How to Live Like James Bond

Bond… James Bond. A Different day, a different country. Passports and bank accounts. Corporate documentsand tax havens. Small islands and encrypted communication. Boats. Helicopters. Gold.Flag Theory. PT. Flag theory is the art and science of being a permanent traveler. Not confined by the borders of any one country, flag theory is for PT’s whostrategically place flags around the world to increase freedom and prosperity. The spy-like lifestyle was first mentioned in 1964 by Harry D Shultz in his novel “How to Keep Your Money and Your Freedom”. The original Flag Theory was comprised of the following 3 flags: (1) a second passport, (2) a safe location for your assets outside your own country and (3) a legal address in a tax haven. A free individual, living in a not so free world. WG hill later coined the term “Flag theory” and also refined the idea that a person could be a “PT” a permanent traveler – also known as a perpetual tourist or just passing through, and he added an additional 2 flags: (4) where the millionaire invests his money the (5)th flag living in the playgrounds. Flag theory and permanent travel was once designed for the ultra rich and the independently wealthy, but now can be properly utilized by anyone willing to pursue an international perspective. Times have changed. You no longer need to go island hopping on a G6 to be a PT or take advantage of flag theory. The information age has sprung forth an entire generation of smart, capable entrepreneurs who don’t rely on a job in one place to make money. Flexible passport options and accessible legal entities make it possible for anyone set up flags in various countries around the world to decrease their sovereign risk. Chances are, you too can take advantage of flag theory, if you are smart enough to realize the immense benefits of internationalization. Respect needs to be paid to those who created the idea of flag theory. However, the world has changed and as such, expounded, new definitions of flags are needed and a revised edition is necessary. The new flag theory doesn’t advocate just 5 or 6 flags, but rather as many that are needed to satisfy the objectives listed below. The Revised Flag Theory The revised flag theory is less concerned with setting up in a set number of jurisdictions, and instead focused on identifying solutions to categorical concerns. The new flag theory is about determining the best course of action for the problem you are facing by using an international perspective. The altered hierarchy is designed to compartmentalize problems to be able to best identify a solution based on our issues, for example:

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Where are the best places to incorporate globally as an internet entrepreneur? I pay too much in taxes, how can I lower this obligation legally by utilizing an international perspective? My employees cost too much and carry huge liability, where else can I hire english speaking skilled labor? How can I effectively pass wealth on to my heirs? What countries offer second passports, and what’s the process for obtaining citizenship in these nations? What’s the most effective corporate structure from a liability and risk standpoint?

We should no longer consider our situation solved by planting just 5 or 6 flags. We should seek to plant as many flags as necessary to achieve the preceding categorical concerns which are detailed below.

Flag 1: Citizenship and Residency The flags you place for citizenship or permanent residency can have a dramatic effect on all the other flags. A second passport is widely recognized as a critical step you can take to reduce your sovereign risk. A passport facilitates worldwide movement and travel. However, citizenship is much more than a passport and travel document – it’s a social contract maintained with a government. With this contract comes benefits, and sometimes drawbacks, its up to you to determine whether you want to continue to be a citizen of your country of birth – or if another option is more beneficial to your current situation. The whole idea of a second passport was previously only available to those with direct lineage, or the ultra-rich who could afford to bribe immigration. Passport programs can also be confusing and the government guidelines are not always clear. However, the ability for anyone to receive a passport has changed dramatically in the past few decades. A second passport or citizenship was previously expensive or tedious to acquire. However, changing laws, increased low-cost mobility, and other factors have created passport opportunities. Now a person can achieve a legitimate citizenship by naturalization for about $5,000 and 3 years with a redomiciliation process. For a quicker timeline, an investment of $100,000 and a background check can get you a new citizenship in just 6 months. There are many different passport options depending on your unique circumstances. Citizenship is sometimes a sensitive issue, but we permanent travelers have a saying: “ubi bene ibi patria” – Where one is well off, there is his country.

Flag 2: Taxation Citizens are taxed in a number of different ways. We are taxed when we earn. We are taxed when we spend. We are taxed when we die. Its been said that only two thing in life are certain: death, and taxes. Tax has become an increasingly complicated and intricate affair as individuals and businesses seek to avoid taxes which is completely legal. Courts have repeatedly ruled that tax evasion is a crime. But that tax avoidance isn’t. It’s well within your rights to pay only the amounts required by law, and nothing more. Many individuals and companies currently legally minimize their taxes by intelligently making use of international corporations offshore. In fact the largest companies in the United States use offshore Companies to legally defer taxes, sometimes indefinitely. The growing number of entrepreneurs with a worldwide focus, or location independent operation are looking for answers. The day of the micro-multinational is upon us. If you ever have a question regarding taxes, you should direct it to a qualified tax professional or tax attorney. “The Founding Fathers never intended a nation where citizens would pay nearly half of everything they earn to the government.” - Ron Paul

Flag 3: Business Entities and Asset Protection Legal Entities are the primary method of asset protection. Legal entities (most commonly trusts or companies) are able to protect your wealth and your business and save dramatically on taxes. A business entity is paramount to conducting business, and for a few hundred or a couple thousand dollars, you can create a business entity – something outside yourself that can be used for literally thousands of objectives. A company or corporation is capable of carrying debts and liabilities, buying property or assets, and transact business outside your own name. This new entity can also be used to open bank accounts, gain citizenship, establish privacy, gift assets, set up a tax base, extend beyond your lifetime, protect and grow wealth, and accomplish many other goals. Business Entities are one of the most important flags to plant internationally. If you own a business of any size, a business entity is absolutely critical, but something some people sometimes ignore for other issues such as marketing. However, for personal financial management and planning, legal entities have numerous advantages. I’m a firm believer that anyone can gain from the benefits of a legal entity. For many people, a legal entity in their home country may be enough – however many people can benefit from an offshore incorporation as well.

