Offshore Online Brokerage Accounts – Are They Safe?
By admin | May 17, 2009
These days, we are all accustomed to doing almost everything online. There cannot be too many of us left who are nervous about using a credit card online, for example. Doing business online is a way to save time, money and headaches. Investing through online brokerage accounts promises much the same benefits.
However, when it comes to investing offshore, borders still pose a significant psychological barrier. There is no longer any real need to have your online brokerage account in the same country you live in, but it seems investors are still reticent about opening brokerage accounts in foreign countries.
An increasing number of financial service providers are offering cross-border online investment services. This trend has caught on more in Europe than in North America, with larger online brokerages like Saxo Bank and Swissquote offering services specifically tailored to investors from outside their home countries.
However North American investors are also becoming more adventurous, opening more and more accounts with foreign banks and brokerages. Such accounts may be opened as individual US citizens or, more commonly, through offshore corporations or trust structures designed to provide an additional level of privacy. However, the main reason for accessing these international markets is to benefit from more profitable cross-border investment opportunities, and diversify risk by spreading their portfolios across different institutions in different base currencies.
These sophisticated investors have potential access not just to a wider range of investment opportunities – but to simplicity, tax savings, and greater control over their portfolios. There is also the opportunity to save money, by gaining access through discount brokerage models to exchanges that would otherwise have to be traded by telephone through far-away correspondent brokerages.
The current economic climate means a lot of investors love the idea of being able to keep a much closer eagle eye on their internationally-diversified portfolios. But, there remains a concern. Is investing through online offshore brokerage accounts safe?
Are Offshore Online Bank and Brokerage Accounts Safe?
In short, the answer is yes, provided you apply normal common sense precautions. The internet allows you to buy and sell foreign securities through overseas brokerage accounts with just as much ease and security as paying your home electricity bill – and in many cases, much greater security.
The first of these precautions is to invest via a reputable firm. Do some due diligence on the company behind the service. Just as you should at home (but many people don’t) check references, make sure the broker is registered and in good standing with the relevant regulators, speak with them in person and find out what experience they have. You should also enquire about the security arrangements on their site, and what protection they offer in the case of DDOS and other types of hack attacks. Many offshore brokerages are actually fully licensed banks, which makes them more secure and makes due diligence easier.
Once you have decided where to open your brokerage account, it is important that you you’re your own precautions to ensure that nobody else will be able to access your account without your permission. Make sure that your security software, like anti-virus and firewalls, are properly installed, functioning and up to date. Consider using an encrypted VPN solution, especially if you are partial to doing your trading from a laptop connected via wifi, which is notoriously insecure.
Also remember that just like those anti-phishing warnings from online banking at home, offshore brokerages will not email asking for you to confirm your details. If you receive any correspondence via email, confirm it by phoning the company directly before clicking on any links or taking any action. Try to get to know a single executive in the brokerage who will recognize your voice over the telephone.
What Services Do You Need?
Just like at home, overseas investing services can vary wildly in terms of costs and features. Even within the same brokerage, there are often different packages available. Fees may differ significantly depending what features, information and access you request.
If you are considering investing in European bonds, unit trusts, ISAs or funds then you probably will not need access to the type of ‘offshore day trading’ account like Thales Securities in Panama that permits you to buy and sell individual stocks in real time.
A so-called ‘fund supermarket’ type account offered by a European bank would suit you in this case. But be sure to check which products of which fund managers are available, and whether the broker is prepared to negotiate fees or rebate commissions they receive from fund managers (many will, especially on larger amounts, but only if you ask them) .
Other banks and brokerages will offer discretionary management of your portfolio. This is suitable for investors who don’t want to have to watch their accounts every day, and who are looking for more of a Swiss-style ‘private banking’ feel in their brokerage. Having access to quality investment advice is of great importance in this case – so ask what kind of management skills the bank has access to in-house. Larger banks have more expertise, but they may be busy chasing bigger fish. Smaller boutique private banks and investment managers often offer a much higher level of personal service.
In turn these various institutions will often target different types of investor. The more questions you ask your broker or banker before you get started, the more benefits you will obtain from the account you finally choose.
If you take the time to do your homework, investing offshore and online is not only safe but it can be very profitable, cutting costs, diversifying risk, and taking charge of your own future. Are you ready for the challenge?
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What is Fiat Money?
By admin | May 16, 2009
Fiat Currency and Fiat Money Explained… By Peter Macfarlane
You’ve probably heard experts on this site and elsewhere talking about Fiat Money… Fiat Currency. But what does it really mean?
No, it has nothing to do with Italian motor cars! The only Italian connection is the Latin language, from which the word fiat – meaning command, decree or order – is derived. My Chambers dictionary defines fiat currency as follows:
Money (paper or coin) made legal tender and assigned a value by government decree, with a commodity value lower than its face value, not convertible into any other specie of equivalent value, and generally with a lower purchasing power than nominally equivalent specie…
In other words, it is a currency whose usefulness results not from any intrinsic value or guarantee that it can be converted into gold or another hard asset, but instead from a government’s order (fiat) that it should be accepted as a means of payment.
