Masters Series: How to Safeguard Your Wealth From the Parasites in Washington

Editor's note: In today's edition of the weekend Masters Series we feature another classic piece from Dr. David "Doc" Eifrig about ways to protect yourself from an increasingly intrusive government... Specifically, how to protect your wealth from our desperate, cash-starved politicians...

This is not just a concern for the rich… If you have spent your life saving money – any amount of money – you could be forced to give it up to those too lazy to work for anything. But Doc has uncovered a series of loopholes that can keep your wealth out of the hands of the government…

In this piece – excerpted from the September 2009 issue of his Retirement Millionaire newsletter – Doc shows a couple simple, legal steps that can safeguard your wealth immediately.

How to Safeguard Your Wealth From the Parasites in Washington

By Dr. David Eifrig

Last month, I attended a private offshore meeting with 300 or so enemies of the U.S. government.

The meeting took place at a beachside resort on the outskirts of one the world's premier banking havens.

It's believed billions in laundered drug, arms, and hush money are parked in this country... a country that has been invaded several times by U.S. troops in the last 100 years – the last time in 1989.

Scattered throughout the room were people of all ages and walks of life. I fully expect a few to be sued someday by Uncle Sam. In fact, one of the higher-profile members of this group has already been a target.

Why are these folks enemies of the U.S. government?

Simply because they refuse to surrender their lives and assets to be wasted by the mushrooming U.S. government. To save the wealth they've created over a lifetime of hard work, they are building an international "lifeboat."

The meeting was hosted by a publishing company called International Living. Its title was "Live and Invest in Panama." The company hosts conferences all over the world on the topic of living abroad.

You may laugh at my claim that folks interested in international asset protection are "enemies" of the U.S. But I can assure you, this is how our government sees them.

Actually, I hope you're also an "enemy" of the tax-and-spend parasites in Washington, D.C. It's absolutely ludicrous what is happening in this country right now. And I hope you take several simple steps to safeguard some of your wealth immediately.

This is not a problem just for the wealthy. This is for anyone with a lifetime of savings. Under the current path, everyone who has something will be forced to give it up to those who don't have anything. And worse, we'll be forced to give it to those too lazy to work for anything.

I don't know about you, but first and foremost, I want to decide who my money goes to. I don't want some bureaucrat in D.C. telling me how kind I have to be.

Anyone contemplating wealth preservation and international diversification must understand two U.S. government concepts: income tax and reportable assets. If you hold assets offshore, some are reportable to the government and some are not. And if you make income while overseas, it is all reportable, although some of it is exempt (the first $87,600 a year plus a $14,000 housing allowance). In our tips below, we've listed ways to legally avoid both reporting assets and paying income taxes while your assets are overseas.

Before I jump in, I need to give you one other piece of advice: Keep this to yourself. All of my suggestions are perfectly legal. I would never advise you to do anything illegal. But that doesn't mean the government wants you to do these things... To the contrary, if too many people start talking about these things and taking the steps below, the government could easily change the rules. Our lifeboat will disappear.

TIP No. 1: Open a Foreign Bank Account – Soon

If you open up a foreign financial account with less than $10,000, you do not have to report the assets. This comes under the Foreign Bank and Financial Authority (FBAR) regulations, and the IRS states you only have to report if...

• You have financial interest in, signature authority, or other authority over one or more accounts in a foreign country, and

• The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

If you keep more than $10,000 in total overseas, you must report it or risk fines and jail time. (A mere 50% of your assets and up to five years in prison, if a judge decides the oversight was willful.)

Be careful about interest-earning accounts, too. Let's say you put $9,990 in an account in January and you earn enough interest to take you over $10,000 by year-end. Well, guess what? Now, you must report the assets and the income.

One more secret: Nothing prevents your spouse and other family members from doing the same. A family of six could keep about $59,000 in accounts overseas and not need to report it. Again, this is all legal and a great way to diversify your portfolio around the world.

One bank where you can easily open an account online – no visit required – is Caye International Bank Limited (CIBL) in Belize.

You've probably never heard of CIBL, and that's because foreign banks are not allowed to advertise in the U.S. the same way domestic banks can. But trust me when I tell you Caye Bank is safer than most U.S. banks. You see, Belize mandates its banks maintain 24% capital liquidity versus the 3%-5% in the U.S. In other words, your bank in Belize has cash to cover 24% of the demand deposits it carries. They don't make banks much more liquid than this.

The only drawback is CIBL charges monthly service fees for checking and savings (up to $12.50).

Alternately, if you want to avoid the big fees, you can look to open an account with a Canadian bank. Most Canadian banks only charge tiny fees – or none at all. The drawback here is you'll have to physically visit Canada.

TIP No. 2: Gold in the Bank

My absolute favorite tip for keeping wealth offshore... Bullion gold and silver (and other metals) are not reportable, nor do they generate taxable income until you sell them. So keeping bullion in a private and secure place overseas is a simple way to hold (and move) assets offshore.

Of course, that requires jetting around the globe with sacks of gold, which can create its own complications. An alternative is investing in Switzerland's Zürcher Kantonalbank (ZKB) exchange-traded gold fund.

ZKB is the state-run bank in the Swiss province (or "canton") of Zurich. ZKB is the third-largest bank in Switzerland, behind UBS and Credit Suisse. It employs nearly 5,000 people and made CHF 750 million in 2009 (US$700 million). It is an extraordinarily safe institution.

The bank offers exchange-traded funds in gold, silver, and platinum that trade on the Swiss stock exchange. The best part is, shares of the gold ETF are matched to physical gold stored in the bank's vault. And the shares are pegged to the price of gold. They do not carry a premium.

Keep in mind, you must buy these on the Swiss stock exchange. If you have not purchased foreign stocks before, the Swiss exchange is safe. However, you'll want to work with an experienced broker. Many of our subscribers have successfully worked with these three companies in the past:

To read more about the ZKB gold ETF, please read Stansberry & Associate's "The Gold Investor's Bible" and refer to the chapter "Finally, Precious Metals ETFs I Can Safely Recommend."

If you're considering moving some assets overseas, the methods above are relatively simple ways to control wealth without drawing much attention to yourself. At a minimum, you can open an account in a friendly, nearby country to get started protecting and diversifying your assets.

As I said, it is critical you don't talk to anybody about what you're doing. If word about these tips gets out too fast, you can be sure Congress will try to shut them down. The country is already in debt to the tune of $140,000 a person... you'd be foolish not to protect your stash right now. But don't tell your friends and don't tell the government either...

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig

Editor's note: Doc believes there are detrimental changes taking place in America right now. And they are going to dramatically affect your money, your family, your health, your privacy, and everything about your daily life over the next few years. Doc has spent the last few months researching these critical shifts – and what he's uncovered are sensitive, sometimes emotional, and very politicized issues. To access his brand-new research – and learn more about how to protect yourself – click here.