I received well over 100 email responses to this topic and not one of them was in defense of PayPal’s business practices.

Roger said, “Our company processed tens of thousands of transactions with PayPal over several years with only 3 charge-backs and 2 of them were reversed.  After all of these years they decided to close our account and froze access to our funds from dozens of clients without any written notice.  PayPal is illegally holding people’s money.”

Jeannette said, “I hate PayPal in every way.  I am looking forward to Visa coming out with their competing service this summer.”

Lisa said, “I used to sell items on EBay as my business. Small ticket items under $100.  Two months ago PayPal determined that my wares were too risky and without notice or warning they shut down my account and froze my funds for 180 days.  This has effectively closed my EBay business until I find another payment method that EBay will accept.”

I could go on and on.  There were dozens of stories like these.

I tell you this for three reasons:

1. I am pissed. I wanted to vent my frustrations and get my revenge.  I am sure my thousands of readers can put a microscopic dent in PayPal’s more than 200 million customer base…
2. I want my subscribers to be alerted to the pitfalls of relying on PayPal.  Find another resource for payment processing if your business demands it.  I did.  I actually set up 3 merchant accounts over the past week.  Overkill?  Maybe, but I don’t want to deal with this issue again.  I hope you are at least aware of the potential problems from using PayPal and give yourself options.
3. Most importantly, I want you to be aware that once a great company loses its way; the doors of opportunity are opened wide.  PayPal’s insistence on providing terrible service and alienating 100’s of thousands of customers per year has given opportunity for competitors to jump in this game.  When PayPal first started, they were cutting edge.  No one offered anything like it.  It was a great solution for millions of people.  But now with their complete lack of interest in taking care of their customer, they have opened the door of opportunity for American Express, Visa, Alert Pay, Google Checkout, Square, Intuit, and hundreds of others looking to take on this market.

For you, this may have little direct meaning.  Most of us aren’t interested in or capable of taking on the giant – PayPal and creating a competing business model.

But the idea is the same and can be observed all around you every day.  Have you ever used a product or service and thought, “This is really irritating, if they could just do X it would do well.”

Where turmoil persists, opportunity exists.

Some entrepreneurs are excellent inventors and creators.  They have the ability to create things from their own sheer brilliance.  We know of these visionaries because they make the headlines; Steven Jobs, Mark Zuckerberg, Jeff Bezos, Bernie Marcus and many others.

But many entrepreneurs take good ideas and make them great.  Ray Kroc didn’t invent the hamburger, the restaurant, fast food, or even McDonalds.  But he did take the concept and turn it into something amazing.

Oprah Winfrey was certainly not the first media personality and talk show host.  But she took the concept and grew it into something no one had ever seen before and became a billionaire in the process.

You could even say the visionaries like Jeff Bezos recreated the way books were sold or Steven Jobs reinvented the personal electronics sector.

Everyday you will encounter businesses that provide some product or service that fills a need, but could use improvement in its current state.

As an entrepreneur your eyes should be constantly open looking for inefficiencies in the marketplace or needs that are not even met.

Many young entrepreneurs are so money focused; they forget the most important thing;

Deliver value to your customer and they will deliver money to you.

Unfortunately most get it backwards and focus on the money, which is egocentric and they forget that in order to reach real professional (and personal for that matter) success, you must first deliver value.

I make an effort to deliver value to you every week through my newsletters.  Maybe I enlighten, sometimes entertain, and occasionally anger, but my goal is to provide real value to you every week.

For my clients, I provide value to them by helping them achieve their goals of protecting their assets and keeping what is rightfully theirs.  What value do you provide to your clients?

The past few months have gotten increasingly busy here at Global Wealth Protection.  We have seen a lot of new clients as well as an increase in traffic on our monthly Ezine – EscapeWealth.

In addition, I have also started hosting a weekly radio show every Monday from 3-4pm EST on the Overseas Radio Network called, “Global Escape Hatch“.  ORN is now completely free.  I encourage each of you to tune in and listen to my show where you can call in and get your questions answered live.

Last week a lot of things came to a head all at once.  As you may imagine from the title, one of them was a battle with Paypal.  I don’t normally accept Paypal for client payments unless the total is small, but I had 2 clients who really preferred that method so I agreed.

The problem is that Paypal decided I actually charged too much money (do they really want smaller fees?) and my account was closed because it was considered high risk.

No problem Paypal.  Close the account.

As it turns out though, when Paypal closes an account, their policy is to hold the funds for 180 days!!!  Who among you is willing to wait 180 days to receive payment for a completed project?  Not I.

So this is my way of blowing off steam and informing you, my dear reader, beware of Paypal.  After researching this issue, it seems there are 100′s of thousand of people in a similar position.  Don’t be a sucker like me.

Ok, moving on.

As previously mentioned, we have seen a huge increase in traffic for our EscapeWealth Ezine and last week we published our January edition.  This was by far our best issue yet.  So instead of continuing my Paypal tirade, I want to direct you to these articles.

Each and  every one of them are worth the read.  They all offer an enormous amount of information and value to you, the reader.

Below are the article titles with links.  Feel free to click on the ones that interest you the most.

Private Trust Banking – 21st Century Offshore Banking

What to do with Your Cash When the Financial System is Broken

(The Easiest) Way to Get a Second Passport? (Plus, How It Can Save Your Life When Things Go Wrong!)

Mike the Good Ole Country Boy vs. Lester the Scoundrel

Three Numbers that are Essential to Your Wealth

Who Really Owns Your Stocks?

Passive Real Estate Investments…For Real!

The Corruption of America

Conversations with an Idiot

Don’t Frack Me Up

The Weekly Jobless Claim Blockbuster

More IRA Restrictions Coming…

When Will Silver Reach a New High?

Can YOU Get in the Global Macro Game?

Call today for your free 30 minute asset protection consultation.  Until next week, live well.

This week I felt it would be important to address the topic, “What is Asset Protection?”  While you clearly have some idea what is involved in asset protection planning, I frequently get this question or some derivation thereof.

