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Tourist Visa Can You Invest on a Tourist Visa? (Additional Math Question)

Discussion in 'Passports and Visas' started by Rye83, Mar 16, 2019.

  1. TheDude

    TheDude DI Forum Patron Highly Rated Poster

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    10 years and counting. :wink:

    Thanks for the discussion. Again, not trying to bag on your decisions. I would rather have a sparring partner after opening this sort of discussion over a load of likes. This sort of thing helps my own decision process as well.

    I feel like any jack@$$ can park money into a fund which has on average doubled an initial investment every 10 years and not have to mess with it for a long time. Warren Buffet himself has suggested such a plan. I would never take advice from myself, but this is very conservative and reasonable.

    Anything less than the above is what you're paying in opportunity cost.

    The only option I could see which would make sense is the SIRRV. I wouldn't want to be tasked with picking stocks though. It would be interesting to look into the full range of options. But again, if you do the math on what you are paying over the course of 20+ years and it ends up massive, then I couldn't see it being worth doing.

    Another point is that having the money to open options can be at least as valuable as the options themselves. And given lots of options, often the best course of action is to do nothing. Your brain wants you to act, to do things. This is why dealing with stocks is so hard. It's really difficult to hold yourself back from checking your portfolio and making moves. The point here is that perhaps it's best to stick that visa option in your back pocket and only pull the trigger when you think it really will make a difference.

    Side note, the SIRRV mentions services and manufacturing as possible fits for investment. I wonder if a digital nomad could create a corporation in a free economic zone and park that 75K into that corporation. Then perhaps the corporation could buy into any fund? Then just pull an income from that corporation? There are also certain perks in the free economic zone, such as a 3 year tax holiday as well as none of mixed ownership and hiring requirements.
     
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    Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    I wasn't taking it as you sh*tting on my decisions. Everyone is coming from a different situation. There are different visas for different situations.

    Yeah. Just this year my return has been nearly 11%. Of course there is no telling what could happen by the end of the year (last year my returns dropped -6% just in December). Robo-investors and fund managers do all of the leg work for their customers. It really isn't all that difficult and, as you say, any jack@$$ can dump money into a fund...so long as that jack@$$ has money to give them.

    You shouldn't be "paying" anything to "invest". The point is to make money. If I wasn't making money on my investments I wouldn't be doing it. What makes me nervous about the Philippines is the quality of education and finding a good fund manager. I have serious doubts on their ability to make wise financial decisions. A lot of research will be done into finding a good one.

    Absolutely. I am waiting on a job offer that would have me on a 6 and 6 rotation (6 weeks work - 6 weeks vacation). The SIRV visa would be a huge benefit as it would save me from a bunch of tourist visa renewals. If that job pulls through I will start to seriously consider a permanent, unlimited entry, visa.

    I noticed they have some special investment interests/investment packages available. One was power generation...which the country desperately needs.

    What you suggest for a "digital nomad" seems to be a very valid approach. I'm pretty certain they just added internet based companies to the negative list that foreigners are allowed to own a 100% share in. I'm not sure you would need to throw $75k at it, you may be able to value your business on paper to reach that number.

    There is also the SVEG visa approach: if you employ 10 Filipinos you get a permanent visa. This visa has been around for a very long time (at least 10 years), but the negative list is just now starting to catch up to make it an reasonable goal.
     
  3. TheDude

    TheDude DI Forum Patron Highly Rated Poster

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    Opportunity cost is the difference between your available options and the option you actually selected. For example, if you put cash into a bank account earning zero interest, then your opportunity cost is whatever return that money could have otherwise generated. If a jack@$$ could have made a return of X% where you made zero, then that X% is your opportunity cost. If that number is $1000 then you essentially paid $1000 for the alternative option even though each of these options were nearly free. This is why you have to be really careful that selecting plan Y is worth the opportunity cost of not selecting plan X. Do the numbers add up? If not, could you simply go with plan X and hold off on plan Y? As the saying goes, a penny saved is a penny earned.

    I know of an agency here which hires tech workers for something ridiculous like under $300 / month. You could fit everyone into something like a $500 / month office. Have a couple of people do admin stuff like talking to clients. One person to manage. The rest do development. Generating enough to pay for the entire thing shouldn't be hard. Get like 10 local college buddies and give them the "here's the deal" speech. I help you. You help me. All you have to do is generate X amount of billable hours and I'll help boost you to get started.
     
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    Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    Looking at Philippine market history, yes, it would add up. Could the market crash and never recover in my lifetime? Yeah, I suppose it could. Could a president declare martial law and freeze all bank assets in country and/or declare all the ills of the country are due to foreigners making any other visa type just as worthless? Yeah. I think they are both equally as likely to happen.

    Not with inflation. A penny saved without interest/returns is money lost...about a 3-6% loss per year in the Philippines. That penny could also lose additional value depending on how that converts into centavos. "A penny invested is a penny earned." is a better, more accurate, saying. :wink:

    No thanks. Too much work involved in paperwork, permits, regulations and management. It is, IMO, quite high risk as well.

    Again, I want reliable passive income. I don't want to actually have to work for it or stress about it (well, I worked to earn the money in the first place, now I just want to sit back, relax and collect my returns) and I certainly don't want to rely on the Filipino workforce to maintain a visa. Running a business and managing Filipino workers in the Philippines is what I imagine hell to be. I can't imagine much of anything that would be more frustrating and less rewarding.
     
