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How To Build Generational Wealth in 14.5 Years

Your Ultimate Guide To The Tax-Free Savings Account (TFSA)

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MoneyMoves
February 11, 2026

Welcome to the first MoneyMoves episode of the year! We’re kicking off the year with one of South Africa’s most powerful wealth-building tools: the much-loved TFSA.

We’re back in the OG studio - check it out below 🫰

Why We Love The TFSA

Why is the TFSA so popular? A TFSA is one of the very few places where SARS doesn’t get a cut. That means:

  • No Interest Tax

    Interest is normally taxed at up to 45%.
    Earn R1,000 interest? Up to R450 goes to SARS.

  • No Dividend Tax

    Dividends are taxed at 20%.
    Earn R1,000 in dividends? R200 to SARS.

  • No Capital Gains Tax

    CGT can be as high as 18%.
    Make R1,000 in profit? Up to R180 goes to SARS.

But inside a TFSA? We don’t pay any of these taxes. In other words, we get the full effect of compounding over the long-term - completely tax free.

Generosity Does Have Limits

SARS is kind… but not that kind.

TFSA contribution limits:

  • R36,000 per year, up to R500,000 lifetime contribution

  • Or R3,000 per month via debit order

  • Tax year runs from 1 March to 28 February (you still have a couple of weeks to max it out!)

The Numbers Are Crazy

Let’s assume you max out your TFSA every year and it grows by 10% per year.

  • After 14.5 years: ± R1,050,000

    (R500,000 contribution + growth over 14.5 years).

Leave it untouched for:

  • 10 years: ± R2,720,000

  • 20 years: ± R7,064,000

  • 30 years: ± R18,320,000

You contributed R3,000 pm for 14.5 years. And you get all of this, tax-free. That’s crazy.

Tax-Free Savings Account? Not Really.

This is where the name causes problems. A TFSA is not really a savings account. It’s an investment account. Think of it like this:

  • Bank account = saving = +-5% per year

  • TFSA = investing = +-10%-12% per year

Imagine the difference in returns over the next 30 years.

Source: Allan Gray fund research tool. Time frame: 7 Feb 2021 - 7 Feb 2026. The graph above is for illustrative purposes only.

Investing Like A Pro Within Your TFSA

*This is not financial advice

What is best for you? Depends on your investment profile. Let’s take two cases:

  1. Younger generation: Wealth creation

  2. Older generation: Wealth creation and protection

If you’re young, equity is your best bet. The stock market is the best place for long-term wealth creation.

📊Our pick: The In-house Unconstrained

  • Allocation: Full equity exposure

  • Benchmark: MSCI World

  • Strategy: Built for long-term wealth creation

Source: Allan Gray fund research tool. Time frame: 7 Feb 2021 - 7 Feb 2026. The graph above is for illustrative purposes only and reflects actual fund performance and performance of the comparative indices. FSP nr: 52899.

If you’re older and want more stability in your TFSA, a blend of various asset classes is more suitable.

📊Our pick: The In-house Moderate

  • Allocation: 50% equity ; 50% cash & bonds

  • Benchmark: South African Multi Asset - Medium Equity

  • Strategy: Blend of wealth creation and wealth protection

Source: Allan Gray fund research tool. Time frame: 7 Feb 2021 - 7 Feb 2026. The graph above is for illustrative purposes only and reflects actual fund performance and performance of the comparative indices. FSP nr: 52899.

Final Thought

Your TFSA can be an amazing tool to build long-term wealth - for you and your family. The strategy is simple:

  1. Max it out.

  2. Invest properly.

  3. Then leave it alone.

If you want help setting yours up or choosing the right investment, you’re always welcome to reach out.

Who Are We?😎

The Knowledge Chest

Paul holds an Honours degree in Financial Analysis from Stellenbosch University. With a career spanning investing, accounting, and education, Paul is committed to becoming the best financial planner in South Africa. Despite his many accolades, Paul insists that his greatest achievement is that he is engaged to a yoga teacher.

The Anchor

Ingrid holds a BA Honours in Journalism from Stellenbosch University. She is a self-diagnosed workaholic, excelling in various roles such as marketing, publicity, and strategic partnerships. Ingrid's commitment to promoting wellness and balance extends beyond her professional endeavours, as she is also an avid yoga teacher.

Our Full Offering🎖️

We have extended our value offering to five key pillars:

  1. Investments

  2. Insurance

  3. Arbitrage

  4. MoneyMoves

  5. StockMaster (coming soon!)

Thank you for trusting us with your wealth. If you have any questions, want to review your portfolio, or just want to chat about what’s happening in the markets, feel free to reach out anytime.

Warm regards,
Paul & Ingrid
Sentient Wealth

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