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Jan. 13, 2013 - Freedomain Radio - Stefan Molyneux
30:22
2299 Protect Yourself from the Predatory State
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Hi, everybody.
It's Stefan Molyneux of Freedom Aid Radio.
I'm here with Bobby Casey, Chief Dominatrix, Head Hojo, Head Huncho, and Chief Bottle Washer at GlobalWealthProtection.com.
We are going to do a conference together, which means that he's kindly invited me to do a speech.
I'm going to do a speech on the history of ethics at a conference in Belize in March, which you can – we'll give the website out for that in a sec.
But thanks so much for taking the time today, Bobby.
Yeah, thanks.
Thanks for having me.
First of all, I do want to say thank you for agreeing to come speak at our conference in Belize.
I'm really looking forward to it.
But I definitely think you will be amongst your peers at this event.
It's filled with libertarians and anarcho-capitalists.
People call me all the time and say, what kind of people come to this thing?
And I say, I'll put it to you this way.
If you're a hardcore Republican or Democrat, you probably won't feel terribly comfortable here.
Right, right.
That's at GlobalEscapeHatch.com if you want to check that out.
I was really interested in the idea behind asset protection.
Oh my God, you sit down at a dinner party and say, I'm into asset protection, and people either think you're talking about condoms or they've already fallen asleep before you finish your sentence, but there is something really important about it that I think we should spend a few minutes just talking about.
Obviously, the huge socialist maw of the state is opening up like one of those giant worms in the Dune movie to swallow up everybody's assets.
I guess there are three strategies I've encountered in the libertarian community.
One is, unfortunately commonly, don't get any assets.
Don't have any assets and then stay poor.
The other is go off the grid.
The third is Gather assets and cross your fingers.
And you bring to the table something that I wasn't aware of until, I guess, relatively recently, the fourth option, which is proactive asset protection.
So let's talk a little bit about that, because I think it's important information for libertarians to have.
Okay, yeah.
You're exactly right.
The dinner party conversation about asset protection, it's not exactly a panty dropper, if you don't mind me saying.
We're not the hot conversationalists.
Nobody says, oh, tell me more about offshore trusts and bank accounts.
That's fascinating.
Listen, everybody.
Everybody, stop talking.
We have an asset protection specialist here.
All eyes on you.
Well, yeah, we have this professional basketball player over here or an asset protection specialist.
Let's talk to that guy.
He's fascinating.
No, yeah, we don't get that kind of attention.
I do my best when I do speaking presentations to keep it interesting and intriguing with storytelling and that sort of thing, but for the most part, it's just not glamorous.
But you're right, most people have kind of, you know, in a libertarian, anarcho-capitalist world anyway, or not anarcho-capitalist, but anarchist world, let's say, Like you said, people say, forget it.
I'm just not going to have anything.
I'm going to live a complete minimalist lifestyle.
But to me, that's just another form of slavery.
It's a paycheck to paycheck.
It's stressful.
It's not a pleasant thing.
I'm sure you've been there.
We've all been there.
I mean, we've all been poor.
I mean, I could say I've had times where I've had money.
I've had times where I've not had money.
It's always more fun when I have money.
So, excuse me.
Yeah, the second method is go off the grid, and in the increasing police state in the U.S. and around the world, the Western world, going off the grid is, it's getting really, really damn difficult.
I mean, it's still possible, but you almost have to be the first guy with nothing to go off the grid and stay off the grid, because once you start Transacting any business or making any deals.
I mean unfortunately it involves dealing with money and money involves wire transfers and credit cards and bank accounts and that sort of stuff and that's where you you put yourself back back in the Back in the long light.
And then the third thing is...
Yeah, and I mean, sorry, that's a decision too, you know, as a relatively new dad, I mean, that's a decision that you can make for yourself.
It's a bit more of a challenging decision to feel comfortable making on behalf of your children.
Because, of course, once you have kids, let alone a sore tooth, having access to the rest of society's resources in a non-terrifying way, I think it's pretty much a distinct advantage.
So I think the going off the grid thing, and I think it's as much, if not more, slavery than living the minimum wage lifestyle, because, you know, you say, well, I'm free of the state because I'm living in the woods.
It's like, you're not, because you're only living in the woods because of the state.
So being chased off the reservation doesn't make you free.
Right.
I mean, you're living in the woods out of fear, and the fear you're Against is the state.
So, in essence, like you said, you're still a slave to the state.
You're just, in essence, a slave to your fear of the state.
