How did Peter Schiff come into his luxurious lifestyle? Let’s take a look at Peter Schiff’s net worth in the world of finance.
Peter Schiff is either loved or laughed at. While his supporters view him as a savant and hero who predicted the stock market crash and housing crisis of 2008, his critics write him off as a “doomsdayer” conspiracy theorist who will have you stockpiling gold bouillon while you wait for the economy to collapse.
Whether you agree with his theories or not, you can’t deny that he has made a windfall as a TV personality, author, podcast host, chairman of precious metals dealer SchiffGold, and CEO and chief global strategist of Euro Pacific Capital. Let’s dive into who he is, what he stands for, and how he makes his money.
Who Is Peter Schiff?
The name Peter Schiff is impossible to separate from the moniker “Dr. Doom.” For years before the 2008 stock market crash, he preached economic collapse and was often ridiculed.
In an August 2006 interview, Schiff said, “The United States is like the Titanic, and I am here with the lifeboat trying to get people to leave the ship…I see a real financial crisis coming for the United States.” He also released a book in 2007 right before the crash titled “Crash Proof: How to Profit From the Coming Economic Collapse.” In his book, he predicted the upcoming economic collapse and the decline of the American dollar.
It turned out he was absolutely correct…and his star began to rise.
In the 20+ years since he started his brokerage firm, Euro Pacific Capital, Schiff has amassed a fortune. He founded a full reserve bank, Euro Pacific Bank, which operates in the Granadines and St. Vincent. He also brings in a paycheck as the owner of the Euro Pacific Asset Management and SchiffGold, which deals in precious metals.
Schiff brings in more gravy as the author of six books, all of which deal with the threat of an imminent crash in the U.S. economy and how investors should prepare. His notoriety in the investment world leads to his own podcast, The Peter Schiff Show, and frequent invitations to appear as a financial commentator on networks such CNBC, FOX News, and Bloomberg TV.
As a vocal libertarian, Schiff became Ron Paul’s economic advisor in his bid for the presidency in 2008.
In 2011 Peter Schiff was listed as one of the Who’s Who of Wall Street.
Peter Schiff Net Worth
Schiff’s net worth is estimated at around 150 million dollars.
Schiff’s investment style is strongly influenced by his Libertarian political views and his belief that U.S. economic policies and the Federal Reserve are fundamentally unsound. His strategy stems from the free-market Austrian School of economics. This theory posits that investors will be repeatedly fooled (by temporarily low-interest rates) to make unprofitable investment decisions.
According to Schiff, the fed sets artificially low interest rates that encourage Americans to rack up credit card debt and discourages them from prudently saving their money.
He is opposed to government economic regulation and intervention through stimulus programs and corporate bailouts. He would like to dismantle most of the government agencies and restore economic freedom and small government. He refers to the American economy as a “house of cards” economy that will eventually collapse.
In his book, ‘The Little Book of Bull Moves,’ Schiff says, “The most important part of any U.S. allocation would be to avoid, like the plague, any stocks largely dependent on American consumers, especially when it comes to discretionary purchases or repaying their debts. That includes financials, retailers, home builders, and consumer discretionary. I would also avoid any high-multiple stocks, which excludes most technology or biotechnology companies.”
He also describes bitcoin as another “tulip bubble.” He doesn’t believe it will ever be actual currency. Ironically, his son, Spencer Schiff, transferred 100% of his portfolio into bitcoin in 2021. In response, Peter Schiff tweeted, “If my own son is this brainwashed, imagine how vulnerable most kids are.
Peter further commented on bitcoin, claiming, “The young generation likes bitcoin because most lack the knowledge or experience to see through the hype. When they get older, they will prefer gold too, assuming bitcoin is even still around.”
All of his 6 books and appearances center around the idea that we are on the brink of another economic collapse. His recommendation is to invest mostly in gold and foreign markets. He is known for his advocacy for commodity-focused investments in countries with growth-friendly fiscal policy. Since 2000, he has been forecasting that gold would soar to $5,000 an ounce. Currently, the highest gold price was $2,067.15 on August 7, 2020.
