When The Time Is Right?

May 27, 2008

Paris, France

PLUS:

n  Where To Buy On The Coast of Veraguas...

n  French Country Retirement Could Be More Affordable Than You Think...

n  Next Time...Pay The Bribe...

n  Beautiful Riverfront Dead Bang In The Path Of Progress For Less Than $1 A Square Meter...

n  Paralysis By Analysis...And Other Threats To Your New Life Overseas...

n  Beyond The English Pale In Kinsale, Ireland...

n  Emergency Helicopter Evac Service In Panama...

AND:

n  Equity Swapping-Your Overseas Retirement Plan...

-------- Last Chance! --------

Six days

from now, behind closed doors in sunny Cancun, Mexico, Lief Simon will detail where and how to make money investing in global real estate starting immediately.

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Dear Overseas Opportunity Letter Reader,

A couple of years ago at a conference in Panama, I met a gentleman, an American from Tennessee, who explained that he had been researching real estate investment opportunities in the Dominican Republic for two years.

"I'm convinced the DR is a market I want to invest in right now," he told me, "but I'm just not sure what to buy."

"Have you invested in real estate outside the States elsewhere?" I asked.

"Well, before I started looking closely at the Dominican Republic, I researched the market in Costa Rica for four years."

"What did you end up buying there?"

"Oh, I never bought anything. After four years of looking, prices had risen so high that I figured it no longer made sense to invest."

"Ah, well, that happens," I offered.

The truth is, it happens a lot.

I have business associates who follow a strategy they refer to as, "Ready, fire, aim." I think it works for investing, too...and for life.

That is to say, as friend and 20-year retiree (since the age of 35) Paul Terhorst puts it, "You can plan to retire overseas...or you can retire overseas and then make some plans."

Whether you're looking to invest in real estate in a new market or to start a new life somewhere exotic and exciting, sure, you want to carry out your due diligence. But realize that, all the while you're researching, the market is moving.

And your life is passing.

That gentleman from Tennessee I met in Panama was so worried that another, better opportunity might come along that he could never bring himself to carry through with any one particular chance.

He was a smart guy. And an experienced investor. He'd done well for himself buying long-term rentals in his home town. He felt comfortable with that market. And perhaps that was the great hindrance to his plans for diversification abroad. Because he understood his home market in Tennessee so well, he was frighteningly aware of how much he didn't understand the markets in Costa Rica, the Dominican Republic, and beyond.

He kept researching and investigating and scouting, trying to identify the right time to invest and the best thing to buy.

There is no "right" time, and there is no "best" buy.

After more than six years in Ireland and four years in Paris, we're preparing for a third international move, this one to Panama City. Over the weekend, someone asked, "Why Panama? Why now?"

I think she was looking for a clear-cut response that would have made the case for why right now is the "right" time to take up foreign residence in the Panamanian capital. And I fear I likely disappointed her.

Panama makes a lot of sense for a lot of reasons, but is it the best place for me or you or anyone thinking about spending time or money right now? Who could answer that question? Not me.

I can only tell you, as I told the woman I chatted with over the weekend, why we're going to Panama this summer:

Because it's a better place to do business than France.

For me, right now, that's a reason. I'm building a publishing business (I appreciate having you along for the ride, by the way), and my husband is building a real estate consulting business. We like France, and we've been happy in Paris, but we're not stupid. And, frankly, I think you'd have to be at least a bit daft to try to indulge entrepreneurial inclinations in this country.

Why did I settle in Waterford, Ireland, more than a decade ago? I was relocating myself and the business I was running at the time to Ireland because the parent company wanted a presence in the EU. But why Waterford specifically?

Because my then brand-new husband was considering investing in a real estate development just outside that city. That project didn't pan out, but, meantime, the choice had been made and Waterford became our home.

Why did we begin spending time in Paris four years ago? Because our daughter suggested it.

Paul Terhorst took early retirement and began his overseas adventures 20 years ago because the accounting firm he was working for decided to pull him out of Argentina. He and his wife had grown to like Buenos Aires, where Paul's firm had assigned him a couple of years earlier. When his superiors told him the BA posting was over, he told them his retirement had begun.