So, I don't see that as a rational...
Rational way to live.
You mentioned the third thing most people do.
Most people just cross their fingers and hope they're okay.
I know you live in Canada.
Of course, I live in Europe and I live in Latvia, which is not terribly litigious, but in the US, hugely, hugely litigious country.
Last statistic I read, there's a new lawsuit filed every 16 seconds.
That can even be fathomed, but if you think about it, there's over 1.2 million practicing attorneys now as of last year in the U.S. with over 600,000 in law school as we speak.
So you're not getting any less litigious nowadays.
So if you're going to have money, you need to do something to think about asset protection.
Most people just...
Well, I gave a presentation a couple days ago to a pretty decent sized group of entrepreneurs.
Like most entrepreneurs, you start thinking about how to run your business and what you do to take care of your business day in and day out, and you forget about the risks that exist out there until it's too late.
Most people say, I'm not at risk for litigation until you are.
It does take a proactive approach.
So, there's a couple of things that you've talked about on the website, which I'll let you go into the details, but it really does seem to be around hiding assets legally.
I mean, everything that we're talking about here is perfectly legal, above the board, nothing skullduggery, no money laundering, no You know, if you sew it into your intestines, you can smuggle it off the plane.
So it's all perfectly legal, but there are ways, of course, of hiding the assets that you have, and there are ways of keeping it out of the reach of any particular bunch of tax-grabbing thugs.
Yeah, that's correct.
It's important to stay within the bounds of the law.
As much as we may despise the state for these things and what it forces us to do and be, You still have to live within the bounds of reality as well, and that does involve following the letter of the law to that regard.
You can't just say, forget it, I don't care what the law says, because whether you believe it or not, whether you agree with it or not, you can get tossed in jail for doing the wrong thing.
It is important to stay within the bounds of the law, and there's lots of Legal strategies, it's a very personalized approach, asset protection planning.
I look at it as more or less a three-pronged approach.
We call it the three-legged stool to asset protection.
One is creating a veil of privacy around your assets.
I'll give you an example.
If you have a Joe entrepreneur that lives in Kansas, he's got a house in Kansas in his name, bank accounts in Kansas in his name, maybe a couple of rental houses in Kansas in his name, maybe an E-Trade account in Kansas in his name.
He is fully exposed.
He's fully, let's say, chained to that, not just the U.S. market, but to that Kansas market.
And he's easily attachable, or his assets are easily attachable in a judgment.
So if he were to have some significant event, let's say he had a Super Bowl party at his house, And one of his buddies leaves, has a few too many, gets in a car wreck and kills somebody.
Well, they're going to go back to Joe Entrepreneur as the one who over-served him at his house at the Super Bowl party.
And they find out Joe Entrepreneur has three or four million dollars worth of assets.
Everything's in his name.
His profile risk is very high.
All those assets are easily attachable.
I mean, for 25 or 30 bucks...
You can get on the internet and find any asset anybody owns in their name.
So first and foremost is to create that veil of privacy.
Get all those assets out of your name.
You use various tools, different entities domestically in the US or in Canada or other countries.
You can use various entities like limited companies and corporations.
You use offshore structures, offshore companies, offshore limited companies, foundations, trusts, those sorts of things.
We talk about geopolitical diversification quite a lot in our business, and what we're talking about is moving assets into various jurisdictions.
So now you've not only got it out of your name, but you've also geographically diversified as well.
But the first step To that three-legged stool of asset protection is to create that veil of privacy.
The second is to create the legal protections and that's using the proper structures.
Again, that's still using the proper corporate structures, the trust, the foundations, that sort of thing.
And then the third is what I just discussed is the diversification.
I'm not an asset manager, so I don't tell people, you know, put 10% in gold, 10% in cash, 10% in this, this, and this.
That's an asset manager or financial advisor's job is to talk about the asset class diversification.
We talk about the geopolitical diversification of maybe having the bank account in Let's say Cook Islands, the Offshore Trust in Belize, another bank account maybe in St.
Vincent, a brokerage account here and there.
That really helps minimize people's risk because once you're not tied to any one particular jurisdiction, then if something happens in one place, at least you still have a nest egg in another place.
Right.
Now, again, just coming from the real amateur outsider's perspective, is it particularly related to tax?
But it's not really, because in America, don't you get taxed on all of your worldwide income?
So it's not really a tax minimization strategy, but really just covering your assets, so to speak.
Well, yeah.
As an American, the tax minimization is very, very, very difficult.
I mean, obviously, there's various...
