SLP250 Andrew Henderson – Nomad Capitalism for Bitcoiners

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Andrew Henderson of Nomad Capitalist joins me on the show to talk about the benefits of nomad capitalism, using overseas residences and citizenships to obtain legal tax savings and increased freedom. We chat:

  • Huge tax savings possible
  • Risks and costs
  • Considerations for Bitcoiners
  • Being a nomad with a family
  • Jurisdictional competition
  • Adapting to a globally changing game

Andrew Henderson links: 

Sponsors: 

Stephan Livera links:

Podcast Transcript:

Stephan Livera:

Andrew, I’ve followed some of your work recently and have been quite impressed with some of the work you’re doing. Welcome to the show.

Andrew Henderson:

Thank you for having me.

Stephan Livera:

Andrew, you’re known for promoting this idea of being a nomad capitalist. How would you define nomad capitalism?

Andrew Henderson:

Somebody who wants to make the most out of the financial opportunities that are available. So if they’re looking at cryptocurrency, if they have a business, whatever it may be, it’s not necessarily somebody who’s looking to move overseas and make as little as possible. It’s someone who’s looking to build an empire, grow their empire. It’s somebody who would like to live overseas in all likelihood, or at least create a plan B so they can live overseas. It’s not about traveling with a suitcase behind you. It is the idea that nomad is, if you look at the nomads in Mongolia, for example, historically they followed the herd and when the opportunities go away. They go and they travel with the herd. I think what we’ve seen over the last 20 to 30 years, a great loss of opportunity, a great rural loss of capitalistic spirit in Western countries.

Andrew Henderson:

And I feel like the herd is moving. If you look at the statistics, the herd is moving back eastward. You saw it thousands of years ago. The centre of commerce, the centre of global trade was above Asia. It moved over, it got over to Western Europe at its peak, and now it’s heading back. And so I think that people who are successful investors, successful entrepreneurs who have wealth should, as I say, go where they’re treated best. They should not stay in a place that doesn’t respect them. That wants to take from them, where they are not respected by the voting class. And so I think there’s been a lot of changes in our lifetime that people should heave.

Stephan Livera:

And so in your book as well, you talk about some of the benefits of this idea of this lifestyle, of living the Nomad Capitalist lifestyle. In your mind, what are some of the top, the key benefits of pursuing this kind of approach?

Andrew Henderson:

A couple of main categories, number one is your finances. So you can legally reduce your taxes. You can choose your own tax rate in many cases whether you’re a crypto trader again, or an entrepreneur where you could pay zero, you could pay five, you could pay 10. A lot of people are paying 40 and 50 and they want it to go up. You can legally access higher quality banks. You can if you’re an American, be able to break free from that access certain crypto investments. There are financial benefits, there are residence and citizenship and lifestyle benefits. You can live in a place with a lower cost of living. Get more value for your money and live in a place that suits you more socially, better weather. You can get a second citizenship. I think every crypto investor should do that so that they are not married to one government.

Andrew Henderson:

You see what countries are doing? We just saw South Korea recently going to make crypto taxes worse. And so when your country goes in the wrong direction, you want a residence, you want a citizenship, you want a place to live. And I think that if you’re cashing out some of your crypto,I don’t want to be invested in just one country. So I’m going to look at how do I invest in up and coming countries? How do I invest in outside of my country for asset protection for diversification those are the main things I think people can get out of it. And I think the beautiful thing is you get to choose from the buffet. You get to choose the best passport for you. You get to choose the best bank and the best banking jurisdiction for you. And they don’t have to be the same place. You get to choose the best place to date, get married, what have you, they don’t have to be all the same place you get to choose. And if you’re not ready to leave your country yet, you can still get a second residence, get a second passport and get a home somewhere that you can go if things get bad. Those are some of the options I think everyone should have available.

Stephan Livera:

Excellent. And also you mentioned around the possibility for very significant tax savings, because when you talk to people domestically, they’re thinking, Oh, I’ll set up a trust, and structure, stream the income. And so they’re talking about these very minimal level of tax savings. Whereas what you’re talking about is taking it from 40 or 50% down to zero or close to 0% taxes. So I think there’s a very big benefit there if you also consider the compounding factor that if you were to do this and then save over the course of 5 to10 years or even longer, that’s really adding up to a lot of savings for individuals. And I think that’s also a point you touch on in your book as well. Could you outline some of the benefits there from that perspective?

Andrew Henderson:

Well, yeah, as I said, you get to choose your own tax rate. You see a lot of countries that are changing crypto policies. They’re making them more rigid in terms of enforcement, in terms of reportability you’re seeing countries that are making you sign under penalty of perjury and going to jail and all that. If you have crypto or not, you’re seeing tax rates go up and tax treatments getting worse in many places, but there are places where it is better and you can pay 0%. Now, if you’re an American, that gets to be more difficult it may be a matter of moving to Puerto Rico. It may be a matter of seeing what it is that you’re doing. You might even decide to give up your citizenship. If you’re not an American it comes down to simply leaving your country and choosing a better place, right?

