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When it comes to discussing offshore anything and US citizens – from offshore trusts to investments, from offshore banking to company incorporation – it?s important to note the following facts: -

- US citizens are taxed on their worldwide income. This includes income from interest, dividends and gains whether onshore or offshore.

- The US government allows money and assets to be moved offshore freely; however it requires full disclosure relating to the amount of money or assets moved and when they are moved.

- The US government has task forces committed to the prevention of money laundering and tax evasion.

- The US government makes it clear that US citizens must comply with all reporting and taxation demands.

So, does this effectively render the offshore world inaccessible or at least useless for US citizens?

No, far from it in fact!

The utilization of offshore trusts and bank accounts can be an excellent way for US citizens to legally and securely protect their assets and themselves from litigation for example.

Offshore trusts offer an individual a fair degree of personal confidentiality, privacy and asset protection from claimants such as an ex-spouse or business client for example; and if properly structured, offshore bank accounts can offer degrees of financial protection from potential future claims as well.

There are many companies and individuals who claim to be able to offer US citizens offshore solutions for taxation reduction or negation purposes. The bottom line is – as stated previously – US citizens are taxed on worldwide income. Therefore it is at best unlikely that the services being advertised will apply to a US citizen and at worst the opportunity will require the US citizen in question to break the law.

So how can offshore asset protection trusts potentially benefit US Citizens?

Any form of asset protection trust – whether onshore or offshore – can be used to protect assets from personal or professional litigation or creditor attack.

Whether established in an offshore jurisdiction or not, most assets protected by the given trust for a US citizen can remain in America. The assets usually remain under the indirect control of the Settlor (the person establishing the trust) as well.

Such a trust will usually be ?irrevocable? for a set term, and during that period the settlor will not Read more…

Think Rich ? Invest News

What’s news this year? New year’s resolutions, same as always, property markets down yet still up, share markets up yet still down, the Aussie dollar falls but is still high, gold prices high even though fallen. Confused yet? You should be!

It’s probably cynical to say that market commentators deliberately keep investment news confusing. It’s probably cynical to say that there is a “boys club”, using jargon, so that the ordinary person never has a chance to compete with them and make great returns. It’s probably cynical but it’s possibly true as well….

The only thing that the average person can see for themselves, without relying on a news report, is that we have had a LOT of rain in recent weeks. If you have managed to get outside you would perhaps have noticed that the grass is a lot longer, the trees are a lot greener, and the smiles on the faces of the farmers are a lot bigger than they have been for around a decade…

From the popular media: Property prices are “softening” but still staying higher than where they were two years ago. Sort of like “three steps forward, two steps back”. In the market news: Aussie Dollar powers ahead then stalls: “The Aussie dollar fell 1.5% over the week against the greenback as a result of the decline in the price of gold. The dollar closed the week at 76.6 US cents, still more than 30% higher than its value one year ago. ” (Note to self: if something goes up by 30% and then drops back by 1.5%, it is STILL up.)

More market news: “The price of gold stepped back to US$407 per ounce, 4.2% lower than it started the week, and its lowest point in over three months. It remains, however, 42% higher than this time two years ago.” (Second note to self: if something goes up by 42% and then drops by 4.2%, it is still up a long way.)

Try going to Paritech.com and doing a chart of the stock “GOLD”

You can see by looking at the 12 month graph of gold prices, that the little drop at the end would only have upset you if you had bought all your gold last week and then wanted to sell it today. If you had happened to have bought all your gold the week before, or a month before, or a year before, and wanted to sell it now, you would have made a profit. (Note to self: buy a good investment and keep it for a long time. Selling one week later may be bad. Listening to news that says “Gold drops 4.2% in a week” may be meaningless.)

So Read more…

Who?s driving whom?
In the early 1900?s, there were over 2000 manufacturers making cars, over 1500 of these in the USA alone. Now, there are only 39 brands of vehicle which you can buy. Of these, 30 of them are controlled by just nine players. Six companies maintain some form of independence: Honda, Hyundai-Kia, Rover-MG, Proton-Lotus, Porsche and Morgan. Honda and Hyundai sell millions of units, the others are responsible for a comparative handful of sales. Therefore, we have just 12 companies who are responsible for the look and feel of the entire world automotive industry. No wonder my car looks the same as 100 others!

