          
          
          
                   HOW TO MAKE REALLY BIG MONEY OVERSEAS
          
               One of the most valuable elements of offshore
          investing is the ability to compound earnings tax free. 
          This factor alone is a major reason for selecting
          offshore opportunities over domestic investments.
          
          
          The value of tax-free compound interest
          
               Much of the discussion of the growing value of an
          annuity investment depends upon the tax free
          compounding of the earnings.
               Everyone knows about the "miracle of compound
          interest."  It is such a cliche that almost everyone
          ignores the powerful, fundamental truth underlying the
          concept.  And few people understand how to make
          compound interest work for them.  
               Compounding is a two-way street.  Debts compound,
          too.  That is why so many "wealthy" people are going
          bankrupt, for example.  Back in the 1970s and 1980s,
          the fashion of the time was to buy real estate
          leveraged with debt, and roll over the debt, counting
          on an increase in the value of the property to pay off
          the debt and make a profit.
               And in much of the United States, real estate
          values did increase at a rate that enabled a lot of
          people to make a lot of money purely on debt financing. 
          They would buy a property.  And they would pay for it
          with borrowed money, sometimes 90% or more of the total
          value.  (The banks played along with this game. They
          made money too as long as prices were rising.) 
               Instead of paying off the loan, they would allow
          the principal and interest to build.  At 10%
          interest...after a year the principal on a $100,000
          loan would grow to $110,000.  In five years it would be
          a monstrous $161,000, and so on. 
               The trouble is, real estate values don't go in one
          direction only.  They also go down, as is they are now
          in many parts of the world.  All that built-up,
          compounded debt eventually has to be paid.  And very
          often, real estate investors do not have the means to
          actually pay off the debt they contracted.  They never
          expected to have to do so.
               The secret of compound interest is to be on the
          right side of it. Debts compound and so do costs. 
          Being on the right side of compounding means
          positioning investments so that time works for them,
          rather than against them.  When investments are
          positioned properly, each passing day adds to their
          value, free from taxes and inflation.
               More than 2,000 years ago the philosopher
          Aristotle explained that the secret of success in
          anything was habit.  Aristotle used the word "ethos." 
          To him it was the crucial ingredient of all genius. 
          And it was nothing more than a recognition of the
          concept of compound interest applied to life itself.
               Aristotle recognized that people do not simply
          wake up one day with the idea for a great
          invention...or jump to the command of a great army...or
          write down a marvelous essay...or get rich.
               All progress is made by small increments
          compounding over time.  A great thinker thinks hard for
          a long time and, over time, comes up with great
          thoughts.
               A great builder lays one brick at a time and, over
          time, builds great monuments.
               A great artist works day after day and, over time,
          produces great works of art.
               So too, a man builds his wealth a little each
          day...and over time...becomes very rich. 
               The idea of building wealth over time has a kind
          of tedious ring to it, but it leaves out the entire
          power of compounding.  With compounding, time adds to
          value.  Instead of being tedious, the passage of time
          in the investment plan becomes an important ingredient
          that turns the capital into more.
               Thus the "miracle of compound interest."  It is
          based upon a powerful, fundamental truth, although too
          few people understand how to make compound interest
          work for them.
               The results are incredible.  As we showed earlier,
          a 20% annual free of tax compounds to a sum 1200%
          larger over a lifetime than the same sum with tax.  It
          is the difference between $8 million and $100 million
          over 40 years.  And the same magic applies when you
          start with smaller amounts. 
               But we do want to stress that just because money
          is offshore does not automatically mean it is tax-free. 
          It is important that a proper and legal structure be
          used to keep the money tax-free, either through
          annuities, trusts, or other structures that you choose
          only after proper accounting and legal advice.
               $2,000 a year into a tax-free account investing in
          stocks that pay 10% dividends, means $35,062.31 after
          10 years -- not including any capital gains. 
          
