Reader Question: Should I move my wealth offshore?

The short answer? In my opinion, yes. 100%. Not necessarily all of it, but definitely some of it.

If you are asking this question, chances are you already know the answer in your gut.

Let’s cover some of the more recent issues making headlines that demonstrate why it is time to start investigating how to move your wealth offshore.

Current problematic trends

Inflation and interest rates

We are all experiencing the effects of high inflation right now. Thanks to the rampant money printing during the pandemic, inflation skyrocketed and we now see costs for most goods consistently increasing, month after month. This has caused an affordability crisis in many countries around the world. As a Canadian, I can attest to the fact that many people in this country are hurting due to inflation alone.

But it gets worse. To quell the inflation they caused, the Bank of Canada has increased interest rates more quickly than at any other time in history. Add to that the fact that Canada has the highest household debt among the G7 countries. The result of massive interest rate hikes for a population that is already drastically overleveraged? Disastrous.

Inflation and increasing interest rates are a formidable duo and at the rate both are going, it makes it extremely difficult to get ahead. The government risks completely breaking the system if they continue on the current path, although I’m sure, like me, many of you are already suspecting that that is the point.

Taxes upon taxes

To cover for their excessive spending, governments are always finding a way to increase taxes. Here in Canada we have the much-loathed carbon tax, which is supposed to somehow protect the environment by making us all poorer. This tax literally adds extra costs to everything and further fuels inflation by making things more expensive. And, because the carbon tax is doing such a great job at fleecing the citizens, we are getting a second carbon tax, called the Clean Fuel Standard, starting in July.

I can’t speak much to the taxes in other countries, but the phenomenon of taxes the world over is pretty similar:

• Get taxed on what you earn
• Get taxed when you spend the money you earned that has been previously taxed
• Get taxed on things you own that you already paid taxes on to purchase with the money you earned that has previously been taxed

The whole thing is a racket, to be sure.

Political interference

Got what is considered the wrong political opinion? They can freeze your bank account!

Canada set the amazing precedent for doing this with the trucker protest in 2022. For merely donating to the trucker convoy, even if it was just $5, Canadian citizens had their bank accounts frozen.

As we’ve seen governments crack down on political dissent, including just opinions they don’t like, I think there is potential to see more of this in the future. Several other financial platforms including PayPal, Patreon and even GoFundMe have also banned people for political reasons, sometimes even withholding their own funds from them. If you are not an ideal citizen, at least according to your government, at some point you could be next on the hit list.

I heard someone say once that you should not live and bank in the same place and this is exactly why. Political persecution is alive and well and in our so-called “progressive” societies.

Defaulting banks

Lastly, we have seen some banks fail recently, mostly in the US with the fall of Silicon Valley Bank and others. Not only that, but banks are making it more difficult to access your own money, mainly because they don’t have the liquidity to sustain much outflow of capital. So, how safe are your funds in a bank anyway? Is your money even yours once it’s in the bank, if they won’t let you have access to it?

The “bail-in” prospect, whereby banks seize funds from depositors and unsecured creditors to help themselves avoid bankruptcy, is a threatening option banks (and governments, for that matter) have been mentioning with increasing frequency. I don’t know about you but, given the state of our nation’s finances, it would not surprise me if this happened at some point.

The solution? Diversification.

So, let’s bring it back to the point of this article – the question of whether you should move your wealth offshore. My answer, based on the reasons above and many more, is yes, but only with appropriate research and planning. What you want to avoid is moving all your eggs from one basket to another or making any rash decisions, because then you are in the exact same situation, right?

Here are some tips to get started with diversifying your finances and protecting yourself:

1. Consider opening a second bank account in your home country. Check out your local credit union or find another bank you trust. If you spread your money around a bit, even at home, you are still diversifying yourself. Call around and see which institutions you feel comfortable with.
2. Dip your toe in with an offshore deposit account. You don’t have to put in a ton of money. Simply open an account, put in some funds and get comfortable with the idea. Once you feel more confident and have seen your money is safe, you can move more funds to the account or branch out and open another account somewhere else. (Check out Caye International Bank in Belize for a great offshore banking option!)
3. There are other ways to move wealth offshore than just opening a bank account. Consider investing in tangible assets such as land (hello, teak!) and real estate. Take the time to research the destination country beforehand and work with people you trust. Bonus points if you are actually able to visit your destination in person first!
4. Spread your assets across multiple countries as you gain experience and become more knowledgeable about offshore strategies. Gain exposure to more markets, currencies and asset types.
5. Work with an international legal/tax expert if you want to put together a comprehensive offshore plan. Complex offshore strategies, particularly when you start to build in trusts, corporations and various other business and tax strategies, require proper planning and execution.
6. Understand what you want to get out of your offshore strategy. Are you moving some cash to protect your wealth and gain privacy? Are you making a deposit or purchasing a tangible asset to qualify for residency? Are you looking for bigger returns on your investments? Be very clear about your intentions for each step of your plan and research them extensively before making any commitments to ensure you are making the best decision.

The Writing is on the Wall

I’m going to ask you at this point to believe your own eyes and ears. Look around you. Things are progressing rapidly in an unsettling direction. Even if you only have access to news from the mainstream media with all its narrative spin, it is apparent that our economies in Canada, the US, and many countries across the globe are in trouble.

Your best protection is to diversify where you hold your wealth and in which asset types you hold it so you can spread your exposure around. This way, if any part of your investment eco-system becomes untenable for any reason, you’ve got enough assets in other places that you will be okay. And that peace of mind is priceless!

So, my answer is a definite YES, you should move some of your wealth offshore. And sooner, rather than later! Because better a year too early than a day too late.

Want to stay in the know about current events and all things offshore? Make sure you subscribe to Escape Artist Insiders magazine. It keeps you up to date on the latest offshore investment trends and provides great insights on how to build a Plan B and diversify your wealth. The June 2023 “Your Privacy Toolkit” issue is one of the best issues I have ever read, so this is a great time to become a subscriber. I promise, you won’t be disappointed!

See you next week!

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Lisa is an aspiring expat from Canada who is working to put together her Plan B with a young family in tow. She is excited to pair her lifelong love of writing with her passion for offshore strategies and outside-the box investments in her weekly articles for Escape Artist readers. Follow this “rebel with a cause” as she walks the path less traveled and shares her experiences along the way.

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