Andrew Henderson:

Because Americans are taxed on their worldwide income, no matter where they go. Whereas pretty much everyone else’s not. And so you can choose to go somewhere. I think the compounding effect is very important. I had a gentleman recently, he’s a young guy. He came to me and he had started a side hustle. He was investing in crypto through his day job, but he started a side household during the pandemic. He’s working from home. He had nothing to do, right. For 16 hours of the day. So he started making close to a million dollars a year, I think, was the run rate by the time he was done. And we figured out all the taxes, he was squirreling away each month to pay the tax bill, the money he was squirreling away would have turned into something like an extra $800,000 in crypto.

Andrew Henderson:

Had he been you know, putting that extra money from his cash cup business into crypto. He’s a pretty young guy. And so if you look at 10, 20, 30, 40 years what’s the benefit of an extra $800,000. Not only that you’re saving it, but you’re reinvesting it into a business into more crypto into whatever. It adds up and I look at my own life going where I’m treated best. I will over the course of a lifetime, create tens of millions of dollars in extra value to create more businesses, create more jobs. Give to causes that are important, I can promise you if that money was given to the US government, it would be squandered, right. And 2 cents on the dollar would get to anything meaningful. So you can pay as little as zero when in crypto, and you can live in an environment where they actually welcome you and they want your business, unlike the country. You’re probably living in now where they think that you aren’t paying enough.

Stephan Livera:

Yeah. I’ve noticed as well from some of your content where you mentioned, you talk about being a Libertarian. I’m also a Libertarian. I think in some ways, this is almost like putting it into practice because I see a lot of libertarians who unfortunately spend a lot of time just spinning their wheels and spinning in the light. And they’re not being effective where really, I think pursuing some of these kinds of strategies actually allow people to achieve additional freedom for themselves in a way that was not possible.

Andrew Henderson:

I think what a lot of people do and I’ve been studying Libertarianism, I’ve been a student in of, since I was a teenager. I imagine the dating prospects being a 14 year old, picking up Libertarian yard signs to put in your parents’ front yard. But it really hit me when I was 20, 21, something like that. When I first got the actual tax bill, I was all for taxes should be so low. The government wastes your money, but it actually became real when I started to become successful. And I think it’s becoming a real right now for a lot of folks in the crypto industry. And what I think is concerning I’ve never had an air of invincibility. I never thought that I was going to outsmart the IRS or the CRA or whomever for the rest of my life.

Andrew Henderson:

And I think that there’s an opportunity. We have a big wide world, even during COVID, by the way Oh, you can’t go anywhere during COVID. I have people going all over the place during COVID I’ve been in how many countries during COVID, you can go places. You may not be able to go to Canada, but you don’t want to go there anyway. Right? Their taxes are terrible. Their freedom is terrible. They’ve got a lot of problems. So the problem is that people do this thing where I live in the U.S. It’s still the best country on earth because you can own guns or something. And I’m all for that. But I think that people have this thing where there’s every excuse in the book to not go where you’re treated best, because in reality, it’s scary. And I get it. The good news is there’s now a nomad capitalist and many other resources that didn’t exist when I started doing this 13 years ago.

Andrew Henderson:

You can make a pretty soft landing, but I think so many people want to sit around. They’re going to hide their crypto from the IRS or from the tax man. They’ll never find out and they’re never gonna want to cash it in, or they’ll never change the tax code to make taking loans more disadvantageous. They’ll never do any of that. When freedom becomes limited they’re going to have their guns and I don’t know what they plan on doing, they’re going to take on the military. I mean, to me, challenge having spent a life around libertarians and waits in the broadcasting business. Again, I’m there with you politically, but there is, as you say, so much wheel spinning so many, so much discussing how many angels can dance on the head of a pin and is the goal freedom, or is the goal just to be trolls? I want the feeling of freedom and the greatest thing I’ve got from leaving the United States physically. And the greatest thing I got from actually renouncing my US citizenship and divorcing the country is an amazing piece of mind. I don’t have to fight. I don’t have to worry. I don’t have to be on guard or have my weapons ready or do whatever else people are doing. I just enjoy my life. I go where I’m treated best. And I think it’s a beautiful thing.

Stephan Livera:

And so, I mean, certainly there’s a lot of benefits there. I think it would also be good to just talk about what are some of the typical costs or some of the risks that we face when trying to pursue this approach. I suppose you might face additional scrutiny from tax offices for going overseas and trying to do this kind of strategy. What your view on that kind of risk and the costs associated with that?

Andrew Henderson:

Well, I have a business and we help people do this and it’s was born out of my own experiences that I was sharing through nomad capitalist. People came to me and we’ve done, we’ve helped hundreds of people from everyday entrepreneurs to multibillionaires to some very prominent crypto people as well. And I think that very rarely does somebody actually have a problem where, if you have a foreign bank account, for example, you have to legally report that if you’re in the United States, for example but you don’t have to report privately vaulted, precious metals. If it’s in a private vault outside of the country, you don’t have to report foreign real estate. If you’re an American. Now, if you earn income, that would be taxable subject to any tax credits from the other country where it is.

