From Ronald Holland's upcoming fourth book, Restoring Our American Legacy. Get ready for a new 21st century reappraisal of how Americans should look at domestic and foreign investing, real estate investments, wealth preservation, American history and our global foreign policy. He asks if it is time to consider an improved political paradigm utilizing successful Swiss style direct democracy and the confederation model along with our existing political structure to return our nation back to the limited Republic form of government established by our Founding Fathers. In this new century of instant communications, 24 hour news, the War on Terror, exploding government and private debt, a falling dollar and America's declining status around the world it is time for a change. Americans must retake control over our government policies at home and abroad by restraining politicians, the bureaucracy and special interests to restore the control of productive American citizens back over our own government. Our wealth, prosperity and ultimate liberty depend on Restoring Our American Legacy before it is too late!
Talking Points: The most important question to ask sales people and in your due diligence efforts regarding managed investments, financial products, real estate or property investments etc. and even the purchase of a home or second home vacation property is "What can go wrong?" Contrary to popular belief, no investment including real estate always goes up in value. Even the stock averages that often show long-term appreciation are manipulated to show the best results because poor performing equities in the averages are replaced with better performing companies on a regular basis. The bottom line is if an investment story sounds too good to be true, it probably is. Remember, Caveat Emptor (Latin for “Buyer Beware”). This was certainly a popular expression during the time of The Roman Empire almost 2,000 years ago and it is still true today.
Risky Investments, Greedy Firms & High Pressure, Commissioned Sales People
"At a late stage in speculation, a larger and larger group of people seeks to become rich without a real understanding of the processes involved. Not surprisingly, swindlers and catchpenny schemes flourish" -- Charles Kindleberger 1978, Manias, Panics and Crashes
Investing and investment markets are a necessary and important part of building one's financial and personal security in the 21st century. Proper global diversification and allocation in a prudent conservative manner is the best way to achieve financial growth and safeguard wealth. The problem begins when investors, as well as investment advisors, allow greed, the hot tip of the moment and the gambling fever of rampant speculation, often exploited by the financial media and investment salespeople, to takeover conservative, proven sound investment advice and fund management. Remember, in the end, politicians will always be politicians, salesmen are always salesmen and most investments are just paper promises and guarantees. No one selling investments or advisory services has a crystal ball and if they imply such then run the other way.
Forget the Promises - Tell Me What Could Go Wrong!
How many of you with previous investments, a former asset protection or investment management program were appraised of the risks or what could go wrong in a worst case scenario? The downside risk, which should be the first question asked at the forefront of every investment and wealth preservation discussion, is usually never mentioned. Then think about how your earlier investment and financial planning choices might have been different if someone had been willing to provide you with this very necessary information.
In the investment world the downside is always discovered after the product in question heads south and it’s too late. Please understand that most commission sales people in the U.S. investment business are put under enormous pressure to perform for the firm (this doesn't necessarily mean investment performance.) This performance is generating sales commissions, revenue and fee based income. Do not be deceived by all the titles: financial consultant, vice president, financial planner, advisor, etc. -- because in the final analysis, they are all just salesmen. If you ollowed the situation with the Putnam Mutual Fund operation in Boston, you realize how investment fraud, deceptive selling practices, misrepresentation and mismanagement are rampant both inside the regulated U.S. investment environment as well as offshore.
Many investors have suffered the consequences of a high pressure financial sales presentation which attempted to push, cajole, threaten or promise a financial Armageddon or returns beyond your wildest dreams if you blindly follow their recommendation. The story is always the same, "act today before it is too late!" This is the nature of financial sales and, as long as you understand that you are the buyer and they are the seller and keep in mind who is actually looking out for your interests, then you'll be in a position to make a sound investment decision. My warning is if you think it is different offshore, then think again. Pushy financial firms, high-pressure salesmen and risky investments are everywhere therefore always do your own due diligence and remember the old adage: "If it sounds too good to be true, then it probably is."
An American investor concerned about controls, manipulation and political risk should consider diversifying a portion of their investment wealth outside the dollar and vulnerable U.S. markets. But, do your homework, be careful with whom you deal and remember there are no easy, sure solutions to questions concerning economics, banking, and markets.
Enjoy the Caribbean Sun and Fun But Be Careful Investing
Sales pressure and dishonesty can be far worse outside the U.S. especially in some of the less regulated former tax havens and jurisdictions. In some of the island havens there are more high-pressure con artists than sand on the beach.
Why? It's simple. Because they can get away with it.
Most U.S. regulations exist to promote the best interests of the financial services industry rather than protecting the consumer however there are some investor benefits from an over-regulated financial environment. Blatant lies and misinformation will land U.S. financial salesmen in big trouble with their employers including large fines and even jail time. On the other hand, in many offshore jurisdictions the investor protection regulations sound great but in practice there is minimal enforcement and protection.
Go to exotic locations to enjoy the beach, gamble or chase your personal pleasures but don't make the mistake of investing much of your wealth in questionable jurisdictions. For global services and structures, I personally prefer the more regulated island jurisdictions such as the Isle of Man, Bermuda, or Grand Cayman.
