Why go offshore????
Offshore Investing – Why Now is the Time
South Africa is currently facing an economic crisis yet again, this is nothing new to the African continent and we have been here before, there are even rumours doing the rounds that a possible recession is on the cards, our unemployment rate has gone up significantly, the political instability of recent years is at a precibus, more skilled individuals have again sought homeage in foreign territories so for now, it's a wait and see game.
With rumours of South Africa’s rating approaching junk status(yes we have been spared for the moment, but a review of things is due in 6 months.) The ever weakening Rand has been depreciating faster and faster roughly 54% against the US Dollar ($) over the last 5 years, the Sterling GBP hasn't been at this rate for over a decade.
The notion that South African economy is struggling isn’t exactly hot off the press, this has been an ongoing concern for Economists and Investors alike both locally and abroad for months now. The next 6 months are more than crucial in the determining of whether we will eventually be downgraded to junk status or not, so listening and paying attention to what's happening across all sectors is an absolute necessity. Staying informed will keep you a step ahead.
The Current State of our Nation
If you are serious about making a return on your investments, or potentially safeguarding your precious savings, you will need to come to terms with the idea that keeping your funds on our shores isn’t likely to yield the kind of growth/protection you seek. This is taking a realistic stance, given all the different variables, our current economic climate, foreign investment, the constant political turbulence and uncertainty all play a cardinal part in this assessment.
When the people or entities you trust with your future cannot (or will not) protect it in the face of disaster, you will need a backup plan. The important question here is, do you have one?
As it stands presently, South Africa contributes to just under 1% of the global GDP – possibly even less. In 2015, it was reported that the Rand was ranked the third worst performing currency for the year, and at present it shows little sign of improving. Commodities are trading at an all time low, and foreign investors are pulling out of the region, left right and centre, this downward trend is set to be seen for the foreseeable future.
In summation, by keeping your wealth on South African shores, you can open yourself up to the all the different effects that our country's political and financial instability is bringing about, this means in lamens terms that you are willing to risk a lot, with only the prospect of minimal/limited growth, to add to this we are facing a natural problem too, the drought is hindering production and almost crippling our agricultural industry. If we were to then add the effects of inflation, exorbitant taxes and an all-round volatile socio-political environment to the mix, your hard earned savings are definitely exposed to a ticking time-bomb. What could the simple solution to the perplexing situation be...going offshore. Mitigate your exposure and ensure that you have a medium to long-term strategy in mind, in finance as with most other things in life, the wheel will eventually turn and the future is uncertain, we can only do what we can to stay informed and protect ourselves against possible down-turn.
Austen Morris Associates are ideally positioned to help you navigate these murky waters to make your money work for you, instead of the other way round. Give us a call to arrange a meeting today.
+2787 470 0316