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-By Caleb Jones
I already have a series going on this blog about living abroad part time which I’ve written several articles about, and I will continue that series. This article is the start of a new series that will document my process and journey of permanently moving out of the United States, which will happen several years from now. Hopefully, from this series you will learn some techniques, as well as gain an insight into my thought process that may also help you if you wish to escape the slowly dying West.
As I’ve stated before, my current plan is to live abroad part time for the next nine years, spending 1-3 months out of the country every year. I’ve been doing this for a while now and will continue to do so. Over time, I may even expand that 1-3 months to 4-5 months, but that depends on my mood and the economic state of the US over the next few years. I'm pretty flexible because of my lifestyle.
Then, around 2025, I will permanently shift my home base to somewhere outside of the United States, and swap things so that I will be there (or elsewhere) 8 or 9 months out of the year, while returning to spend the summer in the US to visit my friends, family, women, children, and possibly grandchildren if I have any by then. My son is 24 and my daughter is almost 18, so in the next nine years grandkids are likely.
Right off the bat, you should notice that this is very different than me moving to some distant land and never coming back. Despite its many problems, I have a deep, emotional attachment to the US, since I was born and raised here. I’m sure you feel the same way about your home country, even if you hate it. If you live the Alpha Male 2.0 lifestyle like I do, you’re able to not only live anywhere you want in the world, but also to travel quite a bit and thus visit your homeland a lot, even if you move far away.
The Five Flags
Among capitalist expatriates, there’s a popular concept called the Five Flags. It’s a way of arranging your life so you’re protected from government, taxes, and economic collapse as much as humanly possible. It essentially means you do this:
1. You live in country A, preferably a tax haven that allows long visa stays (6 months or more).
2. You have your citizenship and passport in country B, preferably one that doesn’t tax international income.
3. Your business is based in country C, preferably another tax haven.
4. Your investments are in country D, preferably a place with no capital gains taxes.
5. You buy most of your personal stuff (clothing, toys, etc.) in country E, preferably a place with little or no sales tax or VAT taxes.
Five Flags is Alpha Male 2.0 in the ultra-extreme, and though you’ll be completely protected no matter what happens, you can see that it would be very complicated and beyond the ability for the typical person to accomplish and maintain. I will not be doing Five Flags myself. I agree it’s a good system, but I don’t want to take the time to maintain such a complex structure.
Instead, I will be following a simpler Three Flags model, where you have a passport in one country, live in a second country, and have your business based in a third country. I may also have investments in a smattering of other countries, though my investment strategy changes based on world conditions, so that may change.
This means I need to do and/or determine several things:
1. I need to get a second passport in a country that easily offers them to Americans and doesn’t tax international income. As an American, I am one of the few people on Earth who are forced at gunpoint to pay taxes to my home country even if I don’t physically live there and don’t make any income there. More insane big goverment BS from the Land of the Free.
This is unacceptable of course, so at some point in the next nine years I’m going to need a second passport from another country so I don’t have to worry about this insanity. I'll have to choose the country and then follow that country's process to assume citizenship.
2. I need to pick a country to move to and assume as my home base for my physical residence. This place needs to have low or zero personal taxes on income from outside of the country for non-citizens. Remember, I won’t be living full-time in the country where I’m getting my second passport. Instead, I’ll be living in another country, but leaving for a few weeks or longer every time my visa expires.
You may be wondering about the concept called "perpetual traveler," where a guy with location-independent income never lives anywhere for longer than 3-12 months, always moving to a different country after that. Why don't I do that?
Well, I'd love to do that, but I'm getting older. Next month I turn 44, so I'll be officially in my mid-forties. As you get older, you start to want a "home" to put your stuff (not that I have much stuff). Settling down with an OLTR is also very likely at some point in my future, particularly when I hit my 50s. If I was in my 20s or 30s I would absolutely do the perpetual traveler thing and enjoy the hell out of it. Being a PT is much less expensive and more conducive to personal freedom than having a home base, but I'm choosing to incur this expense because of my personal desires. Perhaps in another life.
3. I need to pick a third country with extremely low (or zero) business taxes to base my business operations.
4. I need to pick a few other countries to place my investments in, if I feel like it and if it makes sense at the time. Ideally, countries should not be where I live, nor where my second passport is based, but they can be literally anywhere else, even in the US(!) if the situation warrants it.
