HARRY SCHULTZ
In 1964, Harry D. Schultz - the world's highest-paid financial consultant, according to "Guinness Book of World Records," and author of a number of books on investing that were bestsellers in the 1970s - published a book entitled "How to Keep Your Money and Your Freedom." He espoused his Three Flags concept that described the need to have a second passport, a safe location for your assets outside your own country, and a legal address in a tax haven. The concept later expanded to Five Flags to include a conventional business place and a place to play.
W.G. HILL
Dr. W. G. Hill, a former American citizen, entrepreneur, self-made millionaire, author, and inveterate traveler, was influenced by the concepts of Harry Schultz. He had found a winning formula on which to base his future. In 1989, after years of living a PT lifestyle and fine-tuning many new ideas, Hill wrote the first definitive book on the subject, entitled "PT." This valuable work discusses the essence of the philosophy and is definitely recommended reading for anyone who aspires to a free and uncompromising way of life.
PT is not a fixed set of rules. It's just a way of thinking... an attitude towards life.
In a classic 1950s pamphlet, he explained how this ideal could easily be achieved by spreading your interests out over various unrelated countries. It's not expensive (indeed, it's probably cheaper than any alternative). He wrote about international arbitrage through the use of three different nations, jurisdictions, or - as he called them - 'flags.' Later, in the 1980s, legendary author W.G. Hill expanded the number of flags to five - so it became the 'Five Flags Theory.'
The original theory was based on ‘three flags.’ During the eighties and early nineties, this grew to five flags.
With the advent of the Internet and cyberspace, when Bye Bye Big Brother was first published in 2006, we added a sixth flag to the previous flags. Marvelous new opportunities had been opened up that were 'made for PTs' due to the Internet. Cyberspace was added as the sixth flag that brings all the other five flags together.
W.G. Hill, and later Grandpa, have always been at pains to point out that the Six Flags Theory is not a hard or fast set of rules. It is rather an attempt to put a little structure to the PT lifestyle to understand what international arbitrage really means.
Almost nobody really lives the six flag lifestyle, but many people choose to live parts of it. Living is an art, not a science, and each individual will interpret PT ideas in his or her own way.
INTRODUCING THE SIX FLAGS
Today, millions of the wealthiest and most productive people on the planet take advantage of the best that each country has to offer. Governments are viewed as providers of facilities and services, like hotel keepers. If they offer good accommodation and make you feel comfortable and prosperous, you stay. If your government becomes too demanding or too nosy, or if a competitor offers a better deal, you can move on.
Economic opportunities, financial privacy, taxes, extradition treaties, social values, military obligations, quality of passport, the stability of government, medical standards, respect for property rights, personal safety and freedom of travel, thought and action – these factors are all taken into consideration when choosing legal residence and citizenship.
People of intelligence and wealth owe it to themselves and their descendants to have more than one flag. No one with common sense should give all their assets or allegiance to just one country, one flag.
Why? No country or government has ever survived more than a few generations without totally annihilating itself or its own middle and upper classes.
Even in that last bastion of capitalism, the US, people of property have been thrice pushed out of the country. In 1780, the entire middle and the ruling class was forced to move to Canada. They were the Tories who supported England in the American Revolution or War of Independence. In 1865, it happened again. All large landowners who supported the Confederacy in the Civil War migrated to Mexico, Europe, or South America.
In the post-1917 period, prohibition, compulsory military service, confiscatory income taxes, and suffocating government regulations once again caused many independent-minded Americans and their European counterparts to seek new flags. They made the amazing discovery that as expatriates or tax exiles abroad, they need not belong to any particular country nor participate in its senseless policies.
Ernest Hemingway and Gertrude Stein might be considered early PTs (Proto Types).
The PT’s relationship with – or divorce from – the government is a matter of choice. It is an option. The passport you hold and the country where you live need not be a burden that you were born to and will be saddled with forever. No government can be trusted to control your money. They will not take your best interests to heart. Politicians are interested in redistributing wealth – usually into their own pockets. In the end, they will only succeed in redistributing taxpayers. The major portion of all liquid private wealth, the smart money, has already been anonymously registered offshore. It has been reflagged.