In the case of the US dollar, for example, the currency is not backed by gold, nor by anything else for that matter – other than the world’s confidence in the US economy.
Now imagine if your business had a client – let’s call him Sam – who had always appeared wealthy and had been a reliable payer over time. So you always extended him all the credit he wanted. But little by little, you see he is getting further and further into debt, and you start hearing rumors elsewhere that things are not going to well for Sam, economically speaking. You will grow increasingly concerned, right?
At some point, you are going to start putting limits on Sam’s credit line. And that’s what is happening in the rest of the world these days to the ‘full faith and credit of the US government’ which is what backs the US dollar.
The US dollar is subject to the order of the US government , which in turn has delegated running the currency to the various Federal Reserve banks making up the Federal Reserve System (do you remember how on older dollar bills, you could see which of the Federal Reserve Banks emitted that specific bill – but newer bills just say ‘United States Federal Reserve System’?) The Federal Reserve Banks are private corporations owned and run by a secretive group of bankers. (You’ll find more at my Offshore Banking and Asset Protection blog if you want to explore this – I won’t go into it more here, although it’s a fascinating topic…)
Around the world, fiat currency is owned by its creators, the Central Banks. The Federal Reserve, the Bank of England, the European Central Bank and so on. It may be encumbered by its creators. That means they may, and most likely will, use it as security to borrow more money.
What’s the opposite to Fiat Currency? Gold bullion, of course. Gold Bullion is owned by its holder, YOU. The last thing any government wants to see is a return to money consisting only of gold and silver coins. Why? Because no government can control the world supply and demand of gold bullion. Governments are scared of losing control of the financial system because – well – money is power! Have you ever heard of the Golden Rule? It’s simple. He who has the gold, makes the rules!
Fiat Money is effectively a giant ponzi scheme. Just like ponzi schemes such as Madoff’s or Stanford’s, you can make good money from them, provided you take your profits and pull out at the right time. If you have your money in dollars and pull out at the right time, you might make great real purchasing power gains. But you are doing so at the expense of others who get in after you.
The above article was originally written for The Gold Report: How to Buy and Hide Physical Gold Bullion Offshore by Peter Macfarlane. Also check this page for more interesting articles on Gold and Silver Investments.
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How can you achieve the lifestyle of complete freedom without having the first million in the bank?
By admin | May 12, 2009
This is a question that was recently posed to me by real estate guru Thomas Bolther, who was setting out to answer this question on his own website. How can one live free offshore and make money at the same time? Actually, it’s surprisingly easy. The offshore element gives you a huge head start over those who must deal with taxes and over-burdensome government regulations when setting up their businesses.
One good thing coming out of this recession/depression is that it is really making people question their lifestyle choices. Forcing radical change on people can be a force for the good. You might have been putting off something you really wanted to do for years, for example, because of pressure of work or lack of time. Then, suddenly, you lose your job and you are free to realize your dream! Ironic, huh?
Of course, in real life things aren’t that simple. But on the other hand, we often make things too complicated. Always ask yourself why. Things that have just come to be accepted as fact often need to be challenged. And right now we are all facing challenges. It is up to us to make the best of them, and that will probably involve doing something new and different.
Remember that in the years following the great depression in the 1930s, many of America’s greatest fortunes were made, and family dynasties were created that survive till this day. I believe that over the coming two or three years, many new fortunes will be created. Many of those, says Thomas Bolther, will be in real estate – that’s why he talks about How to be a Property Tycoon. The people who become rich will not be ‘lucky.’ They will be creative entrepreneurs who saw opportunities and reacted. People who are open minded.
In fact, a lot of it comes down to common sense. And most of those fortunes will not be made in the USA or the UK. They will be made (at least on paper, but more likely in practice too) in offshore havens like Panama, the Cayman Islands or Taiwan.
They say that “travel broadens the mind” and talking from personal experience I can say that is very true. Another wise man once said that the world is like a book, and those who never travel only see one page. You see that in different cultures and countries, there are different ways of doing the same thing, that work just as well. As you gain experience of the world, you just begin to see opportunities that never occur to people who stay at home watching soap operas.
The internet, of course, allows you to run an ‘ideas’ business like that from anywhere. A new concept for me, for example, was running an onshore real estate business from offshore over the internet. But my friend Thomas Bolther explained very neatly how he did this for years, and how he has now all but phased out the real estate part, making the transition to a 100% online business. He calls it Living as a Laptop Hippie.
All the while he was living the offshore lifestyle he wanted. Thomas’s article is called “How to Build Real Wealth Offshore and Online” and it’s Part 4 of our FREE FIVE PART Secrets of the Super Rich course, available free right now simply by entering your e-mail address in the box tothe right of your screen.