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  5. IggyPop

    IggyPop DI Member Showcase Reviewer

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    With the retirement visa you don't need to have a pension, and you can also invest the deposit.

    This from the immigration website:
    1. Conversion of the requisite deposit into active investments, including purchase of condominium unit;
    I presume active investments covers the stock market for you. And if you are 50yo or older then the amount is $20k rather than 75k for an investors visa, or if you are under 50yo then the amount is 50k.
     
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    Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    I am 36. The SRRV "investment" requirement is $50k USD, not $75k (that is for the SIRV, an investor's visa). I do not consider a condo an "investment". I've seen what has happened to almost every condo complex in the Philippines. They generally age just as gracefully as a trailer park. The maintenance fees and the difficulty in selling if you want to jump ship are too much of a hassle with far too much risk of losing your investment IMO.

    Note: If your condo complex happens to be at the 60:40 Filipino:Foreigner mandatory ownership ratio when you want to sell you are going to get stuck unless you are willing to sell at a significant discount/loss to a Filipino. I also do not want to be tied down to one location in the country and I do not want to be bothered with renting to foreigners (75% of which seem to completely broke, have some mental disorder or both) or locals (no....just no).

    I have not seen anywhere where stocks are a part of the permitted SRRV "investment" requirements. If you can show me where they specifically state this then I would be very interested in learning about it.

    There is also the issue of proving that you have a pension income with the SRRV. I do not have a pension and I probably won't for the next 3-4 decades. If they consider income from military disability (which is around $420/month) and income that can be shown on a 1099INT then, yes, I meet that requirement. But what happens if that interest/investment/dividend fluctuates (as it will with market performance) and dips below the required amount? Do I lose my visa at the most inopportune time? I could go on with the "what ifs" and concerns. I know I would probably be alright...but I prepare for the worse case scenario. The SRRV is has too many moving parts and a wrench thrown at any of them could result in the whole thing to come crashing down, I'm just not interested in it.

    From what I have read the SIRV (which is not a retirement visa like the SRRV) is much less of a hassle to obtain and requires much less maintenance than an SRRV. The extra $25k investment with the SIRV is not a concern. I like the simplicity of the SIRV. $75k = visa. No $75k = no visa.
     
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  7. IggyPop

    IggyPop DI Member Showcase Reviewer

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    Sorry I didn't make myself clear. No pension is required for SRRV, if you meet the 50k term deposit.
    https://www.philembassy.no/consular-services/visa/special-resident-retirees-visa-srrv

    I dug a bit more on google and you're right only property purchase, or long term lease (at least 20 years), form "active investments" for SRRV members to convert their term deposit. Or they may simply leave it in term deposit.

    By comparison the SIRV requires 75k in a domestic corporation.

    I fail to see why SIRV is simpler than an SRRV on term deposit.

    I hear you on the condos and not wanting to be a landlord. You could however buy at a pre-sell discount and sell on completion for a profit. Then repeat.
     
    Last edited: Mar 25, 2019
  8. TheDude

    TheDude DI Forum Patron Highly Rated Poster

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    I looked into this also and it seems you would have to be nuts to buy a condo here. First, the value of the condo rests on how well it's managed...

    We can stop right there.

    Not sure it makes sense anywhere though. You still have to bankroll the upkeep of the building and AFAIK you don't own anything when the thing falls down.

    I bet a condo isn't the only option though. I have seen other mentions of a long term lease on a house and other schemes. I wonder if it would be an option to dump some cash into a well run resort / club / co-op / development project? Maybe something where you could get a share which you could just sell back into a pool and get cashed out if the thing sells. I suppose that's still like a condo, but you would be more like an investor than a tenant. Even then, it would likely be hard to get any return on it. A resort in Resort World Negros would likely be lucky to cover the overhead to run it. And you would again return to the problem of someone being able to run it competently over the long haul.

    You might talk to Gord when you get back. Philx is into all sorts of development projects. They deal with a lot of retirees, so he might have some good advice.
     
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    Rye83

    Rye83 with pastrami Secured Account Highly Rated Poster SC Connoisseur Veteran Army

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    Which also loses value with every year that passes. "Schemes" seem like a very appropriate word for the SRRV property investment option.

    There's that "work" word showing its ugly head again. Going to the Philippines on a retirement visa only to end up having to run a business...lol no thanks.

    There is absolutely nobody that could convince me to "invest" in real estate in the Philippines. If I can't own 100% of the land (and until they pass a law that directly says it is legal for foreigners to own land, you can't) then there is absolutely zero value in a lot/property to me. If you tell me that I, an unmarried foreigner, can own, not lease, a property (that means the title goes in my name and my name alone...not a partner's name, not a corporation's name) but can't produce a law, which would be an amendment to the constitution, or a Supreme Court ruling backing that claim up then you are just a smooth talking scam artist.

    I'm not saying Gord would tell me such a thing, I doubt he would. I know that if I am unwilling to lease or buy a condo then my options are nil for "owning" property in the Philippines.
     
  10. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    I agree with all you have written in various posts above concerning property ownership in the Philippines. Any sensible investment should be reasonably easy to liquidate - property here may not be so. Also, I think I read that all condos revert to the owner of the land after 50 years - if I am correct on that, then if purchased part way into to those 50 years it becomes a rapidly declining asset.

    Having found an investment route that suits you (and you have age on your side) I would consider a small investment in gold - either as physical gold or in gold mining stocks - as an insurance policy in case the world economy goes 'nipples up'.
     
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