It is said that money makes the world go ‘round, but as we head into another new year, are you still going ‘round with questions about how to keep your money safe, what to do with it and how to invest? If so, you need to read on before another twelve months pass you by. Everywhere you look there are potential problems for investment and new business and wealth preservation strategies, so it’s time to make a plan about what to do next.
It was not that long ago you could “asset protect” your life by using trusts, buying insurance, interposing international structures and using straight forward tax planning.
For many of us, good sound business sense went a long way when it came to the goal of preservation of capital. But that was yesterday. To say it is a new day is quite an understatement in the world of wealth management and asset protection. Remember when people would talk about buying a CD from a specific bank. Today, it seems comical to be putting money into a bank CD at essentially zero percent, doesn’t it?
In 2011, the Dow was up modestly, and as we enter into the first thirty days of 2012, jobs are taking a front seat as the number one debate on the agenda for this election year. So, how are we doing? December saw 200, 000 new jobs but it’s time to dig a little bit deeper into those figures to fully understand them.
If you take a closer look at the jobs food chain, the start of jobs creation would be new upstart companies or perhaps IPO’s. But according to Dealogic.com, last year did not see the US in first place in the IPO market. In fact, it was Hong Kong that was in the number one spot for IPO’s, meaning for the third year in a row, Hong Kong beat New York City for the number of IPO’s across the board. Furthermore, in 2011, Hong Kong saw 31-billion dollars of IPO’s along with an additional 41-billion dollars for mainland China.
It was actually the Euro crisis that helped point the US economic blame in another direction or at least temporarily stall the ill will toward the US. But, as the Euro zone sorts through the maze of challenges, the solution may be long and drawn out. It goes without saying that this type of media coverage does not sell ad space in any medium.
On a personal note, 2011 was indeed a very strange year. In fact, I have never fielded so many calls from potential clients anxious to get all of their assets out of the US, the US dollars or, in fact, anything related to the US.
For some people, it seems to be that despising anything US concerning money or jobs was certainly in vogue for 2011, many blaming Washington for alienating all people and businesses with cash, both foreign and domestic. Not to mention their frustration with the IRS having a field day with ex-pats. Bankers all over the world believe the Department of Justice is the New Death Star, people storing gold and demonizing any business that crosses borders from the Obama administration seems to be the order of the day.
The hidden language, that we will refer to as gems, in FATCA, The Bank Secrecy Act, The Hire Act, The Patriot Act, Sarbanes-Oxley Act, Dodd-Frank have gone a long way in the US becoming the country to be feared, unfortunately that includes its people. While each piece of legislation falls under the guise of “government protection” of some sorts, the unintended consequences have been less than business friendly.
Digging deeper into it, fear seems to be at the heart of everything.
So, instead of business people conquering the world and making trade partners wherever we go, Washington is busy building walls, traps and unsustainable gotchas for our citizenry.
Now as we enter into another year, what are we to do in 2012, as the Mayan Calendar Year of the end times, prepare for Armageddon? Well let’s hope not. …
The challenges for your assets:
– Currency risk
– Jurisdiction risk
– Asset class risk
– Price inflation
– Tax Compliance
Just to name a few. …
As my grandfather would always say: “Takes more knowledge than a man in college!”
So, what is the answer? The US is heading for the Euro styled model right now. Keep in mind, compliance costs for doing business and accumulating wealth will eat more into the bottom line.
Talking about 2012 would not be complete without talking about social media and what’s to come. In reference to global business, ponder these numbers a bit. Facemash turned “The Facebook” turned “Facebook” will soon have over a billion users.
According to Facebook, the statistics are staggering and are only going to continue to grow. It seems while our governments have been busy building walls, Facebook users are building “walls” of their own and tearing down borders in a business friendly manner. Notice that 75-percent of Facebook users are outside of the US.
Take a quick look at these current Facebook stats:
People on Facebook
· More than 800 million active users
· More than 50% of our active users log on to Facebook in any given day
· Average user has 130 friends
Activity on Facebook
· More than 900 million objects that people interact with (pages, groups, events and community pages)
· Average user is connected to 80 community pages, groups and events
· On average, more than 250 million photos are uploaded per day
· More than 70 languages available on the site
· More than 75% of users are outside of the United States
· Over 300,000 users helped translate the site through the translations application
· On average, people on Facebook install apps more than 20 million times every day
· Every month, more than 500 million people use an app on Facebook or experience Facebook Platform on other websites
· More than 7 million apps and websites are integrated with Facebook
· More than 350 million active users currently access Facebook through their mobile devices
· More than 475 mobile operators globally work to deploy and promote Facebook mobile products
Facebook was born and bred in the US, along with Twitter and many other social networking sites. I am optimistic about the year ahead, and I am also optimistic the US can be a great place to do business again. We now have more regulation than ever before, which simply means more paper work. Having said that, companies like Facebook will teach Washington how to act in a global economy.
For 2012, we will be reporting throughout the year on how to keep you in tax compliance, keep you asset protected, and help assure your nest egg is preserved, because despite all challenges today, the US still represents an attractive place to invest as long as you are the one making sure you know where and how your money is going ‘round.