The great American Ford empire now controls the European Volvo and British Jaguar; General Motors Holden has links with Fiat, Subaru and Saab; Fiat in turn, controls Ferrari, Lancia and Maserati; Mercedes

Think Ritch NO, my spell check is not broken. You should always be thinking richly, and occasionally you should visit the archived newsletter section of the invest-org-au website. There you will find a wealth of information, ramblings and also be able to ?back trade? to see how much money my previous ingenious tips would have made for you?

With the above, the ?Think RITCH? refers to a little acronym for ?Refund of Imputation Tax Credits?. Even if you are NOT a tax-payer, if you receive a pension or benefit that is tax-free, you can still get extra RITCH. If you do NOT submit a tax return, you can still lodge a single page RITC form to the Australian Tax Office and you can get FREE MONEY (a refund of your imputation tax credits. This is because Australian companies usually pay tax on their profits before they pay the shareholders. Often they pay more tax than you would, and as an owner, you can ask for this back).

Note that it is nobody?s job to tell you this? If you are entitled to get money back from the Australian Tax Office, do not expect them to call you and say ?Ah, we have $945 of your money, would you like it back?? It is NOT gonna happen. Do not wait for the ATO to call you. Do not expect your accountant or Financial Planner to call you and tell you (unless they are REALLY nice and good at their job).

It is up to you to ask for the money. To quote Jesus out of context, ?You have not, because you ask not?. Pensioners, self-funded retirees and any of those who earn less than $60 000 could definitely benefit from ownership of Australian shares and/or managed funds. Check with your accountant or call the ATO regarding RITC. Invest five minutes of your time and as little as $500 of your money to benefit twice (the investment could make you money, plus the ATO gives you money when you fill in the RITC form). Call your favourite investment adviser or Financial Planner to find out more. Keep Thinking RITCH?

Australia, you?re moving on up. Sometimes they report boring things on the financial news (OK, most of the time), and it seems boring because they use jargon and you don?t know what it means, or how it impacts you. National Accounts Surplus is up; is that good? Foreign Accounts Deficit is down; is that bad? Balance of Trade Figures ascendant; is that a rock band?

Ignoring the jargon of GDP and import/export figures, just try to think of Australia as a business. The business buys things, and sells things to other people. A business such as ?Beds R? Us? may buy timber for $20, turn it into a bed (paying the tradesman $10) and then sell the bed for $50. This means that they made a profit, and will probably make a larger profit the next year (because with more profits they can buy more timber and employ more staff), and they will probably continue to grow.

In the last decade, the cost of manufactured goods (such as cars, clothing, cameras, TVs and DVD players) has actually fallen; quite dramatically in the last few years. (Are you old enough to remember when the cheapest new car was around $30 000? Now they can make a brand new car for $13 000. Remember when digital cameras and DVDs were over a thousand dollars? Now they sell them in the grocery stores!)

Australia buys a lot of manufactured goods. Over the same timeframe, the cost of raw materials (coal, oil, gas, steel, wheat, cattle, aluminium and gold) has risen, again quite dramatically in the last few years.

Thinking again of Australia as a business that buys and sells things, that puts us in a good position. We are buying things for less, and selling things for more. China is paying more for our oil and cotton. We are paying the Chinese less for the toys and clothes. Australia is turning a profit!

For most of our short (two century) history, Australia has seen its ?terms of trade? (what we buy compared to what Read more…

Back to the past

You may also recall reading a newsletter with information on who the world?s biggest oil companies were (refer to ?Invest News? August 2005) and how they spent their money diversifying into other industries. The ?common sense? belief that higher oil prices would make oil companies go broke, may be commonly held? this doesn?t mean that it is true?.

Oil goes up, buy more oil…

Huh? Since the article was written, the price of oil (and petrol) has continued to rise at a massive rate. The profits of oil companies have increased dramatically, as has their share price. Did you buy into any oil companies? Prices on fuels and lubricants have risen by 21%, so did we all buy 20% less oil? Nope, we bought 18% MORE.

The oil companies don?t just have us over a barrel; they have us over millions of barrels a day? Did you buy into oil companies yet?

See the Past, now look at the Now

OK, so you?ve got the message about the oil companies. Like the dinosaurs that they dig up, these huge juggernauts* will rule the world for a long time. Don?t fight it, get used to it, and learn to profit from it. If you don?t take my word for it, look at what the major investment managers are doing with their money.

