Then, on the highway... mon dieu...rush-hour traffic. Another hour-and-a-half later, we arrived finally at the little apartment on rue de Verneuil that the kids, traveling with us, remember as home. Our 21-year-old daughter Kaitlin and her boyfriend Harry have taken caffeine pills...and say they feel great! Meantime, Lief and I are sleepwalking through the day, barely able to remember each others'names...while Jack is asking if we can go to the park to play soccer. This jet lag stuff seems tougher to deal with the older you get. "What time is it?" Lief asked a little while ago. "Time? Where?" I mumbled in response. "I think I changed my watch from Panama time to Newark time during our layover. But I can't remember if I changed it to Paris time when we arrived this morning. Frankly, I'm not sure if it's a.m. or p.m." The kids went for a walk, to reacquaint themselves with our neighborhood. The shop on the corner run by the family that gave Kaitlin and Jackson free sweets every time we'd stop in is still there (to Jackson's delight). The boulangerieacross the street has remodeled itself up-market (alas, the croissants will cost more). A new brasserie called l'Empire has opened two blocks down. A new Monoprix (a kind of French Wal-Mart with sundries and groceries) has opened five minutes'walk away. We have a chocolaterie now where an art gallery used to be. And a papeterie two buildings down. "Our street is even cooler than it used to be," Kaitlin exclaimed as she, Harry, and Jack burst back in through the front door a few minutes ago. We're told temperatures here in Paris reached nearly 100 degrees Fahrenheit last week. Right now, the sun is shining brightly, but it's a pleasant 75 or so. The two young children of our building's guardienne are running around in the courtyard outside our window, their little feet clicking and clacking on the cobblestones, their small voices floating up and in through our open windows...along with, now and then, a " Bonjour, Madame"..." Bonjour, Monsieur," as the residents of our building greet each other coming and going. Lief found the key to the cave, and he and the kids went down to choose wine for our first dinner together tonight. I asked them to bring up some champagne, as well. Ah, they're just back, arms full of bottles. I'd better go help them through the door... Kathleen Peddicord Continue Reading:
Nothing substitutes for feet on the ground. You've got to walk the beaches, the pavements, and the hillsides of whatever overseas Shangri-las may be tempting you virtually. Only then can you know if any one of them is the right place for you to spend your time or your money. Readers write every day to say, "I've been reading your letters for months (or years), and I'm convinced I want to make a move. What should I do next?" Come to a conference. That's why we offer them--because they're the logical and the necessary next step. You can do it on your own, and everything can work out great. But it's tougher, and it's less efficient. It takes longer, and it costs more money in the long run. Before you make a move or invest your money in a new country, you need to engage a corps of resources you trust and to build an in-country network of support. You need an attorney, a banker, a tax advisor (if you're an American, you need two--one in the new country and one back in the States), and a residency adviser...you need a shipping agency and an insurance provider...maybe you need to find a real estate agent who won't try to rip you off (in some markets, not an easy thing), a property manager, or an architect... Thinking a little more day-to-day, maybe you're going to need recommendations for doctors, decorators, veterinarians, schools for your children, Internet providers, and cell phone contracts... How do you get the electricity turned on in your new home? And then how do you pay your electric bill each month? How do you find household help, a driver, or a gardener? Where should you shop for appliances, lighting fixtures, and bedclothes? What should you bring with you from home? Should you ship your car? These are only some of the questions you'll need to answer as you prepare to launch a new life in a new place. But what if you're interested not only in reinventing your lifestyle, but also in building a new way to pay for it? What if you want to start a business? Then you've got another long list of questions to find answers for. Again, you can seek out all this information on your own...or you can come join us for a few days in the country where you're focusing your attention. You'll be presented with answers for every question I've suggested here...plus you'll be given every opportunity to ask every question of your own, as well. The responses you receive won't be