Andrew Henderson:

So you want to go into it with the proper advice. And what I’ve seen is a lot of people who come to me, even they’ve been living overseas for years, they have accountants who don’t know how to file up the simplest of forms. Something that we would do, where we would work with people who do every day of the year. And so I think that you want to work with people who are very focused on international. I think you want to make sure you understand the rules. If you’re not American, and let’s say you’re Australian or Canadian, there’s a lot of talk, which is five, 10, 20 years old about the 183 day rule. For example, just be in your country fewer than 183 days. Well, I can promise you if you’re nomadic and you’re, bebopping around the world six months a year, and then you spend 181 days in Australia.

Andrew Henderson:

They’re not going to agree that you’ve left, right? So you want to have the most up to date information. You want to work with people who know this stuff, but I think if you do that, I mean, it is a commitment, right? Americans, that to me, the biggest thing that trips people up is Americans talking about Puerto Rico. And you have so many people that, that comment that they’re going to spend five or six months a year in Puerto Rico and they say, Oh, but you’re in the U.S. You can just get it out on a pontoon boat and go somewhere else. You don’t have to stay there. To me, it’s just a bad idea. You have to commit to changing your life. If you want things in your life to change, you gotta change the things in your life.

Andrew Henderson:

But if you commit to spending, let’s say nine months, a year in another country, you can dramatically lower your taxes, but you don’t want to rely on people on some forum or people who are talking about something that worked in 2007, because as more people are doing this, tax offices are cracking down. There was a case where a guy closed down every connection he had to his country, but he forgot to cancel the rent on his space, in the Marina for his boat. The boat went with him, but the space in the Marina continued to be rented. And the government successfully argued that he had an intention to come back. Otherwise, why would you keep this space in the boat? He took away everything. And so I think you really want to drill down on making sure you know what to do. And it really does require a commitment. This is not like some halfhearted thing. The best thing I tell people to do is actually make the move. So therefore on paper, it looks like you’re making the move.

Stephan Livera:

Right. I see. And in terms of the typical costs that people would pay, I know this is maybe, maybe this is a little bit of a, how long is a piece of string question, but if you could maybe just outline some range, I guess, in terms of the costs that people would pay to get, say, additional citizenships overseas, to kind of structure their life in the way as you’re suggesting.

Andrew Henderson:

I think it’s like anything. And you go to a hotel. Are you staying at the Ibis? Are you staying at the four seasons? The Ibis, you come down, you take the the frozen macaroni out of the out of the lobby. You put it in the microwave and you scan your little key card and they bill you at checkout. You go to the four seasons, they have 17 different people waiting to serve you. So you can set up an offshore company, for a thousand bucks. I think most of those companies, like in Belize, Seychelles, Marshall Islands, those are pretty much has been, so you’re not going to be very respected with those. I think onshore is the new offshore. That’s going to cost a little bit more money, the Caymans, the UAE, et cetera, those costs a bit more money. And so when it comes to things like citizenships, I mean, it’s very important for a crypto investor.

Andrew Henderson:

There’s numerous ways to do it. It doesn’t cost a lot to say, Hey, my dad is Mexican, or my grandmother was Italian. And then just work through either with a lawyer or someone like us, or even the embassy yourself to go and get your passport. But when it comes to what a lot of crypto investors are doing, let’s talk about passports. You want to go and get a citizenship in six months, if you’re not a criminal, if you don’t have a shady background. If you’re from a good country, probably pretty close to a hundred percent chance, they’re going to approve you when a country like a Dominica or an Antigua or a St. Kitts. And you’re going to be looking at spending for a single person, a hundred grand and up for those plus fees. If you’re a family, 130 grand and up plus fees, and those fees in many cases, aren’t cheap.

Andrew Henderson:

And so, again, I think it comes down to, for us we work with seven and eight figure entrepreneurs. We’re generally anywhere from $50,000 to $200,000, depending on the options people choose. And if it’s one person or seven people were probably closer to the four seasons than the Ibis, because it’s built around. What I wanted, right. Is having one person manage seven different lawyers around the world that could be substantially cheaper if you want to be your own general contractor. So I think it is kind of it could range from all you need is a second passport, and you’re going to go and live there and set up residence. And that’s crypto friendly and you get really lucky and it costs you a couple of grand all the way to you’re a family of four, and you want the Cadillac and you want everything quick and you want the best of everything and it’s going to cost you quite a lot.

Stephan Livera:

I see. Yeah. And so I guess, related as well as maybe there are different levels to this, right? So I think you’re typically working with people who are at a more upper level, what are the, I guess, levels that you would say, like, maybe there are people who try to do this at like a cheaper level. It’s like as you rise in your net worth and your income, at what point does it make sense to do it in the nomad capitalist style? Let’s say?

Andrew Henderson:

You don’t have to go out and get a citizenship by investment. I happen to think that if I’m a crypto investor, the governments are going to be coming after me sooner than later for more tax, they’re going to regulate me. I’m going to want a place to go. I think everyone should do something. And I think everyone should work with somebody because you don’t want to make mistakes, but what you might do. If you’re not the seven or eight figure investor is, you might say, I’m not going to get citizenship by investment. I’m going to get a residence permit in a country like in Portugal or in a country like a Mexico or something like that, or I’m going to get what I call a paper residence, and I’m going to work towards citizenship more slowly, whether I need to spend time in the country or not.