Individuals can remove themselves from any government's control and jurisdiction by acquiring dual-citizenship, investing internationally, and becoming human multinationals. Departing physically and permanently is not required. A PT can live where he wants, leave when he wants. The secret is paperwork to effect a change of legal status. Many wondrous benefits can be achieved by merely wrapping yourself and your assets in a new flag.
YOUR SIX FLAGS UNFURLED
In order to accomplish this miracle, you merely have to re-arrange, relocate, and re-title your possessions and persona according to this simple outline. Your six flags are:
The PT's Six Flags Unfurled
First Flag
CITIZENSHIP
In addition to your native country's passport, you should hold one or more passports from preferably neutral, respectable nations. The best of these countries do not tax citizens living outside their territory (that's everyone except the USA), nor do they draft citizens into military service. These second passports should allow visa-free access to as many nations as possible. For ease of travel, we recommend the European Union followed by Latin American passports. "Banking passports" (see more info on this below) should match your language and racial characteristics.
These should be from a country unconcerned about its offshore citizens and what they do outside its borders. There must be no tax or military requirement for non-residents. Passports must be available to foreigners relatively easily. Dual or multiple nationalities is one of the cornerstones of the PT philosophy. The PT should strive to have several passports regardless of original nationality. A second passport always comes in handy and has often saved the skin of many an individual during times of war, persecution, and political upheaval.
Second Flag
RESIDENCE HAVENS (DOMICILES).
This is your official residence. A country that regards you as a bonafide resident, although you might not actually spend too much (or any) time there. It should be a country that does not tax income earned abroad. The net effect is that you never have to file any personal tax returns anywhere. Tax havens like Turks and Caicos, Panama and Andorra are low-budget candidates. Bermuda, Liechtenstein, Switzerland, and Monaco are more upmarket. In the first world, the UK, Italy, Croatia, and Ireland are also worth considering because of their no-tax or the low tax treatment of foreigners. Most Asian, Central, and South American countries do not tax offshore incomes. Like Paraguay, many of these countries, the oil-rich Arab countries (and believe it or not, North Korea!), have no income taxes at all. Argentina, Uruguay, and Brazil are de-facto tax havens. But then again, the whole world can be a “no tax-fiscal paradise-tax haven” for PTs who arrange their paperwork properly. Example: No country will tax “tourists” who are “Passing Through.” We know PTs who have been low profile “tourists” in the same place for over 50 years. Thus, this flag is strictly optional.
Third Flag
PLAYGROUNDS.
These are places where you physically choose to spend most of your time. They depend on your personal taste. Quality of life is a top priority. Because of legal restrictions on how long one may stay without being considered a resident for tax purposes, it may be necessary to have from two to four playgrounds. But you can easily make arrangements to spend all of your time as a PT in one playground if desired. It's just a question of getting the paperwork right.
My personal recommendations: For no nukes. Terrorists nor pollution and good fishing: New Zealand. For the most interesting sex life imaginable: Thailand. Other sex-havens include Cuba, Dominican Republic, Madagascar, Brazil, Mexico, Paraguay, and The Philippines. For a superb year-round climate: California, USA. Yes-- for non-USA persons, the USA or other police states can still be an excellent playground or place to invest. Or have a look at Queensland, Australia. For the gourmet, we give top honors to the French Riviera. For good eats – tied for second place in our view is Hong Kong, Tokyo & Italy.
For stimulating nightlife and an active social life: Paris, London, Sao Paulo, or San Francisco. Some would include Dubai. Emirates. But for me, being an “Infidel” in any Arab country is too dangerous. For the best electronics at the cheapest prices: Ciuidade d'Este, Paraguay, New York City, Singapore, Taiwan, and a long list of duty-free ports (for consumer goods).
Fishing in Europe? Ireland (summers only unless you love cold, damp weather). Punta Del Este (Uruguay) is the playground of Buenos Aires and also could serve as a great European winter home. The world is your playground as a PT. The author travelled for forty years and lived in over 50 countries before settling down in his favorite PT area—The French Riviera. But for a perfect year-round climate, with few exceptions (like Newport Beach, California), he has found one usually needs to relocate seasonally to have perpetually good weather.
Fourth Flag
BUSINESS BASES.