The quick and simple answer is that asset protection is a means of protecting your assets from future potential creditors or claimants.  From this perspective, a better definition may be that asset protection is a systemic approach to pre-litigation planning to deter lawsuits and encourage out-of-court settlements.

Another explanation may be that asset protection planning involves minimizing your personal and financial risks.  At Global Wealth Protection, we accomplish this with a 2 step process;

1. Create a veil of privacy for you and your assets
2. Create legal structures to segregate you from your assets while maintaining maximum control

By doing these 2 steps, we have accomplished the goal of making you appear unattractive to potential future creditors and claimants as well as provided you with the legal protections for those assets in the event that your veil of privacy is pierced.

Of course many people believe that they are not a target for litigation.  I have talked to enough people (read about  Susan and Frank – “Oh Good, the Government is Here to Help”), to know that lawsuits can come from nearly any source; tenants, credit card companies, friends, family, neighbors, contractors, coworkers, employers, employees, customers, and the list goes on and on.

There are many tools that can be used in asset protection planning.  One of the most basic tools is a Wyoming Limited Liability company (LLC).  A properly structured Wyoming LLC can offer you privacy (ownership is not disclosed to the state) and legal protections (Wyoming does not allow foreclosure of business assets) for your real estate, investment portfolios, private business interests, intellectual property, or nearly any other category of valuable asset.

Land trusts when combined with one or more Wyoming LLC’s can also be a very cost effective structure for protecting your real estate assets.  I work with many real estate investors who like this method as it offers them complete anonymity as well as legal asset protection from potential creditors.

I wrote a newsletter a couple of weeks ago titled, “Protect Your Assets Like the Uber-Rich” that addressed the specific topic of real estate asset protection.  After writing this article I had a couple of calls from friends of mine who are real estate investment professionals.  One has been in the business for over 10 years and another for over 30 years and both of them said this was the only method they use for protecting their real estate assets.

I am a firm believer in diversification of your assets among various investment categories as well as geographical diversification, or what I call ‘geo-arbitrage’.  This is effectively a ‘don’t put your eggs in one basket’ strategy from a global viewpoint.  I highly encourage clients to implement an offshore strategy as part of their asset protection planning.

At a minimum, clients should have an offshore bank account with some funds set aside for a rainy day.  You can grow your offshore presence with precious metals storage, brokerage accounts, or even managed accounts for the wealthier individuals.  The offshore world is the ideal scenario for web-based entrepreneurs.

For our online entrepreneur clients, we typically help them establish a Seychelles or Belize offshore company, offshore bank account, and offshore merchant account.  This gives online entrepreneurs an excellent opportunity to diversify geographically as well as lower his cost of doing business.

For those of you not up to date on US news, the FATCA requirements that are part of the HIRE act will make it much more difficult to set up and maintain offshore bank accounts and investments after 2013.  You have a very short window of opportunity to escape the draconian reporting and withholding requirements and establish your own offshore asset protection plan.

For those of you interested in developing your own private offshore asset protection plan, I can work with you one-on-one to formulate a strategy that works for your specific situation.

I will summarize by saying the 2 biggest mistakes people make are; 1- assuming they aren’t wealthy enough to need asset protection planning, and 2- waiting until it’s too late.

If you have a level of wealth that you cannot afford to lose, you need to minimize your risk.  And you need to do it before you have already been sued.  It will be much easier and cheaper to do it before it becomes necessary.

Call today to schedule your free 30 minute asset protection consultation.  Until next week, live well.

Two weeks ago to the day I received a call from a friend of mine in the US.  Dave runs a motorcycle performance shop in North Carolina and called me to chat about business.  In the conversation he mentioned that he would be in Milan, Italy the next week and wondered if I was available.

Four days later I was on a flight to Milan and going to the EICMA International Motorcycle Exhibition with Dave and a few of his local Italian friends.  I won’t bore you with the details, but last week was a well deserved break filled with great Italian food, motorcycles, and supermodels.  We even managed to talk a little business.

I hope you enjoyed last week’s interview with Paul Rosenberg.  This was certainly different than my normal routine, but after reading his book, I just knew he was a perfect fit for this audience. 

Paul is one of the most intriguing men I have ever spoken to and leads a life that most of us only dream about.  If you missed last week’s newsletter titled “A Free Man’s Perspective”, you can find it on the website here.

Speaking of websites, we are in the process of updating the website and should be finished in the next few days.  For any of you that have visited the site, you certainly know it was very cutting edge….in 1997.

Aside from the old school look and feel of the site, it didn’t fully reflect what our firm does for clients.  Quite frankly it was too cumbersome to easily update, therefore it just didn’t happen.  I guess being busy is good, but in hindsight the website was allowed to suffer.  Lesson learned.

Now on to some useful information.  Many of you may have noticed that this week has been very interesting in the global debt markets (or at least those of you that actually care about that sort of thing).

Italy has now crossed an important threshold – the 10 year Italian bond yield exceeded the critically important 7% mark.  Many consider this to be the point of no return for European debt.  This is the point where Ireland and Greece started begging for their ECB handouts.

If you are unfamiliar with bonds, the price and yield are inversely related.  In other words, if the price of the bond goes down, the yield goes up, and vice-versa.  This week the Italian 10 year bond yield went dramatically higher (bond prices went down) signaling a lack of trust in the Italian government’s ability to maintain sound fiscal policy.

This puts Italy in a long line of European countries that had to go with hat in hand looking for a bailout to keep the Ponzi scheme….I mean government alive.  The big difference here is that Italy is significantly larger than any of the other PIIGS.

According to the IMF, Greece’s 2010 GDP was just over $300B ranking it as the 32^nd largest country in the world.  Italy’s 2010 GDP was just over $2T ranking it as 8^th largest or nearly 7 times the size of Greece.  Italy’s debt to GDP ratio is now over 120%.  This is completely unsustainable.  It is also likely to be the death nail in the EU coffin.