With almost all incorporations, you can get a bank account anywhere worldwide. You can, for instance set up a Singapore bank account with the proper company documents from the United States, or Nevis, or Hong Kong. Asset Protection flags are where your business maintains a registered office – the place where your company’s articles of incorporation are filed. It is usually not in the same jurisdiction as where your office is, for reasons of liability and taxes. Many people use offshore companies in places like the Cayman Islands, Belize, Guernsey, or other no-tax or low-tax jurisdictions. Asset protection flags are interesting, because you can sometimes objectively state that setting up a company in Nevis as an LLC might be better than Hong Kong, because there are less reporting requirements and you don’t face a yearly audit. Alternatively you could state that Hong Kong is more reputable and won’t send up a ‘red flag’ to the authorities. Its quite easy to find a jurisdiction for a business entity which has no tax, or territorial tax rules. Planned properly with the guidance of a professional, tax can be deferred indefinitely, or eliminated completely. “Each person enjoys, over himself and his powers, full and exclusive rights of control and use, and therefore owes no service or product to anyone else that he has not contracted to supply.” – G. Cohen Trusts Can Also Be A Flag A trust is comprised of 2 essential, basic parts; a trustee, and a beneficiary. The trustee is the person who you trust to keep assets held in the trust safe for the benefit of the beneficiaries. The founder is the person who creates the trust and a protector is a person who can veto or remove the trustee. A trust can be the owner of a business entity and create an additional level of protection. This is because a court order cannot compel a person located outside their jurisdiction to take action. A trust is an efficient way to place assets outside your ownership, but somewhat within your control – as the trustee has a fiduciary duty to protect the assets for your benefit. Learning more about asset protection can dramatically improve your business, and also can help with your wealth management.

Flag 4: Business Markets and Wealth Management The countries are where you hold your assets and wealth should be held in another jurisdiction from where your money is actually earned or spent. Ideally, these jurisdictions have a reputation for privacy, professionalism and stability. One you have protected your assets within a legal entity, its important to invest your liquid assets in an intelligent fashion. This is highly contingent upon your individual circumstances and risk profile. One thing should be clear, your financial planning should not be restricted to just plopping cash in a bank

account and watching it dissolve slowly over time due to inflation. You need to be personally responsible for the growth of our wealth, and how we protect and manage our assets. Flag: Bank Accounts What country you bank in is almost as relevant as the bank itself. A systemic collapse could wipe away your liquid assets. Obviously this is a long shot, but we should prepare for the worst, and hope for the best. I don’t like to keep all of my money in one bank, or all of the banks within one country. Bank accounts can be opened under a personal name, or through a corporate account and controlled and owned by a legal entity. Other relevant flags within this sector include: brokerage accounts, investment advisors, private funds, opportunities for business, and essentially anything that makes you money. While legal entities provide the vehicle for investment and business, business markets are the highway upon which we drive. “Freedom can run a monetary system as superbly as it runs the rest of the economy. Contrary to many writers, there is nothing special about money that requires extensive governmental dictation.” – Murray Rothbard

Flag 5: Infrastructure and Intangible Assets The internet has changed the face of business and commerce forever. Now that businesses can operate without an established base, from the internet – the locations where our infrastructure flags are planted becomes important. Just where is the flag for the infrastructure of an internet business. Further, our intellectual property and intangible assets are more at risk than ever before. You need to be hyper vigilant about the security of your financial information, passwords, and national identification number. Three questions you might ask yourself about your data security and infrastructure… •

Where are the servers which host your website physically located?

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Where, and with who is your domain registered?

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Where do you drop ship from?

It’s like anything else, you often don’t appreciate it until its gone. Your security, your identity, and your website need to be protected at all times. Not knowing is no longer an excuse. Sensitive information should be sent via encrypted email. Firewalls, VPN access and virus software are a must. It’s not about being paranoid, its about being prepared. Your merchant account is the point of sale for your business if you operate an internet business. Merchant accounts have altered the landscape of business and commerce forever. For the very first

time, a teenager in Wisconsin can pay a programmer in Russia to build a website and start accepting payments from a buyer in Brazil. With a website and a merchant account, you have instant access to the worlds largest marketplace – the world wide web. Overnight, your business can be a micromultinational. Other Infrastructure and Intangible Assets flags: Important documents, servers, merchant accounts, processes, server farms, domain registration, encrypted communication, patents, passwords, industrial design. What’s changed? Instead of looking for a set number of jurisdictions to establish 3, 5 or 6 flags, I posit that we address each of our problems individually to pick out the best jurisdiction for our unique needs. For instance, many entrepreneurs don’t have just one business, so the idea that one jurisdiction is all that is needed as a business base falls short. Entrepreneurs should use legal entities trusts, corporations, LLC’s and other set ups to create maximum profits and minimal liability. A person can implement the best jurisdictional law from any country in the world. The essence of the PT lifestyle and the original flag theory remains: Freedom.Freedom of mobility, from excess taxes, from obligations, duties and services we don’t enjoy. Being a PT is about the individual right to liberty and the pursuit of happiness wherever we happen to find it. “Man is free at the moment he wishes to be.” – Voltaire Previous Flag: “Business or investments in low or no tax environments.” Taxation is not longer as simple as setting up an business in a low tax environment. Complicated tax laws have made some of the original suggestions from Harry D Shultz are ineffective or even illegal. Not to discount his pioneering of the field, but a more comprehensive and holistic view of tax issues is necessary, especially for ex-pats who no longer reside in their home domicile. Moreover, your business domicile is not necessarily your tax domicile, and vice versa. Also, Business and investments in low or high tax environment are highly relevant. It’s possible where the increased tax burden is offset by the increased ROI, or that the investment is more secure. The goal is no longer to blindly search for zero tax obligation, the goal should be maximum profits. This category is redundant. The internet was a game changer, instead of making the world larger, the world is becoming smaller and increasingly interconnected. Work and income can be effectively maintained without a physical location or a flag. You no longer need to live in one place to work, or rely on an employer for a job. For the first time ever, a small business owner in Dallas can pay a programmer in Russia, start a website, and set up a business that funds them living in Italy as an ex-patriot.

