There's nothing like lockdown to induce a bad case of wanderlust. 11 months into the biggest bummer of many of our lifetimes, it's wonderful to hear some ordinary good news. Remember weddings? Lady Kablo certainly does. She got married in December. Lockdown is giving her a little time to think about what she'd like for her perfect honeymoon.

Many of us striving for financial independence hope to travel once we no longer have to work. Every time I take a trip, be it abroad or local, I'm reminded travel money works differently from ordinary money. While I'm extremely frugal in my day-to-day life, when I travel I don't think about money. I also don't worry about how much I eat or drink, I never check my phone and in general I'm just a much cooler person.

In this week's episode we help Lady Kabelo think about her honeymoon. In the process, we reminisce over some of our own adventures and dream about a time when we can do exciting things like visit friends and go to the shops. Hopefully this episode delivers a spot of whimsy to your lockdown.

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Lady Kabelo

I got married in December. Having spent the last 3 or 4 years following your savvy advice to tackle debt, emergency fund, insurance, retirement and medical aid, the time may have arrived for an international honeymoon trip

(Yes, Covid is also a factor. I'm hoping when it's over some hard-hit places will be a little cheaper in an effort to attract visitors.)

Every overseas vacation I've taken has been with my parents, so I've never considered the planning and budgeting that goes into an international vacation.

My biggest nightmare is running out of money in a foreign country. As a result, I am leaning towards all-inclusive packages - even if we overspend, we'll at least have food. The downside is you're in a resort removed from the "real" place and people but then you can get cabs into the nearby towns for daily excursions.

But I'm not sure if this is the most cost-effective way to travel. So, my questions:

Are the all-inclusive packages a good way to travel?
What are the hidden costs people commonly forget to plan for?
What are the biggest financial mistakes people make with regards to travelling?
Any additional tips for cost-effective travel?

Win of the week: Charlene

Thank you from the bottom of my heart for the financial education. I've been reading and listening to all your advice since lockdown in March and it has really made a HUGE impact on my financial decisions. I cannot thank you enough. I live in Mossel Bay. Should you ever be in the area I would love to offer lunch/dinner to thank you both for everything.

I've been getting my financial house in order ever since. I have identified ETFs that I have invested in and I am very happy with the performance. I have invested in Satrix Emerging Markets(20%), Ashburton Global 1200 (60%) , Sygnia 4th industrial revolution (10%) and Satrix Nasdaq 100(10%).

I have now sold a property and have money I want to invest. I want to invest it in the overseas markets directly. I'm currently using EasyEquities and I see I can use their platform for international investments as well. I had a look at their fees and I see they charge a brokerage fee of 0.25%. This whole world story is a bit intimidating and scary... so I am thinking to approach it using EasyEquities even though I know it's a bit more expensive. What are your views on this?

My next hurdle is choosing what to buy. I want to buy similar ETFs to those I currently have, but don't know where to start. I saw Vanguard has a Total World stock ETF etc etc. Could you please kindly point me in the right direction?

Dylan

I was wondering whether a RA can be paid out to more than one person?

In a family where the wife was a stay at home mom for most of their life and they only really have the husband's retirement fund to live off when he retires, would it be possible to pay the fund out to both people in order to split the retirement income between two incomes to save on income tax?

I read the blog on Tax on lump sums in retirement. It states that if you have discretionary investment funds available at retirement, it's a good idea to hold on to your retirement savings and rather use your discretionary savings to cover expenses. It explains that by doing this, you allow your retirement savings to grow some more.

Now this got me wondering, why would you want to cash out discretionary investments to have your retirement savings grow more? It seems the wrong way around to me. If your retirement savings grow larger, sure you save on the CGT and DWT inside the retirement product for the time your discretionary savings last you, but now you will probably pay more income tax on the extra retirement income than you ever would pay on CGT if you did it the other way around.

My gut tells me it would be more efficient to take your retirement income when you start needing it and supplement that with your discretionary savings where required while trying to minimize the CGT of the investments you cash out.

Jean

We have been saving for our son's tertiary education and now have a sum in our bank account earning pathetic returns. We will need to start drawing from this in about 9 months time. We have been thinking of Satrix world as we really need better returns. Are ETFs/ international ETFs, too risky for this application?

Chad

I am a great fan of 1 share to rule them all. (Vanguard total world in my case). However, your recent podcast wrt the dangers of too much exposure offshore got me thinking about Rand-hedging. What would you say is the best ratio of Offshore vs Local equities in a total equity portfolio (apart from 20% which is Reg28 compliant)?

Then there is the question of which is the most diversified local ETF? I have been investing in the Satrix 40 when the Rand is really weak but realise now that this might not exactly be a Rand-hedge ETF. Is the Sygnia itrix SWIX 40 ETF a good rand hedge option? Please help?

Martin

My brother sent me a link to one of your shows when I took an interest in my finances and I've been hooked ever since.

Thanks for all the education, even if the majority goes over my head at the moment. But I can confidently say there is a huge difference now in comparison to when I started a few months back.

I follow the Dave Ramsey baby steps: I am currently saving my emergency fund and up to two months-worth of expenses.

It is a decent amount but I feel it is being wasted in a savings account.

I keep hearing everyone say put the money in a money market account.

I have been looking around with no luck. I bank with FNB and for example the one they propose I open is one with an opening amount of 100k.

I also came across one from Old Mutual which seems reasonable and you get a card as you would want to have easy access to the funds when needed.

What are the options out there and which do you guys use?