1 hr 6 min

Where budgets fail (#187‪)‬ The Fat Wallet Show from Just One Lap

    • Education

Conventional wisdom has it that a budget is at the heart of any successful financial strategy. My wisdom has it that a budget is an excellent tool for self-deception. Nobody was better than drawing up a theoretical map of how money should be spent than me not spending money that way.
In this episode we discuss where budgets fall short. We each share our own approaches to budgeting and offer some more useful alternatives.
Subscribe to our RSS feed here. Subscribe or rate us in iTunes. Win of the week: Ken from the Fat Wallet Community Group on Facebook.
I've looked for a post on STXWDM + STXEMG vs ASHGEQ in various places, including this group but I can't find one.
In episode #85 ASHGEQ was voted by Kristia and Simon as the one ETF to rule them all.
Stealthy Wealth voted for STXWDM as the one ETF to rule the world.
The argument for ASHGEQ is more diversification + emerging market exposure.
The argument for STXWDM is lower fees.
DOES STXWDM + STXEMG GIVE THE BEST OF BOTH?
The argument against STXEMG could be too much Tencent exposure. In episode #72 Simon did some math and determined that there was less Tencent than in a JSE top40 index, so that seems ok.
Does it cost more to hold two EFFs than it does one?
STXWDM has a TER of 0.35%
STXEMG has a TER of 0.40%
For the sake of simplicity, I'll assume they both have a TER of 0.4% and R100 is bought in a 50/50 ratio.
Holding only one ETF = 0.4% of R100 = R0.40
Holding two ETFs = (0.4% of R50) + (0.4% of R50) = R0.40 i.e. same same but different.
ASHGEQ has a TER of 0.6%
Does this mean that the combined cost of STXWDM + STXEMG is less than ASHGEQ?
I presume there would be the cost of an additional trade? Two trades vs one. I don't know what that cost would be.
Using EasyEquitites to purchase the ETFs, would buying both still work out cheaper than ASHGEQ after considering both transaction costs and TER?
Assuming that the cost does in fact make it cheaper to buy STXWDM + STXEMG over ASHGEQ, and assuming those are the only two ETFs one buys, I'm interested to hear in what proportion you guys would suggest buying them, assuming a time horizon of 20+ years?
In Stealthy's article he says, "I estimate the Emerging Market component of the Ashburton 1200 to be 3.5%, but let’s be generous and call it 5%."
Following that, one might buy 95% STXWDM + 5% STXEMG to emulate to the 'one ETF to rule them all'.
But just because that's the ratio of the ASHGEQ, doesn't necessarily make it the best ratio, and so I'm interested to hear what ratio others would suggest?
Mariette 
I've had one for a few years now, and there are the stupid things that they do for me which I can live without. They do help a lot with emails getting lost in the big ship. There have been a few times where I've requested cession documents, interest rate adjustments, etc. where it would take very long to sort out, and if I put my private banker on the matter, it's sorted within a day. I'm busy moving my tax free shares account over to EasyEquities, and I'm battling, this is where he will come in very handy.
I'm soon not going to have one anymore, I'm downgrading my account to save on fees. Slightly ironic that I need this paid service when I want to invest better.
Mariana 
What salary is referred to when people talk about % of salary going to savings. Is it:
Cost to company, which Includes employer’s contribution to: Pension/Provident fund (to which her employer contributes 10%) and 60% of medical aid, UIF Gross salary (Cash salary excl employer’s contributions as above) Take-home salary (Deductions: Tax, pension fund contribution (7% of cash salary) , 40% of medical aid, UIF, Group Insurance) When they ask about “after tax salary”, is that cash salary minus tax but still including my other deductions like PF and Medical aid?
They (her pension fund provider) have a normal one indicating what my annual costs would be if I continue with the policy. Then they say I should use an alt

Conventional wisdom has it that a budget is at the heart of any successful financial strategy. My wisdom has it that a budget is an excellent tool for self-deception. Nobody was better than drawing up a theoretical map of how money should be spent than me not spending money that way.
In this episode we discuss where budgets fall short. We each share our own approaches to budgeting and offer some more useful alternatives.
Subscribe to our RSS feed here. Subscribe or rate us in iTunes. Win of the week: Ken from the Fat Wallet Community Group on Facebook.
I've looked for a post on STXWDM + STXEMG vs ASHGEQ in various places, including this group but I can't find one.
In episode #85 ASHGEQ was voted by Kristia and Simon as the one ETF to rule them all.
Stealthy Wealth voted for STXWDM as the one ETF to rule the world.
The argument for ASHGEQ is more diversification + emerging market exposure.
The argument for STXWDM is lower fees.
DOES STXWDM + STXEMG GIVE THE BEST OF BOTH?
The argument against STXEMG could be too much Tencent exposure. In episode #72 Simon did some math and determined that there was less Tencent than in a JSE top40 index, so that seems ok.
Does it cost more to hold two EFFs than it does one?
STXWDM has a TER of 0.35%
STXEMG has a TER of 0.40%
For the sake of simplicity, I'll assume they both have a TER of 0.4% and R100 is bought in a 50/50 ratio.
Holding only one ETF = 0.4% of R100 = R0.40
Holding two ETFs = (0.4% of R50) + (0.4% of R50) = R0.40 i.e. same same but different.
ASHGEQ has a TER of 0.6%
Does this mean that the combined cost of STXWDM + STXEMG is less than ASHGEQ?
I presume there would be the cost of an additional trade? Two trades vs one. I don't know what that cost would be.
Using EasyEquitites to purchase the ETFs, would buying both still work out cheaper than ASHGEQ after considering both transaction costs and TER?
Assuming that the cost does in fact make it cheaper to buy STXWDM + STXEMG over ASHGEQ, and assuming those are the only two ETFs one buys, I'm interested to hear in what proportion you guys would suggest buying them, assuming a time horizon of 20+ years?
In Stealthy's article he says, "I estimate the Emerging Market component of the Ashburton 1200 to be 3.5%, but let’s be generous and call it 5%."
Following that, one might buy 95% STXWDM + 5% STXEMG to emulate to the 'one ETF to rule them all'.
But just because that's the ratio of the ASHGEQ, doesn't necessarily make it the best ratio, and so I'm interested to hear what ratio others would suggest?
Mariette 
I've had one for a few years now, and there are the stupid things that they do for me which I can live without. They do help a lot with emails getting lost in the big ship. There have been a few times where I've requested cession documents, interest rate adjustments, etc. where it would take very long to sort out, and if I put my private banker on the matter, it's sorted within a day. I'm busy moving my tax free shares account over to EasyEquities, and I'm battling, this is where he will come in very handy.
I'm soon not going to have one anymore, I'm downgrading my account to save on fees. Slightly ironic that I need this paid service when I want to invest better.
Mariana 
What salary is referred to when people talk about % of salary going to savings. Is it:
Cost to company, which Includes employer’s contribution to: Pension/Provident fund (to which her employer contributes 10%) and 60% of medical aid, UIF Gross salary (Cash salary excl employer’s contributions as above) Take-home salary (Deductions: Tax, pension fund contribution (7% of cash salary) , 40% of medical aid, UIF, Group Insurance) When they ask about “after tax salary”, is that cash salary minus tax but still including my other deductions like PF and Medical aid?
They (her pension fund provider) have a normal one indicating what my annual costs would be if I continue with the policy. Then they say I should use an alt

1 hr 6 min

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