Previous Flag: Playgrounds The playgrounds “flag” has been eliminated. Lifestyle is not a flag, lifestyle is fluid experience, a journey. Flag Theory assumes that the lifestyle is a given, but won’t dedicate significant forethought to the subjectivity inherent in lifestyle choices. This system assumes you live co-currently where you play and work. After all, what good is all the wealth and money in the world if you don’t have the time to enjoy it? Most people drift through life with a deferred life plan, or only spend part of their year on vacation. Permanent travelers spend their lives building a business from a location that resonates with them on a deep level. Rather than eliminate the ‘playground flag’, I centerlifestyle is intrinsic for the type of person who implements flag theory. The elimination of the playgrounds flag does not mean that you can’t build a recording studio at your buddy’s resort, or a house on a secretive island in South East Asia. I merely posit that it shouldn’t be considered a flag that’s used for a strategic advancement of solving your privacy and freedom issues. Further, your playgrounds as a PT is highly mobile, and can effectively be anywhere you enjoy spending time. No flag needs to be planted. Whereas once you established a legal entity flag, it’s “planted”. It makes little sense to alter it indiscriminately. However, our playgrounds can be constantly changing, and this is WHY we established the other flags, so that we can enjoy privacy, wealth and freedom. The whole premise of flag theory rests on your ability to be a free individual, location independent, so that each country we visit views us as a tourist, temporary, just “passing through”. Furthermore, It makes little sense to stay in one place for one time, unless you want to qualify as a tax citizen. Increased Government Scrutiny When Shultz first mentioned strategic expatriation and offshore tax havens almost 50 years ago, the world was a different place. There were no KYC restrictions, complicated reporting procedures or unfair stigma that unfortunately sometimes scares people away from the legitimate, professional and legal offshore business environment. You may benefit from an offshore company, but you should proceed with caution and talk with an international tax attorney from your principle domicile before you form an offshore company. As governments clamp down and attempt to shut down the offshore world – it’s important to ensure that your actions are legal, and that your tax minimization doesn’t turn into tax evasion. Now more than ever, you need to be intelligent in your business dealings, communications, associations and actions. “You had to live—did live, from habit that became instinct—in the assumption that every sound you made was overheard, and, except in darkness, every movement scrutinized.” – George Orwell The rules of the game have changed.

It’s not all changes for the worse, living in the information age, anyone can create abundance. Flag theory is no longer for millionaires, flag theory can be used to become a millionaire. Flag theory can facilitate anyone with expendable capital to invest internationally in the most attractive investments for their situation. Many millionaires traditionally benefitted from an international trust, perhaps you too could benefit from an asset protection trust which are now relatively inexpensive and easy to acquire. The offshore world was previously unavailable to the layperson, but now an offshore company can be formed for under $1000. The nature of the internet has created an entire generation of entrepreneurs who might benefit from the decreased liability of an offshore company. However, there are many issues to consider to make sure your offshore flag is established legally. Despite common misconceptions linking offshoring and tax evasion, there are numerous reasons you might want to incorporate outside your home state or country. Increased asset protection, decreased liability, access to new investors and local compliance are just a few reasons for creating a foreign corporation. Freedom The fundamental need for flag theory comes down to this: You are a free individual, and every possible step should be taken to protect and preserve that freedom. •

Flag theory is for those who desire to live truly free. To achieve individual autonomy and freedom decrease or reliance on any one system.

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Flag theory isn’t a method, a technique or a strategy that mandates specific requirements. The principle goal is thus: to attain superior quality of life by establishing flags in the best countries around the world.

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Flag theory allows you to diminish the risk of principally operating and storing your assets within the borders of one jurisdiction.

Your individual flags should mitigate your sovereign risk, legally avoid taxes, while increasing profits, safety and wealth. Flag theory is for individuals who are no longer confined by the borders of any one sovereignty. “Flag theory is for those with courage enough to pursue freedom.” – W.G. Hill

7 Truths They Don’t Want You To Know 1. Your money can lose its value – overnight. Imagine waking up one morning and learning that you now have half the net worth as the day before. This is essentially what happened to people in Argentina just one week ago, when they saw the purchasing power of thier currency decrease by 30% overnight. Think it can’t happen to you? Society at large has a misplaced faith in currency and the banking system. It is easy to do when you have banking institutions that can’t fail, and you enter the eye of the economic storm. However, the financial crisis that was nearly averted in 2008 was never cleaned up, it was simply swept under the rug. There are major flaws in the system that still exist today. Further, the idea that paper money is somehow secure is a rather modern mistake, let us learn, and not make the same mistakes as others have made in the past. Paper money and or ones and zero’s in a computer, (i.e. your bank account) is not inherently valuable. It is backed purely by faith, and if that faith disappears, so will the value. Those who are well read in economic literature, particularly Austrian economics obviously would concur with my sentiments: don’t trust a monetary system based on debt and inflation, as it is unsustainable. People who save and invest wisely are economically successful in the long run. Governments are no different. The Yen and the Euro are the two currencies that are the most vulnerable at the current time. As the economies behind these currencies become more distressed, burdened by the debt of bad governments, the currency in turn becomes devalued – as the countries currency is the underbelly, exposed and open to be cut on the open market by shrewd investors, hedge funds and banking institutions. Escape from the Euro Many of the countries here seem to encourage laziness. Its impossible to hire workers who actually work more than (the 3 hour workday) and as an entrepreneurs working in Europe, its even harder to fire them. Perhaps that’s why I’m seeing a multitude of entrepreneurs flocking in droves to opportunities in SE Asia. A major global event that could transcend the world economy would be the death or downfall of a major currency. This would obviously have dramatic effects on the global economy, and when you look

at just how fragile currencies like the yen and Euro are, there is clearly a deep seeded instability which could cause the entire pyramid on which the current financial system is built (fiat currency) to collapse.

2. Capital controls are being introduced As governments become more desperate to protect their economic well being, and currency, they sometimes institute powerful capital controls. What is a capital control? It is a law, order or measure by the government restricting the free movement of capital, and we are seeing them being introduced all over the world in different ways. Take for instance the Chinese RMB. The currency is so hard to exchange, and the people are so afraid of it becoming worthless, that countless people have livelihoods, full time jobs running backpacks full of RMB notes (the largest denomination is about $20) between Hong Kong and the Mainland. Believe it or not, a currency that is not fully convertible is actually a lax , or recent rules in Greece and Spain which prevent the outflow of capital, restricting residents to withdrawing a mere few hundred dollars a day. Who is to say this won’t happen where you live? As the currencies become even more leveraged and unstable, the governments that back them will try to avoid the masses from transferring out of the failing currency. Unless you have a bank account set up in a foreign country (which is very easy and simple to do) – or a corporate bank account (such as a Belize Bank account tied to a Belize LLC) set up in a foreign country – you may find it difficult or impossible to transfer out your life savings if things start to go wrong. After your funds are no longer able to be transferred, higher taxes are naturally the next step. 3. Taxes are getting higher, harder to escape, with harsher punishment Someone puts a gun to your head, and orders you to give them half of your income or you will be arrested and thrown in jail. If I did that to you, you would call it robbery. if your government does that to you, you call it taxes. What may be worse is the absolute waste of bureaucracy that stems from the inefficient waste of creating rules, on top of rules, on top of rules for new taxes, to stop people from avoiding the old taxes, continued on ad naseum. Some places in the world, the taxes are low, comprehensible, and happily paid by citizens. Why Higher Taxes?

