Knowing how to keep your money safe from the government has become vital in today’s uncertain economy.
As governments intervene, policies change, inflation rises and global markets become unpredictable, it’s smart to explore ways to safeguard your assets. To be proactive in managing your money, you must be informed on strategies to help make the appropriate financial calls.
Some of these strategies have been traditionally used by wealthy families to keep generational wealth, but some of them are fairly new steps that you can implement to protect your assets.
In this post, we’ll guide you through 6 key strategies for keeping your money safe from the government. Each one of these strategies has its benefits to help you build a strong financial future.
1. Diversification of Investments
Arguably one of the best investing strategies available for protecting your assets is to diversify your portfolio. By spreading out your investments across different areas and classes of assets, you can reduce the risk of government intervention and also improve your potential returns on those assets.
Why It’s Important
Mixing assets helps to minimize risks because if one asset underperforms, you have other investments to balance out the potential losses.
Types of Investments for Diversification
➡️ ETFs
➡️ Cryptocurrencies
➡️ Stocks
➡️ Bonds
➡️ Real Estate
➡️ Commodities (Gold, silver, oil, etc.)
How it Protects You from the Government
Policy changes on assets: investing in different class assets protects you in the case of a single asset being impacted by government policies. For example, if the government implements a new regulation on the financial sector, you won’t be affected as much if you also have assets in other sectors like healthcare or tech.
Political risks: If you buy foreign assets, you are now protecting yourself in the case of US policies changing unfavorably. If you have global investments, it will help to mitigate risks.
Currency changes: If the value of one currency changes, it can affect the value of your investment. Diversifying in other sectors apart from traditional finance, like crypto or real estate, is always advisable.
Hedging against inflation: Your assets can be affected by the government inflating or deflating fiat currency. Diversifying your portfolio to hold onto commodities and cryptocurrencies will help maintain purchasing power during times of inflation.
2. Use of Cryptocurrencies
The decentralized financial system that supports cryptocurrencies is a highly private and self-custodial asset. Not like fiat currency which is controlled by a government or central bank, crypto “lives” on the blockchain.
It’s important to note that as crypto continues to grow and becomes more commonly used, some countries and regions have imposed certain regulations. But for the most part, keeping your crypto safe and anonymous is still possible.
Why It’s Important
Leveraging cryptocurrencies provides an asset class protecting you from total government control and gives you financial autonomy.
How it Protects You from the Government
Decentralization: Crypto is not controlled by any one authority. This means that generally speaking, they are less susceptible to implications and actions by government entities to seize or freeze assets which is possible through traditional banks. This is the main idea behind self-custody – you are in control.
Privacy and anonymity: Cryptocurrencies can offer a higher level of privacy, especially compared to traditional banking systems. Most transactions can be pseudonymous, which can protect your finances from government surveillance. But, remember that depending on the exchange or wallet you use for buying, selling, and storing crypto, you may need to comply with KYC regulations. Additionally, depending on your country or region, you may be responsible for declaring taxes on your crypto assets.
Worldwide accessibility: What makes digital currencies unique is that they can be accessed and used globally without needing to rely on traditional banks. This makes moving assets across borders easier without the interference of government restrictions.
Resistance to inflation: Certain types of crypto, like Bitcoin, have a fixed amount in existence. This makes it resistant to inflation because the amount is capped, unlike fiat currency which can be continuously printed. Meaning, that Bitcoin cannot be devalued due to inflation.
Examples of Government Restrictions in the Real-World
- In 2015, the Greek financial crisis led to the population buying more BTC as the government placed restrictions on banks and ATMs, capping the amount that people could withdraw from their OWN accounts!
- The ongoing hyperinflation we are seeing in Venezuela. Citizens have looked to Bitcoin and other cryptocurrencies as a way to save and preserve their wealth. Since the government can’t control crypto, it’s been used as a tool to safeguard assets and make transactions globally.
How to Keep Your Crypto Safe
To protect your crypto investments for the long term, you must use a reliable wallet.
Material Bitcoin is deemed one of the best hardware wallets available for storing your private keys offline, adding an extra layer of protection against hacking and online threats. You can buy and transfer Bitcoin right from the wallet securely, giving you access anytime you need it.
3. Offshore Banking Accounts
When you open a bank account in a foreign country, you might be able to benefit from the financial regulations that are available in that country. This is a strategy that we’ve seen used by many large companies and institutions as a way to protect assets from their government where taxes or conducts are different.
Popular Locations for Offshore Accounts
➡️ The Cayman Islands is a popular destination because it’s considered to be “tax-neutral”
➡️ Switzerland holds high privacy laws and traditionally has had a stable economy
➡️ Singapore offers great tax exemptions and favorable financial regulations
Legal Responsibilities
You must understand the legal responsibilities that you have to your government when you hold offshore assets. Regardless of holding your fiat currency or other assets abroad, you still need to declare these accounts to the IRS (if you live in the US). You also need to comply with the Foreign Account Tax Compliance Act (FATCA).
