Investment Global And Local — Offshore Investing

It is what's involved on this Monday evening and it's proudly brought to you by Global and Local Investment in the studio with me. We've got Michael and Mauro. Good evening gentlemen. Good evening. Good evening Danny. Nice hot Monday evening and hopefully by Thursday we'll have lots of rain. It has been a little a little strange okay because I keep expecting it it gets a bit cool and I go okay maybe maybe it's autumn and then bang it comes back at you again. Anyway it's a bit like I'm hoping the economy is going to do. Come back at us again. You guys the show is brought to you by Global and Local Investment and we had such a great response last time. Initially we were going to be doing this sort of half an hour twice a month and then we were like ah we can't actually get everything across that we need to in that time. So going forward it's going to be a solid hour of you guys. We had so many questions last time. You got a lot of questions as well and we're going to be we're going to be sort of you know having a chat about a couple of those. Should we start off with the first one? Should we jump right in? Go for it. Okay so the question the first question and this is one definitely came through a couple of a couple of times is isn't it risky to invest offshore because you talk about offshore investing and I know personally I get that girl I don't know what to do you don't know how to do it. Talk to me about that. Risk is an interesting beast number one. Risk is are you wanting a return in excess of interest in a bank account? Risk is are you wanting access on your funds within a day, a year, five years? But in answer to that there are many many options. Income funds, index funds, equity funds, property funds, European funds.

There is a thousand and one options. The essence of it is to take a mix of options some no risk, some moderate and some high and to have a total overall blend where your capital isn't at risk and you have access on it. Can I add something? Yes please do. Risk in terms of offshore investments also comes in two different formats and with that there's there's opportunity to generate capital growth as well. So if you are invested in a foreign currency you have the opportunity to make or to generate growth on the on the devaluating rand but that's a risk as well because the rand could appreciate. It's probably not such a big risk really let's be honest. Well let's uh let's see what happens. That's that's the first one the second one is whatever you're invested in whichever fund of investment type what have you that has got an opportunity to grow and it's got an opportunity not to grow. So you're looking at two two of the same it's like a yin yang symbol so it's one and the same risk and opportunity. We tend to believe that like you mentioned that the the the currency will depreciate and the assets that you're invested offshore will appreciate. So you you you've in the especially in the long run you will have both those opportunities coming in but in the short run you know that's where volatility comes in and that's where the risk is greater. All right so we have it is what's involved this evening probably brought to you by Global and Local Investment.

We got the guys in the studio any questions I believe all of our bits and pieces are working digitally tonight so if you've got any questions you can SMS us on 41348 those SMS is charged at 150. Alternatively WhatsApp your questions to 084 822 0938. We're going to go off script a little bit Jeff you don't mind because something's coming somebody says but hang on now I've got my insurance broken I've got my RA and my life policy etc etc etc that's not what you guys necessarily do I mean I could use you if I had my broker and I had my little like life insurance and RA or whatever but I had some additional funds or whatever the case may be I would then come to people like you am I correct. So your normal broker would enter you into a life policy retirement annuity endowment which has a fixed term and is in rain so yeah retirement annuity you haven't access on that until 55 most other products you only have access on it within five years. With us we offer funds a fund is a specific investment type where generally you have access on it within a week and that is offshore or local. So essentially it's an addendum to what I already have and it's a way to ensure that my money does grow as well so I'm not just relying and I know and this is a personal experience you know if you get in the old days you used to have your RA and they would come there and they would say okay you're going to do this you're going to pay this much and at the end of it you're going to get $11 billion rand and that's the last you hear from the guys and when it comes to retirement age then very often you suddenly realize that that $11 billion rand number one didn't materialize and number two isn't enough. If I can add on to that I've found out that often if the client asks can I have maths what do I need at age 55 60 65 yeah we do the maths but in order to reach that number he's earning a month 25 000 and he has to invest 8 000 it's not going to work. It's what can you afford and then every year judge your return measured every year and if you can add on to it. Yeah and what I like about you guys and I did some research we were talking off air because I happen to know unbeknownst to you by the way and initially I happened to know one of your clients and I had a chat to one of your clients and they were saying to me that that in fact you guys are exactly that your advisors somebody can just talk to you and you're happy to talk to people you're not just going to go and say and I'm gonna think Michael I do that you know I need to make sure the people on the show who they say they are and you came very highly recommended by the way. It's about helping people grow their money but also giving them hope and giving them happiness isn't only about selling stuff. Yes I like it okay so we move on now because darn we got a lot of questions. Are you able to invest in multiple currencies in one investment portfolio? Yes you are. Okay so you can have multiple investments in different currencies you can have one investment in multiple currencies all depends how you feel you know if you had to ask us say which currency which offshore currency should I go into we would typically say go to the US dollar. Yeah okay but that might not be a currency that you let's say thinking okay you might prefer pounds you might prefer euros. Typically we like to focus on the bigger hard currency so dollars, pounds, euros okay sometimes Australian dollars. Why would we prefer the US dollar? Well it's very simply it is the defector world currency if you look at the amount of offshore investment funds available around the world you're talking about a great great number of US dollar based funds so that universe is greater for us to source funds from okay if you're looking for funds in in pounds or euros that universe is smaller okay. You also got to think that the US dollar is the most traded currency in the world so you're never going to find a position where you're not going to be able to find a market for your US dollars when you want to convert them back to your hands okay you probably won't ever find it with euros or pounds either but the defector world currency is dollars you know a lot of a lot of international trade is priced in dollars so it's just is the easiest currency to work in. All righty okay Michael one more quick thing and then we're gonna we're gonna have some music and come back but before we go.

