Investing – Wealth Migrate

Wealth Migrate: Know Your Client (KYC) Process And Its Importance

Blog, Company, Investing, Investor Basics, Knowledge Base, Portfolio, Resources, Uncategorized / Wealth Migrate

As an investor you want the peace of mind to know that any financial transactions you complete on the Wealth Migrate platform are secure and comply with all necessary legal regulations. It’s for this reason that Wealth Migrate requires you to complete the Know your client (KYC) process before you can officially start crowdfunding real estate and structured note investments online.

KYC is an important part of the trust-building process between Wealth Migrate and its investors, as it allows potential investors to identify and verify themselves.¹ This is the first step in Wealth Migrate’s due diligence process which ensures that not only do our investors have peace of mind with their financial transactions, but that Wealth Migrate is a licenced company that upholds the laws applicable to its business and investors. On behalf of the company, it also needs to ensure it’s not dealing with investors that may be involved in illegal activities such as money laundering or fraud.²

A crucial part of this process is by aggregating our global investors into a compliant special purpose vehicle (SPV) to create an investment network. This system screens and regulates against anti-money laundering (AML) and know your client (KYC) processes upon member registration. The financial transaction system handles all payments from investors and distributions back to investors. With America’s strict countenance on counter-terrorism and anti-fraud laws, Wealth Migrate isn’t prepared to accept the risks of investors from the United States of America.

Additionally, Wealth Migrate has a valid Category 1 licence (FSP 47394) as granted by the Financial Services Conduct Authority, and this licence allows Wealth Migrate to provide its crowdfunding offering on an intermediary services basis using shares as a financial product category.³ The company is therefore held liable by the Financial Services Conduct Authority for complying with laws regarding its financial transactions.

The KYC onboarding process is therefore a significant step to reduce the potential risks for both parties and ensure that the company and its investors are interacting in a trustworthy manner.⁴ The company is taking due care to ensure that the potential investor is who they claim to be and is using funds obtained legally for a legitimate purpose. This also works in the favour of an investor as the company must uphold its duties and responsibilities as well as provide transparency about its business as a licenced financial services provider.

What information is needed to KYC?

Some basic information is needed to ensure the investor’s identity is correct such as their full name, date of birth address and identification number. The documentation for submission needs to provide proof of the person’s identity, place of residence, and the funds for investment.⁵

Typical documents include:⁶

A driver’s licence
A passport
An identity document
Utility statements for a mobile phone, electricity, or water
Rental contract
Bank statements

How to KYC on the Wealth Migrate platform

We’ve made this process easier and simpler as all the documentation can be submitted online. Investors will firstly need to sign up and create an account on Wealth Migrate and then undergo the KYC process. Within three days from submission, the KYC Team will do a preliminary cross-reference check and provide feedback via e-mail.

Follow these steps to achieve a successful KYC process:

Step one:

Create your investor account – register with your chosen e-mail address and password.

Country of residence – select the country on the drop-down menu.

Select your investor category – click on the type of investor profile that suits your investment style.

Step two:

You will be required to upload the following documents:

Two forms of identification including the front and back of:
- a driver’s licence
- an ID card
- and/or a colour copy of your valid passport

A recent proof of address, no older than three months of either:
- a utility bill,
- a rates and taxes bill or Council Tax bill
- a mobile phone statement

Bank statements will not be accepted as proof of address
A full-page bank statement, no older than three months

Step three:

You will receive an automated e-mail once your profile has been verified.

Your KYC status will display as ‘approved’ on your profile.

We’ve also made some visual guides available as a downloadable PDF or video to help our members with this process so that they can start investing with ease. Download our thorough step-by-step guide here for an in-depth overview of the KYC process or view our quick “How to KYC” tutorial video here.

Explore the investment deals available on Wealth Migrate’s Fintech platform and use these visual tutorials as a guide on your wealth creation journey – click here to learn how to invest, and learn to understand and interpret your investment portfolio, here.

