Health care and visits home when living overseas.

Two Big Expenses Of Retiring Overseas That Nobody Talks About

July 13, 2014, Panama City, Panama: Factoring health care and visits home into your living-overseas monthly budget.

Also This Week: Luxury Meets Lethargy—Welcome To The Emirates... Life In A Coup... Life In A (Slightly) Communist State... President Correa, Again?...

Plus, From Resident Global Property Investing Expert Lief Simon: Wall Street Can Keep Its Paper...

Editor's note: With Kathleen on vacation until tomorrow, we revisit this essay from her, originally published in April 2013...

Dear Live and Invest Overseas Reader,

You may be surprised to learn of the two biggest expenses expats often face. Most of us think of rent. Food and entertainment. Taxes maybe.

But, in my experience, many expats spend more on two other expenses. These two expenses rarely show up in cost summaries for destinations abroad, and they rarely seem like a big deal when planning to retire overseas.

What expenses am I thinking of? Trips back to the United States and U.S. health insurance.

We recently heard from a Seattle couple planning to retire to a tropical climate. They're on a budget and are thinking of Ecuador, which they know to be a good low-cost choice. They're interested in Ecuador rather than one of the tropical countries in Southeast Asia (which could, in fact, be more affordable than Ecuador) because they want to be closer to "home." They plan to make frequent trips back to Seattle.

I told them to forget about saving money. If they make frequent trips to Seattle, their cost of living, all in, after moving to Ecuador will almost certainly exceed what they spend now.

Let's run some numbers for this couple. A quick check on Expedia shows fares from Guayaquil, Ecuador, to Seattle at about US$1,300, or US$2,600 for two. Those are the deep-discount, advance-purchase, come-hell-or-high-water fares, nonrefundable, nonchangeable. In many cases, the couple will have to pay more.

But airfares are only the beginning. The couple will have to get from their overseas home to Guayaquil, in a bus, car, or taxi, maybe spending a night in a hotel. Once in Seattle they may need a hotel, too, and a rental car. They'll need presents for the grandchildren, and they'll want to have dinners out with family, including a few splurges.

We have to make some guesses, about total trip costs and what the word "frequent" means. For the sake of argument, let's put the trip costs at US$5,000 and figure on three trips a year. That totals US$15,000, easily more than the couple might spend annually on rent, food and entertainment, or any other cost category while living in Ecuador.


Creative Real Estate Investment Opportunities In The United...

Wall Street Can Keep Its Paper

July 11, 2014, Panama City, Panama: For the small investor looking to diversify globally, the United Kingdom has some attractive packages. From cemetery plot investment to fruit fields and dairies, you have more options than in the United States.

Editor's Note: As Lief and Kathleen continue their vacation, today's essay is republished from Lief Simon's Offshore Living Letter. Lief's Offshore Living Letter comes out twice-weekly (Mondays and Thursdays) and addresses the benefits of and current opportunities for diversifying your portfolio, your business, your assets, and your life.

Dear Live and Invest Overseas Reader,

About two years ago, I invested in cemetery plots in the UK. Specifically, I bought a 10-plot package and recommended that my Marketwatch members do the same.

Last week I heard from the agent who brokered the investment. He was contacting me to tell me that the developer behind the offer has received planning permission for a crematorium on the site. As a result, a large investment group is interested in buying out the entire cemetery. The expectation is that all investors will be paid out ahead of schedule and within the next two months.

I liked this offer because of the projected returns (IRR of 15% to 20%), the low capital requirement, the currency diversification (more on this in a minute), and the availability of developer financing if you bought a 10-plot package. Otherwise the minimum investment was three plots at £995 each.

I went for the financing and set things up so the monthly payments have been charged automatically to my credit card. I've made 27 payments to date and have nine to go, but it looks like the exit event will happen well before the final payment has been made and a year or more earlier than was originally projected. It's looking now as though my return will be an annualized 44%.

One reason I jumped for this offer when I discovered it, as I said, was because it was an investment in the British pound. The pound has strengthened against the U.S. dollar (my investment currency) since I bought in, bumping up my U.S. dollar IRR by 3% per year to 47%.


What It Means To Expats In Ecuador If Rafael Correa Runs Again

President Correa, Again?

July 10, 2014, Cuenca, Ecuador: As Correa serves his second term as Ecuadorian president, proposed constitutional amendments would remove term limits, allowing him to run again.

Dear Live and Invest Overseas Reader,

The possibility that Ecuador's Rafael Correa may seek another presidential term is getting strong reaction not only from politicians and the media, but from Ecuador's growing community of English-speaking foreign residents as well.

Although Correa, who is serving his second full term as president, has not committed to running again, he supports a constitutional amendment that would remove term limits and give him the option. The amendment, along with several others, was submitted to the country's constitutional court last week by the president of the National Assembly. If the court finds no problems with the wording, the amendments will be voted on by the assembly where they are almost certain to pass. Correa's Alianza País party has the super majority necessary to change the constitution.

