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SOVEREIGN MAN

Capital Preservation

September 9, 2010
Dallas, Texas, USA

How would you feel if a gang of criminals broke into your home, stole your most valuable possessions, and then went on national TV to claim it was for your own good?

My guess is that you would be pretty angry. Yet this is essentially what our central bankers and political leadership are doing right now.

Recently, at a picturesque resort in beautiful Wyoming, Fed chairman Ben Bernanke met with his global counterparts, including Bank of England’s Mervyn King, the ECB’s Jean-Claude Trichet, and Masaaki Shirakawa of the Bank of Japan.

The financial world was attentively looking for indications of what these men are planning after having exhausted every monetary policy tool at their disposal.

These bankers have collectively printed trillions of currency units, purchased unprecedented amounts of government debt, given handouts to commercial banks, slashed interest rates to record lows, and taken risky assets onto their ever-expanding balance sheets.

And how have these historic efforts fared? Poorly. Aside from a few outliers, economic data in the developed world is anemic at best. There has been little recovery in the jobs and housing markets, and the debt crises have grown worse.

Look, I’ll be the first to tell you that there are great opportunities and good news stories around the world; unfortunately, millions of people are having their lives and livelihoods turned upside down whilst Bernanke and his friends toasted themselves to expensive champagne at a luxury resort.

Politicians, meanwhile, are flying around the world on their government jets, praising themselves in front of voters and trying to convince the taxpayers that stimulus programs are working.

They’ve spent trillions of dollars over the last few years with little result. The ultimate consequence is more debt with little benefit to show for it.

Despite printing and spending trillions of dollars, the world is still faced with the same financial conditions as when this crisis started: huge government debt, and lack of credit availability in the private sector.

And so… what is their solution now? Continue cutting interest rates, spending trillions of dollars, and printing trillions more.

printing money Capital Preservation

Full stop. Something is wrong with this picture.

The first thing that comes to mind is the definition of insanity: “doing the same thing over and over again, but expecting a different result.” This is exactly what’s happening now.

Then again, how do you cut interest rates that are already at zero? How much more money do you print when you have already printed trillions of it? How much more do you spend when the deficit is already beyond $2 trillion?

At some point, even the most insane individual has to question this logic.

The crazed decisions of our financial and political leadership have a significant impact on our hard-earned savings… and entrusting our capital to a corrupt system of incompetent bureaucrats is a sure-fire way to lose it.

As we enter the Age of Turmoil, the risks to our capital are only going to increase. The way out, the way to survive and thrive, is to become self-reliant and reject the limiting options that have been force-fed by the old system.

Yesterday we talked about defining your reality as the first pillar of self-reliance. I believe that the second pillar of self-reliance is capital preservation: maintaining the value and purchasing power of the savings that we depend on to feed our families.

In the past, loose central banking and generous government entitlement programs were part of the old system that made a lot of people very rich. It generated huge returns in the market, easy credit for businesses and investors, and a giant safety net courtesy of the taxpayers.

That system has collapsed. There are a lot of people who still cling to it, who put their trust in their governments and central bankers… they’ll keep buying bonds, CD’s, etc., and they’re going to have their lives turned upside down.

Over the next 10-years as the Age of Turmoil rages on, you can absolutely bet on things like rising taxes, capital controls, further erosion of financial privacy, increased regulation, and negative real returns.

Perhaps most importantly, there’s a major debate in finance right now among various camps who are arguing whether we will see significant inflation, deflation, both, or neither.

Wherever you stand on the issue, I would suggest asking yourself one simple question: Will the paper currencies of the largest debtor nations in history continue to be reasonable stores of value in the long-term?

Absolutely not. A complete loss of confidence is coming, and this will have catastrophic effects on your savings if it is trapped in a debtor nation’s fiat currency.

Fundamentally, finding suitable alternatives to preserve capital is one of the ways that the self-reliant individual can survive and thrive in the Age of Turmoil.

This includes things like foreign bank accounts, alternative and productive assets, offshore gold storage, high yield financial assets, foreign currencies, etc.

In the upcoming premium service that I plan on launching next week, I will be providing a lot of actionable information about these sorts of ideas; to give you an example, here’s a quote from the first edition that I’m presently working on for you:

“The reason I like this option so much is because it kills two birds with one stone– you’re well on your way to acquiring second citizenship, and you’re also moving some money overseas. These are two of the most important flags you could ever plant. To get started, get in touch with my contact:”

I really appreciate all the amazing comments from the last few days, so I’d like to keep the contest going. Let me know what you think– what are some of the ways that you plan on preserving your capital?

Just like yesterday, one commenter from today will win a free 12-month subscription to our premium service… I’ll announce all the winners next week.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • Ridindawg

    Me?!…..Hell I’m gonna ride Simon’s coat tails!! Thus the coming premium perscription! ummm or is that subscription? :( Now please Simon…I’m waiting for the new coming newsletter aka Train. Jus show me where it is….I’ll hop the damn thing! Oh! PS….I too am a survivalist….and have land in good ole Montana. I can grow food and hunt big time. Yet meanwhile back at the ranch….I am buying gold…looking for a great way to short the market (I assume that will be via options…or is there is good mutual fund that rolls that way?) Waiting for the market to take some good gold/silver stocks down with it…then will buy more….already have outside usa bank accounts as a hedge for the coming currrency regulations, annnnd!…..gonna go have a good time living simple and cheap in various tropic lifestyles where they are already mostly surviving off the land ( no resorts for me..been there done that, me no likey! me like native.)
    Dawg

  • Trossaki

    I’ve already had a second citizenship as well as a passport. I also started a business which located in that country which has it own bank accounts which I control. As the sole owner and CEO of a legal entity I am not subject to my home country tax burden. This business is already growing and is going multi national. At that stage I will use a Singaporean entity as a parent company of all my international dealings which will save enomous amount of tax on the earning since the second country only “produce” on orders from the customers through the Singaporean entity. I hope the “termoil” does not happen too soon so I can grow my company big and strong enough to take advantage of the “termoil”. Thanks for the good works you’ve done. Hope to meet you sometime. Best regards, Tom R

  • Eric

    The main purpose of currency is to facilitate the exchange of goods and services. The notion of capital preservation implies the recognition of the need for an exchange at some time in the future. But it also implies that in the future, all parties will recognize the value of the currency as a medium for exchange with other parties as well.
    My currency is worth more today than it will be worth tomorrow, so it makes sense to use it at its maximum purchasing power (ie today). So the best way to preserve my capital at this point is to spend it on ‘durable goods’: items that will last me a long time, and that will not lose value as time passes.
    For now, to me, this means items such as planning my offshore strategy, visiting countries where I will be planting various flags, investing in my businesses, and finally exchanging what is left for a medium of exchange that is not likely to depreciate in the future: precious metals.

