When Live Beyond Borders was launched to inform about global wealth diversification and international living options, many of our friends and acquaintances thought we were nuts. They insisted that Western jurisdictions are safe, due to their well-established democracies and strong economies.
Developments of the past year have caused many people to have second thoughts about the official “all is fine” narrative. Most still think – or rather hope – that our governments will eventually cope with the current crisis. Others have less optimistic expectations, but are unwilling or unable to act accordingly. They continue to pay high premiums for health, accident, fire and other insurance policies, but ignore the need for a Plan B, which is a personal insurance against rapidly declining economic and political conditions in their home country.
As the crisis unfolds, time to prepare is running out. If you wait too long, you will suffer the consequences.
Your wealth and personal freedom are at risk
Our economies have been in crisis mode for more than a decade. Massive intervention by governments and central banks has so far prevented a severe recession. But instead of rectifying the underlying problems, it has made matters worse. We now face peak debt, markets crippled by over-regulation and a surge in zombie companies, as well as rapidly growing income and wealth inequality. Without far-reaching changes, our economies will not return to a sustainable growth path. But instead of implementing market-oriented reforms with safeguards for the weak and poor in our societies, politicians and top bureaucrats prefer to protect vested interests and pamper the Top 1%.
Personal freedom has been declining in most Western countries. Governments and Big Tech work closely together to reduce our privacy. Mass surveillance on the street and in public buildings is already a fact of life, and “smart” devices are starting to monitor every aspect of our private lives at home. Freedom of speech is severely curtailed, as authorities and social media giants nowadays decide, what is fake news and what is not.
Politicians and the media are blaming the coronavirus for the current predicament. But nothing could be further away from the truth. The coronavirus is not the cause for our failing economies. It has proven to be far less deadly than originally forecasted by the so-called “specialists”, and if politicians had not acted with unnecessary harsh lockdowns and other ill-conceived policies, the economic damage would have been manageable.
We are not asserting that Covid-19 is harmless, but it does not justify the massive infringements of economic and personal freedom enacted by authorities in most countries. It becomes increasingly clear, that the virus serves as a scapegoat to cover up previous mismanagement and is used by a small group of insiders to increase their power and plunder state budgets for personal gains.
By now it should be obvious even to fierce optimists, that the good times are over, at least for the Bottom 90%. Still many people are unwilling to accept, that the world is changing. And those who do are often unable to act, hoping that the future won’t be all that bad. But history tells us, that periods of exuberance often end in chaos and despair.
A wave of company bankruptcies, insolvencies of public pension and healthcare systems, growing inflation as well as the collapse of our current monetary system can’t be ruled out. The majority of the population will suffer, as they lose their jobs and see their savings being wiped out. Governments will react with taxes increases, which will mostly affect the middle class, and by further suppressing economic and personal freedom.
Nobody can predict the future and hopefully we will be spared the worst. But the odds are clearly against us. Past wealth is no guarantee for future prosperity. Just look at Venezuela, which used to be the richest country in South America, but has meanwhile become a failed state with wide-spread poverty, despite having huge oil reserves. The same can happen tomorrow to any Western country.
The coming crisis won’t be equally spread around the world. Some countries will only experience a minor recession, while others might face a breakdown of their economy and civil unrest. Some nations might even go to war with each other, as politicians try to distract the populace from their inability to govern the country successfully.
Individuals will also be affected differently. While some stand to lose everything, others will manage to keep most of their wealth intact and some might make a fortune. Not all is doom and gloom. Every crisis offers opportunities and if you prepare well, you can be on the winning side.
To succeed where others fail, you have to challenge the official narrative, that is fed to us by politicians and the mass media. You have to shed recency bias, that makes you believe, that the trends and patterns observed in the past, will continue in the future. You have to embrace new ideas, even if they make you feel uncomfortable at first. And above all, you have to defeat your own complacency and laziness, that prevents you from making necessary changes today.
