Question:
I have R50 000 that I would like to invest, however I still have R800 000 outstanding on my home loan. I am not sure whether I should invest this into a product like Satrix, or keep this in my home loan which is at prime minus two percent. I do have other smaller investments. Please advise.

Answer:
If you have smaller debts like credit cards or a car loan, then paying off this expensive debt would make good use of your money.

If you only have the home loan, then you need to weigh up the pros and cons. If your home loan is costing you 11.5 percent, then that is effectively the return you will be getting from investing the money into your bond.

Your investments in Satrix, for example, would have to yield at least that in order for you to break even. With current trends in interest rates moving in the upwards direction, I think there is a strong case to reduce your exposure to debt.

It would be advisable for you to seek the advise of a certified financial advisor to help you structure a long-term savings plan for your retirement.