  • Terence

    I seem to recall in recent months that Simon named 4 countries in particular as great locations to get a second passport. They were Paraguay, Brazil, Uruguay, and Singapore. Important for me is time to achieve, but also not needing a lot of money. I am hoping that issues such as these are covered extensively along with the must have contacts needed to begin making things happen.

  • Fiscal freedom

    F=Fiscally
    R=Relocate
    E=Elsewhere
    E=Entirely
    D=Dictating
    O=Outside
    M=Monies
    Always knew I had to rely on myself and not any government for my general wellbeing. At age 32, bought myself some acreage outside of a small town (lower taxes) after having started my own service business. Established streams of income from this acreage-renting out land to horse owners, raising chickens(agricultural tax advantages). Needed good water source on property so traded the dirt dug from the pond for dozer operator services. Will establish second citizenship in a foreign country, and use my service skills to again set ourselves up. Learning Spanish as a second language(has already come in handy in setting up banking procedures). Believe the source of seeds for food production is being compromised so have found a source for non genetically-modified seeds; will then have a ‘clean’ food source which will collect the seed at the end of each growing season to replant again. For those needing other resources, may consider trading places by house sitting in the US or other countries. There is a bi-monthly newletter called, ‘The Caretaker Gazette’. Is a bi-monthly publication for a small fee out of Boerne, TX. Hopefully, this info will ‘spark some energy’ in the right direction and may good things happen for you…many blessings!

  • Val

    HI everyone,
    will like to know if anyone know Belize, San Pedro. I’m looking to do thier. I”m not an American but Canadian. And we are going as bad as the US.
    Simon I will like to thank you for all the information you are giving.
    If you have any contact or info on Belize please do.
    as far as protection same as all the comments: gold, etf commodities, yen,

  • JTapiador

    Simon,

    I am not a materially rich person at this point. My parents went through two bankruptcies when I was growing up. As a result, we were a family of very modest means.

    But through diligent work, some smart decisions, and His help, I carved out a niche for myself and my own family. I learned as much as I can without having to believe everything that politicians, media, or clerics tell me.

    Without going into much detail, by age 34 and living in a developing country like the Philippines, I have accomplished much more than my peers of my age did … and I plan to do more.

    So going back to your original question in preserving capital, we go back to the fundamental sources of capital: your talent, your health, and your relations. A smart, physically fit, and trustworthy person has the capability to thrive in any place or situation.

    If that person accepts turmoil as a fact of life, he has taken the first step in preserving his ‘capital’. Afterwards, he can then learn transferable skills (survival skills, entrepreneurial skills); regularly exercise (keep the body in shape, fight stress); and cultivate and expand relations (protect family, open opportunities). These create an environment that generate new wealth no matter the situation.

    Ultimately, the bedrock of that capital is his own self-awareness as well as sensitivity to his environment. This wisdom, I dare say spiritual wisdom, will allow him and his family to thrive in a turbulent world.

  • Califbabs

    Thank you so much for the useful information. It’s good to confirm I’m on the right track. I’ve paid off all my debts, I’m investing in gold, and have been thinking about getting a second passport. I’ve learned the hard way you can’t depend on a job to get anywhere. It’s really disgusting what Wall Street has be able to get away with. Government sanctioned robbery. Maybe next time they could use a gun so we have it up front.
    Thanks again for your help.

  • Offshoreguy

    I have been planning my escape from America and capital preservation for the last three years.

    In anticipation of departing, I’ve been downsizing and shedding as many superfluous and extraneous personal possessions that I can. My motto: Small, Tight, and Concise.

    My father is a immigrant from a European country. I fortunately found out that I could take advantage of the benefits of his citizenship. I gathered together all the paperwork, got everything stamped and stapled, photos taken, and personally handed in my passport application to the country’s embassy in Washington DC. Six weeks later I drove back and picked up my passport.

    Likewise I have been dumping dollars and accumulating precious metals since 2005. At today’s price I have close to 30K in metals.

    My last step is to get an online business going. My goal is to have it up, running, and offering my services by the end of September.

  • Bryant Kong

    Simon,

    I just wanted to say, what a blessing and a necessity for many of us as we dig into your field notes everyday.

    I am an Chinese American in his early 30′s who has permanent residency in South Korea (due to my Korean wife… who will not be getting US citizenship in order to diversify our flags).

    We are hoping to use our universal skills in being able to be mobile throughout our existence on this planet (she being an artist/author/graphic designer while I am in the business and ministerial world).

    The world is being redefined and we know that the policy makers are not going to make it better so we must create our own reality to do that.

    I am curious, other than International schools, do anyone else recommend any other education program or platform for children to be more versed and prepared for the future that belies them.

    I have a one year old and we are looking for educational alternatives for our future kids (innovative home-schooling, mobile institutions, etc.)?

  • Gsmythe

    Thank you for the opportunity to win a free subscription, Simon, to what is sure to be more great thought-provoking and inspiring late night reading!