Another friend also took early retirement, about five years ago, when the engineering firm he was working for was bought out by a larger one. He saw the corporate restructuring as a chance for a bigger change. Instead of moving up the company ladder, he moved down south, to Cuenca, Ecuador.

Sometimes life takes you by the collar and pulls you along. Sometimes it waits for you to create your own momentum.

I say again, there is no best opportunity and there is no right time.

So here's what you do: You do something right now.

If your life's circumstances aren't conspiring to pull you in the direction of new horizons, get yourself up to start chasing them.

"But...but...but," you may be thinking.

But what?

What's holding you back? You're worried you can't afford it? I've shown you that you could retire and live well in Cuenca, Ecuador, on as little as $660 per month...or in Atlantida or Salto, Uruguay, on as little as $1,038 per month.

Worried it'll be a lot of hassle and work? You're right. It will be. It's easier to stay put and to do nothing. But where would that leave you at the end of the day? What stories would you have to tell? What adventures to remember?

Don't like the idea of moving far from your children or grandchildren? Don't. Try Panama or Mexico. A new life in either of these countries would put you no farther from your loved ones than would a move to Oregon, say, or southern California. You (and they) could even drive to Mexico for visits.

Generally scared to death? What are you afraid of? That your new life won't work out as you hope and expect? So what? You could always return home.

Or move on. Again, there's no "right" place, and trying different places on for size is part of the fun.

Maybe it is the fun.

On the other hand, maybe you're not worried your living and investing overseas plans might fail. Maybe you're worried they'll succeed.

Where would that leave you?

I can't imagine.

But you can.

Kathleen Peddicord

P.S. If the gentleman from Tennessee had bought almost anything in the Dominican Republic during the two years he researched that market-back land without a view, even-today it'd be worth at least double what he'd paid for it.

P.P.S. After more than 10 years living and working in Waterford, Ireland, we discovered her anew this month. We were like tourists in Jackson's home town. More below.

P.P.S. Lief was out the door early yesterday morning for Cancun, Mexico, where he'll be for the next two weeks for back-to-back conferences, including his own Global Real Estate Profits Summit June 2-3. If you're not signed up yet, here's your last chance to avail of Lief's two-for-one offer for Live and Invest Overseas readers. 

If you do see Lief in Cancun, tell him that I won nearly every lot I bid on at Rody Keighery's antiques auction (CityAuctionRooms.com) in Waterford, Ireland, yesterday afternoon. Move Plus from Dublin will be collecting the furniture from Rody later this week, then packing it into a container for shipment to Panama City. Tell him not to worry. I'm only slightly over budget...

------ Borrow To Buy In Central America 

Georgetown Trust lends in Panama, Costa Rica, Nicaragua, Belize, Honduras, and beyond. Attractive terms.

Find out more.

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FROM THE MAILBAG:

"What about retiring in France?" asks N. Butler from Amsterdam, Holland.

It can be far cheaper than you might imagine...if you settle outside Paris. For years, Brits and others have been retiring to the French countryside, buying houses to renovate, and starting small businesses. For the Brits, especially, the appeal is not only the cost...but also the sunshine.

The cost of country real estate is surprisingly low in France, because the French don't value it. They've been migrating to the cities for decades. Within as little as an hour or an hour-and-a-half train ride of Paris, it's possible to find charming village homes or farmhouses for less than 100,000 euro.

A bit farther from the capital, south, in Limousin, for example, real estate for renovation can be even more affordable-downright cheap for Continental Europe-and the cost of living, too, can be appealing even if your retirement budget is modest. Locally grown foods don't have the transportation costs included in city prices. Health care (the best in the world, says the World Health Organization) is free for residents. And, living in a village with a nearby train station, you could be happily car-free.

Take a look at PropertiesinLimousin.ie.

"You've recommended Veraguas as the next big thing in Panama. Where, specifically, in this province would you recommend buying property?" writes J. Saunders Stateside.