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A simple understanding of macroeconomic factors for investors

Blog, Document Guidelines, Investing, Knowledge Base, Online Investment, Real Estate, Real Estate Investment, Resources, Uncategorized / Wealth Migrate

Determining the interest rate, inflation, and platform returns

Wealth Migrate’s FinTech platform means investing in offshore real estate is more accessible and convenient, your wealth isn’t tied up in red tape with our global compliance processes. We’ve enabled a method to create wealth that doesn’t involve hidden fees or extra intermediaries.

All investors learn a new language when it comes to creating wealth by understanding how markets work, and in this way, macroeconomics is a crucial part of learning to invest. Macroeconomics is broadly defined by The Economic Times as the “branch of economics that studies the behaviour and performance of an economy as a whole.” ^[1]

What is inflation?

The quantity theory of money holds that “money supply and price level in an economy are in direct proportion to one another.”^[2] These two factors exist in a seesaw effect, where if the money supply is too big, purchase power decreases and prices rise. Therefore, inflation deals with the supply of money in an economy, relying on purchasing power and the rise in prices.

Inflation measures how much more expensive goods and services have become over time.^[3] This is determined during a defined period and is typically set to 12 months. It’s a measurement of the average rate of increase in prices or the cost of living over a defined period, where inflation refers to prices on the rise.

For the households in a country, the cost of living is determined by the price of basic goods and services that each person needs to pay for, this includes housing, food, taxes, and healthcare.^[4] The cost of this basket is known as the consumer price index (CPI), which tracks the change in prices.

Consumer price inflation is the rate of change in the CPI over a set period and is the most common measure of inflation.^[5] For example, if the base year CPI is 100 and in 2021 the existing CPI is 110, CPI inflation for 2021 would be 10%.

How does the interest rate work?

Raising or lowering inflation has an inverse effect on the base interest rate and depending on the action taken, this can either boost savings or spending.^[6] This is a simplistic explanation of how inflation influences the interest rate as other factors may also play a role in macroeconomics. The increase or decrease of the interest rate affects the economy in a variety of ways but specifically in the cost of borrowing for commercial banks.

What happens when the interest rate increases?^[7]

This raises the cost of borrowing for commercial banks and results in the banks upping their own interest rates, which encourages the population to save and gain higher returns with the cost of borrowing becoming expensive. The knock-on effect of lowering spending in an economy causes economic growth to slow. With more cash held in bank accounts and less being spent, money supply tightens and demand for goods drops – a lower demand for goods should make them cheaper, lowering inflation.

What happens when the interest rate decreases?^[8]

This drops the cost of borrowing for commercial banks and results in the banks reducing their own interest rates. The knock-on effect is that interest rates on both savings accounts and loans are low, making borrowing and spending appealing, but not saving. It causes economic growth by widening money supply and increasing spending on goods and services – a higher demand for goods should make them more expensive, increasing inflation.

How does a platform return work?

Everything you need to know before investing is on the deal itself in the meta-marketplace. When browsing through the deal be sure to view the deal overview as this contains our recorded webinar with specific details from our team, as well as the investment summary, market summary and risk category.

When you invest in one of our deals there is also an initiation fee cost. All our deals transparently display the fee charges, and the investment will take this into account and inform you of what this charge is.

Here’s a breakdown of our fee structure:

Initiation fee: An upfront fee charged at the start of the investment covering the costs of sourcing and due diligence for the deal and setting up the deal-specific legal structure that enables global investors compliant access to the deal through the most tax-efficient structure.
Success fee: A percentage-based fee only charged on profitable dividends or interest to cover ongoing costs of the legal structures. If the deal is not profitable, these costs are covered at risk by our marketplace.
Capital gain success fee: A percentage-based fee only charged on profitable gains. This fee is how we make money, by only getting a reward on successful deals and ensuring our interests are aligned with our investors.

When you browse a deal on our marketplace the projected returns calculator takes your initial investment amount (generally $97 USD) and includes the initiation fee.

To give you an estimate of the projected return for the investment, the calculator will include the average for the following factors (if applicable):

Cash flow percentage
Annual dividends or interest
10% success fee
Return of capital
Capital gain
Capital gain success fee
Projected cash-on-cash return
Projected internal rate of return

For example, this is what one of our investment deals, BNP US Equity Memory Profit Autocall (Shariah Compliant) March 2022, will yield in platform returns when you invest $97 (USD). The image below is how all the projected returns are broken down for each individual investment on our meta-marketplace.

