Nomad Capitalist Chapter 10: Foreign Asset Storage - Super-Spy Vaults or Tinfoil Hats?

Henderson walks into what sounds like a Bond villain lair. Steel gates. Blast-proof doors. Metal detectors. Backscatter machines. Guards you can see and guards you cannot. He is deep underground in Singapore, inside the Freeport. One of the most secure private vaults on the planet.

All around him are hard assets. Rare art. Classic cars. And the hardest asset of all: gold.

His guide is Joshua, an Israeli guy running operations for a logistics company at the facility. Henderson is five minutes late because his taxi driver barely spoke English. Classic Singapore moment. Joshua shows him around the vaults, and at one point Henderson points to a crate of five hundred silver bars and jokes that the owner is probably not happy today. Silver prices had dropped 25% that year.

But the people storing things in this vault are not checking spot prices every morning. They are playing a different game entirely. And that is what this chapter is about. Why would anyone store gold in an underground vault on the other side of the world? Is this a paranoid tinfoil hat thing? Or is it actually smart?

The Singapore Freeport

The Freeport, now called Le Freeport to sound even fancier, exists because Singapore made a calculated bet. When Switzerland gave up on banking secrecy under pressure from high-tax countries, Singapore stepped in. They said: bring your money here. Bring your assets. We will not ask too many questions.

The vault is essentially a commercial building for lease. It just happens to be among the most secure buildings in the world. Big tenants like Christie’s use it to store what Henderson describes as Steve Wynn’s thirteenth Renoir and Jay Leno’s 117th classic car. But smaller tenants also rent private vaults inside the facility. And those smaller operators let regular people store gold there.

Here is the surprising part. You can store as little as one silver coin worth about $20. You can start with $20 and add more each month. This is not just for millionaires. Services inside the Freeport let anyone build up gold holdings gradually. The same democratization that happened with real estate crowdfunding happened with gold storage.

Singapore helped by dropping customs controls on bullion and ending purchase taxes on gold. You can ship your gold to Singapore and list it simply as “gold” with no name attached. From a privacy standpoint, this is significant. Physical precious metals stored in a private vault are one of only two asset types US citizens can own overseas without reporting to the IRS. The other one is real estate, which Henderson covers in the next chapter.

Let me repeat that because it is important. Your bank accounts overseas? You must report them. Your gold in a private vault? You do not. Someone at the IRS must have owned a lot of gold when they wrote that rule.

Why Would an Entrepreneur Care About Gold?

Here is where I expected Henderson to go full gold bug conspiracy mode. He does not. His argument is practical.

He tells the story of Chance, a young Australian entrepreneur who hated accounting so much that anxiety would hit him every time a form arrived. Henderson helped Chance set up a company in the Caribbean where no books get audited. Problem was, that structure limited which banks would work with him. Most of Europe and Hong Kong do not want to deal with Caribbean zero-tax companies anymore.

So Henderson told Chance to diversify into gold. Chance ran a high-margin business with lots of cash sitting around doing nothing in the bank. Instead of relying entirely on the two emerging-world banks that would accept his structure, he started moving money into a private precious metals account each month. Even if gold prices dropped, his wealth was spread across more places and more asset types. Less anxiety, more insurance.

This is something I think about from my own experience in IT. I have seen people put everything into one place. One bank. One stock. One country. It feels fine until it is not. Henderson tells a story about a father-son team with $3 million in a single HSBC Hong Kong account. HSBC decided they did not want US citizens anymore and shut the account down. Three million dollars, one bank, one decision they could not control.

Henderson’s rule is simple. Having $3,000 in one account is forgivable. Having $3,000,000 in one account is reckless. You should never trust everything to one entity. Gold is one more bucket for your money.

The Yugoslavia Story

This is the part of the chapter that stuck with me the most. Henderson went to Serbia to understand what happens when a currency collapses. Not from textbooks. From people who lived through it.

He met Jovana, a dentist from a wealthy Belgrade family. Over dinner, she told him about the war. When Yugoslavia fell apart, the dinar became worthless. Her family lost practically everything they held in local currency. Their cash? Gone. Their real estate? Crashed.

But they had two things that saved them from total ruin. A stack of US dollars and about fifty gold coins.

The government could print more dinars. They could not print more gold. Yugoslavia was falling apart, but gold was global. It did not care about borders or conflicts. Because of those fifty coins, Jovana’s family kept their financial stability and eventually recovered.

Henderson’s assistant from Montenegro had a similar story. Her father would come home from work with a bag full of paper money. The kids would shout “Daddy, you are rich!” And the father would just toss the bills at them to play with. His hours-old paycheck was already worthless.

