Episode 007 - Protect Yourself

On this episode we discuss the methods of protecting yourself, your assets and your businesses in the 21st century, and how most of the time you are your own worst enemy when it comes to asset protection.

On this episode we discuss the methods of protecting yourself, your assets and your businesses in the 21st century, and how most of the time you are your own worst enemy when it comes to asset protection.

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Show Notes

Building your financial independence to live an unconstrained life requires a lot of hard work up front. Work that takes your time and money. The results of doing this is the accumulation of assets.

Consider the history of the 1800s gold rush. Living in Arizona, I regularly hear the tales of the miners in the Gold Rush - those that forged their path into the mountains of southern Arizona, found gold deposits and mined them, only to be robbed and often killed as they were transporting their new found wealth back to the towns and assay offices to be deposited in the bank vaults. This history should teach us that it is one thing to take all the risks, forge your path into the world and discover your own treasure. But it is all for nothing if you can’t secure it and protect yourself.

Theft is usually a result of the presentation of opportunity. Imagine if you have a house on a street with 10 other houses. A thief is driving along the street to case which house he/she wants to break into. They know there is a risk to them in doing this, so they will go with the house that not only contains the likely assets they wish to acquire, but the house that is least likely to give them difficult to enter. They will probably skip past any house that has a big Alarm company sign posted out the front. They will look for houses with hidden access, where they could make a noise of breaking glass, etc. without concerning others. The house that doesn’t have dogs or some other noisy alerting alarms. The house that doesn’t have CCTV surveillance on it, so they get filmed and caught afterwards?

Is that your house? Is your house properly secured? Is your house on the street the most attractive target? Have you ever driven down your street and imagined you are that thief, and picked the best house on the street for a breakin? I’m sure you would never break into a house, but if you don’t think like a thief, how could you make yourself the least attractive to them?

This is the key in protection - don’t be an easy target. And who controls that? YOU DO.

You can’t advertise yourself as an opportunity. The secrets to doing that are going to be the core of what we cover on this episode. It is all about stealth.

There are two main parts of stealth:

