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That inspiration took place nearly twenty years ago when in my global travels I discovered a distortion (and a weak British pound) that allowed me to buy a shiny Rolls Royce, and import it duty-free back into the United States—for a mere $14,000. I gained much more than a luxury car from that loophole. I gained the understanding that distortions could turn my international journeys from expenses into moneymakers.
 

. 1966 Rolls Royce Phantom V PV23 .

Though that Rolls has long since been sold (at a profit I might add) and that particular loophole has changed, you can still find similar distortions that will not only pay for your travels, but could become a profitable business. Over the past twenty years, I have gained enormous tax and business benefits from my travels…and I want to show you how to do the same thing.

Two distortions that remain

Two things help make your penchant to travel worldwide profitable: taxes and currency fluctuations.

First, let’s look at the tax benefits of global business activities. A recent front-page article in the USA Today points out how the two current U.S. Presidential candidates have very similar economic policies. The article stated that the reason behind this is that U.S. economic policy is now controlled by the realities of the global economy. These economic realities dictate what U.S. administrations do and also dictate a part of the country’s tax policy, unchanged in 20 years (and unlikely to change soon). 

This policy gives U.S. business people who conduct business abroad a better deal than their poor brothers who operate only in the U.S. The tax law essentially leaves non-U.S. companies totally free of U.S. taxes (even if owned by U.S. citizens). To qualify, your business must 1) not do business in the U.S. and 2) earn 70% or more of your income from nonpassive sources (passive sources include rent, royalties, dividends, etc.). 

This loophole is technical and loaded with pitfalls, so don’t run off and start an offshore company half cocked. You’ll want a good international attorney (see my list). But this is a solid loophole forced upon Congress by the fact that U.S. businesses must be allowed to compete in global markets to maintain a balance of trade. There is little chance that this benefit will be eroded in the near future. Anyone with a desire to build a reasonable business overseas can take advantage of this fact.

A second tax benefit, even if you don’t have an overseas company, is that if you take your trips with the intent of making a profit through business, the cost of the trip, flight, hotels, etc., can be tax deductible. This tax benefit is for almost anyone willing to look for business opportunities when they travel abroad.

Turn your passion into profit

What type of business should you start? I recommend you make it something you really enjoy. Most of us travel for pleasure, so begin your business by turning your passion into profit. You do not have to make a big deal out of your business to gain tax benefits. The activity can (and should) be fun, but if you desire, the offshore business can be kept quite small. For example, my mother, a grandma in her 70s, is not a business person in any sense of the word. Her passion is making and collecting dolls. 

Because she knows the art of making dolls well, she is able to have a very small international business. She knows that the best doll eyes in the world are manufactured by a small company deep in the countryside of England. She turned several of her UK visits (to see me when I lived in the UK) into profitable trips by buying these exquisite dolls’ eyes there and selling them to her doll-making friends back home.

The $14,000 Rolls Royce

This example also highlights the second way to make money with your travels: currency fluctuations. As currencies rise and fall versus the U.S. dollar, they create distortions. When I lived in England, the pound was very weak (as low as one pound per dollar). This made my Mom’s doll eyes cheaper in U.S. dollar terms. The pound per dollar parity also meant when I bought my Rolls for 14,000 pounds—I paid only  $14,000 bucks!
 

Often a crashing currency also comes attached with an economic crisis. This creates an even better opportunity. In the case of my Rolls, I took advantage of an English economic crunch (which drove the price of luxury cars down and forced many diehard owners to sell), a weak pound, and a U.S. customs loophole. Three distortion opportunities like this are the best.So talk to a tax attorney experienced in international structures, keep and eye on currency fluctuations (right now the Euro is still relatively weak, although it has moved up in recent weeks, which helps create European bargains), and look for distortions relating to fun things you want to be involved in.  1,900% pillow profits Don’t make this harder than it is. There are opportunities all over the world waiting to be used. Art lovers might get into the business of buying art at auctions in one country and selling elsewhere. Love to fish or golf? Organize tours to your favorite fishing or golfing spots. Recently on my latest trip to Ecuador, my wife Merri stumbled across these amazing, huge herbal pillows, filled with Eucalyptus, rosemary, pine, lemon, orange, rose, and chamomile.

. Phantom V Interior (1959-1968) .

Having an interest in aromatherapy, I know that very small herb-filled pillows sell in U.S. health stores for as much as $39.95. These full-sized pillows in Ecuador sell for just two dollars! This is a distortion I know I could (if I didn’t already have more than enough business there) capitalize on. If you love photography, why not create a book or calendar? The 12 best golf course in the world (of course you’d have to spend time at St. Andrews) or the best dozen fishing spots (you’d have to fish for salmon in Scotland), or the most famous paintings, or the top 12 wine cellars, the list goes on and on.

Do you prefer to write? How about creating a travel newsletter or writing a book about a subject you love? One of my readers, a private pilot, wrote quite a good book on the best restaurants near small airports. Unique restaurant guides of all sorts make sense (i.e. the best pubs in Limerick…the ten best places in the world to get french fries…the most romantic hotels, etc.) In fact, German business woman Ann LaViolette created an entire global business based on the idea of Romantic hotels. She published a Romantik Hotel and Restaurant Guide, which lists romantic hideaways all around the world. I learned about this business while staying at the Hotel Hermitage, a quaint, charming inn developed from a 17th-century plantation on the tropical island of Nevis. We had a lovely balcony overlooking the mountains and blue sea, with monkeys swinging from the trees. She also hosts weddings there…we enjoyed watching a plantation wedding, complete with the bride’s horseback arrival.

Free hotels, rooms, and meals

This hotel stay reminds me of one more benefit that can come from your global business.
When Merri and I enjoyed the Hermitage (the rooms normally cost from $190 to $690 per night), our stay was free. We have received free hotel rooms, flights, tours, meals, and cruises. Real estate developers have even offered to give us free beachfront lots. So you can gain free fringe benefits when you spot distortions because having a global business view makes you an important person, able to help other people’s businesses as well as your own. This mentality puts you one step ahead of the lot. 

I could go on and on, because this subject is my passion, but the main point is to grasp the underlying principles: do what you love as you travel the world. Keep your eyes open for business distortions, especially those created by currency fluctuations or a by a local economic crisis.
 

Gary Scott and his wife Merri have, for the past 20 years, run a small publishing business from different spots all over the world…the UK, Hong Kong, and the Dominican Republic to name a few. The Scotts recently moved from their home in Naples, Florida, to share their time between their Blue Ridge Mountain farm in North Carolina and their plantation in the Ecuadorian Andes. . Rolls-Royce & Bentley - The Crewe Years -  - Click Here -

The Big Mac index The Economist’s Big Mac Index (www.economist.com) is a good way to figure out where the dollar is strongest and weakest (in other words, where you have the most buying power) at any give moment. The average Cost of a Big Mac in the States is $2.51  Cheapest Big Macs $1.20 China  $1.21 Hungary  $1.31 Hong Kong  $1.34 South Africa  $1.39 Russia  $1.54 Australia  $1.65 Brazil  Most expensive Big Macs $3.48 Switzerland  $3.00 Britain  $2.78 Japan  $2.62 France   —Steve Sjuggerud .