I grew up in the former Soviet Union. I know exactly what this feels like. When your country changes overnight, when the rules stop working, the people who had hard assets survived. The people who trusted only the system did not. That is not paranoia. That is history.

Henderson puts it well. Gold is insurance. You insure your home against disasters you hope never come. You should insure your wealth the same way. Gold has held value for thousands of years. Name one paper currency that can say the same.

Das Safe in Vienna

Not everyone wants to fly to Singapore. So Henderson visits the other end of the gold storage spectrum. A place called Das Safe in Vienna, Austria.

If Le Freeport is James Bond, Das Safe is a Cold War spy novel. The building was hard to find on Google Maps. Henderson was not about to ask random people on the street where the secret gold vault was. He walked inside to find fraying red carpet and an older man sitting at a desk across a large room.

The man greeted him. When Henderson said he wanted to store gold, the man got up. He had a slight paunch under a pinstriped vest. Exactly how you would picture the keeper of a European vault. Then he apologized for not having business cards. “Our business card isn’t the kind of thing most people want their dry cleaner to find left in a jacket pocket.”

I have to admit, that line made me laugh.

Das Safe used to be part of a bank, so it is well secured despite looking gloomy on the outside. The real draw is anonymity. For an extra annual fee, you rent a box without providing your name or any identification. The Austrian government is apparently fine with this. One of the last places in the EU where privacy actually means something.

The downside? Cost starts at about $600 and goes up to $1,000 per year. The small boxes were sold out long ago. You have to take the big ones. And if you need to sell your gold, you physically go down there, carry it out in a bag, and find a dealer. Not exactly convenient.

But Henderson makes an interesting point. $1,200 per year for private vault storage used to be available only to the ultra-rich. Now anyone can do it. If you want to impress someone on a first date, mention you have gold coins locked away in an anonymous Austrian vault. She might think you are boring for telling her. But she will also think you are very rich.

What to Actually Buy

Henderson gets practical at the end. If you are going to own gold, here is what he recommends.

Buy gold and silver with a low spread. The spread is the difference between buy and sell prices. Gold and silver have the lowest spreads because they are the most traded. Platinum and palladium cost more to trade, so they are worse for liquid wealth protection.

Hundred-gram bars are a good size. Each one is worth around $4,000, which means you can own several and sell only part of your holdings if you need cash. If you want portability and plan to physically carry gold, one-ounce coins from major mints work. US Mint, Royal Canadian Mint, Austrian Mint, Perth Mint. These are recognized everywhere. You pay an extra percentage point for the convenience, but you can sell them to anyone.

Most importantly, get segregated, allocated storage. This means you own specific coins or bars with your name on the account. Not a fraction of someone else’s big gold bar. Not a paper promise backed by gold somewhere. Actual metal that belongs to you.

And avoid bank safe deposit boxes. They require reporting and have little protection if your bank gets into trouble. The whole point is to keep this separate from the banking system.

Some Singapore Extras

Henderson mentions a newer development. Some Singapore services let you borrow against your stored gold. So you buy $125,000 in gold, put it in a private vault reducing your paper currency exposure, and then borrow $100,000 against it at a low interest rate. You get both gold protection and cash for investments. Before, you would need $200,000 to have $100,000 in gold and $100,000 in real estate. Now you can do both with less capital.

Singapore is a good choice for storage because crime is almost zero. People carry cash and expensive electronics around without worry. Corruption is also near zero. And the whole region is competing to attract wealth, which means customer service is a priority, not an afterthought.

Key Takeaway

This chapter changed how I think about gold. Before reading it, I associated gold investing with conspiracy theorists on YouTube. People who think the dollar is going to collapse next Tuesday and they will need gold coins to buy groceries.

Henderson’s argument is much simpler. Gold is diversification. It is insurance. It is one more bucket for your wealth that does not depend on any single bank, country, or currency. You do not have to believe the financial system is going to crash. You just have to acknowledge that putting all your eggs in one basket is not smart.

The most convincing argument is Jovana’s family. Fifty gold coins saved them from total ruin when their country fell apart. That is not theory. That is history. And it has happened in many countries, many times.

Henderson’s practical advice is straightforward. Start small. Even $20 in silver. Store it in a private vault outside your home country. Singapore for the best security. Austria for anonymity. Buy gold and silver with low spreads. Get segregated storage. Do not put everything in the banking system.

Is it a tinfoil hat thing? Henderson says no. And after reading this chapter, I agree. It is just another flag to plant. Another place to spread your risk. The only difference from opening a foreign bank account is that gold has been a store of value for five thousand years. No bank can say that.

Book: Nomad Capitalist by Andrew Henderson | ISBN: 9798461831486

Previous: Chapter 9 - Offshore Companies Next: Chapter 11 - Investing Overseas

Part of the Nomad Capitalist series