Folks, wake up to reality.  Nearly every major government in the world is dead broke.  The US debt to GDP ratio now stands at about 100%.  Japan is over 200%.  Debt has been the fuel of the last few decades and we are now running on fumes.

Many of you will read this and think, “Bobby’s a nutcase.  The world has had problems before, but we always pull through.”  Many of you will fire off an email demanding to be unsubscribed from the list because I am unpatriotic or disrespectful of the Obamessiah.  (FYI, you can unsubscribe yourself at the bottom).

Hopefully though, many of you will realize that you need to do something about it.  You need to develop your own ‘escape hatch’ giving you the right to work, live and play without fear and apprehension of what the political ruling class will do next to rob you of your freedom.

Your ‘escape hatch’ will vary depending on your own set of circumstances, but generally it involves creating a veil of privacy around you and your assets.  This is what many call the multiple flag strategy, or geo-arbitrage.

This can be as simple as setting up an offshore LLC and bank account to conduct your business and holding physical gold or silver as an inflation hedge.  Real estate investors may want to consider using a combination of land trusts and LLC’s, as discussed in my article ‘Protect Your Assets Like the Uber-Rich’.

No matter what your situation requires, it is important to create your own ‘escape hatch’ before it’s too late.  Our firm can help you with many of the strategies from residency and citizenship, US and offshore company formation, land trusts, living trusts, asset protection trusts, offshore banking, internet privacy and more.  Contact us today to schedule your free 30 minute consultation.

Bobby:  Hi Paul, thanks for joining me today.  I appreciate you taking the time to share with me and my readers.  Let’s get started, shall we?

Ok, I am very familiar with your company, Cryptohippie.  I am a devoted customer of yours and find this product to be a necessity in today’s world where privacy has become long forgotten human right.  I also want to thank you for offering my readers a free 7 day trial.  Can you tell me a bit about the product and what makes it so important?

Paul:  Sure.  You have a firewall to protect the data on your computer, and that’s a good idea, but then you send that data through the internet and a wide variety of thieves just pick it up in transit.  It’s actually easier for them that way.  And those thieves include governments, mafia-type groups, advertisers and many others.  We stop all that with encryption, multi-jurisdictional routing, and so on.  Essentially, we make you anonymous on the Internet, with no pain or strain.

Bobby:  How would someone pick up my data in transit?

Paul:  By capturing the traffic at your ISP, or at any the routers that connect to your ISP, or by comprising major Internet routers, or by tapping a cable, or by cutting a cable and forcing traffic through a router you control, or…

Governments simply force telephone companies to feed all their traffic to them.  It has been known for years that the NSA has offices in AT&T facilities and that they simply scoop up all their traffic; it’s easy to do with a fiber optic splitter. [http://www.zdnet.com/blog/ip-telephony/these-photos-illustrate-at-ts-phone-internet-tracking-activities-for-nsa/1103] It’s foolish to think that all the others are heroically defying the state.

Beside all that, Google, Yahoo, Facebook, Hotmail and all the rest grab everything they can, whenever they can.  Then, data consolidators take hundreds of these databases and cross-reference them.

Bobby:  Why in the world would someone be interested in my data?  Why is it bad for someone to get their hands on it?

Paul:  Because there’s big money in it… as in many, many billions.  They scam credit cards all the time; you get paid back, but the credit card companies don’t.  Other times they use people’s information to setup bank accounts and move stolen money or criminal proceeds.  Even knowing who communicates with whom can be very profitable when it comes to commercial espionage.  Of course, governments save every email you send, records of every web site you visit, and so on.

They are also getting very good at searching all that data and assembling it.  And, they can use that information against you whenever they like.  Do you remember Nixon’s enemies file or Hillary Clinton’s 900 FBI files?  Those were microscopic, compared to what these guys have now.  By the way, “these guys” includes thousands or millions of bureaucrats.

Bobby:  I think I told you that I recently bought your book, “A Lodging for Wayfaring Men”.  Ironically I bought the book as a recommendation from one of my readers (thanks Jason).  I did not bother looking at the author’s name and didn’t actually realize you were the author until just a couple of days ago.  I have to say, this book was eye opening for me.  I am a huge fan of Ayn Rand’s “Atlas Shrugged” and “The Fountainhead” and your book almost seems like a modern day version.  Were you influenced by Rand?

Paul:  Oh yes.  I think almost everyone who writes seriously on liberty is influenced by Rand in one way or another.  There are areas of disagreement between the two of us, but she brought many excellent ideas to me and I am deeply grateful for her contribution.

Bobby:  One of the things I enjoyed most about this book was the philosophical aspect of being completely unwilling to accept the status quo.  The characters in the book are all bound by their own morality, but that clearly doesn’t seem to fit with society’s definition of good and evil.  Can you expand a bit on the philosophy in the book?

Paul:  Glad to.  Any type of morality that is imposed from without is a cheap replacement for the real thing.  If we are to be moral, it has to come from within us.  That’s why a man like Jesus always talked about ‘planting seeds’ or ‘cleaning the inside of the cup’.  He knew that the only legitimate goodness is that which grows organically within us.  Following external rules is second-hand morality at best, and very often a tool of manipulation.

Bobby:  Interesting concept – ‘morality imposed from without’.  Can you further explain what you mean here?  Also, you talk about Jesus, but from reading your book it seems you are not a very religious person, at least not in the traditional sense.  Can you also discuss this along with your idea that ‘second hand morality is often a tool of manipulation’?

Paul:  Sure.   Morality imposed from without demotes you; it degrades you.  To be a moral person, you must learn to judge rightly, to learn to choose the good, to hold to it even when you will suffer for it, and to spread that way of life.  It sets YOU as the decider, as the moral actor.  An imposed morality says that you are fit to be ordered around and nothing more.  It’s an insult.

