Holiday investing can be life-saving!

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22 November 2021
I see trees of green, red roses too, I see them bloom, for me and you, and I think to myself, what a wonderful world”, words from the song “What a Wonderful World” by the late great Louis Armstrong, words that resonate with me every time I think of going on holiday.

It’s an even more wonderful world today due to advances in investment products and supporting technology making holiday investing so much easier and more accessible than in the past.

I think most would agree that it has been a horrid two years since COVID-19 reared its ugly head, changing the ebb and flow of our wonderful world. A good break to refresh, recharge and get lost with yourself is much needed for so many.

Investing for a holiday is just as important as investing for your retirement years. Both serve different purposes yet both are necessary to ensure that life’s journey is worth the ride. After all, there is more to life than just working and investing, it’s about living and balance.

If you were to Google the topic “research on the positive effects of holidays” you would be presented with a plethora of information supporting the notion that holidays are good for your health. According to some of the research, holidays can decrease blood pressure, improve sleep quality, reduce stress, reduce the risk of heart attacks, increase productivity and even prolong your life.

Investing for holidays are an essential part of a good financial plan; what’s the point investing for your retirement if you are literally killing your body and mind by neglecting to rest. Retirement becomes irrelevant if stress and lack of rest ultimately wins the race.

Now that we have established the importance of holidays (hey the research says so J) setting up an investment plan for regular holiday trips is vital, maybe even life-saving!

Investing for a holiday is a simple exercise. Here are a few pointers to help you kick start your holiday investing:

  1. Do your homework

Get a good idea upfront as to all the costs. Plane tickets, accommodation, entertainment, cab fare, souvenir money, tips, travel insurance, emergency money etc. Know what to expect and plan for it. It is often the smaller things that dent your fun.  

  1. Choose a low risk investment

Investing for a holiday is normally a short-term investment requiring a more conservative and stable investment strategy than your longer term investing objectives. Choose an investment product that focuses on low risk of capital loss with a high degree of stability.

  1. Choose a low cost investment

When selecting a holiday investment ask for your Effective Annual Cost (EAC) which will give you a good idea as to the costs applicable and then choose an investment with a low fee base.

Consider the following effect of fees:

Investment amount per month

Time Horizon

Estimated Growth rate

Ongoing Fees per annum (EAC)

Estimated total rand amount paid in fees over the 4 year period

R 1 000

4 years



R 1 699

R 1 000

4 years



R 2 796

R 1 000

4 years



R 3 866

R 1 000

4 years



R 4 910

Please note that the above table is only for illustrative purposes

The lower your total fee (EAC), the more your money stays in your camp helping boost your overall investment outcome. 

  1. Give up that extra daily cappuccino and muffin

An average cappuccino and a muffin can set you back as much as R 50 a day. That can add up to about  R 1 250 per month. Now imagine adding R 1 250 per month more to your holiday investment. The saving is huge and results can be massive.

If you were saving R 1 000 p.m. for 4 years at roughly 6% p.a. paying 1% p.a. in ongoing fees you could have about R 52 800. If you add the savings on cappuccinos and muffins to the mix you could be saving R 2 250 p.m. and after 4 years of saving at roughly 6% p.a. paying 1% p.a. in ongoing fees you could have as much R 118 800.

  1. Walk or cycle for bread and milk

Instead of firing up the car and wasting petrol to buy bread and milk around the corner rather take a leisurely cycle or walk. Add any saving on your monthly petrol bill as a result to your holiday investment. The benefits of exercise are great for your body and mind and can even help you shape that perfect beach body to flaunt.

Even a R 50 saving per month makes a difference...….add that to your cappuccino and muffin savings and you are suddenly investing R 1 300 per month extra towards your holiday investment.

  1. Make it fun

Track your investment monthly and actively monitor your progress. Set bite-sized targets. Have fun just like completing levels in a computer game, get to the next one quickly and before you know it you will have enough for your holiday, maybe even sooner than planned.

Holiday investing ranks right up there with retirement investing, they are both needed to help us all live healthier and fuller lives. Plan your next getaway today and give your body a well- deserved break, your health depends on it!



Gareth van Deventer CFP®
Head: OUTvest Advice Center
OUTvest is an authorised FSP. All our investments are exposed to risk, not guaranteed and dependent on the performance of the underlying assets. Ts and Cs apply.
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