There's various loopholes with qualified retirement plans, investing in real estate, which gives you some pretty significant depreciation deductions as of now anyway, mortgage interest deduction, that sort of thing.
There are some of those things you can do to minimize, but for an American, minimizing tax offshore is very difficult.
There are still a couple of things.
There's some offshore insurance products depending on what type of business you're in.
You might get set up a captive insurance company offshore like a lot of doctors offices and professional practice firms set up a captive insurance where more or less they're self-insuring through their own insurance company like in Bermuda or Bahamas or Caymans or something.
Another option for tax strategies is to set up offshore private placement life insurance policies inside of a life insurance trust offshore.
That is two of the very few ways.
The only other way really is if you're legitimately conducting business offshore.
Then you can set up offshore companies and defer that tax offshore, but when you do repatriate the income into the US, you pay tax.
For the most part, asset protection really has nothing to do with tax strategies.
It has to do with risk minimization.
Diversifying your assets, getting it out of your name, making it difficult for any future potential creditor to find your asset, number one.
If they can find it and you're compelled to disclose it under oath, then even once you do disclose it, Yeah, so we're just discussing, even if you get to the point where your creditor and you're forced to disclose under oath the location or nature of your assets.
For example, let's say you're forced to disclose and the court finds out that you have a foundation, for example, in Belize with a couple million dollars in it.
Just because they can find it at that point doesn't mean the court can actually Get a hold of that money because, for example, Belize is not going to recognize a foreign judgment.
You would have to actually be sued in Belize to actually have your money taken there.
In the case of foundation, a foundation is similar to a trust in the sense that you gift the asset away for the manager of the foundation to manage those assets for the beneficiaries.
Once those assets are in a trust or a foundation, they can't touch it anyway.
And once it's outside of the country, you can't even compel the foundation manager or trustee to hand over those assets.
So, yeah, it's not really asset protection.
In some cases, there are some narrowly focused tax minimization strategies.
But for the most part, you're minimizing your risk.
Your litigation risk or minimizing your geopolitical risk.
I mean, I have countless, countless stories of clients and people I know that have had their bank accounts or their assets seized or frozen.
Because of some type of investigation.
Actually, the reason I just spoke at that event in Minneapolis a couple of days ago was they had just had a speaker about two months ago come and speak to their group and talk about how he had some tax-related issues.
Basically, he had his tax Tax preparers and his CFO and that sort of thing were doing some funny things with his books.
They weren't paying tax for a while.
I don't know what the time frame was, but he ended up being the primary shareholder and CEO of the company.
He ended up getting tossed in jail.
In the interim, during the investigation, they more or less wiped him out financially.
They froze all of his assets, making it virtually impossible for him to even defend himself.
This is during the investigation process, not after he was convicted.
It's the whole guilty until proven innocent thing.
Guilty without a means to defend yourself because you can't pay a lawyer without selling off a kidney.
Right.
He was quite wealthy.
Granted, he didn't pay the tax.
Sure, he does have that personal liability because he is the shareholder and the CEO of the company.
They seized his assets and first his accounts before he was even proving guilty, before they even went to court.
They seized it because they were afraid he was going to run with the money.
Maybe he would have.
I don't know.
But regardless, he had to borrow money to even defend himself, and it still cost him a lot of money.
And then they wiped out his bank accounts.
Huge amounts of penalties and interest.
And I had another client who actually went to jail for an identity theft issue and lost all of his assets in the process.
He ran a used car lot and somebody came in to buy his car.
I don't know if you know much about used car lots, but they sell their packages of notes to waste cash so they can go to the auction house and buy more cars.
Well, he did that and a guy came in and stole his identity information and started a business with his identity information.
A few years later, the IRS shows up at this guy's door saying they owed $400,000 in taxes.
He didn't make enough money to ever owe $400,000 in taxes.
He ended up going to court.
Kind of a messy story, and it was his fault here, but he's self-represented.
Good old country boy down in Mississippi, didn't know any better.
He said, I'll just go to court and tell him the deal.
You know, they'll understand.
And he did.
Got angry in court.
Got tossed in jail for contempt.
And they made a deal with him after 90 days.
Said, we'll let you out if you plead guilty.
Well, in the process, they had already put liens on his 40-acre farm and put liens on his property and wiped out his bank accounts while he was in jail.
I think that we can only also assume that these kinds of predations are only going to increase as the boomers retire, as the tax base shrinks with the youth unemployment at like 20-25% and this sort of European-style sclerotic Death by a thousand paper cuts end of the economy that seems to be going on.
