The Fat Wallet Show from Just One Lap - #51: Offshore investing with Candice Paine

#51: Offshore investing with Candice Paine

Explicit content warning

06/04/17 • 63 min

The Fat Wallet Show from Just One Lap

We have long been huge fans of Candice Paine. If you are one of many who asked us about offshore investing, you’re about to become one of her fans too. In this illuminating interview, Candice explains all the different ways to take your money offshore.

I was expecting a very complicated process, but basically you can move your money into different currencies and regions from the comfort of your own bank. However, if you are determined to move money into a different country altogether, we talk about that too.

By far the scariest part of this conversation has to do with estate duties. As two of our listeners pointed out, should you die when your money is offshore, you will pay estate duties in the country where you are invested. In the USA and the UK, that is 40%. Think about that for a second. Almost half of your investment gets destroyed simply because you died - as if you had a choice!

This leads to all sorts of paperwork. Since I’m willing to do just about anything to avoid paperwork, I’m very comfortable with my offshore ETFs in my tax-free savings account.

We’ve finally reached the end of our hectic recording schedule. Life returns to normal, freeing up more time for your questions. Send them to [email protected]. I swear, if you ask me about cryptocurrencies, I’ll scream. But you can listen to a JSE Direct podcast on Bitcoin here.

Kris

This leads to all sorts of paperwork. Since I’m willing to do just about anything to avoid paperwork, I’m very comfortable with my offshore ETFs in my tax-free savings account.

Kris

Previous Episode

#50: The birthday episode

I can’t think of anything better than learning about something that piques my curiosity. It’s an incredibly powerful antidote to boredom.

Learning is easiest in environments where beginner’s mind is encouraged, which is why I’ve always been a fan of learning in secret. When you start expecting answers instead of questions, you create an expectation of mastery. With that, humility and curiosity are lost. An expectation of mastery leads to fear and inevitable failure. Perfect, complete knowledge is a myth. Learning is a life’s work.

True understanding isn’t always a by-product of learning. When learning doesn’t stem from genuine curiosity, when asking questions isn’t encouraged, when the teacher is impatient, understanding gets lost, curiosity wanes, passion for the subject matter gets snuffed out.

More than sharing information, it’s my hope that this one-year-old show will provide a framework for asking questions. I hope, by listening to this show, you will be less afraid to speak up next time something isn’t completely clear. I hope you will never be afraid to ask the same question twice. I hope we are creating a hunger for true understanding, whatever the field.

For the last year, this show and its listeners have been a source of great pride and joy for the Just One Lap team. Thank you for listening to The Fat Wallet Show.

Kris

Next Episode

#52: Can ETFs break the market?

Since Simon and I are both vocal fans of index trackers, we are often asked about the possibility that ETFs could break the market. The questions submitted by Jaco de Wet this week are questions we field often. The fear is that index trackers will become such a large part of the market that price discovery will be compromised and management won’t be held accountable due to a lack of shareholder engagement.

If you’re not completely new to the investment world, odds are you’ve heard the phrase, “Past performance is not an indication of future performance”. If you speak to someone who has been investing for a while, you’ve probably also heard them say that some market event is unlike anything they had ever seen.

While the market tends to trend higher over time, “unlikely” market events happen all the time. Think 2008, tech bubble and even the introduction of index trackers. Who saw it coming? Nobody. Why? Because the market is organic.

In its purest form, the stock market is made up of those with money to spare (investors), those raising money (companies) and the people and institutions that facilitate these transactions. While the players in the market remain constant, the conditions surrounding the lending and borrowing that occurs in the market change with the times.

If the market hadn’t adapted to the times, the JSE, which was founded in 1887 after the discovery of gold in the Witwatersrand, would be a market for gold. The introduction of ordinary listed companies didn’t break the market. The market adapted to the needs of its constituents.

The argument Simon and I try to formulate this week centers around the fact that the market isn’t static. Both markets and legislation change to reflect the needs of the times. If index trackers in their current form became so prevalent that they become major shareholders of companies, price discovery and accountability certainly will become an issue.

However, in the time it will take to get to that point in the market, the market will adapt. Legislation will adapt. Index trackers themselves will adapt. For as long as there is a market, there will be people in the market seeking profit from inefficiencies. While ETFs and other index trackers can certainly change the market the way listed companies changed the market, the market will adapt.

Kris