So to return to our original question, you just don’t need a million in the bank to be free, to be your own boss. There are millions of businesses out there you can start with no money down, and many of them can be run from a laptop, with the paperwork and banking elements all secured in an offshore tax haven. Even if you end up with fewer material benefits, you will buy peace of mind, freedom from stress.
Why go offshore? Going offshore is no longer about hiding money – it is about creating wealth in an environment that is free from burdensome over-regulation. Real free markets. And most importantly, by freeing up your mind’s creativity, by living free and hopefully debt-free, you reduce or eliminate the stress and worry that I’ll bet are the biggest factors holding you back right now. If you feel it’s time to change, then go for it! Don’t wait until you have a million in the bank, or you might never get there!
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Enhanced Banking Privacy in the UK
By admin | May 5, 2009
Sometimes, you can achieve the most privacy by hiding in plain sight.
With all the hullabaloo about offshore banking, remember the basic fact that databases only know what you tell them. Sometimes going offshore can raise red flags, and there are more discreet and private banking options in major OECD or G20 member countries themselves… like the United Kingdom.
With this in mind, I’m grateful to a reader for sending in this submission for my blog. He’s drawing attention to how pre-paid credit cards from the UK can be a useful privacy tool, whether or not (maybe even especially if you are not) based in the United Kingdom.
Begin quote… Hello Peter, as a wannabe travel journalist hoping to specialise in “OFFSHORE” area in the very near future, please feel free to use this sir.
Sorry for writing to you ad hoc, but one of your articles in the Q Wealth Report has inspired me to send you my thoughts. I’m VERY new to the offshore and privacy game after a tenuous bankruptcy in which I lost a lot. However, I have since done a lot of work with Prepaid cards issued in Britain, and I think these products are amazing. In Britain, they issue a prepaid Visa or Mastercard card without ID if they can find you on the electoral register… if not, you send them in a UTILITY BILL as identification proof and away you go. It’s not that hard to get hold of a utility bill Peter.
Also, there are no central database of these cards as they are not reportable (yet) and you can hold up to £5000 in them. Even better, you can have your wages/salary pad in to the cards, and some even allow you to pay direct debits and standing orders from the cards. Check out www.tuxedomoney.com admittedly expensive, but a superb way of having UK facilities, but not having all the unnecessary extras that goes with an average current account. Plus, and my favourite use of the cards, is that they build your credit rating dramatically.
There are 2 cards in the UK, the cashplus card, www.mycashplus.co.uk and www.sterlingcard.co.uk that offer a facility called credit builder. Here, they use the monthly fee you pay for the card, and issue it as a loan amount paid off over 12 months, and report each monthly payment to the credit reference agencies. Interest free too of course. So you are building a credit rating to develop in to other things, while also having a useful tool for socking away a few quid.
The Cashplus and Sterling pre pay cards both offer section 75 protection, so if a retailer goes bust, purchases are damaged etc, you can claim like you would a normal credit card. I thik this is unique also amongst pre pay providers.
I think that the all round use of UK prepaid cards, and the fact that they are very easy to obtain make them a winner for most of your readers sir, and a useful tool for most arsenals.
I was asking for advice on any particular investments etc, that an absolute beginner can work at, and the best methods of opening an offshore account for a very small player. I only have a small amount monthly to invest just now, but I’m hoping to get to another offshore financial haven, New Zealand and pursue my travel writing dream in the future.
Your offshore articles are superb, the VERY best that I have read, and it’s obvious that you know your onions. I will also publish some future articles about more British loopholes in due course.
You can also add on to the article that if anybody requires any help, I would be glad to assist wherever possible sir. If they contact yourself, and then you may forward to this address. End quote!
Remember, if you would like to get in contact with the writer, please see my contact details here.
Topics: Currencies and Cash | No Comments »
Free Secure E-Mail Address
By admin | May 5, 2009
Many of my clients already have a secure e-mail address on an offshore server. Although secure e-mail is only one aspect of communications privacy, it’s an important aspect when it comes to e-mailing each other back and forth about delicate and confidential matters of the type we handle on a daily basis.
I’ve therefore added a new permanent page to this site explaining how you, as a Q Wealth reader, can get a free, easy-to-use secure e-mail address, that you can use to communicate with me and your other offshore friends – including a number of offshore providers and banks using PGP and other forms of encrypted e-mail.
Click here to learn how to get your Free Recommended Secure E-Mail Address
Let me stress that this is not your average wannabee encrypted e-mail service that for all we know might be a honeypot set up by the authorities. This is a highly professional solution that actually usually costs a lot of money. It is run by technicians who are personal friends of mine. We have invested thousands of dollars setting up this solution so our clients’ offshore communications may remain private.
Please feel free to make use of this free secure offshore e-mail service. Also, if you would like my PGP key, just drop me an e-mail. PGP is highly recommended to as the universal standard encryption program. If you don’t yet use PGP, you will find free, simple, step-by-step instructions for using PGP provided with your free secure e-mail address.
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