One of the most common investment questions South Africans ask is:
“How much of my money should I keep locally, and how much should I invest offshore?”
Is it 50/50?
60/40?
70% offshore?
There is no universal percentage that works for everyone. But there is a much better starting point.
Start with your lifestyle, not the investment
Before asking:
“Where should I invest?”
Ask:
“What life must this money fund?”
That question changes everything.
It is also the heart of the debate we explored through our two fictional investors, Local Louie and Offshore Oscar.
Louie believes South Africa is home. His expenses are in rand, his property is here and much of his lifestyle is funded locally.
Oscar thinks more globally. He travels, worries about long-term currency depreciation and wants part of his wealth earning and compounding in pounds, dollars or euros.
Who is right?
Potentially, both.
Because the answer depends less on ideology and more on what each investor needs their money to do.
Match your spending patterns to your lifestyle
If you live in South Africa, your everyday expenses are primarily rand liabilities. Your groceries, rates, electricity, medical aid and much of your discretionary spending happen locally.
It therefore makes sense to retain sufficient local assets and income to fund that lifestyle. But many South Africans also have international spending needs.
Travel.
Overseas education.
Imported goods.
Healthcare abroad.
Children living offshore.
Possible future relocation.
Retirement spending outside South Africa.
Those are effectively hard-currency liabilities.
That leads to a simple principle:
Match part of your assets and income to the currencies in which you expect to spend.
That is where the local/offshore discussion becomes far more useful.
A 14% return is not always the same 14%
In our Local Louie and Offshore Oscar comparisons, we deliberately used the same headline return.
Louie earns 14% in rand.
Oscar earns 14% in hard currency.
At first glance, they look equal. But headline return is only one part of the story.
You must also consider:
Currency. Inflation. Risk. Liquidity. Term. Capital protection. And purchasing power.
If the rand depreciates over time, Oscar’s hard-currency income could translate into significantly greater rand purchasing power.
But Oscar is not automatically the winner.
If most of his future expenses remain in South Africa, he still needs local liquidity and rand income.
So the better question is not:
“What return did I earn?”
It is:
“What will that return allow me to buy five or ten years from now?”
That is the real test.
So, is there a formula?
Not a rigid percentage. But there is a framework. At Quality Group, we believe capital should be divided according to the job it must perform.
Think of your portfolio in four buckets:
- Local lifestyle capital
Money required for South African expenses, commitments and short-term liquidity. - Offshore lifestyle capital
Assets intended to preserve international purchasing power and fund future hard-currency expenditure. - Predictable-income capital
Assets designed to generate regular cashflow, including appropriately selected local Prime-Linked and international Fixed Return alternatives. - Growth and legacy capital
Longer-term capital intended to compound, diversify and build wealth for the next generation.
Once you define those needs, your local/offshore balance starts becoming much clearer.
The hidden risk of accidental concentration
Many South Africans are more concentrated locally than they realise.
Their home is here.
Their business is here.
Their pension is here.
Their salary is earned here.
Then most of their investments are also denominated in rand.
That creates dependence on one economy, one currency and one outcome.
Offshore investing is therefore not about predicting disaster.
It is about diversification.
But taking everything offshore purely because one fears the rand can create a different imbalance.
Balance remains the objective.
Louie and Oscar need each other
The real lesson is not that Local Louie is wrong and Offshore Oscar is right.
It is that each sees something the other may miss.
Louie reminds Oscar that money must fund life today.
Oscar reminds Louie that purchasing power tomorrow matters just as much.
The more intelligent strategy is therefore not:
Local OR offshore.
It is:
Local AND offshore, deliberately balanced around the life your money is expected to fund.
There may be no magic 60/40 or 70/30 formula.
But there is a practical one:
Start with the lifestyle. Define the currencies. Identify the income needs. Protect purchasing power. Then allocate the capital.
At Quality Group, we believe every investment should have a job.
Some capital must provide income.
Some must protect purchasing power.
Some must remain liquid.
Some must grow.
And some should build the family wealth that outlives us. Generational wealth
So perhaps the most important question is not:
“How much local and how much offshore?”
It is:
“If my portfolio looks exactly the same ten years from now, will it still fund the lifestyle I am protecting today?”
Because ultimately,
How we invest … is how we live.
Lifestyle → Currency → Income → Purchasing Power → Allocation.