Best deals in Veraguas are to be found on the western coast of the Azuero peninsula. The shopping is easier on the east coast of the peninsula (in Los Santos province), because it's more developed. On the west coast, in Veraguas, you're ahead of the crowd, which is a good thing from an investment point of view, but it means you need to put in your time on the ground.

We remind you often that, in the emerging markets we recommend, there's no such thing as a Multiple Listing Service. In a pre-emerging market like the coast of Veraguas, there aren't even listings. At least no organized listings. There's no formal market. It's all word-of-mouth and who you know. What's available and at what price can change overnight.

The farther south you go from Santiago, the capital of Veraguas, the cheaper the per-square-meter price can be...but the more removed you are from infrastructure, services, and amenities. This is where I'd look, though. (In truth, it's where I have been looking for the past year.)

Best buy, of course, is coastal land. However, other opportunities are also worth paying attention to right now. Around San Francisco town, for example, riverfront can be bought cheap right now (titled for as little as $1 a square meter) and will appreciate nicely over the coming two to four years.

If you can't be on the ground yourself, you can ask Michael Martinez, e-mail:  panamagoldcoast@yahoo.com, to scout for you. Better, though, to be on the ground yourself. 

ALSO RIGHT NOW:

Swap your assets. It's the overseas retirement plan whose time has come.

Wondering how you could ever afford to retire overseas? Twenty-year retiree Paul Terhorst, currently residing in Buenos Aires, Argentina, has a plan:

Sell your house in the States. Put the proceeds into stocks and (maybe) an apartment or house in the Third World.

This is one benefit of retiring abroad. You can easily swap between international asset classes.

I'm a retired accountant, not an investment advisor. I don't give specific investment advice, and nothing here should be construed as such.

But let's review some asset classes an overseas retiree is likely to own...or could own...or should own...

First, the U.S. housing decline has several more years and another 30% or more to go. How do I know? I don't. No one does. But if we look at housing cycles over time, we see a tendency to regress to the mean. In other words, prices tend to fall back to where they would have been originally under more normal conditions. In this case, a further 30% decline would be an average. Different parts of the country will fall more or less.

Meanwhile, the U.S. stock market has already sold off, as of this writing, some 25%. I'm looking for a bottom some time this summer, say July or August. So there's plenty of time to swap into these assets if you're so inclined. I plan to buy the Qs (symbol QQQQ) and China (symbol FXI) when the market settles lower. The Qs are a basket of high-tech stocks in the U.S.; FXI is a basket of the very largest, most stable Chinese companies. I may even sell some of my more stodgy stocks to buy these high flyers.

Now let's get to the international part. Consider an apartment or other real estate investment outside the U.S., specifically in the Third World. I still like Argentina and Mexico, and I'd like Thailand, too, if they'd ease up on their rules against foreign ownership of land. I figure most of us feel queasy without at least some real estate, somewhere, in our portfolios. By getting into someplace in the Third World, you can calm your nerves. You'll always have a home to return to.

Another possibility: Get into business overseas. I've met expat developers, writers, wine makers, teachers, bakers, real estate agents...

Again, my point is this: It's time to swap asset classes abroad. As a retired expat, you're in a unique position to do this. And your retirement is the big winner.

The past 400 years of Irish history were determined one bleak day in Kinsale, one of the most important towns in Ireland with a charter dating back to 1334. After more than 10 years of living and working next-door in Waterford, we finally decided to take a closer look...

If only the Irish and Spanish forces had been able to hold their ground at Kinsale in 1602, Irish history might have written itself differently. Alas, the English routed the clans and their Spanish allies in what became the turning point of the Nine Years' War. As a result, James I expanded English rule from the Pale, the region on the island's east coast where his predecessor Elizabeth I's authority had been contained, to all Ireland.

Immediately following their victory, the British built first James Fort (named for their new king) and then Charles Fort on either side of the estuary leading into Kinsale, to keep the French and the Spanish out. Charles Fort is the best remaining example of a star-shaped fort in Europe...and the ideal place for an 8-year-old boy to spend a sunny afternoon.