    I’m Irish born, left when I was 5, moved to New Orleans with our family in 1976 (culture shock indeed!- they swore to me everyone was still speaking English), moved from there around the US, then to Australia, back to the US, then after college to Italy and France, back to NYC and now in Texas (practically a country state on its own if you believe the natives, and they can be convincing). At 33 my husband and I started a small franchised business in the education field which we’ve grown and with a now 6 year old son, the US school system and business climate have me positively itching to move abroad again and broaden my child’s horizons and our options. We’re thinking of starting a sustainable tourism/trade-based business in Panama and get the tax breaks to really launch something great. A distant second idea is to do the same back in Ireland and take advantage of cheaper real estate, but ultimately, we just want a way to have some other options and foster our son’s already fearsome independence streak (gets it from us I guess!) and his gift of gab for speaking with anyone no matter their language or background. My entire Irish family except me have all gotten US passports over the last 30 years, and though I really have come to love my adopted country of the US, I’ve never felt compelled to get my citizenship. Frankly, over the years the societal changes here have made it less and less compelling. For the last 10 years my family has been warning me that things are changing in the US and especially since 9/11, that I won’t be able to travel so freely as I did before, that I NEED to become a citizen, but I feel like I’m the one who really needs to have other opportunities abroad and not be pegged /too tied to the US, and that the US should be happy to have me as I currently employ 18 of its citizens, and am still hiring and growing our business despite the downturn. I worked in Manhattan up through and past 9/11 and witnessed the wonderful clamp down of the Patriot Act and Homeland Security and No Child Left Behind and have watched the toll that’s taken on the creativity of upcoming kids in the US, teachers, and entrepreneurs. OUCH! Feels (I hate to say it) but like we’re getting to a place where a whole generation of talent is being or has been squandered or squashed as a result. It’s been over 15 years now since I’ve lived abroad and 10 since I’ve really gotten to travel too much overseas. I know it’s all changed overseas since I was single and traveling like crazy. I feel like with a bit more current knowledge, (and your subscription could help!), my family would be able to make that leap, sell this business and trade it for a new company in an emerging economy where our business skills would help empower many more people. If you’ve actually read this post all the way through, thanks! And again thanks for the great newsletters and posts. Geraldine Smythe

  • Rwoodrin

    The system is corrupt. It is that way wherever you may travel. As such it provides a measure of order.
    The advantage to planting multiple flags is if and when you run afoul of local customs. Then move on. That and possibly different opportunities that lie with various juridictions.
    But for most of us in NA that is not possible.
    I believed this meltdown was a possibility 20 years ago and single mindledly pursued a career change involved in technical fields that could easily translate to barter Which eventually lead directly to my heart attacks and disability.
    So I am now depenedent on SS and a reliable source of electricity that keeps me alive on a C-Pap at night. Just one consequence of forsight without compassion.
    So here is two things worth noting:The grass is not always greener and it is always within your reach to change your circumstances…wherever that might be. I still intend to better my life.
    Now wherever you might find yourself, you need to be as self reliant as possible. More is possible for some…less for others.
    The basic needs has to be first met; food, shelter, safety, and water.
    I can’t move anywhere. So my options are what is available where I’m at. Solar power? Wind turbines? Water which contains 2 combustible elements; hydrogen and oxygen, both flammable. Possible fuel ?
    Self-education on health with alternative healing modalities. Growing your own food. Self containing communities here in the good old USA…off the grid. Most of these are things I can help here where I live. My dad is 82 and lived through the great depression and is in good health. Could I in good faith (if I had the means) leave him to the wolves. He as easily could’ve done that to me and didn’t.
    I’ve lived my whole life within 30 miles of my birth place and while I don’t fool myself, I honestly believe I stand a better chance of survival here than anywhere in the world.If it comes to a crapshoot you stand as good a chance wherever you might find yourself.
    I can now leave home without locking the door and many times I’ve found my keys in the front door or in my car in the morning.
    I know in a time of crisis that can change, where neighbors turn on each other but damn I can’t help but think but people you’ve known for 40+ years wouldn’t be more a friend than someone I just met.
    Maybe that I’m naive.
    Gold stored in a vault somewhere that I’ve never seen and can’t get to seems a whole lot like the fiat system we have now. And that ladies and gentleman is one problem with having only one focus. And leads to this question: Are you pursuing these flags for self sufficency or for later conquest?
    If it is in conquest then good ridance and take all the parasites with you. Seems to me I’ve heard that song before. “I’m from the ……and I’m here to help you.”
    I think each person has to choose what they believe is in their best interests. Most of the time you have to live with the results.
    But I do think the people spoken of in the US Constitution are about to rebel and rise up in violent protest. In which case it would be advisable to get the hell out of Dodge. But I also think it won’t be confined to one location. One place is as good as another under that scenario.
    Despite what I have written here I am optimistic about the future and I really hope that any that can escape the PC crowd of the west, do so. I am somewhat envious of that freedom of thought.

  • Jeffreed

    I left my country of permanent residence 30 years ago and have been back twice. With a boat building business in Thailand and a new startup boat repair company in Hongkong life is quite busy. The only way I can preserve capital is to continue investing in the things that I do best. When all this gets to be too much and it is time to slow down I have an an online business in mind. I am 60 years of age and have just had a great 2 week break in Puerto Galera….what a life!

    • Ridindawg

      Hey Jeff!…..It sounds like you are living a good life! I am just turning 60 and am now planning on spending my winters in the Tropics. Thailand has for years been on the top of my list. My goal is to have a nice simple cabin in Montana on a river paid for, and also a simple place in the tropics paid for, thus I can live the simple life ( minus the dollar chasin merry go round) and live off of the land if I need too. I have a deal for ya……I am a Chiropractor, if all that boat building has made your back sore, and if you are willing to show me and me lady your part of the world, I’ll work on ya and make ya feel like you are 30 again. :)
      Ridindawg

  • Twinflame06

    I like physical silver right now and shares in companies that I can take delivery of the physical certificates. I am also thinking about buying some foreign real estate. But before I do i will consult with you.:))

  • Davey-Boy

    By far the #1 way that I will continue to preserve my capitol is by maintaining a healthy mind, body and soul . Without those, one is not in much of a position to take advantage of the limitless opportunities that are coming around in this new “Age of Turmoil” . Those of us that keep our minds sharp and our bodies healthy will have the upper hand and be able to make the necessary decisions to ensure that our capital will be preserved.