Andrew Henderson:

And that’s going to be a lot less expensive, right? Because the legal fees are less because there’s a lot less due diligence than a citizenship by investment program has. The legal fees are going to be a little bit less and there’s a lot less to contribute. I think the challenge with a lot of crypto people though, is you’ll have a guy who comes to you with a million dollars. It’s hard to suggest spending $150,000, 15% of your net worth on a citizenship by investment. But if you think crypto is doubling in the next six months, and you’re an American that $2 million net worth now qualifies you, that if you give up your citizenship, you’re a covered expatriate and you owe whole bunch of tax potentially. And so it really depends. I mean, you could be a six-figure guy, but if things are going through the roof very quickly, you might spend a disproportionate amount of your money.

Andrew Henderson:

Whereas, I just had someone recently, who’s just a traditional entrepreneur. They’ve got $60 million in the bank and we decided, $1 million for European union citizenship in a year was not worth it because their income and it’s not going through the roof. It’s very steady. So I think sometimes for crypto, you get stuck in kind of a catch 22 almost where in order to accomplish what you want, you need a more expensive tool. I think that sometimes you spend a disproportionate amount of your wealth, but if you’re not in a hurry, then I would say look at something like setting up a residence permit that leads to citizenship. It’s really hard to find good international tax people, honestly. There aren’t that many, I’ve spent a lot of years doing it, but if you could find someone yourself, I mean most of them, they have a problem.

Andrew Henderson:

But I think from the citizenship perspective that one’s a lot easier. And the tax perspective when it comes to crypto is most people don’t know crypto. And then of course, most people don’t know international. So I think that one mistake people make is they get discouraged from doing this because they talked to a guy who doesn’t know who’s exceedingly conservative, right. We’re not trying to do anything shady. It we’re trying to be fully above board, but obviously some people don’t know what they’re doing and it just becomes, they become too conservative.

Stephan Livera:

I see. Yeah. And so it’s important to get the right information. And I’ve seen that there are different strategies available. So for some people it’s about, literally just going and living in a zero or a very low tax jurisdiction. And in other cases it’s more like having a what’s it called a three country shuffle or a multiple countries approach. Could you maybe contrast and just outline some of the differences in those approaches and how to think about those?

Andrew Henderson:

Well, I think what people have often confused is they think about digital nomads, right? I’m not a big fan of labels. I like the label nomad capitalist, because I came up with it. Right. But I don’t know whether I’m a digital, nomad or not. I think that the challenge I’ve seen is that people think digital nomads, you’re always dragging a suitcase. You, Oh, you have 39 possessions. A lot of people don’t want that. Right. I mean, I like having, I have homes all over the world and I live in them and it’s great. I don’t have to stay in hotels and I have everything where I need it. And so what I created was the idea of the trifecta, which I think is a great way to live, which could be tax advantageous. And I think it’s also lifestyle advantageous, which is you have three homes, whether you rent them or own them.

Andrew Henderson:

And you spent four months a year in each. So that means that if you set up your taxes properly, you can potentially not get sucked into any of those countries, tax nets. You’re contributing I pay more in sales tax in Malaysia spending three or four months a year there than the average person pays in a full year of income tax. And I don’t think I have a job. I’m not taking any jobs away from people. So you can create value without paying income tax. And so I think that the trifecta is one way where I’m able to say, I’m going to spend some time in Europe and get my Europe in. I’m going to spend some time in Asia, consumer culture, fast modern the future, where I am in the Malaysia, super nice people. And right now I’m in Bogota, Colombia.

Andrew Henderson:

I liked the Latin influence from the U.S. They have a few of the tastes of home that I like to have every once in a while. And so I like to I couldn’t commit to just one of those, but also if I committed to live in Columbia, full-time, it would be a tax mess. So it’s nice for both reasons too, to kind of enjoy the best of both worlds. However, there are countries where they have either zero tax, like the UAE, they have a tax exclusion like Portugal for 10 years, they have, or Uruguay or places like that. They have a non Dom program like an Ireland. They have territorial taxation, they have special crypto tax breaks. You can pick one of those countries and live there full time, or you can split your time up so that you don’t become tax resident in an otherwise tax high tax country. So those are the options. You’re certainly free to drag a suitcase behind you. I used to do that for years a week or two or a month in every country. But I think a lot of people that I talked to who are higher level investors, they like the stability. And so you have the option of one place or two or three, and you can split it up and it gives you a lot of advantage.

Stephan Livera:

Yeah. That sounds really like there’s options there in terms of how you want to go about this. Now I think probably many listeners are thinking, okay, but I’ve, I’ve got ties here. Like I have my how would I raise my kids? Or how would I look after my parents and my relatives who live here? What are some strategies that you use when either for yourself or when you’re dealing with your clients on how they think about raising their children or dealing with family who are dealing with family as part of the strategy.

Andrew Henderson:

I think everyone’s different, right? So in my family, I grew up in the Midwest in a very Protestant family. My parents gave me the permission slip when I was 12 years old, they were the ones, my father who said, go where you’re treated best. Don’t think you have to stay here. You should go where the opportunities are best for you. You don’t have to take care of us. And so I think a lot of people probably weren’t that lucky, their parents or their grandparents kind of expect for them to be around. And so what I say to that is you don’t have to leave your country forever. You’re allowed to come back and visit. I think a lot of times and this is not tax advice because every country is different, but a lot of times it’s better to come back for little nibbles over the course of a year, rather than one big swath once.

