Question:
I will soon receive R200 000 and want to invest it. What is the best way of investing without investing in the stock market?

Answer:
I do not know what your overall financial state is but there are rules of thumb that can be applied to a windfall. One of the safest ways to invest is to pay off your debt, especially now with interest rates going up.

Short-term debt is expensive, so getting rid of it will save you high monthly payments. Once you have paid off your short-term debt, like clothing accounts and credit cards, you may want to put the balance into your home bond.

If you do not own a home you may want to consider getting into the property market. Paying rent for the rest of your life is not a good use of your money.

Long-term products

You should also ask an expert to help you with establishing what you need in order to retire one day. There are many long-term investment products on the market.

You say you don’t want to invest in the stock market, which is understandable if you are unsure of how the markets work. But you need to note that if you invest in a retirement annuity or a savings policy, the money is actually placed in the stock market — so you are investing in the stock market whether you like it or not.

Stocks do give a very strong return in the long term, so don’t cut them out of your investment portfolio. An easy way to invest in the stock market is to buy unit trusts or invest in a product such as that offered by Satrix (www.satrix.co.za).