Which fund managers are buying into oil companies, and how much are they buying? Are they hoping to make more money in the future than they did this year? The fund manager?s job is to make money in the future, so what are they doing now?

Fund Manager —–

What is in their Top Ten? (as at June 30th 2005)

Credit Suisse—- Mortgages, phone companies and finance companies.

Barclays: —–Total Fina Elf is number two, Exxon Mobil at seven.

Merril Lynch —–Total Fina Elf is number two stock on their list also Platinum Royal Dutch Shell is number ten stock

UBS Global —-Total Fina Elf is number 3, BP at number 10

Westpac Intl —-Exxon Mobil number 1 stock held

BT USA —-Exxon Mobil number 2

BT Global —-Exxon Mobil number 1

BT European —-Royal Dutch Shell number 1, Total Fina Elf number 3

Oil = Money

If the oil companies are NOT going to make massive billions of dollars worth of profits in future years, then why are the biggest and smartest fund managers investing into the oil companies? Perhaps with all their money and all their research, the major oil companies know that major oil companies will continue to turn gargantuan profits. Perhaps with the largest fund managers? money and research, the fund managers have also come to the same conclusion: oil equals money.

Save the trees: shoot a beaver?

Sure, you can buck the trend against the juggernauts*. You can invest all of your money into stocks other than mining and oil. You can invest into ?new? areas such internet stocks and bio-technology. You can invest into mortgages and finance companies like Credit Suisse. You can invest into eco-responsible, genetically unmodified, environmentally-sustainable alfalfa-eating, alpaca-friendly, tree-hugging hippy stocks**.

It may make you feel good. It may even make you a dollar or two. A good idea is to diversify your money: — have some smiley, care-bear investments** and also have a little bit of investment into some of the ?smash, pillage and wreck the environment? stocks.

Exxon/Mobil hurt some penguins with a leaking oil-tanker. Fine, sell their shares, punch the CEO, or volunteer at Greenpeace.

Union Carbide upset some people with dodgy battery acid. Throw out your torches, toys and computers or choose to make a positive difference.

When I discovered that a subsidiary of BHP was mining uranium, I felt so bad about it that I donated some of my BHP dividends to my favourite charity***. Now, BHP were not making uranium nuclear weapons, it was for nuclear energy; and it was not BHP, just one of their connections.

I am not crazy enough to sell all of my BHP shares just because some of their friends are a little environmentally unfriendly: — that would be silly. Besides, I can do a lot more for the environment by gifting thousands of dollars to good causes, than I can by chaining myself to a bulldozer? Bulldozer. Hmm, that gives me another excuse to use the term ?juggernaut??

Travel insurance is an necessary item if you are going on a vacation, sinc you may never know what can happen on a vacation. It is hoped nothing will transpire and you will have a good time. But there are some unfortunate people who don’t have such a good time and they wind up needing that travel insurance for one or more reasons.

Travel insurance is the best way to make sure that you have a great vacation. If you lose your baggage or have a awful accident, then you can utilize the travel insurance to fall back on while you can recover some of the lost money, as they can compensate their customers for up to $1 million. And all you have to do is pay a small price to recover that money.

Little things can destroy a vacation, such as lost baggage or money, but travel insurance is there to help you have a good time on your vacation even if this does happen. There is always a telephone number there to contact them, and they will be more than happy to help you with your problem. They assist you by finding the best way to help you and then paying for it.

Travel insurance doesn’t have to be high-priced and you will still get the same type of coverage for a portion of the price that more expensive firms provide. If you search around and see what is available from either vacation companies or online travel insurance companies, then you are certain to get a good price for full coverage. Take that money and use it for your own good, it is your money at the end of the day, so take it and use it for something else.

Why You Should Consider USA Travel Insurance

America is always an outstanding place to visit for a vacation, but any visitor that comes to America will need to have their USA travel insurance, since America is known to be a lousy place for tourists if you are not careful.

Although America has many of the most beautiful sites, it also has some of the highest crime rates in the world, and tourists are the most susceptible to these potential assaults. Read more…

The model which is used to find the average credit score is to the advantage of the consumer rather than the commonly used middle score one. In many cases in the USA the average credit score is mainly used by sub-prime lenders. These sub-prime lenders lend money to people who have a credit rating other than an A or A-. With the middle credit score model your lender looks at the 3 scores in your report and looks directly in the middle. For example if you have scores of 720, 676, and 660 the lender takes the 676 number and then your loan conditions are based on the 676 number.