    My C. P. Plan

    *Continue to hold onto my real estate investments (adding to them when the opportunities arise)

    *Seek out foreign property ownership (heading down to Ecuador early in the New Year to kick up some dirt/sand)

    *Purchase Precious Metals (a process that I am just beginning)

    *Continue to develop and expand my online presence (having a successful online business enables one to have limitless opportunities)

    There is lots of work to be done and the importance of staying connected with positive, like-minded , open individuals can only be of benefit to each and everyone of us.

    Thanks Simon…for what you do !

  • lionel

    In addition to gold and silver, I’ll start doing what’s been outlined in ‘Going Global’ by diversifying into the other currencies mentioned…

  • http://biosphericresonance.com Nicole

    Since I hardly have any capital except for what’s inside my head, for me capital preservation equals personal preservation. I know how to keep healthy, grow good food, provide clean water, etc.
    Planting multiple flags will definitely have to play a part too somehow, as the US is becoming a very dangerous place to live for anyone with a mind of their own.

  • Kleiner1996

    Up to now we were able to see our capital grow almost no matter where we invested it. Take property, its no longer a safe bet, in fact if you want to preserve capital, then its time to get out. This is what I’m doing and moving into rented property. That way I stop the downward spiral of property values over the next 5 years and gain flexibility.
    Where to invest? My money has gone in economies such as Brazil which are set to way outperform the US/EU over this time.
    What to invest? One area I have put my money is in land. The ROI can be very high if you do your due diligence and have patience to find the right thing.

  • Rcesperanza

    Thank you for continuing to provide accurate, actionable, and proven resources to the internationalization community. As someone who has invested good money in several of your premium services & products, I highly recommend them to others who may be sitting on the fence. The on the ground contacts alone that Simon has cultivated in different countries are worth the price of admission. Keep up the good work & please let us know about the Paraguay citizenship options & contacts.
    Thanks…

  • Gran_wazoo
    • BW

      Oh, my goodness.

      “We can conduct any kind of search we want,” said [police chief] McClintock. “We could ask TSA to bring wands or X-ray machines like they have in airports, though we don’t think that’s appropriate for PATCO riders at this time.”

      *At This Time*! More & better searching methods to come later!

  • James

    Not sure if this is the best post to ask this question since this series is getting so many comments, but I suppose it is relevant. Simon, I’m living in SE Asia and I dabble in internet marketing. I’m always looking for other opportunities for making money as I’ve gotten a little burnt out on what I do. One possibility I’ve been playing with is currency trading, and I take it from things I’ve read here as well as the general nature of your lifestyle that this is something you have quite a bit of knowledge about.

    I was just wondering if you could give any tips on a good resource–free or paid–where a complete newb could start studying up on on the currency markets and learning as much as possible about how it all works and some good strategies before actually getting involved. Can you point me in a good direction? If so, it would be much appreciated. Cheers.

  • Rjgribble

    How will we get to our gold stored in foreign countries when world turmoil closes down transportation systems?
    How will we communicate let alone run businesses when turmoil or electro-magnetic surges knock out phone and computer sytems?
    How do we obtain medicines that will no longer be manufactured or easily available in most places? Maybe
    hoarding supply of various meds would be almost as good as gold.
    How does one protect against dengue fever in Central and South America?
    Can anyone help with answers to these questions?

  • Pdaly

    Why would another foreign fiat currency be free of the risks to the Euro, Yen, Dollar and Pound. Surely they are all, to a greater or lesser extent, buit on the same principle and managed by people with the same outlook and world view?

    • http://twitter.com/FizzGig3211 Michael Coombes

      They are not “free” of risks, rather it’s a way of spreading your risk across multiple platforms. That way if the US$ crashes, but the EURO stays high, you only lose buying power of the currency that you have in US$.

      For instance, one currency that is relatively stable but poorly traded is the NZ$. That’s currently keeping relative value compared to the US$, EU, and YEN.

      The better option is to convert your currency (which is based on percieved value by the market for pretty much all currencies in the world now) to something that will hold relative value – such as precious metals, jewels. Better still, convert your currency into something that will generate an income for you as well, such as land, shares in a fundamentally sound company, or something similar.

  • Pdaly

    Simon, I find myself agreeing with a good proportion of your analysis and philosophy. There is one question though that keeps coming up in my mind.

    In a future world where the current nation-state model would have broken down, what governance models would it be replaced by?

    How will the rule of law be maintained over territories? Without the rule of law, there will be no contracts, no trust, no ability to hold on to your wealth and earnings.

    Are we talking about a futuristic version of the Middle Ages with many small sovereignties in a constant flux of alliances and skirmishes? How do you see it?

  • Surviving farmer

    Well, since I’m very young and I don’t have many assets to secure, I started at the beginning: learning to produce my own food. I bought seeds, read some books on how to grow crops and now I’m farming my own letuce, beans, patatoes and garlic. Next to that, I bought some chickes that bring me eggs for free.
    So, that was my hint for preparing yourself: make sure you get the means and the knowledge to feed your family yourself.

  • msc

    In 2006-2008 I used to work in London and had savings account in GBP. Crisis in 2008 made my savings sink by 40% compared to CHF. I was employed as an architect, I did not have a clue about market and economy. I left my office job and tried to find out what went wrong with my savings – I started to study the market and economy. I went to Switzerland, opened an account in April 2009 and my savings in CHF appreciated against most currencies since. That is investor approach. Next to that I have opened trading account. I could not have done more regarding I have been working in unpaid ‘junior’ position and have been saving for 2 years only.

