Schiff Sovereign Podcast

Welcome to another edition of the Sovereign Man podcast. As we enter 2019, you’ll start to see more podcasts from us. And you also might notice a few changes. We’ve upped the production value of our chats with Simon. And we’ll continue to improve both the production and the content of our podcasts. And we’d love to hear your feedback on our efforts. In today’s podcast, Simon gives us an update from on the ground in Puerto Rico… and explains why you should absolutely consider moving to Puerto Rico if you have a business, earn investment income or want to freelance and significantly lower your tax bill. Plus, Simon shares some specifics on how to get started taking advantage of Puerto Rico’s tax incentives (and who can benefit from Act 20 and Act 22). It’s an outrageous deal to be able to live in paradise and pay essentially zero tax. So if you have any interest in Puerto Rico… and you could potentially benefit from moving yourself or your business there, please do not miss this discussion. And make sure to subscribe to our podcast on iTunes or Google Play. Here’s what you’ll hear about in today’s episode: Intro – Simon talks about how amazing life is in Puerto Rico, something which surprised him. (He’s not a beach guy.) About 3:00 in — Why moving to Puerto Rico is like moving to Florida… with major financial benefits 5:45 — What Simon gave up to move to Puerto Rico, and why it reminds him of South Park 8 minutes — Why Simon sees voting with your wallet as much more powerful than voting at the booth 10:00 — The big difference between living in a high-tax state like California and living in PR, and how the tax incentives work 18:15 — details about Act 22, including whether it works for crypto people, investments in US companies, etc. 27:27 — details about Act 20, what constitutes a “qualifying” business 31 — Can an employee on salary do this? 32:54 — Are you still paying self-employment, FICA, etc.? How do the taxes work? 36 — How does the IRS consider you a resident of PR? What do you need to do? 36:30 — Do you create an LLC or a corporation? 38:30 — How is the rise of socialism going to affect programs like these? Will these incentives last? 47:50 — Do you need to be wealthy to reap these advantages? What is the income threshold or net worth threshold to make moving to PR a good idea? (Plus, Simon’s decision not to use “rule of thumb” ever again.) 50 — The power of compound-compound (double compound) interest, and whether Einstein said that thing about it. 54: Why Simon is no longer skeptical about the PR tax incentives 57: Why the requirements for Act 20 are better than they’ve ever been (and why you should lock them in… now) 1:09: How expensive is it to live in PR? Are there “middle class” options? Plus, what life is like there 1:11: Drawbacks to living in PR 1:12 Opportunities in PR 1:20: Summing it all up — and Simon’s advice on first steps We hope you enjoy today’s podcast and learn a lot about expanding your freedom and opportunities. And make sure to subscribe to our podcast on iTunes or Google Play.

Between the year 1054 and 1224, there were 83 civil wars in Russia. That’s about one civil war every two years. Through the middle ages, feudal lords were periodically murdered in peasant revolts. When people sense too much unfairness in the system, the pitchforks come out. Wealth and inequality have been with us for all of recorded human history, and probably before that. Things get rocky when that gap grows large enough, or is even just perceived as large. Invariably, this inequality gets “corrected” either by a government or an armed revolution. Wealth is either taken by the state and redistributed, or taken by pitchfork, machete, or gun wielding mob. We’re kind of at the point now where wealth and income inequality has once again gotten pretty pronounced. Just a small sign of the times we discuss in today’s podcast involves a school in Great Britain that has banned expensive jackets. The idea is to protect the feelings of kids whose families cannot afford the jackets. So in order to avoid “poverty shaming,” parents won’t be allowed to send their kids back to school after Christmas break with top brands like Canada Goose and Moncler. So if all the students can’t afford a $900 jacket… then nobody is allowed to wear one. Invariably, the “solutions” don’t lift the disadvantaged up, but simply drag the privileged down. And wealth isn’t the only type of inequality. What’s next? Forcing the best athletes to carry weights, or bringing down the smart kids’ test scores? It’s nothing new. Back in 2008, the Occupy Wall Street movement gave voice to the same feeling. Someone at the top is screwing the little guy. Inequality is part of human nature. We are not all going to be born with the same skills, intelligence, desires, and preferences. In today’s podcast, we get into the palpable anger over inequality that is boiling over, and the types of absurd responses we see.