Andrew Henderson:

So you can come in and check in. What I say is my wife doesn’t understand this, but you know, my family and I, we weren’t seeing each other every every day, right. So if you come back often enough, you’re probably not seeing your family that much less. We have tremendous technology. These days, you can talk to people from anywhere. How many friends did I have when I was in the United States, I lived in Phoenix. They lived in Chicago, they lived in Los Angeles. They lived in Kansas city. They lived in New York, right? I mean, was I abandoning them? So I think that’s something that a lot of people are dealing with, especially in Western countries where people are very mobile as to raising your own immediate family. I think having a supportive partner who’s with you is good.

Andrew Henderson:

If you’re going to be having children, there are a lot benefits, for example, most Latin American countries. If you give birth on their soil, your child becomes an instant citizen and you can work towards your own second citizenship in a year or two in many cases. So you can start building your own global citizen family. And here’s the reality Stephan, they have schools pretty much everywhere you go these days, it may be shocking to some people, but they do have schools right now, by the way, with the whole pandemic, nobody’s going to school, you’re sitting at home on a computer screen. If you can sit at home on a computer screen in Gary, Indiana, you can do it in Bogota, Colombia, Kuala Lumpur, Malaysia, or Kathmandu. And to me, it’s all about the mental barrier that people have.

Andrew Henderson:

I mean, this is what I talk about. The statistics don’t lie. The US has some of the worst schools in the developing world. So if the goal is to go where you’re treated best, if the goal is a quality education, you probably ain’t getting it where you are right now that ain’t, by the way, that’s because I went to public school. So I mean, if you want the best schools, you should send your kids to Korea or Singapore or Taiwan, that’s where the best schools are. And I think that if you’re making enough money, what a lot of people are going to start doing is hiring tutors. I’ve talked about that. When I was dating Mrs. H, my wife, and the idea of hiring someone who travels and teaches the things that are important and follows a curriculum. I think there’s a lot of opportunities, I think for getting into the top universities, they like a rich history of travel and different experiences and multicultural. So I quite frankly think that the education is much better doing this.

Stephan Livera:

I see. Yeah. And I think there’s certainly some interesting ways that I think it’s a really about changing people’s mindsets as well of thinking, how can we achieve this? As opposed to sort of looking for ways that you can’t you can’t do it. I think as this is primarily a Bitcoin show, one other important point is just around the practicalities. So in the case of some different residency programs, I know that you have to still deal with Fiat banking, right? And you might, they might be saying, Oh, we need you to show X number of US dollars in the bank account. How do you deal with that in the case of a Bitcoin investor or entrepreneur?

Andrew Henderson:

Well I’ll just go back to the previous question really quickly, which is if you’re in crypto, what percentage of the world thinks crypto is dangerous, that it’s used for shady purpose that only criminals use it? I mean, how many misconceptions? I think if anybody should understand this, it’s someone who is a cryptocurrency investor, right. Because how many people have played ignorant over the years and continue to do so, even as you see this increasing adoption most people don’t get it. And so most people don’t get this because they don’t want to get it. Right. But to answer your question, you’re correct. And I started really getting into this a couple of years ago when I realized I think the first guy, had something like $80 million in Bitcoin. And that was when it was $3,000 a Bitcoin. And I’m like, okay, well, surely this guy must have 30 grand to show Mexico that he has – Nope, chase bank has $11 in it.

Andrew Henderson:

And so I think, what’s, what’s not a bad idea. There’s a couple of things I tell people. Number one is if you’re getting East statements sometimes to satisfy bureaucrats, they’re getting better at this, but sometimes it’s better to like turn off the statements and have them come in the mail for a couple months. So if you’re going to go and apply, you can just show them the mail statements like a utility bill, something like that. If you don’t have utility bills in your name, get something in your name that you can prove your address. That’s a big one for the banking. Yeah. I would suggest I understand the opportunity cost, but the opportunity cost of paying taxes is a lot higher, put some money in the bank for, especially for a lot of these residences, like Latin America some places in Asia, like they want to see how much money have you had at the bank for the last three months or six months or 12 months to make sure you’re not a deadbeat.

Andrew Henderson:

And what I tell people is you have to understand you’re dealing with bureaucrats, right? And I know again, as a libertarian. You, sometimes you hate that. Why am I moving to deal with more bureaucrats? Because it’s still better. There’s nowhere perfect. But if you can put 50 grand in the bank or 20 grand in the bank, or if you can show an income of a couple of grand a month, just just cash out three grand a month, perhaps on the first of every month for six months in a row, and then spend that, that’s going to help you because yes, you’re correct. Not every country cares. And one of the citizenship by investments, they just, okay, where’s the money coming from when you’re making the donation, you cash out your crypto, you send it through your bank. No problem.