  • Gpkn77

    I have been fortunately blessed with the opportunity to be “expatriated” in Singapore and China as part of my work for a multi-national. Because of this I have had access to financial markets and bank accounts in Singapore and Hongkong. I intend to keep a big portion of my assets in these locations, even as I work in China and return home to the Philippines. I am also working to get residency in HK, taking advantage of the fact that my mom acquired HK citizenship after I was born. I am taking your advice to heart. Citizenship one place, residency in another, assets in a third location, and business/career in another. Thanks for your valuable insights that have helped to broaden my thinking which came at the right time in my career/life. I have been an avid reader since you started this… and even in the prior publication with Casey research…Keep it up

  • Rowena

    So far, have accumulated some gold and silver.
    Am learning a portable occupation which can take me anywhere and have value and which can be exchanged for basic necessities..
    Not having much money in the banking system but cash on hand.
    Food which is storable.
    Seeds which are exchangable.
    Vitamins which can be stored for some time.
    Keeping healthy.
    Knowing key trustworthy locals who know the local community more than myself having just recently moved here.
    Knowledge and researching knowledge such as what you provide.
    Learning key aspects of surviving off the grid and how to implement.
    More than one source of income.

  • OneLessSheep

    …sadly, i too was one of the sleeping sheep that followed the masses through the “debt-spend-plan for death” cycle that has been pushed by world governments…

    …so im starting rather late in building my escape and capital preservation. i cant (wont) renounce, but i am looking into getting a second passport based on the guidance provided by simon in his earlier postings (and thanks to a polish immigrant grandfather). i am gathering the documentation and will be sending out the email to ck law office (michal wisniewski) immediately following this email to see if he has the time to assist me with this important step. 650 euro is such a small price to pay for the freedom of a second passport.

    …as i said, im starting late and having to rethink everything that i have learned to this point in my life. for example, i have two land properties in the US (20 acres of horse land in arizona and 5 acres of ariable property in kansas). everything to this point indicated that buying raw land was a good hedge for wealth preservation. however, as simon said, the world ten years from now, will be a very different animal. owning raw property has its limitations (plus both properties are still in the US, so i need to offload one and plant another flag elsewhere in the world). so that is in the works as well.

    …even now as i type this, im second guessing things that i need to do. turmoil isnt easy, but i know that any preparations that i make today will certainly make it that much better tomorrow.

    …today also marks the day that im cashing out a majority of my savings bonds and dumping the money into gold. even though it isnt much, every little bit helps and every long journey begins with that proverbial first step.

    …as i said, waking up to realize that you have been a sheep isnt fun. its very unsettling to realize that the definition of the american dream isnt what you once thought that it was. even though im changing late in the game, i think that i still have enough time to make a difference in my future. im taking small steps towards the goal, but im moving forward…something that i wouldnt have done without simon’s persistence and advice.

  • Jsummoleguy

    Fortunately, most of your readers haven’t experienced disaster such as mine. In 2005, I was running a successful, $multimillion business, with real estate holdings worth $2.5 million. By 2008 everything was wiped out.
    I moved to China and now live modestly, but comfortably on my Social Security, saving money and starting new ventures, as the country is ripe with opportunity. As my capital grows, I plan to branch out, plant flags in Malaysia, Ecuador or Uruguay, mainly for the friendlier climates, both weather wise and politically.
    Who said you can’t start over at 70! ;-)

    • jim

      Are you asian?
      Panama has ~3 million people, 10% are asian. They own many,many of the businesses.
      Many benefits come with living/working in Panama.
      I own RE, have banking, and see a huge opportunity now developing there.
      Send me an email, at wennick2@verizon.net if you have questions. jim

  • Juan Cortez

    I’ve started planting flags based on this and other postings. My first step is to visit a country and establish some comfort with it then open a bank account with a few hundred bucks. Once established, I then rent a safe-deposit box into which I can place some gold & silver bullion…a little each visit at an amount which won’t be a problem with customs. Once I’ve made enough visits to scope the property opportunities at the flags I’ve planted then I’ll consider looking at potential real estate investments for additional homes.

  • Jason

    I just learned about the 72(t) rule regarding IRAs. Does anyone know how this would affect purchasing a condo overseas and living in it if I wanted to “retire” early? Thanks!

    Simon, keep up the good work!

  • Emloeffler

    There is a life cycle to everything in this world…individuals, products, companies and empires. Sadly, the Western Empire for a multitude of reasons is in decline. Individuals of significant wealth such as John Dorrance and Sir John Templeton and large corporations have long ago realized and acted to protect their wealth and freedoms through expatriation and globalization.

    Individuals who have awakened and see through the diversionary chatter that confuses and paralyzes are charting their individual strategic global plans in a forward thinking manner towards personal and financial freedoms.

    Electing this course of personal globalization takes courage as it is the road less traveled. Personally, I’ve been branded with unkind labels by my family who over time are slowly seeing the truth of the changes occurring and personal loss of freedoms.

    Community in this path provides the much needed reinforcement, encouragement, and pitfall avoidance. Finding quality contacts and service providers is the difference between success and failure as there are many who will readily charge exorbitant sums and send you down the wrong path. This is the brave new world whether you chose to plant your flags of personal freedom or remain in the old paradigm.

    I wish you all much success in your liberation and hope to meet and network with you on our journeys.

  • jpotts

    Simon — I read your blog every day and save them as well. I have not commented on you latest “Age of Turmoil” series because I could not agree more with you. Please put me on the list for joining your upcoming newsletter! — John Potts

  • Marlin

    I do agree.

    If one is to assure that their assets do not collapse as the old system does, they will need to store it in a way which is not predigested and tailored to the old system.

    Things are changing and those who see this coming and take action on this grand window of opportunity will be rewarded for it on the other side.

  • Jeffbaba

    I was wondering if anyone has experience in taking gold bullion – coins and bars from the USA to overseas.
    If so do you know of any procedures that need to be complied with so as to avoid possible confiscation or problems?

