Facing the Future: Why a Second Trump Presidency Drives Diversification

Politics is always a tricky subject... until it becomes personal.

That's a lesson I (re)learned at our annual IL Bootcamp in Las Vegas at the end of October.

From dozens of consultations with members of my Global Citizen service this year, I already knew the role US politics plays in people's plans to diversify globally. But in that context, I have nearly two hours of face-to-face conversation to get a sense of where people were coming from. It's a slow reveal.

In Vegas, by contrast, political fears came tumbling out quickly. After all, the election was only days away at that point.

What I'm about to say is not a political judgment. It's just a statement of fact: By a large majority, people I’ve met online and in Las Vegas were deeply concerned about the prospect of a second Trump presidency.

Now it’s a reality.

Given that, I thought it would be useful to summarize those concerns… and highlight the opportunities the rest of the world offers.

The first thing most people mentioned was the prospect of inflation and a collapse of the dollar's purchasing power. Trump won the election on the back of widespread anger over inflation under Joe Biden, but if the president-elect enacts his promised agenda, inflation will get worse. (That's not just my opinion, but also that of nearly every neutral economist.)

My standard response was to recommend holding assets in foreign currencies. Whilst the dollar declines, their purchasing power will stay the same, or even grow. That's why it's wise to invest in things like foreign real estate, multicurrency bank accounts, offshore gold storage, and even foreign stocks. The more of your wealth you have in non-dollar-denominated assets, the more of it you’ll preserve for the future.

The second big concern was the impact of a Trump presidency on freedom of travel. Americans are used to being able to go practically anywhere without the need of a visa. But Trump's policy proposals could easily trigger a backlash, especially in Europe and Latin America. It's not hard to imagine some countries imposing visa requirements on US passport holders in retaliation for harsher US immigration policies.

Of course, anyone who already has a second citizenship, permanent residency, or renewable temporary residency in a foreign country would be exempt from such restrictions. That was a big motivation for many people I spoke to in Las Vegas: to get permission to live abroad as soon as possible.

The third concern was about the rule of law. Under archaic traditions that go back to medieval England, police departments all over the country routinely confiscate personal property from US citizens on the slimmest of pretexts. The IRS and the FBI do the same with people’s bank accounts. This happens in a reversal of the normal rule of justice. When the government takes your money, it's up to you to prove it wasn't involved in crime, not the other way around. It's not hard to imagine state and local police and judicial authorities seeing Trump administration as a validation of this practice.

There are many ways to use global diversification to reduce this risk, but my favorite is an offshore asset protection trust. If you create an irrevocable trust in the right foreign jurisdiction, it's effectively impossible for any US authority to get their hands on it. On top of that, offshore trusts have significant tax and estate planning advantages, which become critical if you own multiple properties abroad, as do many members of Ronan McMahon’s Real Estate Trend Alert.

I'm keenly aware that many people reading this article will probably disagree that there is anything to worry about. I certainly hope so.

But for those with concerns about the result of the recent election, found it or not, I'm here to help.