Author Topic: Investment Strategies for Nomads  (Read 6421 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.

Moneypenny

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Re: Investment Strategies for Nomads
« Reply #9 on: September 27, 2017, 08:27:39 am »
... 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.

I like your thinking, good luck. :TU:

Orca

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Re: Investment Strategies for Nomads
« Reply #10 on: September 27, 2017, 07:55:45 pm »
Here is why you should duck.

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

Orca

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Re: Investment Strategies for Nomads
« Reply #11 on: September 27, 2017, 09:12:15 pm »
Or did you money go to this place? Sorry Andre, couldn't resists and please carry on with your blog.
« Last Edit: September 27, 2017, 09:21:56 pm by Orca »
I started here with nothing and still have most of it left.

Patrick

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Re: Investment Strategies for Nomads
« Reply #12 on: September 28, 2017, 01:57:39 am »
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..
Actually I'm thinking me too! This is exactly what I plan to be doing in a few years time. I'm sitting typing this in Lisbon, where my wife and I have spent the last few days walking and cycling all around the city. Wonderfully, the biggest worry we've had is that we don't slip on the polished mosaic pavement. A pleasant change from whether we'll be mugged in the 300m between the gym and our apartment, or if the lights will stay on for all of next month (9 days without power in the last 30).

There's a lot to see in this world, and I hope to explore as much as possible before I need plastic hips and blood pressure medicine!

Though I must mention one interesting thing we noticed in the local travel agencies. They have cheap offers for pretty much all of Europe and the west, but their most exotic and expensive trip is a combo trip to Kruger park and Mozambique! Everyone we speak to is in awe that we've been to those places. The pot of gold always seems to be at the opposite end of the rainbow.

Moneypenny

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Re: Investment Strategies for Nomads
« Reply #13 on: September 28, 2017, 10:14:33 am »
A The pot of gold always seems to be at the opposite end of the rainbow.

So true.  We had a quick vacay in Moz last month for my bday and as soon as you leave the resort/coast line youre just thinking "Lets get out of here" same with Lesotho and Madagascar.  Most of the holidays abroad Ive kind of expected more than what it delivered, Eiffel Tower was impressive but I hated the graffiti and spitting in the streets, Portugal was okay-ish & Spain (loved the jamon) was fun, Stonehenge was uhhmm dare I say it - small - but I loved Sherwood Forrest.  Switzerland (Jungfrau-region), Italian Alps (Treviso), Germany/Belgium, Mauritius were beautiful and delivered more than expected.  Amsterdam was a total disaster, you can just say so many times, no Im not interested in what youre selling but still interesting to see what people consider as fetishes and fun.  Egypt was interesting, might have had a little something to do with the fact that our guide sneaked us right below into one of the pyramids into a restricted burial chamber.  I must admit I was thinking "they are going to bury us there and no one will ever know" also thought "so be it what a nice place to rest and future archaeologist will have a field day trying to figure out what our bones are doing there and how we fit into the royal picture."  Riding camels were also fun. Best of all for me was Scotland, what a stunning place. I can go on forever, traveling basically my number one interest. Ill stop now.  The point being, you cannot put a price on an experience. Its all good in the end, just go and explore! 

bw

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Re: Investment Strategies for Nomads
« Reply #14 on: October 17, 2017, 11:22:00 am »
I love the topic...

excerpt from a book ' the gypsy in me'
Solo travel has a peculiar power for those of us who are suited to it. Along with the discovery of one's own true nature and the opportunities to express it comes a corresponding freedom to think thoughts that may be considered odd, threatening, even reprehensible and lunatic, by ones familiar acquaintances. It is perfectly natural that prophets should come out the wilderness bearing revelations, but all prophets are not created equal. Some are giants, some are mediocre, some are of piddling stature, and some are nuts. The difficulty is that neither they nor those that receive there proclamations can really tell untill much later.

Mine is not pure asceticism of a single-handed yachtsman or a Saint-Exupery.There is no lack of people in my journeys, and they are my principal interest. Nor am I a dispassionate voyeur peering into other peoples lives. Strong connections are formed rapidly, and they nourish me. What distinguishes them from my relationships with friends and family at home is the absence of those expectations which I find burdensome and restrictive, demanding that I behave in certain predictable ways. These emotionable transactions trade too heavily on guilt and obligation for my taste. When I travel alone, I experience a sense of freedom that occasionally comes close to ecstasy.

The physical freedom is an important element - the ability to stay or go as one pleases, to follow whatever the inner voice suggests, is a rare luxury in most lives, and there must be many who have never allowed themselves to experience that inner-directedness -- the compass in the heart. More valuable to me even than that is the freedom to be whoever and whatever you feel yourself to be rather than having to conform to the patterns that others are accustomed to expect. "