Governments around the world need resources to live, so they ensure that different methods are put in place to raise revenue from their people, and in most cases, it is by various types of taxes.
The truth is that nobody will be happy to allow the government to continue to collect money from them under the different guise that is the reason why people will go all length to ensure that they protect their money from the government.
Protecting your money from the government might not be easy especially when you live in a country that is heavily policed but if you know the right approach to take, your money will be well shielded from the government.
Common Ways They Catch You When You are Trying to Hide Your Money From the IRS:
Receiving Income – If they can prove you have an unreported income, you are committing a crime. The two best ways to receive income that may avoid detection are cash deals with no contracts involved or via cryptocurrency.
Holding Income – Most typically get caught here in dropping off or picking up the income from an account that can be tracked or accessed.
Spending the Money – If you are living a lifestyle not supported by your filed tax returns, you raise red flags.
Reporting – Be very careful how you fill out your tax returns. They are complicated for a few reasons and one of them is to catch you in a lie.
Legal Ways to Hide Money from the Government
1. Diversify Into Gold
This only works if you purchase say gold coins and then lock them up somewhere safe.
Gold has exploded in value for a reason. People trust that gold is always going to be worth something. It’s the perfect protection against the worst-case scenario.
Gold is still one of the safest places to put your money after thousands of years. Don’t count on that changing anytime soon.
Since writing this originally, gold has dropped a bit in value. Historically speaking, that doesn’t change a thing.
2. Invest in Commodities Market
Another way you can hide your money from the government is to invest in the commodities market. When you invest in the commodities market it means that you have paid for commodities to be collected on a future date whether in cash with the interest of the commodities you paid for.
With that, it means that your money is stored somewhere and it will be difficult for the government to charge you tax over what you have not earned.
3. Reduce Your Savings Account
Be careful with having too large a savings account. The interest on your savings account will not protect your money from government inflation. That means your money is sitting and shrinking.
It’s kind of like filling a bucket with a hole in it. Savings are great for emergencies but try to get a lot of your savings into investments or use it to pay off high-interest debt.
4. Invest in Stocks
Another strategy that you need to adapt to hide money from the government is to invest in the stock exchange.
When you invest in the stock exchange, it means that you would have succeeded in reducing the liquid cash in your hands or your bank accounts.
When you invest in the stock market you will not only protect your money from the government but you will also make more money and increase your financial worth.
Although you will be required to VAT and other taxes, the merits far outweigh the demerits.
5. Consider Reducing 401k Investments
Some people will start throwing rocks at me for this one but it’s true for some people. You might get tax advantages from your 401k but those tax advantages aren’t always worth the risks they put you through.
The government is treating these accounts more and more aggressively by the year. 401k’s are also rarely managed impressively either.
Consider the story of the person in Germany around WW2 that pulled out his retirement account. He saved in it for his whole life. He could only afford a loaf of bread with it all. Inflation is unpredictable in government hands.
That makes weak investments bad investments.
6. Invest in Real Estate
One of the ways to protect your money from the government is to invest in real estate.
When you invest in real estate, you will still have to pay some form of tax to the government, but the money you will get from the investment will make the money you are paying in form of tax to the government almost negligible.
In investing in real estate, you can diversify your investments; try as much as possible to invest in other countries.
One good thing about investing in real estate outside your country is that the government won’t know the true value of your investment and as such, they won’t be able to slam unnecessary tax on you.
7. Try Out Bitcoin
On the speculative end, bitcoin is a cryptocurrency that’s designed to be safe from government printing. Bitcoins can only be created by using actual computer energy.
That means that it doesn’t rely on trust to maintain its scarcity (only its value.) This is definitely more for the techies out there. It’s also very unproven which usually means risky.
8. Start a Charity Organization
One of the surest ways you can protect your money from the government is to start a charity organization; a Not for Profit Organization (NGO). Of course, running a charity organization means that you are expected to finance the organization from your purse or from grants.
But the truth is that if your charity organization is addressing a major challenge in society you likely going to get more grants that will ensure that your money is intact.
Governments all over the world do not tax Charity organizations rather when people give to charity organizations; they get tax cut in return.
9. Invest Offshore Accounts
Investing in the US poses some risks. With such a large government debt, no one would be surprised to see another Cyprus starting up here. When your money is out of the United States, you have a little bit safer location.
Naturally, I’m not saying to put all your money in Cyprus. Find countries with great records of security. This is not only possible for millionaires. Anyone can offshore bank with a little research.
These essentially go hand in hand with Trusts. Once you have successfully set up your international asset protection trust, you will most likely need an offshore bank account to go along with it.
10. Don’t Overpay the IRS
Some people get excited about their tax returns. I just get mad. The IRS just took an interest-free loan from you for the year.
That’s money that you’re not making. Don’t overpay the IRS if you don’t have to. Adjust your forms to pay them what you “owe” them on the dot, if at all possible.
When you’re thinking about how to protect your money from the government, you need to be creative. There is no one size fits all solution and the laws change by the day.
In many cases, it would be useful to hire a professional in the field for help.
Remember, you’re the one that earned the money. As long as they’re fighting a war you don’t support or encouraging a system you wouldn’t pay for, you have the responsibility to support them as little as possible.
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