    • Brian Richards1945

      Jeff,
      It varies depending upon jurisdiction. For instance, I know Switzerland allows free entry of gold bullion, but you might have difficulties taking gold into Latin America. (in fact considering the widespread corruption, I would not attempt it) Contact the target country’s embassy to get started. And had you considered having your gold transported by a precious metals carrier, such as Brinks or Viamat?

      • Val

        Hi, Brian
        I’m new on this blog I”m Canadian. I was asking myself the same question? And still not certain of how to transfer gold and to store it in another country. But after thinking about it I agree with the two ideas. If anyone who will have any idea where to store it instead of vault in banks

    • Stainless Steel Rat

      I recently looked into bringing my precious metals with me when I moved out of the U.S. and can give a little bit of information.I had about 75 ounces of Krugerrands, gold bars, and a few silver bars, and was going to be going through a few countries in transit to my final destination. I wasn’t able to find much accurate information on what regulations and duties the countries had for PMs, other than the fact that my final destination required that I report to customs if I was bringing more than US$10,000 of gold bullion into the country. With all the possible places for something to go wrong (I’d really hate to end up paying duty in the transit countries, then have everything get confiscated at my final destination because I was lacking some piece of paperwork – like a receipt for the metal), I decided to look for alternatives.Next I looked into having the PMs moved by Viamat to their vaults in Switzerland. They said that they could pick up the metal in my hometown (large city in the middle of the U.S.) from a business location and move it to Switzerland for US$2550. That was the rate for up to 800 ounces of gold and silver. Their storage fee for up to one million Swiss Francs worth of precious metals was around US$2600 per year. Since those fees represented a fairly high percentage of the value of the PMs, I didn’t want to go that route.Since having the PMs confiscated would have been a significant loss for my net worth, I took the safe way out and sold them to a private buyer before I left (other than a few coins that got mixed in with my other pocket change while going through airport x-rays). I figured it would be easier, and less suspicious-looking, to wire the money to my new bank and either re-buy the PMs in my new country or just convert the money to a more stable currency. For me, the gold ownership was really a way to counteract a drop in the US dollar, which I can do other ways (holding more stable currencies, real estate, etc.) once I got my money to my final destination.That’s not exactly what you were looking for, but I hope it helps a bit.

  • JIM

    SOME IDEAS OF MINE

    1) LOOK FOR A REIT THAT WILL BE BUYING CONDO BUILDINGS, AND TEMPORARILY RENTING, UNTIL THE ECONOMY TURNS. Anybody have any names?
    2) BUY pre 1930 gold and silver coins, high quality, and slabbed. Refer to the Red Book, buy on Ebay, and always bid less than the Red Book value.
    This way you can benefit from both _ precious metal appreciation and numismatic appreciation.
    3) Definitely open a bank account overseas. Interest on 1 year CD’s are mor than 3 times what you’ll get in a US bank (crooks).
    4) LISTEN TO THOSE THAT TELL YOU TO GO GLOBAL.
    I love Panama. Best move you can make is buying that second or retirement home outside the USA.
    5) Buy currency ETF’s. Buy according to regions (asia, latin america, scandinavian, etc.)

    Please give me feedback, that is not negative. I’m just looking for the best for each idea.
    ANY OTHER IDEAS OUT THERE?
    Jim wennick2@verizon.net

  • Jimslag

    Hello Simon, Some of the things I am looking at include an offshore bank account, land or real estate in another locale. Also looking at starting to spend more time in someplace outside the US. I am retired military, so expatriation is not a realistic option for me. Am saving a little here and there in a foreign currency denominated bank account. A little here and there and starting late due to being trapped in the debt cycle, but working my way out of it. Thank you for your guidance along with others for the multiple flags approach. Need to look at a viable skill for future use.

  • MDe

    Simon
    Your comments are right on target as far as I am concerned. We can’t get out of this country fast enough. What are your suggestions for transitioning from an employee to an enterprenuer at the same time you are trying to move out of the US. That may be a really big leap for some. Any thoughts as to how to approach that in reasonable stages?

  • Judy Thompson

    I am in Monterrey Mexico on my way to Argentina and Uruguay. I am a 70 year old retired teacher. All that I´ve read from International Living and you, Simon, has inspired me to get on the road. I travel on an absolute shoestring. After 38 years of marriage my husband left with the neighbor lady. I am free to travel and make a new home for my two sons and their families. I stay in hostels and travel by bus as much as is safe. Relying on advice from missionaries I know, too. It´s all great fun and a wonderful sense of freedom. Judith C Thompson from Washington State

  • Andy10

    I live in Australia, which has an intrusive financial system, and totally agree with the reasons for owning gold, as we’ve got a government committed to spending billions & a housing bubble that could pop in the next 5 years. But can’t see that it’s a good idea to buy at these near-record prices. What happens if/when the big players decide to offload?

    Here in Oz you need Photo ID for all bullion purchases. It’s photocopied and filed away, part of the ridiculous anti-terrorrism/money laundering laws. As far as foreign currency, you can get around this if your transactions are less than $1000.

    Andy.

  • Tr549

    To me, capital preservation is investment. The first investment principle one should learn is “income producing real-estate” – farmland, parking lots, rental houses, billboards, radio spectrum. The second investment principle is “diversity” – different sectors and currencies (most people I know are 100% invested in the USD-not a good idea).

    More important than investment is survival – food, water, keeping warm. The vast majority of mankind throughout history has focused on these basics, yet most Americans have lost a real understanding of how to provide these for oneself. This has to be done before any investment/capital preservation.

    I live in a suburb of a major US city. I keep a one year supply of basic food for my family. I live on a creek, own a good water filter, and I can collect rain water into a small swimming pool. I have multiple forms of heat available to the house – electric heaters, natural gas heat, lp gas heat, and firewood. In addition, I work on finding friends that are like-minded and can work together in a crisis situation (“relationship” could be a third investment principle). I would prefer to live in a small town in the US but it is not an option for me. Instead I have a good friend a couple of hours away with some land but not much money. I bought a tractor and we work together to farm the land and keep some animals (chickens and rabbits).