Not surprisingly, the mutual funds his company manages focus on long-term investments in gold, crude oil and agricultural commodities, and international holdings. These are a hedge, he contends, against his prediction of the economic decline the U.S. will suffer due to its high debt and the fed’s market intervention.
He tells people to put 10 – 15% of their money in gold, with some of his clients adding another 10% in gold-mining shares.
The number one holding in his Gold Fund, as of Jan 2021, was Metalla Royalty & Streaming. Mr. Schiff built this company to increase share value by accumulating a diversified portfolio of royalties and streams with attractive returns. The second-largest holding was Fortuna Silver Mines Inc., a company with operations in Peru, Mexico, and Argentina.
The largest holding in his International Dividend Income Fund was Newmont Corp, a gold mining company.
It’s fair to say that Schiff’s business is selling gold, so he will continue to advocate for it whether it performs or not. Peter Schiff’s market predictions hinge on whether or not gold rises significantly. But his net worth will continue to grow as long as investors keep putting their trust and money into his funds.
Real Estate Investment
Real estate is not a substantial factor in the success of the Peter Schiff net worth equation.
Peter Schiff does not advocate buying a home as an investment. He sees it as a lifestyle choice. Nonetheless, he owns homes himself, in both Connecticut and Puerto Rico. Schiff purchased his 8,469sf Connecticut home in 2009 for $2.4 million. It is currently valued at more than $3.3 million.
He also owns a boat, which he doesn’t see as a good investment either. He believes that, like a car or a boat, a home will depreciate over time…and he says that he hates watching as it slowly falls apart. His massive Connecticut property requires constant upkeep and repair.
Regardless of his opinion, it doesn’t stop him from booking speaking engagements at real estate investment conferences to talk about the fiscal cliff, the dollar’s collapse, and government debt.
Schiff says that if you do own a house, you have to take advantage of the money. He doesn’t advise owning a home free and clear. On the ‘Real Estate Radio & Podcast’ in 2013, Schiff explains his opinion that “The only way that you make money as a homeowner is by being a debtor.
You are not really making money on the value of your house going up, but rather on the value of the debt being wiped clean. If you can buy a property with a 3.5% down payment, which you can with an FHA loan, you get a lot of leverage and take advantage of the chief financing. When inflation wipes out all the savers and debtors, they also wipe out your mortgage debt.”
Schiff goes on to say that, “Brokers try to con you into thinking you’re throwing away money if you rent. You’re not throwing away money because you get a place to live out of it.”
We can break down Schiff’s income into 4 main categories: salary and profit from Euro Pacific Capital and SchiffGold, his investments, his radio shows, and current podcast & other appearances, and lastly, his book sales.
By 2009, Euro Pacific Capital was managing $1.5 billion for nearly 15,000 clients.
The mutual funds charge fees on the capital invested, usually around 1.5% annually. Schiff’s income comes from the profit and the salary he earns from his firm. For example, between 2008 and 2010, he earned $17 million as his salary from the firm and reported dividends, interest, and capital gains between $1.4 million and $6.34 million.
Further, the profits from the sale of his books on economics and other media products. Given that his book ‘Crash Proof 2.0: How to Profit from the Economic Collapse’ was on the New York Times best-sellers list, it is likely he could have sold around 20,000 books in a week. According to standard contract royalties, at about $15 per book, that would earn him around 40k in one week. You can see how this can add up.
Schiff keeps himself in the zeitgeist and maintains his celebrity through social media, his podcast, “The Peter Schiff Show,” and other media appearances. He’s a true master at his own marketing. Schiff’s sometimes controversial and inflammatory statements, such as “All bitcoin is the latest iteration of fool’s gold and anybody buying it is ultimately a fool,” make headlines and draw in readers, viewers, and clicks.
Regardless of his accuracy at predicting the stock market or the track record of his management firm’s portfolios, his appearances as a TV and internet personality and commentator generate more celebrity and continue to pad his income.
