Jason Bourne. Master spy. Sure, he’s got the moves…the training and the smarts. However, at the end of the day, what has kept the fictional Mr. Bourne alive, more often than not, is access to his handy-dandy “Burn Bag”.
What is a Burn Bag?
What is a Burn Bag? In the annals of spies, a “Burn Bag” generally refers to a bag or container into which a diverse set of secret and/or important documents are placed, usually before being…literally…burned. However, for our purposes, your “Burn Bag” isn’t about “destroying” anything. Quite to the contrary, your Burn Bag is all about helping you “build” security.
In Bourne’s case, his Burn Bag usually contained the accouterments of escape – a bevy of passports, diverse international currencies, credit cards issued from different banks, all in different countries and…well…he is a spy, locked in a world of intrigue and danger…so, generally, a favorite pistol or two. You don’t have to be an International Man of Mystery, but you do have to Get Smart about your financial future and your family’s long-term security. In today’s highly litigious world, with new tax schemes being derived out of thin air, seemingly around every corner, in order to separate your hard-earned cash from your wallet/purse, it doesn’t take the survival deft of a 007 to understand asset protection is critical. That is precisely why your personal Burn Bag is essential. A “secret stash” of asset options that you can use to “escape” from the omnipresent financial perils of modern society.
There are 5 essential reasons why you must seriously consider creating your own “real world” Burn Bag:
1) Preserving your freedom of mobility and right to travel, as well as that of your family;
2) Protecting your home;
3) Securing your business assets;
4) Ensuring an investment nest egg for you and your family; and
5) Allowing yourself the opportunity to enjoy life and family time, without restraints.
Seems like pretty basic and simple stuff. The necessities of life, if you will. Sadly, that is exactly what is under assault today, from the overreaching arm of government, as all too many nations struggle with an inability to just say “no” to spending, which means they are wringing their native citizen population, for every drop of cash they can. Oh…the “theft” goes by many names…taxes…fees…currency controls…but it all leads to one thing – governments need to monitor your every move, every decision and every financial asset with greater scrutiny than ever before in the annals of history. The high-tech era only facilitates this personal privacy invasion and don’t believe for a minute, this is going to get better any time soon. When a general optimist like me says that…something to think about. However, I am not about problems, only solutions…paraphrasing John Lennon. So, back to the Burn Bag and why it is a must have for every reader of Escape Artist.
I just stated the 5 reasons why you must have a Burn Bag…now. Those 5 reasons are predicated on a simple financial strategy, literally pioneered decades ago (No myths about how it is something that “I discovered”). That strategy is best known as the “Five Flags of Freedom.” The 5 Flags Theory, for short, is derived from the theory that the only way that someone can maximize their chances of perpetual freedom is to diversify/separate one’s financial and lifestyle assets globally. That would mean, as a minimum…5 Flags…5 different countries, divided as follows:
1) Citizenship – Have at least one passport from a nation, other than your home country;
2) Residence – Have at least one additional residential abode, be it purchased or leased, separate from both your home country and that of your second passport;
3) Business – Keep your core business/corporate assets registered in a country that is neither your home country, or your country of second passport or second residence;
4) Investments – Keep your core investment accounts and assets, in a low tax (especially capital gains tax), high liquidity market, that is in a country separate from your home country, while also separate from the countries identified in 1-3 above: and
5) Recreation – Purchase or lease a separate home for recreation purposes, such as family vacations, where you can freely enjoy spending the assets you so wisely earned, without the prying eyes of “Big Brother”. Of course, this recreational paradise of choice must be in a separate country from your home country, or any of the countries selected in items 1-4 above.
Deep breath. Seems complicated, at first, doesn’t it? I have two, somewhat contradictory responses. First, nothing in life that is truly “worth it” is ever all that “easy”. Really…reflect on that in the context of your own lives. How much in your world that you truly value came without effort, sacrifice and toil? If you are like most, the answer is likely, “Very little…to nothing at all.” However, my second response is that this seemingly complicated world can be made all the easier, if you use the services of an experienced asset protection consulting firm [plug coming] like my company, Zen Global. However, more on that when closing out the article. For now, let’s refocus on the Five Flags of Freedom.
