JS 76: Asset Protection & Internationalization with Bobby Casey of Global Wealth Protection

September 11th, 2014 by Jason | 2 Comments »


On this episode of Jason Hartman’s JetSetter Show, he invites Bobby Casey from Global Wealth Protection to talk about alternative investments, asset protection and internationalization. In the interview, Casey brings up both business and personal issues related to your presence in a particular jurisdiction, how trust companies can be used and secured, and how you can really manipulate and control your own assets to get the most out of them

 

Key Takeaways

02.33 – Years ago, investing a lot into the stock market seemed more reliable, now it’s more a case of putting all your eggs in one basket. There are some who are firmer believers in investing in real estate and hard assets as well.

04.30 – Back in the 1970s, Doug Casey made a name for himself in his promotion of internationalization, to the point of having multiple passports, bank accounts and investments in multiple jurisdictions.

06.30 – With the US becoming steadily more militarized, it’s becoming more important to be sure of your own investments and situation within different jurisdictions.

08.00 – Internationalization also works as a sort of personal backup – various real estate investments can be unsuccessful and having a back-up in another jurisdiction can be a sensible business strategy. Similarly, at the very least, a second passport gives you another valid travel document.

09.40 – Paraguay remains one of the most popular destinations for US citizens looking to obtain a second passport. That said, with this sort of transaction, there are always fraud risks, so listeners should take particular care.

11.40 – When considering your options for alternative investments and managing your assets, Bobby Casey personally recommends asset-class diversification as well as geo-political diversification.

11.55 – Be wary of likely “investments” where you don’t receive any income – this is not an investment; this is a speculation. If you are going to actively invest money into speculations, work on a figure closer to 5% than to 50%.

13.25 – Trust companies can be used for a number of different purposes, because it’s basically the act of setting up a structure to manage your wealth. The most common usage is to assist beneficiaries, usually the trust-holder’s children, but they can also help with litigation risks because often the money is no longer seen to be in your ownership.

15.40 – Again, risks can be associated with the management of trusts if a case does come to court, and there’s a chance of being accused of contempt of court. As a settler, never name yourself as protector of the trust.

17.35 – The number one most important aspect is only doing business with people you trust.

18.40 – One of the positives of having your assets in farmland or property is that these are not easy to liquidate, and discrepancies will be noticed.

20.00 – The amount you get back and the time you wait until you get the money back depends on the projects you work on and invest in – ie. timber farms are a great way to compound your wealth, but it can be a lengthy process. With many timber farms, you’re splitting the profit over time with the management team working on the site.

22.50 – Even if you have the usual management, political or business risks, with investments and assets like timber farms or real estate, you do still have your stake in the property.

24.00 – Mango farms or other fruit farms can also be a fairly reliable investment due to the longevity of the tree’s production itself, so your investment is long-term.

25.20 – More information can be found at www.globalwealthprotection.com or by emailing Bobby Casey directly at [email protected]

 

Transcript

Introduction:
Welcome to the Jet Setter Show, where we explore lifestyle-friendly destinations world-wide. Enjoy and learn from a variety of experts on topics ranging from up-scale travel and wholesale prices to retiring overseas, to global real-estate and business opportunities to tax havens and expatriate opportunities. You’ll get great ideas on unique cultures, causes and cruise vacations. Whether you’re wealthy or just want to live a wealthy lifestyle, the Jet Setter Show is for you. Here’s your host, Jason Hartman.

Jason:
Hey, it’s my pleasure to welcome Bobby Casey back to the show. He’s been on the fore and he is an expert in the area of internationalisation and asset protection. Today he wants to talk about some alternative investments, and he’s coming to us, I believe, from Riga, Latvia. Is that correct, Bobby? Welcome.

Bobby:
Hey, Jason, thanks for having me on today, and yes, today I am in Riga, Latvia. I live here and this is one of these rare occasions I’m actually sitting at home today, so as I’ve told you, I travel a lot, so I’m sitting at home.

Jason:
That’s why I said that, because you’re an international man of mystery and I never know exactly where you are. It’s good to have you back, so tell us what you’re up to lately and what’s going on in the world of internationalization and asset protection and alternative investing?