Last week I recorded the most memorable podcast I’ve hosted in some time. Jim Grant, editor of the famed Grant’s Interest Rate Observer, joined us for a discussion. Grant’s, in my opinion, is one of the finest financial publications out there. And it’s a treat to have a guy like Jim on the podcast. He’s written Grant’s for 35 years. And in that time, he’s made some incredible calls (including first writing about the excesses in housing in 2001) and some not so incredible ones… But, most importantly, he’s amassed a cult following of the best and brightest in business and finance. Central bankers, Wall Street CEOs, hedge fund billionaires… they all read Jim. In other words, his opinions count. So I hope you’ll tune in to hear what he has to say… In our discussion, Jim and I talk about the current state of the economy, the latest Fed announcement and some of the insane excesses in the market today. And Jim sums of the absurdity of today’s market in one, important paradox. Finally, we share a few ideas on how to protect yourself and maybe even profit from these excesses. Also, at the end of our discussion, Jim shares a very special offer for Sovereign Man readers. To learn more about the exclusive deal we’ve arranged, just click here… And, you can listen to the podcast here.

It’s been a hell of a week here in the Italian countryside. I’ve been treating my team and some friends to a sort of mini-vacation at a 400-year old wine and olive estate that we’ve taken over. The views, the food, the wine, the company… it’s all incredible. Each night about two dozen of us dine outside under a canopy of grape vines, and the conversations are so stimulating that the dinners often last for 7 or 8 hours. Being in Italy, though, it’s hard to not notice the obvious deterioration of this beautiful country. Italy was the world’s superpower TWO times in its history– first during the time of the ancient Romans, and second during the early Renaissance when city-states like Venice and Florence became the dominant economies of Europe. Each time they screwed it up. Too much wasteful spending, too much debt, too many regulations, too many wars, too much debasement of the currency. It doesn’t matter how strong your country or empire is. If enough time goes by with those destructive forces at play, the country weakens and loses its power. It’s inevitable. No country in history has ever been able to indefinitely indebt itself, overspend, wage endless wars, etc. without consequence. And it would be foolish to think that this time is any different. We’re seeing precisely those trends all over the world today, especially in the west. And to boot, at least here in Europe, nearly the entire continent is suffering from multiple crises at the same time. Place like Italy, Greece, etc. are dealing with the constant threat of their looming debt crisis. But they also have failing banking systems with the need for constant bailouts. They’re dealing with a fertility crisis and shrinking populations. Frequent political crisis (as we saw here in Italy just a few months ago). Pension crisis. Immigration and refugee crisis. What could possibly go wrong? There are a few bright spots on the continent. But I think Europe is in pretty bad shape for the long-term. We cover this in today’s podcast… and speaking of crisis, we manage to work in some discussion about Elon Musk’s latest drama, plus round out the podcast with a quick summary of this year’s amazing entrepreneurship camp that we just finished last week. You can download the episode here.

In today’s podcast, I share the details of a deal a well-known private bank just offered me (and its roster of other high-net worth clients). It’s a bad deal in every way… the asset in question is valued insanely high, there’s likely a ton of debt attached to this deal and I doubt anyone who invests will make their money back. Still, I’m confident this deal will get done. It’s classic top-of-the-cycle economics. If you look back throughout history, during every boom, there’s one asset that gets insanely bubbly. In the 90’s, it was tech stocks. In the 2000’s, it was real estate. And I tell you what that asset class is today… and why, just like every time in the past, this will end in recession. I also looked back to see how long it takes for the economy to correct after the Fed starts raising interest rates. You should listen in for the reveal… But I will tell you, the Fed started raising interest rates in December 2015. And, if history is any indicator, a recession could happen very, very soon. Luckily, as an individual investor, you don’t have to participate in this madness. You’re allowed to wait it out on the sidelines. Because better deals will be on the way. And you’ll have the opportunity to buy incredibly high-quality assets for pennies on the dollar. That’s what I’m doing. And I share a few ideas toward the end of today’s discussion. You can listen in here…

Last week, Paolo Savona, an Italian man no one outside the country had ever heard of, was denied the position of finance minister. Italy’s President denied his appointment because Savona is anti-euro. The President believes Italy should remain part of the euro. I wrote a Notes about the entire situation last week. But the point I discuss in today’s podcast is that this situation should not have been a major deal… but it wreaked havoc across global markets. Even some of the world’s safest assets sold off. So if this turmoil in Italy can cause such chaos, what will happen when there’s a MAJOR crisis? How should you prepare? The event that will end this 10-year bull market will catch almost everybody by surprise. That’s the nature of the beast. So you must take time now, while you’re still thinking clearly, to come up with a game plan of how you’ll handle the next downturn. Because when the event comes, and stocks crater, it will already be too late… emotions will take over. On the podcast, I discuss the types of questions you should be asking yourself and the decisions you should be making today. I also share some of my experiences from my recent travels to Australia, the Philippines and Bangkok. You can tune in here.

