Securing a future in 2020

TEXTILE GUY said:
You could always do what stupid us did ..... we are debt free, so, rented the house out, got a job off shore and and took a working holiday.
Nice to have $$$ rather than ZAR in my grubby paws.

Was going to be a longer term thing, but a few viruses pitched up, one Chinese, one Republican .... so looking at possibly a year in India or maybe Australia ...... see what fate dishes out.

I think sometimes we plan so much for ou dae - we forget to live.
At 40, you have time and age on your side.
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We were planning the same to be honest, just freed the house and were planning to go work overseas for a bit as a working holiday.. dont see that happening anytime soon.. was hoping to emigrate to be honest but ya hay..
 
Dames said:
Luckily I’m also living debt free at the moment -massive weight off shoulders that’s for sure! Good advice, thanks.
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same here, mrs and I are 35, house finally free.. though we have an investment property, but no real savings... basically focused on paying off the property. Now to build savings but with covid and jobs in SA, must admit have serious concerns around future....
 
cguy said:
In terms of investments - rental property is something to be careful of, but for those reasons there may be some deals. Target middle income/professional tenants (who are likely to remain employed in the current situation) and ideally don’t leverage it.

Don’t invest in volatile markets beyond your stress tolerance - equities is a relatively small part of my portfolio, but I was nevertheless having heat attacks all through March. This is just a mental health thing.

Being in SA, it’s probably best to invest globally and diversify for stability (asset classes and countries).
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I've started going far more aggressive overseas.. like 80% of funds offshore in equities, and a 20% in SA. most offshore are heavily slanted towards USA, so I had to look at funds where the underlying funds invested in other countries to give a more holistic approach towards county diversification.

I guess lets see in 10 years. lol..
 
Just based on where we currently are and our trajectory I personally took the decision a while ago to get out of all my SA investments. This isn't to say that I'm leaving SA but I thought it wise to simply not invest here any longer. Bizarrely a maxim someone shared with me which has turned out to be true is that its easier to make R20 than it is to make $1, just don't keep your R.

I stopped contributing to local RA's/pension funds despite the "supposed" tax benefit and made a point of it not to be forced by my employer to be part of a fund, an easy argument once you point out it doesn't affect your total CTC and screw the policy.

My only debt at this point is my house which I have also stopped paying additional funds in to and just let the bond run its course. Should things with expropriation without compensation progress I'll pull out all my surplus capital I have put in and move that offshore as well.

So, after all that, what do I actually do in terms of investment?

I opened a USD offshore account via my bank in which I leave the minimum amount to not have any fees. Everything I have surplus to invest goes to that account irrespective of what the exchange rate is at the time, in the long term the ZAR will most likely continue depreciating at 5-10% a year anyway.

From there my funds are split into specific index trackers such as the ones offered by Vanguard and Blackrock mongst others depending on who has the lowest fees. A nominal amount goes to international bonds. Finally on a speculative side I take up small positions in areas I think that will do well such as BioTech and Psychiatric Property.

The main thing is that my investments are fairly liquid and not exposed to the **** storm we have here.

My next step is to get an account opened unlinked to an SA bank for safety sake.
 
Kashman said:
I've started going far more aggressive overseas.. like 80% of funds offshore in equities, and a 20% in SA. most offshore are heavily slanted towards USA, so I had to look at funds where the underlying funds invested in other countries to give a more holistic approach towards county diversification.

I guess lets see in 10 years. lol..
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You are not concerned about all the money printing going on in the USA?
 
Arzy said:
The main thing is that my investments are fairly liquid and not exposed to the **** storm we have here.
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What's your opinion on the FED printing money and buying up / inflating the market during COVID?

BBSA said:
You are not concerned about all the money printing going on in the USA?
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Exactly.

Kashman said:
so I had to look at funds where the underlying funds invested in other countries to give a more holistic approach towards county diversification.
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Though this would mitigate that to some degree. You'd really need to make sure you're diversified though.

Using the US stock brokering services to invest worldwide (not just the US) seems like a good call.
 
Pretty much what @Arzy said except my “offshore” shares are still Rand denominated and invested via EE and Investec.

- I’ve recently stopped contributing to the black hole which is a South African RA
- Investments are 99% globally exposed excluding my wife’s compulsory provident fund.
- Debt is now 1x car and 1x property
- Short term still pushing money into the bond that will stop as soon as I’m comfortable that we can afford this place and another

The plan: move out of JHB. Whether that’s somewhere else in SA or emigrate I’m not sure yet.

One thing is sure though: my patriotism level is at 0 and I’m in this for my wife and I and our unborn children.

My advise to anybody would be to secure your own retirement independent of anything this ****ing government are regulating like Reg 28.
 
Hamster said:
My advise to anybody would be to secure your own retirement independent of anything this ****ing government are regulating like Reg 28.
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People have been speaking about this since last year (appropriation of pensions by gauvamint).