So the need for the government to gather funds is going to get greater while the tax base is effectively shrinking.
And of course, immigrants will find other places to go once that starts to happen.
So there is a lot of tentacles flailing around, grabbing at any kind of cash they can get a hold of as the state really begins to find itself backed into a corner.
So I think that these kinds of risks are generally going to increase.
Yeah.
That's what we talk about, the freedom through internationalization strategy.
It's more or less just a geopolitical diversification or whatever you want to call it, multi-jurisdictional planning.
People say, I can't leave the U.S., I've got friends, family here.
That's fine.
I can't do that.
It doesn't mean you can't have two or three bank accounts in another country and maybe your brokerage account because nowadays with technology the way it is, you conduct all your banking and financial transactions on the internet anyway, right?
I don't care if you bank at Bank of America around the corner.
You don't ever go to the bank.
I mean, you use your debit card, and you log in to pay your bills online, and you do your wire transfers online, and that's it.
So, what difference does it make if you do that online with a bank in Coke Island or the Bank of America around the corner?
Doesn't matter where the server is, right?
Yeah, I mean, but it does matter.
It does matter if you get some...
Some crazy bureaucrat who decides he wants to make a name for himself and he seizes all your bank accounts at Bank of America whereas he can't touch the ones in Cook Islands.
Okay, so what kind of assets, I'm sure this is a pretty common question, but given that this is going out to a general internet audience with a wide range of income disparities, obviously, if you have no assets, well, they've stopped listening already, other than to admire my shiny forehead.
But what sort of, yes, it is.
Now, what sort of asset size or wealth bracket should people start really thinking about this stuff in?
Thank you.
You know, that's a tough question.
I struggle with that question.
And I tell you, this is what I tell people, because I do.
This is a very common question.
I get this all the time.
And I tell people, seriously, when you have enough wealth where you can no longer afford to lose it, that's when you need to start thinking about it.
Now, I will say, in our consulting practice, Our typical client runs somewhere around $2 to $20 million, US dollars, net worth.
We do have several clients less than $2 million.
We have a lot of real estate investors.
For example, people that are buying rental properties.
I mean, rental properties in the US right now are pretty cheap.
I mean, you can get some pretty decent rental properties for $100 grand, even less.
Now, and most people are still buying those with a lot of debt.
So you could have 20 rental houses With $100,000 per house, that's a pretty sizable asset you're managing.
We have $200,000 in equity spread amongst all of them.
You've exposed yourself to an enormous amount of risk there.
You're getting cash flow, or hopefully you are if you manage your business.
You're getting cash flow from 20 rental houses.
You're building equity in a pretty sizable investment portfolio of rental properties.
But you don't have that $2 to $10 or $20 million net worth yet.
But with 20 rental houses, who knows when the next tenant you stick in one of those houses is going to start cooking meth in the kitchen and blow it up and kill somebody.
Right?
So you've got some exposure there.
I mean, tenant exposure is huge for property investors.
And that person could easily have a $200,000 net worth.
So they should seriously consider it too.
Then you got some people that are sitting on three, four, five, $6 million in their investment accounts that still have it in their own name.
They don't really think anything about it.
By all means, they really need to do something.
The typical What we call our client avatar is an entrepreneur or investor.
Typically, they've got some money, maybe not super wealthy yet, but they've got a decent sized business.
They've got some investments.
They're probably in the 30 to 50, 55 year old range and they're starting to build some exposure and build some wealth.
Just a round number, I'd say probably, if you want to stick a number on it, maybe a million bucks in assets, but that's such an arbitrary number.
Like I said, the guy with 20 rental houses with a $200,000 net worth would be a very good candidate for some asset protection planning as well.
Right.
Now, let me back up.
The guy with 20 rental houses with a $200,000 net worth, he doesn't really need any offshore planning.
Let me clarify that there.
He probably isn't at the level yet he needs to start setting up offshore trusts and bank accounts and that sort of thing.
That might get a little complex for the guy who's still more or less a property manager of 20 rental houses.
Right, right.
Okay, okay.
Now, you've also talked about having passports in other countries, and I wonder if you can talk a little bit about that, just to round off the topic.
Sure, yeah.
Well, I really think that's a pretty important step.
It's a hard step, and it's not something you just flip the switch on, just to get that second passport.
There are a couple of economic passport programs you can go with.
They're quite expensive, depending on your level of net worth, I suppose, but you're looking like Dominica or St.
