Here is a banker's reply to our reader who is concerned about overseas accounts.
Dear International Friend,
In yesterday's message, we studied a reply to a reader's doubts that offshore banks accounts are of value and may create problems. See an offshore banker's opinion here. EClub advisor Teddy Christiansen of Jyske Bank replied:
I have read your comments to Gary Scott about offshore accounts.An offshore account is not something only for the rich people. If youcompare the US automobile market to the European market, why do so manyAmericans drive in Mercedes, BMW, Volvo etc. They probably all have onor two US manufactured cars too. Are they better or just different.It is the same with an offshore account, it give you possibilities todiversify much more than just an US account. The US bankers andinvestment advisers have perhaps 90% knowledge to the US market and 10%others. In Europe it might be 50% local and 50% international, becausein Europe there are many different nations and currencies.
From January next the EURO will change that situation, but still thereis a lot of different possibilities. Norway is not in the EU – pays 6:50% on a current account. United Kingdom,Denmark, Sweden and Switzerland is not in the EURO. Then we have all theEast European countries – The Baltics etc.
Think about additional diversification of your portfolio through anoffshore account – try one, you may start as low as US$ 20.000. You caneven keep your investment in US Dollar if this is what you like.Forget about tax safe heavens – why be on the run, if you can make abetter deal and pay your tax with a smile. Have you ever met a personwho complained about taxes were too low. I know what we are talkingabout, because we paid in Denmark up to 60% income tax.Teddy Christiansen, Jyske Bank.”
What Teddy is saying here make so much sense. Try borrowing yen from a U.S. bank and then reinvest the loan in German marks and Swedish bonds. (see article about investing in SAS bonds) Many investors have the wrong point of view by thinking that overseas banks are all about hiding money and avoiding tax. This is not the case at all. Being international broadens your horizons and expands your options in every field including banking.
This is why Jyske bank will conduct a session on how to use the Multicurrency Sandwich at our next International Business Made EZ course in Ecuador January 25, 26, 27. I hope to see you there.