Simply put, the alternatives are more painful. As politicians become more desperate to maintain the status quo (huge governments and cushy pensions) there are traditionally 3 ways to “re-balance” the budget in the long run austerity measures – As if politicians could bring themselves to be frugal when creating a budget, they have very little incentive to do so, as they are extremely unpopular with the masses who want handouts. printing money – Quantitative easing is essentially central banker trying to blow up a balloon (the world economy) with hot air (fiat currency) that has a giant hole in it (debt, inflation) higher taxes – the 3rd way a government will continue their insane expenditure spending is to implement higher taxes. The issue here is known as the “Laffer Curve” and is an economic phenomenon whereby the following occurs: Governments Raise taxes ==> Collect Less Money Governments Lower taxes ==> Collect More Money How could it be that governments raise taxes but end up collecting less money? The Laffer Curve posits that as the people are threatened with higher taxes, they have a greater incentive to spend more time to minimize, or even illegally avoid taxes. In Hong Kong, when at worst, you only have to pay about 17% of your income to taxes, there is little point to avoiding or even minimizing taxes. You just pay them, because it is simple, and easy to do so. Meanwhile, in France – you can sometimes have over 50%+ of your income owed in taxes, (and the PM wants to raise it to 75% if you earn over 1M Euros) it just so happens that talented and affluent individuals, like Gerard Depardieu will give up French Citizenship. If you take a look at a country like Monaco – which has the highest GDP per capita in the world, but actually no taxes, it goes to show that taxes may not even be necessary to run a successful economy. (By the way I’ll be in Monaco next month, so if live in the area, drop me an email). As taxes get higher, it becomes necessary to institute even further capital controls. And as further capital controls come, taxes continue to increase.

4. Overcrowding and population controls The world is getting more crowded. Have ya been to India or China? Its downright frightening how many people live on Planet earth. There are over 1.3 billion people in china and 1.2 billion people in India. And most of them are guys. And hey, lets be honest, the party is never as good when you screw up the guy to girl ratio.

Pollution is reaching unprecedented levels. For instance in china, the smog is so damaging that the BBC has reported on the existence of cancer villages. China’s response to the rapidly expanding? Banning BBQ. Leave it to big governments to completely miss the point. Perhaps if China took a look at the massive amount of coal power plants, then perhaps the world could start making steps in the right direction. However, there will be no stop to consumption until the world runs of fossil fuel, which might happen sooner than you think. Many predict that we will reach the peak in 2033.

5. Commodity Crunch Laws of economics dictate that anything with a limited supply and a rising demand will see an increase in price. The coming decades there will be a huge increase in the cost of things like gold, oil, silver, rare earth metals commodities which are inherently valuable and easily traded, with a limited supply unlike corn, wheat, soy, etc. If you want to make big money in the coming years, borrow at the ultra low rates, and bet on commodities. The newest rage in Oil & Gas is the acquisition of natural gas via fracking, which is extremely damaging to the water supply. This much is clear, coal, oil, and gas are polluting the world; selling out future generations for cost and convenience sake. This is why renewable energy is so critical for mankind to continue to innovate, iterate and improve, so that we can stop destroying the earth we depend upon.

6. Diminishing clean food and water supplies As the world becomes ever more crowded and polluted, there will obviously be increased pressure on the availability of clean food and water. I’ve talked about the importance of clean food and water here and I’m not alone in this sentiment. When I have the chance to chat with international investors like Tim Staermose, I routinely pick their mind on this issue, and we all concur that there will be a dramatic demand for organic food and potable water. Others stateside feel the same way. That’s why the ‘survivalist’ mentality, homesteading, and rainwater harvesting is all the rage these days. And for good reason. Is it acceptable for government to arrest citizens for drinking raw milk, collecting rainwater, or having a vegetable garden.

People will take a lot of crap from their government before they do anything, but when you start threatening their livelihood and ability to survive, a switch is turned. When this happens, watch out. There is very little incentive to start a revolution based on higher taxes (lest we forget, that was how America was born) but when there isn’t enough food to go around, watch out, because there will be massive…

7. Riots and War We will see a war of massive proportions by 2050. There are too many players with incentives to control and dominate the worlds dwindling resources. As countries seek to grab up the last “easy” resources in the world – the battleground could well be Africa. China has been investing in Africa for years, and now the Obama administration is setting up drone bases in Niger. It is impossible to predict where and when the next major wars will occur, but the world has been at war constantly since WWII. At this point, peace would be the anomaly. So the question becomes: What are YOU going to do to protect yourself, your savings, your family, your legacy? These “things” do not exist in a vacuum, they exacerbate and accelerate each other. They could happen overnight, before you have action to prepare. This ins’t “sky is falling” chicken little post – this is saying look: When you examine the macroeconomic conditions that that the aforementioned 7 truths are inevitable. What can you do? Think International. Adopt a worldwide perspective where you constantly seek to establishing flags globally so that you can pivot your wealth and your self to a safer location should things start to deteriorate where you currently live.

Flag Theory Get a 2nd passport without taxation on a worldwide basis that allows for freedom of movement. Establish a tax domicile or residency so you no longer pay high taxes. Own physical land with clean food, potable water, and renewable energy. (more on this soon) Place your assets in different baskets that hedge against different scenarios. For instance, get a gold backed debit card. Start a business in an emerging market.

