We have porches, backyards, and driveways, and we fill every square inch of every room, every cupboard, and every storage shed with stuff. We keep two cars, lawn equipment, garden implements, boxes of old clothes, plastic tubs of mementos, hardly-ever-used appliances, the latest electronic gadgets, and on and on. We expand to fill the available space, and, typically, the space available is a lot.
Not so in Europe. Euro-city living isn't spacious. It's compact. In Paris, for example, you don't live in a house but an apartment. An apartment with no basement, no attic, no laundry room, no mud room, no family room, not a single walk-in closet, and maybe one or two bedrooms.
Under these circumstances, it doesn't take much to fill the available space. Europeans don't mind. They don't buy a new pair of shoes until the old ones wear out. They don't invest in a new coffee maker until the current one is kaput. Maybe they have a car, but more often they keep a bicycle. No need for a lawn mower or a weed whacker. No room for three or four televisions.
Our move from Waterford, Ireland, to Paris, France, took us from a 5,000-square-foot house on 6 acres to a 112-square-meter (1,200-square-foot) apartment. The adjustment, at first, was a shock. We'd sold much of our furniture and household belongings with our home in Waterford. Still, I had to do some creative organizing to fit our family of four into our seriously downsized quarters.
We squeezed in with not a square meter to spare. Sure, I would have welcomed a roomier closet in the master bedroom or a playroom for Jack. Honestly, though, after a while, we wondered how we'd ever occupied so much space as we had during our Irish country living adventure.
We found, over time, that we didn't miss the stuff we'd off-loaded during our move...and we didn't miss the area it had occupied either.
We learned to live not in our apartment, but in our city, as Europeans do. Within a 15-minute walk of our place were five parks. These were Jackson's backyard, where he met his playmates from school, where he and Lief played catch, and where we enjoyed picnics nearly every weekend the weather allowed. Within a 10-minute walk of our apartment were eight cafes. We'd stop for tea in the morning, a drink on the way home, or a snack after running errands on Saturday afternoon.
Neither did we miss our car. Paris is the world's most walkable city, and, when your feet give out, the Metro will take you anywhere you want to go for 1.70 euro.
We didn't miss yard work or spring-cleaning the attic. We didn't miss reorganizing closets to make room for yet more plastic tubs of things we couldn't possibly part with. It was an unexpected but liberating side effect of Euro-city life.
And it led to another unexpected benefit that Lief embraced whole-heartedly: We (well, I) spent less money. Some of our fixed costs increased, but our discretionary spending was reduced dramatically. I learned to buy with judgment, rather than on impulse. Every purchase had to pass the where-will-I-put-it test?
Formerly a hobby shopper, I had no choice but to reform.
Though, I admit, not completely.
Leaving Paris for Panama City, we decided to make our apartment there available for rental. When the French rental manager we engaged came to inventory the contents of the place, I walked her room to room, cupboard to cupboard. She grew increasingly quiet, finally noticeably unhappy.
"You will have to get rid of many of these things," she said at last. "These knick-knacks. All the extra kitchenware. All those CDs and DVDs.
"You have too much stuff. Some of it will have to go."
Kathleen PeddicordContinue Reading:
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Or, for about the same money, I noticed today, you could buy an entire French town to renovate and restore. I made the mistake of telling Kathie about this over breakfast this morning...
It's the town of Courbefy, which is returning to the auction block for a second time May 21. The town was put up initially for auction last month but got no bidders at the reserve price of €300,000.
Courbefy was abandoned in the 1970s. Since then, several groups have tried to turn it into some kind of tourism destination, with no luck.
With the press coverage the upcoming second auction has been receiving, this one could be more successful. Many potential buyers have been showing interest, including one Paris group that is considering the offer as a land buy. They want a place to raise cattle...meaning they'd tear down many of the 19 old buildings standing (or near-standing, I guess) on the 20 hectares the town occupies. What a shame that would be.
France has plenty of options for the would-be renovator, as does Italy. Most are in the countryside, but not necessarily far from a town or city. Our stone farmhouse in Istria, Croatia, waiting to be renovated, is about 30 minutes from the main town on the coast but only 5 minutes to the nearest town with a shop and a restaurant. This kind of setting can be appealing for a quiet retirement.
Of course, a renovation project is a lot of work, which is another benefit in retirement...it gives you something to do. And doing this kind of work in the foreign country you've chosen for retirement can be a great way to become part of your new community. You'll get to know the local tradesmen and vendors, and, immediately, you'll have a circle of acquaintances who likely will become friends. This is how Kathie and I initially made new friends when living in Waterford and Paris.
Renovating our house in Ireland years ago gave us the opportunity to get to know much of Waterford County beyond where we were living. We traveled around in search of workshops and stores in Waterford and beyond, discovering parts of this country that, otherwise, we might never have known. The same thing is happening in Medellin, Colombia, where we're currently renovating an apartment. We've traveled all over Medellin and the surrounding towns in search of antique shops, lighting stores, furniture craftsmen... Again, the renovation project is helping us to penetrate quickly from the tourist to the local community.