Remember, when you establish asset protection, insurance or investment accounts outside your home country be on guard even more than you would at home. Make sure you are dealing in an advanced, heavily regulated top tier jurisdiction with a long history of financial management, expertise and infrastructure and confirm that the products or investment manager are all part of a long-standing institution that will not go under tomorrow. Also make sure that the offshore product is legal and designed for American investors and make sure you understand your regulatory and reporting requirements to the American authorities. Remember, ignorance is no defense in these matters.
"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford
Just as quality offshore providers will do due diligence on you and the source of your investment funds, you too should check them out fully and completely. If you feel any pressure or think for a moment the promises and benefits are too good to be true, then they probably are. Stay away from deals, products and strategies that are touted as all benefits, performance and protection and where the downside risks are never mentioned.
Case Study: Too Good To Be True
A final example. Don’t laugh - it's true. A prospective client called me in early July of 2003 with $560,000 to invest. As we talked it became apparent he was involved in a “FOREX Trade Program” and he was expecting around $13,000 per week as profits for his initial investment. I asked him how the program worked and he indicated that he legally couldn’t disclose this information because of confidentiality reasons as he was privately invited to join the program. So then I asked, well how much did you invest? He indicated $700,000 or so I thought. I answered, “well you won’t get rich quick with that kind of quick return” and he replied, “Mr. Holland, maybe you can’t earn this kind of return but I have been guaranteed a $560,000 return on my initial $700.00 investment over the next 40 weeks.”
Now don’t say, what an idiot because this kind of thing happens everyday. This gentleman was well educated and my only response was “well don’t send them more money until you get your full $560,000. Many astute investors continue to fall for the Nigerian internet bank account scam. I have a Swiss investment advisor friend who only was just able to talk two wealthy clients out of flying to Europe to meet with a representative of the scam artists in order to claim their millions.
Again, none of us are totally immune to scams and rip-off artists. I have some simple advice on dealing with questionable “too good to be true” investments, tax reduction efforts and asset protection and privacy programs. If it appears too good to be true, then you can bet your last dollar that it is. Never invest on a whim and if anyone attempts to create a sense of urgency regarding an investment opportunity, don't do it!
Offshore & Onshore Promoters: A Major Risk You Never Hear About
There is a world of difference between downplaying investment risks or high-pressure sales and the blatant theft or disregard for fiduciary responsibility. Although this is often rampant offshore, many of the past rip-off artists in the offshore industry have actually worked from inside the United States. Just do a Google search on the well-known offshore gurus - Jerome Schneider and Marc Harris - and you'll see what I mean.
Everyone has read the airline magazines and seen the advertisements with the old men and beautiful women living the high life of the rich and famous in their own "offshore private wealth haven." These types of advertisements attempt to create the mindset that if you purchase certain expensive information or establish their "unique" offshore account structure then you could somehow avoid paying taxes and thereby become rich.
Don't laugh! Many thousands of Americans have followed this line of wishful thinking and doled out hundreds of millions to offshore promoters with crazy schemes that didn't work, were illegal, or were so secret that the investors found their "asset protected offshore accounts" were looted by the offshore promoters themselves.
Remember, there is little or no tax benefit anymore for Americans investing offshore. The same goes for most structures, bearer share scams, and offshore corporations. Yes they do offer a degree of asset protection and confidentiality but not substantial tax savings. Let’s face it. The absence of taxes does not exist anywhere in the real 21st century world except for the lucky few citizens of real tax havens. This is especially true for Americans who are taxed on worldwide income regardless of where their investments are or where they live.
When American investors attempt to either beat Uncle Sam at taxes or hide money offshore illegally they have little or no recourse when their offshore nest egg is suddenly lost, looted or stolen. Those who market these offshore "hide your wealth scams" are aware of this and when they get your money they know that legally you cannot come after them. Why? They are often in a questionable corrupt foreign jurisdiction where they are paying off the local politicians, the legal system or both.
If you follow this course of action and lose your investment, the promoters know you are left with two very painful choices. First, after a few phone calls, faxes, letters or maybe even a personal visit, you'll give up and walk away from the crime because the promoters understand you will have only lost your money. Your second option is even worse. If you go to the U.S. authorities you still lose your money but can expect additional government fines, penalties, and maybe even jail time for the non-reporting, filing and disclosure. These offshore scam artists know investors will always take the lesser of two evils. This is why this criminal offshore risk is so under-reported in the press.
My recommendations:
1. Never deal with lone individuals or risky, questionable strategies, products or jurisdictions in the offshore world.
2. Whenever tax avoidance or secrecy is promised, stay away from the promoter and the structure because both are impossible today for Americans legally investing offshore.
3. Always make sure your structures, strategy and funds are with well-known financial institutions with long-standing reputations and international business activities located in highly regulated, top-tier offshore jurisdictions.
If you fail to follow these rules, then prepare to pay the ultimate price for an offshore structure that neither protects your assets nor is legal because when things go wrong you'll have no recourse. Even worse, you will have lost the assets that you desired to safeguard and will be unable to get redress or warn others about the scam.