Second-hand morality is almost the same, but is made to look better.  Some person or group claims to have a higher moral standing than anyone else and convinces people to take them on as an intellectual and moral partner.  They want you to adopt their moral standard, and they ALWAYS make that standard work in their favor.  That’s how they get people to willingly turn over their income and that’s how they get young men to willingly die for them.

As for Jesus, you are quite right:  I hold him in the highest esteem, although I’m certainly not religious in the traditional, systemic fashion.

Bobby:  Obviously with your company, Cryptohippie and your book, “A Lodging for Wayfaring Men”, this was not exactly a fairy tale fiction story.   There is an element of truth behind your writing.  You obviously believe strongly about this.  I tend to agree and see huge danger on the horizon for the world, but as an eternal optimist, I also see huge opportunity.

Today we have nearly every major world government spending more than it makes in tax revenue and borrowing the balance.  We are clearly on a path to some of the superpowers imploding due to their own socialist policies.  Nearly every day we are hearing news stories about the European Union countries, the US and Japan having significant budgetary issues and wanting to raise taxes on the wealthy – because they should pay more – in order to fund their agendas.  It seems like the “Atlas Shrugged” predictions are coming true.  But in today’s globalized economy, the solution seems to be ‘Gamma’ (from “A Lodging of Wayfaring Men”) instead of ‘Galt’s Gulch’.  What are your thoughts on this?

Paul:  Yes, I do think the Gamma solution – invisible commerce, communication and identity on the Internet – is our greatest tool.  Encryption is nearly free and it provides superb protection.  It can’t protect everything, but it seriously tips the balance in our favor.  That’s why governments world-over are promoting reasons to capture and regulate the Internet.  They massively screwed-up by allowing it to get started in the 90s.

Bobby:  So Cryptohippie is essentially someone’s entry point into Gamma as discussed in your book, correct?  And if so, what would you recommend for someone who is just becoming enlightened to this world of private digital commerce?

Paul:  Yes, Cryptohippie would function much that way. I definitely recommend that people learn about digital currencies.  The best starting point is DGCMagazine.com.  There’s a lot of good information to pickup there.  People have to start using encryption, if they haven’t already.  Many types are free, for goodness sake, and they are not that hard to use.  Mostly, however, I want people to start doing something.  Talk is cheap.  People must act if they want the world to change.  Waiting for someone else to do it is a waste of life – we must act.  I barely care where they get started, so long as they do get started – pick a spot and start exerting your will in the world.

Bobby:  As I stated before, I am an eternal optimist.  I truly believe that we are living in a pivotal time in history.  Imagine the opportunities available in Russia in the early 1990’s.  They emerged from communist rule and within just a few years entrepreneurship flourished.  I personally have some friends and clients there who have succeeded beyond their wildest dreams due to the turmoil during this era.  I see a similar situation today, but on a grander, more global scale.

Those that are intelligent, hard working, and opportunistic will be alert to new opportunities and will drive the world economy forward from the doldrums we have been experiencing over the past few years.  With technology advancing at such a rapid rate, there is no reason why people cannot live, work and play wherever they chose.  We aren’t shackled by geographical boundaries anymore, but many people are still afraid of change so they stick to the old norms.  Tell me your thoughts on where you see the opportunities of the future.

Paul:  The future is absolutely golden, if we can get through this next passage without global tyranny taking hold.  The situation is actually much, much better than people understand already.  But we’ll have to go through a very dangerous passage.  I actually wrote a long piece on this in my newsletter this month.  If you look at the right economic data, you’ll see that scarcity is slowly dying in the Western world – we just don’t feel it because our prosperity has been skimmed away from us even faster.  We stand at the edge of a tremendous economic boom; far bigger and better than anything in history.  We have just a few insanities to reject and a few simple virtues to return to.

Bobby:  Is there anything else you would like to share with my readers that we haven’t already covered?

Paul:  Hmmm… I guess not, but I would like to elaborate on something we discussed earlier:

Live your life.  Most of this world is designed to keep you within limits that other people have drawn. Even good people will try to keep you within pre-defined limits.  Ignore all of that.  Live your life.  Yes, get the best input you can find, ask advice of people who are able to provide it, live peaceably, live reasonably, live with kindness, but live your way.  Step outside the prescribed paths.  Try new things.  If you make mistakes (and you will), figure out why and avoid them next time.  Take some risks, accept pain when you must, and refuse to merely exist. Live.

Bobby:  I want to thank you again for your time and willingness to share.  Take care.

Paul:  Thanks for having me.

In my consulting business, I frequently work with real estate investors who are interested in creating a bulletproof asset protection plan to shield themselves from predatory litigation.  From my viewpoint, real estate investors have one of the highest risk profiles of any business person.

Clearly the world is more litigious today than it was just 10 years ago.  I call this phenomenon ‘wealth through litigation’.  It is a sad state of affairs when the average American now believes his path to riches lies not with hard work, but with winning a big lawsuit or the lottery.

The litigation problem real estate investors face is twofold – huge exposure and ease of collection.  Later in this newsletter I will provide you with an option to virtually eliminate both of those risks, but for now, let me explain with a hypothetical story.

Mike Smith is an average guy who has worked hard, saved money, and invested in residential rental properties in his hometown.  Mike has spent the past 10 years building a sizeable portfolio of rental properties that now totals 25 homes.  His average rental is valued at $100,000; therefore he is controlling $2.5M in assets.  With $1M in various mortgages, this gives him a net worth of $1.5M.

Mike pays about $7000 per month in mortgage payments, puts aside another $7000 per month for repairs and vacancies and collects $20,000 per month in gross rents.  This leaves him with $6000 in net profit.

At his job, he earns about $150,000 per year.  This gives Mike a net worth of $1.5M and an annual income of $222,000.  Sounds pretty decent, right?  The problem is Mike has a huge bull’s-eye on his back now.  While he may not be rich in today’s standards of Wall Street bankers and political lobbyists, he does has a sizeable net worth and income level.

With this target painted on Mike, he is now financially susceptible to every potential future creditor.  The list of predators is virtually endless.