Most political commentators take Correa at his word that he would prefer to leave office at the end of the current term, in 2017, no matter what the constitution says. He has said on a number of occasions that he and his Belgian-born wife plan to move to their home near Brussels, where he plans to join the faculty of a local university. The pundits say that, if a strong presidential contender from Correa's País party emerges, he will step aside.

On the other hand, Correa is well-known for his over-sized ego and a sense of personal indispensableness. If a suitable replacement capable of winning the general election does not come forward, and if he sees a serious threat to his legacy, observers feel sure he will toss his sombrero into the ring again.

An indication that Correa is serious about finding a credible replacement is the fact that he supports another constitutional amendment that would lower the presidential-eligibility age from 35 to 30. Many believe it is intended to allow assembly president Gabriela Rivadeneira to run for president if Correa does not. Rivadeneira is 30 and is viewed by some as Correa's heir apparent.

Although he continues to be one of Latin America's most popular presidents, registering an approval rating in the mid-70% range in opinion polls, he and his supporters were shocked by the results of local elections in February when Alianza País candidates were defeated in key municipal and provincial elections. The mayorships of Quito, Guayaquil, and Cuenca, the country's three largest cities, are now in the hands of opposition leaders. It was only after those election setbacks that the term limit amendment idea gained traction.

Although opinions among Ecuadorians about whether Correa should seek another term are, understandably, divided along political lines, feelings among the country's expats are more complicated. Even expats who consider themselves conservative give the left-wing Correa high marks and are ambivalent on the question of another term.


What It’s Like Living In Communist Vietnam

Life In A (Slightly) Communist State

July 9, 2014, Hanoi, Vietnam: Living in a communist state has its differences. But modern Vietnam is more capitalist in practice.

Dear Live and Invest Overseas Reader,

We've been living in Vietnam for several years now. During that time, we have made many close Vietnamese friends and have learned more about the history and rich culture of these people than we ever imagined. We've also been around a lot of foreign tourists, who are generally amazed that a Westerner would choose to live in a communist country.

The truth is that for all practical purposes, living in Vietnam is like living in any country, communist or not. After spending about one minute in Hanoi, anybody can see that this city is first and foremost the epitome of capitalism on steroids. The majority of Vietnamese are self-employed entrepreneurs. They own and operate hotels and restaurants, they sell vegetables and fish at the markets, they fix motorbikes and appliances, they promote their tour companies, shine shoes, and create a never-ending assortment of soups and noodles and rice dishes to sell in their tiny shops or at their pop-up sidewalk restaurants.

Most Vietnamese work from dawn until late in the evening, often seven days a week. Many earn just enough to get by, though a growing percentage of people have enough disposable income to buy some extras and even luxuries. Throughout the years, we've watched as the locals have traded their bicycles for motorbikes and their motorbikes for cars. More people wear eyeglasses now, and more children and young adults are fitted with braces. People keep pets—something that was very unusual just a few years ago. When they take their vacations, they love to travel. Domestic tourism is a rapidly growing industry here.

The difficult days of rationing and shortages are over. Today's Vietnamese shop in traditional markets and glitzy new malls. They take their children to parks, zoos, museums, beaches, giant waterparks, amusement parks, and the aquarium on their school breaks. They buy their own fashionable clothes, choose their own vocations, and love to gossip. In many respects, Vietnam is just like anywhere else. But there are differences, too...

Because it is a socialized country, some businesses are owned, or partly-owned, by the government. You'll see many products that have the word "Vina" in the name: Vinacafe, Vinashipping, Vinatex, Vinataba... These are all enterprises that the government owns either in part or entirely.


Life Continues As Normal For Expats Through The Thailand Coup

Life In A Coup

July 8, 2014, Chiang Mai, Thailand: Thailand tourism is down following the military coup in May 2014. But for most Thais and expats, life continues as normal

Dear Live and Invest Overseas Reader,

On May 22, the army took over the government here in Thailand. I wrote about the coup d'etat at that time, calling it just another coup.

We expats may dislike coups, we're nervous about having fewer rights. But for those of us without a political agenda, most expat life—and Thai life, too—goes on as before.

Those last few days in May and early June were tense. Some protesters and politicians were detained. And although it appears many were let go, we wonder exactly how many. The palace endorsed the coup, giving the army some moral authority. Soon the sporadic protests died down or were further repressed. The army ended the TV blackout at most stations, lifted the curfew, and reduced its public presence.

Coup leaders now promise an interim government by September, and new elections down the road, although without a fixed target date. In the meantime, the media remains censored, with politicians silent.

On June 23, the Bangkok Post reported the results of a Nida poll. Thais polled gave coup leaders an approval rating of 8.82 out of 10, and 73% agreed that "the country has a better atmosphere and is more peaceful." I wonder how many of those polled felt intimidated. Then again, those opinions square with those of Thai friends we've talked to about the coup.

Vicki and I have had long experience with coups. During our first year in Argentina in the 1980s, we lived through five nonviolent coups there. At the time, nearly all countries in Latin America were run by generals.


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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

Read more here.


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