Author Topic: Investment Strategies for Nomads  (Read 108 times)

andre

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Investment Strategies for Nomads
« on: September 22, 2017, 01:22:38 pm »
Hi guys - been lurking here for a while and I figured I'd start a thread to (hopefully) tap into the collective wisdom of this forum   :P

Im turning 45 in a few months and have long since come to the realization that we MUST make the best use of our opportunities as our lives is but a blink of the eye. Thus, by the end of next year, the wife and I plan to pack life in as we know it and start traveling full-time while were (mostly) still of sound body and mind.  ;D

I know what youre thinking. What crazy hippy crap is this?!!
Ill add more later..

Hamster

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Re: Investment Strategies for Nomads
« Reply #1 on: September 22, 2017, 02:12:21 pm »
Lucky bastids...

jaDEB

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Re: Investment Strategies for Nomads
« Reply #2 on: September 22, 2017, 02:20:13 pm »
Ditto  :mad:
jaDEB

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andre

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Re: Investment Strategies for Nomads
« Reply #3 on: September 22, 2017, 03:37:05 pm »
Lucky bastids...

 :D ;D

Everything comes at a price or sacrifice. But please - the purpose of this thread is not to be smug. I genuinely would appreciate feedback, comments and advice on my plans..  :(
Dont get the wrong idea.  Im pretty much Mr. Joe Middleclass who has always worked for a salary. No silver spoon sadly. Due to making umm.. 'lifestyle choices' we were able to save and diligently dabble in buy-to-let property over the last 20 years. (Hint: we're DINKs).  ;)
Although our property has done great - as well as provided for a reasonable rental yield we need to diversify going forward - possibly even reconsider some of the capital currently 'stuck' in property as I'm not convinced it's the best choice long term...
It gets a bit more complicated from here - the truth is that there's almost no chance of us ever returning to SA full time. Perhaps we'll come back for a short-term work contract or maybe a holiday - SA is still EXTREMELY cheap! Furthermore, this is still our base of tax residence and will be for the foreseeable future.
I should mention that although we are SA born we both also hold Italian citizenship. :-X

more to come..

Mr_Dividend

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Re: Investment Strategies for Nomads
« Reply #4 on: September 22, 2017, 04:38:38 pm »
Good man, also going to be doing the same thing.

On the financial side - would look at other countries tax systems. For me, the UK system has a lot of advantages. Will you be keeping the properties or converting into shares/REITs? Would be looking at fixing some of that income (if staying in SA) into euro's/dollars through oversea's reits.

andre

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Re: Investment Strategies for Nomads
« Reply #5 on: September 22, 2017, 06:11:59 pm »
Good man, also going to be doing the same thing.

On the financial side - would look at other countries tax systems. For me, the UK system has a lot of advantages. Will you be keeping the properties or converting into shares/REITs? Would be looking at fixing some of that income (if staying in SA) into euro's/dollars through oversea's reits.

And THIS is why I'm starting this conversation.  :TU: Tax is my biggest issue

Theoretically (according to the 4% rule anyway  ::) ) IF we structure our finances properly we should be able to travel indefinitely on our modest (but reasonable) budget.  When we pack it in we plan to liquidate everything we have down to what fits into a 45L backpack that is except for our properties and whatever we have in existing pension structures (RAs, pension funds, TFSA). I've already bitten the bullet and converted old insurance type products to low-cost products to get out of recurring payments.
I'm thinking that when we travel we should keep contributing to TFSAs.. THoughts on that?
As we will have a relatively low taxable income as we split everything between us there would be little benefit to add to other retirement structures.

As it stands now our primary source of income would be rental but thats not going to cut it in the long term. Over the next 12 months, while we both earn, I plan on moving our available discretionary funds to Europe and invest directly into a cost-effective ETF's (more on this later). By the way - as a traveler, the N26 black account seems like great value. For now, I'm sticking to the free account and can fund a DeGiro custody account from there (shout out to Patrick for his diligence  ;D

I'm definitely considering putting our primary residence on the market middle next year. Although this will make a dent in potential rental income it might be the way to go...
The question is what to do with it effectively replace the lost income...

Orca

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Re: Investment Strategies for Nomads
« Reply #6 on: September 22, 2017, 06:54:01 pm »
This is really going to be interesting tax wise. You will have to do stacks of juggling here trying to keep your tax residency in SA. Gets very complicated in this case.

In the first place EU countries.

Youre automatically resident if either:

1.You spent 183 or more days in the country in the tax year
2.Your only home was in that country - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year.

So you would have to relocate to a different country every 90 days to escape being tax resident.

If you happen to get this right then you have a further problem. SA will regard you as non resident after 183 days absence and all your properties will be regarded as a "deemed" sold at the valuation on the day you left and CGT will be payable.
Good news is that you have 5 years to pay it in yearly increments. With interest though.

More later. Beer time.

I started here with nothing and still have most of it left.

andre

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Re: Investment Strategies for Nomads
« Reply #7 on: September 22, 2017, 07:10:43 pm »
This is really going to be interesting tax wise. You will have to do stacks of juggling here trying to keep your tax residency in SA. Gets very complicated in this case.

In the first place EU countries.

Youre automatically resident if either:

1.You spent 183 or more days in the country in the tax year
2.Your only home was in that country - you must have owned, rented or lived in it for at least 91 days in total - and you spent at least 30 days there in the tax year.

So you would have to relocate to a different country every 90 days to escape being tax resident.

If you happen to get this right then you have a further problem. SA will regard you as non resident after 183 days absence and all your properties will be regarded as a "deemed" sold at the valuation on the day you left and CGT will be payable.
Good news is that you have 5 years to pay it in yearly increments. With interest though.

More later. Beer time.

Interesting info!
On the first part - we wont be spending much time in the EU first 4 years at least. Europe is last on my list and even then ..
Eventually it will happen though.

Quote
A will regard you as non resident after 183 days absence and all your properties will be regarded as a "deemed" sold at the valuation on the day you left and CGT will be payable.

Wasnt aware of this though?
I have a number of friends working offshore and they maximise their time out of country often for tax purposes. How would this affect them?
Either way perhaps this is good reason to get rid of property..

In the Cape it's wine time  8)
Enjoy the long weekend!

Orca

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Re: Investment Strategies for Nomads
« Reply #8 on: September 22, 2017, 07:39:36 pm »
Nope. I'm in Portugal. We have great wine here too.
I started here with nothing and still have most of it left.