Wealth Archives - Foreign policy

Asset Protection Strategies To Protect Your Wealth During Times of Uncertainty

Published on November 30, 2020

During times of social, economic, or political uncertainty forces can move quickly that can cause havoc in markets, banks and institutions that all rely upon predictability and stability of the future. Without guarantees, whole economic systems can be rendered impotent.

If your economic livelihood is dependent upon these systems then you are inevitably tied to its continuity. While it is nearly impossible to be free from institutional authority as the modern economy is so intertwined with these systems of transactions, it is possible to mitigate the risk that these institutions bring through financial emergency planning.

There are simple methods that can hugely reduce your reliance upon any single institution or state-actor for your well-being. Here are six plan b financial strategies that will prepare you for any emergency.

Open an overseas bank account

Opening an account in a strong bank that has a history of stability, has a strong capital reserve ratio, in a country that is economically and politically stable is likely the most important action that can be taken to safeguard your assets.

Putting your money in a bank that has conservative lending policies, is backed by a government that has a solid finance record, in a country other than where you reside is the most effective strategy in combatting economic, financial, and political uncertainty at home.

Secure your business in a foreign jurisdiction

Forming an overseas company is perhaps the second most effective way to protect the assets that can also help to reduce taxes, provide a layer of liability protection, and as well as a measure of financial discretion between you and the assets that are held by the corporate entity. Incorporating a foreign-based company through a multi-jurisdictional corporate structure gives you maximum security by using two structures that are based in different countries.

While it may not completely leave you in anonymity as you still have tax liability, though it still provides a good layer of insulation in precarious situations. Combining two offshore structures, using the liability of an LLC and the security of an offshore protection trust helps give you the maximum asset protection that is currently offered in today’s financial marketplace. This will help you diversify, protect and keep confidential what’s important. For more information, visit offshore-protection.com.

Diversify your assets

Diversify your assets across several accounts in multiple denominations in different countries and banking institutions around the world. Diversification is about spreading your risk, and reducing your exposure. This is best achieved by having many different ways that you would be able to get access to assets should a currency crash, a market fail or a bank goes under.

By having several banks in a variety of accounts and countries where you can draw your money from gives you several fall backs that are important in todays hyper digitized world. When all it takes is a push of a button to have your cards frozen having an alternative source where you can withdraw cash is essential. If any single source dries up you will not be dependent upon any single institution for your well-being.

Keep a backup of physical cash

Keeping enough cash on hand in order for you and your family to survive a few months is a simple yet effective strategy. Having hard currency is an easy backup plan and doesn’t require much forethought or justification. Its simple and if your bank goes under you have some quick immediate reserves to tide you over and get you to where you need to go fast.

Store physical gold

Having physical assets such as gold is an important part of a diversification and asset protection plan. While currencies are known to depreciate and inflate, gold on the other hand is stable and provides a valuable asset that is highly liquid and easily convertible should assets need to be liquidated in an emergency.

Gold retains its value and generally appreciates in value at a pace to out preform most indexes. It is a reliable backup plan as well as an investment that will hedge some of the risks of being in a volatile economy or banking system.

Obtain a second passport or residency

Having a second passport in a country where you are free to move as you please is an essential part of any diversified financial plan. A second passport allows greater mobility, autonomy and gives security to you and your family.

While having a second residence can be a suitable alternative if a second passport isn’t possible the goal is ensuring a long term viable solution where you are welcomed to live as a first-class citizen. Having a second residency gives you access to health, social and financial services and can often lead to citizenship possibilities after several years as a permeant resident.

Obtaining a second passport usually requires an investment in either time or money if you are not lucky enough to have a parent or grandparent from another country. In order to maximize your mobility and autonomy a second passport is essential as it gives you flexibility for long-term planning, more possibilities of visa-free travel, and offers a reliable escape option should your first passport become compromised.

Takeaway

Having a sound financial plan is about severing your dependency from any single institution, bank, or country for your well-being. Being financially independent gives you a measure of control during times of emergency. Ensuring you have a plan b gives you options during a time when all else may be lost.

Offshore Protection: Why You Need International Asset Protection

Published on November 12, 2020November 19, 2020

Business

We live in immensely volatile, risky, and uncertain times. This applies at both the personal and physical levels, as well as at the financial level. We are not even a quarter way through the 21^st century, and already we have seen unprecedented numbers of political upheavals, catastrophic pandemics, natural disasters, and economic collapses. The question is: what does this mean for the safety of your hard-earned wealth?