Using a Trust Fund
Creating a trust fund as an offshore account is another alternative to safeguarding your assets. A trust fund allows for legal ownership of assets for a separate person or entity.
This provides another layer of protection and separation from the asset, although we recommend using a financial advisor and lawyer in this case, as setting up a trust fund can be complicated.
4. Investment in Tangible Assets
Defining a tangible asset relies specifically on the ability to physically touch and possess the item. The most common asset that is tangible is Gold as it is a physical item and has an inherent value associated with it. Other popular examples include silver, collectibles like art and antiques, coins, and real estate.
Why It’s Important
Tangible items are characterized by having inherent worth. This is what separates its value from fiat currencies. It is also how owning tangible assets can protect savings against inflation, as these assets usually keep their value during inflation periods.
How it Protects You from the Government
Physical ownership over the asset: Since you can store the asset yourself, it is less likely for the government to seize or control how you manage the items.
Staying anonymous: For the most part, tangible assets can remain anonymous and ownership does not need to be reported to government agencies like fiat currency does. Collectibles like art or coins and stamps can easily be traded and moved globally, making it impossible for governments to expropriate the asset.
5. Utilization of Legal Structures
The two main legal structures used in the US for keeping your money safe from the government are Limited Liability Companies (LLCs) and trusts. Both of these structures provide ways of managing assets and wealth but without the same regulations as traditional companies or bank accounts.
Types of Structures
Trusts, as we briefly mentioned earlier, are types of arrangements made to either another person or entity known as the trustee, who can manage assets on behalf of the beneficiary. There are different types of trusts, like revocable and irrevocable, and therefore should be set up by a trusted financial advisor and law firm.
LLCs are types of companies that have special liability protection for their owner(s). Essentially, these types of companies separate their assets from the owner(s), exempting them from business debts. This helps to protect business owner(s) if the company underperforms or closes.
How it Protects You from the Government
Common practice: Most major companies and the mega-rich take advantage of these structures, including Elon Musk and Jeff Bezos.
Separation between you and the asset: Depending on the structure you implement, you gain an added layer of privacy and anonymity. This keeps your association with the asset separate from your identity.
Transferring or donating assets: There are also benefits for estate laws and taxes, specifically about inheritances and transfer of ownership.
6. Maintaining a Low Profile
When looking for answers on how to protect your assets from the government, keeping a low financial profile is an easy start. Being discreet with your financial activities can help to reduce the government’s involvement in your business.
Of course, you must comply with laws and regulations, but there are many ways to protect yourself and stay anonymous while investing your money to make it grow.
Why It’s Important
Safeguarding your personal information and assets is rule #1, especially from public exposure. Protecting your personal data and financial details can prevent theft, fraud, and hacking. It can also help to ensure that the government doesn’t get involved or get drawn to your asset portfolio.
How it Protects You from the Government
Anonymity: Using anonymous accounts or pseudonyms when legally allowed is a great way to keep your money and transactions private. Especially assets like cryptocurrencies allow you to buy and sell internationally and conduct transactions without revealing your identity.
A famous example of staying under the radar is Bitcoin’s inventor “Satoshi Nakamoto“. He/She/They/Them is a pseudonym and has been able to stay anonymous since the beginning.
Private collectors who purchase high-end art anonymously through private auctions or trusts also keep their identities confidential, protecting their wealth from governments and the public.
Protecting Your Money
Utilizing these 6 strategies for protecting your assets from the government is a useful way to safeguard your wealth.
You need to stay informed about laws and regulations, but, adopting some of these approaches might be a helpful way to protect your financial future.
Remember to diversify your assets in different asset classes such as crypto, ETFs, and real estate.
Comply with your country’s laws but be aware of your rights to protect your money from the government.
Frequently Asked Questions
What are the safest investments to protect my money?
- Diversified investment portfolios, tangible assets, and cryptocurrencies are easy ways to protect your investments.
Where is the safest place to invest my money right now?
- A mix of diversified investments, along with offshore accounts in stable jurisdictions is best. For Digital currencies like Bitcoin and Ethereum, safeguard your assets in hardware wallets like Material Bitcoin.
How can I protect my assets from government intervention?
- Use a combination of diverse assets, cryptocurrencies, offshore accounts, and tangible assets, while using legal structures, and maintaining a low profile.
Is it legal to hold offshore bank accounts?
- Yes, but you must declare them to tax authorities and comply with local laws.
How to protect assets from the IRS?
- Taking advantage of legal structures like trusts and LLCs with the help of a professional financial advisor and lawyer will help you safeguard your assets.
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