          YEAR                        TAX-FREE INCLUDING
                                      TOTAL DIVIDENDS 
                                              
          1 starting capital            $2,000.00         
          $2,200.00
          2 add US$2,000                $4,200.00         
          $4,620.00
          3 each year                   $6,620.00         
          $7,282.00
          4                             $9,282.00        
          $10,210.20
          5                            $12,210.20        
          $13,431.22
          6                            $15,431.22        
          $16,974.34
          7                            $18,974.34        
          $20,871.77
          8                            $22,871.77        
          $25,158.94
          9                            $27,158.94        
          $29,874.83
          10                           $31,874.83        
          $35,062.31
          
               After 25 years, he'd have $216,363.29 -- just by
          putting $2,000 a year into his IRA, with its $2,000
          contribution limit.  An annuity has no such limit.
          
          11               $37,062.31     $40,768.54
          12               $42,768.54     $47,045.39
          13               $49,045.39     $53,949.92
          14               $55,949.92     $61,544.91
          15               $63,544.91     $69,899.40
          16               $71,899.40     $79,089.34
          17               $81,089.34     $89,198.27
          18               $91,198.27    $100,318.09
          19              $102,318.09    $112,549.89
          20              $114,549.89    $126,004.87
          21              $128,004.87    $140,805.35
          22              $142,805.35    $157,085.88
          23              $159,085.88    $174,994.46
          24              $176,994.46    $194,693.90
          25              $196,693.90    $216,363.29
          
               Compounding this kind of income from investments,
          in a tax-free annuity, is a guaranteed way to build
          wealth.  There weren't any extra risks, or any extra
          effort.  Once the wealth-building strategy was in
          place, it was just a matter of time.  Most investors
          are looking for extraordinary capital gains -- and most
          fail to realize how hard it is to achieve that. 
          Wealth-building investors should seek investments
          offering decent dividends or interest, and let that
          yield compound.  Think of it another way:
          
          
                       Amounts at Compound Interest
          
          
             Multiply the Principal by the Factor in the Table
          
          Years   1%         2%      3%      4%      5%      6%      7% 
            1  1.0100     1.0200  1.0300  1.0400  1.0500  1.0600  1.0700  
            2  1.0201     1.0404  1.0609  1.0816  1.1025  1.1236  1.1449  
            3  1.0303     1.0612  1.0927  1.1249  1.1576  1.1910  1.2250  
            4  1.0406     1.0824  1.1255  1.1699  1.2155  1.2625  1.3108  
          
            5  1.0510     1.1041  1.1593  1.2167  1.2763  1.3382  1.4026  
            6  1.0615     1.1262  1.1941  1.2653  1.3401  1.4185  1.5007  
            7  1.0721     1.1487  1.2299  1.3159  1.4071  1.5036  1.6058  
            8  1.0829     1.1717  1.2668  1.3686  1.4775  1.5938  1.7182  
            9  1.0937     1.1951  1.3048  1.4233  1.5513  1.6895  1.8385  
            10 1.1046     1.2190  1.3439  1.4802  1.6289  1.7908  1.9672  
          
            11 1.1157     1 2434  1.3842  1.5395  1.7103  1.8983  2.1049  
            12 1.1268     1 2682  1.4258  1.6010  1.7959  2.0122  2.2522  
            13 1.1381     1.2936  1.4685  1.6651  1.8856  2.1329  2.4098  
            14 1.1495     1.3195  1.5126  1.7317  1.9799  2.2609  2.5785  
            15 1.1610     1.3459  1.5580  1.8009  2.0789  2.3966  2.7590  
            16 1.1726     1.3728  1.6047  1.8730  2.1829  2.5404  2.9522  
            17 1.1843     1.4002  1.6528  1.9479  2.2920  2.6928  3.1588  
            19 1.2081     1.4568  1.7535  2.1068  2.5270  3.0256  3.6165  
            20 1.2202     1.4859  1.8061  2.1911  2.6533  3.2071  3.8697  
          
            21 1.2324     1.5157  1.8603  2.2788  2.7860  3.3996  4.1406  
            22 1.2447     1.5460  1.9161  2.3699  2.9253  3.6035  4.4304  
            23 1.2572     1.5769  1.9736  2.4647  3.0715  3.8197  4.7405  
            24 1.2697     1.6084  2.0328  2.5633  3.2251  4.0489  5.0724  
            25 1.2824     1.6406  2.0938  2.6658  3.3864  4.2919  5.4274  
          