Top 9 Ways to Fly Under the Radar These days it is becoming harder and harder to live your life without some kind of interference from the government. Individual sovereignty has become virtually lost. There are, however, some things you can do to fly under the radar of government and become independent. This is a list of tips and tricks for living your life without the burden of government, or to help you if you simply wish to disappear.10 Leave no Trails This means pay in cash – always (unless you own an anonymous credit card), shred any documentation you do not need (use a decent shredder that turns your paper in to dust – authorities can piece together the basic type of shredded documents). Don’t use your real name if possible, and definitely don’t apply for credit. Your credit report is like a big map pointing right to you.9 Secure Yourself Online If you are going to be using the internet in your secret lifestyle, you should do everything you can to secure yourself online. This means using PGP (encryption software) when emailing people (and using an email account that can not be traced to you directly), and, most importantly, it means saying nothing online that you would not be prepared to see on the front page of the newspaper.8 Get an Anonymous Mobile Phone Most countries allow you to buy prepaid mobile phones that do not need to be registered to a name or address. Once you get your prepaid sim card, only top it up with cash and do not give anyone the number. Use the number exclusively for making outgoing calls. If you are planning to contact someone that may be looking for you, you should discard the prepaid sim once a month and try to buy prepaid sims online that will let you call from a foreign number.7 Give up the Perks In order to reduce the chances of someone finding you when you don’t want to be found, you need to stop using things like frequent flier points, ATMs (unless you have an anonymous card – see item 2), cable, video store memberships, etc. For entertainment there is always the internet – and if you are wanting to avoid having an internet account linked to you, just download the latest music and movies from a free internet cafe.6 Live Simply The best way to remain anonymous (and therefore to be ignored by the powers that be) is to live a simple lifestyle. If you lead a flashy lifestyle, live in the best house, drive the latest Bentley, throw world

famous parties, people are going to start paying attention and the taxman is going to wonder how you can afford it. In the case of tax evasion, some governments can even order you to give detailed evidence of how you have paid for your high price consumer goods if they are unable to find a taxable source of income in your life. This can then be used as evidence of tax fraud. Become a Diplomat For 75,000 Euros, you can become an official diplomatic of one of two stable Southern African (but not South Africa) nations. The result is that you are exempt from tax in your country of residence from all income earned outside of the nation. Your home becomes an officially registered consulate and you receive immunity from the governmental forces. While this won’t help you with anonymity, it does help you with avoidance of the law.4 Use a Mail Drop A mail drop enables you to receive mail from anywhere without your real address becoming known. It can act as a complete barrier between you and companies on the internet that you buy goods from, and can help protect you from people who are seeking information on your wealth based on your home’s location and public records. Coupled with a false name and false documentation, you can virtually become a new person.3 Become a Perpetual Tourist This is perhaps the best method of becoming a sovereign individual. A perpetual tourist keeps his finances in tax havens and then travels the world spending as much time as is necessary to avoid becoming official resident anywhere. Tourists are often treated better than residents and you can choose to live in nations that are closer to your way of thinking.2 Get an Anonymous Credit Card Anonymous credit cards are quite easy to come by on the internet. You simply provide upfront funds and an email address and you are emailed your card number and expiry date. When you use the card online you can give any name and address and security code as the clearing house will only take in to account the number and expiry date. This means that you have less security as it is easier for someone to steal your card number and use it – but you have 100% total anonymity. Combined with a mail drop, you can purchase any goods you want and they can never be traced to you.1

THE PERPETUAL TRAVELER AND THE 5 FLAGS THEORY I am always looking at new approaches to lifestyle and living in general. I am wondering who might have any direct experience or educated opinion on the PT concepts, and what value they may entertain for those taking a survival approach to life and living in general. So… Who has any direct experience or an educated opinion on the 5 Flags Theory and PT? Please share.

PT - The Perpetual Traveler Permanent Tourist, Prior Taxpayer = Perfect Thing! INDIVIDUAL SOVEREIGNTY In a nutshell, a PT merely arranges his or her paperwork in such a way that all governments consider him a tourist. A person who is just "Passing Through". The advantage is that being thought of by government officials as a person who is merely "Parked Temporarily", a PT is not subjected to taxes, military service, lawsuits, or persecution for partaking in innocent but forbidden pursuits or pleasures. Unlike most citizens or subjects, the PT will not be persecuted for his beliefs or lack of them. PT stands for many things: a PT can be a "Prior Taxpayer", "Permanent Tourist", "Practically Transparent", "Privacy Trained", "Party Thrower", "Priority Thinker", "Positive Thinker", "Prepared Totally", "Paranoid Together" or "Permanent Traveler" if he or she wants to be. The individual who is a PT can stay in one place most of the time. Or all of the time. PT is a concept, a way of life, a way of perceiving the universe and your place in it. One can be a fulltime PT or a part-time PT. Some may not want to break out all at once, or become a PT at all. They just want to be aware of the possibilities, and be prepared to modify their lifestyle in the event of a crisis. Knowledge will make you sort of a PT. A "Possibility Thinker" who is "Prepared Thoroughly" for the future.

PROSPECTS FOR INDIVIDUAL FREEDOM Read history and you'll find human society is much like a river. At first it flows straight. A torrent of water breaks through seeking the shortest route to the sea. It goes in more or less straight line downhill. Then, every river or creek gradually bends like a snake. The great mathematician, Albert Einstein once wrote a paper explaining the mathematical reasons why water can't help winding and turning in every greater complexity. Depending on river flow and terrain, there will be many variations; shallows, rapids, eddies, branches, even dead-end ponds

