Why You Shouldn’t Buy US Shares Directly If You Have R1,000 or Below (Do THIS Instead)

[00:00:00]Welcome to the Investors' Chair podcast with Ivan Explore investing, saving, and budgeting in South Africa.

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[00:00:11]Hello, wonderful people. Welcome to the Investors' Chair podcast with myself, Ivan Today's conversation is should you invest internationally directly when you have a small budget?

[00:00:25]Talking about 1,000 rand, talking about 500 rand. Should you go international into the New York Stock Market and buy shares of Tesla? Or should you find an alternative way to go international? The answer to this question, guys, is that you should not. This is my personal opinion. Go international directly when you have a small budget. Why? It's because of the fees that are associated when you go directly to the New York Stock Market to buy shares compared to when you go to the JSE. What do I mean?

[00:01:00]So, when you start investing into shares, you have to have your broker, right? Whether it's EasyEquities, BroStocks, Shift, whatever broker you are using, when you invest international, they charge a higher fee compared to when you're investing into the JSE. That's number one. Number two, guys, when you are investing international and you are in South Africa, you cannot buy directly shares of Microsoft, Tesla, uh uh uh uh uh uh uh MasterCard, whatever company it is internationally using your rand. Meaning now you must change your rand to the dollar.

[00:01:38]And with that, there is fees associated with that. And also, the value of that amount will not be that much in the dollars. So, what is the best option?

[00:01:50]When I'm saying basically in this video, I said you should not go internationally. But the keyword that I said is that you should not go internationally directly because there is a better and cheaper alternative. What is that better and cheaper alternative? It is for you as a South African using your rand to invest indirectly internationally. What do I mean? In South Africa via the JSE, we have ETF, exchange traded funds, which are like basket of shares grouped together that tracks the performance of international market. We have for example, the Nasdaq 100 which has the 100 biggest non-financial companies in the USA, right? We have the S&P 500. We have the uh the AI ETF that has all the biggest AI companies. We have the tech ETF um uh uh uh in which is listed in the JSE that tracks the biggest tech companies in the world. So, you can invest into a global market into the USA market indirectly using the JSE. So, that you don't have to to you to now have to pay so much fees to invest internationally. Your money is still in rands invested via the JSE, but that ETF tracks the performance of those international companies. So, that save you the stress of worrying about fees and forex uh exchange rates of your the currency you are using. So, that's the better alternative. So, look into a lot of these ETF that tracks the international markets, the USA markets.

[00:03:29]We even have one that tracks the Indian market. I know Satrix has it. We have one that tracks the Taiwan China market.

[00:03:36]We even have one that specifically has the Chinese biggest companies, your Alibaba, your Tencent, and the rest and the rest and the rest. So, that's a better alternative, especially if you have a short amount of money or a amount of money. If you have even a try to trade run. This is a better way for you to access international markets while still not feeling that pressure of the fees. So, guys, let me know what you think about today's episode. Until next time, be blessed.