Jackson, in Ireland with Lief and me earlier this month, enjoyed the week in Waterford, his "home town," as he reminded us regularly (he was born in here). In Kinsale, we stayed at The Old Presbytery (OldPres.com), a quintessentially Irish bed and breakfast, the likes of which are harder and harder to come by in Ireland these days.

FROM THE "MAYBE IT'D BE EASIER JUST TO STAY HOME" FILES:

"Trust me on this.  You're not getting to Ecuador on Ecuadoriana Air." 

From Paul Terhorst:

"Costa Rica, 1974. I had to audit a banana company, and Vicki and I were bouncing around among the Banana Republics. The night before our flight from Costa Rica to Ecuador, we had dinner with the client.

"I said, 'We're flying to Ecuador tomorrow on Ecuadoriana.'

"He said, 'No you're not. Ecuadoriana Air doesn't fly.'

"I said, 'We have our tickets, reservations, everything.'

"He said, 'Trust me on this. You're not getting to Ecuador on Ecuadoriana Air.'

"The following morning, we went to the airport, checked in, and got our boarding passes. Only then did we discover there were no planes. Ecuadoriana hadn't flown in more than two months. They continued to sell tickets, book reservations, publish schedules, and so on; no one had told the bureaucracy to stop doing any of those things...so they kept doing them. The airline carried on, conducting business as usual... except for the flying part. They'd been grounded by the FAA or something.

"We finally made the trip on another airline, via Panama, to Guayaquil. We were to spend three days there. On arrival in Guayaquil, a sign at the airport read, 'The airport closes tomorrow for two months.'"

"I learned my lesson. Next time, I won't buck the system. I'll pay the bribe."

One more...from correspondent Christian MacDonald, traveling in Peru:

"'This time, I'm not paying a bribe,' I told myself as the cop handed me my ticket for going the wrong way on a one-way street. So I headed to the police station, ticket in hand, early the next morning.

"'When did you get this ticket?' asked the officer on duty.

"'Yesterday,' I replied. This earned me a frown.

"'Not soon enough,' he told me. 'Come back Monday.'

"It turns out they need a few days to process an infraction before they're prepared to accept payment of the fine. Fair enough.

"I returned Monday morning and took my place at the back of the long line. I reached the head of the line at exactly 12:30.

"'Regressen a las tres,' the officer told me. Return at 3 o'clock, after lunch. This was becoming annoying.

"Once again, at 3 o'clock, I stood at the end of a long line consisting mostly of those would-be ticket-payers who had hung around for the two-and-a-half-hour lunch break. After a 20-minute delay, the cop commanded, '¡Vengan mañana! Hago licencias esta tarde.' Come back tomorrow. The guy had decided to work on drivers' licenses the rest of the afternoon, instead of our tickets.

"Everyone grumbled but dispersed, ready to lose another day's work and return to the line again tomorrow.

"But not me. I headed straight to the commandant's office-something a local Peruvian never could have gotten away with-where I demanded that I be able to pay my ticket today. I've been here three times, I told him.

"He jumped up and yelled at the original officer to process my ticket-and only my ticket.

"Next time, I'll pay the bribe."

Panama boasts First World medical care and, now, emergency in-country evac service by helicopter.

LifeFlight Panama has launched a new helicopter evacuation service in Panama using a Bell Longranger III helicopter that can fly from Panama City to most all other points in the country round-trip without refueling. The service is intended for emergency evacuation within the country to the nearest hospital or a hospital in Panama City, depending on the emergency.

Health care, of course, is a key issue for expats and foreign retirees. The health care in Panama is excellent (I can assure you from experience). This service adds another layer of sophistication.

As a resident of Panama, you (and your entire household) can subscribe to LifeFlight for $204 per year. As a tourist, you'll pay $29 for 30 days of coverage. Reasonable rates, but we're contacting the company to see about negotiating a Live and Invest Overseas reader rate. We'll keep you posted.