Expat Hank Bails on America
Jul 11 • Categorized as Asset Protection,Citizenship & ResidencyBy Bobby Casey, Global Wealth Protection
Is a 2nd Passport or Foreign Residency Right for You?
I had a very interesting conversation with a reader this week. ‘Hank’ is an American citizen living in Ecuador and running a local business exporting raw materials around the world.
Hank was very familiar with asset protection and international taxation issues and had previously worked at a law firm assisting international clients with these issues.
The two of us had very similar ideas about politics, economics and ways to reduce the risks is your financial life. We chatted on the phone for quite awhile about these and other issues.
Politics – We’re screwed. Politicians are all liars. Democrats and Republicans are all alike. President Bush presided over this country during the largest increase in government spending in history (at the time).
He waged war in countries that never asked for us in order to enrich his political cronies at the oil companies and defense contractors. He effectively colonized the Middle East.
In the name of national security he robbed us of privacy and personal freedoms through the Patriot Act. We now are subject to phone taps, email interception, bank and property seizures, and vigorous, yet gentle groping while passing through security at airports all over the country.
King Bush also grew entitlement programs at a break neck pace further indebting us and our heirs to a generation that we have no responsibility for, nor can we afford.
But luckily, Komrade Obama came on the scene. He has taken the Bush playbook and doubled down on nearly every move. Under his leadership, he has put the US in debt unlike anything ever before seen in the history of mankind.
The US debt per taxpayer has now reached about $129,000. We are running ANNUAL deficits exceeding $1 trillion. Keep in mind, this is annual. It accrues each year. Imagine running up a $20,000 credit card balance this year. And next year you accrue another $20,000 balance that you use to pay off your interest from the previous years. Welcome to US political economics.
Economics – We’re screwed. Mainly because we now have no separation of Politics and Economics.
At what point in history did our political leaders become responsible for the economic well being of the country and its citizens? The current environment reminds me more and more each day of the book, Atlas Shrugged, by Ayn Rand (my all time favorite novel). Much like the boiling frog analogy, we cannot really pinpoint the time when the water became too hot for comfort.
We do know that it sure was nice when the government stepped in and bought mortgages, treasury bonds, and bailed out companies to make us all feel nice and cozy. It gave us that secure feeling that big brother really was watching out for our best interests (just a hint of sarcasm here).
The reality is individualism and personal responsibility has somehow left the mainstream thought process of the American public. Our society has come to expect that Social Security and Medicare will take care of us when we are old and Medicaid and welfare programs will take care of us when we are poor.
We have been sold a bill of goods that we really do need hundreds of military bases all over the world to protect us from the evils that lurk in the shadows.
What we don’t realize is that this all comes at a price. The piper must be paid, and he is here to collect.
As Hank mentioned when we were on the phone, he has found the only way for him to ensure his safety, privacy and personal freedoms was to leave the US.
Hank, and many others like him, has found living in other countries to be much less intrusive on their personal lives. Ultimately, it all boils down to economics.
When the citizens of a country have to pay for excessive government intrusion, it will increase your cost of living and reduce the free time you have to spend doing the things you truly love.
Taxes in any form are always passed down to the end user. Many people are now complaining about how corporations are ‘getting away with murder’ by shifting profits to low tax jurisdictions.
Keep in mind the alternative is they keep their profits here, pay the highest corporate tax rate in the world, and pass the cost increase on to you dear consumer. Do you really think the corporate benefactors at HP, Dell, Intel, Proctor and Gamble and others are willing to bear the burden of the increased cost? Not likely. Welcome to higher prices thanks to massive government growth.
Of course there is always the hidden tax, inflation. Since the Obamessiah took office, the money supply in the US has more than doubled. It has far outpaced economic productivity.
Have you bought a gallon of milk lately? A gallon of gasoline? Loaf of bread? Movie ticket? Furniture? Are any of these items less expensive today than they were 3 years ago?
The government is left with few choices but to either massively cut spending, increase taxes, or print money and inflate away the debt. We all know #1 is not an option.