However, right now is quite possibly a once in a lifetime opportunity to become a residential real estate mogul.  As you can see from the graph below, housing prices were climbing steadily from 2000 until the crisis began in 2007 where there was a rapid decline and now it appears an uptrend is firmly in place.

There are other demographic issues here that may also provide a tailwind to the rental real estate market.  With millions of people having their homes foreclosed on over the past couple of years, there are a lot of people with bad credit scores which place them outside of the realm of bank financing.

We are also seeing an idealogical shift much like the transformation that happened after the great depression in 1929.  During this era people began to dramatically cut back their spending habits and focus on self-sustainability.  Even the wealthier folks who lived through that time decided that there was no need for their previously opulent lifestyles.

This shift in thought process is happening today as well.  I’ve had conversations with several highly successful entrepreneur friends who have made dramatic shifts in their lifestyle even though it wasn’t financially necessary.

In addition to this shift, technological advances over the past few years have provided the ability for workers to be much more transient than before – moving from city to city chasing job opportunities as well as working from a home location more conducive to their lifestyle whilst working remotely.

These various trends have already begun and are creating a shift from home ownership to home rental.  I see huge opportunities over the  upcoming years for those real estate entrepreneurs willing to work hard and take advantage of this economic transformation.

Of course, herein also lies the problem.  Once you begin to develop this portfolio of assets, like Mike Smith, you also increase the size of your bull’s-eye.  Do not lose sight of the pitfalls while pursuing the opportunity.

I work with many real estate investors today and one of the biggest problems they face with a properly structured asset protection plan is cost.  Asset protection planning can get expensive and it rarely offers any immediate benefit.  It’s like buying disability insurance for an Olympic athelete, it’s just hard to justify.

I always advocate getting your personal assets out of your own name as well as segretation of the assets themselves.  However, when you are talking about a house that may only cost $50,000, spending $2,000 on a properly stuctured LLC can get cost prohibitive.  Especially if you own 25 rental houses.

Using LLC’s is a great way to go as long as they are properly structured, but this requires cafeful planning, registration in the right state and a bulletproof operating agreement.  This really isn’t a DIY task.

Another option that is rarely discussed and used almost exclusively by the uber-rich is to have a land trust hold title to your property and use this same properly structured LLC as the trustee.

A land trust can be created for significantly less money than an LLC and because a land trust is not recorded in any public record, it offers you complete anonymity for your real estate holdings.

In the  above example with Mike Smith, you could implement a structure using 25 separate land trusts and one or two LLC’s as opposed to 25 LLC’s.  This would be significantly more cost effective and equally (if not moreso) as beneficial.

You would create a separate land trust for each property owned and then use the same LLC as the trustee for each of them.

A land trust is a legal entity that exists solely for the purpose of holding assets.  A trust has three main elements:

1. Beneficiary – the individual(s) who control the trust and its assets.  As a beneficiary, you have control of the property held in trust just as if you were the owner and are entitled to profits from the rental or sale of the asset.
2. Trustee – The individual (or other entity like an LLC) who actually owns the property in trust.  The trustee has the management responsibility of the assets distributing profits according to the terms of the agreement.
3. Trust agreement – This contract outlines the terms of how the trust is managed and administered.  It spells out the responsibilities of the beneficiaries and the trustee.

The benefits of using a land trust are;

1. Privacy of ownership – The property owner of record is only disclosed in the trust agreement.  The trust agreement which lists the beneficiaries is not a matter of public record allowing you to retain full control of the asset without creating a public record of your beneficial ownership.  This is an ideal asset protection planning tool for real estate holdings because it makes it very difficult for potential creditors to track down your holdings.  Frequently attorneys take cases on a contingency basis.  If the attorney cannot find any asset of value in your name, he is much less likely to want to pursue a lawsuit against you on this basis.  By establishing a veil of privacy around your assets, this frequently is enough of a deterrent to keep the wolves at bay.
2. Ease of transfer – Transferring a property held in trust is much easier than transferring a property you own in your own name.  The beneficial interest in a trust is considered personal property, not real property therfore you can assign your beneficial interest to another party without a formal closing.
3. Ease of control by multiple owners – If there are mulitple partners in a real estate investment, the owners can place the asset in the trust and assign themselves as beneficiaries.  Then only the trustee’s signature is required to execute documents as opposed to each and every beneficiary.
   
4. Comined with an LLC as trustee – If you use a properly structured LLC as the trustee, you have created an additional layer of privacy between you and the real estate asset.  The LLC, as trustee, effectively serves as property manager keeping all banking records in the name of the LLC as it relates to the property.  Additionally, you can also create a 2^nd LLC to use as beneficiary as an additional layer of asset protection if so desired.

With a properly developed asset protection plan using land trusts and an LLC, you remedy the investors two biggest dilemmas – huge exposure and ease of collection.

The land trust creates the veil of privacy around the assets making it virtually impossible for creditors to determine the beneficial owners of the real estate.  When backed up with the legal asset protection benefits of the properly structured LLC, you create a very cost effective, easily scalable, and bulletproof proof plan that is ideal for residential real estate investors.

If you are a real estate investor and would like to schedule a free 30 minute consultation to learn how we can help you properly structure your bulletproof asset protection plan, contact us today.

Living in Eastern Europe, I am somewhat sheltered from this, but with Facebook and all of the news outlets it’s impossible to avoid the implications of what’s going on with this movement.

The OWS movement reminds me of a scene from the movie ‘Network’ starring Peter Finch where he plays the role of network anchorman, presumably modeled after Walter Cronkite.  Click here to watch the scene.

Finch repeatedly says, “I’m mad as hell and I’m not going to take it anymore”.  This was during the ‘70’s when the US was suffering from a recession, high inflation, high gas prices, and record high unemployment.  Sound familiar.

Today is a different world though.  We live in the age of Facebook, Twitter, text messaging and blogs.  We have reached a point of worldwide group consciousness never before seen in the history of mankind.