            26 1.2953     1.6734  2.1566  2.7725  3.5557  4.5494  5.8074  
            27 1.3082     1.7069  2.2213  2.8834  3.7335  4.8223  6.2139  
            28 1.3213     1.7410  2.2213  2.9987  3.9201  5.1117  6.6488  
            29 1.3345     1.7758  2.3566  3.1187  4.1161  5.4184  7.1143  
            30 1.3476     1.8114  2.4773  3.7434  4.3219  5.7435  7.6123  
          
          
          
          Years   8%         9%     10%     11%     12%    13%
          
            1  1.0800     1.0900  1.1000  1.1100  1.1200  1.1300
            2  1.1664     1.1881  1.2100  1.2321  1.2544  1.2769
            3  1.2597     1.2950  1.3310  1.3676  1.4049  1.4429
            4  1.3605     1.4116  1.4641  1.5181  1.5735  1.6305
          
            5  1.4693     1.5386  1.6105  1.6851  1.7623  1.8424
            6  1.5869     1.6771  1.7716  1.8704  1.9738  2.0820
          
            7  1.7138     1.8280  1.9487  2.0762  2.2107  2.3526
            8  1.8509     1.9926  2.1436  2.3045  2.4760  2.6584
            9  1.9990     2.1719  2.3579  2.5580  2.7731  3.0040
            10 2.1589     2.3674  2.5937  2.8394  3.1058  3.3946
          
            11 2.3316     2.5804  2.8531  3.1518  3.4785  3.8359
            12 2.5182     2.8127  3.1384  3.4985  3.8960  4.3345
            13 2.7196     3.0658  3.4523  3.8833  4.3635  4.8980
            14 2.9372     3.3417  3.7975  4.3104  4.8871  5.5348
            15 3.1722     3.6425  4.1772  4.7846  5.4736  6.2543
          
            16 3.4259     3.9703  4.5950  5.3109  6.1304  7.0673
            17 3.7000     4.3276  5.0545  5.8951  6.8660  7.9861
            18 3.9960     4.7171  5.5599  6.5436  7.6900  9.0243
            19 4.3157     5.1417  6.1159  7.2633  8.6128  10.0197
            20 4.6610     5.6044  6.7275  8.0623  9.6463  11.5231
          
            21 5.0338     6.1088  7.4002  8.9492  10.8038 13.0211
            22 5.4365     6.6586  8.1403  9.9336  12.1003 14.7138
            23 5.8715     7.2579  8.9543  11.0263 13.5523 16.6266
            24 6.3412     7.9111  9.8497  12.2392 15.1786 18.7881
            25 6.8485     8.6231  10.8347 13.5855 17.0001 21.2305
          
            26 7.3964     9.3992  11.9182 15.0797 19.0401 23.9905
            27 7.9881     10.2451 13.1100 16.7386 21.3249 27.1093
            28 8.6271     11.1671 14.4210 18.5799 23.8839 30.6335
            29 9.3173     12.1722 15.8631 20.6237 26.7499 34.6158
            30 10.0627    13.2677 17.4494 22.8923 29.9599 39.1159
          
          
          
                       How the Dollar Value of Time
                        Helps Disciplined Investors
          
               Below are two individuals who have different
          attitudes toward investing. The early investor chooses
          to begin investing $5,000 annually for retirement.  The
          late investor waits ten years before beginning a
          program.
          
                         Early Investor                Late Investor
          
          Age       Amount         Value               Amount         Value
          
          35        $5,000         $5,524                 0         0
          36        5,000          11,626                 0         0
          37        5,000          18,366                 0         0
          38        5,000          25,813                 0         0
          39        5,000          34,040                 0         0
          40        5,000          43,128                 0         0
          41        5,000          53,168                 0         0
          42        5,000          64,258                 0         0
          43        5,000          76,511                 0         0
          44        5,000          90,046                 0         0
          45            0          99,475              7,500          8,285
          46            0          109,891             7,500          17,438
          47            0          121,398             7,500          27,549
          48            0          134,111             7,500          38,719
          49            0          148,154             7,500          51,059
          50            0          163,667             7,500          64,691
          51            0          180,806             7,500          79,751
          52            0          199,738             7,500          96,387
          53            0          220,653             7,500          114,765
          54            0          243,759             7,500          135,068
          55            0          269,284             7,500          157,496
          56            0          297,481             7,500          182,274
          57            0          328,631             7,500          209,645
          58            0          363,043             7,500          239,883
          59            0          401,059             7,500          273,287
          60            0          443,055             7,500          310,190
          61            0          489,448             7,500          350,956
          62            0          540,700             7,500          395,991
          63            0          597,318             7,500          445,742
          64            0          659,865             7,500          500,702
          65            0          728,962             7,500          561,417
          