This quick overview of investing belongs to an educational series that we provide to our investors. For more information, view further articles on our blog that cover how to invest in Wealth Migrate’s platform, and how our processes protect your information and financial transactions.

^[1] The Economic Times (March 2022). ‘Definition of macroeconomics?’. Retrieved from The Economic Times.
^[2] The Economic Times. (March 2022). ‘Definition of quantity theory of money?’. Retrieved from The Economic Times.
^[3] Smialek, J. (January 2022). ‘Inflation has arrived. Here’s what you need to know.’ Retrieved from The New York Times.
^[4] Banton, C. (March 2021). ‘Cost of living definition’. Retrieved from Investopedia.
^[5] Oner, C. (2022). ‘Inflation: prices on the rise’. Retrieved from International Monetary Fund.
^[6] U. S. Wealth Management. (March 2022). ‘How do interest rates affect investments?’. Retrieved from U. S. Bank.
^[7]Wessel, D., and Powell, T. (November 2020). ‘What are inflation expectations? Why do they matter?’. Retrieved from Brookings.
^[8]Wessel, D., and Powell, T. (November 2020). ‘What are inflation expectations? Why do they matter?’. Retrieved from Brookings.

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Understanding the role of a sponsor in commercial real estate

Investing, Investing, Investor Basics, Uncategorized, Using Wealth Migrate / Wealth Migrate

For anyone interested in investing in commercial real estate, it is important to understand the roles of the parties involved. The sponsor plays an active part in the success of the investment, while the investor has a more passive role.

A sponsor is responsible for “finding, acquiring, managing, and eventually disposing of real estate property on behalf of the partnership ^[1] Sponsors own the property, run day-to-day operations, oversee the transactions, raise money from investors, and are accountable for the mortgage of the property.^[2] Due to the wide scope of responsibility, selecting the sponsor with credible experience and a successful track record is critical for the well-being.^[3]

Wealth Migrate vets our sponsors in our marketplace in accordance with all security and legal compliance checks. This responsibility on our part makes it easier for our investors to focus on the process of investing.

We evaluate our sponsors according to the check list below:^[4]

How much experience does the sponsor have in the local marketing and that asset class?
Have any of the sponsor’s development projects failed to meet expectations?
How capable is the sponsor in evaluating risks?
How does the sponsor identify other equity investors and secure debt?
What systems does the sponsor have in place to ensure proper management of the project?

The sponsor is mainly responsible for the performance of the property as well as financial reporting, making payments to investors, and preparing tax statements during the tax season.^[5] As the time and cost involved that goes into preparing to acquire a deal is quite substantial, an acquisition fee is usually charged to cover costs and compensate sponsors for their work.

Sponsors make money with an acquisition fee, through ownership in a deal that ranges from 5%-10% in total equity, and annual asset management fees.^[6] Sponsors are also incentivised by performance with a promote structure and preferred return.^[7] This means that an investor is guaranteed a full return of their initial investment amount for a preferred return.

Due to the importance of the sponsor, individual investors will ordinarily have to thoroughly research a potential sponsor. A sponsor must be trusted, have credibility, a proven track record, connections to right financing and equity relationships, and other expertise in operations and management. In terms of Wealth Migrate’s service offering, our investors can trust that we have performed the required due diligence before we partner with any of our sponsors.

^[1] Kennedy, K. (March 2019). ‘The Importance of a reputable property investment sponsor’. Retrieved from LinkedIn.
^[2] McKenna, R. (May 2019). ‘ Insider’s guide to vetting a commercial real estate sponsor ‘. Retrieved from BiggerPockets.
^[3] McKenna, R. (May 2019). ‘ Insider’s guide to vetting a commercial real estate sponsor ‘. Retrieved from BiggerPockets.
^[4] Robinson, D. (July 2019). ‘ Real estate sponsorship and sponsor equity: The key to selecting a great sponsor’. Retrieved from Black Collie Capital.
^[5] Kennedy, K. (March 2019). ‘The Importance of a reputable property investment sponsor’. Retrieved from LinkedIn.
^[6] Frankel, M. (February 2021). ‘ What is sponsor promote in real estate? ‘. Retrieved from Millionacres.
^[7] Frankel, M. (February 2021). ‘ What is sponsor promote in real estate? ‘. Retrieved from Millionacres.

