Return on Investment (ROI) Formula: A South African Guide

By | April 23, 2024
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What is ROI?

Return on Investment (ROI) is a financial metric used to measure the profitability or efficiency of an investment. It essentially tells you how much return you’re getting on the money you put in. Understanding ROI is crucial for South African investors because it helps them compare different investment options and make informed decisions about their finances.

The Basic ROI Formula

The most common formula for calculating ROI is:

ROI = (Gain from Investment – Initial Investment) / Initial Investment x 100%

Here’s a breakdown of the formula:

  • Gain from Investment: This is the total profit or benefit you receive from your investment. It could be income generated (like rental income from property), capital appreciation (increase in the value of an asset), or a combination of both.
  • Initial Investment: This is the total amount of money you initially put into the investment. It includes the purchase price of the asset and any additional costs associated with the investment (e.g., brokerage fees for stocks).

Example:

Let’s say you invest R100,000 in a stock that increases in value to R120,000 after one year. You don’t receive any dividends during that year.

ROI = (R120,000 – R100,000) / R100,000 x 100% = 20%

This means your investment generated a 20% return on your initial investment over one year.

Important Considerations for South African Investors

  • Time Horizon: ROI is typically calculated over a specific period. Consider your investment timeframe when evaluating ROI. A short-term investment might have a higher ROI than a long-term one, but that doesn’t necessarily mean it’s a better investment for your goals.
  • Cash Flow: The basic ROI formula doesn’t account for ongoing costs associated with the investment. For example, if you own a rental property, you’ll have expenses like maintenance and property taxes. These costs should be factored in for a more accurate picture of your return.
  • Taxes: Capital gains taxes and other investment-related taxes can affect your overall return. Be sure to factor in potential tax implications when calculating ROI.
  • Risk vs. Return: Generally, investments with higher potential returns also carry higher risks. Consider your risk tolerance when choosing investments and understand the risk profile before calculating ROI.

South African Resources for ROI

Several South African financial institutions offer ROI calculators on their websites. These tools can help you estimate the potential return on various investments based on your specific input. Here are a few examples:

Conclusion

The ROI formula is a valuable tool for South African investors to assess the profitability of their investments. Remember, ROI is just one piece of the puzzle. Consider your investment goals, risk tolerance, and tax implications before making investment decisions.

Related Resources

📋 Online Applications Guide Comprehensive guides for online applications in South Africa
🛡️ PSIRA Registration Guide Step-by-step PSIRA registration and renewal process
🏛️ University Applications University admission requirements and application tips

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Complete Guide to NSFAS Online Loan Application for South African Students (2025)

If you are a South African student looking to pursue higher education but are facing financial difficulties, the National Student Financial Aid Scheme (NSFAS) is one of the most accessible funding options available. NSFAS provides financial aid in the form of bursaries and loans to qualifying students at public universities and TVET colleges in South Africa.

This guide will walk you through everything you need to know about the NSFAS loan application process, from eligibility requirements to application steps and frequently asked questions.

📌 What is NSFAS?

The National Student Financial Aid Scheme (NSFAS) is a government-funded financial aid scheme aimed at helping students from low- and middle-income households to access tertiary education without the burden of upfront fees.

NSFAS offers both bursaries and income-contingent loans:

  • Bursaries: For eligible students who meet academic and household income criteria (especially for TVET and university students).
  • Loans: For students who do not meet all bursary criteria or who are pursuing postgraduate qualifications not funded under bursary schemes.

✅ Who Qualifies for an NSFAS Loan?

To qualify for an NSFAS loan (especially for postgraduate students or programs not funded under the bursary system), you must:

  • Be a South African citizen.
  • Be financially needy, with a household income of less than R350,000 per year.
  • Have a valid South African ID.
  • Be enrolled or accepted to study at a public university or TVET college.
  • Not be funded through another bursary program that covers all expenses.
  • Maintain satisfactory academic progress (returning students).

📚 Courses Funded by NSFAS

NSFAS primarily funds undergraduate qualifications, but certain postgraduate programs (e.g., PGCE, postgraduate diplomas in education, and professional courses like LLB) may be considered under the NSFAS loan scheme, not bursaries.

If you’re studying:

  • Undergraduate degree or diploma: You are likely eligible for a full NSFAS bursary.
  • Postgraduate study: You may qualify for a loan, depending on the course and funding availability.

📄 Required Documents for NSFAS Application

When applying, make sure you have the following documents scanned and ready:

  1. Certified copy of your South African ID or Smart Card.
  2. Parent(s) or guardian(s) ID documents.
  3. Proof of income (latest payslips, UIF, or affidavit if unemployed).
  4. Consent Form signed by your parent(s)/guardian(s) to allow NSFAS to verify income.
  5. Proof of registration or acceptance at a public institution.
  6. Academic transcripts (for continuing or postgraduate students).

🖥️ How to Apply for an NSFAS Loan Online

Step-by-Step NSFAS Online Application Process (2025)

  1. Visit the NSFAS Website

    Go to: https://www.nsfas.org.za

  2. Create an Account

    • Click on “MyNSFAS” and register your profile.
    • You’ll need a valid email address and South African cellphone number.
    • Choose a strong password and verify your account via email or SMS.

  3. Login and Start the Application

    • After registration, log in to your MyNSFAS account.
    • Click on “Apply” to begin a new application.

  4. Fill in Your Personal Details

    • Input your ID number, name, surname, and other details exactly as they appear on your ID.
    • Provide household income information and living arrangements.

  5. Upload Required Documents

    • Upload all supporting documents in PDF or JPEG format.
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  6. Submit Your Application

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    • Log in regularly to check your application status.
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🗓️ Important NSFAS Dates (2025)

  • Application Opening Date: September 1, 2025
  • Application Deadline: January 31, 2026
  • Appeals Period: February 2026 (if rejected)
  • Disbursement: After registration and approval

Note: Dates are subject to change; always confirm on the official NSFAS website.

💸 What Does the NSFAS Loan Cover?

NSFAS funding typically includes:

  • Tuition fees
  • Registration fees
  • Accommodation (if living away from home)
  • Meals and transport
  • Learning materials (e.g., textbooks)

For loans, repayment is only required once you start working and earn above a threshold (around R30,000 annually, but subject to change).

🔄 NSFAS Loan Repayment

Repayments are:

  • Income-contingent – you only repay when you can afford to.
  • Administered by DHET (Department of Higher Education and Training).
  • Interest-bearing, but interest rates are low and favorable.

You can also apply for a partial loan conversion to a bursary if you perform well academically.

🔁 How to Appeal a Rejected NSFAS Application

If your application is rejected, you may submit an appeal via your MyNSFAS portal:

  1. Log into your MyNSFAS account.
  2. Click on “Track Funding Progress”.
  3. If rejected, click on “Submit Appeal”.
  4. Upload any missing or corrected documents.
  5. Provide a clear explanation or motivation.

📱 NSFAS Contact Information

📝 Final Tips Before Applying

  • Apply early to avoid system overload near the deadline.
  • Use your own email and cellphone number (do not use someone else’s).
  • Double-check that all your documents are certified and legible.
  • Keep a copy of your submission confirmation for reference.

By following this guide, you can confidently apply for NSFAS funding and move one step closer to achieving your academic and career dreams—without the burden of immediate financial pressure.

If you need a printable checklist or PDF version of this guide, let me know and I’ll create one for you.