Today I want to share with you my philosophical beliefs on capitalism and a free market in order to help you understand why asset protection planning is so important. 

Historically, capitalism has proven itself to be the only system that works efficiently, but it now seems the governments of the world are increasingly trying to regulate and tax us to the point where we give up and move to our own little Galt’s Gulch (for those of you that don’t know this term, this is from the book ‘Atlas Shrugged’ by Ayn Rand, and one of my personal favorites). 

I truly believe in the free market and it really irks me to read news headlines like “The Free Market Failure…”.  I believe this to be a myth.  We have not had a truly free market in a very long time.  The governments of the world tend to want to expand their power base and tax and regulate every sector of the market.

Fortunately, there are still opportunities to protect our assets from not only unscrupulous creditors, but also government influence.  I do not advocate tax evasion or avoidance of your financial responsibilities of any sort, but at some point, you need to realize where other parties have crossed the line and become a burden on your personal freedoms. 

In the US, we will likely reach a point soon where there will be currency controls and you won’t be allowed to move your money outside of the country and invest in world markets.  In 1933 President Roosevelt confiscated all publicly held gold and within a few short months, devalued the dollar effectively stealing the citizens’ wealth. 

We are still in the midst of the largest economic crisis in modern history and most likely there will be drastic protectionist policies put in place which will not be positive for those of you with wealth.

Entrepreneurs and investors are the growth drivers of our economy.  The creation and preservation of your wealth is what will continue to improve the prosperity of the world.  The governments’ social programs are not what the world needs for progress.  This is why asset protection planning is so crucial for economic progress in today’s world.

As a society, we need you to prosper in order to improve the living standards of all.  As the cliché goes, “a rising tide lifts all ships”.  This holds true in economics as well.  As the entrepreneurs and investors of the world increase their wealth, it improves the living standards of the whole society.

 Our firm’s mission is to provide asset protection planning that allow you to create and preserve your wealth and protect it from the two main threats of the modern world; taxes and litigation.  While not very altruistic by nature, I do want the world to prosper.  This is only achievable by allowing productive members of society to maintain and increase their wealth. 

Contact us today for your free 30 minute consultation.

I don’t usually repost other people’s blogs, but this one is pretty funny.  Please click through to read the remainder…

The Top Ten Reasons You Should Celebrate House Passage Of The Healthcare Bill

10) A nation that can afford trillions in deficits as far as the eye can see can surely afford hundreds of billions more. Right?

9) While many of Bart Stupak’s pro-life constituents might feel he has betrayed his pledge to guard the sanctity of life, they will be getting some nice new runway lights, which is kind of the same thing.  

It’s for the children. The 27-year-old children.

7) New taxes on interest income, dividends, and capital gains will surely spur a renaissance in job-creating investments.  As Paul Krugman might say, it’s textbook economics.

You can read the rest here…

If you are reading this blog, you know my focus is on asset protection planning.  Presumably we are also somewhat like-minded or else you would quickly tire of my rants.  My point being, this health care bill has a significant impact on your wealth.  And the longer you wait to act on creating an asset protection plan, the worse the problem will get.  It is highly likely that many avenues for creating offshore structures and offshore banking will be closed.

With nearly $1T pledged for this enormous bill, there are only 3 ways the federal government can pay for it; cut spending, raise taxes, or inflation.  And by inflation, I mean printing dollars.  Who here believes the Federal government will cut spending?  Anyone, anyone?  So basically we are looking at the destruction of your wealth through taxation and inflation.  If you don’t believe me, just read your old high school history books.  We only have to look as far back as the ’70’s to see what happened when we printed an extra $100B.  Tax rates skyrocketed and inflation was in the mid double digits.  And $100B now barely covers the congressional furniture and toilet seat budget…

I would like to say that I don’t mean to scare you, but I would be lying.  I want to scare you.  I want to scare you into action.  I personally believe that through true capitalism, the world prospers.  And people like you are the capitalists that make the world go ’round.  But we are on the verge of a major redistribution of wealth, and it won’t be redistributed into the hands of the productive members in society.

In the past coupl of years, public sector jobs have skyrocketed both in number and in pay.  Public sector jobs now average $11.90 per hour MORE than private sector jobs.  And the value of public sector benefits is nearly double.  The only large net employer over the past year has been in government.  Where do you think payroll funds come from?

Entrepreneurs and investors make money.  Bureaucrats consume it.  Period.  The productive members in society create and produce and the taxation from this production pays for government services.  With approximately 50% of the population now no longer paying taxes, we cannot continue on this path.  We are heading for major change.  Maybe not catastrophic, but certainly major change is coming.

And I want you to do something.  Protect your assets.  Protect yourself from litigation.  Protect yourself from over burdensome taxation.  Protect yourself from inflation.  I hope I have sparked some thoughts with you here and encourage you to take action.  Until next time, live well.

