In our previous part we covered citizenship, in the following section of my opinion piece I am going to talk about that dreaded word – taxes.
As Benjamin Franklin was quoted as saying in 1789, “but in this world nothing can be said to be certain, except death and taxes”. While I’ll avoid the former on this occasion, what I do want to talk about is taxation. In fact, my section on taxation follows on nicely from my discussion on citizenship.
Well, because much like in the case of citizenship, the taxes that you pay are ultimately dependant on where you live. In the vast majority of cases, we as everyday workers will have our tax contributions taken directly from our weekly/monthly pay packet. As such, this happens well before we are able to touch, feel or even smell our hard-earned money.
My research on the different tax rates payable across Planet Earth yielded some very interesting results. In a nutshell, the highest ‘income’ tax rate at the time of writing is the 42% that those in Belgium have to cough-up. This is followed swiftly by the hard-working, ultra-efficient German population, who pay a whopping 39.7% on earned income.
At the other end of the spectrum, those living and working in the idyllic Cariabian Island nation of the Bahamas pay nothing. That’s right – Zero, Zilch, Nada.
So how is it that those grafting away for near-on 40 hours per week in Belgium are required to hand-over a mouth-watering 42%, when those in the Bahamas not only get to enjoy white sandy beaches and crystal-blue water, but a 0% tax-rate, too?
The full and frank answer to this is beyond the remit of this article. However, as I am sure we will all agree, the system as we know it today is completely unfair.
So, the golden question remains – Is there anything we can do to lower the taxes we pay?
The short answer to this question is “No”. The slightly longer answer is “No, not unless you earn your income outside of a traditional employee setting”.
What I mean by this is that an everyday worker employed by McDonald’s who is on a minimum wage salary has no chance in hell of reducing the tax they pay. As I noted earlier, the tax is deducted before the hard working employee receives their salary, so in this sense, there’s not a lot that they can do.
However, if you currently run your own business, whether that’s a traditional business or a business that is run purely online, then certain options do exist. In fact, you don’t need to be a multi-national company like Apple or Google to create a tax-efficient arrangement.
On the contrary, your best bet is to follow the steps I outlined in the previous section of citizenship. You see, by obtaining a second passport, not only do you have the opportunity to break-free from the status quo of your home nation, but you also have an excellent chance of reducing the amount of tax that you pay.
In order to keep things simple, I thought it would be worthwhile sticking with the same three nation states that I mentioned in the citizenship article. Notably, these were Paraguay, Dominica, and Macedonia.
Paraguay: Both the income tax and corporate tax rate stands at just 10%.
The Dominican Republic: The corporate tax rate stands at 27% – so not so good in this instance.
Macedonia: Both the income tax and corporate tax rate stands at just 10%.
As you’ll see from the above, while Paraguay and Macedonia offer super-low tax rates of just 10%, the likes of the Dominican Republic are not as favorable, with a corporate rate of 27%.
Nevertheless, the key point here is that by doing some significant research, there is a chance that you can reduce the tax you pay. To help you along the way, I’ve listed some really useful resources.
TaxFoundation – Corporate Tax Rates Around World
VEEM – Top 5 Countries for Low Business Taxes
Nomad Capitalist – 15 Countries with No Income Taxes
WIFI Tribe – Top 10 Best Countries to Start a Business in 2019
Don’t forget, the entire end-to-end spectrum of living off the grid is no easy feat. It takes a considerable amount of time and effort to obtain the lifestyle that you truly want to live.
As such, if you want it, go and get it!
So now that I’ve covered citizenship and tax, how do you feel so far? Are you ready to hear the next step that you will need to take to finally live off the grid as a political act? If so, I’m now going to talk about homeownership.
Owning your own home is a fundamental right for all. Well, in my opinion, anyway. But why is it so difficult to get on the property ladder these days?
Sure, the financial challenges of owning a property will of course vary depending on where you live. This not only concerns your chosen country of residence, but your specific region, city, or even neighborhood.
However, in order to set the scene, let’s take a look at some of the more pricer places to own a home.
At the very top of the tree is that of Hong Kong, with an average property price of $1.2 million. Yes, that’s USD, not Monopoly Dollars!