Andrew Henderson:

But yeah, especially for some of the cheaper programs, they want to see that you’re economically viable. And I think that, you know, getting a headstart on either an income and, or some kind of savings in the bank that could range again from an income of $800 a month, up to five or $6,000 a month savings to the bank could range from $5,000 up to low six figures. Depends. There’s so many programs. But that is definitely something that you want to have. And you might also be required in some cases, again, more for the cheaper programs to set up a bank account somewhere else. You go to a country in Europe, they want you to put 20 grand in the bank and keep it there. Or, you need to open a term deposit to get the residence or invest in some government bonds. What I’ll tell people is let’s just find the lowest opportunity cost a way to get you what you need to lower your taxes and get you the lifestyle that you want.

Stephan Livera:

Excellent and are there, this may be already a thing, but perhaps it will grow as a trend. Also have some programs or agents who will just take payment directly in Bitcoin. Is that also something you’re seeing?

Andrew Henderson:

Well, we started doing that years ago. There are some programs where the government wants you to pay directly, and there are a couple of them in Antigua and Barbuda in the Caribbean has become, I think, a good adopter of, of cryptocurrency. And so you can, you can do that. But for service fees and for a lot of the government fees, we’ve done that. Do I see more people doing that? And I try to pay attention when everyone else is doing in the business, but I think that the smart ones are I think that the offshore world is very interesting. There’s a lot of, I mean when I said in 2012, I’m going to show my face, I’m going to use my real name. It was kind of like, why would you do that?

Andrew Henderson:

Because there was so little transparency, I think in many ways, it’s a very old school business with people who, sit in beautiful office towers and they’re 55 and they don’t really understand crypto. So I don’t know that many companies are doing it. Certainly there are some, but we were one of the early adopters of it. And do I think governments will do it? I think a few and I think there are some that are very friendly to crypto, but I think that governments are also kind of stuck in the past. Right? I think when I talked to people in the government, sometimes. I’m invited to meet presidents, prime ministers, et cetera. But other times they’re like how many cases have you brought to our Island for citizenship? And I said, I had 17 million viewers last year, people are emailing me left and right. They came to your Island. They may not be my clients, but they’re coming and they don’t understand that. So I think that expecting the government to be ahead of the curve is probably not going to happen. But you do have some countries like Antigua, like Georgia, perhaps like Malta Bermuda who we’re doing things and you have companies like us who are doing things.

Stephan Livera:

Excellent. And I’m also curious if there are any common pitfalls that you notice when people are trying to do this, what are some of the, I guess, common mistakes that people make when they’re trying to go through this, or if they had the wrong expectation going in?

Andrew Henderson:

Well, a couple of things, I mean, when you’re talking about a physical lifestyle and you mentioned the family, and obviously the stakes are higher there than if you’re single, you’re allowed to make a mistake. I think people sometimes look at it as I’m getting into something for the rest of my life. You can sign up to live in Dubai or in Lisbon or whatever for a year, and then go from there. I think that was the greatest thing that I did for myself. When I decided to leave the U.S. full time, rather than just constant traveling. I said, I’m going to do this for a year. And I kind of told myself what I knew was a lie. I knew I would keep doing it, but I wanted to give myself an out to not be embarrassed. I think people they feel comfortable doing that.

Andrew Henderson:

So that’s definitely one thing. I think that also important, especially if you’re an American, but increasingly even if you’re not, is making everything work together. Right. So you want to make sure that you’re, I have, what’s called the tax friendly quadrant. Where are you as a person leaving? Where are you as a person arriving, where’s your business, or in this case, your crypto leaving, where is it arriving? You need to satisfy all four of those areas. So again, simply saying, I’m just going to get on a plane and fly out of Australia, and I’m not going to do all the proper paperwork or get the proper advice or get a tax memorandum or get an opinion letter or whatever. You’re opening yourself up to thinking that you’re clean when maybe five years later, you get a knock on the door. We see things from the IRS, they take four or five years to catch up to you in some cases, these tax authorities.

Andrew Henderson:

And so imagine that you thought you were saving money hundreds of thousands of dollars a year. And it turns out five years from now, you’ve got a $3 million tax bill, right? I think it has to be holistic. What you do in each country needs to support rather than hinder what you’re doing in the other countries. Lastly, make sure you’re setting up shop from a tax perspective in a country that legitimately has tax benefits. I hear so many people on the conference circuit saying, get Panama friendly nations visa, and you only need to spend one day in Panama for the tax benefits. There’s so much sleight of hand like that. Where to be a Panama tax resident, you either need to demonstrate a substantial connection to the country or spend six months in the country, right? One day per year might keep your permanent residence active, but it’s, the tax residence and permanent residence are not the same thing.

Andrew Henderson:

I have residents permits all over the world. Doesn’t mean I’m getting tax benefits or tax disadvantages from them. So I think that those are the things that you need to work on. And what I say is I don’t want people to chase shiny objects. If you call the lawyer in Panama the solution, every time it’s going to be Panama. And for most people, the idea is not to have a shiny object. You’re not chasing after St. Kitts because that’s what everyone else in the crypto business have got you’re chasing after what works best for you. I even had some of my own friends call me recently and said, Oh, we want to get the St Lucia passport. I said, why? They said, because we saw you got it. Well, who cares? What I got, I mean, three years have passed four years have passed. New opportunities are out there. I was single then, you’re married. I mean, I don’t copy what I’m doing. So hopefully that’s a number of things people can avoid. I that also say, don’t be too cocky. I see people doing that and getting themselves in pitfalls.

