The front showcase of what the media is showing us regarding the economy is the Russian invasion, bombings and terror.
But during times of crisis, there’s often more than meets the eye.
In this article, I’ll discuss what’s going unnoticed behind the scenes which makes me concerned for the future of our economy.
Or more importantly, the future of your wealth if you’re unprepared. For example…
Are you aware the ATO recently announced a crackdown on family trust distributions?
It’s a common tax planning strategy for discretionary (family) trusts to distribute income to private companies (otherwise known as corporate beneficiaries or bucket companies) as these entities pay significantly less taxes than individuals.
Alternatively, others use family trusts to distribute their income to adult children who remain subject to lower marginal tax rates.
However, the new Feb 2022 ATO trust draft rulings mean this has changed.
If you’re unprepared this will catch you off guard, financially.
The ATO now take the stance if you distribute income to private companies or adult children (above 18 years old) you’re a tax evader.
Fortunately, we anticipated a crackdown on family trusts which is why we moved our affairs to other structures a few years ago.
If you have a family trust, you too may need to reconsider your strategy.
However, what’s to stop them from cracking down on more tax planning strategies?
We believe international banks are calling in their loans and therefore will seek to steal as much money as possible from mums and dads or tax payers.
It’s clear your wealth and assets are at threat more than ever after a sequence of events including the sanctions which we’ll discuss below.
For the first time in history Switzerland have imposed sanctions and frozen bank accounts of Russian oligarchs.
Most of the sanctions have been no surprise to us, including 25+ members / allies of the European Union.
Switzerland, on the contrary, is astonishing.
Why is this of particular interest to us and equally important for you to know?
Switzerland has been, and is, a well-known neutral country in war. That is, it’s never taken sides, as we’re seeing now.
For years upon years, Switzerland has been a safe haven to store and protect your wealth and assets in times of crisis.
It’s been this way for a long, long time.
We can go all the way back to World War 2, for example.
Before and during WWII, many Jews sought to hide their wealth and assets in Swiss banks / safety deposit boxes when Nazi Germany were invading them in the Holocaust.
Equally, Switzerland was the favourite haven for Nazi bank accounts.
Does this mean Switzerland’s neutrality has ended?
We can’t know for sure but it certainly makes you think what could happen if things get worse.
Furthermore, can we trust Switzerland as a place to store wealth?
This also has to be taken into consideration now.
To take matters even further…
For the first time in history, private institutions such as banks and SWIFT go ahead with sanctions and agree to the governments’ request of banning Russia from their systems.
What else is happening across the world?
Biden recently announced plans to seize assets from Russian oligarchs to show support to Ukraine.
This includes assets ranging from superyachts, luxury apartments, private jets and more.
Whether this can be accomplished or not is not the concern.
Rather, it’s the concept of what happens if you haven’t protected your assets?
It’s a well-known fact the elite use structures such as trusts, foundations, IBCs, etc. to protect their wealth.
And there’s good reason to it…
If you own assets in your own name, you’re an easy prey.
By contrast, if you control your assets through structures, this divorces you (the owner) from your assets.
Featured: “General Principles of Asset Protection”
In other news, petrol prices are expected to break records in Western Australia on the back of the Ukraine uncertainty. Not to mention the property rise as well.
Eventually, this could roll over into other essentials such as groceries … making the average weekly expenses far more for the everyday person.
I could go as far as to say we may even see people not even be able to afford driving their own car.
But I digress.
Conclusion – What Do the Sanctions Show Us?
As the title of this article implies…
Yes, these sanctions show your wealth is potentially at threat, the possible direction of the world and effects of what could happen to you if you’re not prepared.
To highlight the key points we can learn from these sanctions, some lessons include:
1) Your wealth is at risk anywhere, anytime.
2) The richer you are, the more you’re at risk
3) The dire necessity for a Plan B, as Simon Black says
Let’s break down the importance of these highlighted points…
The sanctions are showing us if you directly or indirectly get on the wrong side of the regime, your wealth is at threat of being temporarily frozen or, even worse, seized.
Therefore, you must be wise about your wealth.
If you have a high net worth, it’s clear what the risks are.
Even if you’re not wealthy, these events show your livelihood is at threat for indirectly falling out of favour with your government.
That is, if your country (not you) enter the blacklist, travel restrictions, martial law and bank freezes could be imposed, limiting your ability to make an income.
Plan B and a proactive approach is not a luxury, it’s a dire necessity.
One may consider:
- Protecting your assets from seizure by CONTROLLING, not OWNING them
- Diversifying wealth into onshore and offshore bank accounts in the event that certain countries go on the blacklist
- Obtaining second passports to overcome travel restrictions or flee your country at any given moment
- Balancing your portfolio into different investment sectors
- Educating yourself in natural health if the health system / hospitals fall apart
- Buying local production to prepare for major food shortages
- Having an emergency cash fund in a physical location such as your house or a vault in the event ATMs freeze accounts or shut down
The more boxes you tick off using this list above, and more, the closer you are to becoming a sovereign individual.
Action is critical…
Even if you start with small steps such as educating yourself in the economy.
Education turns into knowledge, knowledge turns into action, and action turns into results.
The final message is to do what’s hard while it’s still relatively easy.
In the same way you buy car insurance before you have an accident, and home insurance before your house burns down … asset protection insures your wealth from being stolen from you.
Until next time.
GWC Advice is Limited to Educational Advice.
The information provided by Global Wealth Club is provided for educational purposes only. It should not be relied upon as financial product, tax, asset protection or legal advice. None of the information provided by Global Wealth Club takes into account your personal objectives, financial situation or needs. You must make your own decision how to proceed.
If you want financial product advice that takes account of your particular objectives, financial situation or needs, please seek advice from an Australian Financial Services licensee before making any financial decision.
If you want tax, asset protection or legal advice that takes account of your particular objectives, financial situation or needs, please seek advice from a licensed professional in the area such as an accountant, lawyer or similar professional.