theoretical. They'll be real-world and born of experience. For every live event we sponsor, we convene our key in-country resources and friends, including the contacts and colleagues we work with personally. In Belize, Panama, France, and Uruguay, for example (the countries where we're holding Live and Invest Overseas Conferences in the next six months), we'll introduce you to the bankers, tax advisers, attorneys, residency experts, insurance providers, and shipping agents we've worked with personally. We understand that every introduction we make at one of our conferences come with a strong personal endorsement. We take this responsibility seriously. In addition to our corps of advisers in each case, we make other invaluable introductions, as well, at all our live events--to people just like you who have already made the move and who are already enjoying new lives in these new places so full of opportunity. These expats in whose footsteps you're considering following are the best possible source of information and advice. They know what you need to know better than anyone. And they join us for our Live and Invest Overseas Conferences in the spirit of community, eager to share their tales (of success and, yes, of struggle). At one of our Live and Invest Overseas Conferences, you meet dozens of people who've made the kind of move you're considering...and you also meet dozens, maybe hundreds of people who are right now just where you are. Thinking, deliberating, considering the options. You learn from them, too, from their stories and from the questions they ask that maybe haven't occurred to you yet. This opportunity to engage one-on-one with so many like-minded souls has always been, for me, the biggest benefit of participating in one of our live, in-country events. After 20 years putting on conferences all over the world, it's the reason I continue to look forward to every one. Each Live and Invest Overseas Conference is a chance to make invaluable connections, to secure resources you can trust, to meet potential new business associates, and, perhaps most important, to make new friends in the place that well could become your new home. New friends...and maybe more. Lief and I met at a conference I hosted in Ireland 13 years ago this month... But that's a story for another day. Kathleen PeddicordP.S. What else this week?
- "It has been nearly four years since I moved from Tucson, Arizona, to Boquete, Panama," writes newPanama Letter Editor Lee Zeltzer.
"Looking back over my experiences, the operative word is 'change'...in Spanish, cambio.
"Panama has changed in the time I've been living here, but more rhelevant to me is the change I've experienced.
"I came to Boquete with my wife to start a new life when our last of four children moved on to university. Within 18 months, my wife had left. For many reasons, she has not returned. Big change..."
PLUS: From Global Real Estate Investing Guru Lief Simon: Years ago, I knew of a development project in New Zealand where the developer offered investors a guaranteed yieldfrom the rental of their units for the first three years of operation of 12%. Development sold out quickly. After three years of operation, the 12% yield the investors had been enjoying plummeted to around 5%. That was all market rental rates at the time could generate on the original amount of the investment. Meantime, other rental properties in the same market were yielding more--around 8%. In other words, not only had the yield fallen for the investors who'd bought into the guarantee, but the capital value of their units was less than they'd been led to believe (and than they'd paid). Bottom line, the investors had overpaid for their units by enough to allow the developer to be able to return them the 12% per year yield he'd guaranteed. He'd paid them back with their own money. Several months ago, a consulting client wrote to ask me about a development project he was considering investing in. The developer was offering a guaranteed yield, in this case of 19%! My client is neither stupid nor naïve. He'd done his due diligence. What he had discovered was that the management company the developer had put in place had negotiated a contract with a travel agency that guaranteed to fill 80% of the rooms with their tour groups. He'd run the numbers, and the guaranteed yield panned out, as did a comparative analysis of purchase prices for comparable units in that market. My client invested. After he bought, unit prices increased, and the guaranteed yield was reduced for new investors, signs that the developer hadn't padded the original unit prices to be able to pay the yield he was guaranteeing first investors. So how can you tell when a guaranteed yield is a sweet, risk-reduced opportunity...and when it's a scam?
