🧑‍💻 Flag Theory for the 99%

My personal plan for creating home bases around the world without being a multimillionaire or trying to dodge taxes.

Hey Insiders!

Flag theory originated with rich, old, white men in the 1980s…

I say it’s time to take it back!

The idea is relatively simple - use globalization and tax heavens to spread out your assets so you can reduce your taxes as much as possible, and live in “playgrounds”.

For example…

  • Be a resident of a country that doesn’t tax foreign income

  • Have your company set up in another tax favorable country

  • Live in countries that you enjoy as a tourist

But what about the rest of us?

The 99% that don’t have, or don’t want, complex corporate structures in order to sidestep taxation.

What about those of us that are more interested in being global citizens and want to spend time in our favorite parts of the world, tax exemption or not, and keep complexity to a minimum?

Today in 4min 2sec I’m going to talk about just that.

Here’s my personal flag theory plan and how I came up with it.

My goal with this article isn’t to give you an exact blueprint to follow but to inspire you to create your own plan based on your goals.

Let’s dive in!

Flag Theory for the 99%

As I recently wrote, I’ve been a digital nomad for the last 7 years.

This experience has taught me what I like and don’t like when it comes to destinations.

❤️ I like:

  • cities with entrepreneurial energy

  • seasons, but shorting winter

  • generally speaking… Europe

👎 I don’t like:

  • overly “adventurous” countries

  • places that require long flights to the US

  • small towns or villages (there are exceptions)

Going forward I want to spend the majority of my time in locations I enjoy and get energy from, followed by small bursts of travel to new destinations as a tourist.

I am also more interested in building a community & perhaps even starting businesses in my chosen “Hard Bases” in order to more deeply connect with those places.

Hard Bases vs Soft Bases

Before I jump into my personal flag theory plan, I need to explain the difference between what I call a Hard & Soft Base:

🗿 Hard Bases are places where you own property, know the language, have residency, and perhaps even own a business.

Very likely this is also a place where you have family or other important personal relationships.

They should be kept to a minimum since they can add complexity and be places that you really, really enjoy and could see yourself spending a minimum of 10 years in.

🧽 Soft Bases are places that you enjoy spending time in but don’t have any sort of “hard ties” to.

You have friends and an established community but don’t own property or have a business.

When you visit here you rent, perhaps returning to the same place again and again, or even keep a few things in storage.

A note on residencies:

Residencies can help with things like banking, getting the best deal on apartments, and the freedom to stay for as long as you like and move around.

However, the more residencies you have the more complexity you need to deal with.

A few key residencies are necessary so the complexity is warranted, but too many and you end up running into diminishing returns.

Acquiring residencies can also be very expensive, which is why historically it’s been reserved for the wealthy.

However, today even the most budget-conscious can acquire a residency if they are intentional and strategic.

Enjoying this so far? Consider sharing it with someone you think will also like it👇

Our Hard Bases: Cincinnati 🇺🇸 & Varna 🇧🇬

Both Cincinnati & Varna are cities that my wife Sarah and I truly love, have spent a lot of time in, and have strong relationship ties to.

Property

🇧🇬 We currently own a small plot of farmland outside of Varna. That land has been in my family for decades and my dad gifted it to Sarah and me when we got married.

At the moment there isn’t much on the property other than a broken-down cabin that my grandpa built many years ago and lots of fruit trees.

Long term we would like to build a small cabin on the property that we can use as a Bulgarian home base and rent out when we’re not there.

🇺🇸 We don’t own any property in the US at the moment but plan to change that soon. The problem with owning property in the US is that it’s incredibly expensive and would likely reduce our ability to move around.

To fix this our plan is to purchase a duplex so we can rent out one unit to cover as much of the mortgage as possible.

This would allow us to own property and have a hard base in the US without weighing on our mobility.

When we’re not in the US we could rent out our apartment on Airbnb to fully cover the mortgage or maybe even make a small profit.

Residency

🇺🇸 We are both US citizens so this is already a check.

🇧🇬 For us Bulgarian residency is a lynchpin goal because it unlocks the rest of Europe.

Luckily I’m already a Bulgarian citizen, so Sarah can eventually acquire it through our marriage.

Once we can secure her Bulgarian residency we will be able to spend as much time in Europe as we want, unlocking many of our Soft Bases.

Our Soft Bases: Spain, Hungary, & Mexico

After many years of travel, there are a few places that we go back to again and again and have grown to love - Spain, Hungary, and Mexico.

Here are a few reasons why and what our Soft Base goals are for each.

🇪🇸 Spain

There’s a reason why Spain is one of the most popular countries for expats. It has a great lifestyle and great West European amenities at a lower cost.

Good healthcare, abundant & affordable healthy food, and great weather year-round.

Sarah and I also have great family friends that live here thanks to Sarah’s years as an au pair which provides a great “homey” vibe.

We also both know decent Spanish (Sarah’s is MUCH better than mine) so we can get around and make friends with locals.

Spain also has several cities that give me “the fizz”, this feeling of joy I can’t put into words but nevertheless feel deep in my body.

