First off, to all those who have suffered, complained, sued, and celebrated: thank you for all your contributions to this site on the subject of the Portugal GV scheme. The anecdotal data is better than any book I could have read on the process and I feel far more informed than I anticipated.
That said, despite the stern warnings of those like @ohbee and @ThroughtheMill, I’m still inclined to move forward with this process. Before I ask my questions, I wanted to provide context into why since everyone has their own reasoning and weighting of what’s important to them.
I’m in the US, I live in a blue state, and I’m an engineer (and as many engineers are: an extremely skeptical person). Like so many I’m extremely unnerved by the election results and fear that so much of the worst outcomes we were at risk of suffering through have not only been hastened but will be worsened in ways we can’t imagine. Inflation, climate change, eroding social safety net, collapsing health systems: I don’t see how things course correct in my lifetime.
I’m young enough to have an appetite for risk and a still burgeoning career in a specialized field, but old enough to know that the party ends at some point and I need to make choices for the best opportunity for the most stable future possible, whatever that may be. I have a decent retirement savings accrued and a substantial liquid savings. That said, the cynic in me has me convinced that the retirement savings won’t be worth anything that could be retired on by the time I could due to the degrading state of the world. My outlook on them is to make them work as well for me as possible while they have value and don’t count on their eventual liquidity.
My rationale for wanting to pursue the GV is that I think mobility will be a stronger currency than cash in my lifetime. I think the current instability of the world has the potential to make a great many people unexpected refugees, and that broader citizenship is likely to give you a greater chance at survival. I’m not doing this scheme with the intent of living in Portugal right away, during the process, or possibly ever. My spouse and I are more interested in The Netherlands in general, but their lack of a dual citizenship program made us favor aiming for EU citizenship instead.
Now that I’ve shared my societal doom and gloom, onto process doom and gloom.
I’ve on boarded with one of the big box firms and have paid for the legal engagement. I’ve discussed options, asked many questions (and still have many more), and am just now rolling up my sleeves with the attorney. As of right now, I’m finding myself very torn between the 500,000€ fund investment option and the 250,000/200,000€ cultural investment option for extremely different reasons. I easily have enough capital on hand for the cultural investment option and am willing to accept that it could mean a complete loss of that capital in the end. The capital required for the fund option is far more of a stretch for me, and while I’m willing to make some moves to make it happen, the exposure isn’t what scares me the most.
Regarding the fund investment:
- I’ve settled on either putting everything or almost everything into either Optimize or IMGA. I took the time to read a book on private equity and will be meeting with fund managers to learn more, but I prefer the baked in diversified portfolio of those two funds and the open ended policy even at the cost of lower opportunity for gains. Said differently, I don’t have a lot to gamble with and this appears to be the most conservative and flexible approach.
- My investment would need to be a split of funds from a self directed IRA and my new Portuguese bank account once it’s opened. I’ve read many accounts of using a self directed IRA including one where an applicant had to use two separate SDIRAs for separate source IRAs with different tax treatments, but I haven’t read any accounts of a split of savings and SDIRA.
- I haven’t delved deep enough into this yet with the attorney and firm yet, but the complexity of the SDIRA really scares me. My understanding is the SDIRA has a checkbook US based IRA and Portugal based LDA, and that both must match my name on the records exactly for this to work. Additionally, a wrong move could result in this becoming a taxable event, like the Portugal based LDA sending the funds to my Portuguese bank account instead of the fund. It’s a lot of moving pieces with terrible consequences if a mistake is made. I’d be very interested to hear stories from those who funded their investment via SDIRA and their personal bank account.
Regarding the cultural investment:
- There’s very little information on what’s even available to invest in, or at least not much published publicly.
- I’m aware that it’s at best maybe a break-even move and at worst a total wash. What makes me more nervous is how untested it seems to be. I’ve found very few instances of people who have invested in this (@ohbee stands out as one) and very much want to learn more about what their journey has been like. To me this one feels like a higher risk of a bait and switch since, in the case of a donation, your leverage is gone once the money leaves your bank account. If the Portuguese government modeled this as a state backed escrow program I’d have felt a lot better since it would force the receiving side to have more skin in the game, but this option seems like way more “good faith” exposure than the fund side.
- It’s unclear to me how the 5 year term even works for something like this. Say you invested in a documentary that wrapped up in 4 years and you broke even from the content being sold: would you have to find a second project to invest in? Or, like private funds, do they all have a 5 year minimum term? I’m also assuming a donation inherently satisfies the time requirement since it’s impossible to get back.
So there you have it: way too long a post that likely shares too much conviction and dread, seeking some blend of information and validation from a group of people who seem to have been largely harmed and spiteful of the process. I look forward to your feedback and appreciate you spending time replying to me.