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Diversification: The Strategy of Numbers

Investing, Investor Basics, Knowledge Base, Portfolio, Uncategorized / Wealth Migrate

Diversification is important to investors as it is a way of balancing risks and rewards. Allocating capital into a variety of assets lowers risk exposure. Rather than concentrating money into a single company, industry or asset class, investors can diversify their investments across a range of different companies, industries, and asset classes.¹

Risk minimisation and increasing opportunities for success

The risk of not following a diversification strategy is high; instead of placing all your hopes on a sole investment, dividing your funds across all assets is the smarter strategy. To put it more simply, don’t put all your eggs into one basket as an investor.

Respected global financial expert Ray Dalio has this advice for investors to reduce risks without reducing expected returns. “Diversify between currencies, asset classes, and countries as the best way to reduce risk without reducing opportunity.”² According to my own research, this advice should ideally include partners as well, I describe this in example three with reference to a single company.

He goes on further to explain this strategy in detail and calls this the holy grail of investing. He advises that investors, “Need 15 uncorrelated bets, an array of attractive assets that don’t move in tandem, reduce risk by 80% and risk/return ratio increases by a factor of 5!”³

No idea what that means? You’re not alone.

Arguably diversification is such a simple term and yet it is such a complex thing to implement in your financial planning,⁴ let’s unpack what Dalio means by analysing a few real-life investment examples I’ve come across.

Implementing diversification in financial planning

A homeowner is advised by his financial advisor to pay off his house first before he starts investing. He lives in an emerging market like South Africa, so he continues to pay down his mortgage on his home. He is entirely exposed to South Africa’s weakening economy and its volatile currency, which depreciates statistically by 6% a year against the US Dollar.

The result:
All his wealth is tied up in one: asset, country, currency, and partner. He isn’t making any money while he sleeps, and this is a classic situation where an investor has ‘all their eggs in one basket.’ ⁵

An investor flies to London and buys an apartment to try diversifying their investment portfolio, it is an affordable apartment for London, and it costs £500,000. They apply for and receive a 60% mortgage (loan-to-value) from the bank, and with the deposit and costs, they still need £225,000 in cash (about $300,000 USD). It is a one-bedroom apartment, and the investor needs to arrange for a rental management partner to find a long-term tenant to earn an income on the property.

The result:
This investor also has most of their eggs in one basket, the investment is in a single country, currency, asset, and one partner. If the tenant stops paying, they lose all this income. Factor in challenges such as Brexit or any other economic setbacks, and the asset is fully exposed. If the rental management agent isn’t good, this is a problem as the investor relies solely on this partner to obtain a tenant, get an income and achieve success.

In 2014, I focused on a specific genre and asset class in America. Initially, we had a number of different partners, but then in 2018, all these properties and partnerships were consolidated into a single company. From 2014, these assets and individual partners were well-performing assets, producing a high income. Some investors liked the performance of these investments and invested all their capital. Due to COVID-19 and other factors, this consolidated partner (now one company) has vacancies on many of their assets and isn’t paying out the expected income.

The result:
The investors placed all their eggs in one basket. Granted, investors have multiple assets; however, this is an investment in a single country, currency, and with one partner. If the partner experiences problems, investors are fully exposed to the risks. It’s akin to one partner carrying all the investors’ eggs in one basket.

Hard-won investment lessons in diversification

I learnt this the hard way, and I’ve been investing internationally since 1999 and helping members in 170 countries invest over $1,18 billion (USD). I have learnt from the wealthiest investors and watched what they do. Here’s my perspective on Dalio’s advice about diversification.

Imagine if the investors in either scenario were to do something like this. Take $100,000 (USD) and invest $10,000 (USD) in 10 alternative asset investment opportunities. These are diversified across countries, currencies, assets, and partners.

If two of the assets don’t perform well, the other 80% is still working. Therefore, the risk is reduced by 80%, there is no correlation between these assets, and they don’t move in tandem. The income and capital growth are diversified across 10 opportunities, and the risk or return ratio is increased by a factor of five. (This means you are five times better off).

The power of FinTech and Wealth Migrate

Through advances in tech and with digital platforms such as Wealth Migrate, you can create wealth simply and securely, starting from $100 (USD). Wealth Migrate’s mission is to make quality alternative assets accessible to anyone, anywhere, from any amount.

Over the last 12 months, my wealth creation journey has led me to:

Invest in 10 different assets
Across 4 continents
In 5 currencies
In 9 different asset classes
With 10 different partners

Wealth Migrate has changed how I can invest. Not only is it digitally integrated with Lemon Way, the largest digital wallet provider in Europe, but this FinTech platform also grants me control over my asset portfolio by efficiently managing these investments.

All distributions and dividends are paid straight into my digital wallet, and I can then decide to re-invest in more assets ranging in variety and diversity. One of my highlights is that despite the challenges of COVID-19, I still received a weighted internal rate of return of 14% in the last 12 months.

Learn from the wealthiest investors about wealth creation and protection

Ray Dalio manages $160 billion (USD), and Bridgewater Associates is the largest hedge fund globally.⁶ By following his investment advice on diversification, investors can achieve success with their portfolios. Even if the investment amount ranges from $1,000 (USD) and $100 (USD) is invested into 10 deals, or if it’s $10 million (USD), Wealth Migrate will allow investors to emulate this method of wealth creation.

The world has changed and with that, we must change our conditional way of thinking. It’s no longer about buying one apartment or trusting one partner, it is about diversifying and investing in the best partners and the best global opportunities. During the last year, an estimated “25% of all real estate private equity capital is now raised using online crowdfunding in America” ⁷. This trend is rapidly advancing around the world and now you can take advantage of it.

This is my ten cents on diversification, based on what I see happening in the market. I invite you to copy and invest like the most successful investors in the world.

¹Robbins, T. (February 2017). ‘Unshakeable: your financial freedom playbook creating peace of mind in a world of volatility. Retrieved from Unshakeable.
² Graffeo, E. (November 2020). ‘Investing legend Ray Dalio tells investors to not own bonds or cash’. Retrieved from Markets Insider.
³ Robbins, T. (February 2017). ‘Unshakeable: your financial freedom playbook creating peace of mind in a world of volatility. Retrieved from Unshakeable.
⁴ Comstock, C. (September 2011). ‘Here’s the most brilliant thing Ray Dalio said at his interview last week’. Retrieved from Business Insider.
⁵ Gravier, E. (November 2021). ‘Every financial planner will tell you to diversify your portfolio — here’s what that means’. Retrieved from CNBC.
⁶ Copeland, R., and Levy, R. (January 2020). ‘Ray Dalio is still driving his $160 billion hedge-fund machine’. Retrieved from The Wall Street Journal.
⁷ Gower, A. (2021). ‘Real estate crowdfunding unleashed’. Retrieved from GowerCrowd.

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The crowdfunding effect on property investment in South Africa

Blog, Investing, Investing, Investor Basics, Uncategorized / Wealth Migrate

With the popularity of crowdfunding property investments growing in following, South Africans now have the option to crowdfund their real estate investments through Wealth Migrate. It’s Chief Investment Officer Riaan van der Vyver, voices his opinion on why this is an ideal scenario for local investors.

Wealth Migrate’s category one licence is a game-changer

Just as crowdfunding relies on the spirit of collaboration, this is also necessary for it to become a successful solution in South Africa. Local investors will now benefit from Private Global Wealth holding a category one crowdsourcing licence from the Financial Services Conduct Authority, as this allows the company ‘’to provide its crowdfunding offering on an intermediary services basis using shares as a financial product category.” ^[1]

“For many early adopters of crowdfunding in Africa, particularly those using crowdfunding to raise equity, self-regulation is a challenge and an opportunity.”^[2]

The real benefit to South African investors

Investors have access to a legitimate and credible ‘’funding channel for asset classes’’ through Wealth Migrate.^[3] Once a sponsor passes the due diligence, a deal is put onto the platform’s marketplace, and the company takes on the responsibility of co-raising capital on the deal, with all details disclosed in full on the marketplace.

