*This article is not legal, financial or tax advice, this article is for entertainment purposes. All the options outlined in this article are legal. I don’t condone or advocate you breaking the law.
Uncle Sam Is 20 Trillion dollars down and that debt is rising faster than ever.
Debt to GDP is also rising quickly.
The US, in 2017 had debt equivalent to 105% of GDP for that year.
There is a trade war with China looming.
And China has been hinting at the release of it’s Petro Yuan.
The US is pumping up the money supply with Voodoo economics and stomping around the world enforcing the US petro dollar as the international standard.
Being deeply in debt and having a competitor for the world’s reserve currency is not a good position for the U.S. to be in.
Not for the U.S., and not for us as businessmen, whether you’re an American or not, most likely you rely on the US market for some of your business.
The stock market crashes on average every decade and it looks like we’re due for a crash now.
With that said, this article is not about fear mongering.
I’ve been hearing about an imminent potential crash for the last decade from doom and gloom websites advocating throwing all your money into their gold affiliate program today.
I’m optimistic, I think there is a good chance will see a collapse in our lifetime, but I think we’ve got another 15 or 20 years to go.
The US is the most powerful empire of all time and proven to be very resilient.
It could even be longer than that. Or there could be no collapse at all.
Of course there will be recessions along the way, but I wouldn’t underestimate the power of America’s economic and currency control, they still have by far the most powerful military on the planet.
With that said, as a businessman, having a gameplan for a potential economic meltdown is a good idea, even if you don’t live in the US and aren’t an American citizen.;
A calm, collected, rational plan on how to play your hand in case of an economic emergency in the future is a good idea.
How To Prepare For A Potential Economic Collapse
1. Create The Mindframe Of Surviving And Thriving No Matter What
Adapt and overcome is a motto that will serve you well in business and in life. Focus on getting your mind to where you’re confident that you can survive and thrive in any condition.
Not just get by, but actually do well, because you’re smart, capable, adaptable and prepared. While everyone else is watching the football game, you’re focusing on what needs to be done to protect your financial future.
Don’t give in to doubt or fear based consciousness. Fear in moderation is your friend because it keeps you on your toes, but anything more than that and fear becomes your enemy.
2. Focus On Getting Rich Now
Money is freedom.
Money is options
With money it will always be easier to survive and thrive.
You want to get as much money as possible coming in as income, reinvested into your business and stashed away before the sh$# the fan.
Even better if you can get your money online as it gives you the option to geoarbitrage in the future.
3. Get Your Banking Right
The top 20 safest banks in the world are in Germany, Switzerland, Singapore Hong Kong And Canada.
It takes until 40 to get to the US banks thanks to their reserve ratios, derivatives and who knows what else they’re doing.
Obviously in a collapse scenario you’d want your money in a safe bank offshore (legally of course).
But I realize not everyone wants to or is capable of leaving the US.
If it came down to it, I think having your money in the biggest banks is your best bet, banks like Citibank or JP Morgan.
Even if they’re technically less safer then some of the smaller banks, they’re the ones most likely to be bailed out by the government (as happened in 2008).
Another option as an American, is Canada, where it might be easier to open an account then in other places. TD is ranked as #9 in safety, although Canada is heavily dependent on the US.
If you’re living in Asia like me, your best options are Hong Kong and Singapore, both home to very strong banks. Unfortunately I’ve heard they’re difficult to get into these days. Another option is Malaysia, which has a favorable banking system for westerners and seems to be developing quickly.
4. Offshore Real Estate
If you’d be been following my work, you might be surprised to hear me recommend offshore real estate considering I did articles on why you shouldn’t buy a house or invest in real estate.
I still stand by those articles because the focus of them is on North American real estate.(some wealthy, smart and exceptionally hard working guys can make a lot of money investing in real estate in the west). From cost, debt and the appreciation myth, I still stand by my reasoning for most (but not all) guys living in the US.
But now I’m talking about wealth protection offshore which is a totally different ballgame. Because you probably don’t want to be holding real estate going into an economic collapse, just look at how many people forfeited their homes and properties in the last real estate crash.
Offshore real estate is solid, tangible, you can live in it and it’s very hard for your gov’t to take it away from you outside of an act of war. It’s a very real option for protecting your money in the future.
Also, in Southeast Asia where I live, the economies are developing quickly and real estate is very cheap. Plus in some cases it comes with benefits.
In Malaysia, $120,000 will get you a nice condo, and potentially residency (combined with a bank balance and monthly income) in the my second home program.
Then you’ve got:
- Money in a tangible, secure asset (assuming you did your due diligence on titles)
- A bit of appreciation per year.
- It’s cheap enough that you can buy without a mortgage
- You can rent it out when you’re not there
- The potential for residency as part of an investment package
- You have somewhere to live in the case of a US collapse
- You get a potential currency appreciation play against a declining USD
5. Protect Your Currency
If the US economy collapses, you probably don’t want the bulk of your cash in USD.
You only have to look at Weimar Germany to see what a collapse and hyperinflation will do (hint it’s wheelbarrows full of cash to pay for foodstuffs)
The same goes for stocks, all you have to do is look at the black Thursday to see what happens in a crash, you don’t want your money there.
You’ve got crypto and gold – and in a US economic collapse I could see money moving there.
A lot of money already is flooding into crypto as we speak, although none of my money (for reasons covered here).
