Cutting tax costs with offshore investing

 US-PDGov

By Thomas Spencer

A lot of U.S. citizens are getting fed up with the ever-increasing taxes that are enforced on business profits and more and more of them are turning to offshore options to maximize their profit potential. People are starting to see that they can see a drastic increase in income just by switching to an offshore business. With the way that the economy is going at the moment, a lot of business owners have no other choice but to do so if they want to stay in operation. If you’re unfamiliar with why you should move your business offshore; read on, you may be surprised.

A lot of people have the notion that making profits with an offshore company is illegal or malicious, but this is just a misunderstanding. Utilizing the benefits of an offshore company is absolutely legal and there is nothing wrong about doing so. You’re able to benefit from an offshore company by setting up your products or services with them, have them distributed throughout the world to utilize the advantages of taxation requirements that are enforced in different locations. 

Offshore service providers are able to profit from this by charging a small royalty fee for offering their services. Asset protection is associated with using an offshore. In this day and age, asset protection can be a lifesaver with all of the risks of being sued by money-hungry lawyers. Your risks can be minimized by allowing your assets to be inaccessible and you’re able to do this by using an offshore company. 

The reason that your assets are more secure with offshore entities is because of the privacy structure of offshore banking. This means that if you ever face a lawsuit of any type, your assets will not be at stake. This can be very beneficial for anyone who is currently in a legal battle.

If you have a family and want to ensure their financial well-being after you’ve passed on, using an offshore service can be a great way to do so. You can easily setup your assets or bank accounts to pass over generation to generation all while avoiding costly tax requirements. There’s no reason to pay the middle man when all you want to do is ensure that your family is able to be financially stable after you’ve passed.

You should take some measures to ensure that you’re picking a good offshore company before you allow them to take your business. It’s not extremely common, but from time to time there are some offshore companies that simply pocket your money. You can avoid this by spending some time researching and checking out the financial and legal history of the company in question.

You want to make the most of your company, and using offshore services will allow you to do so. Follow the trend of many other successful business owners and start using offshore companies to your advantage.

About the author: Thomas Spencer has spent more than 20 years in a Cyprus holding company and has continued to achieve much financial success.

How to protect the valuables in your home

By Katelyn Porter

You can never been too prepared when protecting your home from burglars. Unfortunately, you never know when your house can be under attack. With a few simple steps, you can go great lengths to protect your valuables in the event your house is broken into.

Small Collectibles

This depends on the size of what you are collecting. You can be collecting anything from coins to cars. With smaller collectibles, it's easier for intruders to grab them on the run. It's important to not just store these items in a dresser drawer, as this is one of the first places an intruder will rummage through.

Invest in a small wall safe. They can range in various materials, and can have a key or combination. Find one that fits your budget and needs. Small safes can be easily hidden for you to store all of your collectibles and small valuables. Hang a picture of the safe. Never tell your friends and family where this safe is. The less people who know, the safer your will be.

Electronics

Tech junkies spend a lot of money on their electronics. If you don't take your laptop or tablet with you when you leave your home, you can purchase apps to protect the devices. Some of them have security camera apps that will snap a picture of the intruder. Be sure to set passwords for these devices, so in the event they are stolen, your information cannot be accessed.

For items like cameras, keep them out of sight when you are not using them. Leaving them in a window or on your desk can make it an easy steal. For larger items like your TV, mark down the serial number so you can give it the authorities.

Jewelry

Jewelry is another item that can easily be stolen. For jewelry you wear each day, it's fine to leave out on your dresser when your home at night. Although for nicer pieces of jewelry you don't wear often, you should take the necessary steps to hide it. These items can easily be stored in a small safe, and then you won't have to worry about misplacing them.Costume jewelry doesn't need to be hidden. So be smart about what you are storing in your safe. It will be more heartbreaking to lose $500 necklace than a $5 pair of earrings.

