Hey FI Europeans! In this episode, Mathias interviews Christoph Heuerman: he is a self-described Perpetual Traveller, has visited 160 countries worldwide and keeps travelling. Besides travelling he is also an investor and expert on international tax and flag theory. His knowledge of tax systems and offshore countries led him to discover that there are options to live a fulfilling and active life while minimizing taxes. Christoph studied Administrative Sciences at the University of Konstanz in Germany and he knows the parliaments of Berlin and Brussels from the inside as he did internships there. We will talk with him to see how those strategies may help someone to reach FI quicker and continue growing wealth. Enjoy!
We also talk about:
- Flag Theory
- Flag Theory within the EU
- Flag Theory and family/kids
Perpetual Travelling / Flag Theory as a FIRE strategy
Christoph sees Flag Theory and his status of Perpetual Traveller as a way to achieve more freedom. The basic statement of this theory is that you shouldn’t have everything in one country but instead you should diversify yourself globally, something that is now made possible by the development of the internet, flights and other infrastructures, choosing the countries that offer the best conditions for each part of your life organization. This type of optimization can of course have a great impact on our FI strategies, and we discuss with Christoph its implications in this regard.
Implementing a strategy with Flag Theory
Basically the theory identifies a number of ‘flags’ – which can vary from 3 to 12, one for each key aspect of your life – that can be used to relocate that aspect to the country that offers the best conditions for its organization. This can mean for example that we have our financial activity based in one country while we elect another one as our ‘playground’ country, where we spend our time enjoying life. There are many factors to consider, from tax regimes to bureaucracies and administrations, and we dive deep in the subject with many practical examples.
Fiscality and how to deal with it
One of the big topics is minimizing taxes on your income or dividends, and this is obviously helpful to someone trying to save for FIRE purposes. But taxes also have obvious benefits for Governments and ultimately citizens: we discuss with Christoph about this trade-off and the criticism that comes from many people about minimizing taxes. Of course tax optimization is a legal activity, and one interesting point he makes regards the amount of indirect taxes that hit everyone anyway, and he shares other insights about this delicate topic.
Let us know what you think about the Interview in the comments or our Facebook Group!