the best part? There’s a huge demand for them. So if you find a hidden gem then you could be sitting on a big payday.

To be successful in investing in antiques, you need to know what you’re doing. I recommend you learn as much as you can about the antique piece you’re interested in before investing any of your capital.

How to get started:

I recommend you get started by watching the video below on how you can make money investing in antiques. The video will give you a baseline understanding of what you’re getting yourself into, and what exactly you need to do to get started.

Interested in investing in antiques? I recommend you start by watching this video.

05. Buy Stocks on the Johannesburg Stock Exchange [Couple of thousand Rands]

As always, there is always some kind of risk associated with every investment, especially when it comes to stock trading. However once mastered, it can earn you a full-time living.

Average return on investment:

While the average return on investment for the stock market as a whole is around 10%, you can’t expect to match it. There are psychological forces at play, which makes your average investor very bad at investing. According to Market Watch, your average investor only returns 4.79% on their invested capital, which is less than half of the overall market growth.

How to get started:

The most important part about investing in a company is research.

To avoid making bad decisions, I have a few guidelines that you should follow.

  • When you buy a stock you are buying a very small part of a big company, so treat the process like you’re buying a small business.
  • Make sure the company has a future. Is it in a thriving or dying industry?
  • You need to make sure the company you’re about to invest in is actually making money. Don’t just invest on a hunch.
  • Now that you know the company has a future, and it’s making money, now you need to check if the price of the stock is overvalued. You wouldn’t but a can of coke for R100 would you? If it’s overvalued, place it on your watch list and wait for the price of the stock to drop.

Obviously there’s a lot more to it. I could write an entire article on each of those tips, however, if this is something you want to take a lot more seriously then I highly recommend you follow Phil Town on YouTube and watch as many videos of his as possible. His investment strategy which is based on Warren Buffett’s strategy is extremely effective.

Even though you live in South Africa it’s still possible to buy stocks from other markets around the world. And, you should definitely consider doing just that. This will make it possible for you to benefit from the growth of companies from all around the world.

Ready to buy stocks?

If you’re new to buying stocks I would recommend starting out with South African companies to get your feet wet. The only place you can do that is to buy stocks through JSE’s (Johannesburg Stock Exchange) verified brokers.

To help you find a broker that will best suit your needs, I wrote a list of 9 top places to buy shares online in South Africa. In that guide, I compare each platform’s brokerage fees, as well as how easy it is it get started on the platform. So make sure you read that before getting started.

NOTE: If you would like to invest in overseas companies, make sure you read my guide that walks through how to buy international stocks in South Africa.

06. Bonds [Couple of thousand Rands]

Do you have faith in the South African government? If so, you should think about buying government bonds. You’re going to receive a return by holding onto the bond until it reaches maturity. The risks are minimal.

The only problem is that it is going to take a very long time to get paid. Of course, there are many different types of bonds. Therefore, you should do your research and find out which one is best for your investment preferences.

Average return on investment:

According to Morningstar, over the long term since 1926, stocks have actually performed a lot better than bonds. As mentioned previously, stocks compound around 10% per annum, while on the other hand, bonds have only returned between 5% to 6% per annum.

07. Annuity [Couple of thousand Rands]

Finally, you should know that South Africans may be able to benefit from annuities. This is a great way to make a little money and the risks are very small. In this type of situation, you’re going to be paying a life insurance company.

In return, they’ll pay back the money over a period of time in much smaller increments. Annuities are very popular all around the world because they’re reliable and very safe. This is a great investment for beginners. In fact, this could very well be the best investment for a South African who has never invested their money.

Average return on investment:

According to Annuity Gator, on average you can expect only 3.27% to 5.5% return on your money per annum.

08. Buy Gold Krugerrands [R15,000+]

If you’re interested in buying and holding onto valuable coins, you’ll definitely want to buy some gold Krugerrands. These gold coins are immensely valuable.

The only problem here is that you’re going to be required to spend a lot to get started. In fact, these coins are valued at more than R18,000 for each. Be cautious and make sure you buy low and sell high for the best results.

Average return on investment:

Since gold Krugerrands follow the value of gold closely, it will have a similar return on investment. That said, from 1982 to 2011, gold has increased in value by 8% per annum [SOURCE].

How to get started:

Start by buying gold Krugerrands from a reputable seller. I buy mine using my FNB share trader account, however, if you don’t bank with them you’re going to have to buy some online using wither bidorbuy, or jmbullion.com.

09. Buying Raw Materials Commodities [R15,000+]

South Africa is a unique place. There is always a chance that you’re going to be given the opportunity to buy raw material. You might just get a good deal on it too. There are plenty of raw materials to invest in. Gold, silver, cotton, and diamonds are all very expensive.

If you’re able to buy some of these materials for a low price, you might be able to flip them for a big profit. Again, you need to understand the commodity in question to ensure that you’re going to be buying low and selling high.

10. Invest in Property [R50,000+]

There is a lot of property in the country of South Africa. Simultaneously, there are plenty of people and companies that need access to the property. This is why you should think about investing in South African properties. This can be a great investment opportunity as long as you choose the right place.

Average return on investment:

According to the National Council of Real Estate Investment Fiduciaries (NCREIF), your expected average return on investment for residential properties is around 10.5% and 9.4% for commercial properties.

Final Thoughts

Starting out investing can be difficult but done right can also be highly profitable. Please remember to never invest money that you need. If you do, your emotions will be involved which means you’ll be more likely to make bad investing decisions.

If I were a beginner investor, before putting my money anywhere, I would first invest in myself. Go to events, read books, watch YouTube videos, or you can read my free online guide that will show you 14 ways you can make money online in South Africa as a beginner. Investing in yourself will give you a better return on your investment than any of the methods mentioned above. So start today and start learning!

YOUR TURN: Have you made any decent investments lately that deserve to be on this list? Let us know in the comments below so we can start learning from each other.

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