These are places where you actually earn your money. If you own an existing business that can't be moved, you may not have much choice in the matter: You may have to bite the bullet, suffer some regulation, and pay some taxes. But you can incorporate elsewhere and transfer income “offshore” legally. Almost all businesses can be gradually shifted abroad by outsourcing and exporting more. If you learn to earn money with your communication skills, you can probably re-domicile and operate in cyberspace (on the Internet). Or for something like real estate investing, you may choose an offshore tax haven as your physical business base. Then you can be largely free of regulation & also tax-free. Either way, an active and visible business should be incorporated. Why? For insulation against personal liability. Ideally, you will have Grandpa or one of his reliable contacts set up your paperwork properly. Then you will never have to file personal tax returns, nor need any permits, licenses, or special dispensations. You must absolutely positively never use any accountants nor lawyers based in your home country as their records are instantly available to Big Brother. Of course, many people will choose to operate full or part-time in their birth country to “make hay while the sun shines.” They will keep some of the six flags in reserve.
For active businesses, personal contacts, labor markets, or materials may be important. London, Tokyo, and New York are the big centers for finance and insurance. Zurich, Milan, Singapore, and Frankfurt are also contenders. But in today's global economy with the Internet, you could base yourself and your business anywhere.
Wild-card contenders such as Brazil, Israel, Estonia, Malaysia, or Panama are all competing to offer you a safe business haven. Some countries specialize in providing the best headquarters for particular businesses. For instance, to own or operate freighters and tankers, Panama or Liberia may offer the best deals. Governments are like hotels. You use them only as long as they serve your needs. There are good reasons to consider Delaware or Nevada as a place of incorporation to serve a USA consumer market. Individuals with invisible incomes (see Insider Secrets) two or more passports generally do not need corporations, trusts, or other “structures” to operate most effectively.
Fifth Flag
ASSET HAVENS & MANAGEMENT
These countries are where you keep your savings and investments, safely salted away from where that money is actually earned or spent. They should score highly on respect for privacy, communications, professionalism, and stability. Your assets may be kept in secret numbered accounts, where they can be controlled with hacker-proof encrypted electronic messages or personal visits.
Naturally, you don't live, play, or do much business in the place where your assets are discreetly hidden. In Grandpa’s opinion, it is important to have a legally issued “banking passport” from a country that does not (by treaty or otherwise) insist that your banking haven give them a full dossier on your activities.
You can have several assets havens. Top-ranked candidates used to include Switzerland, Luxembourg, and Liechtenstein. But they are phasing out secrecy at least for EU or USA citizens. Singapore and a few other places I do not wish to publicize may still be good for offshore banking. Bankers in other locations may not yet be up to the Swiss standards, but they fly under the radar and are more accessible to people with moderate wealth. Contact Grandpa or read more about this topic in his other books—like Invisible Investor.
Sixth Flag
ELECTRONIC HAVEN IN CYBERSPACE.
In cyberspace, you can be everywhere and nowhere at the same time!
This is your Internet Business, Communications, and Cash Transmittal System. It's so cheap to rent server space that it doesn't matter much where your servers and websites are located. Grandpa can assist. You can be physically anywhere, but invisible to all. Have a few servers and offshore sites. Best for them to be in places like Taiwan, Costa Rica, or Panama - or in far off island nations, like Tuvalu or Niue.
Better still, why not be "distributed," so you change your transmitting and receiving jurisdiction automatically every second - technology makes it possible. It is becoming easier by the day to be anonymous. Your Internet presence should emanate from any place where the net is unregulated and untaxed. Your electronic base should be anywhere - where you are not. You can never be served with process or sued with no physical presence. Your encrypted communications, files, and data banks will be safe from private or government snoopers. If 'authorities' in your server's host country bother you or an ISP gives you grief, you just press 'delete.' With your sixth flag in cyberspace, you can take advantage of many new opportunities in the 21st Century Information Age.
Virtually all the reports in the Insider Secrets & Bye Bye Big Brother series deal directly or obliquely with selecting, setting up, and operating under the protection of your six flags. You can do it yourself with our information, or if you want hand-holding services, Grandpa and associates will always be at hand to provide personal guidance for consulting clients. Understanding the six flags theory is vital. We strongly recommend you re-read this basic summary section a few times. Think more about it. Can it apply to make you happier, healthier & richer? The full story is in Grandpa’s three volumes, titled, " Bye Big Brother.
