Ultimate Plan B according to Sovereign Man
Sovereign Man is an online community led by Simon Black looking for ways for people to avoid catastrophic losses. The book opens with an excellent one-page story of Lucius Quintius Cincinnatus, 584BC, which is the last recorded time that a politician does not profit from a crisis by seizing more power.
While many of the stories involve countries such as Argentina and Venezuela, the book contains mostly legal setup advice relevant to US persons.
Citizenship and Residencies
One of the biggest risks to wealth in the last 120 years was being a citizen of a country that decided to use some of its citizen's money because it could (whether it was to wage and lose a war, for communism, ...).
Having several citizenships and residencies would have gone a long way to mitigate this. The book explains several ways to achieve this. Residence in Mexico and citizenship in Puerto Rico with a backdoor to Spain and EU citizenship appear to be interesting avenues for US persons.
Options allow additional travel and residence privileges.
The author makes the following points that are not about performance but legal protection
- banks are unsafe, FDIC is underfunded, he describes how to chose the least worse bank
- withdraw cash
- 28 days t-bills are safer than bank deposits, they can be bought directly by US persons (with SSN)
- Gold and silver may protect against inflation
- how to buy precious metals while minimising costs
- how to own directly the stocks rather than the broker owning them
While this desire to cut the middleman seems obsessive, we saw many cases of ETFs that followed a simple interpretation of their mandate rather than what their fiduciary duty would entail.
The author makes the following points
- advice for IRA and 401(k) plans, more generally retirement savings should be inexpensive and tax sheltered
- self directed IRA setup as LLC seem best in US as it is tax-sheltered and offers maximum flexibility
Lower Tax Burden
For US persons again:
- Going across state lines
- Foreign earned income exclusion
- Opportunity zones
Again, legal-oriented advice:
- how to be as unattractive as possible
- strip equity for real estate with loans, withdraw the cash or send oversea
- put assets in US-based LLC, Foreign based company, or better, Foreign trusts
The person who has all his assets in the country, all cash in the bank is the most vulnerable to lawsuit, regulation. While such a situation is the default, much of the advice in this book does not cost much to setup and maintain.