Tax increases and printing money are the easy choices for policymakers.
Money printing is the hidden tax that raises the prices for nearly everything you buy. Thank you government incompetence.
In just a couple of week the federal government faces a major hurdle. On August 2nd we will have reached the federal debt limit, which means we won’t be able to pay our bills in August.
Currently the debt ceiling is at $14.29 trillion. The last time it was raised was just last year. Most likely it will be raised again, all at your expense.
Right now the Republicans and Democrats are playing a cat and mouse game trying to negotiate for higher taxes, lower taxes, spending cuts, new programs, and who gets the last serving of garlic mashed potatoes at the dinner table.
In other words, we have no idea what they are really doing in Washington, but ultimately their only goal is to win votes to make sure they get re-elected. Heaven forbid they lose their job and have to actually work for a living.
This is what happens though when you put the purse of the minority into the hands of the majority. Politicians have to pander to the majority to keep their jobs. Unfortunately it’s the productive minority who has to foot the bill.
Or you can be like Hank and I. Hank left the US permanently several years ago. I left a few years ago and have been back for several months now. In just a few short weeks, I will be leaving permanently.
This may seem like an extreme move to many of you. Some of you have already taken the plunge. I have talked with many of you who have left and never heard an inkling of regret.
I have also talked with many of you that would love to make the jump, but just aren’t sure where to go, how to educate your kids, or how to earn a living abroad.
I can tell you from personal experience, the hardest thing about making the move – is making the decision to make the move. Once the decision has been made, you will figure out the rest. By solidifying in your mind that you want to make the leap, you will be open to finding the solutions to each and every challenge that will present itself. But the process will certainly be rewarding.
We are currently working with a couple of law firms in the Baltics who are offering services helping clients establish residency in Estonia and Latvia. We will be offering a special report sometime in the next couple of weeks that will explain the details of the programs available and exactly what you need to do and who you need to talk to.
Estonia and Latvia are both EU countries so by obtaining residency in one of these countries, you would also have EU residency. Both of these countries have developed unique programs that make it very easy to receive a 5 year residency permit.
They are actively seeking educated, productive people who can bring money and jobs to the area. They are providing incentives for people like you and offering the reward of EU residency.
If this appeals to you drop me a line here and I will keep you on the early notification list.
I would love to hear from those of you that have taken the plunge to live an expat life. Please share your stories in the comments section or email them to me and I will share them with other readers.
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Interesting blogg, adored reading though it. ta.
Hello there, You’ve done an excellent job. I will definitely digg it and in my view recommend to my friends. I am sure they’ll be benefited from this site.
Love your site, love your informative articles. I lived in Panama for 7 months and loved it, but ended up back here in the frozen north ( the husband hated it). Guess a big change like this isn’t for everyone, but I can say it’s definately worth a try (you need to both be on board with it if your attached tho). As for me, I’d do it again in a heartbeat. Have a good day eh!
Dear Bobby,
What an excellent stream of consciouness! I am preparing to go to Medellin Colombia or Odessa Ukraine within the next 35 days to teach English and establish additional revenue streams. Unfortunately, with the financial condition of our economy, citizens are becoming even more cold toward one another-I feel isolated here in the States unlike the connected energy I share with people in Colombia and Ukraine.
Nice job-keep up the good work.
Stephen
Thanks Stephen. Congrats on your upcoming move.
Great Information! I just launched my own expatriate tax return service for expatriates.
Good luck on your new business.
Thank you!
“Our society has come to expect that Social Security and Medicare will take care of us when we are old and Medicaid and welfare programs will take care of us when we are poor.”
Uh, YEAH! I’ve worked all my life (I’m in my 70′s) and paid for those “entitlements” the whole while through the social contributions and income taxes withheld from my wages. I kept my end of the bargain, only to have you cavalierly dismiss the sacrifices that I and millions of hardworking Americans like me have made and made … and made.