The national average in the USA seems to be anywhere in the 580-650 range for credit scores. Even with the national average you can generally still qualify for loans or credit cards with an average score. Some things that can taint an average score though is missing payments and definitely a past bankruptcy. Having an average credit score by no means you will not qualify for loans or credit cards.

The rating you have can be changed over time, for bad or worse, it all depends on how you pay your bills. Obviously you will get better interest rates on loans and credit Read more…

As the Yankee Dollar continues to slide and the Loonie breaks the 90-US cent barrier for the first time since 1977, all of a sudden everything that is American ? from MacDonald?s hamburgers to real estate ? looks darn cheap to Canadian eyes.

The $US/$CAD Noon Rate hit 0.9032 on May 5, 2006 as reported by the Bank of Canada, and the Loonie is predicted to equal the Greenback by close to year?s end. There are essentially four major key reasons for the recent surge of the Canadian Dollar vis-?-vis its American counterpart:

[ ] A substantial increase in demand for Canadian commodities, most notably oil and precious metals, from the United States.

[ ] A rising participation of American interests in the exploration and development of Canada?s natural reserves, and a subsequent increased demand for shares in Canadian companies.

[ ] A steady increase in Canadian interest rates, which are moving at a faster pace than the corresponding increases of the Feds, and which in turn attract foreign investors.

[ ] Financial leverage, which is higher in Canada than in the U.S.

This last point deserves a closer scrutiny, as it is directly related to real estate, my field of expertise and practice. Financial leverage takes the form of borrowing money and reinvesting it in hopes to earn a greater rate of return than the cost of interest. Leverage allows greater potential return for the investor than otherwise would have been available. Because real capital appreciation has been constantly more remarked in Canada than in the United States these past few years, it turns out that leverage is stronger in Canada than in the U.S., meaning the spread between real capital appreciation and cost of borrowing is higher in Canada. And this notwithstanding the fact that mortgage rates in Canada are typically nominally higher than in the States and that, in fact, wages in Canada are typically nominally lower.

The last time the Canadian Dollar was at par with the American Dollar was in 1976, just before the election in Quebec of the separatist government of Rene Levesque (1922 ? 1987). Following that election, the Loonie began a long downfall, greased by weakening commodity prices and rising government deficits and domestic debt. The slide culminated in the record low of 62 cents U.S. for one Canadian Dollar in January, 2002.

The current exchange rate, therefore, represents a huge increase with drastic consequences on both sides of the border. For instance, a house priced at U.S.$350,000 would convert in CAD$564,500 approximately using the U.S.$1.00=CAD$0.62 exchange rate of 2002. The same U.S.$350,000 residential property costs a mere CAD $387,500 using today?s U.S.$1.00=CAD$0.9032. That?s a difference of CAD$177,000 in a little more than four years or, to put it differently, a price depreciation of approximately 31.35 percent in four years, or 7.838 percent p.a.

It sure beats the yield of treasury bonds, both in Canada and in the United States!

It is even easier to see how appealing has American real estate become for Canadian investors if we look, for instance, at the average rental property that would sell across the border from where I am. In 2002, rental properties would sell for an average US$80,000 in Washington State, or CAD$129,000 using the 0.62 cents conversion rate of that time. Now the same rentals sell for an average US$115,000, or CAD$127,300 approximately using the 0.9032 rate. Even though they have appreciated in value and are, therefore, more expensive for Americans, they have become actually less expensive for Canadians.

Interestingly enough, the Loonie has not been rising rapidly against other key currencies like the Euro and the Yen. A fact, this, which underscores that Canada and the United States have become mutual major trading partners, setting aside disputes and differences of opinion in the matter of salmon fishing and lumber subsidies of years past. In fact, the Canadian Board of Trade reports that over 70 percent of the manufactured goods produced in Canada are destined for the American markets, as opposed Read more…

First and foremost let me state here and now for the record, that Canada is flexing its military muscle once again. It seems that the nuclear sub ? I forgot the name but there is no mistaking it ? Canada has only one, bought second hand from Britain ? that had to be de-commissioned because it was leaking underwater, is now going to be re-commissioned. Apparently the leak has been fixed. Alright, now that we can sit at the table on even footings, let me go straight to the point.

