Making smart financial decisions early in life isnt just advisable its essential. A recent Sanlam Finances Through the Life Stages survey of over 5 000 South Africans highlights this urgency, with 54% of respondents saying they would advise their younger selves to view money as an asset to grow, not a luxury to spend. Fikile Mbhokota, CEO of Satrix, explains how exchange-traded funds (ETFs) can be powerful tools for individuals looking to maximise their long-term returns.
An exchange-traded fund is a type of investment fund that is also an exchange-traded product, i.e., it is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars.
'While traditional savings methods have their place, supplementing your savings strategy with ETF investments can help your money work harder for you. These investment vehicles ensure you're not just putting money aside but give it the potential to grow and compound over time, helping you reach your long-term financial goals more effectively.'
Understanding the difference between saving and investing
Mbhokota points out that while saving and investing are both crucial components of a sound financial strategy, they serve different purposes and come with distinct characteristics. Understanding this difference is key to developing a well-rounded approach to managing ones finances:
