If u have US20 million wat will u invest in?

Now that the FIFA World Cup has come and gone the next craze is of course the coming FIFA world cup which for the first time in history is set to be hosted in Africa. There have been questions on whether or not South Africa, the host country can actually host this competition successfully but that is not important to an investor.

If you have $20 million to invest, I would advice you to convert all that money into ZAR (South African Rand which is the currency of South Africa). It is at its lowest compared to the US dollar. You will get something like ZAR120 million to ZAR140 million, the exchange rate is between $1 = ZAR6 to ZAR7. For the whole amount you should buy physical property like land, buildings, malls and many more. Since the announcement by FIFA that South Africa is to host the 2010 world cup, property has risen by an average of 33% and property stocks by 17%.

You donвЂ™t want to buy into South African property stocks though as there are not as volatile as US stocks so you might end up stuck with paper assets you donвЂ™t want. Property in South Africa is envisaged to grow exponentially from now on until 2010 but what everyone is afraid to talk about is post 2010 because the whole FIFA world cup thing would be a thing of the past but as an investor you have to take such things into perspective.

You buy as much physical property as possible and then you elect a property manager who would do all the administrative work for a % of the revenue and you sit back and relax in Miami or somewhere nice and warm. In late 2009 just after or before the national elections of South Africa you sell all you property and this is what I think you might make from you initial $20 million investment:

1.The average ROI (Return on investment) in real estate in South Africa at the moment is between 20% and 35% excluding management fee of 10%. Therefore you are looking at between ZAR12 million and ZAR18 million revenue per annum for 4 years which is roughly ZAR50 million profit over the four year period.

2.The average rate of appreciation of property is 30% per annum and therefore you are looking at ZAR263 million after 4 years without capital reinvestment of revenue.

HINT: The current exchange rate is $1=ZAR6 to ZAR7 but closer to the FIFA world cup most tourist (projected at 500 000) would be exchanging the US$ for the ZAR which would devalue the US$ against the ZAR so you are looking at better exchange rates.

Initial investment: $20 million

Total Value of investment after 4 years: ZAR 263 million ($43 million)
Total Value of revenue after 4 years: ZAR 50 million ($8 million)

Total Investment after 4 years: $51 million
Total ROI : $31 million
Total ROI %: 155%