So also under a currency a American dollar currency might enter might enter into

multiple other currencies so any adjustments in those come through in the American dollar. There are over 600,000 unit trusts in the world of those 90 plus percent are in dollars. Okay all right some fascinating questions obviously when guys were listening the other week they they thought long and hard about this because there's a lot of them that I recognize from here but I mean you guys also got a bunch mail to you we'll talk more about that when we come back it is what's involved proudly brought to you by global and local investment and we're talking financing we're talking investing how to do it and how to help people like you and I just get some more bang for our buck we'll be back with the guys in just a bit. What's involved proudly brought to you by global and local investments and we are chatting to Michael and Moro and just going through some of your questions from last week as I said if you got any questions 4 1 3 4 8 is the SMS line otherwise you can WhatsApp us 0 8 4 8 2 2 0 9 3 8 guys um let's just give out an email address because sometimes people would rather email you guys directly Moro what what's the best email address info at global local.co.za info at global local.co.za two L's in the middle yes the first time I googled you guys I missed I missed out the second L so it's global local it's a two separate words put together global local so it's the two L's info at global local.co.za guys I'm more than happy to answer any of your questions um so now we're talking now about offshore because that's where we started with the last time so so when you when you want to disinvest get out of your your offshore investment okay um must the funds then get paid into a local South African bank account or can I ask for it to get paid somewhere else so either so if you have an offshore phone with a company like Alan Grey RMB you ended it normally to access those funds takes about eight days working days you have to either enter into an offshore bank account in your own name in any country in the world so the butcher got England weather but it has to be in your own name alternatively you can enter it back into SA into your own bank account and you have to within a month by law have that currency changed back into rain so it allows you a chance to watch the rate so if the rate's bad and you think let me just wait a bit longer maybe I can get more rans for my dollars you have a month okay so so that okay good so if I do invest for example in an offshore living annuity does my income then get paid into my South African bank account or do I then have to do the the offshore bank again I'm just thinking now I mean you know if I go if I say to you guys listen I want to put a bunch of money out there do the offshore thing as you suggested but I want the the return or whatever to get paid into an account okay so let's let's start at the top of that the living annuity is a post retirement product where you're putting in capital that's come from a retirement annuity or a pension fund something like that provident fund okay so you can invest the underlying capital so your your your product that you're investing is the living annuity the underlying capital gets invested offshore okay okay which means any income from that gets paid locally okay so what that happens is you actually land up splitting that underlying portfolio you've got a portion in cash in rans to that pays your income here okay and the balance is invested offshore it's usually sort of 80 85 90 percent that's invested offshore the 10 percent gets used to to generate the income from here and that's kept in cash within the living annuity uh okay yeah if i can just add on that so