Bobby:
Well, the reason that I wanted to talk to you about this, Jason, is because I know you’re a big believer in hard assets like real estate and that sort of thing, and quite frankly, we’re living in a crazy world with governments manipulating the financial markets on a regular basis and the Federal Reserve printing money, of course, still printing money, although they are turning it back. Now you’ve got the European Central Bank printing money and Japan can’t print fast enough, so clearly we have a lot of craziness going on in the financial markets. I’m a big believer in the stock market as a piece of your investment portfolio, but nowadays if you’re putting all your eggs in that stock market basket, you’re risking your future, you’re risking your wealth and you’re risking your retirement keeping it in the stock market. I think it’s pure speculation now that they seem to be keeping it all there.

Jason:
Bobby, I think you’re being way too nice and politically correct here. Let’s call it what it is; I call the stock market the modern version of organised crime.

Bobby:
Yeah, you know I’ve had this conversation with some people before too, and I do believe that there are a lot of companies that trade on the stock market that do really good things that provide great value and sell quality products and services to their clients, but it’s just hard to find those where the stock price itself is not manipulated, so it takes a lot of work to dig down under that.

Jason:
The thing is, it’s such a dynamic thing and such a moving target. What company is good today, and what stock isn’t massively manipulated today? Assuming you dig down and do lots of research to try and figure it out like you’re saying, that all changes tomorrow morning. It’s not like a stable hard asset, like if you invest in farmland or in income property. Personally, I like housing because everybody needs a place to live. That’s pretty stable – I mean there are moving parts to everything, but businesses have a lot of moving parts, and when you’re a stock investor, you are, of course, investing in a business. Also, you have so many layers to the onion on Wall Street because you’ve got all the market makers and the Wall St people, as well as the core company itself as the actual investment, but then there are all these middle men between it. I’m really glad we’re talking about alternative investments today, and conceptually, you know I’m a fan of this concept that Doug Casey put foward – no relation to you, although I know we both know Doug and have talked to him at length. He, in the ’70s, I think, was the first guy to talk about this concept of internationalization – the idea of having investments in multiple jurisdictions, having bank accounts in multiple jurisdictions, hopefully passports in multiple jurisdictions and living in one place and having affairs in other places. Conceptually, I think that’s a great idea, I love it. What are your comments and thoughts about that?

Bobby:
You’re right, Doug was one of the early guys that came out and talked about this. Doug’s a good friend of mine, and in a sense, I guess I could call him a philosophical mentor of mine. I can’t say he’s some guy I go to on a regular basis to talk about these issues, but philosophically Doug is definitely a mentor because of a lot of his thoughts and writings on this subject. He’s no relation but we do know each other pretty well. Like you said, I’m a big believer in internationalizing not only your life, but also your investments. I give a presentation about achieving freedom through internationalization, and now of course we have the US becoming more and more of a police state on a daily basis. I don’t want to get into any time-specific things because I don’t know how often this show’s going to be heard, but clearly we have on the news things happening where the police are just robbing your rights, and now the police departments in the US are fully militarized.

Jason:
Bobby, what the heck does the Sheriff’s department need tanks and armoured personnel for? This is ridiculous, this is just absurd. Our constitution protects us from the military being used against American citizens on American soil.

Bobby:
What constitution? I heard you mention that and I’ve faintly heard that term before.

Jason:
Exactly. We can discuss that ad nauseum. What they’ve done is they’ve made an end run around the constitution by letting all this federal money flow into police departments which are militarized and have a lot of the same equipment that the military uses. It’s insane, it’s just ridiculous.

Bobby:
I can take that even one step further: why does the EPA need full assault rifles and militarized vehicles and tanks? Why does the –

Jason:
Well, you know why they need that, Bobby. Because they’ve got to protect the environment. I’m joking!

Bobby:
Yeah, why does the IRS need assault rifles and shot guns with their agents? Why do we need these things? I’m a big believer in minimizing your own personal connection to any one jurisdiction, and I’m not saying that one jurisdiction is better than the other. Certainly, there are some jurisdictions that are better for some things and worse for others, so just like Doug Casey talks about with planting his multiple flags, my idea is to minimize your connection with any one jurisdiction so that if something happens… Maybe, for example, you have a bunch of apartment buildings in Atlanta, Georgia, but you also have some real estate projects in South America, if something goes down the tubes in Atlanta, at least you still have that investment portfolio and your real estate investments in South America. The same thing with the second passports: some people say ‘Why do I need a second passport?’ Well, for one, it is another travel document. I know quite a few people who have had serious issues with their American passport. If you don’t believe me, open up the cover and read the part where it says ‘This travel document is property of the United States government and must be remanded upon request’ –

Jason:
‘Upon request or upon order’. It’s fairly hard to do this. The second passport and dual-citizenship is not an easy thing, and we’ve talked about it on this show extensively with other guests who specialize in that area, so there are many episodes on that topic. I’m curious, Bobby, you’re a US citizen and we’ve talked before about some of the tax-breaks you get from living abroad. You know, you can get about $230,000 of income, I think, every year outside of the US tax, and I think you can do that legally. We don’t need to go into that; I want to talk about alternative investments, but I’m curious. You have a second passport, right? So you have a dual-citizenship?