Domestic dangers

It is becoming increasingly apparent that traditional “onshore” wealth management strategies are fundamentally flawed. Keeping all your assets tied up in your home country has many disadvantages and risks compared to the benefits of holistic offshore financial protection strategies. Truly, this has been the case for many decades now, but it is even more important to consider during these times of uncertainty and crisis.

Recent changes in domestic economic regulations, tax policies, banking practices, and information sharing requirements are just a few factors which have all played a part in degrading the effectiveness of onshore financial systems. Let us now examine more closely some of the major dangers to your domestic wealth.

High Taxes

Developed western nations have a tendency toward exorbitant tax rates. In many European countries such as Sweden, Portugal, Denmark, or Austria, more than half of your income can be lost in taxes. High-earning residents of Canada or the US can expect to pay 30 – 40%. Thus, for those living in these countries, high taxes are probably the most significant threat to your wealth.

Fortunately, there are many tax-friendly offshore jurisdictions that offer offshore protection measures that can be utilized to greatly reduce your high tax burden, one such company is Offshore-Protection.

Negative real return

The combination of high inflation rates with extremely low interest rates offered by banks and other financial institutions results in the real value of your money actually decreasing over time. The year 2020 has seen interest rates plummet to all-time lows. At the time of writing, average central bank interest rates are at 0.25% in the US, 0.1% in the UK, and 0% in Europe. Japan and Switzerland actually have negative interest rates, at -0.1% and -0.75%. Compare these with continued positive inflation in most of these nations, and you can see that the result is a negative real growth rate.

In comparison, offshore banks in countries like Turkey, Armenia and Georgia offer interest rates of around 10% or higher (in fact, Turkey has the highest interest rates in the world, often in excess of 15%).

Economic and banking collapse

Banking systems in many Western nations are extremely inefficient and unstable. This is especially the case in the US, which has more debt than any other country on earth. In fact, the US has one of the most unreliable banking systems in the world, along with policies that previously required banks to maintain capital reserves of only 3% (as of March 2020, minimum reserve requirements in the US were removed altogether). The figure is similar for other developed countries like the UK and the Eurozone. This means that banks in these countries are tremendously vulnerable to unexpected economic shocks and other unforeseen events, which can ultimately lead to debt crises and collapse (as was clearly seen in 2008).

In contrast, there are offshore banking centers which have average capital reserve ratios in excess of 20% (e.g. Belize and Cayman Islands). This, along with many other factors, makes these banks a much safer home for your hard-earned wealth.

Litigation and lack of privacy

Another threat to your domestic wealth and assets is local court proceedings. Having your assets tied up in your home country makes them vulnerable in a situation where you are unfairly sued. This is an important consideration in a country like the US, which is the most litigious nation in the world (America is home to only 4.4% of the world’s population but is where 96% of all lawsuits occur). The problem is compounded by the complete lack of financial privacy that places your personal wealth in full view of those who may want to get their hands on it.

Fortunately, there are offshore jurisdictions which offer powerful financial vehicles to help safeguard your wealth from local court proceedings and other domestic risks. They also uphold the values of confidentiality and the rights to financial privacy.

Disasters and political upheavals

Finally, there are the dangers of unexpected natural disasters, political upheavals, and other catastrophes which can lead to sudden losses of much of your personal wealth without warning. These risks are greatly concentrated when you keeps all of your assets within the borders of a single country. Should anything go suddenly wrong, the effects would be heavily felt. This is made even worse for those who live in countries with shaky and corrupt political systems, as many do.

The solution is quite simple: diversify your assets across multiple countries to reduce the specific risks associated with each system. Singapore and Switzerland are just two examples of thriving offshore financial centres with incredibly stable political and economic environments.

Why you need offshore protection

We have explored some of the most significant risks to your personal wealth that can arise within your country of residence. Of course, these risks are impossible to eradicate completely, but they can be greatly mitigated and reduced through intelligent offshore financial planning. An international asset protection strategy is undoubtedly the best way to safeguard your wealth from domestic risks and minimise losses which arise due to high taxation and low-interest rates.