Beware of Specific U.S. Political Risks: Including Currency, Jurisdictional, Records, Controls and Confiscation
"The beginning of wisdom is to call things by their right name." -- Chinese Proverb
The American financial establishment is always keen to bring up the political investment risks of foreign jurisdictions. Although this risk is certainly justified in many less developed nations and regions, most of Europe is on par with the United States regarding reporting and accounting standards. In fact, recent scandals - Enron-style accounting, the Putnam mutual fund problems, and the excesses of the former NYSE chairman - have shown Europe to be far less abusive than in America.
The irony is U.S. regulations require that all investment materials include a discussion of the offshore risks whenever a mutual fund in non-U.S. stock or bond investments or another currency is utilized in an American financial product. The provider must mention the increased currency, reporting and regulatory risks of even U.S. mutual funds or variable annuity portfolios investing in offshore securities. This self-serving hypocrisy became especially true following the revelations of Enron and other dot-com based highflying stocks built upon false reporting and financial cover-ups by both regulators and auditing firms. The collapse of the American stock market mania in 2001 and the weakness of the dollar now clearly indicates that offshore investments do not have a total monopoly on added risks from a weak currency, failed regulatory oversight and political risks.
I'm sure you realize the weak dollar can wreak havoc on your portfolio value from currency losses when compared to other non-dollar denominated equity and bond portfolios. There are also increasing political risks from the U.S. jurisdiction. These range from possible government confiscation during a future crisis environment to controls and limitations on the movement and even liquidity of your funds. Democratic governments like the U.S. often use exchange controls, fines and penalties in times of war or financial upheaval to keep money in home markets and jurisdictions. Weigh the potential costs of having too much of your total overall wealth at risk to bureaucrats and political actions in your home country. America is especially at risk due to the potential terrorist risk aimed at our financial markets and infrastructure.
For Additional Reading and Research:
Internet Fraud: How To Avoid Internet Investment Scams
firm licensed in 47 states.Ronald Holland - For more information go to http://www.ronaldholland.com
Note, Ronald now lives at Asheville NC's Wolf Laurel Resort, where he markets ski property, homes and real estate in one of the highest elevation 4-season mountain resorts in the eastern United States. He is an internationally known financial & marketing consultant & author of 3 books and over a hundred articles & reports, a leading speaker at financial conferences in the US and abroad and editor of several internet based news sites. He invented several financial products & services including the first gold IRA account and the first Swiss franc denominated variable annuity portfolio in the US and was president of a Swiss owned investment
Ronald Holland is editor of this website and a broker/realtor with
Wolf's Crossing Realty. For questions, comments or
lot listings in Wolf Laurel, please use this E-MAIL INFORMATION REQUEST
or call toll-free 800-541-1738 or after hours at 828-689-2148More of our websites about Asheville, Wolf Laurel & our high mountain area.
Wolf Top News - News. links and headlines about the Preserve and Wolf Laurel Resort.
Asheville's Big Bald Highlands - Provides info on all mountain resorts in Wolf Laurel area.
Ski Dixie - Travel, resort and real estate news for Southern skiers.
Move To Asheville - Info on why Asheville is a major tourist destination & 2nd home market.
Golf Asheville - Asheville is truly a golfing paradise with 19 courses around the city.
Ski Asheville - Learn more about the 8 ski resorts within 90 miles of Asheville.
The Mountain High Club - For mountain lovers who want the best in mountain experiences.
Asheville High Country - (Under development) with info only on Asheville area mountains.
RonaldHolland.com - More about the Holland's & their marketing & business activities.
Ray's Weather Station & Forecast at Wolf Laurel - A weather station at our 4,500 ft elevation.
Ron's Web Cam - See the real time weather, views and conditions here.
Please click the graphic at the left to receive a free photo tour DVD featuring highlights of the seasons of Wolf Laurel and the Western NC area provided by Wolf's Crossing Realty & a listing of resale mountain lots at Wolf Laurel where prices begin at under $25,000 per lot.
Take the Wolf Grand Tour in 2007! - A fun, relaxed, no pressure alternative to see the broad range of of real estate opportunities, homes and lots in Wolf Laurel, Wolf Ridge Ski Resort, Breakaway Village, the Peaks at Wolf Ridge, the Haw Ridge Summit airport community and the Preserve at Wolf Laurel including Buck Town, Steeplechase and The Ridges.. What could be better than a brief private tour of all the resorts together followed by wine or sparking grape juice and cheese on a mountain top with long-range views that seem to go on forever? We are only 35 minutes from exciting Asheville, NC recently named by Frommer's, the most respected name in travel writing as one of the top 12 destinations in the world for 2007.
Do Your Own Due Diligence! - No sales pressure, just balanced information as we drive you and your family through the different communities answering your questions on prices, views, winter access, climate and lifestyle as we highlight the unique advantages, differences & amenities of each resort in a fair and balanced manner as we do not represent any particular resort or development. CLICK HERE for more information and to schedule your complimentary private Grand Tour of our resort area.
|