    Beyond survival, I own farmland (purchased for less than $500 per acre) and investment property (for income) in Mexico and keep an FM3 visa. I am working on getting a small house with land in Ecuador (great soil and inexpensive) and beginning a farm. In theory, I can have a good standard-living on a retirement income. I continually work on trying to simplify my life but I am not yet ready to take this step (more specifically, my wife is not yet ready). I want it in place as a backup plan (diversity).

    Finally, I have a small amount of gold and silver coins. I believe this should be about 10% of your net worth and I’m working toward that percentage. I do not view gold and silver as an “investment” but more like insurance – it’s good to have if you need it.

  • Vigeoro

    Let’s cut the crap, pardon the French: These times are looking more and more dicey for the AngloSaxon world, but not everywhere is suffering: There is prosperity in Sudamerica, UAE, China, even parts of Europe. I have seen this myself. Some places in the world are seeing a renaissance in their economies. That statement may be hard to believe for Americans.

    The problem: The AngloSaxon governments are becoming more repressive in their “eat the rich schemes”. No one is thinking rationally, and, like sharks drawn to blood, the feeding frenzy is beginning and will only intensify until the carcass (the rich) are no longer available because they have left or because their wealth has been squandered.

    I am reminded by today’s situation concerning “they” the wealthy with a meeting I had with a couple of Jews who fled Europe in the 1930s and set up roots in LatinoAmerica. One of them said something to the effect that your wealth is not really your own unless you can take it with you. I never forgot those words. Paper is just paper. Real Estate stays in the country where the government lives that gauges your carcass.

    Solution: Make your wealth portable and safeguard it intelligently. Gold/silver bars fit the bill nicely.

    How: A safety box full of gold/silver in a jurisdiction where the rule of law is respected (not USA, sorry folks!). In these pages, Abu Dhabi, Vienna, and Singapore Safety Box services have been mentioned. Book a trip to one of these interesting locales, enjoy the scenery, take pictures, go to the safety box service that has been recommended on these pages, and store your valuables there. Imagine this: have wealth (gold/silver coins) in Vienna, Abu Dhabi, Singapore, Panama. Multiple locales.

    You can thank me later. Now, give me my free one-year subscription! Nice.

  • Gunslingergregi

    There is a reason real estate is called real estate. Save money buy it cash rent it out. Life is simple.

  • jon2152

    How to preserve wealth? Monetary wealth will be a challenge to preserve, but for it to be meaningful, you must first preserve yourself. Number one is to be self-reliant to the extent possible. This includes maintaining health, spirit and mind. The second is to take responsibility for your own decisions, this is the core requirement for personal growth and and liberty. The third is to realize that you need other people. Generally, all people need relationships to thrive and to enjoy life, just like we need food. Like food, we should be careful to select only healthy relationships, and avoid those that are unhealthy. Learn to recognize value. Do these things and you could land in the middle of nowhere, without resources, and in a few years be quite well off.
    Attitude is the one thing that you have the most control over. Be prudent, not fearful. Have courage, but temper it with wisdom. Be adaptable, but do not stray from your own ethics. Accept that life is finite, but is of infinite value.
    Preserve your monetary wealth by making your investment decisions based on risk instead of reward. Buy when risk is low and things are cheap, sell when risk is high and things are expensive.
    Remember that trusting the government to take care of you enconomic future is not a plan, it’s a suicide pact.
    Everything else is just process, today’s wealth preservation plan will change tomorrow. Don’t get attached to the process. The one thing that you will always have whereever you go is you – do your best to preserve, grow, and develop your greatest asset!

  • Val

    Hi Simon,
    I”m new in your blog , I’m from Canada. I want to thank you for your blog this is amazing what you are doing and all the comments we can read.
    Here in Canada we don’t get a lot of news, everything is keep secret. We also have a lot of problem but people don’t wake up since all the news are silent about the economic crisis. The news especially in Quebec are very socialist, they is a lot of propaganda in the news.
    I wonder if anyone have heard about Belize

  • Eagle

    Thanks so much for the information you provide. My rude awakening began when a son had an encounter with the law. I quickly came to the conclusion that I had more to fear from government than from local thugs. I have gotten all of my property out of my name (mainly with trusts), but had come to the conclusion before I found you that things were getting to the place that I was going to have to go offshore with most of my assets, and also with residency. I’m looking forward to learning specifics on how to do that, hopefully soon.

    I have one question: It sounds like your premium service will be priced for people with more assets than the average person has. Is there a way to get the information and services I need outside of your premium service, if I can’t afford it?

  • P.

    Simon,

    The launch of your service is rather timely. Just last week I received an email from my online brokerage stating that I had a “non-qualified investment” in my registered savings account. Here are the meat and potatoes:

    “It’s important that you remove any non-qualified holdings from your registered account. All non-qualified holdings in your account are subject to a Canada Revenue Agency penalty of 50% of the book value of the non-qualified holdings, regardless of the current market value. The penalty will be assessed directly by the Canada Revenue Agency if prompt action is not taken to remove the investment form your TFSA account.”

    So I promptly called customer service to confirm if I was soon to be subject to the aforementioned extortion. Luckily, no. My brokerage made a mistake. But I did find out that, although my brokerage prevents me from purchasing such “non-qualified investments,” they can do nothing about the monthly list from the CRA which details all new securities and options that are now considered “non-qualified investments.”

    I began following your adventures since you were part of WOB in an effort to expand my universal choices. Since then, I have sold my house, gotten out of debt, accumulated capital, and hard assets. I am quitting my day job at the end of the month, selling my car, exercise equipment, and hamster and leaving my home country in a few weeks time which will allow me to focus more on my online marketing efforts as well as plant and grow multiple flags.

    The lessons learned from this little mistake my brokerage made only highlight the need to diversify internationally sooner rather than later – no matter what country you hail from – which brings me back to your premium service. In the latest WOB edition Fitz discusses some real estate investment opportunities in South America. I plan on deploying some capital there but would really like to learn the nuts and bolts of how a citizen of Canada can properly hold this investment and other concerns off shore.

