Blurred lines of business…

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In today’s world, the rules are always shifting and what’s legal today may be illegal tomorrow. It seems to me that the biggest fortunes are created where the lines are blurred, but that’s not a secret… Just take the trade of Marijuana in the USA nowadays. Yesterday this plant was the devil and today its the saviour; suddenly it cures cancer!! Being legalised in some states and in some ways it is making people rich and opening new avenues to make lots of money. If you told that to someone a few years ago they would have called you out as crazy.

The prohibition era is another example… One day you could have a drink and the next day it was the most illegal thing in the world. There are a few examples throughout history where a change of laws made people rich or poor. This might not be the best example because you had to break the law to make money – which is not what I’m suggesting. I’m talking about the blurred lines and the businesses in the grey area. Opportunities often arise in grey areas when changes in laws and regulations take effect.

Another great example is the financial industry. Rules and regulations are always shifting and the loopholes make some people rich. Generally this is followed by some sort of crash or crisis, plunging the world into a recession. But regardless, what I want to draw your attention to is the blurred lines. Its always a matter of perspective! The spider’s normality is the fly’s chaos.

I was very surprised when the Swiss dropped their pants for the U.S. government a few years ago, they gave up they famous bank secrecy, and then the witch hunt began! What people don’t know or understand is that the regulatory changes that occur across the globe make many businesses suffer greatly. Bureaucrats are dreaming up forms and questionnaires and instead of innovation we have regulation. This will slowly kill the flame of entrepreneurship in many places and shift them somewhere else. I wonder how many man hours are literally wasted on answering obsolete questionnaires, filling out forms that have no reason to exist. What is interesting (and sad) to observe nowadays is that the gap between rich and poor is growing everywhere in the world. Inequality fuels conflict and that will have very negative results rather sooner than later. It can go as far as civil unrest and revolutions. When these things occur, the playing field gets levelled and we start the whole story from scratch. Its like two steps forward and three steps back. Total nonsense if you ask me!

Another thing that disturbs me is the overcompensation that is occurring now as well. For decades, the private banks were bending the rules and looking the other way for the benefit of their own bottom line and now they want to be whiter than white and look for problems where there are none. Do you know how many jobs have been created in the “compliance” departments of banks over the last few years? I can only guess but it has to be tens of thousands. All of these people, who are hired to look for bad elements among the clients of the banks, are not actively adding anything to the bottom line, on the contrary they cost a lot of money.

I don’t think that people are going to accept this for a long time because its a terrible intrusion into everyone’s privacy. Do you really want to explain why you deposited 500$ in your savings account and where you got the cash from? Its not the question that is disturbing but it is the assumption that you are doing something illegal – are we all criminals now until proven innocent? That’s not a sane way to run our world, it really isn’t.

There was a time when people kept their cash in their homes because they didn’t trust anyone, especially not banks – these times will come back very soon and that will hurt the global economy wildly. It will entail a chain reaction of losses because if there are no deposits then the financial institutions can give out less loans. With less loans comes less growth because businesses and consumers need loans to invest in growth. Already now, greater risk and compliance regulations make getting loans extremely hard these days and that will get worse too. So you see, nothing good comes from all of the changes that lawmakers have come up with. I believe that there will be many new avenues for the circulation of money in the coming years because money needs to circulate by nature, that’s what it was invented for!

I wonder, if you do the math, how many man hours are being wasted every day on answering stupid questions; if we could convert these hours into hours of productivity, chances are we would make the world a better place. Looking at it realistically however, these are just reveries of an economic optimist. Hope is what dies last…

It is hard to grasp that we have such an evolved system and we are moving backwards in many ways.

On a more general note, you can strive as much as you want to make money, if you stick to the beaten path it will never work like you’d dream it would and that’s a fact. It is common knowledge that life is at it’s best when you’re living on the edge (at least to some people). You have to be somewhat of a thrill-seeker to enjoy this type of lifestyle and the rewards are always worth it.

What gets to me is the injustice that often prevails in the world. The little guy gets punished while the fat cats run free. You have to strive to grow until you are big enough to change the rules or bend them in your favour. I loved the irony of the sequence of “too big to fail” events post the 2008 financial crisis because there is no such thing as too big to fail. Sometimes you need to burn a house to the ground, simply to build a new better house on top of the ruins. We live in a world where whistleblowers get millions of Dollars as rewards and the honest (innocent) wealth manager goes to jail because the industry is blindly vilified or demonised. Its a witch hunt, except for the fact that this is not the middle ages any more. Can you imagine the times when every woman with red hair was labelled a witch and had to fear for her life every day without any legitimate reason. That’s what is happening in the financial industry today and its very unpleasant. So in short, if you move to Colorado to grow (newly legal) mind-altering drugs, you are hailed as a visionary entrepreneur but if you look after people’s wealth you could very well be the next Bernie Madoff. Is everybody high already?

The funniest, silliest and most ridiculous case of a client that I encountered in the recent past was a (well-known) bank refusing to open an account for a new company because they claimed that the directors (founders) of the business didn’t have any previous experience in the industry they were branching out to. The bank refused to open even a simple current account! I’m not making this up! What’s wrong with the world? How would an entrepreneur start a business if he or she can’t even open a bank account? We live in an absurd world of paradox.

In my businesses I’m often confronted with clients and situations who are struggling with the way our world is changing. I generally see opportunities rather than obstacles because I’m a problem solver… For example; there are millions of companies that will be handed forms to fill out about their “FATCA” status and nobody knows how to do it or even what a FATCA status is. The banks interpret their duty as handing the forms to the client and telling them to fill them out but they wont help. So, there’s a great opportunity in offering the service of helping companies to comply with these regulations. If you take the time to master this subject you can earn handsome service fees over the coming year(s).

In an ever changing world, there are always new opportunities to make money and along the blurred lines, where things are new and people are not well versed, that’s where you can reap the biggest rewards.

It is certainly challenging to succeed in today’s marketplace but remember, someone always needs something… If you don’t like the business you are in or the place you are at, CHANGE! You are not a tree…

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