With that said, both will be something to keep your eye on moving into an economic collapse.
But neither of those are really currencies, at least not yet, maybe some day you’ll be able to pay your bills with crypto but not yet, although it will be interesting to see how it plays out.
They’re gambles on those instruments appreciating to the USD, the sensation is always the price of those instruments in USD.
With that said, they’re definitely options to look at in the future, if you start to see a crash coming.
Another option, is offshore banking (again the legal kind) and keeping your money outside of the US, in a currency you believe will appreciate to the USD. Or in a basket of currencies to hedge your bets.
6. Consider Moving
I know I have many patriotic Americans reading this, and moving might sound like blasphemy, but I think it’s your obligation in life to do what’s best for you and your family.
I don’t think becoming a prepper and bunkering down is the ideal move. If something catastrophic happens in the US, you will not want to be there.
As far as I’m concerned, if the government can’t manage the economy, the social contract has been violated.
The truth is countries rise and fall, and it looks like America is on the way down (although, America is extremely resilient and could surprise everyone.)
The odds are, one of your ancestors probably moved to America in the last hundred years when it was the land of opportunity.
For me I think Asia is the next land of opportunity, because China will own this century. I don’t want to live in China but plan to benefit from their prosperity by living right next door in South East Asia (at least for now).
With that said, moving abroad a big adjustment and culture shock. I’m not selling you on leaving the US now. You really need to be a seasoned, disciplined entrepreneur to move halfway around the world, don’t buy into the digital nomad dream.
I’m optimistic, I think (and hope) we have another two decades if not longer before we see a collapse. Enough time to build your financial freedom in the US and think about where you want to live in the future.
7. Consider Incorporating Offshore
If the US collapses, I don’t see a situation where they would take your business from you. But I see a situation where corporate taxes go up.
Incorporating offshore is legal, and you’re still liable for US taxes (with whatever expat exemptions you get) but it’s something to think about if you’re planning on leaving the US.
Incorporating somewhere like Labuan gets you minimal tax on foreign sourced income, a 2 year renewable residency, and entry into Malaysian banks. Something to consider if you plan on moving abroad eventually.
8. Prep Your Business For A Hit (Offshore income streams and Payment acceptance)
In the event of a collapse I will expect a big hit to my business.
There are three things I want to have in place by then:
- A gameplan on how to thrive in the event of a crash
- Multiple sources of income that aren’t tied to the US
- Acceptance of different payments
Some of the things I’m thinking about are:
- Getting RLD into China (minus the naughty stuff) and tapping the massive market there
- Getting clients outside of the US which I already have
- Putting out an economic survival guide.
- Setting up my site to take payment in Renminbi (when it becomes possible)
- Diversifying into service based businesses in Southeast Asia
I don’t know about the structure of your business, but I think it’s worth looking into how to prepare for the future.
9. Consider A Second Residency And Passport
If you are thinking of moving in the future, looking into residency scenarios and potential second passports is a good idea.
In Asia you can buy residency.
In Thailand it’s $15,000 for a 5 year elite visa.
Malaysia is much better where an investment in a business can get you a 2 year residency visa by incorporating in Labuan or a longer residency visa by investing in the my second home program.
With that said there is a difference between a residency visa and a tax resident, which is something to be aware of and do your homework on.
The other thing you can do is get a second passport, making you a citizen of another country (this is legal).
The best way to get it is by birth, if you have Hungarian, Irish and Israeli parents those options are open (also applies to a number of other countries).My dad is Irish so I’m looking to get an Irish passport in the next few years.
The good thing about another passport, especially an Irish one is it also allows you to live in the European Union.
You also have the extreme option of renouncing your US citizenship (I’m Canadian and don’t see myself renouncing).People around the world would die for a US passport, and I don’t recommend it at this point. Not unless you have another solid, first world passport or you’re very financially secure and committed. Andrew Henderson boldly just renounced his citizenship, you can see his take on renunciation here.
With that said, if it’s 15 years from now, and the government is cracking down on expats, and the collapse seems imminent, it might be something to consider.
All of the above ideas are good to consider going forward.
It pays to be prepared.
Although, despite what many people say, an economic collapse in our lifetime is not a sure thing.
I’d love for that to be the case and not have to watch the US crash.
But on the other hand, there is real potential for a crash, I think we have a few decades before that happens but that it’s smart to start planning now, there is a whole, wide, world available to you.
Just make sure to do your homework and consult with a qualified professional before you pull the trigger on anything. A lot of the options outlined are complicated and you don’t want to make mistakes. Also find the right financial professionals, the best expat tax lawyers in your country and expect to pay.
Also, don’t feel overwhelmed and fall into fear consciousness, especially if you’re just starting out. Assume you have plenty of time to get rich and you’re going to keep your eyes on the prize.
Lastly I’ve left you with some resources for you to use in putting together your plan:
- RLD Money Section: All my free content on getting paid
- How To Sell: My book on surviving, thriving and getting out of corporate sales and into your own business
- How To Plan Your Financial Future: My free, super-detailed guide to planning your financial future
- Go Where You’re Treated Best: My article on moving to where you’re treated best
- Nomadlist.com: Best website on analyzing potential countries to live in
- Nomadcapitalist.com: Andrew Henderson’s site on financial advise for expats – top quality