This is the biggest problem! If you spend too much at home, this will attract the attention of local tax collectors who will do an analysis of your income and expenses and quickly discover something fishy. You can spend cash at home only if you do it low profile. You can bring back cash of the legally allowable amounts when you return from vacation trips. Or you can access your foreign cash via automatic teller machines and credit cards using a card in your new “alternate identity”.
For out-of-the wall cash use banks at some distance from where you live. Never transfer funds from your offshore bank to your home country bank account. It will be considered taxable income unless you can show conclusively that it was a tax-free gift from someone likely to make such a gift. There will be a tax due from the donor of the gift. If the donor is a foreigner, the local tax collector may be able to stick you for the gift tax. The purpose of having a judgment-proof nest egg abroad is not to bring it home to spend it, but to keep it abroad for the day you become a MDX – or to survive a rainy day back home.
If you get older and decide you may never use up your money before the rainy day comes, it is best (safest) to be a big spender only on vacations abroad. The game plan that will work for most PTs is to earn enough in your home country to build up offshore assets and then relocate comfortably abroad. Relocation can mean just moving abroad at a young age to turn over a new leaf, to get involved in a different line of work or activity, to wave bye-bye to ex- wives, tax collectors and bureaucrats.
Or to retire and go fishing every day. Or to discover Sex Havens. Life can be great when you can go anywhere, do anything, have a large income and no records to keep. You ship your assets abroad in advance of your departure and then take your ass abroad to join your assets. Don’t bring the mother lode home unless you want to create a very strong likelihood that you’ll have to pay taxes on the whole shebang as ordinary income. Above all, don’t spill the beans to any girlfriends, employees or anyone else in your home country. Keep your finances confidential, as most Continentals do.