There exists a wide array of offshore financial tools and methods which can be utilised. These rage from simply utilising a personal offshore bank account, to forming an offshore asset protection trust or offshore company, to even going so far as to acquire second citizenship in a tax friendly and economically stable country. The appropriate path and tools to employ will naturally differ according to each individual’s requirements, financial means, and willingness to take the necessary steps.

7 Tips to Keep Your Wealth and Assets Safe

Published on October 28, 2020February 5, 2021

Business

If you have worked hard to reach your financial goals and you’re finally living the lifestyle you’ve always dreamed of, it can be scary to consider the prospect that it could all be taken away.

Don’t lose sleep at night wondering if the money you’ve worked so hard to accrue will be yours as long as you need it! There are ways to protect your wealth and assets, so even in unforeseen circumstances or an emergency, you won’t lose everything you’ve worked so hard to earn. It would be advisable to consult legal financial services such as Caple Royalty to address your concern.

Know When to Hire the Right Attorney

It is extremely important to know when to hire the right attorney. Dealing with legal issues can get expensive fast, so making sure you have the right person on your team can go a long way towards protecting your wealth.

For example, If you’re injured in an accident, much of your money could go down the drain on medical costs. Hiring an attorney is important, but you have to make sure you hire the right one. According to Attorney Brian White, “Since most personal injury attorneys work on contingency, you may end up receiving less money if you hire a mediocre or inexperienced attorney.”

Going through a divorce? Even if it’s relatively civil, you should still hire an attorney. Struggling with a business partnership? An attorney can help you find a resolution that doesn’t require you to pay more than you should. When in doubt, schedule a consultation to see how an attorney can work to protect you and your assets.

Plan Your Estate and Keep It up-to-Date

When you think of estate planning, you probably think about what is going to happen to your money and your assets after you pass. This is an extremely important thing to think about. Proper planning can prevent family squabbles and issues, but it’s not the only kind of plan you should have.

If you have multiple assets and multiple streams of income, it is extremely important to plan how they will be used throughout your lifetime. For example, a trust might be used to pay for a child’s education, while earnings from stocks may be used to pay certain bills.

Make sure you revisit your strategy often. This ensures that you’re keeping money in high-yield accounts and you’re covering all of your costs without any shortfalls.

Hire a Financial Advisor You Trust

For those with wealth and multiple assets, hiring a financial advisor is a no-brainer. They can provide you with services that include:

Guidance on developing an investment strategy
Asset allocation
Minimizing taxes
Rebalancing a portfolio
How to time retirement account withdrawals

They can also provide you with support when making decisions that make you feel uncomfortable. An advisor can keep your fears and emotions in check, which is extremely important when making decisions that will affect your assets, your income, or your portfolio.

Don’t Put Primary Assets in Your Name

There are many reasons to start a trust. It can allow your family to avoid probate when you pass, it’s a great way to pay for a child’s education, and it can be a great way to support a charity that you feel passionate about.

It can also protect your assets while you’re alive. For example, putting a sizeable investment in a trust with your children as beneficiaries can keep you from losing the money if you’re sued. You can also hold other things, like an expensive car, in a trust in order to keep your name out of public records.

It’s also important to separate personal and professional assets. That way, if you’re ever sued professionally, they can’t come after your personal assets, and vice versa.

Diversify

A lot of people talk about diversification, but it can be more tempting to put all of your eggs in one basket. When the possible returns seem massive, you may want to go all-in, but a more restrained approach is always the best approach.

Diversification means utilizing a variety of investments to get the biggest return on your money, but it also means diversifying other aspects of your wealth. For example, having a financial advisor is important, but you may want to add a stock broker to your team. You may want to have traditional accounts in the United States, but you may also want to consider trying an offshore account. Diversifying in a variety of ways can help you best protect your wealth.

Don’t Rely Upon Homestead Exemptions or Bankruptcy

It’s surprisingly easy to get reckless with your money, even if it doesn’t seem reckless at the time. That’s because declaring bankruptcy often meant that you could clear away your debts while keeping many of your assets. At least, that’s what it used to mean. Those declaring bankruptcy today aren’t so lucky.

Today, homestead exemptions are limited and changes to the bankruptcy code mean you’ll end up losing a lot more of your assets than in the past. Not to mention, it leaves the future of your wealth in the hands of a bankruptcy judge, which means you aren’t going to fare so well.

