How To Invest Your Money Offshore As A South African | Money Marx 

Thanks man! Glad it was helpful! :)

Haha thanks Shaun!

Thanks Jannie! IBKR is a bit more challenging to get used to, but once you are done with the registration process and figured out how to fund it, it is quite simple actually.

Thanks Mauricio! Glad you found it to be helpful! :)

Thank you for the nice comment. Glad you enjoyed it!

It's only a pleasure Seabelo! :)

Hey Frederick. Thanks man I appreciate it. Where do you want to borrow money from? Are you referring to getting funding from overseas venture capitalist? Or taking out loans from banks overseas?

@@MoneyMarx Hello, Yes, Venture capitalists or banks are possibilities to consider. The concept is to purchase rental properties at a reduced loan rate and repay the investor/bank. This could potentially open the door for the average Joe on the street in South Africa.

You're welcome :)

Thanks man! Glad you enjoyed it!

Only a pleasure Jackie 😀

Thanks Leeroy! :)

Thanks for watching! Here is the Interactive Brokers Tutorial: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-gITZxNd_Iqk.html

Dankie Erik, ek waardeer dit opreg! :)

Only a pleasure Lebogang! :)

Hey Teagan. That is an excellent suggestion for a video! I will probably make one in the future, but as to why I decided on VWRA, you can check this video in the meantime ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE--10iIBnwITg.html

Thanks Gorden and welcome to the tribe! I continue to change my rands to dollars and invest in the offshore markets regardless of the exchange rate as I believe that it is important to hedge against the falling rand and diversify my investments overseas

Hahaha! It would be an honor if a mere peasant like me gets associated with the Great Graham Stephan! 😅 But jah, I do take loads of inspiration from his videos as clearly what he is doing is working really well! 😀 Jah IBKR becomes really useful if you have large amounts to invest at a time. I try to save up around R15k before I transfer it in order to dilute out the flat rates. But if you only have smaller amounts then the EE USD account will work just fine. The Estate tax only really becomes a problem after you have invested around $200k, which equates to roughly R3 million, so it is a great place to start. You can always also just transfer your positions from EE to IBKR once you are more comfortable with using the platform.

@@MoneyMarx you mention here that the estate tax only becomes a problem after you have invested around $200k, but in the video you said $60k - would you please explain the part I am missing here. I would really like to invest offshore directly to hedge against the rand long-term but I want to ensure I understand all the intricacies re tax, avoiding or reducing situs tax etc.

Hey Ryan. Only a pleasure! :) I prefer the accumulating ones as they generally offer higher returns in the long run. Yes you will need to pay taxes on the dividends received from both ETFs, but later on when you sell your ETF holdings for a profit and you trigger Capital gains tax, your DWT can be written back as a tax credit. Distributing ETFs makes the whole tax calculation a bit easier, but for me personally, I opted for the higher returns as I am not doing my own taxes haha. I would strongly advise to appoint a good tax practitioner to file your tax returns if you decided to invest in the offshore markets, as there are many possible traps that you can fall into if you do it yourself. I opted for the VWRA ETF and will make a video in the future to compare a couple of the best options, but in the mean time you can check out this video which explains it quite well: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE--10iIBnwITg.html

@@MoneyMarx Thanks a million!

Hey Sokhana. Will sure do :)

I've been trying to open account with them, it's so hard to do so their site is problematic.

Hey Buks. That is an option. If you have a large number of assets (property, cars, etc) then setting up a trust is also a good idea to save on taxes. I haven't researched this too much yet, but will probably make a video about it one day in the future.

@@MoneyMarx Setting up a trust is expensive.A pty ltd is cheap and quick

Hey DeeCarli. Excellent question! The MSCI World is only focused on the Developed markets and seeing that the Developed markets outperformed the Emerging markets by quite a margin the past couple of years/decades, the MSCI World will by default yield higher returns. And if we concentrate even more on only the US markets, the S&P 500 and the Nasdaq 100 outperformed the MSCI World the past couple of years as well. This is all great to know about the past, but as we know, past performance is not a reliable indicator for future performance, so we cannot really say for sure of the US/Developed markets will continue to outperform the Emerging markets in the next decade. SA forms part of the Emerging market yes, but only about 10% I think, so if you want to get exposure to other developing countries like China, most of Asia and South America, you will have to invest in some sort of ETF with Emerging market exposure. It really depends how simple/complicated you want to make your investing strategy. If you want a simple, straightforward strategy then just go Vanguard Total World ETF. The markets do always go up in the long run, so you should be okay with this ETF. If you want to optimize returns, then you will have to use a combination of research, conviction and luck to decide which sector will perform the best in the future. With that said, you can't go wrong with the MSCI World or even the S&P500, as these are already very well diversified. It just comes down to your own preference and strategy. :)

I hear you. Thank you for your response

Hey AW. That is a good question and requires a video on its own to explain, which by the way is a great topic for one, thanks haha! But in essence, within a TFSA environment you wont pay tax on any local or offshore interest, local or offshore capital gains and local dividend withholding tax. But you will still pay tax on offshorr dividend withholding tax, which, if you are invested in the US, will be 15%. So In that case, you will only save 5% in local DWT which is not much. But over a long investment period where your investments will likely grow to a substantial amount, it is the capital gains tax that you will get klapped with when you sell your porfits. But luckily in a TFSA there is no tax payable on either offshore or local CG. And as explained in this video, rand denominated offshore ETFs do well both when the share price increase znd when the rand weakens. And based on history, the rand will most likely continue to weaken against the dollar every year. So using this reasoning, offshore ETFs should grow bigger than local ones, and thus the savings on CGT will be much higher when you do decide to sell one day. But if you are looking to score the most on DWT savings, then local ETFs will be better suited in a TFSA as then you get to save the whole 20%, not just the 5% as with offshore ETFs. I hope this makes sense haha.

@@MoneyMarx Thanks for the in depth response! All males sense. I am holding for the long haul so it is CGT that I am looking to save on the most. And personally I trust the us/world market more than the SA market so I would prefer to go more into those ETFs with a smaller portion in the SA Etfs

Dankie vir die verduideliking Pieter. Antwoord wat ek nodig gehad het.

@@MoneyMarxthis needs a whole video! Please do so?