or lakes. Life forms grow and adapt to the changing river. Usually changes are imperceptible. Every once in a while there is a big flood. Then for a time, the river flows relatively straight again. For a little while. In society, groups of human beings start off with simple rules which gradually develop into even more complex systems. Some members of the group benefit at the expense of others. Sooner or later, bends and kinks are eliminated by a major change in the government form. This can be the result of war, epidemic, or simply exhaustion. But surely as a river develops bends, a new bureaucracy will eventually grow. What is perceived as an onerous burden to one person (a tax?) is perceived as a career opportunity to the tax collector. Thus, a good number of people at any time believe they are living in the best of all possible worlds at the best of all possible times. Simultaneously, others feel oppressed. Someone with the PT mentality who isn't living the PT life will perceive this situation as intolerable. "Everything is going to hell. Nothing is as good as it used to be." What is the reality? Simply that some people in any society (or fish in a river) will have it good (or bad) some of the time. Most of the people will have it good (or bad) most of the time. A few people will seem to have it very good all of the time. As I said in PT, happiness is a state of mind, a perception. Your reality is not necessarily my reality... ...A PT by definition is a non-conformist in a highly regulated, highly taxed, first world society. Thus a PT must adapt in a special way. "How do I cope?" you ask. "How do I get myself and my family a material lifestyle better than anyone else or at least better than average?" Merely asking this question would be offensive to a socialist who wants all people to be 'equal'. "How do I avoid conscription, confrontation, imprisonment and perhaps even death at the hands of my own government?" (This question is possibly treason in certain locations). The answer for a PT is not difficult. Figure out what kind of behavior is being rewarded in the town (or country) where you live, and what kind of behavior is being punished. Then take the obvious path to make more money, sex, power, immortality, glory or whatever it is that you think you need. Obviously you must avoid activities or behavior that gets you into trouble locally. If you can't exist comfortably where you are, or can't get what you want where you live; then look for opportunities (and restrictions) elsewhere in the world. Consider a physical move to where greater opportunities exist. Your particular river may have too many bends for your taste, but for the foreseeable future there will always be plenty of other rivers. Most fish are attached to a particular river, but you can choose to move to the environment that suits you best. In some countries, entrepreneurs are richly rewarded. In the USA this is still true, but more so in unregulated, new fields of endeavor like say, computers. It is hard (but not impossible) to go to jail for coming up with the best selling original innovation in software or hardware. Try to be innovative in American or Swiss banking and you will be breaking a million and one rules. In countries like the Philippines and Thailand, it pays better to be a politician or army officer than a businessman. In Iran or anyplace where religious know nothings are in control, being a traditional community religious leader is less dangerous. It leads to respectability power and a good standard of living. You must match your personality and talents to a community that

appreciates (or at least tolerates) you. Thus, the question to be concerned with is not "Where is the world heading?" but rather, "Where in the world should I be heading?" The world's communities are heading in a myriad of different directions -- all at the same time. This is where the PT concept comes into play. By identifying several countries or communities where your favorite diversions or perversions are socially acceptable, you will avoid going to jail. If you like to smoke grass, do it in the Netherlands where it is legal. Obviously if you enjoy booze, don't go to the Muslim world. The key is to go to those locations where you can legally and openly do what you love most. If you want to earn a lot of money, or have power over other people, there are places in the world where you are far more likely to succeed than other's. Having more than one passport, and an open mind is all that you need to make that vital difference to the amount of 'quality' you get out of life. You can be a Bad Guy! It doesn't really matter that ecologists make life difficult for real estate developers in your particular suburb. There are plenty of nice places in the world to develop (or depending one one's point of view, despoil). Ecology isn't fashionable in Africa. Even if you are a homicidal maniac, you can always find some place in the world to be hired as a mercenary and hack away at innocent victims. And if you don't want to be an innocent victim, as a PT you can always go and live somewhere that is relatively safe from violent crime (like Monaco, New Zealand, Japan or Liechtenstein). It is silly (in my opinion) to say thing like 'individual freedom is being eroded all over the world,' It simply isn't true. There are different sorts of freedom and different sorts of slavery going on in hundreds of different places. One can have a Swiss Family Robinson sort of freedom by becoming hermits on an uninhabited island. Living with or near other people always involves some compromises and some advantages. My idea of an ideal place to live is where I pay little or no taxes, don't have to risk getting my head shot off in any wars and I have a first class Chinese take-away nearby. We can get what we want by living in any one of a dozen prosperous tax havens. As a PT, you can expand your place of living options to virtually any locality. Unless you are an American, you needn't renounce and you don't even need two passports. Australian PT's live invisibly in New Zealand and Kiwis live in Oz. Any European can live indefinitely and invisibly in any other European country. The PT, being perceived by local cops and bureaucrats (if perceived at all) as a "Passing Through Tourist" who minds his own business, keeps a low profile, and avoids trouble. It is inconceivable that any other member of my family could ever be conscripted into any military service, jailed for any offence, or sent a bill for income tax. In any of the places I have lived as a PT over the dozen years, if there was the merest whiff of trouble, I was off like Bambi. The only time I had to move was when I made the mistake of confiding my PT status to my mail-drop operator. To be a successful PT, your status and PT life should be your most closely guarded secret. But that's my point of view. General Colin Powell would no doubt say that he found freedom and a satisfying career in the military when other doors of opportunity were shut to him because of his race or background. General Powell is not a PT and surely wouldn't want to join our ranks any more than we would want to join the US army.

Fact to remember; most people in the world are not PT material. Over half are directly or indirectly employed or supported by the government! They wouldn't go for a PT style existence even if they could. If they thought about us, which we hope they won't, it would be to classify PT's as Penitentiary Targets. Not even all millionaires are potential PT's An individual (one of my consulting clients) became a PT and bitterly regrets it. He cashed out of a multi-million dollar business, obtained another passport, picked up all his chips and moved to another country where he took up residence with one of the world's most beautiful and pleasant women. Yet he complains that his kick in life was having the prestige (and problems) that came with a lot of employees, a huge income, and a big, visible lifestyle. His old life included recognition he misses. Stuff like giving parties for the local lights, photos and a mention in the town's society pages. 'Now,' he says, 'I am a rich nobody!'. He finds the PT life boring. How about you? Unlike this client, once I had enough money to live well, I found more satisfying things to do than running a business. My business career was a stepping stone, not something I wanted to do until I croaked in my office swivel chair. It was no thrill or satisfaction to spend most of my time defending inevitable private lawsuits and fighting public regulatory agencies. I found being a recognized local celebrity was a royal pain in the butt. Obviously there are different strokes for different folks. It's also a function of age. At 20-35 maybe you need to make your mark on the world. At 55 maybe you love and read more. Former Princess Di (who was younger than the typical age at which people decide to become PT's) apparently most of all, feared being sidelined out of the public eye. This writer feels the other way 'around'. Why? For lots of reasons. One is that people in the public eye are envied. There are and always have been non-entities lurking around. They want to harm those they envy. Little punks with lethal weapons stalk the rich and famous. Other threats are litigants, bureaucrats or journalists who can and will cut you down with lethal paperwork. Notoriety, display or anything that attracts envy (or the other side of the coin, admiration) is to be avoided, at least by myself. Look at what happened to John Lennon. He never hurt anyone! The guy who shot him had no connection with him at all... How much dough do you need? One clear requirement for PT freedom and mobility is either a net worth that enables you to live off your assets, or a portable occupation that allows you to earn money without licenses, permits or a permanent place of business. In my travels I've met street musicians, computer programmers and English teachers who are PT's though they may not know it. My report "PT", identifies a lot of portable jobs. The outlook for PT's is good. Even if places like the U.S.A. attempt to impose an exit tax on assets, there will always be ways for people, who make an effort, to move themselves and most of their assets to another country. In the old South Africa, rich people who wanted to expatriate assets and themselves often build yachts. They bought art works, jewellery, stamp collections and other portable wealth. Then they simply sailed off into the stars. A small percentage but large number of Germans and Italians (Jewish and otherwise) were able to exit Europe for the U.S.A. and South America. They saw (as almost anyone could see ) that war was in the air and things were going to get worse before they got better. People killed or