Don’t Be Overly Flashy

Protecting your assets and wealth often involves complicated legal documents and in-depth strategizing, but it also includes common sense. You’re just as at risk of theft as you are of suffering a bad day at the stock market.

Don’t be overly flashy with your wealth. That doesn’t mean you can’t buy that boat or the Ferrari that you’ve always wanted, but it does mean that you should keep pictures off of social media. It’s also a good idea not to bring up your purchases or your wealth with the wrong crowd. Even family can get greedy and do something rash to affect your wealth and assets in a negative way.

Just because your money is sitting in a high-yield savings account doesn’t mean it’s safe. From houses to cars to cash, there are many things you should be doing to keep your wealth right where it is so you can enjoy it for a lifetime.

Wealth Inequality during the Coronavirus Pandemic

Published on March 22, 2020March 23, 2020

Coronavirus/Health

Privilege – a tale as old as time. The word used to be associated with land owners and monarchs. When we hear it today, it automatically makes us think of the rich and famous – celebrities. The people who have it all – looks, popularity, the riches, and in the eyes of the working class, happiness.

Celebrities are a part of modern-day American culture – regular people see them as role models, even believing that one person deserves to accumulate such wealth and power. But in the light of the new threat of the corona pandemic, that power hierarchy is being put into question.

There’s news all over the social media of celebrities being tested positive for COVID-19, like Idris Elba, Kevin Durant and Tom Hanks. Some of these celebrities showed no symptoms, but were in contact with infected people. There’s been a few celebrities like Kris Jenner who announced negative test results, after complaining on their social media about not being able to get tested.

Meanwhile, an average American is being denied a test, even if they show clear symptoms. They have been denied on the basis of not having travelled abroad. Some don’t even get a sugar-coated version; they are straight up told there aren’t enough tests for everyone.

This pandemic really highlights the fact that capitalism managed to seep through every aspect of living. This is further displayed with the recent news of US senators selling their stocks back in January, all the while attempting to convince the public that nothing is out of the ordinary.

The issue isn’t in celebrities being tested – they should be getting tested for the safety of the people around them, but it’s not just them that should be getting tested. The problem is that right alongside hearing about Heidi Klum being tested negative for corona, we also hear reports of the utter failure of testing regular people, as well as medical professionals who are the single most exposed group.

Fans of these celebrities are reacting to the news with shock. “Not Forrest Gump!”, “Uncle Idris too, corona has officially gone too far!”. But these responses are to be expected – the general public has always been getting distracted by the higher-ups, news outlets and people that dictate what is important. This is exactly why now is the time to wake up and start realizing the harsh truth –Sure, Uncle Idris and Tom Hanks aren’t directly profiting from the current situation like those 4 US senators, but they are the face of the astounding wealth inequality worldwide.

At the end of the day, these multi-millionaires will be the ones getting the vital resources, not an average person. They WILL be fine – after all, they can afford all the medical care in the world. This is not what our reality in the modern age should look like – if we appropriately divide tests among people who actually need it and not just among the wealthy, it could save an immeasurable amount of lives. If we keep heading the same path, it could potentially lead to global destruction. The collapse of the global economy would alter the lives of everyone, but the working class is going to be the most affected, as always.

Testing is just one aspect of the blinding inequality the entire world is being faced with in this crisis. The working class is massively being laid off due to self-quarantine, while billionaires are worrying about saving money. Researchers and scientists are working day and night to find a cure to save the world, while multi-million-dollar conglomerates are thinking about how to further monetize global suffering. People working minimum wage are essential in this crisis – nurses, cashiers, teachers – they expose themselves for us every single day by going to work, while people from high-paying fields sit comfortably at home and do their work from their laptops. Service workers and gig organizers face bankruptcy, while the top 1% hides in the shadows and plays Monopoly with the global economy.

The people in power care only about their own, about people like themselves. Rich, powerful, influential. We mean nothing to them, and it’s as if they are on a separate plane of existence. We do not have their support, and when the ship sinks, they are going to be the ones on the lifeboats. After we hopefully rise from this situation, we should remember who was there for us, and it was people sinking with us. Everyday people, heroes. We should respect those people risking their lives so that we can collectively stay afloat. Structural change is long overdue, but we will save that for later, after defeating our common enemy. For now, all that we can do is support each other in this hardship that we’re all faced with. We do that by protecting ourselves and others in every little way we can find.

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