In our previous post, we explored the balance sheet and the four main types of assets:
Liquid assets, Investment assets, Business assets, and Lifestyle assets.
Today, we zoom in on investment assets—what they are, how they work, and how students can start building them wisely.
What is an investment vehicle?
An investment vehicle is simply a product that allows you to invest your money. Think of it as a basket that holds your investment assets.
Each vehicle has its own:
- Rules and regulations
- Risk and return profile
- Tax implications
- Accessibility and cost
Common examples of investment vehicles include
| Investment vehicle | Description | Student-Friendly Example |
|---|---|---|
| 🎯 GoalSave Accounts | Goal-based savings accounts offered by banks, often with incentives or higher interest if you don’t withdraw early. You set a target and save monthly toward it. | Using Tymebank’s GoalSave to save for a laptop or driving lessons, with automatic monthly deposits |
| 📞 Call Deposits | Flexible savings account where you can “call” or withdraw your money with short notice (usually 1–7 days). Interest rates are better than regular savings but lower than fixed deposits. | Keeping your emergency fund in a call deposit so it earns interest but stays accessible |
| 🏦 Fixed Deposits | You lock your money away for a set period (e.g., 6 or 12 months) and earn a fixed interest rate. Usually offers higher returns than a regular savings account. | Saving your bursary surplus in a 12-month fixed deposit to earn interest while you focus on studies |
| 📈Share Trading Accounts | Lets you buy and sell shares on a stock exchange | EasyEquities share trading account used to invest in Capitec or MTN |
| 📜Bonds | You lend money to a government or company and earn interest | Buying RSA Retail Savings Bonds from the SA government |
| 📊Mutual Funds | Pooled investments managed by professionals | Investing in a fund that holds a mix of SA stocks and bonds |
| 🔄ETFs (Exchange-Traded Funds) | Like mutual funds, but traded like shares | Buying a low-cost ETF that tracks the JSE Top 40 |
| 🏠Real Estate | Physical property or fractional ownership | Renting out a backyard flatlet or investing in a REIT |
| 🛡️Retirement Accounts | Long-term savings with tax benefits | Contributing to a retirement annuity or pension fund |
| 🌱Tax-Free Savings Accounts (TFSA) | Long-term savings with no tax on growth or withdrawals | Saving monthly in a TFSA with a local bank or investment platform |
| 🔄Endowments & Sinking Funds | Structured long-term investments with tax benefits | Using an endowment to save for a future goal like a car or studies |
We’ll unpack each of these in future posts—so stay tuned!
What is an asset class?
An asset class is a group of investments that behave similarly in terms of risk and return. You use investment vehicles to access these asset classes.
Here’s a breakdown with student-friendly examples:
| Asset Class | What It Is | Student Example |
|---|---|---|
| 💵 Cash & Equivalents | Bank savings, money market | Your emergency fund or NSFAS refund saved in a high-interest account |
| 📜 Bonds | Lending money for interest | Buying RSA Retail Savings Bonds from the SA government |
| 📈 Equity | Owning shares in companies | Investing in Capitec or MTN shares via EasyEquities |
| 🏠 Property | Real estate ownership | Renting out a backyard flatlet or investing in a REIT |
| 🪙 Commodities | Physical goods like gold | Buying Krugerrands or silver coins as a hedge |
| 🎨 Alternatives | Unique or speculative assets | Holding Bitcoin, collecting rare sneakers, or flipping thrifted items online |
🧭 Choosing the Right Investment Vehicle and Asset Class
Before you invest, ask yourself:
- Investment Goals: Are you saving for retirement, a short-term goal, or just learning the ropes?
- Risk Profile: Are you comfortable with ups and downs, or do you prefer stability?
- Time Horizon: How long can you leave your money invested?
- Tax Implications: Will your earnings be taxed now, later, or not at all?
🌱 Final Thoughts
Every investor have to start somewhere. Start by:
✅ Understanding when to use which type of investment vehicle
✅ Learning about one asset class at a time
✅ Asking questions
✅ Building habits that grow your financial confidence
This content is designed to share financial principles and practical insights that support informed decision-making. It is not intended as financial advice, nor does it recommend specific products, providers, or investment strategies. I am not a licensed financial services provider, and this material does not replace the need for a personalized financial analysis by a qualified professional,