imprisoned by governments usually have years of warning and plenty of signals that it is time to leave. Don't be a Prisoner of your Possessions "Once we begin using material products to define ourselves, we are doomed to be on an endless treadmill of dissatisfaction". - Erich Fromm - in his book "To Have or To Be", 1979. A good friend of mine who was in the midst of a crisis didn't leave. Why? Because his wife insisted on staying with her old friends, furniture and crockery. He will loose is freedom if he allows this foolishness. Another friend said he'd rather go to jail for twenty years than be separated forever from his old gang. Another person, an author known amongst his small niche of readers, didn't follow his own advice and ended up in jail in New Zealand. He only got out of being extradited back to America by having a huge bribe! Talk about arrogance! Their is an old French saying 'Chaque un à son gout'. Each to his own taste. Indeed, I prefer to be "Prepared Thoroughly". The Only Certainty is Change Some people (probably the vast majority) think that the centre of the universe is their home town. They actually think that they couldn't make it, or be happy anywhere else. Generations of people stay in hell holes or refugee camps where life itself is a terrible struggle. It is clear to them (from other who do escape), that a little effort and initiative would make a new life possible. But the majority don't make the move. They don't seek to better themselves. Why? The vast majority prefer the certainty of misery to the uncertainty of change. Perceptions For people living in relatively prosperous countries like today's U.S.A. or Scandinavia, some of the most wealthy and privileged will perceive that they are slaves living in gulags, birds in guilded cages. It is clearly a question of perception. But by becoming a PT and taking advantage of the opportunities available, any person can physically live wherever they want and escape most of the perceived negatives in their life. Finding freedom in an unfree world is possible if you simply decide what it is that you want to avoid, and what is important to you. Then, you take the steps to go where you want and do the things you want to do... You Can Go Back to Where You Started From! ...A future PT doesn't disclose his PT intentions to anyone in his home country, especially lawyers, accountants, politicians, journalists, or potentially hostile ex-wives. We won't go over the motivations of all of these categories but a lawyer's interest is in making continuing fees and getting publicity to generate new future clients. This is exactly what a PT needs to avoid. The big move, when it comes, is essentially a divorce from the system. It's an annulment from the old country's bureaucrats (government employees), lawyers (officers of the court) and accountants (IRS collection agents). It should cut you off physically from any potential litigants, especially alimony seeking women. To Summarize: Don't waste time on meaningless speculations by trying to figure out what will happen in the world over the next 2000 years. Fine if you want to write a book of predictions for which there is always a market. But for your own personal use there is no point in trying to figure out where the world his going politically, socially or economically. There is not even the hope of getting

any useful answers. The only answer is that everything will change. A 'PT' is Pragmatic. The PT mentality merely asks "Am I happy with what I am? Do I enjoy who I'm with and doing what I do?" If the answer is "No" (to any question), the next step is to make changes. Start by reading, or rereading my 'PT' Reports. The only answer is that everything will change. A 'PT' is Pragmatic. The PT mentality merely asks "Am I happy with what I am? Do I enjoy who I'm with and doing what I do?" If the answer is "No" (to any question), the next step is to make changes. Start by reading, or rereading PT Club's Reports and books. Education is the key. Knowledge lights the way! The answer to your future lies in asking yourself, the right question. Making predictions for the long term future is not necessary. The very essence of being a PT is staying prepared for the unexpected and unpredictable changes. It is only necessary to 'see' the options and choose. The way forward is in your control, so stay in control and have a happy and fruitful life...

THE FIVE FLAGS THEORY People of intelligence and wealth associate themselves with different countries for different reasons. In PT, you can learn about Dr Hill's Five Flag Theory. Discover why no one with common sense gives all their assets or allegiance to any one flag. The Five Flag Theory will help you conduct all your PT business safely and effectively. Flag 1: Business Base These are places where you make your money. They must be different from your personal fiscal domicile, the place where you legally reside. Flag 2: Passport & Citizenship These should be from a country unconcerned about offshore citizens and what they do outsideits borders. Flag 3: Domicile This should be a tax haven with good communications. A place where wealthy, productive people can be creative, live, relax, prosper and enjoy themselves. Such a place should not be threatened by war or revolution and preferably should enjoy good levels of banking secrecy. Flag 4: Asset Repository This should be a place from which assets, securities and business affairs can be managed anonymously by proxy. Flag 5: Playgrounds These are places where you would actually physically spend your time.

INTRODUCING PT: THE SIX FLAGS THEORY “Where Liberty Is, There is My Country” Benjamin Franklin What’s a PT? A PT is somebody who is Prepared Thoroughly for any eventuality or situation. A PT lives stress-free and sleeps soundly at night because he or she is Prepared Thoroughly, free to concentrate on the good things in life. A PT is a Prior Taxpayer and a Privacy Thinker – a Perpetual Traveler or Permanent Tourist who is just Parked Temporarily or Passing Through. PT is also a form of defense: Protection against Tyranny. Some people have called PT “a coherent plan for a happy, prosperous international lifestyle.” PTs would probably just say it is the ‘Perfect Thing.’ Under the guise of helping us (“for your own safety”) governments have intruded into every area o our lives, taking the largest part of our earnings in taxes and rewarding us with little aside from restrictions and harassment. PT is a way to assert your freedom – to escape from the growing repression and intrusiveness of Big Governments everywhere. Like the corporations who have learned to internationalize and diversify, PT shows productive people how to get out from under the thumb of Big Brother. An alternative title could be: How to Remake Yourself into a One Man Multinational. PTs don’t ask for or expect government help or protection in any way. In the same way, we refuse to contribute to superfluous socialist welfare states. But we don’t believe in fighting. We will simply resist quietly, under the radar. Hopefully nobody will ever notice we have gone!

