‘Real’ investing feels out of reach for young South Africans — here’s why it isn’t

By Lindokuhle George, Junior Investment Consultant, 10X Investments

Cast your mind back to your first payslip as a young professional. You probably couldn’t wait to spend it, but you also knew you should put some away, somewhere it could grow. But where?

Unless you grew up in a home where your parents spoke openly about things like unit trusts or stock portfolios, chances are you thought that “real” investing was something for the very wealthy, who had access to a broker, a trust fund, or those with a finance degree. So, in all likelihood, the extent of your investing was your company’s retirement annuity or pension fund.

While technology has made it easier than ever to buy and sell shares, cryptocurrencies, and other assets with a few taps on your phone, that idea of “real” investing being out of reach can still feel true for millions of young South Africans entering the workforce. But low-cost, diversified investments may offer a more accessible way to participate in financial markets .

The state of play

Before looking at how low-cost investing might fit into that picture, it’s worth understanding how few young, working South Africans are actually investing. According to data from the 2026 Old Mutual Savings & Investment Monitor (OMSIM), as many as 80% of Gen Z South African workers use informal tools like cash savings, while 56% of all workers use stokvels. These serve an important purpose. They offer accessible, flexible ways to save and build community support, but they work differently to structured investment vehicles, which are designed for long-term growth through compounding.

Many young people want to grow their wealth. But some turn to quick-fix solutions in that pursuit. A growing number of students, for example, are gambling away their National Student Financial Aid Scheme (NSFAS) funding as they look for quick returns. All too often, the consequences are disastrous.

Many South African families carry more debt than they can afford , with household debt      equivalent to around 62% of disposable income, per the South African Reserve Bank’s December 2025 Quarterly Bulletin. And with just six percent of South Africans on track to retire comfortably – based 10X’s Retirement Reality Report – meaning that many people face real pressure on their long-term financial position. Low-cost, diversified investing may form part of a long-term wealth-building strategy, depending on an individual’s circumstances and objectives, particularly for young workers who have time on their side to start early.

Why  fees, diversification, and starting now matter

In the simplest possible terms, this kind of investing means holding a diversified portfolio built from index-based building blocks (funds that track the broader market), rather than picking and choosing individual stocks; it’s one approach among several and may not always be right for every investor’s needs or objectives. If you’ve ever heard someone talk about the JSE Top 40 (the largest 40 companies listed on the JSE, by market value) or the S&P 500, they’re talking about market indices.

These indices are a defined basket of securities, selected and weighted according to a set methodology, used to measure the performance of a particular market or segment. Index-based investing means buying a fund designed to track the performance of one of these indices. Different index funds track different indices, spanning different markets, sectors and asset classes,not only company shares.

It’s an approach which makes investing more accessible for several reasons. First, low-cost, index-based investment products typically come with lower fees than other investment options, meaning that they’re available to a broader set of investors.

This approach can simplify the investment decision-making process for investors who may not have specialist investment knowledge. You’re simply investing in funds that track a defined index (which could span equities, bonds or other asset classes) on a single exchange or across several.

Importantly, for people just starting on their wealth-building journeys, this kind of investing doesn’t require you to lay down a large amount of capital initially. That’s why starting early matters: a longer time horizon gives compound growth more room to work. Regular contributions can support this process, but investment returns are never guaranteed, and consistent saving alone doesn’t guarantee financial security.

Cost matters

The lower fees associated with these investment products don’t just make investing more accessible. Over time, all else being equal, they also mean an investor retains more of their investment returns. Here’s an illustration of how that effect can compound over decades.. We can illustrate what this might look like.

Let’s take two investors, for example. Each of them saves R1,500 a month for 30 years, earning an average annual return of eight percent before fees. The only difference is cost: one pays 0.5% in fees, the other 1.5%. That single percentage point won’t seem like much. In the early parts of an investment period, in particular, it would be almost invisible on a monthly statement.

Over time, however, that difference compounds. So much so that, based on the assumptions above, the investor paying lower fees could have R327,000 more than the investor paying higher fees by the end of the period (illustrative only. Assumes contributions of R1,500 a month with no withdrawals, an average annual return of 8% before fees, compounded monthly, over a 30-year period. Figures are before tax, do not account for inflation, and are not a forecast or guarantee of actual investment performance.) 

Investing is a form of financial inclusion

Within a South African context of high youth unemployment (youth unemployment stood at 60.9% for those aged 15–24 and 40.6% for 25–34-year-olds in Q1 2026, per StatsSA), wealth inequality, and low household savings rates, low-cost, diversified investing isn’t just a personal-finance tip; it’s a path to financial inclusion.

For young South African workers, that means being better placed to look after their families in old age and potentially even being able to give the next generation a leg up. Crucially, young South Africans have investing’s greatest advantage at their disposal: time.
This style of investing can also lower some of the practical barriers to getting started. Certain products have lower minimum investment requirements and can simplify portfolio construction. But investors should still take the time to understand the product and the risks involved.     . Even a small amount of money, invested consistently, can bring benefit from the effects of compounding over time, especially when you stop thinking in months and start thinking in decades. Actual returns will always depend on market performance and are never guaranteed.