Medication

If you take a controlled substance, this could also put you at risk for a burglary. Different intruders have different motives for the intrusion, but in the end it comes down to money. Whether they are abusing drugs or selling drugs, controlled substances can get them money or a high. Keep these out of sight, especially if they usually left on your nightstand.

Attached Images: 

 

License: Creative Commons image source 

Katelyn Porter has been a victim of burglary in the past. After a result of the devastating experience, she has taken the steps to create awareness about protecting home valuables. She stores her US gold coins, fine jewelry, and important paperwork in her safe, and has invested in a security system.

Financial instruments and accounts that provide protection from creditors

Creditors are limited by laws that protect consumers even if those consumers are late on their bills or are sued for liability compensation. Examples of these laws are state statutes of limitations, and federal credit protection laws such as the Consumers Credit Protection Act.

Despite consumer protection from creditors, these laws do not necessarily protect individuals from liens or seizing of assets by the Internal Revenue Service (IRS) or from specific court rulings.  Having said that, several types of financial instruments and accounts protect consumers from creditors allowing an opportunity to keep retirement savings safe from difficult financial situations. 

Homesteads 

Homesteads are a type of property rather than a financial instrument, but they can also provide financial safety from creditors according to The Coleman Law Firm. Moreover, the Coleman Law Firm states the Homestead exemption provides asset protection for land 160 acres or less in size. The following state exemption chart at Creditor Exemption outlines which states allow homestead exemptions. 

Insurance

Both Ginger Applegarth of MSN Money and Attorneys at Law Unrah, Turner, Burke and Frees appeal to cost effective insurance solutions to asset protection. Namely, auto, and homeowners insurance are able to protect assets from liability lawsuits for less than asset protection insurance and in terms of creditor claims, term life insurance also provides more cost effective financial security. However, it is probably a good idea to keep in mind life insurance financial protection is limited. This limitation is elaborated by Gideon Rothschild and Daniel S. Rubin of Moses & Singer LLP.  For example, although Title 11 of the U.S. Code does protect assets from creditors, the focus is beneficiaries or dependents and not owners.

Trusts

Trusts are a type of legal entity used in estate planning and are often considered financial instruments used to protect assets. Cornell University Law School  describes Trusts as right to property via a fiduciary relationship i.e. not ownership but retention of rights of ownership. Several types of trusts exist, and according to Estate Street Partners, LLC an irrevocable asset protection trust combined with a limited liability corporation provides 'fortress' like asset protection. Several kinds of Trusts can be used for protection according to the Law Offices of Janet Brewer Moreover, of those discussed are Qualified personal residence trusts, irrevocable life insurance trusts and inter-vivos qualified terminable interest property trusts.

IRAs

Individual Retirement Accounts or IRAs are another financial instrument that protect consumers from creditors. However, according to the New York Times,  in the event of bankruptcy, funds in an IRA are only protected up to one million dollars with the exception of rollovers from corporate retirement plans. The New York Times also refers to difference in state law exemption amounts for non-bankruptcy lawsuit protection. In other words, how much monetary protection provided by an IRA varies between states for creditor claims not associated with a bankruptcy filing. 

Pensions

Defined contribution plans such as 401(k)s and 403(b)s are protected by the Employee Retirement Income Security Act (ERISA). However, according to Executive Capital Resources, these types of accounts are not protected against Qualified Domestic Relations Orders (QDROs) which are judicial claims against retirement assets during events such as divorce proceedings. Moreover, according to the Wall Street Journal, a kind of 401(k) called the Solo 401(k) is not protected from creditors in every states.

Best funds for inflation protection

In the World of investing the practice of hedging is used to combat inflationary pressures. This is done in order to protect one's investments from adverse circumstances arising in particular industries and sectors, economic down turns and inflation. In the case of inflation, hedging involves investing in funds that traditionally perform well and/or better than most other funds during periods of high inflation.

