Be Your Own Private Banker

Smart money is as smart money does. [The Rude Awakening] June 29, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Be Your Own Private Banker - There are five main functions a private banker performs. - But you can do some of these things on your own. - For the rest, your lawyer can help you out. [You’re Invited To A LIVE Zoom Call!]( [Click here to learn more]( What: An urgent Zoom call exclusively for readers of Jim Rickards. When: Friday, _______ at 10 AM Eastern. Where: Attend right from home via a virtual link. [>> Spots are limited. Click here to see how to reserve your seat.]( [Click Here To Learn More]( [Sean Ring] SEAN RING Dear Reader, Good morning on a cool, overcast Thursday in Piedmont. Let me do some housekeeping first. I mentioned I’ll be in Sicily from tomorrow night until Thursday night. But I forgot next week is July 4th. So Paradigm’s offices are closed on both Monday and Tuesday. I imagine you’d like a break anyway, so I’ll just republish two popular Rude editions those days. I’ll carry on as usual from sunny northern Sicily for the rest of the week. As for this edition of the Rude, I had the strange idea that anyone can do the kind of things rich people - high net worth and ultra-high net worth individuals - do to protect their stash. A private banker's primary function is to protect the wealth the HNWI has already accumulated. It’s not to make them richer. Heck, a business owner would laugh a banker out of the room if the banker claimed he could. After asset protection, there’s portfolio management, minimizing tax liability, estate planning, and philanthropy. I’ll take each of these in turn. But first, please note this isn’t legal or financial advice, as I’m not a lawyer or licensed financial advisor. This piece aims to give you ideas to bring to your professionals so they may proceed. They know your financial situation. Asset protection This answers the question, “How do I protect what I’ve already earned, saved, and invested?” Trusts, foundations, and companies are commonly used as asset wrappers to protect and manage assets. Each structure has its own unique features and benefits. Here's an overview of how they can be used: - Trusts: A trust is a legal arrangement where a person or entity (the trustee) holds and manages assets to benefit another person or group of people (the beneficiaries). Trusts provide a high level of control, flexibility, and privacy. Here's how they work: - Settlor: The person who creates the trust and transfers assets into it. - Trustee: The person or entity responsible for managing the trust assets and ensuring they are used for the beneficiaries’ benefit. - Beneficiaries: Individuals or groups who will receive the benefits or assets from the trust. Benefits of using trusts: - Asset protection: Trusts can shield assets from creditors or legal claims, as the trust, not the individual, legally owns the assets. - Estate planning: Trusts allow for efficient transfer of assets upon the settlor's death, potentially minimizing estate taxes and avoiding probate. - Privacy: Trusts provide confidentiality, as they aren’t publicly disclosed. - Control: Trust documents specify how the assets should be managed and distributed, giving the settlor control over the assets even after transferring them. - Foundations: Foundations are legal entities established for charitable, philanthropic, or social purposes. They are typically funded by a donation or endowment and operate for the benefit of a specific cause or group. Here's how foundations are used as asset wrappers: - Founder: The person or entity who establishes the foundation and provides the initial endowment. - Board of Directors: Individuals responsible for managing the foundation's activities and ensuring compliance with its mission. - Beneficiaries: The recipients of the foundation's charitable activities or support. Benefits of using foundations: - Philanthropy: Foundations provide a structured approach to supporting charitable causes and positively impacting society. - Asset protection: Assets transferred to a foundation are legally separate from the founder's assets, protecting them from personal liabilities. - Tax benefits: Depending on the jurisdiction, foundations may enjoy tax advantages, such as exemptions or deductions for charitable donations. - Companies: Companies, also known as corporations or business entities, are widely used for commercial purposes. While their primary function is not typically asset protection, they can be utilized as asset wrappers in certain situations. Here's how companies can be used: - Shareholders: Individuals or entities who own shares in the company, representing their ownership interest. - Directors: Individuals responsible for managing the company's affairs and making operational decisions. - Officers: Executives appointed to oversee specific functions within the company, such as CEO, CFO, etc. Benefits of using companies: - Limited liability: Shareholders of a company generally have limited liability, meaning their personal assets are separate from the company's liabilities. - Business operations: Companies can be used to conduct business activities, generate income, and accumulate assets. - Investment management: Companies can hold and manage investments on behalf of their shareholders, providing a layer of separation between the individual and the assets. It's important to note that the specific rules and regulations governing trusts, foundations, and companies can vary significantly between jurisdictions. Always consult with legal and financial professionals familiar with the laws in your jurisdiction to determine the most appropriate asset wrapper for your needs. [Strange Map Shows the U.S. “Turning Red”?]