Never invested before but keen to start this year? Investing can be intimidating and let’s be ‘Franc’, in 2021, many of us don’t really have time or desire to sit with a financial advisor.
However, with the rise of consumer-friendly investment apps like Franc, it is super easy to start an investment portfolio with as little as R10. There is no paperwork so you can set up your profile and become an investor in mere minutes. There are also no restrictions so you can add or withdraw your money at any point without penalties, allowing you to stay in control.
YOMZANSI downloaded the Franc app and investigated the offering for you:
Franc helps you set a goal
Want to reach your life and financial goals sooner but not sure how? The easiest way to grow your money is when you invest towards a goal, and Franc can help you do just that. It works like this: download the free app, answer a few questions that will help determine your risk profile and then Franc creates a personalised investment plan for you, dividing your investment into a Cash Fund (Allan Gray Money Market) and/or Equity Fund (Satrix 40 ETF) as per your investor profile. Franc does everything for you and so you do not need to manage the stock market yourself. You can invest a once off amount or set a stop order from your bank account to save every month. Best part – there is no minimum requirement – you can invest R10 if you wish, but they recommend more meaningful and consistent investments if you want to see a return. Remember, investing is best for the long term!
Franc will get your money to work for you
Passive income can be earned by investments that you make. Although the investment does the work for you and you don’t have to put in any effort to generate passive income (earning while you sleep!), a lot of the hard work was done upfront when you invested your hard earned money in order to create the pool of capital that will make you money!
As an example, their Cash Fund (Allan Gray Money Market) pays out interest every month – this is passive income earned by customers, which is then reinvested to earn interest on itself as well as the initial investment (compound interest). South Africans under 65 years of age can earn up to R23, 800 of interest income a year without paying any tax. Their chosen Equity Fund, the Satrix 40 ETF pays out an after tax distribution every quarter which they also reinvest on their customers behalf so that they can own more shares in the fund.
Franc cuts through the B.S
Franc’s mission is to make investing accessible to everyone. They believe too many institutions have made investing overly complicated, require excessively high minimum investment requirements and have been charging steep fees for far too long. Franc has removed all of those barriers. While they are not trying to reinvent investing, they want to make it simple by identifying the best funds in the market and give more people access, so they can have a better financial future. In addition to helping people access the best investments, Franc is completely transparent, and charges an all-in fee of 1% per year of the value of your investment. This includes all fund management fees but does not include brokerage and transaction costs which are charged once off on buying and selling from the equity fund. Franc also has a great blog on their website (https://www.franc.app/blog) which has lots of cool articles about investing and other money matters.
Shouldn’t I just put my money in the bank?
Bank savings accounts allow you to withdraw your money at any time but offer very low interest rates (0.5-1%) and charge you monthly bank fees. With a money market investment like the one Franc offers, you get a very good interest rate (3.5-4% after fees) and you can withdraw your money whenever you need it. The Cash Fund is a low-risk fund so it is unlikely you will lose any of your money by being invested in this fund. The Equity Fund is higher risk, which means there is a chance that you may lose some of your initial investment, especially if you are only invested for a short period (Franc suggests you only look at investing in the Equity Fund if you are investing for 3 years or longer). Franc selected both these funds because they have historically both yielded good returns and are from very reputable fund managers..
Get started
In summary, the reasons why investing with Franc is something you need to look into this year:
- You can manage your investments on your phone
- Invest what you can afford
- Do it at your own pace while paying really low fees
If you want to start investing from as little as R10 then click the link to download the Franc app:
Download Franc for Android: http://bit.ly/3qaCj8G
Download Franc for Apple: http://apple.co/3i3cODw
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