Until you get there, keep working at it. One flag is better than none. Two or three flags are better than one!
How does it apply to you?
Does the PT Five Flags Theory Really Work?
by Peter Macfarlane
A number of readers have recently been asking me recently about the ‘Perpetual Traveler’ or ‘Permanent Tourist’ theories. The idea behind these theories is that smart, freedom-seeking individuals should not be bound in their allegiances to just one government. We decided to determine if these theories have a practical application in real life. In other words, do they work? Our answer is - “Yes, but they are not suitable for everyone.”
There also seems to be some confusion about the number of flags: The ‘Three Flags Theory’ of Harry Schultz, the ‘Five Flags Theory’ of the W.G. Hill series, published in 2010 by Neil Strauss in his bestselling book Emergency… or the ‘Six Flags Theory’ of "Grandpa's" Bye Bye Big Brother 3 volume set of books? There need be no confusion. Each additional flag just makes the prior flags more useful. The motor car was a big improvement over the horse-drawn carriage, but it got better with a self-starter, and still easier to use with an automatic transmission. The six flags are a guide to separating yourself from a Big Brother government that possibly, in your personal opinion, has become too oppressive to bear.
Many of Grandpa's “P.T.” readers and clients decided to escape from the country of their birth because they actually felt the pain of being unfairly accused or convicted of some victimless crime-- like not filing an intrusive information form. Many escapees were being put through the ringer of divorces, frivolous lawsuits, or other government-sanctioned legal change that took away their business, freedom, or hard-earned assets. Grandpa, in his books and PT philosophy, answers the question:
“How can I best protect my ass and my assets?”
The answer is simple: Move both out of harm's way! Leave the jurisdiction. There are over 150 other countries to choose from.
What useful purpose does a government serve? Most people accept government institutions because it has always been there; they have always assumed it was essential. People do not question its existence, much less its right to exist.
The Six Flags help us achieve freedom by not having one single government in control of us. Most countries treat foreigners far better than their own citizens. So part of the idea is to move abroad, be low profile, and seem to be a foreigner, just Passing Through wherever you happen to be – hence the ‘Permanent Tourist’ tag. You also achieve pretty good privacy because no government can gain access to the full picture of you. They won't know who you are or what you are doing.
In general, ‘PTs’ can, by moving between countries regularly, legally reduce or eliminate their tax burden. However, many adopt this PT lifestyle primarily for self-ownership or freedom reasons – Checking out of “Big Brother's System” increases your assets and your spare time. Not to mention improving your love life.
PT goals are achieved by simply using different governments, or flags, for different parts of your life. At its simplest, the theory works well with three flags:
Have citizenship and eventually get a passport from any country that does not tax income earned outside the country. Your new country should not attempt to exercise any fiscal or moral controls over citizens who reside offshore. This will be your “Passport Flag(s).”
Have your active businesses, investments, and secret stashes of assets in stable, low, or no tax countries – This will be your Business Haven Flag(s). Flag 2 was later divided into two separate flags. See below*.
3) Live as an unregistered tourist in countries where they value and protect what you esteem most. Where what gives you pleasure is not outlawed. These countries are known to PTs as our Playground Flags. They will be the places where you spend time and enjoy life.
In the 1980s, author Dr. W.G. Hill and the Scope International publishing house produced a series of books, including The Passport Report, PT1, PT2, and Banking in Silence. These books are available from the PTsecrets WEB
In these later books, the original three flags were increased to five flags, later six --- by adding an additional
*Asset Haven – a Money Management Flag or offshore banking center, independent of the active business flag – and finally a
Tax Haven -Legal Residence Flag in a so-called tax haven country where you can have a registered, legal, official residence.
Note that your ‘official’ residence is not necessarily where you physically spend all or even most of your time. We wrote about residence and citizenship in various countries, and tax has ns. Best to choose one where nobody looks, and nobody cares if you are physically there. You can live, play, invest anywhere, and still qualify as a “legal resident” in many places.
