The world is changing fast and to keep up you need local knowledge with global context.
You’ve done everything you were told to do. You’ve got no debt – if you do, you’re paying it as quickly as you can – and you save a decent chunk of your salary/wages. You budget wisely, too, never going over the stipulated amount. You’ve even invested some money onto the stock market, in the hopes that one day you’ll be handsomely rewarded.
Alright, but now what? In my age group (and I’m very guilty of this) there’s a desire for instant gratification. For example, when I first signed up on EasyEquities, I would check my portfolio every five minutes. Frustration ensued when nothing happened. Rage followed with every dip and pure elation with every high.
Being the rather impatient person that I am, I’d either want to, depending on what my stocks were doing, sell and cut my losses or sell and take my profits. Thankfully, I’ve grown since then and can now understand the importance of patience – particularly when it comes to investing and saving for your future. Patience allows you to keep going even though you don’t see immediate results.
While it may be frustrating and tough to save money in the long run, I was reminded of the words once uttered by 19th century businessman, P.T Barnum:
Money is a terrible master but an excellent servant.
As with everything, the above saying can be interpreted in numerous ways. Personally, I see it as advice to save, remain patient and be rewarded in the future by your hard work. Yes, it’s easy to squander your cash and spend frivolously, but as the years go by, you find yourself relying on money just to survive – not as a tool to make your life easier.
It helps to visualise your long-term goals and achieving them. This takes the fixation of the money itself and displaces it on the dream. Remembering why you’re sacrificing and saving is what will get you to the finish line. Whether it’s for a comfortable retirement, dream holiday or family home, remembering what the pay off is will be motivation enough. If you find it difficult to save, set up a debit order for your savings – in other words, pay yourself first.
Of course, there are many in SA right now who can’t afford to do this, sticking to strict budgets. To you I say, invest what you have left over and save what you can. The debit order or direct deposit method works for those who perhaps fear they may send the money if it’s there. This also makes it a habit.
Yes, it’s tough to save – but remember, it’s also a privilege. You’re in a position to put money away for your future. What you choose to do is up to you.
Last week, I asked you to send me your finance and investment queries. Here, Iniel van Zyl* of Brenthurst Wealth Management shares expert advice by providing answers to your questions.
How do I invest in overseas companies? My interests are mainly tech and countries like Australia, Japan and Canada. If you can advise me on what my options are and where to get the information on the companies to invest in I will appreciate it.
Investing in offshore companies is a multi-step process and can be conducted in the following ways:
By directly taking your cash offshore and investing the funds in the desired offshore companies by way of a direct share portfolio or unit trust investment structure.
Authorised online investment platforms such as EasyEquities and Plus500 offers investors an alternative to manage their own offshore share portfolios by converting Rands to US Dollars through an Inter-Account Transfer / EasyFX feature and using the converted Dollars to invest directly in offshore companies.
South Africans are only permitted to take a maximum of R10 million a year offshore per taxpaying individual if granted tax clearance by SARS. Without the required tax clearance, a taxpaying individual may only commute a maximum of R1 million offshore per calendar year.
Indirectly by investing in foreign rand-denominated funds through asset swaps or exchange traded funds. There are various authorised Financial Services Providers such as certain investment companies, banks and online trading platforms in South Africa that offers offshore unit trust or ETF investments. With these investments, the funds are priced in Rands, however, the capital is invested offshore, which provides a diversification of offshore exposure to desired companies and sectors.
By following this route, one is not obliged to obtain a tax clearance certificate from SARS in order to invest in these funds as your investment is made in Rand and paid out in Rand upon being disinvested.
Investing offshore requires careful consideration and is best to consult with a qualified financial planner and to conduct your own rigorous web research in order to make a well-informed decision.
Read more about offshore investing.
Have a question about share investing? Write to me at [email protected].
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