( This map shows [a disturbing global trend]( you NEED to know about… [CLICK HERE To See When the U.S. Will Turn Red]( As you can see… Right now the U.S. is still “yellow”… But thanks to a sinister move Biden just made… The U.S. could soon “turn RED”! And if that happens… Every dollar you own could be made worthless – or even confiscated. [Click here NOW to learn how to protect yourself before the U.S. turns red](. [Click Here To Learn More]( Portfolio management This answers the question, “Where do I put all my money?” Portfolio management in the context of private banking refers to the professional management of investment portfolios for high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs). Private banks offer specialized services to clients with substantial financial resources, aiming to preserve and grow their wealth over time. You can do the same without the bells and whistles. Here's a quick overview of portfolio management: - Client Assessment - Investment Strategy - Investment Selection - Ongoing Monitoring and Reporting The key here is to put your wealth in investments that don’t keep you up at night. Minimizing tax liability This answers the question, “How do I keep my wealth in my children’s hands and not the government’s?” Minimizing tax liability involves employing legitimate strategies and taking advantage of available deductions, exemptions, credits, and incentives to reduce the overall tax burden. Here are some general approaches to minimizing tax liability: - Optimize Deductions and Credits - Maximize Retirement Contributions - Consider Tax-Advantaged Investments - Timing of Income and Expenses - Capital Gains and Losses - Tax-efficient Asset Allocation - Consider Tax Treaties and International Tax Planning: - Charitable Giving (see below) Why give your money to the government, which redistributes it to complete strangers, when you can ensure your children’s futures? Estate planning This answers the question, “How do I know things will be ok after I shuffle off my mortal coil?” Succession planning involves creating a comprehensive strategy to address the transition of both financial and non-financial assets. Here are key steps and considerations involved in succession planning: - Define Objectives and Goals - Identify Successors and Roles - Estate Planning and Wealth Transfer - Business Succession Planning - Family Governance and Communication - Philanthropic Planning - Tax Planning and Professional Advice - Periodic Review and Updating The trick here is to make sure the smart kids get the company to run. The slow ones get the dividends to reap, but keep them away from the machine. Philanthropy When a high-net-worth individual (HNWI) or ultra-high-net-worth individual (UHNWI) engages in philanthropy, several key considerations should be considered to ensure effective and impactful charitable giving. Here are the primary considerations: - Mission and Values - Impact and Outcomes - Strategic Approach - Due Diligence - Sustainability and Scalability - Engaging Stakeholders - Collaboration and Partnerships - Measurement and Evaluation - Professional Expertise - Ethical Considerations One of my buddies loves elephants. He donates pallets of cash to elephant charities. To each his own. Wrap Up Even if you don’t think you qualify, knowing how the rich think is great. This is just one of the ways. But protecting your assets is even more critical for you! Think of your assets as the total of your life’s work minus what you spent. It’s everything left over from what you earned. Protect it with all you’ve got. Have a great day! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( In Case You Missed It… Why Trust AI? [Sean Ring] SEAN RING Happy Hump Day from a hot, sticky Asti! Jeff C., you sent in a question ages ago. Unfortunately, I pasted it into the wrong folder and lost it until a few days ago. Today, I answer it. It’s a great question, worthy of an entire Rude. In today’s article, you said ChatGPT helped you in your work. After several examples in the news of completely erroneous results from (biased?) AI, why would you trust it? -Jeff C., Decatur, GA Is AI Biased? I’d say ChatGPT is. I wrote a piece on it for the [Morning Reckoning]( in March. Here’s a hilarious example of its bias: [pub] Credit: [Daily Reckoning]( Seriously? But the following example is even more egregious. When AI Entirely Backfired. If you’re wondering where Jeff is getting the “erroneous results” from, here’s perhaps the most famous case. From [The Guardian]( This story begins on 27 August 2019, when Roberto Mata was a passenger on an Avianca flight 670 from El Salvador to New York, and a metal food and drink trolley allegedly injured his knee. As is the American way, Mata duly sued Avianca, and the airline responded by asking that the case be dismissed because “the statute of limitations had expired.” Mata’s lawyers argued on 25 April that the lawsuit should be continued and appended a list of over half a dozen previous court cases that apparently set precedents supporting their argument. Avianca’s lawyers and Judge P Kevin