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The difference between only having a bank account in your home country and having an additional bank account in another country is major. Here are the top 10 reasons why.The above introductory comments are edited excerpts from an article* by Nick Giambruno (internationalman.com) entitled 10 Reasons Why You Need an Offshore Bank Account.
The following article is presented courtesy of Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
Giambruno goes on to say in further edited excerpts: Reason #1: Dilute Your Political Risk …The biggest risk you face today is not market or financial risk—as big as those risks are—but rather the risk from your own government [and] there is no doubt this kind of risk is rising in most parts of the West. Governments are hopelessly sinking deeper into insolvency so they are turning to the same desperate measures they always have throughout history, and it’s a big threat to your savings. It’s only prudent to expect more:
among other destructive actions. These are just a few recent examples [but] if you think these kinds of things can’t happen in your country, think again. According to Judge Andrew Napolitano: “People who have more than $100,000 in the bank are targets for any government that’s looking for money to shore up its own inability to manage its finances.” A big part of any strategy to reduce your political risk is to place some of your savings outside the immediate reach of the thieving bureaucrats in your home country and obtaining an offshore bank account is a convenient way to do just that. …[With a foreign bank account] your savings cannot be easily confiscated, frozen, or devalued at the drop of a hat or with a couple of taps on the keyboard. In the event capital controls are imposed, an offshore bank account will help ensure that you have access to your money when you need it the most. In short, your savings in an offshore bank will largely be safe from any madness in your home country. Reason #2: Sounder Banking Systems and Banks Almost all of the banking systems in Western countries are fundamentally unsound—leveraged to the hilt and backed by the promises of insolvent governments. Worse, most of these banks only keep a tiny fraction of cash on hand to meet customer withdrawal requests. This means that in the event of a financial shock like another Lehman-style event, you could have trouble accessing your money. If you look to bank in a jurisdiction with low debt and a history of stability, you can find banks that:
Offshore banks are almost always more responsible custodians of your hard earned-savings. Reason #3: Asset Protection [of primary concern to Americans] Maybe you think it’s just other people who live on the lawsuit firing line… and you live somewhere else. Think again. [In the U.S., for example,] the Legal Resource Network reports that 15 million lawsuits are filed there every year…[which] works out to a new lawsuit for one out of every 12 adults each year – year after year…[As a result,] t’s no fluke that 80% of the world’s lawyers—over 1.2 million of them—work in the U.S.. That’s where the action is. Your money is the trophy they’re competing for.While there is no such thing as 100% protection, an offshore bank account can help make [Americans]…a hard target…[as it] protects them from being paralyzed by a lightning seizure by any government agency armed with a summary power to freeze one’s assets since such summary powers can’t reach beyond the U.S.. If you ever find yourself in a wrestling match with a government agency or with a frivolous lawsuit, you’ll have resources you can count on. Reason #4: Currency Diversification Holding foreign currencies is a great way to diversify the risk in your portfolio, protect your purchasing power, and internationalize some of your savings. [While] chances are…your domestic bank offers few—if any—options to hold foreign currencies, offshore banks, on the other hand, commonly offer convenient online platforms for you to hold foreign currencies. Reason #5: Higher Interest Rates for Your Deposits In what amounts to a war on savers, the European Central Bank and the Fed have manipulated interest rates to near historical lows. These artificially low interest rates amount to a wealth transfer from savers—who would otherwise enjoy higher returns on their deposits—to borrowers… If you live in the West, there’s a good chance that the interest you’re earning on your savings isn’t even keeping pace with the real rate of inflation…[but] you can find banks [abroad] that pay interest rates significantly higher than what you’d find at home. Reason #6: Ensure Access to Medical Care Abroad …[Should you be] denied or delayed treatment in your home country…you may want to seek medical care abroad and, in a dramatic scenario, this could be the difference between life and death. [Were the above the case you would]…have to transfer money abroad to pay for it but if capital controls…[happened to be in place] it could be difficult or impossible to transfer funds abroad to pay for the medical care you need. This is where having an offshore bank account—which isn’t held hostage to capital controls in your home country—can help ensure that you always have access to medical care abroad.Reason #7: The Ability to Act Quickly When it comes to international diversification, it’s always better to be a year early than a minute too late. Once a government has imposed capital controls or levied bank accounts, it will be too late to take protective action. If you don’t already have one, you should open an offshore bank account now—even if it’s a small one. Just having one available—regardless of how much money you initially put in it—gives you meaningful benefits. Namely the option to act quickly and transfer more money abroad in the future, should the situation warrant it. Reason #8: Maintain Limited Privacy [Americans take note] Americans who have an aggregate of $10,000 or more in foreign financial accounts at any time during the year must file an FBAR (FinCEN Form 114). However, if the aggregate total of your foreign financial accounts remains under $10,000 for the year, and they are not held in a trust, LLC, or other structure, you can legally maintain your privacy. Reason #9: Peace of Mind An offshore bank account is like an insurance policy.
Knowing that you have taken a strong measure to protect yourself from these things should give you a degree of mental comfort. Reason #10: Maximize Your Personal Freedom Having an offshore bank account gives you more options. More options means more freedom. It’s a crucial step in freeing yourself from absolute dependence on any one country. Achieve that freedom, and it becomes very difficult for any government to control your destiny. Conclusion It’s no secret that it is becoming harder and harder to open an offshore bank account, [especially for Americans and] soon it could be impossible. This is a strong incentive to act sooner rather than later to get one—even if you don’t plan to use it immediately. …Offshore banking is completely legal and is not about tax evasion or other illegal activities. It’s simply about legally diversifying your political risk by putting your liquid savings in sound, well-capitalized institutions where they’re treated best. Even if your home government doesn’t slap on capital controls or confiscate deposits, you’re no worse off for having moved [some of] your savings to a safer home. In fact, you’re far better off for the reasons described above. Obtaining an offshore bank account is a prudent step that makes sense no matter what.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://www.internationalman.com/articles/10-reasons-why-you-need-an-offshore-bank-account (Copyright © 2014 Casey Research, LLC. You may also want to check out Going Global, our comprehensive publication where we discuss our favorite banks and jurisdictions for offshore banking, including crucially, those that still accept Americans as clients.) Related Articles: 1. How Best To Protect Your Wealth From Desperate Governments & Collapsing Economies Many governments of the world are now hopelessly in debt and on the verge of economic collapse. As their leaders become more desperate, they will resort to more desperate measures. In the next few years, we shall see the leaders of the most “respected” countries throw out the rule book and resort to a final grab of their citizens’ wealth. This article identifies which assets would be the best to own under such circumstances, where they should be held, and why.] Read More » 2. Capital Controls: How & Why They’re Implemented; What Harm They Cause; How to Protect Yourself It’s crucially important to your financial future that you understand what capital controls are, how and why they are implemented, the harm they can cause, and what you can do to protect yourself. [This article does just that. Read on!] Read More » Long the champion and beneficiary of free trade and the free flow of capital, the United States has enacted legislation that becomes effective, in part, on January 1, 2014 [revised from January 1, 2013 date mentioned in the original article] that a growing number of commentators and professionals believe could be the start of capital controls in America and have serious unintended consequences. Let me explain…… Words: 1252 Read More »
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