A caveat must be made here to the extent that the purpose of this Article is not to compare real estate markets but, rather, to compare economic environments. It is next to impossible to compare real estate markets since, as experienced investors no doubt already know, real estate markets are far too many and too varied to render any comparison at all meaningful.

A recent report prepared for and on behalf of none other than The Bank of Nova Scotia and released in February reveals, among other things, that the 2005 Household Debt to Income indicator measured as a percentage of disposable income is 13.8 percent in the United States (and rising), and 7.7 percent in Canada (and falling). The Household Debt to Income indicator, also known as ?debt service ratio? is very important, in that it measures the ratio of the mortgage payments to disposable income. Clearly the lower the indicator the lower the incidence of service debt on disposable income, and the higher the cash reserves. When the ratio gets too high, households become increasingly dependent on rising property values to service their debt.

The Household Debt to Income indicator, therefore, is nothing more than a measuring gauge of property owners? wealth. The above figures just released merely reflect the fact that Canadian property owners keep the yield they receive from their real estate investments, contrary to their American counterparts. This is so because the financial leverage of each country is different. Financial leverage takes the form of borrowing money and reinvesting it with the hope to earn a greater rate of return than the cost of interest. Leverage allows greater potential return to the investor than otherwise would have been available. But conversely, the potential for loss is greater because if the investment becomes worthless, not only is that money lost but the loan still needs to be repaid.

Because real capital appreciation has been constantly more remarked in Canada than in the United States these past few years, it turns out that leverage is stronger in Canada than in the U.S., meaning the spread between real capital appreciation and cost of borrowing is higher in Canada. And this notwithstanding the fact that mortgage rates in Canada are typically nominally higher than in the States and that, in fact, wages in Canada are typically nominally lower.

Household Debt to Income influences another economic indicator important for real estate investing: the Household Debt to Equity Ratio, also known as ?loan to value?. This is the ratio of the mortgage debt to the value of the underlying property and it increases when homeowners refinance and tap into their home equity through a second mortgage or home equity loan. According to the report of The Bank of Nova Scotia, the 2005 Household Debt to Equity Ratio is 73 percent for Canada (and rising) and 53 percent for the United States (and falling). It is easier to understand loan to value by looking at things in reverse. A 73 percent ratio simply means that the cost of borrowing is the difference between 100 percent of total value of the real asset minus the owner?s equity ? in the case of Canada 100 ? 73 = 27 percent. Hence, average cost of borrowing in Canada expressed as Read more…

Most home buyers start their home search on the net. If you?re a real estate agent or broker and you think your website should
be doing more, you?re not alone. Realtors are in a very competitive business and a good web site will make your business more successful.

A realtor?s website design needs to accomplish several things. First, your realtor site represents your business image and your value proposition, or why that buyer should choose you as their agent. If your website looks like it was done by a 12 year old, that?s the first impression you?re going to project! If you?re not good at graphic design, this is not the place to learn. It?s your business, and the success of your realtor business on the internet starts with a good, professional web design and reliable web hosting.

Several choices are available that can put you ahead of the ?do-it-yourself? look, quickly and painlessly. For a few hundred bucks, you can get a simple, but professionally designed web site designed specifically for your realtor business. Sure, even more generic template websites are available for less, but why reinvent the wheel? A good realtor website is specifically designed for addressing things like mls listings, mortgage calculators, pictures, pdf files for floor plans and other necessary items.

Unless you want your site to look like hundreds of other realtors, you should consider a limited edition type of website. These are more a structure than a template and allow you to choose from thousands of pictures and the better companies will provide you with several hours of graphic design time.

When you really want to stand out, full custom realtor web sites are the way to go. While you can go to a graphic designer and spend a great deal to get an exquisitely beautiful site, a number of realtor website companies have custom design packages that give you a great first impression, provide the features you
need, and keep the costs reasonable.

Second, your time is better spent with customers, rather than fiddling on the computer putting in listings and making time consuming basic updates. That?s where using a company that makes realtor websites and provides hosting can be a big plus. Better ones, have an administrative section that simplifies or automates many functions that can take away precious selling time. Automatic MLS listing updates, and check boxes to automatically add links to local attractions or other necessary area information are some examples. A few now have the ability to have your own blog, and link to maps at Read more…