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international investment philosophy

International Investments - More IN-sured
By Gary Scott

international investment philosophy

* International Investments – IN-sured

* Natural Health Tip – Summer Madness ain’t Cool

* Ecuador Real Estate – Compassion

Recent messages have looked at nationwide downward cycles created by poor nutrition, masked by pharmaceuticals and enhanced by insurance. These cycles distort our lives, enhance inflation and place our business and investing success at risk.

We have been reviewing problems with insurance. Lloyds of London’s has warned insurers that they must face up to a growing threat of climate change or risk being swept away.

Insurance concerns have been especially focused here at the farm. In March Merri and I sold the last condos we held in Florida. Shortly after I requested a refund on prepaid insurance premiums. The refund never came. Last week we learned why. Our Florida insurer had gone bust!

At about the same time I received a note from our insurer of the farm. They wanted to increase our liability insurance here by ten times even though we have used this company over 20 years and have never had a claim.

There are at least three huge insurance concerns the Western world faces now. #1: Health Insurance, #2: Liability Insurance and #3 Unfunded Government Insurance.

We can see little warnings everywhere. Many readers have shared additional concerns and suggestions about what to do.

Health Insurance:

Here is a reader who shows ways to reduce your original baseline health insurance costs.

“Dear Gary, I am an attorney and pharmacist. Perhaps my situation will help other insurance-needy folks. I am a 56-yr old woman living in Pennsylvania - one of the states that does not apply group health insurance rates to individual business owners. Several states, however, do give sole entrepreneurs this break. Two years ago my employer health insurance (COBRA) ran out. I had had one major surgery during that time. Living in a state that does not give this type of insurance break to single entrepreneurs (divorced as I am), is a huge financial drain and could prevent me from achieving my dream of lifetime financial independence. Also, the plans available to individuals are a nightmare of medical exams and prior condition exclusions. I was also told that no Rx drug insurance would be available to me as an individual - only group plans! I had chosen to run my own farming business in Iowa while assisting a parent who was dying and during estate settlement, but I didn't qualify for the farmer plans offered through Farm Bureau because I was not an Iowa resident. Iowa's rates on all insurances, by the way, are unbelievably low, compared to PA, - especially car insurance - if you are a resident!

“I finally joined the local Bar Assn here in PA, and found the coverage I needed, even though I was not actively practicing law at the time but had considered opening an office here. My current plan costs over $700/month, but I have eye care, dental, and Rx drug coverage. Can't recall my deductible but I am sure it is not more than $1,000. The only other comparable plan was one that many others use: the local Chamber of Commerce! This is a great resource for the majority of people. Many friends recommended this to me.

“The answer to my particular dilemma is not some expensive health care account, but national legislation that prohibits insurance companies from discriminating against individuals in types of coverage offered and cost if they have been maintaining health care coverage for the preceding year. I should have been able to shop any existing ‘group rates’ in this state, without discrimination. I am, after all, a member of a much larger group - the US Taxpayers!!!! My advice - move to a state that counts a single business owner as a group for health insurance, or open a home-based business, if nothing else, and join the local Chamber! “

Another reader provides a very interesting health insurance resource.

“Gary - this is the great link that I used when looking at health care insurance two years ago. It is the Georgetown University's Guide to Getting and Keeping Health Care Insurance. It shows state-by-state which states allow ‘groups of one’ or self-employed people to obtain group coverage. If you live in such a state, you have a lot less risk when you open your own business because you can get insurance despite health status. This should be a FEDERAL law!!!

“This guide starts out by saying: ‘Under federal law, employer group plans are defined as those sponsored by firms with two (2) or more employees. In a number of states, however, group health insurance has been defined more broadly to include groups of one, that is, self-employed individuals with no other employees.’”

You can read the entire guide at

Self Insured Health

Here is a reader who has done as Merri and I have, self insure through a chapter C corporation.