Why do I focus in these dispatches on the countries I do...and give less (or no) virtual ink to others? I have a Top 10 list. On it are my picks for the best places in the world right now to think about spending your time and your money. This list has been created based on more than 25 years experience traveling the globe and covering this live, retire, invest overseas beat...and it has been compiled with the help of dozens of correspondents and friends who keep in touch with me in real time from all corners of this earth. I can't be everywhere at once or know, firsthand, the situation on the ground in every country in the world at any given time. But I can stay well-informed, with the help of smart, savvy people I trust to provide me not only with information (information alone is a glut on the market...often not worth the virtual paper it's printed on), but, much more important, with perspective and judgment. In that context, here are my Top 10 picks right now:
- #1: Panama
- #2: Belize
- #3: France
- #4: Malaysia
- #5: Ecuador
- #6: Argentina
- #7: Uruguay
- #8: Croatia
- #9: Dominican Republic
- #10: Chile
The trouble with a Top 10 list is that it's limited to 10. If I were to expand this list a bit, I'd add:
- #11: Vietnam
- #12: New Zealand
- #13: Mexico
- #14: Nicaragua
- #15: Malta
Some of these countries make sense as full-time overseas retirement havens; some are more interesting for part-time living (because of the challenges and costs associated with establishing permanent legal residency). All, though, offer particular advantages to the would-be retiree, adventurer, or investor. That is not to say, however, they are the only places in the world that could make sense for you. You have your own agendas and circumstances, your personal experiences and priorities. If you've been traveling to the Bay Islands of Honduras for years, for example, as has one reader who wrote the other day...have made friends in this part of the world...have begun shopping for a beach home on Roatan...don't think you must adjust your plan and refocus your attention on Belize because I recommend that country over Honduras. It's true. Belize is generally more advantaged than Honduras. The whole of the country is English-speaking (while, in Honduras, it's the folks out on the Bay Islands, only, who use English as their primary language of communication). Belize is more stable politically than Honduras. Its currency is tied to the U.S. dollar. Its foreign residency program is one of the most user-friendly in the world right now. And Belize qualifies as one of the few remaining banking havens on the planet. All of that is true, but it doesn't mean Roatan, Honduras, couldn't make sense for you. This is such a personal decision. I offer my Top 10 list as a guide...as some stars to steer by. Based on my long experience and with the help of real-time intelligence from friends on the ground in each place, I recommend these places as worth a close look. But, again, I understand, and you should, too, that they are not the only places to consider considering. The other important thing to understand about any Top Picks list is that, if it's based on real-world experience and real-time intelligence, you can count on it to change. Tax laws, visa requirements, the cost of real estate, the cost of living, and the availability of quality health care...as well as the political situation, the value of the local currency, and the ease of coming and going from other parts of the world...all these things change all the time. Just as some U.S. states are more appealing today as places to live or retire than they were a decade ago, some countries are more interesting to the would-be overseas retiree right now than they were two or three years ago. And we can expect that others will become more interesting in the future than they are today. Any list of the World's Top Retirement Havens, including mine, is a moving target. One thing you come to understand when you begin considering the idea of spending time and money overseas is that you must be flexible and open-minded. Just as circumstances are changing dramatically in the United States right now, so, too, can they and do they elsewhere. One way to hedge the potential risks that this truth implies is to diversify...not only your investments, but also your life. Just as it's smart to invest in different markets and to hold assets of different types in different currencies, so, too, are there advantages to spreading your life among different jurisdictions. Do your banking in one country (where you can feel reasonably secure your deposits are safe), reside in another (where you pay no tax), run your business in a third (where entrepreneurs are respected and incentivized) and hold a passport in another. If possible, hold a second passport. I didn't invent this strategy, of course, It's written of often, as the Five Flags plan. It's about organizing both your time and your money (that is, planting your "flags") to your greatest advantage. Plant your flags based on your current circumstances and agendas. But don't plant them in concrete. You might want to be able to move them around from time to time. Kathleen Peddicord P.S. What else this week?
- At what age should you think about retiring overseas?
It's almost never too late...or too early.
Laurie Norton and Paul Jewitt, two easygoing Canadians, low-key and modest, started their new lives in Belize four years ago, as young 30-somethings.
As Belize Correspondent Ann Kuffner explains, "Laurie and Paul are part of an emerging trend. Move over, Baby Boomers! An increasing number of adventurous 30- and 40-year-olds are making their mark on the local San Pedro Town scene here on Ambergris Caye. They're making their way down here to La Isla Bonita with small savings and pockets full of dreams, and they're starting small businesses so they can stick around.
- "Laurie and Paul, for example, had vacationed in the Virgin Islands, Hawaii, Mexico, Puerto Rico, and Florida. Each time they returned to Toronto, they were more determined to escape the winters. Laurie kept pushing Paul to make their move sooner rather than later..."
- "'Do you have any regrets about moving to Belize?'"That's the question we're probably most frequently asked, both by our neighbors here on Ambergris Caye and also by friends and family back home in the States," writes Belize Correspondent Anne Kuffner.