You can’t even burp in public anymore without someone recording the video on their iPhone, uploading it to YouTube and then sharing it with their 730 Facebook friends within seconds.

Some people believe the revolutions in Egypt and Libya wouldn’t have happened if it weren’t for social media.  I tend to agree.  It provided a virtual medium for people to organize and plan for their civil (and sometimes not so civil) disobedience.

I personally have been dismissing the OWS movement as a bunch of ignorant, lazy, out of work 20 something hippies who don’t understand how the world works.  To some extent, this is the case.

But admittedly, I have been wrong to dismiss this movement as short term hippie protest against capitalism.  I feel the anger is misplaced toward Wall Street and the majority of the blame lies in Washington.  I would feel a bit better if it were labeled, ‘Occupy DC’, but regardless there is merit to their protests, and it shouldn’t be dismissed.

People are angry with the current state of affairs, and rightly so.  Maybe they don’t understand the underlying causes of the ongoing economic crisis, but nonetheless they have the right to be disenchanted with the way things are being handled.

I am sure many of you (if not all) agree that something is just not right today with the world.  There is something out of sync.

We are angry that our elected officials have no fiscal responsibility and continue to rack up government debt that will drag down American productivity and decrease the quality of life for generations to come.

We are angry that huge corporations that fund political parties are not allowed to go bankrupt while our businesses suffer in the downturn.  We are angry that our neighbor stopped paying his mortgage 2 years ago but still lives happily in his house while we continue to pay a mortgage payment on a house that is worth half of what we owe on it.

We are angry that big corporations have record amounts of cash on their balance sheets, but still refuse to hire.  We are angry that the US seems to be turning into a fascist police state robbing you and me of our personal freedoms.  We are angry that we used to have great 6-figure jobs and now have to work 2-3 shit jobs just to make ends meet.

We are angry that old ladies and children are subjected to intrusive pat downs by bullying TSA agents when they want to fly cross country and visit family.  We are angry that politicians get to vote on the citizens’ healthcare and social insurance plans while they get to opt out in favor of much more lucrative plans for themselves.

We are angry when we go fill up our gas tanks for $90 and then read about the subsidies the oil companies receive.  We are angry when we hear stories about companies like Halliburton who received billions in government contracts that were never put up for public bid – especially when we know the former US Vice President was also the former CEO of Halliburton.

Clearly I could go on and on.  There is much to be angry about today.

The potential exists for the OWS movement to be the beginning of a US revolution.  Not in the sense that the people take up arms and storm the White House, but in the economic sense that people are fed up with the system and they stop feeding the beast.

This is essentially what has been happening in Greece over the past few decades.  Greece has a long history of stupid government.  In 1922 the Greek finance minister declared that each drachma would be cut in half and the balance of value would be replaced by 20 year bonds paying a 6.5% coupon.

Imagine you had 10k drachma in your bank account in 1922 and the next day you have 5k drachma and a 5k bond paying 6.5% interest for 20 years.  On the surface this sounds ok, but in reality the Greek government paid the coupon payments for a few more years then defaulted on the bonds.

Between 1940-1944, Greece re-denominated the drachma several times and created inflation that amounted to 160,000,000,000% during that period.  As you may imagine, the people developed a severe distrust for the Greek government.

It’s not hard to understand why so many Greek business people ran the majority of their businesses in the ‘black market’ and outside of the watching eyes of the incompetent policymakers.  Effectively the Greeks decided to stop feeding the beast.

They said, “I’m mad as hell and I’m not going to take it anymore”.

What comes next though is critically important.

What do you intend to do about it?

Do you plan to join the OWS crowd all across America and hold up signs protesting your anger?  Do you plan to build a bunker under your house and stock it with water, can foods, gold, guns and ammo?

Or do you plan to protect the wealth you currently have and position yourself to profit from the market inefficiencies that are abundant today?

Obviously I am a big believer in proper asset protection planning.  It is critically important to create a veil of privacy around your assets to keep the wolves at bay.  A properly structured asset protection plan consists of limited liability companies (LLC), limited partnerships (LP or FLP), and asset protection trusts or living trusts to ensure your estate can pass on to your heirs without government interference.

I am also a big believer in providing value.  Is your skill set sufficient for the globalized job market?  Maybe you can learn a new language, get your master’s degree, learn how to write html code, learn to build wordpress sites, become proficient in options trading, or educate yourself on reading financial statements.  The options for improvement are virtually endless.  But sitting on your laurels does nothing to improve your own situation.

I recently talked with a friend of mine who saw a significant downturn in his business, so instead of whining and complaining then collected unemployment, he researched the job market.  What he found was that in a certain part of the country the job market was booming due to recent oil and natural gas exploration.  He packed up the car, moved there and got a blue collar job making about $80k per year.

Another friend who runs several different web stores went on a buying spree picking up website businesses selling for 1X profit.  Yes, 1X profit.  Sometimes even less.

I’ve got a couple of friends who have been buying up houses in a couple of specific markets for less than 50% of their sales price just 3 years ago.  They are buying only newer houses, renting them out, and selling them as investment property to investors around the world.  Then they do the property management on the backend.

Even my 15 year old daughter has taken it upon herself (sorry, I’m a proud papa) to leverage her skills into freelance work.  She recently started taking jobs on Odesk writing and promoting a couple of fashion blogs.  This is work she can do from anywhere in the world, it’s completely virtual.

There are thousands of available jobs on sites like Odesk or Elance and many people make their living doing various types of freelance work.  For those of you looking for higher paying jobs, a quick search on ExecuNet showed thousands of available jobs both in the US and abroad paying well into the 6 figure range.

The point is that there is opportunity everywhere.  In the ‘70s after the stock market crashed the majority of passive investors fled the equities markets.  But many people built great wealth buying at that time.

I’ve said it many times, but where turmoil exists, opportunity persists.  Personally I’d rather profit from the crisis instead of stock my bunker.