The inventory of old historic properties for renovation is great in Europe, especially in France and Italy, but not exclusively so. Colonial towns in Latin America also offer interesting options...in Casco Viejo in Panama and Granada in Nicaragua, for example...in Cafayate (for small town) or Buenos Aires (big city) in Argentina...in the old town of Montevideo in Uruguay...
Not necessarily historic but nevertheless interesting options are to be found, sometimes at very appealing price points, in places that have experienced dramatic growth in the last 30 years. Our apartment in Medellin is a good example. It's in a building that qualified as high-end when it was erected 35 years ago, but, since, the place had been allowed to deteriorate. Most of the apartments in the building, including ours, haven't been updated since they were built. They need complete overhauls, but the as-is price points make the proposition interesting from an investment point of view. Panama City and Puerto Vallarta offer similar options.
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None of these places felt right, and, finally, Lucy and her crew realized that that fact was less to do with Mexico, Costa Rica, and Panama and more to do with a fundamental personal preference:
Her family prefers Old World living. So they recalibrated and launched a new search on the other side of the Atlantic. This time, they landed in the south of France, which, Lucy reports, is perhaps the best value lifestyle option on the Continent today.
As Lucy explains, this region is "colorful, eclectic, always changing, never following a formula, and very open to retirees."
This is wine country, with a long history and a lot of heart.
And, as Lucy and her family discovered, this region can be far more affordable than you might imagine. Certainly this isn't the cheapest place in the world to retire. However, Lucy calculates that a retired couple could live comfortably here on just about 1,200 euro a month, including 500 euro a month to rent a two-bedroom apartment.
Lucy will be joining us in Scottsdale late April for our next Retire Overseas Conference, when she'll present top current retirement and lifestyle options in Europe, including in this region of France.
In preparation for that event, Lucy has been researching the local property market in this part of the world. She wrote this week to share some of her discoveries...including:
A 91-meter-square stone house just outside the Cessanon-Sur-Orb village center, with a garden, a terrace, two garages, and a pretty view across the Orb Valley, on offer for 112,000 euro...
A typical winemaker's home...a 200-square-meter house with five bedrooms and many original features, including stone floors and large windows, in need of renovation and updating, with an asking price of 180,000 euro...
A five-bedroom house with a large garage plus an independent apartment with a private terrace and street-level access, both with 125 square meters of living space...plus the property has an enclosed 600-square-meter garden with space to create a swimming pool...asking price is 180,000 euro...
A charming, fully renovated, 90-square-meter, two-bedroom stone village house (with a new roof and double-glazed windows) with a vaulted cellar and a pretty living room with a beautiful fireplace, ready to move into, on offer for 117,000 euro...
Another completely renovated two-bedroom, two-bathroom, 80-square-meter house with a roof terrace and open views across the Orb Valley, again, no work required, ready to move into, for 168,000 euro...
Or, if your budget is a bit bigger, a spacious four-bedroom villa, with 280 square meters of living space, a 100-square-meter terrace with summer kitchen, a swimming pool, and a 7,280-square-meter landscaped garden with a view to the mountains, turn-key and beautiful, for 990,000 euro.
Lucy recommends two local property agencies as good places to launch your search in this part of the world:
She'll have much more to share, about her experiences as an expat in France and Spain, about the current best lifestyle and retirement options to be found on the Continent, and about buying, owning, and renovating your dream home in the Old World, in Scottsdale late April.
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June 7, 2011:
"Kathleen, a few months ago I read your article 'Strategies for a Tax Free Life.' I also listened to the audio tapes from your most recent Emergency Offshore Summit, hoping that they would contain the details for how an online company in the United States can move offshore. Alas...not all of my questions were answered...
"I'm planning to move to Panama this year. I have several existing online companies that cater to U.S. customers. Do I need to set up a company offshore to qualify for the FEIE?
"If I set up an offshore company, I'm sure I'll need a bank account in that country. But how about getting a merchant account? Won't my customers be charged an international fee every time they make a purchase? How can I avoid that?
"If I'm planning to live in Panama, wouldn't it make more sense to have my offshore company in a different jurisdiction? Where is best with the least hassle?"
--Jackie L., United States
International tax and business attorney Chris Rusch replies:
Yes, you will need to incorporate offshore to maximize the benefits of the Foreign Earned Income Exclusion. You can read more about this here.
And, yes, it may be better to incorporate in another jurisdiction. I recommend Nevis. As you'll be living and working in Panama, though, you might open a personal account in that country.
Many clients incorporate in both Nevis and Panama, if they wish to rent office space, have a corporate bank account, etc., in Panama.
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June 7, 2011:
"Asunción is like Panama City 100 years ago but with a population of a million-and-a-half," writes a Panamanian friend in Panama City in response to my query regarding her recent trip to Paraguay.
"This country went from a military dictatorship to a dictatorship of a political party. There was almost no middle class. Just the rich and the poor. This changed just a couple of years ago, and a new era has come for the people of Paraguay with this new government.
"There is a lot of opportunity for investment, as there is a lot to be done. People are friendly and honest, and life is almost bucolic. The only thing that is expensive is taxis (there are not enough of them).
"When you visit, as I know you're planning to do as soon as you can, don't stay at the Club de Golf hotel. It is out of town in the countryside, and the taxi to the city costs US$18. Better to stay at the Crowne Plaza in the city..."Continue Reading:
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