Offshore investment: Sorting the fear from the fact

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investing offshore is smart, but it's important to take a measured approach.

Alarmists and Doomsdayers abound in the South African media – and let’s face it, there is plenty of fuel to add to that dumpster fire. Even the most optimistic South African cannot be blind to the erosion of the country’s fortunes over the last couple of decades.

During Covid, when fear was running rampant, and the markets and exchange rates were all over the place, poor financial decisions abounded. People were cashing in pensions, taking an up to a 36% tax knock on their investment and getting money offshore at all costs. This ‘option’ was only available to people over 55, which compounds the problem.

Animals have been migrating since the dawn of time in search of better feeding and breeding grounds. Migrating your wealth for the same reasons just makes sense. Using these RSA entities is a much easier solution for many advisors where all the admin and compliance have already been set up, and, in fairness, they may not have access to other solutions, but it is not necessarily the best solution for you.

The rand is one of the most volatile currencies in the world and is much loved by day traders for exactly that reason. Trying to predict which way the rand is going to go is extremely difficult because it is not based on the true value but on the collective sentiment of tens of thousands of businesses, traders, buyers, speculators, and ordinary people.

 

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