Today’s asset protection newsletter may be a bit philosophical for some, but bear with me it has practical implications. Or don’t bear with me – the delete key is on the top right.
On my radio show this week, “Global Escape Hatch”, I discussed my views on corporate statism and how I am extremely optimistic about the future. I am sure you just read that sentence and thought, “How can he be optimistic about corporate statism.” Let me explain.
The 20th century is well known as the industrial revolution. This is the time when oil became widely used as an energy source allowing technological advancements for companies to expand dramatically and increase productivity. This is also when the early stages of corporate statism began.
In the 19th century, nearly everyone was either a farmer or small business owner. Regulations were non-existent and people took care of themselves. There was no such thing as a nanny-state and personal responsibility was highly regarded.
Fast forward into the mid-1900’s and you have the vast majority of the US population working for a large industrial company building things for personal and government consumption. There were very few farmers left due due to increases in technology that allowed much higher levels of production from fewer workers. There were considerably fewer entrepreneurs due to the massive increase in large companies.
This is the era when, “go to school, get a good job, stay there 40 years, and retire with a pension and gold watch”, became the mantra.
This is also when home ownership became so heavily promoted by government. Government subsidized housing in the form of artificially low interest rates and tax breaks for home ownership provided huge incentives for people to realize the American dream.
We can also look back and see this is when big government began to really take roots in the US. It’s like seeing pieces of a puzzle and trying to put them all together without having the finished picture to go by.
If you take a bird’s eye view though you will see that the pieces all seem to fit together. Big companies came to power due to increases in technology and the discovery of oil as a major source of energy. As the companies grew, they became employment factories providing workers with steady jobs.
This gave them the bargaining power to financially support political agendas conducive to their businesses. Basically the big companies realized they had harnessed centralized power and now had the ability to dictate public policy.
Housing incentives were one of these policies. What better way to control your workforce that give them incentives to stay put? Once someone realizes their American dream by purchasing their own home, it makes it significantly more difficult to move for better employment opportunity.
If you have $100,000 equity in your home and you are offered another job 500 miles away that increases your salary from $50,000 to $65,000, it is very difficult to move quickly with an illiquid asset like a home. If you are renting your home, the choice is quite easy. Hence the incentives to buy.
This form of economic enslavement creates a vicious circle. The big companies financially support political agendas like housing and in turn the politicians provide tax breaks and subsidies to big companies in exchange for their support.
The problem with this is it has created a nation of dependent human beings. The US has become a nation of people who depend on either the government or their company for financial support. Everyone now seems to think they owed something in perpetuity.
From a political viewpoint, the idea is simple. Continue to provide welfare, unemployment, free housing, food stamps, medicaid, etc. until the majority of the population is receiving some sort of handout. This creates a majority of parasites who expect someone else to pay for their existence.
The majority of folks now seem to want to consume more public resources than they want to produce. Politicians love this because they know once the majority is receiving more in handouts than they produce, the majority will keep them in power.
Herein lies the problem with Democracy – majority rules, but the majority are stupid.
If you are still reading, you are probably wondering, “At what point is he getting to the optimism part?”
I am hugely optimistic about the future. I see the coming era as the ‘Golden Age of Entrepreneurship’.
With the US, Japan, and most of Europe in turmoil there is no other option than for governments to shrink. Sure, they will continue to attempt to monetize their debt problems away, but at some point, most likely sooner rather than later, we will see the house of cards come crashing down.
People are starting to wake up to the reality that governments aren’t going to take care of them forever. They will take steps to transform their lives from that of welfare recipient to productive world citizen (more on the world citizen topic later).
A friend sent me an article a couple of days ago from CNN titled, “The fastest growing job in America”. It was a very timely article about how unemployed people are now going out and starting their own businesses and creating multiple streams of income. They have given up on corporate America and taken the bull by the horns.
I have several friends who have experienced corporate layoffs and done exactly the same thing. One friend, Andy, was recently laid off from his corporate job. Instead of sitting around doing nothing, he has now moved firmly into the role of entrepreneur/hustler. Here are a few of this business ventures:
- Wedding catering business
- Flipping cars and motorcycles on Craigslist
- Flipping distressed single family homes
- Renting single family homes
I think Andy would tell you he is more excited about his future now than ever before. Sure, its hard work, but he is working for his own future now and not the future of some corporate boss.
Another friend of mine was laid off from his job a couple of years ago and now he decided to take his hobby of off-road Jeeps and make it a business. Now he is refurbishing vintage Jeeps and Jeep parts and selling them online. No more corporate world for him.
There are many factors at play here in this recent resurgence of entrepreneurship. Not the least of which is massive improvements in technology.
Many of you are reading my newsletter and others looking for answers. While there is no broad stroke answer that can solve all your problems, there are some generalized things you can do to improve your situation and prepare for the future.
- Expand your productive capacity
- Education – formal and otherwise
- Network with other like-minded individuals who can help you grow personally and professionally (our offshore conference, “Global Escape Hatch – Panama 2012” would be a good option. Email me here to be on the notification list.)
- Focus on providing value, not making money
- Find an unfilled or under-filled need and execute
- Constantly seek to improve everything around you
- Never become complacent
As previously stated, we are at the onset of the “Golden Age of Entrepreneurship”. It is up to you to take advantage of it. The government made a huge mistake (from their perspective, not ours) to allow the internet to be created and expand unfettered.
They will attempt to reel in control, but the snowball already has too much momentum. They cannot cage the tiger at this point. Computing and transfer speeds allow working from anywhere in the world thus freeing up your geographical dependence.
VOIP allows connectivity to your clients, partners, friends and family as long as there is an internet connection. No need to rely on old-school copper lines anymore. Cloud computing technology allows you to access your data from anywhere reducing your cost of operation.
We have a huge knowledge base through the internet and libraries around the world. No need to rely on public education as your sole source of knowledge.
Essentially I want you to get out there an hustle like the CNN article previously discussed. Never be complacent and rely on the big company or the government to take care of you again. Individualism, productivity and entrepreneurship should be the new mantra.
For those of you that have already achieved some level of wealth, now is not the time to rely on your past successes as they are no guarantee for your future survival. In addition to following the steps above, you also need to protect the assets and income you already have;
- 3 legged stool of asset protection
- Create a veil of privacy around your assets
- Ensure the proper legal protections for those assets
- Diversify amongst asset classes as well as geographically
I do believe that over the next few years society will deteriorate before it improves. This means there will be more parasites in the form of litigation and blood-sucking government agencies looking to bleed you dry. If you have income or wealth, now is the time to develop your own asset protection plan.
As for your investments, consider the following:
- Invest in your own business – you are your own best investment
- Excess capital should be invested in other productive businesses
- Consider the long term viability of your business and those you invest with
- Invest in hard assets
- Precious metals
- Income producing real estate
- Farmland
- You cannot ignore the influence government has on your business or investments
- Take advantage of that, don’t be a victim
As for your asset protection planning, I would encourage you to consider a “Geo-Arbitrage” strategy (email me here to be considered as one of my personal coaching clients);
- 2nd passport
- 2nd residency – tax friendly jurisdiction
- Offshore company
- Offshore banking
- Offshore investments
- Playground
Contact us today to schedule your free 30 minute asset protection consultation. Until next week, live well
