Protecting Your Wealth Legally

Putting your money into foreign real estate is a more appealing strategy right now than it has ever been. Real estate has always made sense to me as an asset allocation, but I’m more persuaded today than ever that foreign property should be part of every investment portfolio. You can’t watch everything going on in the United States right now and not be persuaded that holding real assets in the form of real estate outside that country isn’t a very good idea.

As you know, thanks to the new U.S. HIRE Act, currency controls in the United States have been seriously tightened. When this legislation takes full effect, foreign financial institutions will be required to report on the investment activities of U.S. citizens.

It’s been increasingly difficult for some time for an American to open a bank account overseas. Some banks have taken the position that they don’t want to do business with Americans, period. Not worth the hassle. Some banks are even kicking current American clients, even longtime American clients, to the curb, unceremoniously closing their accounts.

Options for Americans to protect their assets abroad are going to continue to diminish. If you aren’t already holding a sizeable portion of your assets outside your home country, I strongly recommend that you make this a priority agenda, and a portfolio of international real estate holdings should be an important part of your strategy.

First, if you’re an American, it is one of two assets you can hold offshore without triggering a reporting requirement to Uncle Sam (the other is gold and other precious metals). The real estate you hold in another country is your own business.

Plus, it’s unseizable. The IRS might be able to take your foreign bank accounts (the new legislation makes this easier than ever). But how are they going to take your condo in the Philippines?

When Kathleen and I left the States more than 16 years ago, we made the conscious decision that we would remain fully compliant from a U.S. reporting and tax point of view. We did not and do not want to do anything we shouldn’t do, certainly nothing outside the law.

And that’s not what I’m suggesting to you. What I am suggesting is that it just makes sense to do everything you can to protect the money you’ve earned and the assets you’ve accumulated. And holding some of your wealth in international real estate is an excellent way to do that. I’d say it’s the best way.

You don’t have to be super rich to take up the idea of buying real estate overseas to protect your wealth. Opportunities to buy land, houses, and apartments, for both investment and personal use, exist at all price levels.

In the current climate, my focus is yields, both from rentals and productive land. I write to my Marketwatch members regularly with details of specific current real estate investment opportunities. Recently, I’ve shared particularly appealing opportunities in both those categories in Belize, Brazil, Medellin, Panama, and Uruguay, all markets I find appealing right now for different reasons.

Lief Simon