The 5 Flags Theory is designed to assure you the maximum in asset protection, freedom and security for you and your family. A thorough breakdown and analysis of the principles behind the theory are beyond the scope of this article. You could write a book on analyzing the components and sub-components of the 5 Flags model. In fact, books have been written exactly on that topic. However, as a minimum, I think I owe the readership at least a more thorough discussion on each of the basic 5 Flags.
Planting Your Citizenship Flag
We live in an era that a second passport has become a must. With more and more national governments across the globe trying to restrict the free movement of capital, outside of their borders, how long before that limitation of movement extends to its own citizens? Do you want to be caught by surprise and have your movement or that of your family restricted? Believe it or not, your home country government has every right to do that. However, if you can brandish a second passport, from a different nation, they can’t very well limit the free travel of foreigners. Well, at least not without it being perceived as a “quasi-act of war”.
How important is your freedom? Whether by ancestry, somewhere in your family tree; by relocation and establishing permanent residency somewhere else on the globe; or by taking advantage of the few remaining, legal “passports by investment” options, most folks can qualify for a second passport. My suggestion is that pursuing this option tomorrow is already too late. This is truly a time is of the essence matter. The reason that financial investment passports are waning, almost daily, is because of the immense amount of pressure being brought forth by powerful debtor nations that are looking to ensure a steady supply of “economic cattle to milk”, for ever increasing taxes. Don’t be left behind. Act…today.
Planting Your Residence Flag
Home may well be “…where the heart is”, but in today’s increasingly complex world, a “good home” may be more about using one’s brain power and smarts, then one’s easily beguiled heart. Use your current residence in your home country to warm the heart, but also begin to look about for a smart place to have a second residence. One designed to give you a ready “escape hatch” should your home government’s likely already intrusive behavior worsen. You want a place that you and your family can feel comfortable in and where life necessities like medical care, schools, shopping and services are readily available.
A nearby international airport is certainly a necessary “added bonus” to the equation. Remember, source well and select wisely. This “break glass in case of emergency” option may become your home and that of your family, for years to come. Can’t afford to buy a second home? Believe me, I understand. With capitalist principles being squeezed, economies being derailed and taxes skyrocketing, I believe the norm is for most that aren’t in that top “1%” bracket to feel that their wallets/purses are a little lighter now-a-days. That’s ok…leasing is not a bad “Plan B”. In fact, leasing is even an excellent option, if you want to “test drive” your second residence market, before you buy. Now, this veteran “real estate warrior” is never going say, “Renting is better than buying”, but for those that can’t buy or the cautious, it is a viable option. Just, please, consider the escape hatch, while the opportunity still exists.
Planting Your Business Flag
You need that ideal business “hot spot”. One that resides elsewhere from your primary and secondary residences, as well as someplace different from your second passport. You want a business friendly climate. Labor laws that are, at least, balanced, if not favorable to the business owner. You want a corporate tax structure that rewards entrepreneurs for investing in the local economy and creating jobs. You also want a locale where setting up a business is an automated and simple process, not one mired in the red tape of bureaucracy.
If your business will require frequent meetings with clients, or much travel abroad, a nearby international airport is a must. Also, do not forget to check on what corporate internet speeds are like, in your “Global Headquarters” country of choice. Everything else may seem perfect, but if the internet crawls at the pace of a snail, it will be hard to compete in today’s high-tech world. You need to move your business away from litigious, high personal liability countries, to places that do not reward the parasitic practice of “litigation of opportunity”. If not, your family’s wealth…your wealth…no matter how many “zeros” that wealth totals…is at high risk each and every day. Is that a risk you can tolerate? If not, I would seriously recommend implementing your new “Global Headquarters relocation plan” today. Excellent options exist. You just need to do some serious research and sourcing to find the right locale for you!