PT is not a fixed set of rules. It’s just a way of thinking… an attitude to life. The originator of the PT concept does not even wish to be identified. But he is still going strong today, publishing an excellent investment newsletter. In a classic 1950s pamphlet, he explained how this ideal can easily be achieved by spreading your interests out over various unrelated countries. It’s not expensive (indeed it’s probably cheaper than any alternative). He wrote about international arbitrage through the use of three different nations, jurisdictions, or – as he called them – ‘flags.’ Later, in the 1980s, legendary author W.G. Hill expanded the number of flags to five – so it became the ‘Five Flags Theory.’

With the arrival of the Bye Bye Big Brother ‘Black Books’ in 2006, a sixth flag was added to the previous flags. Marvelous new opportunities had been opened up that were ‘made for PTs’ as a result of the internet. Cyberspace was added as the sixth flag that brings all the other five flags together. W.G. Hill, and later Grandpa, have always been at pains to point out that the Six Flags Theory is not a hard or fast set of rules. It is rather an attempt at putting a little structure to the PT lifestyle so

people can understand what international arbitrage really means. Almost nobody really lives the six flag lifestyle, but many people choose to live parts of it. Living is an art, not a science, and each individual will interpret PT ideas in his or her own way.

Below is a listing of the six flags of Bye Bye Big Brother.

The PT’s Six Flags Unfurled

First Flag CITIZENSHIP

In addition to the passport of your native country, you should hold one or more passports from small, neutral and respectable nations. They do not try to tax their citizens living outside their territory, nor to draft them into military service. These passports should ideally allow visa-free access to as many nations as possible. For ease of travel, we recommend European Union followed by Latin American passports.

Second Flag RESIDENCE HAVENS (DOMICILES)

This is your official residence. A country which regards you as a bona-fide resident, although you might not actually spend too much (or any) time there. It should be a country which does not tax income earned abroad, the effect being that you don’t have to file any personal tax returns anywhere. Tax havens like Turks and Caicos, Panama and Andorra are good low-budget candidates. Bermuda, Liechtenstein, Switzerland and Monaco are more up market – if you can afford them. In the first world, the UK, Italy and Ireland are also worth considering because of their no-tax treatment of foreigners. Most Asian, Central and South American countries do not tax offshore incomes, and many of these countries, like Paraguay (and believe it or not, North Korea!) have no income taxes at all. They are de-facto tax havens. But then again, the whole world is a fiscal paradise for PTs who arrange their paperwork properly.

Third Flag PLAYGROUNDS

These are places where you physically choose to spend most of your time. They depend on your personal taste. Quality of life is top priority. Because of legal restrictions on how long one may stay without being considered resident for tax purposes, it may be necessary to have from two to four playgrounds. But the fact is, you can easily make arrangements to spend all of your time as a PT in one playground if desired. It’s just a question of getting the paperwork right.

Grandpa’s personal recommendations. For no nukes nor pollution and good fishing: New Zealand. For the most interesting sex life imaginable: Thailand. Other sex-havens include Cuba, Paraguay and The Philippines. For a superb year round climate: California, USA or Queensland, Australia. For the gourmet, we give top honors to the French Riviera and Hong Kong. Italy gets third place for excellent food. For stimulating parties and an active social life: Paris, London, Rio de Janeiro or San Francisco. For the best things at the cheapest prices: Singapore, Taiwan and Hong Kong (for consumer goods). Fishing in Europe? Ireland (summers only unless you love cold, damp weather). Uruguay? Punta Del Este is near Buenos Aires (great for a winter home).

Fourth Flag BUSINESS BASES

These are places where you actually earn your money. If you own an existing business that can’t be moved, you may not have much choice in the matter: you may have to bite the bullet and pay some taxes. Almost all businesses can be gradually shifted abroad by outsourcing and exporting more. If you earn money with your skills, you can probably re-domicile and operate in cyberspace (on the internet). Or choose an offshore tax haven as your physical business base. Then you are tax free. Either way, your business will be incorporated, to insulate against personal liability. Ideally, you will set up the paperwork properly and you will never have to file personal tax returns, nor need any permits, licenses or special dispensations.

Good access to contacts, labor markets or materials is also important. London, Tokyo and New York are the big centers for finance and insurance. Zurich, Milan, Singapore and Frankfurt are among the second-ranked contenders. But in today’s global economy, you could frankly base your business anywhere. Wild-card contenders such as Estonia, Malaysia or Panama are out there competing to offer you a business haven. They all deserve a serious look.

Fifth Flag ASSET HAVENS

These countries are where you keep your savings and investments, safely salted away from where your money is actually earned or spent. They should score highly on respect for privacy, communications, professionalism and stability. Your assets, kept in secret numbered accounts, will be controlled with hacker-proof encrypted electronic messages or personal visits only. Naturally, you don’t live, play or do much business in the place where your assets are discreetly planted. And it is important to have a banking passport from a country that does not (by treaty or otherwise) insist your banking haven give them a full dossier on your activities.

You can have several asset havens. Top-ranked candidates include Liechtenstein, Switzerland, or Austria for non-EU or US citizens. Bankers in other locations may not yet be up to the Swiss standards, but they fly under the radar and are more accessible to people with moderate wealth. Read more about Private Banking Secrets.

Sixth Flag ELECTRONIC HAVEN IN CYBERSPACE

This is your Internet Business, Communications and Cash Transmittal System. It’s so cheap to rent server space that it doesn’t matter much where your servers and websites are located. You can be physically anywhere, but invisible to all. Have a few servers, and offshore sites. Best for them to be in places like Taiwan, Costa Rica or Panama – or on far off islands, like Tuvalu or Niue.

Better still, why not just totally distributed so you can change jurisdiction automatically every two seconds – technology makes it possible and it is becoming easier by the day. Your internet presence should emanate from any place where the net is unregulated and untaxed. Your electronic base should be anywhere – where you are not. With no physical presence, you can’t be served with process or sued. Your encrypted communications, files and data banks will be safe from private or government snoopers. If ‘authorities’ in your server’s host country bother you – or if an ISP gives you grief – you just press ‘delete.’ With your sixth flag you can take advantage of many new opportunities in the 21st Century Information Age.