In the next article in this series, I will list the countries that I have in mind for these functions.
As I’ve stated before, my current plan is to live abroad part time for the next nine years, spending 1-3 months out of the country every year. I’ve been doing this for a while now and will continue to do so. Over time, I may even expand that 1-3 months to 4-5 months, but that depends on my mood and the economic state of the US over the next few years. I'm pretty flexible because of my lifestyle.
Then, around 2025, I will permanently shift my home base to somewhere outside of the United States, and swap things so that I will be there (or elsewhere) 8 or 9 months out of the year, while returning to spend the summer in the US to visit my friends, family, women, children, and possibly grandchildren if I have any by then. My son is 24 and my daughter is almost 18, so in the next nine years grandkids are likely.
Right off the bat, you should notice that this is very different than me moving to some distant land and never coming back. Despite its many problems, I have a deep, emotional attachment to the US, since I was born and raised here. I’m sure you feel the same way about your home country, even if you hate it. If you live the Alpha Male 2.0 lifestyle like I do, you’re able to not only live anywhere you want in the world, but also to travel quite a bit and thus visit your homeland a lot, even if you move far away.
The Five Flags
Among capitalist expatriates, there’s a popular concept called the Five Flags. It’s a way of arranging your life so you’re protected from government, taxes, and economic collapse as much as humanly possible. It essentially means you do this:
1. You live in country A, preferably a tax haven that allows long visa stays (6 months or more).
2. You have your citizenship and passport in country B, preferably one that doesn’t tax international income.
3. Your business is based in country C, preferably another tax haven.
4. Your investments are in country D, preferably a place with no capital gains taxes.
5. You buy most of your personal stuff (clothing, toys, etc.) in country E, preferably a place with little or no sales tax or VAT taxes.
Five Flags is Alpha Male 2.0 in the ultra-extreme, and though you’ll be completely protected no matter what happens, you can see that it would be very complicated and beyond the ability for the typical person to accomplish and maintain. I will not be doing Five Flags myself. I agree it’s a good system, but I don’t want to take the time to maintain such a complex structure.
Instead, I will be following a simpler Three Flags model, where you have a passport in one country, live in a second country, and have your business based in a third country. I may also have investments in a smattering of other countries, though my investment strategy changes based on world conditions, so that may change.
This means I need to do and/or determine several things:
1. I need to get a second passport in a country that easily offers them to Americans and doesn’t tax international income. As an American, I am one of the few people on Earth who are forced at gunpoint to pay taxes to my home country even if I don’t physically live there and don’t make any income there. More insane big goverment BS from the Land of the Free.
This is unacceptable of course, so at some point in the next nine years I’m going to need a second passport from another country so I don’t have to worry about this insanity. I'll have to choose the country and then follow that country's process to assume citizenship.
2. I need to pick a country to move to and assume as my home base for my physical residence. This place needs to have low or zero personal taxes on income from outside of the country for non-citizens. Remember, I won’t be living full-time in the country where I’m getting my second passport. Instead, I’ll be living in another country, but leaving for a few weeks or longer every time my visa expires.
You may be wondering about the concept called "perpetual traveler," where a guy with location-independent income never lives anywhere for longer than 3-12 months, always moving to a different country after that. Why don't I do that?
Well, I'd love to do that, but I'm getting older. Next month I turn 44, so I'll be officially in my mid-forties. As you get older, you start to want a "home" to put your stuff (not that I have much stuff). Settling down with an OLTR is also very likely at some point in my future, particularly when I hit my 50s. If I was in my 20s or 30s I would absolutely do the perpetual traveler thing and enjoy the hell out of it. Being a PT is much less expensive and more conducive to personal freedom than having a home base, but I'm choosing to incur this expense because of my personal desires. Perhaps in another life.
3. I need to pick a third country with extremely low (or zero) business taxes to base my business operations.
4. I need to pick a few other countries to place my investments in, if I feel like it and if it makes sense at the time. Ideally, countries should not be where I live, nor where my second passport is based, but they can be literally anywhere else, even in the US(!) if the situation warrants it.
In the next article in this series, I will list the countries that I have in mind for these functions.
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