This is a legitimate question and one I get frequently.  Many people are scared away by the term “offshore asset protection” thinking it involves something inherently illegal.  This is an unfortunate consequence of being bombarded by media.

There is nothing illegal or immoral about offshore asset protection.  In reality, it is not even difficult or complex as many would have you believe.  In many cases it is as simple as establishing an offshore entity to own assets you already own like stocks, bonds, gold or private company stock.  In some cases it involves the use of trusts.

I have touched on the tax benefits and how that can be a significant benefit, so I won’t dive into that too deep here.  But if your business meets certain requirements, it is possible to move it offshore and defer taxation…indefinitely.  One of the biggest threats to your wealth is destruction through taxation and this tool can offer you the ultimate in offshore asset protection.

Aside from tax benefits, what are the other benefits?  The ‘what’s in it for me?’ question.  Another major threat to your wealth is litigation.  Litigation poses a huge threat and takes up an enormous amount of resources in the modern age.  In recent reports, litigation amounted to 2.3% of our GDP.  Think about that for a minute.  In 2009, the US GDP was approximately $14T, which means litigation cost US citizens and businesses about $322B.  To put that in perspective, Norway’s 2007 GDP was 391B. 

My point is, litigation is a very real threat to your wealth and a very large cost.  As your wealth grows, so does the size of the bulls-eye on your back.  This is why proper asset protection planning is critically important.  And an offshore strategy is not just for the super wealthy and criminals.  It can be for you as well.

Let me illustrate a simple example.  Fred owns a small business in rural Kansas.  Fred has owned it for many, many years and has accumulated about $2m that he has begun investing in the stock market.  Fred also owns a home with land in Kansas.  Fred has a nice life, a good income, and a fair amount of investments. 

If Fred is in a car accident and the other driver is injured, the plaintiff attorney, Lucifer, will want to find out what Fred is worth in order to determine if he is to pursue Fred beyond his insurance limits or just drop it there.  Lucifer finds out Fred owns a house, a business, and a $2m investment portfolio, all in Kansas.  Easy pickings.  Lucifer takes Fred to court, court issues judgment, and Fred is cleaned out.

Fred’s neighbor, Jacob, also owns a small business in Kansas.  Jacob also has amassed a $2m investment portfolio and a nice house in Kansas.  But Jacob has moved ownership of the shares of his business to his offshore entity.  His offshore entity also owns his investment account, which is held in a bank in Luxembourg.  Jacob’s house is owned by a NV LLC, and the NV LLC and the offshore entity are wrapped up into an Integrated Asset Protection Trust (IAPT). 

While Fred and Jacob are in similar positions, assuming Jacob also has a similar traffic accident, they are in much different situations after the accident.  First of all the plaintiff attorney, Lucifer, will likely find too many roadblocks in front of Jacob’s wealth to attempt to pursue.  Where does Lucifer file a lawsuit?  Kansas, where Jacob lives?  NV, where his LLC that owns his home is registered?  Belize, where his offshore entity is registered?  Luxembourg, where his investment portfolio is held?  or Cook Islands, where his trustee office is?  As you can see this is quite a dilemma and the roadblocks are many for poor Lucifer.  Meanwhile, Jacob is safe and sound at home, sleeping peacefully knowing his assets are well protected.

Don’t be Fred.

For many, this conjures images of the stereotypical Colombian drug lord laundering money in some offshore bank account in the Caymans. For others, it may bring forth images of former Enron executives with their money stashed away in Bermuda. And while this may be true for some, there are many legitimate entrepreneurs and investors at all levels who take advantage of legally protecting their assets from the very real threats that exist today.

Asset protection, simply put, involves legally protecting your assets from the threats that prevail in today’s society. There are two main threats to your wealth; litigation and government interference.

In 2008, there were nearly 1.2 million lawsuits filed in the US. If you consider there are approximately 300 million people, half of them in the workforce, this leaves about 1.2 million lawsuits for every 150 million people. But from 150 million people, less than 20% of them are really at risk to lose something in a lawsuit. That leaves 30 million people at risk. In this simplified example, 1 in every 25 at risk people were sued in 2008. 1 in 25. Not very good odds…

Are you a real estate investor? You can count on that number going much, much higher. You just never know when your next tenant opens a meth lab in the basement and blows the house up and kills someone. Are your remaining assets at risk in this case? Are you willing to risk your entire future on an event of which you have no control?

Asset protection involves anything from simple domestic LLC, up to a complex strategy involving offshore trusts and IBC’s. The strategy varies widely and is very specific to each situation. This is where proper counsel is crucial. You don’t want to find yourself on the wrong side of the law with the government. But a properly developed asset protection strategy will protect your wealth for future generations and give you that much needed ’sleep at night’ insurance.

I will discuss government interference at another date as that is too deep of a topic for one reading. Until next time, live well.