I’ve wanted wealth in my life ever since I was a kid.
As I’ve aged, my vision of wealth has matured over time. Now, it takes into account my net worth, the quantity and quality of the assets under my control, the ability to pay for my kid’s college and other grown-up things. But it took over a decade of growing, maturing, and understanding before I reached this point. During that time a range of markers came to define wealth to me. A Rolex watch, a loaded Audi, owning a big home, owning a private jet, and buying an island all held some temporary top spot in my evolving model of wealth. But, I remember one in particular.
When I was a kid, I wanted to buy a country.
I don’t remember where I got the idea from. To be honest, it may have been a villain in a movie. But something about having enough capital to own a country felt like the wealthiest thing a person could own. For a 12-year-old with an odd infatuation with money, buying a country is a logical life goal. When you are going back and forth with your middle school friends on being rich, who can beat a county.
Kid 1: I’m gonna have a sports car with butterfly doors because I’m so rich
Kid 2: Well, I’m gonna have a mansion with a pool and a maid
Kid 3: Y’all can come visit me then, cause I’m gonna have a country with a hundred mansions
See … there is no arguing with owning a country.
Can you actually buy a country?
Now, as an informed and mature adult, I wanted to see if my childhood ambitions were truly as delusional as I thought. So I decided to do a little research.
Apparently, you can’t really buy a country. There is a list of billionaires who have enough money to afford one, but who exactly are they buying the country from? And what does it mean to buy a country? Are you the president or prime minister and making laws or do you just own a ton of land? The point is, the idea of just amassing a lot of money and then making an offer to a country in need of some funds is basically a pipe dream.
If you are committed to the dream, there are some opportunities to start your own country. Buying islands are very real. For example, Belize offers several islands for sale, some for less than a house and as little as $200k. After getting your island, you could start your own micro-nation. There is one micro-nation near the UK, Sealand, that is actually looking for a buyer.
Long story short … it’s a nice dream but not a realistic part of my vision for wealth.
OK, so what country are we buying?
I’ve got something to admit: I was exaggerating a little.
In my new vision of wealth, owning a country means owning a part of its economy, no matter how small. It means that I can put up capital and enjoy the beneficial growth and prosperity of that country. Now, if I think South Africa is poised for an economic boom, I want to know how can I get a piece of South Africa?
Well, it’s really never been easier to “own” part of a country. It’s simple, inexpensive, and can be done in minutes through an online brokerage.
Why do I want to buy a country?
Investing your money is a key part of building wealth. If you hold onto cash, it will lose value through inflation. Your money should be making you more money, and investing, in whatever form makes sense for you, is the way to do that.
One tactic I have employed in the past is making bets on industries and countries.
For example, after seeing a presentation at work about tech companies in China, I was really impressed by the market and opportunity overseas. After doing a little research, I was ready to go put some money into Chinese tech companies. They were making great products, had a huge market, and had the government helping to stop competition.
There were a few ways for me to invest in Chinese tech companies. The traditional way would be to research a few big companies over there and buy some stock in a few different ones. I could call a fund manager somewhere and tell him to find me some investments. And then there is the lazy way I decided to use; buy an ETF, an exchange-traded fund.
As Chinese tech companies have continued to grow, make more money, and grow in valuation, I have profited. It’s just a part of my well-diversified portfolio, but it was an easy way for me to take what I hear about the world and other countries and turn it into an investment that makes sense for me.
How do you buy a country?
Exchange Traded Funds (ETFs), invented in 1993, are one of the greatest financial inventions of the last 25 years. They are the more evolved version of mutual funds. They offer extremely easy ways to buy into hundreds of thousands of companies at the same time. They can be sold at any time like a stock, cost $0 to trade if you use Robinhood, and offer lower fees than mutual funds. And, now there are so many to choose from you can easily make an industry or country investment 100x easier than 20 years ago.
There are a lot of different ETFs covering a lot of different things. The “basic” ETF that most people should own and I personally recommend are broad US stock market funds (VTI) and represents the US economy. Want some bonds, buy all of them with a US Bond ETF (BND). Interested in energy, healthcare, or technology … don’t worry because they have an ETF for that also (VDE, VHT, VGT).
But we are here to talk about countries. And ETFs do not disappoint.
There are hundreds of ETFs allowing you to own and invest in different parts of different countries. It’s a way to strategically invest in international trends you understand and feel good about, or simply to invest in a way that feels good with your internal compass. Since I am a big supporter of robo-advisors for affordable wealth management and a personal Wealthfront customer, I already have international exposure automatically through Wealthfront, and use ETFs for smaller strategic investments in other countries.
Are you Nigerian and tired of going home every year to hear your Dad and Uncle talk for hours over Thanksgiving about how Nigeria is about to blow up? Have you been listening to their debates for the last 5 years thinking that they know something and you need to get involved? Have you also thought about how your Uncle can’t be trusted with $5, let alone your hard earned money when it comes to investing back home?
No problem. NGE is Global X’s fund that seeks to invest in the largest and most liquid companies in Nigeria. It’s an easy way to actually invest in Nigeria compared to finding individual companies or asking your Uncle to “make an introduction”.
One thing to watch out for is the fees. For example, NGE’s expense ratio of 1.10% is 27.5x higher than Vanguard’s US Total Market (VTI) fund at 0.04%. Depending on the country, company, and industry, these expense ratios will vary and they do matter. But, it’s still one of the easiest and safest ways to invest in a specific country.
How do I find the countries I’m interested in?
There are a lot of different ETFs that will help you invest in a specific country, several hundred actually.
The first place to look is the first place you always look on the internet … Google. Try searching for “[country name] ETF”. For example, looking for South Africa quickly routed me to EZA, an iShares ETF focused on large-cap companies in South Africa.
To get you started, here is a list of ETFs for major countries:
GXC – China – SPDR S&P China ETF
AFK – Africa – VanEck Vectors Africa ETF
NGE – Nigeria – Global X MSCI Nigeria ETF
EZA – South Africa – iShares MSCI South Africa ETF
FLGR – Germany – Franklin FTSE Germany ETF
FLJP – Japan – Franklin FTSE Japan ETF
EWZ – Brazil – iShares MSCI Brazil Capped ETF
Once you’ve decided on a country, take some time and look at the different ETFs available. One big thing to watch for is the expense ratio. High fees require your investment to grow even more before you make a return. You may not have a choice with some countries but shop around if you can. Find a reputable company with other funds under management and a high trade volume to ensure liquidity.
Have you ever invested internationally? Have a strong bet on a country’s economy and want to hear other opinions? Leave a comment below and join the discussion.