Bobby:
I do not, not at this point, but I am resident in a couple of different places and I’m in process for a dual-citizenship. I’ll tell you, we’ve found quite a few places now where we’re getting second passports pretty easily and a whole lot cheaper than you might think, but we can leave that off for a second.

Jason:
Just give our listeners a little clue though – some main names. Paraguay?

Bobby:
OKay, sure. Paraguay is an excellent option; it’s a very cheap second citizenship option. We have a program to help people get that done pretty quickly and really cheaply. I say relatively cheap, it still takes a couple of years. If you want something done in less than a year, we have a Caribbean program in St. Kitz – I can’t discuss numbers on that because we have a special program that can be done for a whole lot less than anything you see advertised.

Jason:
Yeah, because the stuff I’ve heard is a $250,000 or $400,000 investment in the country. I do want to make a disclaimer to our listeners: be careful with this stuff because there are a lot of scams out there too. I just read an article about fraudulent passports being printed in Paraguay and that they don’t work, and then you’ve spent all that money and just got scammed. I’m sure you know about that stuff.

Bobby:
A side note with that one, Jason, about the fraudulent passports in Paraguay: I was personally sitting in the Migration Office in Paraguay when the lady was arrested that was doing the fraudulent passports.

Jason:
Wow, that’s amazing, so you witnessed the whole thing?

Bobby:
I witnessed the whole thing, I watched the chaos in the Migration Office, and I had an appointment there with some people for some of my clients, and we basically sat there for about 6 hours and just left and rescheduled out appointment because it was so chaotic our meeting just couldn’t happen.

Jason:
Crazy stuff. Well again, there are other episodes on it – maybe we’ll do an episode on it, Bobby, but onto alternative investments.

Bobby:
Sure, I’m a big believer in, like we originally started out saying, asset class diversification, and also geo-political diversification of your asset porfolio. I’m a big believer in hard assets as well, and it’s funny because I saw your post on Facebook the other day. I can’t quote it exactly, but it was something to the extent of ‘if your asset’s not paying you an income, it’s not an asset, it’s not an investment, it’s a speculation.’

Jason:
Yeah, I always say that anything that does not produce income is just a speculation or a gamble. Investing is about investing in things that have cashflow, that have income attached to them. You know, sometimes with speculating and gambling you’ll win, but it’s just not very reliable and it’s certainly not very conservative. I don’t know, Bobby, the older I get the more conservative I get. I’ve worked hard for my money, I’d like to keep it and I’m sure our listeners feel the same way too! So what have you got that produces income?

Bobby:
I’ll make a quick note about speculation. I’m also a believer in speculations as a piece of their portfolio, but if you had a million dollars to invest, you certainly don’t put half of it in a speculation. You might put 5% of it in a speculation. So I do believe in the benefit of having speculations, but that’s not your long-term strategy. If you had a million bucks, you want to allocate $50,000 for example in speculations, and you might put that in 5 different speculations.

Jason:
Absolutely.

Bobby:
Maybe one of them hits and the other four disappear like dust in the wind, right? Like we’ve discussed, Jason, to get to your question about alternative investments – we’ve got a lot of different stuff; we manage money through our trust company. We own a trust company in Anguila, down in the Caribbean. If you don’t know where that is, it’s near Saint Martin.

Jason:
So Bobby, for the listeners, can you define a trust company? What do you mean when you say that?