Barcelona, for example, is very fizzy!

In a perfect world, we could escape to Spain in the most depressing months of the Northern Hemisphere - January, February, and March.

🇭🇺 Hungary

Speaking of the fizz, perhaps the fizziest of all cities for me is Budapest. In my opinion, it’s one of the best European cities for digital nomads.

It’s a great mix of West & East, where things generally work and aren’t plagued by the pains of the Balkans, but have retained an edge…

It’s very safe, yet the streets are covered in graffiti.

Despite an increase in prices over the last 10 years, Budapest is still relatively affordable when compared to other European capitals.

It’s also centrally located which makes weekend trips to other European destinations easy.

While we don’t know the language, English is widely spoken and we have never found it very difficult to get around.

Budapest is a great place to be in the Spring and Fall but since it’s landlocked it’s not at the top of my list in the summer.

🇲🇽 Mexico

Mexico is a bit of an enigma because while we don’t plan on having a Hard Base here, we’re both planning on getting residency.

We discovered Mexico in 2020 just before COVID hit and continued to visit during 2021 and 2022 even spending extended amounts of time living in cities like Merida, Queretaro, and Puerto Vallarta where we’re currently located.

Mexico is great since it’s close to the US which makes it really easy for family and friends to visit.

It’s a huge country with a ton of diversity, great culture, food, and some of the nicest people.

The reason why we’re planning on getting residency despite not planning on making Mexico a Hard Base is that we both like the optionality of spending more time here if we want to.

We also like the idea of visiting frequently and not worrying about weird looks at the border, and as an Eastern European, I find a certain comfort in having citizenship with the country bordering my Hard Base.

This isn’t necessarily different from Spain and Hungary since they’re both in the EU and as Bulgarian citizens Sarah and I would have the same access there.

We hope to be able to use Mexico almost as an extension of our US hard base and pop in and out whenever we need a little break.

Perhaps taking a weeklong vacation to a beach town like Sayulita after a long period of intense work.

The Soft Base Checklist:

The entire idea with a soft base is that it’s a place that you like and can easily click into when you go back.

Here are a few of the things you should look into in order to establish a soft base:

  • existing community

  • a routine you know works for you

  • best hospitals, dentists, etc

  • gym

  • cell service

Another part of having a soft base I mentioned earlier is finding a way to keep a few important items there.

An old mentor of mine once shared with me that when he found an Airbnb in Prague that he really liked and knew he’d like to return to again and again he formed a relationship with the owner.

He made a deal with him to buy a few upgrades for the place, for example, a bigger TV, mixer, and a monitor for the desk, and leave them there raising the “value” of the property.

In exchange, he would get preferential treatment on the booking dates and a better monthly rate.

Obviously, this didn’t involve any sort of official contract and the owner could just screw him over if he really wanted to, but that didn’t happen.

My mentor was able to go back to the same apartment for years and had a place that was well-tailored for him while the owner got to upgrade his property for free.

This is a great way to “harden” a soft base without having to buy a property or deal with further complications.

And it’s exactly how we hope to one day build out all our chosen Soft Bases.

In Conclusion

Again, this is by no means meant to be a step-by-step blueprint or something that we have set in stone.

Parts of the plan will likely change.

But I like bringing you along for the ride and sharing where our heads are at currently so that it can hopefully inspire you or give you ideas.

What do you think about this? Where would you establish a Hard or Soft Base?

What do you think about this version of Flag Theory? Where would you set up Hard and Soft Bases?

Select the option that you identify with the most and let me know more in the comments!

Login or Subscribe to participate in polls.

📆 UPCOMING EVENTS:

Aug 28-31: NomadEire [📍Tralee, Kerry County, Ireland] - Wide-ranging discussion on all things related to nomadic life along with skill sharing, business coaching, and celebration of what Ireland can offer digital nomads.

Sept 28 - Oct 1: Nomadness Fest [📍Louisville, Kentucky, US] - A festival for travelers of color and their allies. 30+ speakers covering topics such as branding, business, domestic travel, effects of over-tourism, and much more.

Sept 30: DNCH [📍Bern, Switzerland + Virtual] - Learn about location-independent life and meet like-minded people interested in the digital nomad lifestyle.

Oct 9-15: The Nomad World [📍Albufeira, Portugal] - Transformative experience for digital nomads and remote workers from across the globe. A mix of expert talks, hands-on workshops, and beach-side fun, aimed at celebrating freedom, connection, and personal growth.

Dec 7-13: Nomad Island Fest [📍 Madeira, Portugal] - Learn from world-class industry experts on topics like mindset, marketing, tech, wealth & health.

That’s it for today!

Thanks for spending a few minutes with me! I’d love to hear what you think about this edition of the newsletter…

What do you think of today's edition?

Let us know what you thought of today's email so we can make our content as awesome as possible

Login or Subscribe to participate in polls.

If you are enjoying this newsletter consider sharing it with someone you think may like it 👇

That’s it for today, hope you have an awesome start to your week!

Cheers 🍻

Today’s email was written by Mitko Karshovski