BANKING ON THE SWISS BEAT
The allure of a Swiss bank account seems to be universal, but when most of our knowledge comes from thrillers involving James Bond or Jason Bourne, it’s hard to separate facts from fables. Here’s everything you’ve ever wanted to know:

By Karina L. Arrue

Only millionaires can have one.

FACT #1:
Virtually anyone can have a Swiss bank account. They don’t all require a $100,000 minimum balance. According to the Swiss Banking Association, most Swiss high-street banks do not require a minimum deposit for an ordinary current or savings account. However, banks offering private banking and wealth management services do require a minimum deposit. Check with the individual bank. There are different types of accounts: retail, private, named and numbered. You can even get a Swiss postal account with no minimum balance and no fees, but it comes with few amenities, and no checkbook. For more info, go to: http://www.postfinance.ch/pf/content/en/seg/priv/prod.html.

FABLE #2:
If I wanted to, I could open an anonymous account.

FACT #2:
As the sba candidly puts it: “Anonymous accounts at Swiss banks exist only in the imagination of thriller writers!” Even the mysterious numbered account (think The DaVinci Code), is attached to someone’s identity. According to the sba, the procedure for opening this type of account is exactly the same as for any other account. “The bank must verify your identity and establish the identity… ‘Numbered’ accounts are certainly not anonymous. With a ‘numbered’ account your business within the bank is carried out not under your name but under a number or code.” This is simply an internal security measure to restrict knowledge of the customer’s identity to a small group of employees in the bank.

FABLE #3:
Money I have stored away in my Swiss account is kept secret under all circumstances.

FACT #3:
Swiss banks have upheld a code of secrecy for hundreds of years; in fact, when it passed the Banking Act of 1934, it made breaking that secrecy code a criminal offense—a banker could go to jail and get a hefty fine for divulging client information! There are limits, however, to Swiss bank secrecy. According to the sba, exceptions are made under these circumstances: civil proceedings (inheritance or divorce, for example); debt recovery and bankruptcies; criminal proceedings (money laundering, association with a criminal organization, theft, tax fraud, blackmail, etc.); international mutual legal assistance proceedings (in terms of criminal matters).

FABLE #4:
Money that I have saved in my offshore account does not need to be reported to the irs.

FACT #4:
While your Swiss bank will not report interest accrued to your account (or even acknowledge its existence), you are responsible for reporting to the appropriate authorities. Be sure to know what earnings you must report to the irs and follow through, or else you could face criminal charges.

FABLE #5:
The only attraction of a Swiss bank account is its secrecy.

FACT #5:
In addition to privacy, Switzerland has an extremely stable economy and infrastructure. While the u.s. might be facing an economic downturn at the moment, imagine a person who lives in a country ravaged by war. They will want to keep their assets safe from political and economical instability. Swiss bankers also have a reputation for being exceptionally good at managing investments and ensuring profitable returns on your money. A tax haven is another attraction of getting a Swiss bank account: as an American, you don’t have to pay tax on interest in Switzerland, unless you’ve invested in Swiss companies or have used the funds from your Swiss bank account to invest in u.s. securities. But specific situations engender specific circumstances, so once again, be sure you know what you are responsible for reporting to the irs and foreign government agencies.

FABLE #6:
Such secret accounts exist only in Switzerland.

FACT #6:
offshore banking is dominated by Switzerland, but there are plenty of other offshore jurisdictions where you can put away your earnings. After Switzerland, the Cayman Islands is the largest center for offshore banking; other jurisdictions include the Bahamas, Bermuda, Panama, Luxembourg and Andorra.

The Business of Pleasure
Cashing In On Your Vacation Home

Wondering how to make the most of your assets in a time of economic downturn? If you own a second home and only use it once or twice a year, why not convert it into a cash-making machine? You could take a hands-off approach and rent your property through a management company, but according to Christine Karpinski, author of How to Rent Vacation Properties by Owner (Kinney Pollack Press, 2007), if you cut out the middle man and use a little ingenuity you could cash in big time.

Here are some tips from Karpinski to make it work:

Aim for the magic “17 weeks” and the bills will take care of themselves. If your monthly mortgage payment is less than or equal to one peak week rental, and you rent approximately 17 weeks per year, you will break even on the cost of your property. Usually there are 12 peak weeks in a rental year. So if you rent these 12 weeks, you will have enough revenue to pay your mortgage payments for the entire year. Other costs, including bills for your phone, power, cable and association dues; are paid by your earnings from approximately five off-week rentals.

Talking to renters yourself is “damage insurance.” The obvious reason to cut out the middleman is, of course, money. But the other reason, says Karpinski, is that you get to control who rents your vacation home—an informal brand of “damage insurance.” “I like to talk to each renter,” she says. “I am friendly and personable, and let the renters know that they are renting my second home. By establishing this relationship, the renters have now transcended from customer to ‘friend.’ If you stay in a hotel and spill coffee on the carpet, what do you do? But if you rent a ‘friend’s’ place, how differently would you handle that spilled coffee? My renters take care of my unit.”

To find renters, rely on the Internet. “There are hundreds of websites that are devoted to listing vacation property renting by owner,” says Karpinski. “They are pretty inexpensive to list your property—only around $150/year. I guess you can say it’s like a classified ad that you take out on the Internet. I have found listing on three to five sites to be 100 percent effective in renting my places.”

When writing your description certain words get results. Karpinski offers a list of her favorite vacation property descriptors to include in ads. Examples are clean, peaceful, romantic, spacious, classic, cozy, private, inviting, rustic, warm, secure/security, and well-appointed. “You’ll notice that beautiful, nice, spectacular, and magnificent were not on my list,” she points out. “These words are so over used-especially in titles—that they just don’t have impact. Use them sparingly.”

Consider accepting pets. Vacation properties that accept pets increase their occupancy by 10 to 50 percent. It’s also a great way to increase off-season rentals. When you accept pets, it’s okay to take an additional $20 to $25/night or $140 to $175/week. That’s enough money to get the carpet cleaned after each stay, or rent eight to ten weeks and you have enough money to replace the carpeting! And the best part is this: if people have a dog that they want to take with them, chances are excellent that it is not the kind of dog that causes a lot of problems—otherwise, they would have spent the “pet fee” to board it.

With a little creative thinking good help isn’t that hard to find! You will almost certainly need to hire a cleaning service for your vacation property. Here are two suggestions:

ONE
Visit your property on a weekend and go outside when most renters are checking out. Your neighbors probably have a cleaning service. Talk to your neighbors’ cleaners and see if they want to pick up a side job. (You can stagger your check-out time so they can clean both.)
TWO
Another good resource for housekeepers is your local church. Sometimes a pastor will know of someone who is looking for extra work. It pays to be resourceful.