you spend your whole life working for a pension when you retire and you want an income off it you can have the bulk of that offshore earning and hard currency so if the rain falls you earn more but you have to have an income with it in rans that's the catch yeah okay so that's why you split it that's why you have that little pocket of money in rans okay income gets paid from there okay and every so often you will rebalance and bring in a little bit more to add to that to that rent account okay because i'm thinking a lot of people are going yeah i'm not going to get paid out my pension but if if i if i try and live on that in terms of the what the south african currency etc etc markets are doing at the moment i'm going to run out of money so would it make sense then to put some of it offshore absolutely so if you have an offshore investment earning and dollars and annual earning a year of call it five per cent and the rain falls by an equal amount a year your return the doubles okay makes sense makes sense um now another question that came in is how does global and local report the offshore investment so is it reported in rans or or the currency that you're invested in or are you going to get okay so in with most product providers you can choose or not give it to you either okay um i would say whilst you're invested think of um looking at the earnings in the offshore currency there okay because that's what it is so you've you've taken the the the range you've converted it into dollars or whatever it's now invested in that currency that's the currency that matters okay because your your whatever the value is in rans fluctuates every day yeah okay so rather look at it in in in the offshore currency because the the the random amount will only matter when you bring it back i'll tell you what when when you do this whole thing and there's foreign currency involved so um a while ago i i put a little teeny teeny teeny tiny bit of money into into um bitcoin and it just it plummeted so i sulked and i haven't looked at it and then since last year i kind of been keeping a bit of an eye on it um and it it's grown but that can terrify you if you shouldn't watch that every day you're gonna go mad i spent eight weeks doing an online course on that

2018 everybody asked me about cryptocurrencies yeah and i had to learn and understand great returns extremely high risk i was about to say that's not a low-risk investment in the west think of it as money you can afford to not have yeah yeah well that's why my little bit's there and it's just it's incredibly complicated now in my life to try and get out so it just stays there so what what we also often say to clients is cryptocurrencies are probably the way of the future but if you go back to 1998 uh 1998 2000 just before the dot com crash we knew the internet was the future we knew that this thing was going to change the world and if you go if you look back from now you'll see how how it has yeah okay you just didn't know the form it was going to before that as well you got to remember that we had all these strange companies coming to market listing their their shares and no one understood how they were going to make money and what happened too many of those came to market the market crashed and and the lot of those companies that were listed before that crash are no longer there yeah and we've got the companies that have come out of that crash the the the the alphabets and the and the and the facebooks of the world companies with proper business plans and proper ways to to generate income and profits so you you got to think of cryptos run about that thing we know it's gonna we know it's fantastic we know that we understand the technology behind it but we don't quite know what the implications are gonna of it are going to be because i think that's the secret there is it's the technology it's that blockchain technology but what is going to be done with it um another question just in show we're going because people are asking so you know that's what we're here for what happens when hyper inflation hits any currency this can happen overnight uh like in Zimbabwe where the inflation is i don't know like eleven to seven million billion four hundred and eleven point twelve percent what happens with that hyperinflation i don't understand it so so it really depends on what currency you in because right now all of the world's advanced the countries america england france wherever their in inflation rates are really the low and the odds are that they aren't going up for a while but if we speak about emerging market the countries like uh