In second, third and fourth place, we have Singapore, Shanghai and Vancouver, with property prices ranging from $815k to $874k. In my place of birth – London, the average property price now stands at $646k, which is just insane.
So here lies the problem. What if you were born in one of the above places, and you’ve spent your entire life there? You’ve not only got family and friends in the respective location, but you also have a job, cultural ties, and everything else goes with it. The answer is simple – You’re screwed.
You either need to face the reality of spending the rest of your existence renting from a land baron. Or, you will need to move to another city or country, far from where you want to be. Even if you are able to get a mortgage in your chosen location, do you really want to spend the next 30-40 years paying it off?
The good news is that there is a potential option. While I appreciate that this might not be suitable for everyone, have you ever considered building a tiny house?
Tiny House Revolution
I’m not talking about the kind of tiny houses that are adopted by Hobbits. More specifically, I’m talking about a tiny house that will give you and your family everything you need. I’m also talking about a tiny house that will allow you to truly achieve your dream of living off the grid, and thus, become a fully-fledged homeowner away from the status quo.
So how does it work? Well, the idea is that you first choose a plot of land that will give you full ownership once payment is made. Think along the lines of a patch of land in an idyllic forest, or situated right by a stunning lake.
Once the land has been built, you then get to start the design stage. You won’t be working with much space, so you will need to ensure that you fully utilize each and every inch that is available to you. Once you have designed the tiny house, you then need to find a local manufacturer that is able to build the home for you.
Some people even decide to add a set of wheels to the tiny house, subsequently allowing them to move as and when they want. Now that’s what I call true freedom!
In terms of the costs, I am led to believe that the average cost will rarely exceed $23,000, although by some estimates, you can get this down even further if you’re shrewd with your finances. Of course you will need to add on the cost of the land, however, all-in-all, you stand the chance of owning your own property, free from the reach of financial institutions of subprime mortgages!
A good friend of mine is actually in the final stages of writing an eBook on how to build your very own tiny house. She has been living in her Canada-based tiny home for well over a decade now, all of which she designed and built herself. I’ll paste a link here once the book is written, so stay tuned!
Buying and Owning a Property Overseas
The second option available to you if you are living in a location with significantly high property prices, mortgage available is difficult, or you simply don’t want a double-decade mortgage, is to purchase a property overseas.
The reason I say this is that upon taking a recent trip to Thailand, it was brought to my attention that foreigners can actually own a condo, as long as the condo-complex in question is 51% owned by Thai people. Anything outside of this, such as a traditional house or villa, cannot be owned solely by a non-Thai citizen.
With the opportunity to buy a newly-built 30 square meter condo for sub-$40,000, this would at the very least allow you to move one step closer to owning your own home.
While I appreciate that living in Thailand might not be for you, I merely mention it as an isolated example. Whether it’s South America, Eastern Europe (especially Bulgaria), or North Africa, there are tonnes of options available to you where property prices are super low, and infrastructure is good.
It is also worth considering combining property ownership with a dual citizenship program. For example, let’s say that you were to go through the Paraguay citizenship process by obtaining permanent residency for three years. At the end of the three years, you would then be eligible to apply for full citizenship.
As per your application, decision-makers will want to see that you have ties to the country before approving your citizenship. One such avenue that would all-but certainly cement your ‘ties’ to the country would be real estate ownership, or even land. In fact, in some parts of Paraguay, housebuilders charge a mere $200 per square meter!
All-in-all, and much like the other sections that I have discussed thus far in my opinion piece, home ownership requires a significant amount of independent research to truly break free of the status quo.
In the final section of my article, I wanted to focus on self sustainability. While I understand that self sustainability goes far and beyond just energy, it is this particular area of living off the grid that I want to discuss.
Why? Well, look around you.
Whether it’s the laptop you’re reading this on, the shower you just took, the TV you have running in the background, the cooker you used to cook your morning eggs, or the lights you use in the bathroom to shave – everything, and mean everything, requires energy in one way, shape, or form.
In this sense, I’m sure very few of you would disagree with me when I say that energy is a necessity, rather than a luxury. In fact, I would go as far as putting energy in the same bracket as other necessities of life, such as food and water.
