{"id":795839,"date":"2024-10-20T15:00:00","date_gmt":"2024-10-20T13:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=795839"},"modified":"2024-10-18T16:01:26","modified_gmt":"2024-10-18T14:01:26","slug":"how-rich-south-africans-are-protecting-their-money","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/wealth\/795839\/how-rich-south-africans-are-protecting-their-money\/","title":{"rendered":"How rich South Africans are protecting their money"},"content":{"rendered":"\n

In 2024, wealthy South Africans are employing a range of strategies to safeguard and grow their wealth, especially after the past couple of years’ unstable economic and political environment. <\/p>\n\n\n\n

According to Henley & Partners<\/a>, many high-net-worth individuals (HNWIs) are increasingly seeking ways to diversify their assets and reduce exposure to local risks, which include a weakening currency, high taxation, and political uncertainties.<\/p>\n\n\n\n

One of the primary tactics is investment migration, where affluent South Africans opt for residency or citizenship through investment programs<\/strong> in countries with more stable economies, better tax regimes, and improved global mobility. <\/p>\n\n\n\n

Nations such as Portugal, Malta, and Mauritius have become popular destinations for these individuals, offering not only financial security but also a hedge against local currency depreciation\u200b. <\/p>\n\n\n\n

This global mobility allows them to protect their assets in stronger currencies and ensure access to international markets.<\/p>\n\n\n\n

However, those who choose to stay in South Africa are increasingly turning to offshore investments<\/strong>. <\/p>\n\n\n\n

A primary factor driving this offshore movement is the desire for diversification. As local markets struggle, with the Johannesburg Stock Exchange (JSE) showing weaker returns and a shrinking list of available companies, affluent investors are broadening their horizons. <\/p>\n\n\n\n

Regulatory changes, such as the South African Treasury’s decision to allow pension funds to invest up to 45% of their assets offshore, have further facilitated this trend.<\/p>\n\n\n\n

Offshore investments provide access to international sectors and industries\u2014such as technology, healthcare, and renewable energy\u2014that are not well represented locally. <\/p>\n\n\n\n

This enables them to benefit from growth opportunities not available within the South African economy, thus lowering their risk profile while gaining exposure to stronger, more diversified economies.<\/p>\n\n\n\n

Efficient Group chief economist Dawie Roodt noted<\/a> there are still many investable companies on the JSE, but investors should stick to highly liquid stocks that they can sell at short notice if needed.<\/p>\n\n\n

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Economist Dawie Roodt<\/em><\/figcaption><\/figure><\/div>\n\n\n

Furthermore, they should invest in companies that provide a rand hedge to protect them from the depreciation of the rand.<\/p>\n\n\n\n

A rand hedge stock is a company listed in South Africa that earns a significant portion of its earnings outside the country in dollars, euros, or pounds.<\/p>\n\n\n\n

Examples of these companies include Naspers, Prosus, Richemont, Anglo American, AB InBev, BHP Group, and Glencore, among others.<\/p>\n\n\n\n

Many HNWIs are also investing in international real estate<\/strong>, particularly in regions like Europe and the US, which offer stable returns and the potential for capital appreciation\u200b. <\/p>\n\n\n\n

Additionally, they are investing in stocks, bonds, and raw materials, such as gold, which have historically acted as hedges against inflation and currency devaluation. <\/p>\n\n\n\n

With the South African rand weakening, investing in precious metals like gold, silver, and platinum<\/strong> is seen as a way to preserve wealth\u200b.<\/p>\n\n\n\n

Private equity and venture capital are other avenues that South Africans are using to protect and grow their wealth. <\/p>\n\n\n\n

By investing in innovative start-ups and expanding brands, they are tapping into the global trend of growth in sectors such as technology and renewable energy. <\/p>\n\n\n\n

Philanthropy<\/strong> is also becoming a prominent tool for preserving wealth. <\/p>\n\n\n\n

Many wealthy South Africans are strategically aligning their charitable giving with long-term financial planning. <\/p>\n\n\n\n

Setting up family foundations or trusts allows them to give back to society, benefit from tax exemptions, and maintain control over resource allocation\u200b.<\/p>\n\n\n\n

These strategies underscore the broader trend of South African elites looking outward for financial security. <\/p>\n\n\n\n

With rising economic and political challenges in the country, these moves reflect a desire for safety, flexibility, and continued wealth generation, even as they navigate a challenging local landscape.<\/p>\n\n\n\n

While some rich South Africans are taking their wealth offshore to protect against local risks, they are also carefully considering how to balance international exposure with domestic opportunities.<\/p>\n\n\n\n

This complex strategy reflects both a response to current economic conditions and a forward-looking approach to wealth preservation.<\/p>\n\n\n\n

\n\n\n\n

Read: Rich South Africans beware<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

This is how high-net worth South Africans are protecting their wealth in 2024. <\/p>\n","protected":false},"author":92,"featured_media":795888,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9880],"tags":[853],"class_list":["post-795839","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wealth","tag-south-africa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/795839","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=795839"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/795839\/revisions"}],"predecessor-version":[{"id":796245,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/795839\/revisions\/796245"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/795888"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=795839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=795839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=795839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}