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It is “quite possible” to “State-proof or make your investments ANC-proof so that the policy decisions and the misgovernance of the country have the lowest possible impact on your investments. That is according to Brenthurst Wealth Director Magnus Heystek who shares some of his top tips with BizNews viewers. He also describes how one can put “further distance” between your assets and the ANC government, “which may or may not do funny stuff in the future with taxes and inheritance taxes, et cetera”. He gives the assurance that one does not have to be “extremely rich” to do so as even normal salaried people can build a portfolio with small amounts of money to invest where the “misgovernance and misrule of the state has the lowest impact on their returns in the long-term. – Chris Steyn
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Relevant timestamps from the interview
- 00:00 – Introductions
- 00:17 – Magnus Heystek on how to take ANC-proof your assets
- 06:04 – On the Western Cape property market
- 07:44 – On Mauritius
- 11:46 – On maintaining legality with personal finances
- 13:59 – Concludes
Highlights from the interview
It is “quite possible” to “State-proof or make your investments ANC-proof so that the policy decisions and the misgovernance of the country have the lowest possible impact on your investments.
That is according to Brenthurst Wealth Management Director Magnus Heystek who shares some of his top tips with BizNews viewers.
And the finance maestro gives the assurance that one does not have to be “extremely rich” to do so. “Even normal salaried people are now asking me, how do I build a portfolio that will look after me and my family with the least impact that the ANC might have on my investment returns. And quite simply, that’s very doable. Even with small amounts of money, you can say, right, where do I invest where the misgovernance and misrule of the state has the lowest impact on the investment returns that I can make on my long-term investments?”
Heystek says when it comes to discretionary investments, “…it’s very, very important that you choose a fund where the underlying asset class is not linked to South Africa, and companies that are being badly damaged by the ANC and the poor economy”.
Something he does recommend is “asset swaps”, an example of one being Brenthurst’s Worldwide Flexible Fund. “I’ll take your money and everybody else’s money, we’ll take your rands, we convert it into dollars, we send it across. So you’d actually invested in a global portfolio, not linked to South Africa. That’s been a superb place to put your money.”
He also warns against investing in listed property “while what is going on is carries on going on”. “The returns have been zero,” he points out.
When it comes to buying residential property in South Africa “while the ANC is in power”, Heystek says to “forget about buying a property while the economy is being mismanaged” and rather rent instead.
He warns: “You won’t make money because you haven’t made money in the last 10 to 15 years. In fact, the residential property market, barring the Western Cape, has been an absolute disaster.”
However, he does have a note of caution for Western Cape property owners as well. “As long as the DA (Democratic Alliance) is in charge of the Western Cape, I’m still fairly comfortable to recommend buying property in the Western Cape, but watch the dynamics and watch the demographic trends in South Africa, and of course the crime trends in the Western Cape, which is a major negative. Make no doubt about it. Property prices are good and solid, but the crime situation in the Western Cape, in certain parts really is a major concern. So crime can spoil this party, so be very careful about that as well.”
As for investing in property abroad, Heystek says the “principle is try and structure something away from South Africa in a perfectly legitimate manner to reduce your taxes”.
“You don’t have to buy property to get permanent residency in Mauritius. You can do it via a retirement visa for anybody over 50. That’s become very popular. So you simply apply for the permanent visa over 50, and you can come and go as much as you long, provided you bring onto the island $18,000 a year. But that’s money that you can spend. It’s not money that you have to invest or tie down. Property is still is an avenue for wealthy people.”
For those who already have assets abroad, Heystek suggests moving those into a trust in Mauritius. “Again, putting further distance between your assets and an ANC government, which may or may not do funny stuff in the future with taxes and inheritance taxes, et cetera.
“So a lot of smart people have used Mauritius as a base to structure their affairs, set up trusts. They’ve got residency on the island. They’ve set up companies. They’re paying 15% tax, if at all. And it’s perfectly legitimate. So there’s a very large and a very nice community of South Africans on the island. Some parts of the island where we have a little flat, they call, well, it’s an area of Black River. They call it the Boere Monaco because there’s so many Afrikaans speaking people there and South Africans… So it’s actually don’t feel like you’re away from home.”
Overall, Heystek says, if possible, people should look at legal ways to structure their personal affairs to look after themselves and their families “and forget about these pro-patriotic arguments of we are Bittereinders and as we’ll stay till the end days”.
“…that kind of story has fallen away. People realise how much damage the ANC has done to personal wealth. I mean, the Rand is an example. That’s dropped by 57% over the last 10 years. Property prices have been one of the worst in the year. And our stock market has been a very poor performer over 15 years now. And if you look at the comparative returns, local versus offshore, somebody who took money offshore 10, 15 years ago, far better off than someone who did not take money offshore. Doesn’t mean you want to emigrate. I mean, I structured my affairs because I don’t want to emigrate, but I don’t want to become poor along with everybody else who hangs onto their poor investments when there are perfectly legitimate and legal avenues out there to do better.”
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