If you took a peek into the portfolio of an HNWI, or a high-net-worth individual, it is very likely that a lot of the investments contained within are international rather than domestic. For decades, the wealthiest individuals and corporations have been turning offshore when they want to preserve and protect their assets.
However, you certainly don’t have to be a billionaire, or even a millionaire, to follow suit. Find out why so many wealthy individuals choose international investments and how you can make the most of the very same benefits for your financial future.
The more money you have, the more you have to lose. For that reason, many wealthy investors value diversification. Rather than keeping all of your assets within a single bank account, a single industry or even a single country, spreading them across multiple jurisdictions can help to mitigate risk and give the investor a greater sense of security.
You might choose to invest in multiple currencies, or you could buy stocks in markets throughout Asia and Europe in addition to North America. Hedging your bets in this way ensures that even in a major economic catastrophe, your assets will be protected as much as possible.
Lowered Tax Rates
When you’re making a significant amount of money, as many high-net-worth individuals do, you’ll also likely pay a lot more in income tax and capital gains tax. Over time, these taxes can erode your assets and leave you with less in profit than you anticipated.
Even if you aren’t making millions in profits on investments or income each year, moving some or all of your assets to an offshore destination could go a long way in reducing your taxes. In Belize, for instance, any profits you make on international investments won’t be taxed as capital gains, which can be a huge advantage for your bottom line.
Greater Financial Security for the Next Generation
Even if the richest individuals have more money than they need, they may still want to protect it in order for their dependents to also enjoy financial security. You may not be making your grandchildren millionaires, but you can still choose international investments as a way to preserve assets for your loved ones.
You might invest in offshore life insurance for your spouse, or you might establish an offshore trust that earmarks cash, real estate and stocks for your children once they reach a certain age or a milestone in life, such as being accepted to college.
You don’t have to be wealthy to appreciate confidentiality when it comes to financial matters. Domestically, there is little privacy to be had, which is what motivates many to take their holdings overseas. If you want to handle your financial affairs with confidentiality or you just want a lack of government intervention in your banking and investing, then international banks in places like Belize might be the best choice.
Many of the wealthiest individuals opt for international investments. Whatever your net worth, investing internationally can bring a number of significant financial benefits.