/ 3 January 2011

What the Brazil World Cup will cost

Our recent article on saving for the Brazil Soccer World Cup generated a great deal of interest among readers and many contributed what they believed the trip would cost.

One of our readers, Dumisani, sent me his spread sheet where he had calculated the costs based on current costs plus inflation and World Cup premiums. He estimates that a week’s trip will set you back R50 000.

His estimate is as follows:
Return Flight JNB to Rio via São Paulo (SAA) = R11 774

Accommodation for seven days at 2 star hotel = R6 300

Food + liquor = R4 099

Foreign Currency $2000 = R21 000 (assuming a 50% rand depreciation)

Match ticket (two matches) = R3 000

Passport = R150

International Driver’s Licence = R249

Travel clinic = R650

Car hire = R3 185

Probably the one figure that is overstated is the foreign currency. As Brazil is an emerging economy our currencies are fairly closely correlated. It would take a fairly big political event in South Africa to cause the rand to depreciate by that amount — but possibly still a risk.

Personally I would budget more for accommodation, at least R1 000 a night and flights could go as high as R20 000 depending on when you flew.

If you are aiming for R50 000 and start in January you would need to invest about R1 100 a month and have a return of 8% per annum to reach this goal.

Dumisani has chosen an Absa Investments Balanced Fund (53% equity) to save for this goal. Initially he did consider forming a stokvel among friends but the bank and transaction costs seemed to be too high and could eat in to the returns of any investment that they would make, so they decided that each person should be free to invest according to his own judgement.

My one word of advice would be for Dumisani to go and check exactly what fees he is paying at Absa — those bank consultants are very quick to take fees!

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