How to Apply Flag Theory and Diversify in 2024

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“Don’t put all your eggs in one basket” is age-old advice that is of especial relevance to the world of investment. This recommendation to diversify is as valid today as it was yesterday. In this article, we will discuss how flag theory can help with your diversification plans.

What Is Flag Theory?

Harry D. Schultz (1923-2023) was a legendary investment writer whose books include What the Prudent Investor Should Know About Switzerland and Other Foreign Havens and Bear Markets: How to Survive and Make Money In Them.

One of the cornerstones of Schultz’s financial freedom philosophy was his “Three Flag Theory”. He urged his readers to:

1. Establish a personal safe haven by obtaining a second passport in a country that does not tax you on overseas income
2. Set up business havens in secure low/non-tax states
3. Travel to lifestyle havens aka playgrounds that align with your mindset and where you can experience more value for money

Later, in collaboration with the possibly apocryphal Dr. William G. Hill, Schultz would develop 2 further flags he recommended his followers plant:

1. Legal residence to avoid the taxation of citizenship
2. Asset haven in an offshore destination

Planting flags makes you a player. It transforms you into a PT. By PT, you can interpret that as perpetual traveler, permanent tourist, or prior taxpayer.

How to Plant Flags With Investment Migration

There are various investment migration solutions that allow you to subscribe to flag theory. You can create a personal safe haven by acquiring Caribbean citizenship. Choose from the Citizenship by Investment Programmes of Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, or St Lucia.

Residency by Investment could land you a base in the Cayman Islands, many investors’ image of an asset or business haven.

Citizenship by Descent can help you relocate to a country with a lower cost of living such as Poland and Portugal, as can Greek, Portuguese, and Spanish Golden Visas, and Turkish Citizenship by Investment. Then there’s Anguilla Tax Residency.

The Latitude Take on Planting Flags

Our Executive Chairman Eric Major supports the concepts Harry D. Schultz promotes but urges you not to get too carried away. “It’s important to remember that Schultz was in the business of selling books (and subscriptions to his newsletter) whilst we are in the business of providing residency and citizenship solutions,” Major reasons.

“I think it’s also fair to see that the investment landscape has evolved somewhat since the heyday of Schultz,” our Executive Chairman continues. “Latitude has its ear to the ground regarding the latest Residency and Citizenship by Investment offerings, so you will be able to hear about them first from us,” concludes Major.

The ABC of Becoming a PT

After reading this, we appreciate that you now can’t wait to start your investment migration adventure. But to ensure you put your best foot forward, we recommend you talk to a Residency and Citizenship by Investment specialist such as Latitude Group. So, don’t delay and contact us today.