His podcast on Apple Podcast has almost 5,000 reviews of 4.6 out of 5 stars. His revenue for the podcast has been recorded at $3 million. His youtube advertising revenue is estimated at around 30k+ for 2021. It is unknown what he rakes in as a speaker.
Family and History
Peter Schiff was born on March 23, 1963, in New Haven, Connecticut. His father, Irwin Schiff (a prominent figure of the US tax protest movement), died in prison, serving 13 years for tax evasion.
He attended Beverly Hills High School in California. He graduated with a bachelor’s degree in finance and accounting from the University of California at Berkeley in 1987.
Peter Schiff started his career in the early 90s as a stockbroker at Shearson Lehman Brothers. In 1996 he and his business partner acquired an inactive brokerage firm and renamed it Euro Pacific Capital.
His firm operated in Los Angeles, California, until 2005, when they moved it to Darien, Connecticut and later to Westport, Connecticut.
He is married to Lauren Schiff, and together they have 3 children.
He currently splits his time between Puerto Rico and Connecticut.
Puerto Rico Move to Save Taxes
Schiff lives in a gorgeous luxury beachfront home in Puerto Rico. He moved to Puerto Rico full time in 2017 because of the tax benefits and the beautiful weather. He encourages Americans to move to Puerto Rico and use it as a tax haven. Euro Pacific Asset Management and Euro Pacific Bank are now both based in Puerto Rico.
The Tax Incentive Code (Act 60), which incorporates tax incentives from 2012 into a single law, became effective in January 2020. The legislation provides tax exemptions to businesses and investors that relocate to Puerto Rico.
Industries that are eligible for the incentives in Act 60 include advertising, education, graphic design, trading companies, health services, legal services, taxes, and accounting, and more.
How do these industries benefit?
Here are all the goodies Peter and his businesses can enjoy in Puerto Rico:
- 4% corporate tax rate on net income from sources outside Puerto Rico for 15 years, renewable for 15 more years
- 100% tax-exempt dividends
- 50% exemption on municipal license taxes
- 75% exemption on property taxes
In summary, by moving to Puerto Rico, Peter can keep most of what he earns. He doesn’t pay taxes on his earnings to the US government. He pays only 4% to the Puerto Rican government and pays 0% on capital gains.
Peter Schiff Net Worth – Conclusion
We can learn great takeaways from the way Peter Schiff has built his enormous net worth.
Never pay more in taxes than you need to. While we can’t all move our businesses to Puerto Rico, we can make the most US tax benefits. For example, if you are self-employed, understanding how to incorporate yourself is essential for keeping more of your money in your pocket and protecting your assets.
Be willing to leave the party early. Schiff was predicting that the stock market bubble would pop years ahead of 2008. And he’s predicting it will happen again. No one can exactly time the market. If you want to get out before the market crashes, you have to be willing to leave some money on the table. You might feel like the only one missing out on huge wins, but eventually, you’ll be right. If you wait for an obvious sign, you’ll be too late.
Invest in the stock market with a strategy (and stick to it). If you want to become rich, you need to invest your money to watch it grow. Peter Schiff has a mistrust of any stocks largely dependent on American consumers. Many investors would disagree. But Schiff always sticks with his investment plan; no matter what happens, that could shake his faith. He is nothing but consistent. There are myriad philosophies about investing in the market, and you need to understand how to make your money work for you.
Take advantage of FHA loans to buy your first home. While Schiff doesn’t believe owning a home is an “investment,” he does recommend that you take advantage of the low down payment available for FHA loans. With a minimum credit score of 580, you can be eligible to make a 3.5% down payment. You must also have a debt-to-income ratio of 50% or less– meaning you must spend only 50% or less on your pre-tax income on your debts.
Invest internationally. Peter doesn’t have faith in the US economy or its markets and therefore invests his clients in many international holdings, as well as gold. Everyone would do well to diversify their portfolios with international holdings. If you choose to invest in real estate, consider looking outside the US for markets with upward mobility, such as Belize real estate.
This article originally appeared on Your Money Geek and has been republished with permission.