The off-shore investing trend has recently become very popular as our economy slows and the rand continues to weaken. This is what not only wealthy people have been doing for decades, but what most people who want to grow wealth have been doing.
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Many people, including myself, are already taking advantage of the offshore investment opportunities rendered and the earning yields in strong currencies and in doing this, can build the life we want in the country we love while benefitting from first world infrastructures and investment vehicles.
If you are not a seasoned investor, here are my top tips to get you off on the road of investing:
1. Understand what type of investor you are
This is the foundation of success and you should build your investment strategy based on this understanding of yourself and your life aspirations will ensure that you invest with that clear understanding in mind.
2. Know what your criteria for investing is
Be clear on this and if investment opportunities do not fit, let it pass. Wait for the right opportunity that fits your criteria and render the yields you seek.
Related: Diversify your portfolio by investing in foreign property
3. Build partnerships and teams
The competencies of the teams sourcing the investments are very important. You need to know their understanding of the market and their expertise and how much access you have to them.
4. Cash flow vs capital gain
Your investment has to be one that is providing you good cash flow yield. Understand the capital gain after taxes.
5. Know the law
In South Africa we have exchange control laws and ensure you do not break any laws when you invest in off-shore investments.
Unless you are planning to build a substantial off-shore investment portfolio, I suggest you do it as simple as possible.
Every investment has a level of a risk. Understand the risk, the likelihood of it happening and then make your decision.
Related: The comprehensive guide to commercial real estate investing
Every investment has an underlying cost structure to pay for the people who are doing the work and manage your investment. Understand the cost structures and ensure it is in line with industry standards. Understand what responsibilities lies with you and what they (the company you invest through) are taking.
9. Develop expertise
Ultimately, if you want to be successful in anything in life, you have to put in enough hours to learn, understand and become an expert so you don’t have to blindly follow others.