Sure, I guess we could technically live without energy if we truly wanted to, but who wants to go back to the days of the Stone Age?
I certainly don’t.
So here’s the bottom line. Energy prices in some parts of the world have spiralled out of control.
I say some parts of the world, because if you’re based in countries such as China, Burma, Iran, Egypt or Qatar, then you are paying a mere pittance for your household electricity. In fact, Burma is now the cheapest place in the world to consume electricity, with an average consumer price of just $0.02 per kWh.
Guess how much that same kWh of electricity costs in my home country – the UK? $0.24! That’s a real-term increase of 1,100%.
If you’re based in Germany, then things are even worse. In fact, as the most expensive country in Europe for electricity, the German people pay a whopping $0.35 per kWh.
Now, some of you reading this article will point to the fact that the likes of Iran and Qatar are able to offer their citizens super low energy prices because they have some of the largest oil reserves in the world. Sure, I can’t disagree with you on that.
Furthermore, I also understand that the UK and Germany have very little in terms of home-based energy resources, which is a potential reason why prices are so expensive.
However, I argue strongly that this isn’t just the case as to why some of us are getting screwed on energy. On the contrary, the reason that many of us are paying crazy prices on our household energy bills is because the industry is heavily dominated by third party companies.
Third Party Companies are no Longer Needed
Think about it in simple terms. In the UK, for example, household electricity is facilitated via major companies such as British Gas, Scottish Power, EDF, nPower and E.ON, to name a few. These companies make multi-billion dollar profits year-on-year, by providing you and me with the electricity that we need.
Is this fair? Well, I’m not naive enough to think that these companies are in the nature of business not to make money. On the contrary, I have no problems at all with the fact that consumer energy companies make money.
What I do have a problem with is the sheer size of the profits they are making, because, ultimately, we are paying well over the odds for something that we desperately need to live a normal, functioning existence.
So, what options do we have?
Well, I made a conscience decision a mere 10 years ago to go solar. In doing so, I now generate the vast majority of my energy needs without needing a third party company.
I say vast majority, because as you can imagine, we are not blessed with year-round sunshine in the UK, meaning that in the winter months, I fall just shy of what I need. However, we are in the 5%-10% range, meaning that the remainder is still generated via solar.
This not only means that I save thousands of dollars each and every year, but I get to fuel my needs in the most eco-friendly of manners.
On the other hand, if you are living in a location that is blessed with year-round sunshine, then not only will you be able to facilitate all of your household energy needs, but you can then sell your surplus energy on back to a third party company!
With the introduction of blockchain technology and other emerging innovations, in the very near future we will be able to sell our surplus energy directly to consumers, without needing a third party multi-national at all!
Nevertheless, the interesting thing is that back when I first invested in solar panels for my home back in 2009, prices were significantly higher than they are now. This isn’t the case just in the UK, but the vast bulk of the Western World.
Not only this, but various countries such as the US and UK now have government subsidy schemes that can assist with the costs of installing solar panels at home. In most cases this works as a grant, meaning that you don’t need to pay the money back.
It is important to remember that the underlying costs of solar panel installation can range between $15,000 – $25,000 (depending on the size and quantity of the panes). However, the payback period is usually just 5 years.
Even better, if you decide in the near future that you want to up-sticks, you still have possession of the solar panel units. All you would need to do is re-install them onto your new property, should you decide to move.
Ultimately, going green and moving away from third party energy companies is yet another step closer to living off the grid.
I truly hope that you have enjoyed reading my opinion piece on living off the grid as a political act. At the very least, it is hoped that you can use some of my ideas, visions, and experiences to start the process of moving away from the status quo.
Whether it’s by obtaining dual citizenship as an insurance policy, lowering your taxes, owning your own home free from profiteering mortgage brokers, or generating your own self sustainable energy – you now have a number of angels to consider.
The overarching point is that all of the above metrics will require a significant amount of independent research to takes things to the next level. However, anything that is worth getting is worth the effort, right?
I should also note that the views expressed in this opinion piece are just that, an opinion. As such, it would be great to hear from you if you have anything to add. Maybe you agree with some of my points, but disagree with others?
Ultimately, I want to build an online community where we can all share ideas and knowledge, with the long-term goal of freedom.