Bobby:
With a trust company, you’re essentially setting up a relationship with a trustee. I’m just going to use a million dollars as an example: you want to set up a trust for some purpose. Typically, people set up trusts for the purpose of helping their beneficiaries (maybe their kids) at a later point in time, so you set up a trust, you have a trustee managing those assets for your beneficiaries to get at some contracted point in time. The trustee, for example, has a contract that might say ‘OKay, I want to mandate these assets for my kids, and they get them after I die, or 5 years after I die, or when they turn 40 or whatever”, but a trust is really just a structure set up to manage your wealth. Essentially, it’s pretty straightforward. People do trusts for several reasons: asset protection purposes, they get the asset out of their name – like John B. Rockefeller said, “Own nothing, control everything”, so they set it up and get it out of their name, because once you gift an asset into a trust it’s no longer legally yours, but you still have some control over who your trustee is. It minimizes your litigation risk with those assets: if you’re sued for a million bucks, it’s no longer your asset so it can’t be touched in a lawsuit. If the trust is offshore, and the assets are non-US assets, there can be some very significant tax benefits there, and then for state planning purposes, it’s no longer in your taxable estate, so when you do pass away, there’s no state tax owed at that point by your heirs.

Jason:
Okay, good, so we’ve got that. I do want to say one more thing about the trusts – just another little disclaimer. I have read about cases where someone will have a crediter and they’ll claim at the judgement debters exam, ‘Hey, I don’t own this, it’s in a trust’, and the judge will say ‘Look, I don’t know about that. I’m going to have you cool your heels in jail for contempt of court until you figure out how to get it back here and repatriate that asset so that you can pay this crediter.’ Nothing is foolproof, I guess is the answer, but you put up roadblocks, and you can make it difficult.

Bobby:
That really depends on how the trust itself is structured. There’s a famous case in the Cook Islands where that happened – I think it was a divorce case and the wife was leaving him and says ‘Hey, I want to get that money from the trust’ and the guy said ‘You can’t have it, it’s in a Cook Islands trust’. The court looked at the trust deed itself and found out that the guy who set the trust up named himself as the protector of the trust, which is a huge no-no. You never, as a settler, name yourself as trust protector, but he had named himself as that. The court said ‘Well, we’re going to hold you in contempt of court until you as protector choose to repatriate that asset back to yourself so you can pay’. So there are ways to actually insulate yourself 100% using the trust. The trust itself just has to be properly structured, and a lot of the time it’s not.

Jason:
That’s the one other disclaimer as part of that. Okay, so that’s good advice: you’ve got to make sure your trustee doesn’t steal your assets. I assume that that’s a valid concern, although I don’t know much about it.

Bobby:
That’s probably the number one concern, and that’s what I always tell people. Whether we are your trustee, or anybody else, just deal with people you trust and feel comfortable with. That’s really what it is. People always ask me, ‘Hey, I’ve heard these trusts in the Cook Islands have a really solid structure’, and that’s great, but do you know the trustee?

Jason:
I know, but it’s there more to it than that, Bobby? What about a fidelity insurance policy or something like that, because history’s replete with stories of everybody dealing with people you trust, you like or are friends with, and then they run off with the money, right? Do you have any other advice on that due diligence?

Bobby:
Well, for one, do business with people you trust, like I said before. That is the number one most important aspect. Of course, you also have to think about it in the sense that, for example, if I manage trust assets for 100 other people, I’m not so inclined to want to steal Jason Hartman’s money because I’m out of business. If I steal your money, I’m on the run the rest of my life. Now, maybe you have enough money to make it worthwhile, but you also have to think logistically. Most people don’t have all their assets just in a bank account, most people have it in some farmland, some apartment buildings, some houses.

Jason:
So in other words, something that’s not easy to liquidate, right?

Bobby:
Yeah, as a trustee, it’s not easy for me to go in and liquidate your farmland in Paraguay so I can run away with your cash. There’s actually some checks and balances with that because, when we set up a trust, we’re not the bank. We’re only the trust company, whereas I might put your money in one, two or even three banks, but the trust itself also knows who the settler of that trust is, and the beneficiaries of that trust. So I can’t just easily run away with that money because they’re going to notify you and your beneficiaries. It’s not nearly as easy as you’d think; it’s mostly horror stories you read on the internet by doing Google searches, which is effectively the black hole of bad information.

Jason:
Alright, well let’s move on. We’ve taken a zillion other roads, and I appreciate your commentary on that, Bobby, but before we wrap up here, let’s talk about some actual investments. What alternative investments are out there?

