In the wake of Romney’s recent political attack by Barack Obama, it is evident that Americans are being fed the image of offshore investing as a devious act rather than one of asset protection. While this has been an ongoing phenomenon since the dawn of political debate, it is also a tool which the Democrats are gladly benefiting from at the moment.
So with the bad press on the media about this small sector of financial diversification, what is the truth really about offshore investment? Is it as bad as the American public thinks it is? Is it taboo to seek alternative means to protect your assets offshore?
Since there is another side to investing which many Americans have been dismissed from knowing properly, this article will try to demystify the offshore process. We’ll start by defining what offshore investing means and from there discuss about the reasons why the benefits are neglected.
What is Offshore Investing?
The term ‘invest offshore’ or ‘offshore investing’ is used interchangeably. In a nutshell, offshore means registered or located abroad. And in order to participate in offshore investment, an international bank account is required.
This is where many folks get confused with the technical term. However, the process of doing offshore banking just means you’re banking with another country or one which you reside in. This can be seen clearly in terms of someone who isn’t yet a citizen but opens an account to have salary or spending money dispensed into it.
From an investment perspective, it is practically the same as you would invest domestically. You choose which financial products you would like: mutual funds, bonds, certificates and so on. From there, your offshore banking account is linked to fund the investment.
The attractive thing about investing offshore is the additional options such as commodities, which you may have heard of with choices in oil, minerals and natural resources. This diversification in income can provide a continued stream which may not be presented domestically and is much easier than online trading which has a complex tax structure.
Now the bad connotation that is often associated with offshore investing from this perspective is that of funding for wars or shady black market practices. While the possibility is there, it is also a propaganda tool to detract US residents from investing money offshore.
And when looked at globally, it goes deeper in that you’re simply looking for a way to protect your asset. Additionally, you’re investing in an emerging economy giving it a chance to prosper.
Hence, these deeds aren’t mentioned in mainstream media because it isn’t popular to be good rather bad is more marketable since politics make it a game to point out these possibilities.
Finally, as with any bank account you own, offshore bank accounts can be accessed via the internet.
So Why Invest Offshore?
The US Government wants to know everything you’re making in terms of dollar amount. Additionally, the tax code which is calculated after your total dollars earned makes it hard for the average American to save.
Is it any wonder why a lot of the news surrounding US politicians who have been pointed out as investing offshore defamed? The thought of hiding money itself makes you curious as to why the seeking of such a choice is necessary. That’s because, universally, the idea of losing money irks everyone.
So rather than telling it as it is, taxes are just ridiculously high since the rich are paying 40% of the income tax for the US economy anyway. And when they are struck with such an ordeal, offshore investment seems like an alternative which can help sustain an economy.
That’s not something the news will tell you.
The Propaganda Towards Investing Offshore
Often labeled as a ‘loophole’ in the tax system to hide money, the idea of investing offshore through ‘tax havens’ has grown into a stigma where the public is brainwashed into thinking that tax evasion is a problem when really taxes are too high.
So when you put one and one together, the combination makes sense where it’s easy to reason with the public to devalue the choice of protecting your asset elsewhere. And the offshore sense of necessity is then not one of choice but one of negative thinking.
Furthermore, with the Foreign Account Compliance Tax Act (FACTA) soon to be in effect, the US doesn’t make it easy for the average citizen to think twice about going offshore. They want to know what you own and which bank account you’ve opened elsewhere too.
Isn’t that asking for too much? We’re already paying taxes and now offshore investment is being treated like it’s a crime for investing your money.
Saving a country from losing it’s dollar value is admirable, but when you make criminals of those who just want to protect their assets and seek for other productive investments, that’s taking the truth too far that it leans towards the corruption of an idea.
The Search For Increasing the Dollar’s Value
Baby boomers are now finding that they have to work past the age of 65 and with social security as well as pension plans phasing out, the reality of the workforce is a mixture of the old versus the new. What’s evident though is that the game of retirement is changing.
Americans are beginning to find that the idea of retiring abroad is becoming a more commonplace thought rather than one in which they have read in books. And since their children aren’t tying them into any one place, finding other ways to increase the dollar’s value is a natural means towards keeping one’s assets protected.
This decision isn’t without it’s loss of sleep though.
Taken into consideration the high cost of living, medical costs and insurance which is making it harder to sustain one’s assets, the currency exchange between US dollars and an emerging economy can help leverage those worries with minimal costs.
Hence, Americans should consider offshore investment not as a stigma but an alternative means for financial planning and asset protection. Additionally, the choices abroad provide other means that you may find benefits you more than that of what is found domestically.
Learn more by contacting Invest Offshore and see how we can help you start your very first offshore investment experience.