Of course Americans have the right to seek a better situation for themselves in another country, if that’s their choice. Our ancestors did just that when they emigrated to the New World. But to adopt such dismissive and condescending attitudes toward your compatriots calls into serious question the soundness of the advice you have on offer. What I pick up from your post is contemptuous polemic, rather than expertise or wisdom.
True, you paid for them. Did you chose to? Was it voluntary? Welcome to Amerika Komrade. What about your own personal responsibility? Feel free to disregard my advice. You are clearly not my target reader.
Obama is fiscally the worst president we’ve ever had. Bill Clinton said we’d be out of debt by now, but we’re only in worse debt than ever. During Obama’s administration, gold has gone exponential and at the same time, the purchasing power of the dollar has plummeted. The only way to make ends meet in retirement now is to leave the country.
The US is on the verge of social and political upheaval. This is going to happen and is necessary for American to heal.
I agree with your article. I was a Republican who voted for George Bush. I’ve been disgusted with the Republicans for a long time. George Bush was merely a bad president. Barrack Obama takes it to a whole new level. The Libertarian party is looking better and better.
A few months ago I moved to Switzerland with my wife and kids. We spent a couple of years looking to get out before we finally managed to get a job in another country. We’re both actuaries. Although, we almost landed in Buenos Aires instead.
Now we live in a nice little community outside of Zurich a couple of blocks from the lake. My son (8yrs old) goes to the local school which teaches in German. We had help with our move by a relocation service. We love our new location, but it’s not cheap. In fact, it’s expensive to live in Switzerland, but if you can pull it off then it’s worth it.
Getting back to the article. If all you know is this article then you should be worried. What is the future going to bring? Would you believe me if I told you economic collapse and war?
If the US is in an economic pre-collapse state, then so is Europe and Japan. By pre-collpase I mean that it won’t take much to push us over the cliff. It turns out that Russia and China are in a pre-collapse state as well. The Middle East is in the state of collapse.
If that is all you know, you should be worried.
The 20th century signs of war by historian Niall Ferguson: Empires in decline, economic volatility and ethnic conflict (think Israel and its neighbors). When all three are present, like they are today, then great upheaval is possible.
Perhaps it’s time to worry a little more.
Could the US really go to war?
Great power rivalries in history:
1. Spain versus Holland in the 16th century. [War]
2. Holland versus England in the 17th century. [War]
3. Britain versus France in both the 18th and 19th centuries. [War]
4. France and Britain versus Germany in the 20th century. [War]
5. Germany versus Russia in 1914. [War]
6. Germany versus Russia (Soviet Union) in 1941. [War]
7. Soviet Union versus the US and its allies in the Cold War after 1945. [No War]
When an empire (US) runs into conflict with a rising power (China), the probability of war is 6 out of 7. Conflict and war can be avoided when both parties are democratic like America vs. Britain, which resulted in no great power rivalry.
Worry a little more.
Did you know that historically the US runs into a crisis period every 80 to 100 years from the beginning of the last crisis period. The last crisis period ran from 1925 to 1945, and the next one from 2005 to 2025. Check out the book called “The Fourth Turning” for more information. About the time most survivors from the last crisis have died out, then the new generations become susceptible to a new crisis. If our pain level is a 2 right now, then it will get to a 10 before the crisis is over.
Imagine that you lead a firefighting team. In your forest you are able to put out every fire before much damage is done. However, after a certain amount of time the forest becomes so thick with old trees and dead bushes that the next fire is so massive that you are unable to stop it. The entire forest is wiped out. Then you go back to putting out fires again. Sure enough, after about the same amount of time the forest builds up to a point that it gets wiped out again. Think America.
Are you convinced yet? No?. Let’s take a look at a little Chinese parable. Here’s the really short version.
The Parable of Goujian
The story of the king [Goujian] who slept on sticks and tasted gall is as known to the Chinese as George Washington and the cherry tree are to Americans. He has become a symbol of resistance against the treaty ports, foreign concessions and the years of colonial humiliation.
