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  1. #1
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    May 2018
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    Investing Abroad

    It has come to my attention that loans in other countries like Bolivia have interest rate for commercials loan at 12%-18% with very good collateral. Let say I have good connections in Bolivia, and those connections are capable of allocating the money in good companies. Is it possible to take a loan in America and invest that in Bolivia, and make money from the difference in the interest rate? Or just find investors, offer them a lower return (8%), and I make money from the difference again?

    I feel this is just to good to be true or legal.

  2. #2
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    May 2018
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    68

    Re: Investing Abroad

    Bolivia has a long history if high inflation. At some point, in the chain, money has to be spent in Bolivianos. It's simple. Whoever borrows in dollars and pays back using $bob takes the major risk... but if (s)he can't pay, the chain risk works its way up the chain eventually to you. Use your extra premium to dilute and insure your risk.

  3. #3
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    May 2018
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    131

    Re: Investing Abroad

    Quote Originally Posted by BloodClaw View Post
    Bolivia has a long history if high inflation. At some point, in the chain, money has to be spent in Bolivianos. It's simple. Whoever borrows in dollars and pays back using $bob takes the major risk... but if (s)he can't pay, the chain risk works its way up the chain eventually to you. Use your extra premium to dilute and insure your risk.
    I think know what your saying. But lets say a lend the money to a company that imports certain product. This company need USD to pay their suppliers, so the loan would be made in USD, and if the loan is made in USD they pay you back in USD. Also in Bolivia people use USD for big transactions like cars or house. If you go to dealership they will give the price of the car in USD.

  4. #4
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    May 2018
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    65

    Re: Investing Abroad

    How much do you know about exchange rate risk?

  5. #5
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    May 2018
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    Re: Investing Abroad

    Quote Originally Posted by BigSmoke View Post
    How much do you know about exchange rate risk?

    The loans would be in USD. So there won't be exchange risk.

  6. #6
    Join Date
    May 2018
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    65

    Re: Investing Abroad

    Quote Originally Posted by Beatz View Post
    The loans would be in USD. So there won't be exchange risk.
    There is always exchange rate risk... but you may not be exposed to the first effects of rapid exchange rates fluctuations. But your clients might be...

  7. #7
    Join Date
    May 2018
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    131

    Re: Investing Abroad

    How? If I receive the money in USD and invest in USD. Btw in Bolivia you can pay stuff using USD, that is why you can take loans in USD.

    Also the the exchange rate in Bolivia hasn't move that much since 2008.

  8. #8
    Join Date
    May 2018
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    37

    Re: Investing Abroad

    How much do you know about Bolivia?

  9. #9
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    May 2018
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    131

    Re: Investing Abroad

    Quote Originally Posted by DwCLorck View Post
    How much do you know about Bolivia?

    I'm from Bolivia, that connection would be my Dad. I'm from a pretty well-know family there, and lately a lot of people have come to us to lend them money. We have lend out all we can right now, but there is still a lot of opportunity out there. So what better way to offer American investors an 8% return, and invest there money at 12% or more. Or just take a loan in America taking advantage of the loan interest rate, and invest it in Bolivia. But I don't know if that is legal. I didn't want to put this in the original post because it would be to long.

  10. #10
    Join Date
    May 2018
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    37

    Re: Investing Abroad

    Define "legal"?


    At a minimum, if you're also "American" (you have a tax payer ID number and file annually with the IRS), you'll need to follow the FATCA rules and declare any foreign interests (bank accounts, trusts, investments, etc) over $10k and pay taxes on any proceeds these generate.


    It gets complicated, which is why most foreign banks are refusing to do business with "US persons".

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