Planting Your Investment Flag
You’ve worked hard all your life to secure an investment portfolio that will serve as the nest egg to secure your family’s future. How would you feel if all…or even most…of that nest egg was just wiped away in a blink? Can’t happen? Is that what the infamous “they” are telling you? Then explain the Great Depression in the USA , or the economic horrors of Weimar Republic Germany, as examples. Even looking to my current “country of residence”, Ecuador, care to say that “it couldn’t happen” to those that endured the financial crisis of as recent as 1998? It can…and it does…happen. To folks exactly like you and I. That is why a nest egg is good, but putting all your eggs in one basket is seldom a sound financial strategy.
You need a fourth target country to host your core investment portfolio and to provide a steady stream of well-valued investment opportunities. This would be a country that has zero, or at least a very low, capital gains tax. It would be a country where restrictions on investments are either non-existent or very minimal. It would be a country that respects property rights and asset rights, with a proven legal court history to support the posture. It would be a country where several asset classes are priced attractively, allowing you to readily select investment options from within your local “investment haven” market.
The former is not to say that you are limited to investing locally…the world is your oyster. So, your flagged country for maintaining your investment assets must have a banking system that makes the electronic wire transfer of funds a relative breeze, in case an investment opportunity arises abroad. Overall, it should be a nation where private banking is respected and appreciated, whether your account reads $2 million, $200,000 or $20,000.
Planting Your Recreation Flag
Think about it. You’ve listened to our advice and have already done everything else precisely correct. You’ve secured your second passport (or third…or fourth), nailed down a secondary residence abroad, created your overseas corporate entity and established a secure investment account in a privacy rights, legal tax haven. Don’t you think after all that hard work you owe yourself and your family a solid vacation? Well, if your answer is “yes”, are you sure you want that vacation to be under the prying and watchful eyes of your home country’s government?
I mean, some countries have become so restrictive that they make you feel like a prisoner. Splurge once a year on a luxury get-away and they mark your as a target for tax audit. I mean…how could you possibly afford such “opulence” on your reported earnings? It gets to be that vacation, becomes work. Don’t let that be your lifestyle. You and your family do deserve better.
So, what you need to do in planting that 5th flag is find a tourism retreat, where your hard-earned currency is welcomed and…well…if you want to splurge, then splurge! Fabulous dinners…Broadway-worthy shows…dancing and drinks all night…a cruise on a private yacht…mad spending at the Casino. Why not? Life is for enjoyment and it passes by quicker than any of us imagine in the exuberance of youth. Enjoy it now, by planting that 5th flag in either a purchased or leased vacation retreat home.
Have the place selected, so that when all your other hard work and flag planting is done, you have somewhere to go and celebrate! If you know an ideal vacation spot for you, and are financially able, my advice is to buy. If you already know that you want to “globe-trot” for the rest of your life, or are financially more limited, then find a nice place to lease for this year…and onward to next year’s adventure. Either way…find the time…slow down…smell the proverbial roses…and enjoy life. Done correctly, the Five Flags of Freedom can help you accomplish that and so much more!
In closing, I would like to offer you just one option as to how Escape Artist can help. Zen Global is my affiliated real estate consulting firm. While it may have been a fact easy to escape, our real estate consulting business, over a three-decade period, has expanded to include a host of additional client services. Asset and portfolio management has been central to our client service model. We’ve made the contacts, done the research and know the score in most countries around the globe.
We can certainly help you identify the best options that suit your needs, provide the leads and contacts to make the 5 Flags model a reality, while also assisting in the securing of real estate opportunities, whether for purchase or lease. If you’d like to explore our consulting service model, whether on an hourly fee basis, or a yearly retainer to manage a family portfolio, please contact me HERE. We will be glad to assist. For registered Escape Artist members only, whether registering at escapeartist.com or escapeartist.com/ecuador, the first 30 minute consultation is fully free of charge. We would be glad to answer your questions and let you get to know us. Either way…pack your Burn Bag…and get yourself and your family secured. The price to be paid for freedom is eternal vigilance. No one is going to look out for you…like you.
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