In last week’s asset protection newsletter titled, “I’m Buying Call Options on Entrepreneurship”, I discussed my bullishness on the innovation and creativity of the entrepreneur despite the stupidity of governments in the US and around the world.

The second paragraph of this article states;

The world truly revolves around entrepreneurship.  You are the dreamers, visionaries and ultimately the creators of economic growth and prosperity.  You are then ones responsible for constantly improving the welfare of the billions of inhabitants on this planet.

Yesterday evening, one of the world’s greatest entrepreneurs died after having battled cancer for the past several years of his life.  Steve Jobs’ name was virtually synonymous with entrepreneur during his lifetime.

Jobs cofounded Apple in the late ‘70’s only to be ousted by the CEO and board he hired several years later.  Approximately 10 years later, Jobs regained the reigns of Apple and brought the world a string of innovative products like the iMac, iPod, iPhone, and most recently, the iPad.

Early in his career he was considered the rogue underdog, but went on to become the tech CEO powerhouse building the 2^nd most valuable company in the world, behind Exxon-Mobile.  The last 10 years of his life could be considered as his most productive years where he continued to impact the world in a big way up until his death yesterday.

Here are a few of my favorite quotes from Jobs;

• “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to…love what you do. – Your time is limited. Don’t waste it living someone else’s life”
• “You’ve got to find what you love… the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.”
• “Remembering that you are going to die is the best way I know to avoid the trap of thinking that you have something to lose.”

The man truly embodied the spirit of passion, perseverance and an unwavering commitment to his own ideals.  Is there any doubt he was passionate about his life and his work?  Bravo to a living an extraordinary life Steve.

Steve Jobs is the modern day, real life equivalent to one of my all time favorite novel characters.  Howard Roark is the unyielding, visionary architect hero from the novel, “The Fountainhead” by Ayn Rand.”

While “The Fountainhead” may have been written nearly 70 years ago, it is more popular today than when it was originally published.  The hero, Howard Roark is an architect who wanted to build things in exactly his own way.  He was completely unwilling to yield to the whims of bosses, regulators, friends, family or even the university where he was studying architecture.

The book even begins with his dismissal from school because of his unwillingness to conform to the norms of the day in regards to architectural design.  He was brash, arrogant, not very personable, volatile, and difficult to work with.

He was also very passionate about his work, exceptionally brilliant, and built things that improved the lives of many.  Sounds just like Steve Jobs to me.

How about you?  Are you passionate about your life’s work?  Are you making a difference in someone’s life?  Are you providing value to the world?

I am not suggesting that we all strive to become the next Steve Jobs.  That would certainly be a tough act to follow.

In spirit however, we should all live our lives with a similar level of passion and an unwillingness to sacrifice our own ideals for the sake of something or someone else.

Personally I value individual creativity, productivity and the power of capitalism as the growth driver of the world economic engine.  I chose asset protection planning as a means to help entrepreneurs and investors their keep money and assets where they are most productive – in their own hands as opposed to the hands of the parasites that now seem to flourish around the world.

Additionally, personal freedom and adventure are ideals that I value highly.  What are your values?  Are you living them every day?

Over the past week I have been working with one of my asset protection clients developing a strategy for him to minimize his risk.  He is a commercial real estate entrepreneur with a fairly large 8 figure net worth.  Every time I work with successful entrepreneurs like him I can feel my optimism growing.

The world truly revolves around entrepreneurship.  You are the dreamers, visionaries and ultimately the creators of economic growth and prosperity.  You are then ones responsible for constantly improving the welfare of the billions of inhabitants on this planet.

So while I may seem doom and gloom at times, it is all in an effort to awaken you to some of the harsher realities in today’s world.  Truth be told, I am an eternal optimist.

I guess you could say I am bullish on the ingenuity and creativeness of entrepreneurs, but very bearish on governments and politics in general.

I found this recent statement by Lon Fuller, a noted legal philosopher and Harvard professor.  I thought it was relevant to what I call ‘The Great Reset’;

Lon Fuller argued that in order to create and maintain a system which can properly be called a ‘legal system’; a certain procedural requirement should be satisfied.  These are (1) that there should be rules in the first place as opposed to ad hoc judgments; (2) those rules must be made known to all those affected by them; (3) rules should not have retrospective effect; (4) the rules should be understandable and; (5) consistent and; (6) should not require the impossible of people; (7) the rules should not be changed so frequently that people cannot orient their actions by them; (8) the rules as announced should coincide with the actual administration of those rules.  Fuller claims that the absence of any of the 8 basic premises of a legal system do not just result in a bad system, but no legal system at all.

America was established as a place where people could come to be free from overzealous governments, religious persecution, and economic constraints.  America was founded as a Republic; or rule by law.

If you take a look at just the US tax code, we are failing miserably with our legal system.

Regardless of the failure of the political machine in America, I am very optimistic about the future.  If there were an option trade to be made here, I would be buying calls on entrepreneurship and puts on stupid statist political agendas.

Right now is the best time in mankind’s history to be an entrepreneur.  I’ve said it many times; ‘Where Turmoil Exists, Opportunity Persists’.

With the explosion of the internet, you can now work from anywhere in the world.  Just five short years ago, it was very, very difficult to earn a living online.  Today, the opportunities are unlimited.

Just this week my 15 year old daughter got a freelance job (using Odesk) working for a clothing company promoting their blog, writing articles, and posting product pictures.  I was bagging groceries at that age hoping some desperate housewife would tip me for bringing groceries to her car.

A friend of mine, MJ Demarco (author of the book ‘The Millionaire Fastlane’ – highly, highly recommended!), says that in today’s world it’s all about providing value.  While that may seem a bit cliché, most people seem to just want to make money.

MJ recommends finding an unfulfilled or under-fulfilled need in the marketplace and adding value.  The majority of people today follow the traditional path and just want to find a job that pays money.  They seem to forget the part about providing value.  (MJ also runs a forum called ‘The Fastlane Forum’ for people looking to connect with other like-minded people).

