Skip to content

Green Peak Advisors

What do I do with 50,000 ILS?

I have 50,000 ILS – what should I do? This is a question I hear posted on various forums quite often and a question that plagues many US expats living in Israel.

We work in ILS, our expenses are primarily in ILS, and we want to have the ability to invest in a diversified and responsible manner. We may also want to consider socking away small amounts of savings on a regular basis, for our retirement, a rainy day, or for our children’s future.

For some reason, it gets complicated. Tax implications and reporting are the major culprits (for example: investing in a PFIC can be complicated tax-wise). Also, local banks don’t understand the tax reporting requirements and transparency required – just try asking your banker for a report detailing long-term and short-term gains/losses. In many instances he/she won’t have a clue to what you’re referring to!

Israel vs. The US

In the US, the options out there are plentiful, relatively simple, easy to execute, and cost effective. You can open an online brokerage account and buy a few diversified funds (ETFs or mutual funds, etc.). If you are more ambitious, you can create a diversified portfolio of stocks/bonds. Or you can simply open a robo-adviser account which will, for a low management fee, select specific low-cost ETFs on your behalf and deploy the money efficiently in a diversified strategy based on your risk profile. These are especially great for smaller sums and if you want to set up reoccurring deposits. In addition, you can choose from different account types – from custodial to IRA, etc. Also, reporting is a cinch. You get your 1099 or K1, and you are good to go.

However, what if you can’t set up a US account and you don’t want to be inconvenienced by converting ILS and transferring funds back to the US (which is time consuming, costly and highly inefficient – especially for small amounts)? What if you really want to remain with an ILS currency exposure, given the fact that you live here and spend here, as I alluded to earlier?
So, bottom line – what are our options and what could be the pros and cons of each of them? How do I determine what makes the most sense for myself? How do we, as expats, invest in a local market that isn’t tailored to US-tax payers?

In the coming posts, I would like to delve into some of the investment options in Israel and perhaps shed some light (by sharing my own opinions and observations) on the various investment opportunities that we do have here.

I encourage people to speak up, ask questions and share their own experiences/knowledge of the investment landscape in Israel. I would specifically like to focus on those that have smaller (but growing) fortunes. For high net-worth individuals, this blog may be less relevant, given that the investment options/alternatives are significantly greater when you have a large portfolio to deploy (such as using an asset manager, family office, or gaining access to institutional level investments).