According to a Business Insider article, stokvel members as a collective, saved approximately R50 Billion in 2020. R50 Billion is a lot of money! Some of this money that can be used to buy assets that grow in value which in turn can create financial freedom and generational wealth for families.
If you are a member of a stokvel, where is that money saved and how do you use it? Is the cash that you contribute every month saved in a low-interest bank account and you use the cash to buy food, school uniforms, pay for school fees, pay for a holiday get-away, etc.? All these activities are fine. Cash is good for the short term.
But it's important to think about the long-term effects of inflation on your cash. Inflation is the increase of the prices of goods and services over time. Each year, your cash buys less and less things because things (food, medicine, uniforms, school fees, rent, transport, etc.) become more and more expensive every year. If you have cash stuck in a bank account stuck for years and years, inflation is making you poorer and poorer with time. In order to keep up with inflation over the years, your money must grow at a rate that is higher than inflation. This is where investing comes into the picture. Long-term investing also allows your money to grow above inflation.
If you're part of a stockvel what is stopping you from doing both : (1) Saving some of the money for short-term needs AND (2) Investing some of the money for long term inflation-beating growth?
Does EasyEquities (my favorite investing platform), allow stockvel investing?
You can set up an EasyEquities account for Stokvels. The number of people in the stokvel must be 2 or more. All the requirements for opening an EasyEquities account as a stokvel are given in this link:
Let's think beyond the short-term, let's think long-term as well..
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