Good governments prosecute thieves; bad governments become them. The government we live under threatens to steal the hard-earned wealth of Americans through two primary ways: inflation and taxes. If you can shield your wealth from the Federal Reserve and the IRS, you are way ahead of the game.
Here is a list of nine things you can do to protect yourself from the twin demons of inflation and taxes:
1.Make sure you invest abroad, open bank accounts abroad, store assets abroad, and even consider living abroad and renouncing your citizenship in the ultimate way to safeguard yourself from Uncle Sam.
2. Own your own home. Real estate can help protect against inflation and the mortgage deduction for your taxes provides a good boost.
3. Consider using Roth IRAs, IRAs, and 401(k)s. These are all excellent ways to protect your assets from the IRS, just be wary of the potential for government confiscation, as happened in Cyprus.
4. Own physical gold and silver. These traditional hedges against inflation should work well.
5. Consider reducing your exposure to bonds in general, especially government bonds, given the precarious state of U.S. public finances.
6. Give to charities and claim your tax deductions.
7. Consider investing in the stock market. Company earnings should keep pace with inflation. Just beware of the existence of stock market bubbles, as we are currently experiencing.
8. Claim all available tax breaks if you are self-employed.
9. Consider hiring a professional to do your taxes.
These are just some; there are many others. Good luck with your money!
F. Peter Brown is the Editor of the Sound Money Institute.
Photo Credit: 401 (K) 2013 (Creative Commons)