Stephan Livera:

Yeah. I think that’s very sound advice for people out there. One other theme that I would love to touch on, and I know you’re probably interested in this also is this idea of jurisdictional competition. I’m very interested in this because I think it’s one way that people can actually put some competitive pressure onto their governments by, by having more people willing to up and leave it forces governments in some ways to be less bad, right. They have to either tax less and regulate less to try to encourage people to either stay or to entice people. So is that a trend that you are seeing in terms of the Nomad Capitalist world?

Andrew Henderson:

Well, here’s my perspective, right? When you leave a girlfriend or a boyfriend who is abusive or who is not treating you well, is your goal that sends a message that hopefully for the next person they shape up or do you just want to go where you’re treated best? I think so many people try and be academic about this will, Monaco only has low or zero tax because they have a casino or Dubai only has zero tax because the country has oil. Okay. So what, right. What do you care? I think that, yes, you’re correct. I think what you’re seeing though is, and I’ve said this to BBC and Bloomberg and Fox business, and they’re asked they I was on Fox business over the new year and they said why don’t people just move to Florida?

Andrew Henderson:

I said, because it’s not go where you’re treated a little bit better. It’s go where you’re treated best. If you’re going to move out of California, if you’re putting the stuff in the truck, if you’re moving the kids out of the school that everyone’s so worried about, you might as well push it and go for all you can get, right. Don’t go from 50% to 44, go to zero, go to four, go to seven. And I think that some governments are not going to compete for you. I use the term legacy brands. The U.S. Is a legacy brand. It is like whatever brand that you would pay a premium for, but not get a premium experience or a premium product. They are living off of the fumes of a once. Great brand. Why do you think some of the top Italian fashion manufacturers go to such pains to hide what allegedly is that their products are mostly made in Romania shipped to Italy, and then just two stitches are put in and they can say made in Italy.

Andrew Henderson:

They’re doing that because they want to preserve a legacy brand. So people pay a thousand dollars for a pair of shoes. Now there’s nothing wrong. I have some nice shoes, nothing wrong with buying nice shoes for a thousand dollars. If you understand, you’re not getting the best deal, potentially, maybe you’re living in California to show off, but you’re not going where you’re treated best. And so I don’t think that legacy brands like the U.S. Or California or Australia or Canada are going to improve. But I think there are other countries that have come up in my lifetime and your lifetime that have decided we’re going to continue to be a hell hole if we don’t offer something interesting. And you look by the way, look at the index of economic freedom. The heritage foundation puts that up and looking at it for 25 years, Georgia and three other ex communist countries are now beating the United States in terms of economic freedom when I was born or when you were born. These were like Soviet countries. They were a disaster. They weren’t even on the list. Right. And look at what they’ve done because they’ve taken nimble and fast action to be competitive. So just go there, just go to the girl that’s nice to you and smiles and treats you nicely and your mother likes, don’t worry what the last girl is doing.

Stephan Livera:

Of course. And I think that’s a totally fair comment. I think that’s, I would modify my statement a little bit. What I’m talking more is about also, I guess, the sustainability of the overall approach it’s not about being spiteful to your ex-girlfriend or ex government but rather wanting there to be a better environment overall. And I think maybe that’s the world we’re moving into is that Bitcoin and other technologies are giving people this possibility that but now the counterpoint to that though, is that it’s a constantly changing game is that different countries are talking about wealth taxes. And I think you’ve mentioned the possibility also of unrealized capital gains taxes. How do you think about you trying to stay ahead of that? And how it’s a constantly shifting game aspect.

Andrew Henderson:

Well, I think again, about the nomad on the step, right? Am I confident that the plan I’ve put in place is going to last me I’m 36 years old? I don’t know. Maybe I’ll make it to 52. Maybe I’ll make it to 92. Who knows, but am I confident in the last me until the end of my life? I don’t know. It works for me now and I’m willing to adapt and I have diversified and become comfortable going back to the mindset and the comfort. I become comfortable being in other environments that I’m capable of moving. If you look at wealth tax, for example, you’re right. Wealth tax, I’ve seen more of the legacy brand countries talk about that. It’s on our newsfeed. It’s in the tax journals that we read every freaking day. And yet when they came out in Malaysia and said, Hey, are you guys going to put it in a wealth tax to pay for COVID?

Andrew Henderson:

They said, no, we tried that. And we’re probably not going to go back to that. You look at countries like Indonesia, which are loosening up their tax regimes and making it more friendly for foreigners. They’re lowering taxes on investments, Indonesia, and they’re going to make it to where it’s very friendly for foreigners to live. If they’re not generating an income from Indonesia. So I think that water seeks its own level. And when some places become too difficult, others will natch will naturally pop up. I do think that I’ve talked about what I call the visa waiver program paradox where it’s certain countries, perhaps like a Chile. Once they become able to visit the U.S. That a visa, once they reached that loftiest of heights for many countries, then they have no problems and they go back to how do we soak the rich, some of them?

