Why should you invest your money? One of the most compelling reasons for you to invest is the prospect of not having to work your entire life! There are only two ways to make money: by working and/or by having your assets and money work for you.
If you keep your money in your back pocket instead of investing it, your money doesn’t work for you and you will never have more money than what you save. By investing your money, you are getting your money to generate more money by earning interest on what you put away or by buying and selling assets that increase in value.
It really doesn’t matter how you do it. Whether you invest in Stock, bonds, unit trusts, futures, options precious metals, property, your own small business, or any combination thereof. The objective is the same; to create wealth for yourself and to ensure you make investments that will generate more cash for you in the future. They say, “Money isn’t everything, but happiness alone can’t keep out the rain”.
Whether your goal is to send your kids to college or to retire on a yacht in the Mediterranean, investing is essential to getting you where you want to be. We can assist you in achieving your investment goals. There are some great special offers in place by various product providers at the moment that can assist investors to get extra reach and value for your money. Don’t hesitate to contact us and one of our professional Financial Planners will be there to guide you and create a personalised investment strategy.
By following a carefully structured approach, investors can create a financially rewarding portfolio. Investors need to be certain of their motivation for investing offshore as it will determine the type of products and funds they choose, as well as the percentage of their portfolio that they allocate to offshore investing.
In South Africa, 25% of the Johannesburg stock exchange is made up of mining companies. Equity investors are therefore predominantly exposed to the resources sector and have to diversify their portfolios offshore to gain exposure to other global industries. The Pharmaceutical industry, for example, is worth US$880 billion globally and is predominantly accessed through North American and European Companies.
Companies whose products such as packaged goods, branded tyres, cellular phones, smartphones and computers, all of whose sales are being driven by the emergence of a strong middle class in China, Brazil and India, are global manufacturing and retailing firms that are predominantly listed on the stock exchanges of developed countries. To access the growth potential of these Companies, one has to invest into markets outside South Africa.
Another common reason for investing offshore is to create an asset base for investors who are planning to retire abroad or sending their children abroad to study.
When is the Right Time?
If one is investing for the long term, you will avoid the panic of trying to time an offshore investment. When the rand is strong is obviously the best time to invest offshore as one’s purchasing power of foreign currency is stronger. South African individuals are allowed to transfer R4 million offshore per year for which they will need a tax clearance certificate. They can also transfer a further R1 million offshore, previously called a travel allowance, and which doesn’t require a tax clearance certificate. Therefore, a couple can take R10 million offshore every year.
Choosing Offshore Products and Funds
The key principle is choosing a provider that you trust, and who preferably has a presence in S.A. A solid track record is very important and such providers will guide investors through the taxation and estate planning considerations of offshore investing. Their teams of analysts will conduct thorough due diligence on each fund manager that is listed offshore and that are allowed onto its offshore funds panel.
This information is not “advice” as defined and contemplated in the Financial Advisory and Intermediary Services act, 37 of 2002, as amended. It is important to speak to a Financial Adviser about Investiments.