Emigrating To Portugal.

[Johnny2Puffs]

Got tired of working so took early retirement 2 months ago. Kids and other family members emigrated to the UK some years ago so we alone here now. My wife and I can now do our own thing and relocate where we want to.
The reason I chose Portugal is because it is 30% cheaper than South Africa for the same lifestyle we have here in Cape Town and the kids are only 2.5 hour flight away. The UK is just too expensive for us.
We don't speak Portuguese but English is a compulsory lingo at schools as it is in most of Euro. So no prob there. We do after all live in the electronic/Google age.
I don't expect any answers here but will carry on posting as if it is my blog. Some people might be interested.

 

[Tom]

that is gr8! and all your reasons are good reasons. I am going back to Germany in Feb, partially for family reasons.

 

[Johnny2Puffs]

that is gr8! and all your reasons are good reasons. I am going back to Germany in Feb, partially for family reasons.

Good for you. Keep posting your experience here for us to read. With all my research over the past year, Germany was my second choice. Strangely Germany is the most lenient of all the Euro countries for foreigners. Local tradesmen and engineers exiting more than they expected.

 

[Zodiac]

Thats so cool Johnny, new beginnings, all the best to you and your relocation

 

[CraftyZA]

All the best man! Take up surfing. amazing scene in Portugal.

 

[Johnny2Puffs]

Thanks Zodiac.
Nobody here knows me personally so here is my calculated risk.
I have no pension fund and am relying on my investments to carry us. I will be living in Portugal but my investments will be here in SA on the JSE and will have to make monthly withdrawals and transfer the money to PT.
My tax will be deducted here and no tax payable in PT as their tax system allows the total income to be split between spouses and therefore no tax. (SA tax will also be deducted as per the Double Tax Treaty).
I have just under R2M in investments and that is a bit concerning but I'm sure we can make it.

 

[Sharrivz]

All the best

 

[Johnny2Puffs]

Just checked. The factor is 4 and debatable to 5. What I mean by this is that your monthly withdrawals times 12 times 4 (or 5) must not exceed your total. Just thought I would share this. I'm borderline.

 

[Andre]

All the best. From you calculations (especially the tax deductions) seems like a prudent move. Keep us updated please.

 

[Silver]

Thanks Zodiac.
Nobody here knows me personally so here is my calculated risk.
I have no pension fund and am relying on my investments to carry us. I will be living in Portugal but my investments will be here in SA on the JSE and will have to make monthly withdrawals and transfer the money to PT.
My tax will be deducted here and no tax payable in PT as their tax system allows the total income to be split between spouses and therefore no tax. (SA tax will also be deducted as per the Double Tax Treaty).
I have just under R2M in investments and that is a bit concerning but I'm sure we can make it.

Hi @Johnny2Puffs

Wishing you all the best with your decision and hope it goes well for you. Will be great you are closer to your family.

Just wanted to ask, when you say you are invested here on the JSE - what are you invested in? I hope it's something solid?

Also, there is a risk with your strategy in that your currencies are mismatched. You will be investing and earning returns and dividends in Rands, yet your spending requirement is in Euros. That is dangerous. If the Rand were to fall, not only would your "fund" be worth less in Euros, but the dividends and other income would also be worth less.

Let me also ask you another question. How long do you plan on staying in Portugal? I assume indefinitely - or are you planning to return to SA at some point in the future? If so, when?

 

[Johnny2Puffs]

I invest in stocks on the JSE directly. Doing good so far. Yes, the ZAR has weakened but I don't expect it to go much lower. You can live like a king on R25k pm in Portugal and that is a fraction of my gains on the JSE.
Some guys on the Portugal expat forum live great on R15k and they pay rent as well.
Before the 2008/9 market crash, apartment blocks mushroomed in the south and bought up by Brits and Germans. Now thousands are back on the market and cannot be sold or rented out. Hence the low prices.
We don't intend coming back as we have nothing to come back to.
So much to do. Been busy spring cleaning to get rid of junk. Pack personal items for shipment and sell furniture, car and electronics. Travel here from Cape Town to Pretoria for my passport. Get SARS and SARB stuff sorted. Pay Exit Tax. Get banking sorted. Visa for my SA wife.
Expect to exit in March.