Van der Vyver highlighted that this crowdfunding method is for unlisted real estate in any alternative asset class, which makes Wealth Migrate’s role as an institutional investor easier for lowering costs and providing better transparency of deals.^[4] This is enabled through a special purpose vehicle (SPV) such as a structured note.

Crowdfunding: a future-forward opportunity

The main challenge with crowdfunding real estate is the model and structure of administrative fees, as this typically ranges from 2.5%-10% and may not include the actual transaction fee.^[5] Globally since 2010, the crowdfunding equity market has become increasingly appealing to individuals who want to grow their wealth but lack sufficient capital to invest without the power of a group fund.^[6] More and more, investors are also looking to diversify their asset portfolios while making use of convenient online websites or apps.^[7]

^[1] CNBC Africa. (May 2021). ‘FSCA grants Wealth Migrate licence to offer crowdfunding services’. Retrieved from CNBC Africa.
^[2] Parker, D. (October 2019). ‘Crowdfunding on the rise in Africa’. Retrieved from Creamer Media
^[3] CNBC Africa. (May 2021). ‘FSCA grants Wealth Migrate licence to offer crowdfunding services’. Retrieved from CNBC Africa.
^[4] CNBC Africa. (May 2021). ‘FSCA grants Wealth Migrate licence to offer crowdfunding services’. Retrieved from CNBC Africa.
^[5] Shneor, R., Zhao, L., and Flåten, B. (2020). ‘Advances in crowdfunding: research and practice’. Retrieved from Palgrave MacMillan.
^[6] Raymond, R. (2015). ‘Six things you need to know about crowdfunding in developing countries’. Retrieved from World Bank Blogs.
^[7] Shneor, R., Zhao, L., and Flåten, B. (2020). ‘Advances in crowdfunding: research and practice’. Retrieved from Palgrave MacMillan.

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Frequently Asked Questions

Investing / Ruan Smit

Investing

Frequently Asked Questions

Resources > Investing

Can I invest through my US LLC?

The essence of our current investment model is that we make use of a specific exemption from the SEC that says that we are not allowed to have US-based tax residents as investors.
What this means is that as of right now, we cannot accommodate investors that are US tax residents paying with US-based funds, nor can we accommodate US entities like to invest in our platform.

Can I invest on behalf of my children and what are the requirements?

If your jurisdiction permits minors investing in global offerings, we can assist in opening a wallet for them.

Please refer to your respective regulator to advise if minors in your country are permitted to have an investment allowance.
If a minor is permitted in your jurisdiction, please contact support@wealthpoint.app for assistance in setting up their profiles.

Can I cancel my investment?

You may cancel your investment up until the deal has been fully funded and is closed on the platform.
Please contact your dedicated wealth consultant or our client relations team at support@wealthpoint.app

Will I be able to fund my investment using my joint account?

Yes, you can fund your investment using your joint bank account.

Under your banking information, you are required to complete the ‘name of account holder’.
Clearly state the details of both parties joint to this account in the field required and ensure this matches your bank statement uploaded as proof of your bank account.
The KYC process will only be applicable to the individual who registered their account on the platform.

Common problems you may encounter when trying to invest?

Have you verified the email address used for your entity profile?
Have you completed your profile and submitted your KYC documents for verification? How to complete your profile and get KYC verified as an individual.
Do you have sufficient funds in your wallet? How to fund your wallet.
Is the deal open? Please navigate to our Marketplace to view the deal card that displays the closing date as well as your funded status.
Is your ‘investor category’ supported by our structure on the platform? Please contact us at support@wealthpoint.app

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Cost Implications

Investing / Ruan Smit

Investing

What cost implications are there when I invest through the Private Wealth Group?

Resources > Inve