To illustrate the affect of inflation on wealth, in the United States a period of high inflation was the 1970's during the first oil crisis period. During these times the value of the dollar declined against stronger foreign currencies and the spending power of one's income declines. This can often go hand in hand with rising cost of goods such as gasoline, and consumer staples further deteriorating one's spending power.

Financial institutions and Governments are well aware of inflation and take great measures to avoid it because of its negative affect on economic performance. For investors this is good news because it allows them to utilize these financial vehicles to hedge their own investments against inflation. A few of these investment vehicles are the following:

• U.S. Treasury Inflation Protected Securities (TIPS)
• British Inflation-linked Gilts (ILG's)
• Canadian Real Return Bonds (RRB's)
• Australian Capital Indexed Bonds
• Gold and other Metal Exchange Traded Funds (ETF's)
• High Grade Inflation Protected Corporate Bonds (IPI's)
• High Yield Domestic and International Certificates of Deposit

U.S. Treasury Inflation Protected Securities (TIPS)

TIPS are a U.S. Government backed financial instrument first instituted in 1997 and that is periodically adjusted for inflation. For example, if inflation in time period A is 2% the TIPS return on investment will incorporate this into the total yield. If however, in period B the inflation rises to 3% the yield in the TIPS will also rise. In addition to this inflation protected yield is a 'real yield' of around 3.3%. So no matter what inflation is, the TIPS 'real yield' on top of inflation should be steady. A similar method is used in ILG's and RRB's.

High grade inflation protected corporate bonds (IPIs)

Corporations like the Government, issue Bonds to raise money for their project capitalization operations. These Bonds are rated as high as AAA and as low as D. Most bonds in the A range are considered secure investments and since the return is fixed, volatility during times of inflation can be a hedge against one's more risky investments. IPI's are corporate bonds that are inflation adjusted allowing for a fixed yield when inflation rises. IPI's are very similar to TIPS except for the fact they are corporate rather than Government backed.

Gold and metal exchange traded funds

Gold and Metals have traditionally held their value well during periods of high inflation and in some case deflation. This is due to the international confidence in Gold as an alternate form of exchange. Unlike money the supply of Gold cannot be drastically reduced or increased allowing its value to remain more fixed.

During periods of high inflation, confidence in this more secure form of exchange rises, sometimes leading to a steady an/or rising price. The same is true for some other precious metals such as platinum. Gold can be purchased through mutual funds and other securities specializing in this type of commodity.

High yield certificates of deposit

Since investors can lock into a fixed interest rate on Certificates of Deposit this can be advantageous if timed correctly. That is to say, the yield on CD's changes periodically and since one locks into a yield that is the yield one is stuck with if the CD yield rises. Nevertheless, CD's are a stable and fixed form of interest that can be a stabilizing factor in a turbulent economic cycle. Moreover, some countries offer attractive fixed and variable rates on bonds, New Zealand and Australia being two current examples with CD rates in excess of 5%.

Australian inflation protected bonds (RBAs)

In seeking to diversify and protect an investment portfolio, and ideal decision may be to invest in an international financial instrument priced in a currency with low inflation , that yields high interest and offers inflation protection. Australian inflation protected bonds may be suitable for this purpose with a 2009 inflation rate of 2.5% and yields above inflation.

Protecting against inflation is a realistic concern in the investment World and among financial institutions. While there are more financial vehicles for protecting against inflation than listed above some of these other methods like SWAPS are more designed for financial institutions and not the individual investor. One can become increasingly sophisticated with how one protects against inflation but the key principle behind Hedge investing is balancing higher volatility and even outperforming those investments during inflation with more stable and secure returns such as those provided in this article.

Sources:

1. http://money.cnn.com/2007/01/16/commentary/sivy/sivy.moneymag/index.htm
2. http://tinyurl.com/6ybljpl
3. http://www.finpipe.com/tips.htm
4. http://personal.fidelity.com/products/fixedincome/bondratings.shtml
5. http://www.bankrate.com/brm/news/investing/20031021a2.asp