 

[Tom]

that so much sounds like my current agenda...just leaving in +/- 2 weeks. at least my wife's visa was sorted before xmas already, the embassy is just waiting for the final flight details.
Back to your life story. Portugal was always a beautiful place to be, mid 80's we drove 3 times nonstop to Lagos (in P, not NIG ), from Germany, the full 2700 km's. For 3 weeks in our summer vacations. But the coastline made up for the long drive! Nice waves, especially in the Sagres area.

 

[Riaz]

all the best man and goodluck

 

[Johnny2Puffs]

Thanks guys. We are going to Viana do Castelo in the north. The south is just too British with Tesco supermarkets and Brit bars.
Will be living in the old city center at the river mouth where the shops and markets are. Fish markets are my favorite. Won't need a car and the fishing spots are walking distance. Train station round the corner to travel Europe.
Don't wanna drive on the wrong side of the road yet. Will take time to get used to LHD.

 

[Silver]

Hi @Johnny2Puffs, it sounds all so exciting and sounds like you are well prepared with all your plans.

With regard to the JSE, my only advice would be to make sure you are invested in solid companies. Preserving your capital with a little bit of growth looks to be more important than trying to shoot the lights out and take too much risk.

I still stick to my original point that earning in Rands and spending in Euros is risky over the longer term. As an example, our JSE All Share index grew by about 20% in 2013. That's a fantastic performance. However, our Rand slid against the EURO by 29%. So if you were just invested in say Satrix40, you would have been down about 10% in EURO terms

On your point about the Rand not getting much weaker from here - I personally agree with that. I think it will strengthen over the next year. But it has in the past done weird things so anything is possible in the short term. Over the longer term (ie 10 years) it is likely to slowly depreciate to the EURO.

Also, I assume you have factored some inflation in Portugal into your longer term calculations.

All the best!!

 

[Johnny2Puffs]

Thanks for your concern Silver. Since 2009 I have made 380% pa or 1800% odd since 2009 but now have diversified to more moderate stocks for my retirement. Been doing this for years. I can take a 3 year drawdown and still manage to recover. Made the calculations and am confident that I will survive for many years.

 

[Silver]

Fabulous Johnny! That is truly a spectacular performance! Wish I had those kind of returns

I think I should ask you to invest for me !!

 

[Johnny2Puffs]

I would't dream of investing in Satrix40. Notoriously low gains and too cyclical. I have written instructions in my portfolio file for my wife should something happen to me. She knows nothing about investing and does not watch the stocks as I do.
As we have no steady pension, she needs to withdraw monthly from the investment gains. The most steady growing is SatrixIndi that averages about 30%+ pa and has had no deep drawdowns.
Cannot live on Satrix40 as it has had a mere 14%pa average.

 

[Johnny2Puffs]

An update. I am now well over my projected gains. Far more than I expected so I am exiting on the 28 May.
Will book the tickets as soon as I can transfer the money from the JSE.
I hope I can get my 29 bottles of juice through customs. It will take me awhile to find sellers in Portugal.
Perhaps I will should look at the old forum for Portugal or Spain.
Will keep you posted on my journey.

 

[Silver]

All the best Johnny
Wishing you a good, safe and peaceful relocation.

Do keep in touch and let us know of you find great juices on that side of the world !

 

[BhavZ]

All the best @Johnny2Puffs

 

[ET]

happy travels and may your greatest worry be running low on battery power

 

[Johnny2Puffs]

Thanks guys. My exit date is now 28 May. Booked and all. Now for SARS. I will have to pay exit tax at 33.3% of all my assets. That sucks but so be it.

 

[ET]

if it's cheaper to buy plane tickets for some of us to come visit with locally purchased diamonds, give a shout

 

[Gizmo]

Cheers Johnny wish you all the best there bud!!