King Goujian (Yue) was defeated by King Fuchai (Wu) and taken prisoner. He worked in the royal stables and gradually won the respect of Fuchai. Later he was allow to govern his old kingdom under Fuchai. Goujian quietly bided his time and hide his capabilities over eight years until he was strong enough to finally attack and defeat Fuchai. During the eight years he quietly undermined Fuchai and facilitated Fuchai’s growth of debt.
Taken like that, the parable of Goujian sums up what some people find alarming about China’s rise as a superpower today. Ever since Deng Xiaoping set about reforming the economy in 1978, China has talked peace. Still militarily and economically too weak to challenge America, it has concentrated on getting richer. Even as China has grown in power and rebuilt its armed forces, the West and Japan have run up debts and sold it their technology. China has been patient, but the day when it can once again start to impose its will is drawing near.
There’s a lot more to this story. If interested check out my website at http://www.1913Intelcom.
There are some gross oversimplifications in your statements.
While the US has nominally high corporate tax rates, in real life many corporations in fact pay little or nothing.
Corporate profits are solid, sometimes excessive, with the current tax situation, so don’t blame taxes for price increases.
We’re less a society that expects (or has) a good government health care system, and pension system, than many other countries.
As the masses of baby boomers retire, I wouldn’t think Ecuador, Costa Rica, Panama, Uruguay, etc. would be able to absorb any substantial numbers if everyone follows your example.
Glad you’re doing so well. As the middle class continues to shrink in the United States, more and more people are pondering their individual situations.
Time will tell if there are realistic solutions.
Sure, there are oversimplifications in the article. If I published a book here no one would take the time to read it. For sake of brevity, it must be shortened.
What you seem to miss (as well as many others), while the overly complicated tax code may offer lots of loopholes, it also creates a compliance nightmare forcing companies to employ entire departments for no other reason that to minimize the tax burden.
So while XYY, Inc. can trim its corporate tax burden from say 35% to 15%, it eats up an enormous amount of profits with unproductive labor keeping current with tax code. This inevitably raises prices. If the cost of compliance is 8% (not unreasonably high), then you can bet prices will cover this expense plus profit margin.
Our society has expectations of government handouts in the form of social security, medicare, medicaid, welfare, unemployment, section 8 housing, and the list goes on and on. Sure, we pay for that, or at least some do. But at a huge penalty. Govt is the least efficient manager of capital on the planet, and yet we have entrusted them to babysit us because we feel its our right?
Hi, I began traveling in 2002 and had shed most of my illiquid assets by 2009.
After living in various foreign countries for periods over 30 days to get a more than tourist feel for a place, I settled down in Mexico, due to the closeness to the USA and family and a lower cost of living. The closeness to family was very important in ending up here as I loved Argentina, Kenya, and several other countries but it just cost too much time and money to visit those I grew up with and loved. I don’t think one should disregard this important fact in picking a new home. It costs money to travel back and forth and the lower the cost the better, plus there’s a greater sense of freedom when you can pick up and fly off for a weekend to visit a sick friend or celebrate a birth.
Mostly, I find a different culture invigorating and leads to a healthier personality unless you are blinded from the go.
Regarding the USA culture, which not only includes a numbing discussion about politics but also the affects of Hollywood, capitalism extreme, changed values, military aggressiveness, a type of arrogance (that I now can say is not only misplaced but stupid and counterproductive), I can now state there are more favorable cultures in which to enjoy one’s life. But for making money, the USA is one of the best places in the world for most people of average means to gain financial independence. There is a cost but what is free in this world?
So I don’t fault the USA. All countries, like people, like planets, like every animate thing, change from good to bad to better to etc. The USA offers what very few countries offer, that is opportunity for self advancement. True, the noisy distractions around that are getting louder but that doesn’t make it a bad place. Love it, help it and yes, leave it if that suits you. But don’t throw stones at the house you grew up in and that allowed you to leave at will with money in your pocket.
Mexico Mike
In today’s globalized economy, self advancement can be achieve from anywhere in the world. Geography plays little part anymore as long as you are in an environment where you have access to good infrastructure, food and water. This is much, much more common than even 20 years ago.