Castel then dutifully embarked on an examination of these “precedents,” only to find that none of the decisions or the legal quotations cited and summarised in the brief existed. Why? Because ChatGPT had made them up. Whereupon, as the New York Times report puts it, “the lawyer who created the brief, Steven A Schwartz of the firm Levidow, Levidow & Oberman, threw himself on the mercy of the court… saying in an affidavit that he had used the artificial intelligence program to do his legal research – ‘a source that has revealed itself to be unreliable’.” This Schwartz, by the way, was no rookie straight out of law school. He has practiced law in the snakepit that is New York for three decades. But he had, apparently, never used ChatGPT before, and, “therefore, was unaware of the possibility that its content could be false.” He had even asked the program to verify that the cases were real, and it had said “yes.” Aw, shucks. Incredible. And 100% true. You may think I’m crazy for using it by now! But before we proceed, let’s ensure we understand what we’re discussing. [Send Me Your Mailing Address!]( [James Altucher]( The biggest gold bull market in history has just begun. That’s why New York Times best-selling author Jim Rickards has arranged to send his must-read book on gold to any U.S. citizen with a valid mailing address today. [Click here now to see how to claim your copy of The New Case For Gold](. [Click Here To Learn More]( Defining the Terms. What is “generative artificial intelligence?” Generative artificial intelligence is a class of AI models that generate new content from scratch. This content comes in many forms, including text, images, music, and other creative outputs. The basis of these models is to learn patterns in data and use those patterns to produce new, unique data similar to the training data. For example, a generative AI trained in paintings could create a new picture that, while unique, embodies the styles and techniques learned from the training data. One type of generative AI is Generative Adversarial Networks (GANs), which consist of two neural networks (a generator and a discriminator) contesting with each other in a game-theoretic framework. Another is an autoregressive model like the GPT series, which generates outputs of one part (one word at a time for text) based on what it has already generated. (This is the one that got that lawyer in trouble.) Do I Trust It? In a word, “No.” Then why do I use it? Because it creates a taxonomy I can follow to give a fairly complete treatment of a subject in a short amount of words (like a Rude piece). I do this to ensure I don’t miss any significant part of the subject, though there’s no guarantee I won’t. So How Do I Use It? Though untrustworthy, I still think learning how to use AI properly is a superpower. Let me take you through my mornings to illustrate my point. First, I wake, shower, and walk Micah to school. Fairly standard. After I drop Micah off, I walk around the block to my buddy Fabrizio’s Civico Cinque café. They serve the best coffee in all of Asti. [SJN] Vittorino, Sara, and Fabrizio Source: Civico 5, via [Facebook]( I’ll sit there for about an hour, researching for the day’s Rude. I read The Journal, Zero Hedge, the Rude Mailbag, and my Twitter feed and hope to get an idea quickly. If it’s a bigger idea than usual, I’ve got to make sure I cover at least most of the bases. That’s where ChatGPT comes in. I haven’t written about money laundering yet, so let’s use that as an example. I asked Chat GPT, “How would you structure a 1,250-word article on money laundering?” This is what it returned: Title: Unveiling the Veil: Understanding the Complexities of Money Laundering Introduction (approx. 150 words) I.. Understanding Money Laundering (approx. 250 words) II. The Stages of Money Laundering (approx. 350 words) III. Methods and Techniques (approx. 400 words) Combating Money Laundering (approx. 300 words) Conclusion (approx. 100 words) Note: The word counts provided are approximate guidelines, and the actual word count may vary based on the specific content and writing style used. Though I didn’t print it here, it also gave me four to five points under each heading to cover. Of course, I can also ask further questions to define each point. What I don’t ask ChatGPT for are facts. I learned this the hard way with my pieces on [Russia’s Resources](. But luckily, unlike our unfortunate lawyer above, I knew the numbers ChatGPT was spewing out were bullshit. So I had to return to the United States Geological Survey’s numbers to ensure I was printing the correct numbers. It was a great lesson. From ChatGPT, get the map, not the details. Wrap Up You can still use models if you know what’s wrong with them. We know ChatGPT makes up stuff if it doesn’t know the answer. So never approach it blindly. Use it for subjects you already know or, though we didn’t cover it, automation. If you’ve got time and notice you’re doing things you don’t want to do repeatedly, I recommend you watch some great YouTube videos to learn. Here are some I enjoyed and learned from: [How To Use ChatGPT To Learn ANY Skill Quickly (Tutorial)]( [How to learn to code FAST using ChatGPT (it's a game changer seriously)]( [I Asked ChatGPT To Make Me As Much Money As Possible]( Enjoy going down that rabbit hole! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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