In order to live your daily life without problems, you need to protect your money. Many people use the financial institutions of the country they live in. In other words, most people use banks in their country, and when they invest, they use brokerage firms in their country of residence to invest.

However, this situation is very dangerous. If a deposit blockade occurs due to the bankruptcy of the country, you will not be able to withdraw money from the bank. In other words, no matter how much money you have in your bank account, it will be meaningless.

The only way to avoid such a situation is to invest abroad. Specifically, you should make offshore investments such as mutual funds, life insurance, and hedge funds.

There is a right way to invest offshore. So, let’s take a look at how you can prepare for the deposit blockade by investing abroad.

A Deposit Blockade Can Happen in a State Failure

In many countries, the nations are already in a financial crisis. This is also the case in developed countries, whose debts are very high. In other words, there is a risk that people will not be able to withdraw their money from banks at all due to the deposit blockade.

Some people may think that there is no possibility of a deposit blockade happening in their country. However, the United States, Japan, and other countries have had a history of deposit blockades in the past.

For example, in the US, President Roosevelt enforced a bank holiday on March 4, 1933, forcing banks to close. The following is the actual news.

Japan also banned the withdrawal of deposits in February 1946. Of course, this kind of deposit blockade is still enforced in many countries even today.

However, a deposit blockade does not mean that you cannot withdraw your money forever. In fact, Argentina has had financial failures in the past and has had several deposit blockades, after that, people were able to withdraw their money from the banks.

However, in some cases, the deposit blockade makes it impossible to withdraw money for a few months. When this happens, you will not be able to spend your daily life.

There is a risk of deposit blockade in almost all countries. Therefore, regardless of whether we live in a developed or a developing country, we need to take measures against deposit blockades.

Even with Bank Deposit Guarantee, Bank Failure Will Have Large Impact

Even if the probability of a national bankruptcy is low, the probability of a bank failure is higher. Depositing money in a bank in your country is not safe, and there is a risk of bank failure.

The system differs from country to country, but many countries have a deposit guarantee system (deposit payoff). The deposit guarantee system protects your money up to a certain deposit amount.

However, money above that amount is not protected. Therefore, if you are a wealthy person, much of your assets will be lost if the bank fails.

As for the deposit blockade, your money will not be taken away, although you will not be able to withdraw your money temporarily. On the other hand, if a bank goes bankrupt, your money will disappear. Therefore, it is effective to take money out from your country by investing abroad.

Taking measures against deposit blockades in advance is also a way to avoid risks in case a bank in your country goes under.

We Should Know What Actions Politicians Took Before the Deposit Blockade

What should we think about when we actually take measures against the deposit blockade? In the past, not only the US and Japan, but also Brazil, Russia, Argentina, Uruguay, Cyprus, and many other countries have implemented deposit blockades.

Try to know what actions were taken by the politicians of these countries when they implemented the deposit blockade. This will help you to understand what you need to do.

When there is a deposit blockade, the politicians will know in advance that the deposit will be blocked. For example, in Argentina, politicians converted their assets into foreign currencies such as US dollars and sent them to foreign financial institutions in advance. In this way, they were able to protect their assets even in the event of a financial blockade.

The reason why they sent their money to foreign financial institutions was because it was the only way to protect their assets.

Of course, many of us are not politicians and cannot predict when a deposit blockade will occur. Therefore, even if there is no sign of a deposit blockade, it is necessary to transfer the funds to a foreign country as soon as possible.

Tax Havens Are the Safest Place to Put Your Assets

What kind of place should we put our money? Even if you use foreign financial institutions, as mentioned earlier, even the US and Japan have had financial blockades in the past. Therefore, you should not send money overseas to developed countries easily.

Instead, send money overseas to tax havens. Tax havens are countries where there is little or no taxation, and they are also called offshore regions. There are many tax havens around the world, and the following are some of the offshore regions.

Tax havens have developed their economies despite being small in area. The reason for this is that they are tax-free areas that attract investment money from all over the world. Therefore, finance has become the main industry in these countries.

Also, to avoid paying taxes, rich people from all over the world migrate to tax havens. This is another reason why tax havens are economically developed. Think of it as using financial institutions in tax havens when you want to prevent deposit blockades.

Tax Havens Have Higher Ratings and Less Debt

Why is it superior to send money to financial institutions in offshore? This is because tax havens have high ratings and little debt.

For example, the Isle of Man is a famous tax haven and has received the highest rating of AAA from rating agencies such as Standard & Poor’s (S&P) and Moody’s. This rating is higher than that of developed countries such as the United States, Japan and France.

Almost all tax havens have a high rating. This means that it is safer than using financial institutions in your country.

Also, offshore countries have a low debt ratio. Because of the low debt, the financial situation of the country is excellent, and there will never be a deposit blockade.

In tax havens, they can earn a large amount of foreign currency, and since the wealthy are willing to move there, there is a system that attracts a large amount of money. As a result, the country does not need to borrow a large amount of money. For example, Switzerland, a tax haven, is famous for its very low external debt.

There are several banks in Switzerland that offer private banking services. The reason why wealthy people use private banking services in Switzerland is not only to manage their assets through financial institutions but also to protect their assets. Switzerland is a low-risk country and is highly reliable.

Investing Offshore in Mutual Funds and Hedge Funds

Send your assets abroad by investing in tax havens. Investing abroad in tax havens is called offshore investments. Private banking is only available to the wealthy, but anyone can start a general offshore investment.

There are different types of offshore investments, and you can invest in mutual funds, life insurance, hedge funds, and more. You not only transfer your assets abroad, but also be able to increase your money through asset management.

As mentioned above, there are different types of offshore investments. There are investment methods that will surely increase your money with 4% annual interest, such as mutual funds and offshore life insurance, and there are also offshore investments that have some risk but can generate more than 10% annual interest.

For example, the following is a hedge fund that I invest in, which operates a bridge loan in Europe.

This is a low-risk hedge fund that offers a stable annual interest rate of 8-10%. You can invest in this hedge fund by investing a lump sum of money of US$10,000 or more.

Offshore investments allow you to invest in funds around the world that are sold in tax havens. So, you should invest in these funds to grow your money and prepare for the deposit blockade.

Of course, you can withdraw the money you have invested in offshore regions at any time. For example, after opening a bank account in a tax haven country, you can send money to your overseas account. Since you will be using a bank in an offshore area, there is no risk of deposit blockade.

Avoiding the Risk of Deposit Blockade by Investing Offshore

When you use a bank in your country to deposit money, or a brokerage firm to start investing, there is a risk of a deposit blockade. If there is a deposit blockade, you will not be able to withdraw your money. In addition, due to the deposit blockade, the country’s credibility will be lost and the value of the currency will decrease.

Therefore, we have to take measures against the deposit blockade. So far, a number of countries have implemented deposit blockades. These countries include the US and Japan.

If you send your assets to a tax haven, your assets are protected. Offshore areas have higher ratings and less debt, so the financial situations are superior.

Furthermore, you can increase your money by investing in mutual funds, life insurance, and hedge funds as offshore investments. You can use the increased money freely. In this way, prepare for the deposit blockade by investing abroad.