A Primer on Internationalization

“The problem—your problem—is that any country can turn into a 1970s Rhodesia. Or a Russia in the ‘20s, Germany in the ‘30s, China in the ‘40s, Cuba in the ‘50s, the Congo in the ‘60s, Vietnam in the ‘70s, Afghanistan in the ‘80s, Bosnia in the ‘90s. These are just examples off the top of my head. Only a fool tries to survive by acting like a vegetable, staying rooted to one place, when the political and economic climate changes for the worse.”

~Doug Casey

So, why is international diversification prudent?

Most people know of the general investment benefits of not having all your asset eggs in one basket. This portfolio-diversification concept—investing in multiple asset classes—also applies to the political risk associated with your home country. It is a risk few people think about diversifying.

Doug Casey has said over and over that spreading your political risk beyond a single jurisdiction is the single most important thing he can recommend today. And I wholeheartedly agree.

In short, it's prudent because it frees you from absolute dependence on any one country. Achieve that freedom, and it becomes very difficult for any country to control you.

While diversifying political risk is something that everyone in the world should strive to achieve, it goes double for those who live under a government that is sinking deeper into fiscal trouble (e.g., most Western governments).

To get started, there are four core areas to consider: your savings, yourself, your income, and your digital presence.

Internationalize Your Savings

Placing some purchasing power beyond the immediate and easy reach of your home government protects against your wealth being trapped in the country should capital controls be declared, or from outright asset seizure that can strike without warning.

Internationalizing your savings can happen several ways: foreign financial accounts; physical gold held abroad; structures like an international trust; and foreign real estate.

Foreign real estate can be especially helpful. I have described it as an “internationalization grand slam,” because it can accomplish a number of key goals all at once.

First, owning real estate in a foreign country (ideally one where you would enjoy living) moves a good chunk of purchasing power into a hard asset outside the immediate reach of your home government. Unlike an intangible financial account, it's highly unlikely that your foreign real estate can be seized in a flash by your home country, without an act of war.

Second, a purchase of foreign real estate can often open up other internationalization options. In most cases, owning property is a valid justification to have a bank account in a foreign country, something that is increasingly difficult for Americans to do. Generally speaking, owning foreign real estate usually puts you on the road to legal residency, and possibly a shortened path to citizenship.

Last, owning foreign real estate can reward you with a second home, a vacation hideaway or place to retire, and an emergency “bolt-hole” always at the ready, should you need to escape trouble back home.

Internationalize Yourself

Unfortunately, there are no solutions to a second passport that are at the same time easy, fast, legitimate, and cheap. But that does not lessen the need to have one.

Unless you plan to live as a permanent traveler, which most people cannot do, you'll need to secure the legal right to live and work in another country. This is where a second passport or, to a lesser degree, legal residency in a foreign country can be useful. A second passport can also greatly expand the number and type of foreign financial accounts available to you.

Any government has the ability to revoke the citizenship and/or passport of its citizens at a moment’s notice under any pretext that it finds convenient. Neither your passport nor your citizenship actually belongs to you. It belongs to the government. Just look at how the US canceled Edward Snowden’s passport by fiat. That was not an aberration. Having a second passport means that you can always escape your home country without having to live like a refugee.

Internationalize Your Income

Internationalizing your income includes structuring your cash flows to reduce dependence on any one source in any one jurisdiction. The goal is to create additional sources of revenue from international investment opportunities and trends, and to orchestrate it with an offshore company domiciled in a favorable jurisdiction.

Internationalize Your Digital Presence

This commonly includes your IP address (which can often pinpoint you to a precise physical address), email account, online file storage, and the components of personal/business websites. 

Conclusion

It's only prudent and logical to assume that you will, somehow and someway, continue to be squeezed harder in the pocketbook and subjected to escalating, arbitrary, and burdensome regulations and restrictions. In short, expect more government and less freedom all around.

The window to protect yourself from these risks by diversifying internationally verifiably closes a bit more with each passing week. There are many ways that you can begin to diversify that do not require you to leave your home country, or even your living room. 

However, it is essential that you develop the options to internationalize before the government closes the window of opportunity to do so. If history is any guide, it won’t be open forever.

In that sense, it's much better to have developed and implemented many parts of your game plan a year early rather than a minute late.

International diversification is a time-tested strategy to protect you from desperate and out-of-control governments.

Wealthy people around the world have used it for centuries to effectively protect their assets and themselves. And thanks to modern technology and a more globalized world, anyone can implement similar strategies.

You'll need accurate information to get started and to navigate the minefield that is out there. Doug Casey's International Man will arm you with sound strategies and trusted options for developing your internationalization game plan. 

To find out how you can get started on implementing these critically important strategies today, check out our Going Global publication and give yourself a black belt in international diversification.

Nick Giambruno

Nick is Doug Casey’s globetrotting companion and is the Senior Editor of Casey Research’s International Man. He writes about economics, offshore banking, second passports, value investing in crisis markets, geopolitics, and surviving a financial collapse, among other topics. He is a CFA charterholder. In short, Nick’s work helps people make the most of their personal freedom and financial opportunity around the world. To get his free video crash course, click here.

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