Kitts.
I mean, you're looking a few hundred thousand dollars, but they can be done really quickly, less than a year.
Otherwise, you're looking, and actually there's a couple of other economic programs, like I think Ireland has a new economic citizenship program.
Bulgaria has one.
Austria has one.
So it can be done pretty quickly.
It's going to cost you a lot of money.
Otherwise, you need to look at things like your ancestry.
Like, for example, if you had parents or grandparents from Ireland or Italy or maybe Netherlands or something like that, Most of your EU countries have an ancestry program where you can reclaim citizenship through your ancestors.
Of course, you can always marry somebody.
Of course, one of the funniest ones, I'll get to the why in just a minute, but one of the funniest ones in the Netherlands, if you can prove that you...
You've had an extramarital affair with a Dutch person for more than three years.
You're entitled to citizenship, if you can believe that.
That's the funniest way I know of to get it.
The funny thing, too, if you were a man, for example, and you had a girlfriend for three years, an extramarital affair in the Netherlands for three years, you're entitled to citizenship, and so is your wife.
Wow, talk about sleeping your way to the top of Europe.
Yeah, wow, that's a very strange way to get citizenship, but okay, I guess they're handing it out like a brothel now.
Yeah, it's one of the more, let's say, liberal countries.
I don't know if you've ever been to Amsterdam, but definitely, they're very open-minded, for sure.
Yeah, you know that you're over Amsterdam when the pilot says that they're going to have to delay landing because of the haze, so that's the best way to check.
I don't know if you know this or not, this is slightly off topic, but as of January 1st this year, you have to be a Dutch citizen now to smoke marijuana there.
Really?
Yeah, that's a new law starting January.
They got a lot of pressure from Belgium and Germany and France because marijuana use there is illegal.
Possession and use there is illegal.
And so their citizens will all go on holiday and drive their car over to Amsterdam or whatever and come back with a Trump full of weed, I guess.
They got a lot of pressure.
What is that old saying about Puritanism?
I think it's true of Protestantism.
The haunting fear that someone somewhere is having a good time.
The nice thing about the Dutch as well is that now with this new law, I suppose, the passport, actually the last 30 pages are just rolling paper.
You can just tear those out and use those.
It really doubles up and that can be quite helpful.
Yeah, I think they're even perforated.
You can use.
Smoke them if you got them.
Okay, so listen, let's just remind people that, of course, GlobalWealthProtection.com for people who are interested in this kind of stuff.
The Global Escape Hatch, I mean, I'm hugely looking forward to it.
I mean, it's going to be a lot of great people there.
I'm going to be there for the week with my family, and I'm really looking forward to Great conversations.
I'm really looking forward to a speech I've been working on basically for the last 30 years.
The history of ethics.
I'm really looking forward to talking about that.
If people want to go check it out, I'll put the link below.
It's not the cheapest libertarian conference, but boy, it's the one with the best snorkeling.
I mean the best speakers and the most information.
That's really what I wanted to plug it.
Well, I will make one little plug about the conference.
Yeah, it's definitely not the cheapest event, but there's a couple things.
One, we do include all of the food, breakfast, lunch, and dinner, and cocktail parties in the price of the event.
So that is a big bonus.
Also, this event is not recorded.
It is a Be There If You Want to Hear It event.
We do not record this event.
We do not sell DVDs to this event.
This is absolutely an exclusive, attend-only event, unlike some of the other events where you can buy the CDs or DVDs afterwards.
This is not the case for our event.
It is really, truly...
From my perspective, all the speakers are fantastic, or 15 of them anyway.
I'm a pretty mediocre speaker myself, but the other 15 are fantastic.
But the networking with the speakers and the attendees, because I know a lot of the attendees personally.
They're personal clients of mine that I've known for quite a while.
A lot of them are previous attendees at other conferences.
And it's a pretty fascinating bunch of people from all over the world.
The camaraderie and the networking with like-minded people is a huge, huge plus.
All right.
Well, listen, I mean, of course, I really appreciate the invitation.
Anything I could do to help get people out of the event, I'm certainly happy to do.
And thank you so much for your time.
And of course, for those who find your services to be of use, I hope that they will contact you.
I don't know a lot about the business, but I truly believe you're the best in the business.
So I hope that people will check out your websites.
And thanks again for your time.
Well, thank you so much.
Look forward to seeing you in Belize here.
Actually, we're less than two months away now, so look forward to seeing you then.
All right.
Take care, Bobby.
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