               The early investor contributed $107,500 less than
          the late investor, but outperformed the late investor
          by over $167,000.  Let time work to your benefit!
               There is also an insurance aspect here that is not
          shown by the pure numbers.  The early investor is
          protected should he become disabled or a bad economy
          limit his earning potential.  He already has his money
          doing the work for him.
          
          
          Using offshore havens legitimately
          
               The words "tax haven" or "offshore haven" bring to
          mind far off corners of the planet with millionaire
          populations.  This population, of course, spends most
          of its day drinking daiquiris on the beach, its funds
          secure in various numbered Swiss bank accounts.  Not
          so.  Tax havens need not be the exclusive recluse of
          the ultra-rich.  People of average means need no longer
          be captive slaves to the politicians in today's modern
          jet-set era. 
               As modern governments continue to expand and
          swallow human rights, deficits and taxes grow.  All
          free-minded individuals must seek a means to protect
          their assets from this monster out of control.  It is
          legally possible to pay absolutely no taxes.  Your
          government may want you to think otherwise.  The media
          may love to tattle about the misery of a particular
          celebrity "tax-evader," but a very important point
          remains unnoticed.  While "tax evasion" is illegal,
          "tax avoidance" is not.  This distinction is crucial.
               A recently published report covers tax havens from
          start to finish, without hopping on the bandwagons for
          the latest "fad" tax havens.  (It is not commonly
          known, but tax havens are just as interested in finding
          you as you are in finding them.)  It explains
          everything from the basic criteria you should use when
          assessing a tax haven to how you can put them to work
          to save you that big chunk of your income whisked off
          each year by the politicians.  For information on The
          Tax Haven Report, by Adam Starchild, ask for a free
          catalog from Scope International Ltd., 62 Murray Road,
          Waterlooville, Hants., PO8 9JL, Great Britain.
               Another source of information is Eden Press, which
          publishes a series of special reports on different
          havens and techniques by which Americans can use them. 
          You can obtain their catalog free by writing to them at
          P. O. Box 8410, Fountain Valley CA 92728.
               If you want to gain a good understanding of how
          the government views tax havens, University Microfilms
          International, through its Books On Demand program, is
          now making available Tax Havens and Their Uses by
          United States Taxpayers by Richard Gordon.  Frequently
          referred to as "The Gordon Report," this was a 1981
          U.S. Treasury Department study prepared at the request
          of Congress.  It was described earlier.
               For more information on private offshore banking
          services, obtain Using Offshore Havens for Privacy and
          Profit from Paladin Press, Box 1307, Boulder, Colorado
          80306.  (This should be available through most
          bookstores.)
          
