Setting yourself up financially

It’s pretty obvious but not a lot of us do it – be financially sound. Why is that?

It is a basic human flaw – to desire more than we have. So we spend our money and not save it. In America alone 40% of citizens don’t have money on hand to afford a $400 emergency. This is crazy to think about, one of the wealthiest countries on the planet and it citizens can’t afford a small emergency.

Adding to this, just a little more than half of Americans have less than $10k in retirement savings and one in three has zero in retirement savings.

Solution

I have found a remedy for this problem and it is what I suggest for all people who want to be prepared in life. It is unabashedly Dave Ramsey’s baby steps. At my point in life, I have gone above and beyond this for preparing. Dave’s baby steps are below:

1. Save $1,000 for your starter emergency fund
2. Pay off all debt (except the house) using the debt snowball
3. Save 3-6 months of expenses in a fully funded emergency fund
4. Invest 15% of your household income in retirement
5. Save for your children’s college fund
6. Pay off your home early
7. Build wealth and give

I really like the Your Money or Your Life program by Vicki Robinson. It really aligns with my life goal of living intentionally and being fiscally responsible. It prioritizes seeing your money as representing life energy. How much life energy do you want to spend on that new toy?

After watching so many prepper videos and reading so much content, it seems like the majority of people in the prepper community buy copious amounts of things needlessly. Those purchases represent time of your life. Is that feeling of security worth months of work? That is up for us all to decide but is important to weigh that opportunity cost.

More Advanced Protection

Once you accomplish those goals you can move on to greater plans. For me, these include

1. Opening a foreign bank account
2. Secure some foreign assets
   1. Gold
   2. Real Estate
   3. Stocks
3. Obtain a foreign permanent residency or citizenship

Foreign Bank Account
Opening a foreign bank account may seem exotic. But is really isn’t; it is just another bank. It is there to accomplish a goal – protection against your own government’s overreach or financial irresponsibility. This includes protection against asset seizure, hyperinflation, lawsuits, and currency collapse. By owning some foreign currency in a foreign institution, you have more protection and independency from your own government. Why put all your eggs in one national basket? I suggest at this point growing your emergency fund. Anything above the 3-6 months goes into this foreign account.

I will be writing about which countries and banks are best

Foreign Assets

It is also important to have some foreign assets to live off in the long term. Now, just to be clear, I am not overly attached to the current America. I do think that the founding principles it was anchored upon were nearly the best the world has seen, I do think that we in the current union have departed from those. I am not hopeful for the future of America.

Due to this, if things get much worse, I want to be prepared to move to a different country. There are some advantages here like the Foreign Earned Income Exclusion which can be used for a tax free ROTH ladder. The United States is particularly overbearing in their global tax policy. But there are some items that you don’t need to report to FBAR (Report of Foreign Bank and Financial Accounts). These include real estate and precious metals. This means you can have huge assets abroad without even needing to (legally) report them to the US government!

I will be writing about how to do this in the future

Foreign Permanent Residency or Citizenship

The ultimate way to ensure you maintain some sovereignty from your country of birth is to diversify your citizenship, particularly in a country that gives more rights to it’s citizenships.

There are so many countries and programs to choose from. The most popular is probably the Golden Visa Program through Portugal

For citizenship there are 3 options

1. Citizenship by Ancestry
2. Citizenship by Investment
3. Citizenship by Naturalization

Ancestry is the easiest and cheapest. If you have blood from specific countries, those countries will give you citizenship. Some of the most well known are Ireland, Italy, Czechia, Poland. If you are Jewish, you can gain citizenship in Israel.

Investment is becoming a more popular method in many countries. Many countries want to attract investors and one way to do this is to provide citizenship for either a government donation, a zero interest bond, or investment into real estate/business.

A majority of the Caribbean islands do this as well as Turkey, Malta, Austria, Montenegro, and Jordan. This is by far the easiest way to gain citizenship if you have the money.

Naturalization is the process we all know. Most countries offer this but the requirements vary significantly. Some countries do not allow one to have multiple passports which limits your selection if you would like to retain the citizenship of your birth.

Countries are rated on the power of their passport, typically in the form of visa free travel. But there are other metrics like taxes, central bank health, personal liberties, amenities that should also be considered.

I will be writing more on gaining foreign residency and citizenship to give you more resources.

As you can see there is so much more you can do than merely stockpiling some food and having an emergency fund. It takes a bit more cash but the reward of freedom and opportunity is worth the added effort.