Andrew Henderson:

So there certainly is that, which is why I like staying in more off the radar less talked about emerging countries that feel just as comfortable to live in. But that aren’t too big for their britches. And listen, there may come a time when, if some of the places like Chile that were good for awhile maybe the United States turns around 30 years from now. Maybe they get their act together, but I kind of look at it like if you’re an alcoholic, you’ve got to hit rock bottom before you seek sobriety. And I don’t think that the U.S. is going to turn around very quickly. Even if you went somewhere else and things got a little worse, there’s still probably going to be a lot better than where you left. Because if you’re living in an English speaking country, they’re probably taking close to half.

Andrew Henderson:

But I don’t see that other countries are doing this crazy stuff because the politics have not been about, like you go to Malaysia, the Malay people who are in charge of the government, the nicest people you’ll meet. And I think they pretty much just leave you alone. People say it’s a Muslim country. There are foreigners. There are the non-Malay locals who walk around dressed like you wouldn’t even believe, and no one says anything. It’s not their place to judge. And I think that they’re focused on bringing people in, being hospitable. That’s the culture and the Western world now is how dare you have any money.? So they get the different, I think it starts with the culture. If you look at the culture, I think you’ll see the right place to go.

Stephan Livera:

I think you make a great point around the cultural aspects of it. I’m also curious your thoughts on how many people, this kind of lifestyle. I think you’re open to your, I guess you’re open about this idea that look nomad capitalism is not for everyone. It works better for people who have a certain level of net wealth or net worth and a certain, I guess, aptitude who are the people who it’s best placed for?

Andrew Henderson:

Well, I don’t know that you have to have a certain level of net wealth. It’s certainly the people that I’m talking to. And I think that the things that I talk about in terms of owning multiple homes, attending multiple citizenships, are designed for someone who wants to protect their assets and have a comfortable life. Certainly there are people who are traveling around the world on a thousand dollars a month. And I made a video recently on YouTube where I would live if I had to start all over. And I was just making a thousand bucks a month in income somehow. But I think there has to be an open-mindedness. I mean, I come back to that. I talked recently about the two first steps to leaving the U.S. and the big first one was you have to get your mind, right? You’ve got to look at the statistics for me, the U.S. Where I’m from number one and nothing except prisoners per capita banking system was the 40th best during the last global recession.

Andrew Henderson:

At the time we needed it to be the strongest. It was 40th in the world. Education system is bad, 37th, best healthcare. If you’re a fact person those are the facts, you may not like the facts, but I think that’s what people have to get over. And I think that’s 80% of the battle, right? I don’t think so many people spend too much time strategizing on is Panama better than Costa Rica and how many days, and this one, and that the first issue is committing to do it. The first issue of committing to do it is understanding that you need to do it. And I also think it’s a matter of, is it painful enough? I look at the idea of paying a country, I used to pay a country that wastes the money that does not represent my values.

Andrew Henderson:

They don’t thank me for it. No, one’s happy. I sit in the money. In fact, there was a billionaire who said I paid $89 million in taxes last year. And people don’t think that’s a fair enough share for the roads and the bridges and the schools. And so if that is painful to you, you’re going to be motivated to take action. If life is comfortable, then you’re not going to take action. Right? I’m convinced I have a a slightly crude theory that if you’re 13 and all the girls are interested in you, for your entire middle school and high school. You would probably have a lower chance of being successful because there’s no drive. For many men, what’s the motivation? You want to get hot chicks. What’s the drive going to be? If there’s no drive, if you just don’t mind paying a million dollars a year to California to be squandered by a governor who doesn’t wear the mask when he tells you to wear the mask, I mean, then just do that, right. But if there’s a pain, if you’re saying this is ridiculous, I’m being taken advantage of, but I think you’re the person who can go and look at how do I change my mindset and realize it’s going to be okay, and probably better somewhere else.

Stephan Livera:

Really a good way to summarize it. I think. So Andrew, I want to respect your time. I know we’re coming to the end of our time. So just before we let you go, where can listeners find you online?

Andrew Henderson:

We’re at nomadcapitalist.com. We have a YouTube channel with over 1100 videos put out one, at least every day. We’ve got over 2000 articles at nomadiccapitalist.com. You can also learn how to work with us. And then I wrote for the people who are watching on TV the book called Nomad Capitalist. This is not a how to guide of which country, is the exact country for you. But what it is is a collection of 280 pages of stories and ideas and things that you can do and things that you can do to help you open up your mindset. So that’s like nine bucks or something in kindle. So we’ve got a lot of free resources. We put it a lot more. And I think this is something that you want to explore for a little while, right? If someone just reached out to me the moment they’re hearing this for the first time, it’s probably not going to be quite as effective because they’re not going to be quite as there yet.

Andrew Henderson:

And I think that for something like this, that’s so new, go and watch a hundred videos on YouTube, nomad capitalist. Go and read the book, go and read a hundred blog posts get an idea for what’s possible. I think that’s, what’s been, and with the people that I work with the most successful in helping them really get into this, understand it jive with it. And by the way, maybe you watch a hundred videos and then figure it out. This sucks. I’m not doing it. This is not worth the hassle. And that’s fine, too.

Stephan Livera:

Excellent. Well, Andrew, thank you very much. It was a very interesting conversation. I’m sure my listeners enjoyed it. Thank you for spending the time with us.

New Speaker:

Thank you, Stephan.


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