Some bonus material for people who actually got through the rest of it without falling asleep!
Let’s say you’re an average family man in an average Western country, and you decide to pack up your kid’s rooms, sell the house, make the huge leap – and buy tickets to Mars.
Chances are, you ain’t coming back. Unless you win the Martian lottery, you can’t afford to come back.
So what do you do with your terrestrial investments? You know: bank accounts, stocks, mutual funds, government pension?
Will there be a First Martian Bank where you can deposit your money? If you still have investments on Earth, how will you manage them? Will First Martian be part of the SWIFT network? How will you buy or sell stocks from your account, when it takes twenty-five minutes to load a browser page? How will you collect your dividends? How will you pay for your National Geographic subscription (extra-terrestrial postage zone!)?
And, if you’re a citizen of one of those countries with
effective irritating tax enforcement, how do you file your annual tax return?
Personal finance is another of those things that short-term NASA missions don’t need to plan for. Martian colony, whole different story.
I’d love to hear what people think.
Mars Colony Administrator’s Handbook – Navigation:
- Part 1 – Introduction
- Part 2 – Resources, Water
- Part 3 – Air, Food
- Part 4 – Energy, Raw Materials, People
- Part 5 – Supply Chain Management, Urban Planning
- Brief Intermission
- Part 6 – Jurisdiction and Law, Economics
- Bonus Post
- Part 7 – Manufacturing, Communications
- Part 8 – Emergency Services, Failure Modes
Great conclusion Jeremy. You should offer consulting services to Mars One. Thanks for a great series. Michel.
Not done yet! There’s probably 4-5 more in the series.
I’m sure Mars One and SpaceX have already thought of much of what I’m posting.
I realize that I’m coming at this from a fairly naive point of view, compared to serious enthusiasts (never mind the engineers who are making it all happen).
Interesting set of questions.
First off, one minor quibble: coming *back* may be much cheaper than going. If we assume the Mars colony ship is fully re-usable (pretty much a requirement for a large scale colony). Then we have a situation where the ship is mostly full going to Mars but mostly *empty* on the way back to Earth. In that case returning may actually be cheap*. This doesn’t really affect your underlying point though, the initial colonists will be going to Mars to stay.
On to the specific investing questions.
1. Some kind of bank on Mars will be necessary, the roundtrip time to Earth makes using banks there unworkable. “Sorry sir we’re at conjunction, it will be 40 minutes before we can approve your credit card…”.
2. Given we have banks on Earth and on Mars some kind of intra-planetary network will be needed to link them together. The distance will impose certain constraints, but one should be able to wire money back in forth. This is in principle no different form wiring money between two countries today.
3. The question of owning assets on Earth is a legal one. I would guess ‘yes. Buying and selling stocks is certainly possible, though you may want to use a limit orders… Day trading is probably infeasible.
Instantaneous communication on Earth is relatively new, there is plenty of prior art on how banking, investing & ownership can work without it.
* As I was writing this it occurred to me that one early export from Mars might be fuel. I would have to do the delta-v calculations to be sure, but given the differences in the size of the gravity wells it may be cheaper to fly fuel from the surface of Mars to Earth orbit than it would be to fly it from the Earth’s surface to Earth orbit…
Good point re Earth’s history prior to modern communications. I should note that many of the financial instruments we take for granted are more recent than, say, telegraphs. Not clear what happens if communication is very slow.
We probably won’t see too many high speed traders on Mars anyhow, at least until they have their own stock markets.
Elon Musk is talking about $500k one-way. That’s assuming reusable craft (not cyclers though). I take your point about people coming back in mostly empty ships. Perhaps all tickets there could include an open option for return. However, getting back to Mars would then be expensive, so this won’t be like a bunch of expats going back home annually to deal with accounting and see family.
Also, the trip is a long one, with significant radiation “debt”. People likely won’t make many repeat trips until we figure out how to go much faster, and shield better.
I still think the taxation / tax return issue may be an annoying limiting factor. People will need to keep an accountant on retainer back on Earth, for starters. Once you’ve filed with the IRS, for example, you have to keep filing every year. Getting out of that is a complex task, best left to expat billionaires.
In Canada, a person could theoretically take an oath of religious poverty, which would excuse them from future tax filings. Not sure how that works elsewhere, or if that’s really feasible. Monks on Mars. Hmm. Sounds like a good plot for a story.
Couple follow ups:
I’m not sure taxation is such a big deal. Canadian law allows for citizens to live abroad and pay their taxes in whichever country they are living. You lose access to the benefits of being a resident (infrastructure, police & fire services, healthcare etc…) but you’ll be off planet so that shouldn’t be an issue.
Also, on radiation ‘debt’. This is a much bigger topic, but I am unconvinced that the current radiation limits correctly reflect the danger.
The current LNT model extrapolates the effects of low dose radiation from what we know about the impact of high doses. This has proven to be inaccurate.
Much more research is needed into both the nature of galactic cosmic rays and their effect on the body before we can establish reasonable restrictions on deep space travel.
US tax law (and probably many other countries too) isn’t as simple as in Canada. Once somebody files with the IRS, they have to continue doing so, otherwise trouble may ensue.
With respect to radiation: I wouldn’t want to be the guinea pig!
Wasn’t aware the IRS imposed that, although not really surprised. But if you’re filing at zero then the requirement is low, even if you’re on Mars, so I still don’t see it as a big issue.
On radiation: I’m not advocating blindly making people guinea pigs by exposing them to GCR.
BUT the most recent research shows that the current models may be overly conservative.
If that turns out to be the case, the radiation exposure from 6 month deep space trips might not be a big issue.
I suspect the colony administration will want to keep accountants and lawyers on retainer on behalf of the colonists, in order to deal with these kinds of fiddly technical details.
Hope you’re right about low level radiation. Better shielding is in development, but the more details that don’t need to be worried about, the better.