“Gary I now have a fantastic medical reimbursement plan for myself that my C Corporation pays for with tax-deductible dollars. I am now the only employee of this company. It even covers OTC preparations and co-pays that the insurance co. does not pay - eyeglasses, etc. Thank God I found this way of financing my own healthcare. It is expensive but it works!”

Self insurance is great if you have your own business, a chapter C corporation and enough money to survive a catastrophic illness before reserves build. Merri and I developed 20 years ago a wellness plan in our Chapter C corp. The company pays all medical and dental costs for us our children (when they were dependants), plus anything (from vitamins to massage to visits to spas) that enhanced our wellness.

This covered the accidental medical portion of personal insurance (property and car)…anything that helped the employees of the corp. (Merri and me) and their children be well. We are hundreds of thousands of dollars ahead from saved premiums and tax benefits.

Liability Insurance

Self Protection of wealth (as well as health) is also a way to address the huge concern of liability. Liability is becoming increasingly hard to attain and is rising in cost.

Here is what one MD wrote about this:

“Gary, I have been deeply involved in the Florida Medical Association's asset protection planning. Part of the plan is holding off-shore accounts with Foster-Dunhill based in the Bahamas. These are totally IRS compliant, and this firm has extremely wealthy US clients-Kennedy's etc. Florida Medical has checked them out. Their website is”

This site mentions three advantages to holding assets outside the country where you live, tax benefits, asset protection and estate planning. Most of the US tax benefits gained by holdings assets abroad have been eliminated in the past decade. Now new legislation is being suggested that will reduce this benefit even more. Honestly (except for the largest estates), good estate planning is easy to attain at home.

However holding assets abroad provides a simple way to gain huge amounts of enhanced privacy and asset protection at very low cost.

Join Merri, Thomas Fischer of Jyske Bank and me at our last International Business and Investing Made EZ course in North Carolina this year. Learn how to gain extra asset protection. Review where to invest and do business now and learn which markets and currencies may be strong in the year ahead. Meet Steve Marchant, our man in Ecuador, and learn about products to export. Go to

Unfunded Government Insurance

The third insurance concern we face is off-budget insurance provided by governments. This type of invisible liability creates currency instability and inflation.

A recent message outlined how the Federal Reserve Bank of St. Louis included an article in its July August “Review” that says the US is bankrupt. See

That same Federal Reserve “Review” includes another article entitled “Federal Credit and Insurance Programs Housing” by John M. Quigley, professor of economics at University of California Berkley.

This article recommends that insurance provided by government sponsored enterprises (GSE’s), should be altered to reduce federal risk exposure. The article says: “Federal policy affecting housing is dominated by indirect off-budget activities-tax expenditure policies and credit, insurance, and guarantee programs-rather than the direct subsidy of housing production or the payment of shelter allowances to the deserving.”

This is a very long complicated article, but the gist is most federal guarantees are not needed to bolster the housing market and that FHA and other similar GSEs actually cause housing inflation.

The article ends with a warning: “Finally there is the skunk in the middle of the road. The implicit federal guarantee that GSE assets are insured is an enormous contingent liability for the federal government.”

This is one more way that the US dollar is being devalued by Federal overspending. This also is one of the causes of inflation. You can access the Fed’s “Review” and this article at

Natural Health Tip – Summer Madness ain’t Cool. Don’t miss tomorrow’s message on three ways to maintain calm during stress!

Ecuador Real Estate – Compassion. See yesterdays message at

Until next message, I hope that your happiness and wealth are assured!


P.S. Beyond compassion one part of Ecuador that Merri and I love most is the sweet happiness of the people. The picture of this happy Ecuadorian says it all! Please send me your photos of happy people that I can share!

At Otavalo Market about 15 minutes from El Meson

Learn more about our August 31-September 4, 2006 Super Thinking + Spanish courses. These are courses that help you learn how to learn. You find new ways to absorb, retain and recall information much more effectively. You improve your health and add Spanish fluency as bonuses! See details at at

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