    Not sure if I’m still in the running for the complimentary subscription, but I look forward to it nonetheless.

    Enjoy your time with family.

    P.

  • Fabio

    Hello from Switzerland,

    i wanted just to inform that another Swiss bank doesn’t want US clients anymore: Banque Cantonale de Vaud (BCV).
    But there is some financial groups that started services specifically to help US citizens, like Maseo Private Wealth. You can find a small article (in french) from the Tribune de Genève newspaper here: http://archives.tdg.ch/TG/TG/-/article-2010-09-1002/les-clients-amactuC3actuA9ricains-effraient-toujours Have a nice day, Fabio

  • Allan

    Hi Simon,

    I read your newsletters daily and have come to respect your advice and way of thinking. Here’s the catch however and I think this applies to many people reading or contemplating going further with you…. I have paid for many PREMIUM services now in my lifetime, Roundtable at ILL, and etc… Shaeffer investments, Agora etc… I now have properties in a few countries and they have turned out to be not liquid, even have gone down in value, and I am getting cash poor. I think you must charge for your premium service but will it be just another set of essentially the same ideas? In my previous services subscribed to, they got richer off my subscriptions, I didn’t.

    How can I feel secure in knowing I will benefit from your service? I need to hear something certain and I will be a Charter subscriber….

    I do need income more than I am getting at 35 in the bank, but I can’t afford it to be illiquid or at risk! I have foreign corps, foundations, canceled my past Non- revocable trusts, etc… I pay yearly to maintain them all…. so I need vehicles that will put more in my account rather than create more burdens for me….. Second passport is coming if I stay in the country I am in for 3 more years, so Simon……… can you please reassure me you have something new and different from the others????

  • Thom

    As people have said if you keep in good health, with a useful skill, an open mind and willingness to travel, the winds of change will be kind to you. Wealth comes and goes. But since it’s the topic of this thread …

    Firstly, an asset is as valuable to you as it is useful in fulfilling your needs. Choose ones that give you options and income streams likely to match your expenses. If you’re moving to a city, buy one apartment to live in and one to generate your spending money. If you’re staying in the US of A, stick $75,000 in a Hong Kong bank – if the IRA goes after you, you can still pay the lawyers. Have a purpose.

    Secondly, worry about the right things. I work around wealth management – I don’t see people’s assets confiscated by government every day, I see contested divorces, messy business related bankruptcy and wills going astray. Simon’s age of turmoil isn’t an impending storm hitting the West, it’s the chaotic unwinding of a knot of unsustainable trends, from badly thought out Western entitlement system, to China trying to outsource it’s banking reserves to the West (and now realising we’ve spent their money on handbags) through to my native England pricing homes at a level were only 7% of new families can buy them. You aren’t going to avoid America’s slump by investing in Shanghai (export boom town) luxury apartments, or a retirement village in Panama that’s being sold to rich whites. Your bank in Antigua is likely to collapse before Wells Fargo does. Most Asian currencies are pegged to the $. Gold on account at Kitco will still get seized by your b*tch of an ex-wife; she’ll never know of a stack of Krugerrands dumped in a hole in the forrest. Keeping your capital safe from the shocks in your life is matter of cause-and-effect, not distance or jurisdiction by themselves. It’s not enough to blindly ship capital abroad – the easiest destination are likely to be affect by all the problems you were trying to avoid.

    Thirdly, if you are doing the sensible thing and spreading your wealth out to avoid shocks back home, you’re by definition going to stray far from markets you understand. You *will* be the dumb foreigner. Do your reading, get an interpreter, buy the way the locals do and check *everything*. In London, a rich Russian will get steered into a $470k apartment in Chelsea with a $7k/yr service charge and a rental yield of 1.5%; an Englishman would have bought a row of houses in a poor part of Newcastle at public auction for a 8% yield renting to families on welfare. And we’re one the world’s *least* corrupt countries!

    Most of the world’s businesses have never been floated on NYSE, most of world’s bank accounts aren’t in dollars, most of the world industry isn’t in the West anymore. The worst case scenario for the West mortgage/credit card/9-5 cycle breaking still only a road bump for the rest of the humanity, whether they’re tilling the soil in Minnesota or trying hard to clone the perfect sheep on the edge of Seoul. Some of your capital ought to go join them !

  • Randy

    I would be one that would be interested in your premium service. There is not very many trustworthy organizations out there that can give us the information on asset protection (setting up foreign bank accounts, getting everything out of your name,etc.). Giving us the nuts and bolt of going offshore would be a great without thinking you are getting riprd off.

  • Jared Krauss

    Being a college student, first I’m going to start saving money from the refunds on loans that I receive to go to school. I have opened a bank account overseas (Scotland, as that is where I will be studying abroad.) and will begin to slowly deposit money into that bank account. I will then do the same thing when I study abroad in the Middle East. I am in the process of gaining citizenship to Italy through blood. Then, when I graduate with my degree in Arabic and Middle Eastern Studies I plan to work for a multinational company trying to expand their interests to the Middle East, gain capital, invest in promising upcoming businesses, such as partners of the company I plan to work for (in country). Eventually, I hope to open up my own NGO in the Middle East that would be a soccer academy as well as a primary schooling for children in rural communities, K-12. During that time I hope to supplement myself as a freelance writer and photographer through my journeys abroad.

    Thanks very much for the opportunity to learn.

    Cheers,
    Jared Krauss

  • anumberone

    Being self reliant is a multi-step process. Working for yourself is the ultimate goal with multiple streams of income (online and offline). Always strive to learn something new each day. Read the classics, Emerson, Peale, the Bible. The more you help others, the more you will benefit.

  • Reggie Chan

    Plenty of English teachers in Asia but not many GREAT ones. You can make decent money and live quite comfortably, but don’t expect to get rich. Hong Kong is one city where there is demand and low taxation but you have to deal with high rent. Once you get that under control, the rest is quite cheap.

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