venice well i think last year their inflation was over a million percent so if you earned a million the rand it's now worth a rand yeah so ouch that's all about spreading your risk and having currencies which if the world has a drama the odds are that currency will survive okay another question that's just coming but that is where you guys would come in i mean i give you i give you my money in good faith but you the guys that are out there watching what's happening watching global events etc etc so what works today is not going to work next year so whatever in investments you have you need to have an expert that constantly looks at the funds and adjusts them because life happens i'm not sure if this is a tongue-in-cheek question is but uh there's so many yeses um all right so this is all good and well you giving all the advice have you invested your own money in your funds can i answer that yes my opening question to everybody is whatever we offer we in and we in it for at least five years so if there is pain it hits us as well so you okay so you do absolutely otherwise why would we offer advice cannot can i add to that so if you look and this is the the sort of internal technical stuff that happens if you look at at global and local what we do is when we come across a an investment product or you know trust whatever that we're interested in we will put our analysts on it they will analyze it top to bottom who's behind it how long they've been in business da da da da okay that that that analysis is then um distributed amongst what we call our investment committee we come together every quarter or so and we and we discuss these things if it's gone through the due diligence process and we're really excited about it it's natural for us to just put our own money in it because now we now know it we know we know who's behind it we understand it yeah okay so that it's natural for us to then say okay you know this is really cool you know go back to your desk fill out an application form put your own money in so so it actually happens not by design but by default okay because because you you know who's behind it you you you know what you know what the potential is you know where the pitfalls are because we studied it okay once again gentlemen this is why we're doing in our own future because we haven't even got through half of these questions yet um one critical one that i think is important um to answer is we're talking about investing offshore if i've now got an investment an offshore investment and i pass away what happens to that money so generally it will have to be returned to south africa and rans if it is a structured product generally it is left to a individual and if that individual has an offshore bank account it can be entered into that bank account okay so i wouldn't necessarily need then a foreign executor or something not necessarily most products out of essay follow our law you would only have to have a local will okay gentlemen we're about to run out of time but somebody's just asked one last question and he's always the one last question is hi guys if one has foreign currency can one invest directly by oneself into an offshore investment account like an alan gray kind of thing yes you can okay so you could do you could do that um so if you look for example most offshore product providers they allow you to invest money coming from south africa or money that you've got offshore um it's got to be in in a recognized bank account typically in your name they would prefer it that way and then you would just fill out an application form when when you get acknowledgement that you've got an account that's open or whatever you you would just instruct your your offshore bankers to transfer the money but a vital thing they aren't allowed to offer advice so that's fine you have to pick yourself that's what i was going to ask i mean then obviously you would need to then educate yourself and and good uh good uh sort of a good deal before you do this because then once you've done it there's no real recourse no real recourse and it's all very well to invest but it's um equally important to know when to sell yeah wow okay last question okay i'm stopping now we're running out daniela's gonna shout at me now we got daniela bachelli from daniela bachelli international app next and we are talking uh we're talking social media we're two in 2020 with social media the where's the highs and the y4s your final question gentlemen thank you so much for being in here what requirements are needed legally for you to be able to trade on behalf of possible clients um he says here i see so many people offering courses etc for you for you to learn how to trade internationally and make money okay so for for us to offer advice to our clients we need to be have a license of the financial services conduct authority the old financial services board um to to be able to trade on behalf of a client you need a category two license yeah um if you have a category one license you can offer advice but you can't uh you can't enter into mandate so if you give me a mandate it means i will invest your money and i will change whatever makeup of that money how we've how we've invested that money without needing to contact you yeah okay category one license says that i will offer you advice but typically the investment is yours okay if i can split it out that way the the guys offering courses and what have you online how to trade currencies and stocks and all this kind of thing they're not giving you advice they're offering they're telling you how to do it okay okay and typically it's not that good idea to do it on your own unless you've been doing this for a long time well i mean for example i've got a mate who who trades uh who trades um currency trading um doing very well for himself and i was like dude can i give you some money and he was like no absolutely not you can't um purely because he doesn't have any of that and he's doing it for himself gentlemen thank you the questions keep coming in somebody once now just said penny and wayne want to know how do we get hold of these guys at global and local quite easily it's info at global local.co.za that's with two L's global local.co.za info at global local.co.za if you guys have got any problems if you can't if you haven't got something to write it down i'm sure you know my contact details by now i'm all over facebook or whatever you can get hold of me there this has been and what's involved proudly brought to you by the guys from global local investments you can check it out global local.co.za Michael Moro thank you so much we'll see you next month for a full hour looking forward to it thank you Thank you so much.

Goodnight.