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How much Dstv is really costing you

Household Finance

How much Dstv is really costing you

Reading Time: 2 minutes

A common excuse for not investing is not having enough money left over after all the other expenses. This view implies that only very rich people can afford to invest – my view of investing is a bit different. I believe that anyone who has enough income to afford entertainment is in a position to invest. If at the beginning of the month you have enough money to buy take-outs, go out to drink or entertain friends then you are in a position to invest.

Everybody loves Satellite TV

Take for example the number of people with pay TV in South Africa. Over 5 million families are estimated to have Dstv, the most popular pay-TV platform in the country. As at January 2017, a monthly subscription to the Premium Dstv package costs R745. The Compact package costs R345.

A Zonotho analysis reveals interesting findings. Huge sums of money could become available for investment if you cancelled your Dstv subscription. Considering the year 2016, if you had a premium subscription, you would have spent almost R9,000 on the pay TV.  If we considered the 9-year period from the beginning of 2008 to the end of 2016 then that amount shoots to over R63,000. Let’s take this a step further. You could have decided to use the Dstv money to invest in shares of the company that owns Dstv – Naspers. That investment portfolio would have grown to over R225,000 over the period January 2008 to December 2016.

The above calculation takes into account the impact of fees incurred when investing directly in shares. If you were to use a low fee platform then the investment would have grown to almost R250,000. That’s a quarter of a million rands!

Related: Buy high, sell high? Are you high? The Steinhoff case

Priorities

It is important to note that Naspers shares performed exceptionally well over the period of the analysis. There is no certainty that such performance will be repeated in the future. The main point of this article is not to discourage subscription to Dstv – after all, entertainment is a very important part of being human. The point of this article is that any person who spends money on entertainment is in a position to invest. In the end, it’s simply a matter of priorities.

Data sources

Total return on Naspers shares.

Historical Dstv prices

2000 to 2014, 2000 to 2015, 2000 to 2016

Conservative assumptions were used in the calculations. For more details email me – thando@zonotho.com.

 

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Thando

Thando is currently the Group Actuary at Clinix Health Group, having previously served as Actuary in Discovery Limited's R&D Lab. Thando loves tech, design, reading and is very passionate about the development of the African continent. Thando also runs Litmail, a tech startup in the e-communication space. All views expressed are Thando's own and neither reflect nor are influenced by the views of affiliated companies.

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