In today’s podcast, I share more thoughts on Puerto Rico including my experiences opening a business there. While the island has its problems, I’m still bullish on the long-term future given Puerto Rico’s incredible tax incentives (especially after meeting with their government leader and seeing how open they are to productive people moving in). I also harp on the latest drama in Argentina… Less than a year after issuing 100-year bonds, the country (which has a long history of default) is in economic turmoil. And the largest investors who bought these bonds – including JPMorgan and Fidelity – are sitting on huge losses. These huge investors are so starved for yield, that they willingly lent money to a default-prone government for 100 year. But, as individuals, we have much better options to earn a decent return… with DRASTICALLY less risk. I share a few of those options near the end of today’s discussion. You can listen here…

I’m writing from San Juan, Puerto Rico today. The Sovereign Man team is here to host 150+ Total Access members over the weekend. And on today’s podcast, we discuss the amazing tax benefits in PR… and why crypto wealth is flocking to the island. These people think crypto is going to the moon. And by being residents in PR, they’ll pay 0% capital gains tax on any appreciation after they move here. So I share my thoughts on this, and why they may be in for a tax surprise with their crypto holdings – even with the amazing tax benefits. Also, following one of the big themes we’ve been covering this year, I discuss fanaticism surrounding crypto (both the bulls and the people calling it a fraud)… and why you should banish fanaticism when making investment decisions. You can listen in here.

Wells Fargo stole the headlines yet again today for defrauding its clients. The bank was fined $1 billion today for selling over 500,000 clients auto insurance they didn’t need (which in some cases caused the owners to default on their car loans and get their cars repossessed) and for charging erroneous fees to mortgage borrowers. If you still bank with Wells Fargo, maybe this will finally serve as a wakeup call to take your money elsewhere. But this is just the latest in a long string of fraudulent bank behavior… Wells Fargo also opened millions of fraudulent accounts for their customers without their permission – in some cases moving money from existing accounts (without the customers’ knowledge) to fund the new accounts. And of course there was the entire mortgage fiasco, where banks would recklessly lend depositor funds to unemployed people to buy homes they couldn’t afford… which ultimately led to the collapse of the financial system (which was then bailed out by taxpayers). And there’s interest-rate fixing scandals, rogue traders losing billions of dollars, commodity price manipulation, forex fraud… the list goes on and on. These banks willfully and repeatedly abuse the trust placed with them by the public. Yet people continue to allow this to happen… all while making .05% interest! In today’s podcast, I explain a few steps you can take to get your money out of the banking system and achieve much higher yields – with less risk than keeping your money with a bank. Sovereign Man readers know I get fired about with these banking abuses. That’s one of the reasons I started my own bank. And I’ve got a few choice rants in today’s podcast. Again, you no longer have to participate in this system. There are plenty of alternatives today. Tune in to today’s podcast here.

On Monday, I shared a recording from aboard the Investor Summit at Sea, hosted by my friends, the Real Estate Guys. This is one of the only conferences I attend each year as a speaker. And that’s because I get so much value from the other speakers and attendees – guys like Chris Martenson, Adam Taggart, Robert Kiyosaki, Peter Schiff and G. Edward Griffin. Yesterday, I was on a panel with Peter Schiff, Chris Martenson and Adam Taggart. And I recorded the discussion for Sovereign Man readers who couldn’t be there in person. This panel largely centered around agriculture. As you probably know, I’ve got some experience in the industry… I took thousands of acres of bare, central Chilean land and transformed it into farmland that will soon yield one of the world’s largest blueberry and walnut crops. But, our discussion didn’t center on my personal experiences with agriculture. Instead, we dug into agriculture’s global supply and demand fundamentals. 200,000 people a day are coming into the world each day. And they all require food. Also, the number of calories being consumed per capita worldwide is increasing. On top of that, as developing countries like China and India get richer, the quality of the calories they consume changes – from beans, rice and veggies to more meat (which requires far more resources to produce). And while demand for food is soaring, arable farmland is on the decline. This is one of the most important problems of our day. And it’s not an easily solvable one. We also touch on geopolitical risks like water rights and the economics – and risks – of farmland investments in developing countries (another topic I know well). A lot of folks say we won’t have a global food shortage because we can just start farming in Africa. But I’m sorry to say that’s not the solution. It takes a tremendous amount of logistics to produce and transport food. And Africa just doesn’t have it. In today’s difficult financial and economic climate, there’s a lot to focus on… and to be wary of. Agriculture’s growing global supply and demand imbalance is one of the trends that certainly has my attention. But even with favorable fundamentals, just like with other asset classes, you can make some major mistakes when investing in this space. I also closed out the panel by asking everyone what they’re doing with their own money. You’ll want to hear what these smart guys have to say. Tune in right here…