Plan B – Your personal insurance policy
To protect your wealth and freedom in the uncertain times ahead, it is advisable to develop a Plan B. This doesn’t mean that you have to resign from your job, sell all your assets and hide in a bunker in the Swiss Alpes or a hut in the Canadian wilderness. You can continue your daily life as before. All you have to do is
- diversify your assets away from fiat currencies and among custodians and jurisdictions and
- make preparations to move abroad if this becomes necessary
Most people underestimate the urgent need to diversify away from fiat currencies. They are so used to the USD, EUR, GBP, AUD, or CAD, that they can’t image a life without them. But fiat currencies are backed by trust, not physical assets, and therefore tend to have a limited lifespan. By officially targeting inflation of 2% and implementing questionable monetary policies such as quantitative easing (QE) and zero/negative interest rates (ZIRP/NIRP), central banks have worked hard to undermine trust in their currencies. A substantial decline in value is inevitable and a complete collapse can’t be ruled out.
To preserve your wealth, it makes sense to hold assets, whose value is mostly independent of fiat money, such as real estate, physical gold/silver and Bitcoin. On the other hand, savings accounts, fixed deposits, life insurance policies and most bonds are bound to generate a negative real return if kept until maturity. Some might even lose all of their value.
We recommend to diversify among custodians, as every service provider is vulnerable to bankruptcy, confiscation or fraud. In particular, don’t keep all your money at a single bank, all your securities with a single broker and all your gold in a single vault.
Being heavily exposed to one jurisdiction like your home country can have devastating consequences. With the economic outlook for many Western nations deteriorating, it is important to diversify internationally. Having a bank and brokerage account in a safe offshore jurisdiction and storing your precious metal far away from home, can protect your assets against confiscation and other property-infringing measures by your government.
Asset diversification is not enough. The economic, political, social, or environmental situation in your home country can deteriorate considerably, making it intolerable or even impossible for you to stay there. Irrespective of whether you love your current home and don’t want to move anywhere else, it is advisable to be prepare to move abroad, if this becomes necessary.
A key challenge is to obtain the necessary immigration documents such as a second passport, residence permit or visa, that allow you to stay in a foreign country for a year or longer. Such documents have to be procured in advance. Once a real crisis erupts it will be impossible or very time consuming to apply for them.
Moving to another country requires you to have sufficient funds there. As capital controls will most likely be implemented in times of crisis, we recommend to open a bank account in the selected jurisdiction(s) while this is still possible, and deposit enough money there to last at least for several months. Precious metal in a local vault or safe deposit box, and some Bitcoin or other crypto coins can complement this.
Once the situation in your home country starts to become intolerable, you should not hesitate to move abroad. Recent experiences with the coronavirus have shown, that borders are shut quickly when governments face a real or perceived thread. Rich people with plenty of personal connections and access to a private jet will continue to travel around the globe. For ordinary citizens many nations can remain closed for months or years, even if they hold valid visas.
History is full of examples, where people got stuck in the wrong country because they hesitated too long. Some suffered only minor setbacks, for others it had deadly consequences. Therefore, be vigilant and ready to act and step out of your comfort zone, once this becomes necessary.
A Plan B is like a personal insurance against the potential loss of wealth and freedom. Like with every insurance, you will incur costs (e.g., for the opening and maintaining of a foreign bank account or for the purchase of a long-stay visa). If you are never forced to implement your Plan B, most of the money will be spent in vain. But you also pay a lot of money for normal insurance policies that you never use, as they provide peace of mind.
Unfortunately, it is very likely, that you will have to implement at least part of your personal Plan B. In this case the benefits will be huge. Having such a plan in place can make the difference between wealth and poverty, or personal freedom and slavery.
Most of the Super Rich and well-informed already have a Plan B in place. Don’t wait until it is too late.
If you need help in developing and implementing your personal Plan B, contact us at firstname.lastname@example.org.
Disclaimer: The above is for informational purposes only. It is not an offer or advice to buy or sell any products or services. LBB and its owner do not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
© 2020 Live Beyond Borders. All rights reserved