Planting Flags

Casa Rosada - The Pink House - Argentina's
Version of the White House

                                             According to Dean Harry Schultz, the way to live your life involves the following:
                                                             - Money in one country
                                                             - Citizenship in a different country
                                                             - Body in another country where neither your citizenship nor money resides.
                                             I have resisted this sage advice from Harry for many years knowing that the day might come when his
                                             genius proves true. That day has come. Seriously consider this advice. --Jim Sinclair            

Those who grew up in the United States, the UK, etc., have enjoyed an amazing level of financial and personal security.  We had stable banks and well-regulated markets and brokerage houses. We had low levels of corruption.  It is difficult for most of us to think that could change.  “Normalcy bias” is alive and well. But all empires change in the course of history.  And others rise. Thus it has always been and thus it will be again.  I am sure that many people in those empires were convinced that “it can’t happen here.”  

Serious political and economic change always brings with it both risk and opportunity. Here at Four Flags Journal, in our attempt to mitigate against risk, we take our basic plan from Dean Harry Schultz.  Mr. Schultz, years ago, saw so clearly into the future that he proposed “planting flags” in order to reduce risk. What did he mean by planting flags?

It has been stated another way—don’t put all your eggs in one basket. 

His strategy was to have your citizenship in one country, your body in another, and your bank account in another. We have chosen the four flags model, but different people elect different levels of flag planting according to their unique circumstances.

Schultz proposed having more than one citizenship. Further, he advocated living in a different country from the one in which you hold citizenship. He said that when governments are in financial crisis, citizens are seen as cash cows to be milked. But if you are a guest in a country, you are likely to be treated as just that—a guest.  As we have seen in the more “developed” countries, it is certainly not the banksters-turned-politicians who bear the consequences of their own bad behavior.  It is the everyday citizen.

Schultz also believed you should bank in yet another country.  In that case, it is not so easy for a third party to freeze or even confiscate your savings through a lawsuit.  It can be done in some cases, but it is complicated and expensive. Next is to have your business structure in a low or non-tax jurisdiction—not necessarily in your country of residence or citizenship.

This will give you an idea of the thinking behind Harry Schultz’s financial recommendations.  Of course for a retired person living on a pension, with no significant assets, this idea might have little value. And yet a second passport can benefit that person as well. But for a person with significant assets, Mr. Schultz may well have had a strategy worth considering.

Some of you, we know, are readers only because you are interested in visiting South America. You like reading about our life here. Others are interested in living in the Deep South—South America. We understand that those readers have many things to consider.  For that reason, we have decided to include some analysis of economics here as we see them, from time to time, as well as other nuts and bolts of living in a country other than the country that you know so well.  However, many U. S. and U.K. residents already feel that they are living in a country other than the one they knew so well—and they haven’t even moved!

Some of us began our move to the south six or eight years ago and have hit some snags and disappointments along the way just from lack of reliable information. Things change in the world all the time so we cannot guarantee that what we observe today, even, will be the same tomorrow. But we hope that at least we can put up a warning flag in front of some of the pot holes along the way.

One word of caution.  We notice that different countries are tightening their requirements for immigration. Argentina raised their financial requirements two years ago and our attorney tells us that there is talk in the government offices about tightening even more. Uruguay recently raised their requirements as well. Even if you are not ready to make a physical move yet, you might want to consider ways to begin to diversify assets. We suspect that, as time passes, there will be fewer choices.

We are on a great adventure and so glad you decided to come along, whether you consider joining  us in person, or just sharing our site.  God bless you all!

If you have friends that are interested in living in this part of the world, we would appreciate your sharing our posts with them. And as always, we know your interests may have changed. You can always just send us a reply entitled “Unsubscribe.” We will be sad to see you go, but we will take you off our mailing list.

Arlean Kelley 04/06/2012 All rights reserved.