“Are you a PT?” asks the border guard, thumbing through all the entry stamps and residence visas from countries he has never heard of in your passport. If you are, then you know the correct answer without blinking: “a what, sir?”
PTs were once described as “an amorphous group of freedom-loving individuals.” In fact, you may well already be one without even knowing it. PT is not a club to which you can belong. It’s a lifestyle choice. PTs see themselves as sovereign individuals: untethered to any nation state, they are expatriates but definitely not patriots. Politically, if only you could pigeon-hole PTs (which you can’t) you might describe them as “libertarians who have no interest in politics.”
There are a number of ‘how-to’ books about being a PT, but if you put twenty PTs in a room together you will undoubtedly get twenty different answers about the best ways to implement those instructions. PT, above all, is about individuality and freedom.
Identifying a PT
Whether talking to border guards or to casual acquaintances in bars from Singapore to Stockholm (and cheaper places in between), PTs are discreet by nature and will always have a cover story. A typical PT will have the outward appearanceof a seasoned and rather boring business traveller, disguising the backpacker who wants to overthrow the government, who may be quietly lurking inside. A friend of mine calls them “gold card hippies.” This is the result of several generations of successful adaption to habitat: such as TSA requirements and the simple realization that Marriott’s are more comfortable than youth hostels. PTs know that while there’s no point fighting the system, the system can certainly be played with from within.
The term “perpetual traveller” or “permanent tourist” was first coined by Harry Schultz in the 1950s. Harry Schultz is a legendary investor, trader and slightly wacky newsletter publisher, now retired and reportedly living in Monaco. I should warn you however that “privacy thinkers” are known to get a kick out of spreading disinformation on their whereabouts.
Schultz, who considered himself both atax exile and a conscientious objector to the military service that was then obligatory inhis native U.S.A., wrote about a jet-set lifestyle using three countries or “flags” to legally avoid inconveniences like taxes and conscription. On his travels he quickly discovered that pretty much everywhere you go, governments treat foreigners better than the locals.
Simple then: change citizenship and become “a foreigner.” Live in a different country from the one where your passport is issued. For good measure, keep your money and business in a third country where neither of the other two governments knows about it. As such, one is “protected thoroughly” by three flags.
In the 1980s, the next generation of PTs came from writer and lecturer Dr W.G. Hill and scope international, his publisher based in a large country house in southern England. A series of books with titles like pt1, pt2, and the Passport Report were advertised in magazines and newspapers worldwide. Those who got on the mailing list received a regular free newsletter called the Mouse Monitor—sub-titled “the International Journal of Bureau-Rat Control.” Much of scope’s material was of course tongue-in-cheek: gems in the PT books include how to be ordained by mail in California for ten dollars; and how to join the ranks of British nobility by buying a square foot of Scottish land that came with a legally questionable title.
The humour of these harmless antics was, however, lost on many, as it was undeniably anti- establishment. There was a more serious side too: PT in those days was all about not paying taxes. On the surface, hill preached legal tax avoidance—but many readers were no doubt tempted to cross the line to illegal tax evasion. PT therefore developed a slightly edgy side, with its proponents becoming “paranoid together” and taking on a “trust nobody” approach.
The Flag Theory
As Margaret thatcher relentlessly knocked down trade barriers and globalization was becoming the norm, Hill developed Schultz’s ideas by adding another two flags, creating the “five flags theory.” Scope relentlessly couriered out expensive, leather-bound books about the five flags to willing buyers in all four corners of the world. Their best moment was when the late democratic Senator Pat Moynihan, an anti-tax-evasion campaigner, held up one of the scope books in a televised debate as an example of what the filthy rich were doing and declared, “this is the manual on how to legally avoid taxes.” Sales went through the roof. Even on my travels today, I sometimes recognize these books on the shelves of lawyers or bankers.
Then, in 2006, an anonymous author, writing under the name of “Grandpa,” released a three- volume tome entitled Bye Bye Big Brother. Firmly rooted in the internet era and in the post-9/11 surveillance state, Grandpa added the sixth and final flag: cyberspace.
Having reached a certain age, I can now look back romantically at the more cloak-and-dagger aspects of the pt. I clearly recall, for example, the first Austrian Sparbuch anonymous savings account I bought as a student, carefully paying cash for the booklet and having it shipped to a mail drop so it couldn’t be traced back to me. The fact that I didn’t have any money to hide, especially after becoming the proud owner of a square foot of land in Scotland, didn’t deter me in the least!
But can the PT concept survive the new age where “privacy thinkers” are being forced through full-body scanners into “perfect transparency?” I think they can.
The original concept of PT was living off the books. Early PTs didn’t need to bother about the residence flag at all. They could literally officially live nowhere. This doesn’t work any longer, except perhaps for a very dedicated few.
Governments around the world have clamped down on hidden foreign bank accounts and penalties for failing to declare have become nothing short of draconian. Passport security has tightened up a lot too.
However, in so many ways I see PT ideas becoming much more widely accepted by society at large. Passports are the most obvious example. Dual or multiple citizenships was a rarity even a decade ago, whereas now it has become the norm. Surely most of us know many couples of different nationalities who have kids with multiple passports. Yes, dual citizenship, that crucial aspect of PT that governments tried to resist for decades, has finally become totally normal and accepted.
The Internet has also opened up the possibility for any entrepreneur to form a company and open a bank account on the other side of the world for a thousand bucks. “privacy tactics,” that used to be reserved for the privileged elite are now accessible to everybody.
And finally, it’s no longer about taxes. I think these days it’s more a genuine lifestyle choice. Today’s young entrepreneurs are more mobile and totally willing to hop on a plane to seek out opportunities, whether in business or with the opposite sex (leading to yet more kids with multiple passports). The next generation of PTs is again adapting to habitat to achieve goals effectively and explore exciting new frontiers of global business.
Yes, that’s right, sixty years after Harry Schultz coined the term, PT is going mainstream.
Am I a PT? Most certainly not! But I do know a few.
- PETER MACFARLANE
Peter is a financial commentator and editor of the q wealth report (www.qwealthreport.com) who runs a private consulting firm in offshore finance: peter MacFarlane and associates (www.petermacfarlane.Info) he spends most of the year on the road visiting his portfolio of high-net worth clients, attending conferences and carrying out due diligence on offshore banks.