Nomad Capitalist: How to Reclaim Your Freedom with Offshore Bank Accounts, Dual Citizenship, Foreign Companies, and Overseas Investments
Who should read this book: If you feel disillusioned by the current system you’re in, want to diversify your money, seeking a bit of adventure, and are looking for a legal way to operate outside of “the system” — then this is the book for you. If you liked 4-Hour Work Week, you’ll love this.
This was like an updated version of the 4-Hour Work Week, playing up on the idea of geo-arbitrage, passive income, and how to remove yourself from the suffocating 9-5 job. I feel a lot of the self-help genre post-4 Hour Work Week is a re-hashing of Tim’s original, but there was certainly some new information here.
While Tim focuses a lot on setting up companies and escaping your job, Andrew Henderson, the author of Nomad Capitalist, pretty much assumes you have some amount of money that you are willing to invest/spend and that you already have a relatively entrepreneurial lifestyle. The question is how to diversify your risk, protect your money and grow it outside of the current system.
Andrew has several James Bond-esque stories of his own that gave me an occasional smirk, which he intertwines with best practices and ideas of what’s possible and more importantly what’s legal. Keep in mind that he does run his own consulting firm, so at the end of the book he basically plugs his service, which is understandable, but some might be annoyed.
That said he provides a lot information about what is achievable and tells you where to look, even if he doesn’t explicitly line it all out, which is more than enough to get started on your own journey. I’ve personally found that in order to achieve our goals often times all we need is permission and to know something is possible, even if we don’t get an instructional step-by-step guide on how to do it (nor should you trust the step by step guide of someone for financial advice as everyone’s situation is different).
“How much will I pay in taxes tomorrow, this month, and this year if I keep doing what I am doing now?” “What changes would I like in my lifestyle that I will not enjoy if I do not make a change?” “How will my retirement plans be affected by continuing to do what I am doing now?” “What will happen in five years if I keep only one passport? Or, what might happen that I am not willing to risk?”
“Go where you are treated best” is a point that he drives home several times. If the banking system in your country gives you ridiculous fees or if you can’t get a loan, why don’t you go to a different bank? If you feel that you’re paying too much in taxes, instead of complaining and doing nothing, why not move somewhere else? If you’re getting poor and expensive healthcare treatment in the US, why not go somewhere cheaper and better?
“To thrive in an ever-globalizing world, you must do what others do not do and go where others will not go. The world economy is changing and those who operate at the edges of this new economy will find the greatest success.”
The topics that he covers which I found most interesting:
- The misconceptions behind off-shore bank accounts, the death of Swiss bank accounts
- Insights into investment opportunities in rising countries in Asia and Europe (Cambodia, Estonia, etc.)
- Medical tourism and the best hospitals abroad
- Marriage/having kids abroad
- Gold and real estate investment
Other big Ideas from the book:
“You only have to do a very few things right in your life so long as you don’t do too many things wrong.”
The same way Uber has allowed anyone to be a taxi driver, the offshore world is opening up so that anyone with even a modest income can not only travel the world but become a citizen of the world.
As of 2018, countries that explicitly forbid dual nationality include Austria, China, Estonia, India, Japan, Lithuania, Netherlands, Norway, Saudi Arabia, and Singapore.
“Prince Court Medical Center was ranked the #1 medical tourism hospital on planet Earth. The level of efficiency I experienced there bore that out. As in Thailand, the doctor not only spoke excellent English but had studied in London. Unlike doctors in the West, he did not seem rushed and answered all of my questions without trying to hastily bounce me out of his office.”
“When ranked by an independent group, the world’s top ten hospitals for medical tourism were in Malaysia, Germany, Lebanon, India, South Korea, Thailand, Turkey, and Singapore. How many of those countries would you have considered before? Yet, they offer world-class care with the added benefit of often extreme efficiency, and – thanks to currency devaluation in some countries – relatively low costs.”
The fragility of “stable” banking systems
During the financial crisis years of 2008 to 2012, 365 banks were put into receivership in the United States. Yet, many people still consider the US banking system to be the best option. However, even in an average year, at least one or two dozen banks will become insolvent in the United States. Meanwhile, the FDIC – the government agency that promises to insure depositor money – has well under 1% of all its insured deposits on hand, and the US government that funds it is $20 trillion in debt. One big bank failure and your life savings are at the mercy of an act of Congress.
Business and foreigner-friendly countries
Estonia offers a 0% tax rate for companies that do not distribute capital, making it very efficient if you reinvest your money. And when you want to take cash out, you pay a moderate rate of 20%.
The World Bank’s Ease of Doing Business Index is a great place to find information on the business atmosphere in each country, as well as the Heritage Foundation’s Index of Economic Freedom
In Montenegro, owning a property automatically qualifies you for residency, even though obtaining citizenship is not possible without greater effort.
Occasional tidbits of humor
There are any number of places to buy and store gold, from services with an e-commerce interface to large vault operators themselves to Hang Seng Bank’s central branch in Hong Kong. At the latter, you can pay cash in Hong Kong dollars to buy up to about ten one-ounce gold coins per day and walk around town like a Dark Ages monarch who kept coins to toss at peasants.