{"id":3157,"date":"2020-07-26T14:42:10","date_gmt":"2020-07-26T14:42:10","guid":{"rendered":"https:\/\/thefinanceghost.com\/?p=3157"},"modified":"2020-07-26T14:42:10","modified_gmt":"2020-07-26T14:42:10","slug":"emigration-nation-should-you-get-on-the-plane","status":"publish","type":"post","link":"https:\/\/thefinanceghost.com\/index.php\/2020\/07\/26\/emigration-nation-should-you-get-on-the-plane\/","title":{"rendered":"Emigration nation: should you get on the plane?"},"content":{"rendered":"<p><span class=\"trx_addons_dropcap trx_addons_dropcap_style_2\">I<\/span>s there a more emotive topic for the South African middle class than emigration?<\/p>\n<p>We are staring down the barrel of the toughest economic times this country has faced since democracy. It makes the 2009 Global Financial Crisis look tame (the numbers don\u2019t lie: real GDP fell -1.5% in 2009 and we are expecting worse than -7% in 2020).<\/p>\n<p>When a ship is battling a terrible storm, the passengers look to the captain and leadership team for hope. Our leadership team isn\u2019t inspiring confidence in anyone right now, forcing the passengers to at least consider whether the lifeboats might be a better option.<\/p>\n<p>[the_ad id=&#8221;3223&#8243;]<\/p>\n<h4>This isn\u2019t an SA-bashing article<\/h4>\n<p>It\u2019s too easy to just say \u201cof course you should emigrate\u201d \u2013 the decision deserves far more analysis than that.<\/p>\n<p>South Africa has problems, but we are still one of the most important emerging markets in the world. There\u2019s still an S in BRICS. We are still in the G20. By no means are we some obscure country that has no relevance to global trends, junk status or otherwise.<\/p>\n<p>There is unquestionably opportunity here. Although the overall economy has been stagnant in recent years, many have still made their fortunes here.<\/p>\n<h4>This is a long article, but you need to read it carefully<\/h4>\n<p>I\u2019m going to take you through a decision process that looks at:<\/p>\n<ul class=\"trx_addons_list_success_circled\">\n<li>Mitigation of crime as the initial test<\/li>\n<li>Separation of financial and physical emigration<\/li>\n<li>How to make the physical emigration decision<\/li>\n<li>Treating the views of SA expats with some caution<\/li>\n<\/ul>\n<h4>The most important caveat to objective analysis: crime<\/h4>\n<p>I want to explain the way I think about the emigration decision and the factors I consider, but I must first touch on the most difficult issue of all: crime.<\/p>\n<p>It\u2019s not about feeling safe, because very few countries are perfectly safe. It\u2019s about feeling like you can successfully mitigate the risks.<\/p>\n<p>I moved from Joburg to Cape Town partially because of how gorgeous Cape Town is, but also because I couldn\u2019t handle the risk of violent crime happening to my family while driving between home and work. Cape Town has crime too, obviously, but the hijacking realities are a fraction of what they are in Joburg.<\/p>\n<p>I felt that hijacking is a risk I cannot mitigate and so I semi-grated, along with thousands of other Joburg families.<\/p>\n<p>Housebreakings, on the other hand, can be mitigated to a great extent by living in a secure complex. The risk is never zero, but it can be managed to an acceptable level in my opinion.<\/p>\n<p>If you feel like you cannot mitigate the risks, or you cannot live a full life in South Africa because of crime, then you can stop reading. You should be on visa application sites instead, giving yourself a shot at happiness elsewhere. I totally get it and respect that decision.<\/p>\n<h4>Separating the financial and physical decisions<\/h4>\n<p>South Africans are allowed to take R1m offshore every year without jumping through hoops and up to R10m per year with permission from the SARB and some other paperwork nightmares from SARS.<\/p>\n<p>I raise this because the vast majority of South Africans will never be at risk of not getting their money out. The exception to this would be a Zimbabwe-style liquidity crisis where the Rand literally becomes worthless in a matter of weeks, but I believe we aren\u2019t at that point.<\/p>\n<p>The Zimbabwe thesis is a frightening one though. Take a look at this Tweet I came across this week:<\/p>\n<p><img decoding=\"async\" class=\"size-full wp-image-3159 aligncenter\" src=\"https:\/\/thefinanceghost.com\/wp-content\/uploads\/2020\/07\/Screenshot_20200726_161912-e1595774353837.jpg\" alt=\"\" width=\"400\" height=\"477\" \/><\/p>\n<p>When doctors are getting food parcels from government, you need to really question what the hell is going on there.<\/p>\n<p>If I believed that we are headed for Zim status in the next 3 years, there are two things I should be doing:<\/p>\n<ol>\n<li>Selling all my fixed assets (especially my house as soon as possible)<\/li>\n<li>Shifting all my Rands into offshore investments or JSE-listed investments with offshore exposure (e.g. S&amp;P 500 ETFs)<\/li>\n<\/ol>\n<p>This is the decision to <em>financially emigrate <\/em>rather than physically emigrate. It is often the precursor to physical emigration, but isn\u2019t always.<\/p>\n<p>I&#8217;ve already switched most of my \u201cliquid exposure\u201d (shares etc.) into offshore investments though. The concept of selling the house and becoming completely liquid is currently under family discussion.<\/p>\n<p>I have a European passport, so that\u2019s also an insurance policy for now considering I have no idea which country I would even move to.<\/p>\n<p>[the_ad id=&#8221;3235&#8243;]<\/p>\n<h4>How do I make the physical decision?<\/h4>\n<p>Having already discussed the concepts of crime mitigation and financial emigration, we now need to look at the biggest decision of them all: physical emigration. This is the classic \u201cpacking for Perth\u201d except Perth isn\u2019t the usual choice anymore now that mining isn\u2019t as attractive as it once was.