My daughter found a way to provide value to her employer by offering her services.  Every day I see opportunities where a need is unfulfilled or under-fulfilled and providing value in this marketplace could give you freedom from the traditional 9-5 life.

Here in Eastern Europe, I have noticed that nearly everyone either speaks English or wants to.  Of course the best time to learn a language is when you are a child, so an English language pre-school would be ideal.  I’ve yet to find one.  They may exist, but they are few and far between.  Need?  Check.  Value?  Check.

A business associate of mine runs a law firm in Panama.  He has found that Americans are becoming more and more leery of the US financial system.  He has negotiated a deal with a credit union in Panama to accept US clients (very few accept foreigners).  This credit union pays 4% interest on basic savings accounts and up to 9% on retirement accounts.

If you put $100,000 in a retirement savings account today and added $10,000 per year for the next 20 years, you would end up with over $1M.  Keep in mind, this is held in cash, no risky investments – no stocks, bonds, options, real estate, etc. – only cash.

Where else can you get 9% a year risk free?  Did I mention there has never been a credit union failure in Panama?  Ever!  (If you would like a free introduction to my lawyer friend, email me here and mention Panama credit union in the subject line).  Need?  Check.  Value?  Check.

Another friend of mine, Jason, found there was a sever lack of quality in the investment research business.  He found there were a lot junk newsletters written by inexperienced traders and investors.

So Jason decided to find some of the top traders in the US with a long and verifiable track record of success and publish their research.  I am personally using one of his publications with much success (click here if you want to watch his free intro video).

For those of you that have chosen to live an expat life, you know that your ability to earn a living abroad was a very critical part of that decision.   If you have the knack for trading, this becomes a viable option for work.

I am personally using Chuck Hughes’ research.  I have been an options trader for several years.  Chuck’s trading methods are very similar to my own, and I have learned a lot about minimizing my own risk and maximizing gain using his options strategies.  For me, this was an investment in my trading education.

Yesterday I made a trade using his recommendation (by the way, I don’t make blind trades on someone else’s recommendations – I always do my own research to verify).  For every $5800 I put into the trade, my maximum gain was $796 and my maximum loss was $170.  This is for a maximum of a 9 week holding period (basically 2 months).

If it reaches max gain, this is over 82% annualized return.  If it reaches max loss, this is about a 17% annualized loss.  For most traders, this is a very, very good risk/reward ration.  If you are interested in learning more, click here to watch Chuck’s free video.  Need?  Check.  Value?  Check.

Day after day I speak with clients and friends who constantly amaze me at their capacity to reengineer their lives and their businesses to provide more value in today’s marketplace.

One friend is taking advantage of recent law changes related to medical marijuana and opening a high tech grow center to supply the local dispensaries.  Trust me; he’s not your ordinary farmer – or pothead for that matter.

Another friend just emailed me about the difficulty he has experienced in finding long boards (skateboards) in Finland.  He has done some research and found there is demand, but very little supply. He is talking to some US manufacturers about importing their product.

I provide value (or attempt to anyway) by offering you an alternative insight into the world of economics.  I help clients minimize their risk through customized asset protection planning.  I also inform you of various opportunities as they arise that can be of great benefit to your quality of life.

What is your value proposition?  Are you one of those people that just want to make money, or are you truly looking for ways to add value to the lives of others?  What are you doing today to improve upon what you did yesterday?

I’ve known Tres now since 2005.  We both started (and finished in ‘07) a Master’s in Entrepreneurship at MIT at that time and have remained good friends since.  Tres works on the trading floor at the CME and runs his own futures brokerage firm in Chicago.

He is also a frequent guest on CNBC, Fox Business and Bloomberg News every week.  Today we are going to talk about what Tres calls his ‘retirement trade’.  The webinar is going to be held today at 7pm EST.  If you are interested in joining us, click here.

In addition to the webinar later today with Tres, I also need to squeeze in play time with my 4 year old son, the daily download of school and social issues with my 15 year old daughter, and taking my 12 year old son to lacrosse practice.

After lacrosse, I think my son and I are going to ride bikes over to the bmx park and I will see if I can clear the big ramp jump.  Don’t worry; my son can call the ambulance if necessary.

You see, while I may be a workaholic, I am also a playaholic.  One of my all time favorite songs is Eminem’s ‘Lose Yourself’.  If you haven’t heard the song, or haven’t listened to it in awhile, click the YouTube link and give it a listen.

My favorite line is right at the beginning of the song – “If you had one shot, or one opportunity to seize everything you ever wanted in one moment, would you capture it, or just let it slip?”  What would you do?

My nephew John, who passed away in June, reintroduced me to this song which I had long since disregarded as just another rap song.  He lived a great life and seized every moment.   I know what his answer was.  (Read my article ‘Homeless and Happy’ for more on this topic).

This song is truly powerful.  I listen to it frequently to remind me about living life to the fullest and never having regrets.

Nearly every day I have a conversation with friends and family inquiring about my own life choices.  They question my sanity about living outside of the US, not owning a home, not owning a car, sending my kids to school in a foreign country, working until 3am but riding bicycles during the day, and many other things that don’t fall in line with the status quo.

One of my unnamed family members was even so kind as to tell me that I was immature and irresponsible for riding motorcycles at my age (I’m 37) and that I needed to grow up and act like an adult.  Maybe he needs to try acting like a kid.

A friend once told me, “I want to be just like you when I grow up.”  I told her, “If you grow up, you will never be like me.”

For me though, I question the sanity of living the comfortable, mediocre life doing the same thing day after day, living in the same place for decades, going on holiday to the same place every summer, and traveling the same road to the same job in the same car at the same time day after day after day.

As Einstein so famously stated, “The definition of insanity is doing the same thing over and over again and expecting different results.”

How do you live your life?  Is it exactly as you want it?  Or do you constantly dream of what could have been?

As Eminem said, “You only get one shot, do not miss your chance…”

Call today to schedule your free 30 minute asset protection consultation.  Until next week, live extraordinary.