               Tax havens are one of the most important subjects
          for an international investor, yet few understand and
          use them properly.  One group discount them as hiding
          holes for dirty money, which is not a legitimate use
          for tax havens.  Others think they are only for banking
          money after you have made it.  Not true either.
               Money grows much faster if a tax haven is part of
          your planning, and almost any international investor
          has an opportunity to use tax havens.  It is the purely
          domestic investor, confined to one country, that cannot
          benefit from the international fiscal loopholes.  
               Simply stated, a tax haven is any country whose
          laws, regulations, traditions, and, in some cases,
          treaty arrangements make it possible for one to reduce
          his overall tax burden.  This general definition,
          however, covers many types of tax havens, and it is
          important that you understand their differences.
               No-Tax Havens.  These are countries that have no
          income, capital gains, or wealth (capital) taxes, and
          in which you can incorporate and/or form a trust.  The
          governments of these countries do earn some revenue
          from corporations; "no-tax" means that what you pay is
          independent of income derived through a company.  These
          states may impose small fees on documents of
          incorporation, a small charge on the value of corporate
          shares, annual registration fees, etc.  Primary
          examples are Bermuda, Bahamas, and the Cayman Islands.
               No-Tax-on-Foreign-Income Havens.  These countries
          do impose income taxes, both on individuals and
          corporations, but only on locally derived income.  They
          exempt from tax any income earned from foreign  sources
          that involve no local business activities apart from
          simple "housekeeping" matters.  For example, in such a
          haven there is often no tax on income derived from
          export of local manufactured goods.
               The no-tax-on-foreign-income havens break down
          into two groups.  There are those that allow a
          corporation to do business both internally and
          externally, taxing only the income coming from internal
          sources, and those that require a company to decide at
          the time of incorporation whether it will be one
          allowed to do local business, with the consequent tax
          liabilities, or one permitted to do only foreign
          business and thus be exempt from taxation.  Primary
          examples in these two sub-categories are Panama,
          Liberia, Jersey, Guernsey, Isle of Man and Gibraltar.
               Low-Tax Havens.  These are countries that impose
          some taxes on all corporate income, wherever earned. 
          However, most have double-taxation agreements many the
          high-tax countries that may reduce the withholding tax
          imposed on income derived from the high-tax countries
          by local corporations.  Cyprus is a primary example. 
          The British Virgin Islands is another, but no longer
          has a tax treaty with the U.S.
               Special Tax Havens.  These are countries that
          impose all or most of the usual taxes, but either allow
          special concessions to special types of companies (such
          as a total exemption from tax on  shipping companies,
          or movie production companies) or allow very special
          types of corporate organization, such as the very
          flexible corporate arrangements offered by
          Liechtenstein.  The Netherlands and Austria are
          particularly good examples of this.
               To understand the precise role of tax havens, it
          is important for you to distinguish two basic sorts of
          income: (1) return on labor and (2) return on capital.
               The first kind of return is what you get from your
          work:  salary, wages, fees for professional services,
          and the like.  The second kind of return relates,
          basically, to the return from your investments:
          dividends on shares of stock; interest on bank
          deposits, loans and bonds; rental income; royalties on
          patents. It is the second kind of income, income from
          an investment portfolio, that tax havens are useful
          for.  Forming a corporation or trust in a tax haven can
          make the second form of income totally tax free, or
          taxed so low that you will hardly notice. Certain types
          of businesses can be effectively based in a tax haven. 
          If you publish a newsletter, for example, you might be
          able to set up the entire operation in a totally tax
          free country such as the Bahamas or the Cayman Islands. 
          If your income comes from copyright royalties, perhaps
          on the computer program you invented, the Netherlands
          is famed as a base for sheltering royalty income.
          
          
          A source of help
          
               One of the best sources of help in setting up
          offshore trusts and corporations is an American
          certified accountant who has a large practice in
          Panama.  Marc Harris holds a master's degree in
          business administration from Columbia University in New
          York, and completed the certified public accountancy
          examination at the age of 18.  He is believed to be the
          youngest person in the U.S. to pass the examination.
               He opened his Panamanian firm in 1985, after being
          a consultant with the accounting firm of Ernst &
          Whinney.  His services are highly recommended because
          he is able to create and administer offshore
          corporations and trusts with complete compliance with
          U.S. laws.  Often an American client uses a tax-haven
          based advisor who knows the local laws but is not
          familiar with American tax law requirements and
          technicalities, and the client eventually gets into
          trouble, so Marc Harris has a unique ability to bridge
          the two worlds for his clients.  Although based in
          Panama, he can create and administer corporations and
          trusts that are registered in all of the popular tax
          havens.
               For more information, please write to The Firm of
          Marc M. Harris, Inc., Attn: Traditional Client
          Services, Estafeta El Dorado, Apartado Postal 6-1097,
          Panama 6, Panama.
               Tax haven trusts and corporations are a very
          complex subject, but the hours you spend studying their
          use will probably pay you more per hour than the hours
          you spend directly earning an income -- an unfortunate
          commentary on the confiscatory taxation policies of
          most governments.
               Just stop and think for a moment how much faster
          your money can grow if you are not paying out an
          average of 40-60% to a taxing government somewhere.
          
          
          