<\/p>\n<p>A four-quadrant decision matrix is a favourite tool for strategists. It allows you to assess four scenarios based on two variables. In this case, I believe the most important variables are:<\/p>\n<ul class=\"trx_addons_list_success_circled\">\n<li>Importance of proximity to family<\/li>\n<li>Income prospects in South Africa<\/li>\n<\/ul>\n<p>Obviously, these points are highly personal.<\/p>\n<p>Let\u2019s deal with the family point first. It\u2019s easy: you either do or do not place high importance on being close to your family and close friends. This is especially difficult when you have kids. If you\u2019re young and single and most of your friends have left anyway, then it\u2019s much easier than when you are taking your kids away from their grandparents, for example.<\/p>\n<p>The second point is trickier. Your ability to earn an income is a factor of your skills and your relationships. If you go overseas, your relationships start from scratch, so your skill set has to be fantastic and sought after in whichever country you go to.<\/p>\n<p>Let\u2019s look at the four scenarios:<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-3158\" src=\"https:\/\/thefinanceghost.com\/wp-content\/uploads\/2020\/07\/Emigration-decision-e1595773885783.png\" alt=\"\" width=\"900\" height=\"799\" \/><\/p>\n<h6>Quadrant 1: Upskill \/ change job<\/h6>\n<p>If you want to be close to family and friends but your income prospects aren\u2019t looking good, then you have to do a bit of soul searching and figure out how to upskill yourself in a new direction.<\/p>\n<p>Should you start a business? Do you need to study further? Is it time to do something completely different? This is the decision facing many of the pilots at SAA, for example. It\u2019s not a pleasant situation to be in, but the tough survive.<\/p>\n<p>In some cases, there is little choice but to emigrate. This is the most emotional emigration of the lot, as it is based on push factors rather than pull factors and you leave your family behind.<\/p>\n<h6>Quadrant 2: Do not emigrate<\/h6>\n<p>The decision to not emigrate is only clear in one quadrant. If you want to be close to family and your income prospects are strong in South Africa, then physical emigration makes no sense (unless you cannot mitigate the crime issue).<\/p>\n<p>With the right crime and financial risk mitigants in place, you can keep lighting the braai.<\/p>\n<p>Full disclosure: I think of myself as being in this quadrant currently.<\/p>\n<h6>Quadrant 3: Emigrate<\/h6>\n<p>The decision to get out is also only clear in one quadrant. With weak income prospects and your family already somewhere else, why would you logically stay here?<\/p>\n<h6>Quadrant 4: Enter the global job market<\/h6>\n<p>This quadrant is typically where professionals with global mobility find themselves. They are specialists in a specific field and can work in many different countries.<\/p>\n<p>If family isn\u2019t an issue, then these people must logically continuously seek the best possible job market for their skills.<\/p>\n<h4>Treat the views of expats with some caution<\/h4>\n<p>Ask 10 South African expats whether you should emigrate and I guarantee 8 will give you a resounding yes. Of those 8, maybe half are genuinely happy.<\/p>\n<p>South African expats don\u2019t have it easy. Whether they are willing to admit it or not, their hearts still feel something when they think about braais, biltong and Springbok world cup victories.<\/p>\n<p>Many will tell you that \u201cleaving is the best thing they ever did\u201d and \u201clife is so perfect here\u201d \u2013 which, in some cases, it is. In many cases it isn\u2019t.<\/p>\n<p>With the greatest of respect to expats, they suffer from confirmation bias and few are willing to admit it. I have enormous respect for those who are capable of giving a balanced answer.<\/p>\n<p>They so desperately NEED emigration to have been the right decision that they only look for positives in the country they\u2019ve moved to and they only focus on the negatives in their place of birth. Except when the Springboks win of course, then the expat population are the first to break out the green jerseys.<\/p>\n<p>Once you\u2019ve packed up your family and sold everything to move to a foreign land, you will seek confirmation all the time, even if you are sometimes really clutching at straws for good reasons why your life is now better.<\/p>\n<p>The human psyche is far more complex and fascinating than even the markets.<\/p>\n<h4>Final thought: this is a fluid process<\/h4>\n<p>I don\u2019t make this assessment once every 5 years. I do it almost continuously in my mind. The facts in front of us are always changing. Our country seems great one day and terrible the next.<\/p>\n<p>Whatever you do, just do everything possible to take emotion out of the decision. Consider your options objectively and calmly and you stand a much better chance of making the right decision.<\/p>\n<p>Good luck!<\/p>\n<p>[the_ad id=&#8221;3234&#8243;]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is there a more emotive topic for the South African middle class than emigration? We are staring down the barrel of the toughest economic times this country has faced since democracy. It makes the 2009 Global Financial Crisis look tame (the numbers don\u2019t lie: real GDP fell -1.5% in 2009 and we are expecting worse than -7% in 2020). When &hellip;<\/p>\n","protected":false},"author":2,"featured_media":3161,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[64,26],"tags":[233,29,25],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/posts\/3157"}],"collection":[{"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/comments?post=3157"}],"version-history":[{"count":0,"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/posts\/3157\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/media?parent=3157"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/categories?post=3157"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thefinanceghost.com\/index.php\/wp-json\/wp\/v2\/tags?post=3157"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}