When considering investments of any kind, the bottom line is, of course, the most important. But one of the most attractive advantages of alternative investments and retirement abroad is that they are not just digits on a screen. They also often carry important ancillary benefits that, while not contributing directly to the bottom line, play an important role in the investment itself and in the investor’s long-term strategic planning.

These fringe benefits can be pure fun, or maybe social status, like having friends over to sample the latest vintage from your own cellar. But with the traditional financial system far from predictable and the outlook for the rest of 2010 remaining bleak, you may be surprised to learn that savvy investors are flocking to alternative Latin American investments as a conservative ‘safe haven’ for serious investments. international asset protection purposes.

International speculator Doug Casey, author of The International Man in 1976, recently wrote that “a wise man…does not allow himself to be limited by an accident of birth.” Casey predicts that “we’re headed for a currency crisis for the record books, and I think you can plan your life around some form of currency control. If you don’t get significant assets out of your home country now, you may soon lose them.” It’s expensive and very difficult to do.”

Whether you agree with that prediction or not (by the way, I do!), there are several very good reasons to diversify into international hard assets, like real estate or physical gold bullion.

For starters, there are the tax benefits. If you currently manage an investment portfolio, your geographic location may not really be that important. The day-to-day management of your portfolio can be carried out from anywhere there is a laptop and broadband. So more and more investors and managers have realized that they simply do not need to be located in a country with high taxes and high costs.

Most Latin American countries have territorial tax systems, which means that if you are an official resident there, you are only subject to tax on your locally sourced income. Anything you do outside of your home country is tax-free as far as they’re concerned, so you don’t even need to bother declaring it. This contrasts sharply with North America and Europe, where the general rule is that your home country taxes you on your worldwide income.

By living, even part-time, in one country while overseeing investments in another, you can legally lower your tax bill in one fell swoop. Some countries, such as Uruguay and Panama, are particularly attractive in this regard, having passed business-friendly laws designed specifically to attract this type of international investment management business. They recognize that although it does not directly generate tax revenue, it stimulates the local economy and provides jobs for local professionals, banks and businesses.

Other countries such as Costa Rica and Belize offer ‘pensionado’ or ‘qualified retiree’ programs that grant specific tax exemptions to foreign retirees who take up residence. If you don’t feel ready to retire just yet, keep in mind that some of these ‘retirees’ are much younger than you might expect and qualify for the programs simply by showing they have enough regular income from abroad to maintain a quality lifestyle. . For them, ‘retirement’ might mean waking up to the sound of the ocean in their beautiful beachfront estate, logging in to check how much money they made overnight, working online for a few hours a day, and traveling a few days a month. to monitor your investments in person.

Oh, I hear you say, but there’s a big problem with this strategy: If you happen to be a US citizen. The United States is the only country in the world that taxes its non-resident citizens. A British or Canadian who moves his official residence to Belize or Uruguay will no longer have to worry about home country taxes, but his American cousin will.

But it is not as serious as it seems. There are still substantial benefits for Americans living abroad, which a competent international tax attorney can help you with. In the end, though, the only way Americans can legally free themselves from the IRS entirely is by renouncing US citizenship.

Many are doing just that. But before taking the drastic step of giving up a US passport, another citizenship is required. Millions of US citizens are entitled to European or other passports based on their ancestry, although the bureaucracy involved can be quite lengthy. That is why the Caribbean states of Saint Kitts and Nevis and the Commonwealth of Dominica offer ‘economic citizenship’ programs, which effectively ‘sell’ citizenships and passports for hundreds of thousands of dollars. Years ago most of the buyers were Russians, then the Chinese came, but today most of the buyers are Americans who are giving up citizenship to become tax exiles.

All of this brings me to another great side benefit of investing in Latin America: Most Latin American countries are relatively liberal when it comes to naturalization: granting citizenship based on a period of residence or other “connection” with the country. country. 2-5 years is the norm. This period, which is already short, can often be further accelerated depending on, for example, marriage or the birth of a child in the country. Often the processing time beyond the officially designated residency period can be a year or more, but keep in mind that citizenship through this method is almost free.

Demonstrating some connection to the country is a must, but this requirement can easily be met by owning real estate or investing in a local business. Therefore, savvy seekers of a second citizenship should look to attractive business opportunities in Latin America instead of investing millions of thousands in small, hurricane-prone islands in the Caribbean.

However, the biggest benefit of going global is intangible. If I had to sum it up in one word, it would have to be ‘freedom’. Tough economic times often cause governments to resort to patriotic calls to ‘get together’ and ‘unite’, something that usually ends as ‘do as I say, not as I do’. The ‘strong leadership’ demanded by the majority in these times is bad news for entrepreneurs, libertarians, classical liberals and all those who love freedom.

Doug Casey suggests that you should at least consider transplanting yourself, or at least start by transplanting some assets. “Don’t look at it as a negative,” he says. “The world is your oyster. Make the most of it.”

Although the bureaucracy in Latin America can be overwhelming at times, it is relatively easy to navigate. There is less regulation than in the US in particular, and more reliance on common sense and individual responsibility. People don’t care about the slightest thing.

Doug is currently involved in developing a community for like-minded people in northern Argentina, not far from Bolivia and Paraguay. The idea is that with the world in constant turmoil, it’s good to have a ‘Plan B’, a place away from the madding crowd that is completely self-sufficient in terms of food, water and energy, and even wine!

Buyers in such communities, many of whom I have had the pleasure of meeting, are not crazy doomsayers. Most of them are patriotic Americans, serious investors and hard-working entrepreneurs, who hope things never get this bad, but sleep easier at night knowing they have a haven prepared and assets in place if the worst comes to the worst. cases. And, lest we forget, they expect to make a good profit on their real estate investment in Latin America in the medium and long term.

As with any investment, due diligence in this area is extremely important. But the next time you review an investment, remember to look for the hidden fringe benefits, as well as the cold, hard numbers. Treat it not just as a way to increase the dollar amount in your bank account, but as a way to diversify, learn and protect your family’s assets by investing in something with an ‘insurance policy’ built in.