A few years ago, “Grandpa” wrote a new three-volume update of the PT series. He named his new 3 volumes, leather-bound and 5 kilograms, Bye Bye Big Brother (BBBB).
THE SIXTH FLAG
In BBBB Grandpa's revised, expanded, and the updated recipe for freedom, he added the sixth flag :
6) Cyberspace – your new Virtual Country. The place that binds the other five flags together. Thanks to modern technology, you can now communicate and do business anonymously and unregulated -- over the Internet.
If you're interested, continue reading our Critique of the PT Five Flags Theory –below. We explain everything in more depth. There’s also more information on the < PTsecrets > website.
Having cleared up the confusion about the number of flags, the big question is, do the 6 Flags actually work?
DO THE 6 FLAGS ACTUALLY WORK?
They certainly work for me, Peter MacFarland, Senior Editor of Q. Not only do I live this lifestyle myself, but I know many other people who are also full or partial PTs. Yet I don’t know anyone who flies with the PT suggested flags raised at all times.
PT is a way of life created as a guide for people who don’t like rules!
Most people tend to interpret the six flags in their own way, picking, choosing, and using the bits they like best.
When people first hear of the PT theory, they sometimes think it sounds difficult, complicated, or expensive. It’s not. On the contrary, by freeing you from accountants, lawyers, lawsuits, creditors, tax collectors, the Six Flags will increase your income as well as giving you the keys to freedom and financial independence.
Most people don’t decide to become PTs overnight.
Think of it as a gradual process – little by little. For starters, you might open a small bank account unreportable if under $10,000, buy a condo or small villa abroad, &/or spend more time overseas (at your playground). Then, expand your business by diversifying across the nearest borders. Create your own invisible income from your cyberspace business haven. Next, you get residence and eventually a 2nd Citizenship & Passport. You look for another country—perhaps where your ancestors hailed from – that leads you to a second passport –often for free. Before you make any deals with the often unreliable 2nd passport providers who advertise on the net, ask Grandpa if they are crooks or otherwise.
Finally, to become a real PT, you actually should consider moving from where you are now. Give up your old residence and citizenship if it is a burden rather than a benefit. We offer a book called Paper PT that tells people how to be a PT in their home country. But though it is an amusing concept, we don't think it's a good idea for anyone with substantial assets or earning power to try and be a PT in their birthplace or long term place of citizenship/residence –if it is a Big Brother country..
Maybe you will want to apply for residence in a tax haven. That is a place that has no income tax and makes no demands (like military service) on its residents. A tax haven residence isn't entirely necessary because the whole world is a haven for PTs. You don't really need a tax haven if you are willing to go “low profile.” We know of PTs who have lived for decades--even in Big Brother countries – as long as they are not living in the same countries where they were born. The trick is to avoid being registered and documented. However, for those who want to run a high profile, visible business, then using a tax haven as a fiscal base of operations can be a very good idea.
If needed, use the Internet (sixth flag – cyberspace) to communicate, make deals, and earn money. Your internet-based business can be anywhere. Before you know it, you are free -- a full-fledged PT.
The 6 PT Flags is a concept that will open up many new options for you.
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Here are some questions you can use to note your thoughts while reading and answer below when reading THE SIX FLAGS UNFURLED.
- What makes you think THE SIX FLAGS UNFURLED is going to be interesting?
- Why do you think "Grandpa," wrote THE SIX FLAGS UNFURLED?
- Something you liked about it.
- Something you disliked about it.
- How did reading it change you, or your views?
- What would you say to persuade a friend to read it or not to read it?
- Summarise it in one written sentence.
- What was your favorite part of THE SIX FLAGS UNFURLED? Why?
- What was the most interesting thing you learned from THE SIX FLAGS UNFURLED?
- If you could change one thing in THE SIX FLAGS UNFURLED, what would it be?
- How might you have written it differently?
- Do THE SIX FLAGS UNFURLED remind you of anything else you’ve already read or seen?
- Was there any mind-blowing piece of information you hadn't thought of before that you think you can use?
- Did THE SIX FLAGS UNFURLED change your opinion or perspective about anything?
- Do you feel different now than you did before you read it?
- What feedback would you give "Grandpa"?
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