Bobby:
Like I said before, we’re big believers in hard assets and I think that deserves a big allocation in your portfolio. For example, we have one project down in Paraguay. It’s a timber farm whose historical average yield is about 15% a year. Now, keep in mind it’s a timber farm: how do you make money from a timber farm? You cut trees down. You don’t cut trees down in one year, though, depending on the type of tree, and this particular timber farm has different types of timber on it. You have a tiered way to make money on it. For example, there’s one tree that matures in 8 years, there’s another tree than matures in 15. That particular project yields an IRR of about 15%, but of course you don’t take your cash out until you cut the trees down, which could be between 5 and 12 years down the road. I think timber farms are an enormously great way to compound your wealth. What do trees do? They grow, and you basically sell them by the pound or by the kilo, and the longer they grow the bigger they get – until their maturity point, anyway – so timber farms are good.

Jason:
Let me ask you some questions about that deal. Is the investor buying land in an entity where they own this land with other people, or are they buying their own plot of land?

Bobby:
I’m sorry, did I say Panama? I meant to say Nicaragua, I apologize. This particular one’s in Nicaragua, but we have another project in Panama. It’s a pretty simple structure, basically it goes into your own name so the property is in your own name. It depends how much you want to buy (1 hectare, 2 hectares, 3 hectares, whatever), and it’s a managed tree farm that’s managed on site by employees, and you’re essentially splitting the profit over time with the tree farm management.

Jason:
Let’s just review your risk on that one. OKay, so you could have a bad manager, you could have political risk in a country like Nicaragua – certainly there’s a political risk aspect, but really you do have that everywhere in the world, there’s always a political risk in everything – and then there’s just a risk that maybe the business won’t be good or the harvest will be bad, the trees might not sell, whatever, right? You have that business risk, right? So management risk, business risk and political risk. Is there anything else for the investor to consider here?

Bobby:
No, I don’t think so – I’ll use the Atlanta apartment building deal again. Of course you have a risk there, but even if you have an economic risk or a political risk, or whatever, you still have that apartment building in Atlanta. You still have people that are going to live there. Maybe next year, instead of paying $800/month in rent, maybe they pay $650, so your income could be lower, but people still need a place to stay. Timberland has done pretty well, historically, over the past couple of million years. So timber land is a pretty good option. In Nicaragua you have some tailwinds there. You’ve also got, in Nicaragua, the approved canal project that the Chinese are funding. Now, that might be 10 or 15 years before that happens, but that’s an economical tailwind for investment into the country.

Jason:
And what’s the minimum investment in that?

Bobby:
I believe the minimum in that one is $50,000.

Jason:
$50,000. OKay, so how much land do you get for $50,000 because here you own the land?

Bobby:
I don’t have the spreadsheet out in front of me, but I believe it’s a couple of hectares.

Jason:
OKay, tell us about another opportunity.

Bobby:
Well there’s an interesting one in a mango farm in Panama. It’s essentially kind of like a tree farm also, but your yield comes a little bit quicker because you’re actually planting a fruit tree that produces an actual crop. The mango farm is an interesting one because, if I’m not mistaken, the minimum investment on that one is about $40,000. You don’t see actual cash-flow for 2-3 years, depending on how quickly the crop pops up, but it’s a good one because the same tree will produce for 50 or 60 years, so unlike on a timber farm, you’re not cutting the tree down, it just keeps reproducing the mangoes year after year. After the first 2-3 years, the cash-flow ramps up pretty dramatically, so you’re getting a little bit after a couple of years. By the 5 year period, you’re actually getting about a 25% annual cash yield. That’s the same deal. You’re also buying a piece of land – it’s pretty simple in Panama as well because you’re actually buying the dirt and then it’s a managed farm and it’s the farm management that you’re actually sharing the profits with.

Jason:
Well, good stuff, Bobby. Give out your website and tell people where they can learn more about you.

Bobby:
Our main website is www.globalwealthprotection.com, and my contact details are just [email protected]

Jason:
Fantastic. Well, Bobby Casey, thanks so much for joining us again, and maybe we’ll have you back to talk about some second passport options. That’s an ongoing fascination of many of our listeners.

Bobby:
That would be a good conversation to have – that is becoming a hot topic, it really is.

Jason:
No question about it, Bobby Casey, thanks for joining us.

Bobby:
Thanks, Jason, thanks for having me.

Outro:
This show is produced by the Hartman Media Company, all rights reserved. For distribution or publication rights and media interviews, please visit www.hartmanmedia.com, or email [email protected]
Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate or business professional for individualized advice. Opinions of guests are their own, and the host is acting on behalf of Platinum Properties Investor Network Inc. exclusively.

Be Sociable, Share!