I agree with you, but some of the people are so heavily invested into vehicles like these that they stick their head in the sand. It is unfortunate for them, but they also still continue to contribute :unsure:.

I think it's also employers fault for making these schemes mandatory. If you have a job whereby you have to pay into a pension fund as part of your employment contract, I would reconsider the terms of your employment.

That money was originally meant to be vested on your behalf for your retirement (because not everyone saves), but if guavamint gets it right, that all becomes meaningless.

By the way we're slowly succumbing to the force of attrition. It's so slow, you don't notice it, but it is happening.
 
r4nd0m said:
I think it's also employers fault for making these schemes mandatory. If you have a job whereby you have to pay into a pension fund as part of your employment contract, I would reconsider the terms of your employment.
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I wouldn’t write it off. I have family members not in the fortunate position I’m in and live in the “now” where saving for retirement is secondary priority and even if they did save it wouldn’t be anything substantial. For them a pension is a must. At least it’s something.
 
r4nd0m said:
What's your opinion on the FED printing money and buying up / inflating the market during COVID?



Exactly.
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A very valid question and my feeling is that it's a bit of a non-issue.

There definitely is a bubble that needs to burst again and it will happen eventually. With the way the world is integrated with the US though anything that goes wrong there will affect everyone regardless.

The recovery will in all likelihood also then come from the US so you end up just riding the storm. Another old saying is that the USA sneezes and the world gets the flu.

An article earlier this week mentioned that if you exclude Naspers from the JSE Amazon, Microsoft, Google and Facebook are all individually worth more than our entire exchange. Texas alone has a bigger GDP with more individual tax payers that our entire country.
 
maumau said:
Nothing from me, nothing from anybody else so we all agree S.A. is done.
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Not necessarily done, but definitely not towards stability and prosperity for the foreseeable future. Let's be honest though, the signals and cues were present for a long time.

More like the world is a big place and South Africa is not the only economy (thankfully).

In terms of living, I still have a job here and the foundations for society still exist. We'll see how quickly that erodes day by day.
 
r4nd0m said:
Not necessarily done, but definitely not towards stability and prosperity for the foreseeable future. Let's be honest though, the signals and cues were present for a long time.

More like the world is a big place and South Africa is not the only economy (thankfully).

In terms of living, I still have a job here and the foundations for society still exist. We'll see how quickly that erodes day by day.
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My thoughts exactly. If you have a job, pleasant living conditions etc no need to rush off. However, passports up do date (for the lucky ones) any spare cash should be offshore for everyone.
 
cguy said:
In terms of investments - rental property is something to be careful of, but for those reasons there may be some deals. Target middle income/professional tenants (who are likely to remain employed in the current situation) and ideally don’t leverage it.

Don’t invest in volatile markets beyond your stress tolerance - equities is a relatively small part of my portfolio, but I was nevertheless having heat attacks all through March. This is just a mental health thing.

Being in SA, it’s probably best to invest globally and diversify for stability (asset classes and countries).
Click to expand...
I've started going far more aggressive overseas.. like 80% of funds offshore in equities, and a 20% in SA. most offshore are heavily slanted towards USA, so I had to look at funds where the underlying funds invested in other countries to give a more holistic approach towards county diversification.

I guess lets see in 10 years. lol..
BBSA said:
You are not concerned about all the money printing going on in the USA?
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Of course, but to be honest, I try not to focus on any 1 country. While stocks in general are focused more US due to it being the largest economy, I am trying to diversify at a country basis, that way if US goes through slumps, other countries like europe, china etc who remain strong can limit losses. While its not as straight forward as that due to the US economy having significant knock effects globally, diversification is one of the levers to limit the impact.

Also by country diversification, I dont lose out on opportunities in another countries, most unicorn companies are in US, but whose to say over the next 10 years, europe does not create the next multi billion dollar industries.

Obviously covid is unique, everyone took a hit so I am focusing on the long game like 20+ years...
 
maumau said:
Nobody investing locally?

Silly question but just asking.
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I am but not heavily, as I said about 80% is offshore but I still maintaining a small balanced fund and a smaller amount to pure SA equities.

I wanted to go 100% offshore, BUT I also know there might be some growth in the SA space that I just to have a little of exposure too. I will review over the next 1-2 years especially with the GDP/DEBT etc. and make a better decision.

I suspect covid will reshape most industries but to what extent or for how long I dont know. Its a gamble but I just feel maybe there maybe are some new opportunities that may arise locally as a result.
 
maumau said:
My thoughts exactly. If you have a job, pleasant living conditions etc no need to rush off. However, passports up do date (for the lucky ones) any spare cash should be offshore for everyone.
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ahh, my dillema, which vexes me greatly everyday..

I am born in SA and this is the only country I know. despite having close to no debt a house paid off, a burning desire to build financial freedom.

I dont have the means to obtain a second passport, and I cant even afford a golden visa.. I am at the mercy of SA I am afraid..
 
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