1. Know your enemy

2. Be invisible to your adversaries

• Who are your enemies?
• · Anyone who would benefit from the opportunity you present to have your assets stolen
• · Your assets include not only your liquid assets (cash, bank accounts, etc.) but also your illiquid assets (real estate, businesses, physical goods)
• · Your enemies might not be those you consider - often “good” people are coerced to do bad things by opportunities
• · This could be those you place trust in - friends, family, governments, police, business partners
• · Attorneys
• · Your enemies may be unknown parties in foreign regions
• · Internet scams
• · Telephone scammers
• · Your enemies might be your state and tax collectors
• · Gradually increasing extortion to the point where you are subservient to them
• · When the reward for hard work is to give the bulk of what you get to keep to a govt agency, we have a problem
• Be invisible
• · Make your house the least attractive target to a thief
• · Install fake alarm monitoring signs prominently
• · Install your own private CCTV cameras
• · Don’t fall for the trap of “cloud based monitoring” or “phone apps” with CCTV - you are giving away your freedom to a third party (the software company) who you don’t know and shouldn’t trust
• · If you install CCTV cameras (good idea), you should have your own private network and install your own private monitoring software
• · If you don’t know how to do this, then don’t do it
• · I use Xeoma software and AXIS IP cameras
• · Make your online life invisible
• · Use services like “DeleteMe” to be removed from public registries
• · If a service like Whitepages.com won’t remove you, contact your local Attorney General’s office to force them to
• · Don’t use any social media accounts without understanding the risks
• · Encrypt your email traffic
• · Use VPNs that you trust when you are communicating sensitive information in public areas (ie. Wifi in coffee shops, etc.)
• · Never advertise your net worth on the Internet
• · I see this happening too much - FIRE people openly advertise their network on their “journey to FI” providing an opportunity to thieves to steal or extort them
• · This is naivety at best - stupidity at worst
• · Don’t advertise what you own publicly or you will not own it for very long
• · “A fool & their money are easily parted”
• · Don’t advertise your wealth
• · Driving a fancy expensive car is nice, but you just told everyone that you are worth attacking
• · Previous generations would never discuss money - we do it more these days, but there is wisdom as to why you should be careful here
• · Acting like a responsible business
• · There is a lot of truth to the “It’s none of your business” statement
• · Business entities offer some form of anonymity to ownership
• · Some states in the USA provide anoymous directors
• · Nevada
• · Delaware
• · You can never be anonymous to the IRS - don’t try
• · Use business entities that offer some form of “charging order” protection
• · Limits the downside of a legal attack on your assets
• · Make your business assets as unattractive to judgments as possible and you will reduce the opportunistic theft of your assets
• · If a bank is giving you a hard time for operating businesses or you requesting to put assets they loan on in a business, find another bank
• · Internationalize yourself
• · The reach of lawsuits and judgements is based on legal jurisdiction
• · This is not a perfect situation - judges can force you to liquidate foreign assets, but are only likely to do that in the case of judgment collections from creditors or bankruptcies
• · If you make the cost of law suits so high to your attackers, they will likely find another target - same philosophy as the thief picking which house to rob
• · Remember, FBARs and FATCA rules - get your own good attorneys and know this will cost you more money
• · Never consider this as a way to evade taxes - if you are a US person, it won’t work
• · This is a better way to obfuscate your asset ownership so you avoid being a target
• Protect yourself in your absence
• · Security requires constant labor and diligence - it costs more and takes more time
• · Laziness is the enemy of security & safety
• · Deferring security to a third party rarely ends well
• · “The cats away....”
• · Develop systems that take care of your security
• · Simple routines you can do on a regular basis
• · Monitor your bank accounts and credit reports dilligently
• · Use technology to help you
• · Movement detection in CCTV
• · Notification systems
• · Harden all attack surfaces
• · Invest in armor, in whatever form that makes sense for your assets
• · Use Trusts and/or Limited Partnerships to hold assets
• · In the case of your demise, the state will not come in a seize your assets before your family can receive them
• · Probate laws in all states need to be reviewed
• · Trusts are relatively cheap to setup - use a lawyer
• Don’t be tempted by some new gadget
• · Most technology based products use some Internet cloud service
• · Alexa, Google Home, etc.
• · Nest monitoring
• · CCTV cameras with cloud based services
• · IoT
• · SmartHome, etc.
• · You are literally opening up your home to someone you don’t know
• · The company might be reputable, but do you personally know every employee in that company who may have access to your home?
• · If you want the benefits of these things, you must have the skills to secure them too
• · Otherwise just say No
• Like your time & money, your TRUST is not an unlimited resource
• · Trusting everyone is foolish
• · If you have never been ripped off, you will be next
• · Streetwise thinking is more natural to those who have risen from the streets
• · Harden your thinking and consider all opportunities to be Trojan horses in disguise
• · We have created a fiction on Instagram, YouTube, Facebook, etc. where everyone “likes” everyone and yet the truth is no one should be trusted without some verification
• · This pretend world that we have created is a trap
• · Watch the movie “The Great Hack” (Netflix - 2019) to get a sense of this
• · Remember, Wall Street (and all of its forms) are not operating for your benefit
• · There is no such thing as a “solid investment”
• · Markets go up and Markets WILL go down
• · Fools that only have experienced up markets are going to be the worse off when markets implode
• · When markets go down, unemployment rises, etc. then this is when crime & theft is rampant
• · Don’t pat yourself on the back because you are FI and did it in a bull market
• · When the bear markets come, you are not prepared for them and your results won’t be easy
• · And this is when you run the risk of a thief stealing everything you’ve worked hard for
• · Remember, Success is when Preparation meets Opportunity
• · But preparation is also your best form of defence
• · There’s a saying in the Hacker community “What is the fundamental difference between an attack & a defence? You always know when an attack didn’t work”
• · It is 10x more work to invest time in defending something than it is to attack something
• · Yet this should be a part of our daily routine
• · If you are not active and diligent in defending what you have, you won’t have it for long