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The 7 Flag Theory Of Diversification: The Key To A Secure Retirement

15 Nov
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The 7 Flag Theory Of Diversification: The Key To A Secure Retirement

How To Build A Profit-Rich, Tax-Light, Bulletproof Life

How do you pack a virtual go bag?

That is, how do you create a fully diversified, profit-rich, tax-light, bulletproof life?

Step by step.

I’m sure you’ve heard of the Five Flags

It’s industry shorthand for outlining the five big-picture opportunities you have for diversifying your life across borders.

In fact, I’d say there are Seven Flags… seven areas of offshore opportunity… each requiring planning.

These Seven Flags are:

  • Banking
  • Foreign Residency
  • Dual Citizenship
  • Earning Money Offshore (perhaps becoming a Digital Nomad)
  • Offshore Investing
  • Asset Protection And Estate Planning
  • Mitigating And Managing Tax Liabilities

You don’t need to incorporate all seven flags in your plan. Maybe you’re looking to retire and have no interest in doing business offshore, for example.

But the more flags you plant, the better protected you are.

A consulting client I worked with a few years ago had set an interesting goal for himself…

He wanted to “be wealthy in at least three countries.”

He had just sold his business and was working with me to formulate his offshore plan… which was specific. He wanted to have enough money in three different countries where he wanted to spend time so that he didn’t have to worry about expenses or budget when he was in each of those places.

That meant not only moving a fair chunk of change to each of the three countries, but then investing the money in investments that would generate enough cash flow to cover the family’s spending in that place.

As I said, he had just sold his business and so was fully liquid. He was able to move quickly. He just needed to decide on the countries and then allocate funds for investment in each of those markets.

The amount he placed was different in each case… as the cost of living in each country for the lifestyle he imagined for himself and his family was different in each case.

Another past client had little by way of current assets but was young and wanted to build a life overseas. His priority was flexibility. He wanted to be able to travel and invest as he identified opportunities. This agenda took him down a consultancy path. He was able to organize steady contract work as a remote computer engineer… meaning he was able to spend time in different countries and move around as he liked.

The Ideal Go-Offshore Strategy

One thing to keep in mind as you make your plans is that diversification doesn’t mean selling everything where you live now, moving to another country, and taking all your money with you to that new country.

That’s simply moving jurisdictions. You’ve relocated all your risk from your home country to your new country.

“Flag Theory” means planting flags in different countries… sometimes multiple flags in multiple countries.

The basic premise is that you hold citizenship in one country… and residency in another…

You keep your financial assets in yet another jurisdiction, locate your business in a fourth, and focus your asset-protection strategies in a fifth.

Of course, you can have more than one legal residency… and more than two passports…

You can invest in real estate many places… certainly in more than one market…

You can have one bank account offshore… or several…

If your net worth and goals merit that much flag planting.

This can become complicated… but it doesn’t have to.

I recommend that you take this step by step… one flag and one jurisdiction at a time.

Don’t try to plant multiples of every type of flag out of the gate. Identify your goals and create a plan to achieve them…

Like the consulting clients I mentioned above.

Every flag requires choices.

How do you decide where each one is best placed?

Where you plant your residency flag(s) can be determined by how much time and money you want to invest in a backup residency… or, more simply, by where you want to live.

Those are the two reasons to invest in a residency visa—because you want a backup plan or because you want to live in a place full time.

An investment in real estate or a business, likewise, can be made because of local country (market) factors… or because the place where you’re buying property or starting a business is the place where you want to be.

Budget, economic cycles, market niches, special offers and opportunities… all of these things factor into your choices for where to do what you decide you want to do…

As does your personal timeline.

Maybe you’re on a mission and in a hurry. Maybe you want your go-offshore plan conceived and executed, your international bases established within a year…

Or maybe you want to work your plan over the next five years or longer.

Part of the answer to the question how long will it take to internationalize your life has to do with your net worth. What level of assets are you looking to move offshore?

Many moving parts.

Don’t worry. I’m going to lay it all out for you, flag by flag and step by step, so that you can address every aspect of a fully customized go-offshore plan and pack the go bag that is ideal for you, given your circumstances and your objectives…


Starting tomorrow morning bright and early East Coast time.

If you haven’t yet reserved your seat in the virtual room for this week’s Offshore Wealth Virtual Conference, this is your last chance.

This could be the most important conversation of the year.

For sure, it’s your best chance to formulate your best Plan B…

At a time when we all need a Plan B more than ever.

Lief Simon