"Without hesitation, my husband Mike and I answer, 'No. No regrets. Not a one.'
"The folks back home often find it baffling that we could be as happy--in fact, happier--living here in little San Pedro Town than we were living in the San Francisco Bay Area.
"Initially, we invested in property on Ambergris Caye because of our love for the Caribbean Sea and the laid-back tropical lifestyle on this island. Even today, years later, we're still thrilled to be surrounded by so much beauty, color, and nature.
"But there's another attractive aspect of daily life on Ambergris Caye that kept drawing us back to this low-key Caribbean retreat: The people and the strong sense of community we perceived here from the start. I'd never experienced anything like it before. In a big metropolitan area, like the San Francisco Bay Area, one can easily feel lost in a sea of bodies. It's difficult to get to know your neighbors..."
- "As I've explained, Vicki and I considered canceling this trip to Chiang Mai," continues Intrepid Correspondent Paul Terhorst, picking up where he left off yesterday.
"On the Thursday before we planned to travel, Switzerland, Brazil, the UK, and Australia raised their travel advisories to: Do not travel to Thailand. These four countries joined 14 others already making this recommendation, including Saudi Arabia, the United Arab Emirates, Spain, China, Hong Kong, Vietnam, Taiwan, Germany, Italy, Denmark, the Netherlands, Israel, Belgium, and New Zealand.
"We came anyway. We flew into Chiang Mai, 700 kilometers north of the main violence in Bangkok.
"I've written that unrest comes with the territory these days. Terrorists, natural disasters, riots, strikes, and more make our world a dangerous place. We need to deal with these problems on the ground and within the context of our own real-world experience. More often than not, it's a bad idea to run away. That was my first tip.
"Here are two more..."
PLUS: From Global Real Estate Investing Guru Lief Simon: How much does it cost to build a house overseas? As my wife, Kathleen Peddicord, likes to say when people ask her how much it costs to live overseas, "I have no idea...and neither does anyone else." It depends where and what you're building. Not only in what country but where in that country. And not only whether you're building big or small but also how you're finishing, fitting out, etc. A friend is building a small house in the interior of Panama. He is acting as the general contractor and hiring local laborers. He can do this because he has years of experience building in this part of this country. It's a small house, so he's buying materials retail. And it's basic. Nothing fancy. His cost for this small guesthouse, once it's completed, will be US$30 to US$35 per square foot, including the cost of the enclosed space and the covered exterior space. That's an appealing number; US$30 a square foot is absolutely (as opposed to relatively) cheap. So, if someone were to ask me what it costs to build a house in Panama, I could reply, "About US$30 a square foot." And I'd be telling the truth. I could provide the invoices to back it up (with my friend's help). But I wouldn't be giving the full story. At that price, you're building what I refer to as "local housing." A simple structure that serves the basic purposes. There's a basic bathroom, a basic kitchen, a small bedroom, maybe a small sitting area. No fancy fixtures, no high-end tiling (maybe no tiling at all), no closets, no laundry room, etc. This kind of "local house" can be comfortable and certainly livable, but it is not the quality of construction and finishes you would expect to find in a middle-class U.S. neighborhood, for example. And it probably doesn't meet the expectations of the typical retiree considering building a home in another country. Jump up to the next price level--to say US$50 to US$60 a square foot--and you're building what I call middle-class local housing. This is probably closer to the kinds of structures you'd expect to find in a middle-class neighborhood in the States--except for the finishes. Still, these won't be what you're used to. Windows, faucets, door hardware, and lighting fixtures, for example, will be what you'd likely consider very low-end. Go up to US$90 a square foot, and you're in the ballpark for high-quality construction and finishes. You can spend as much as you want when it comes to finishes, and this is where the cost of construction can really increase. In the US$90-a-square-foot range, you're buying very good quality stuff. So, again, how much does it cost to build a house in Panama? As much as you want it to cost, within a very broad range (US$30 per square foot to US$90 per square foot or more), depending on the kind of house you want to build. This is the case almost everywhere. In some countries, you can't build at the really super cheap end of the range, because of construction regulations. This is the case in much of Europe. Still, even in Europe, for example, you can spend as little or as much as you want on finishes. I was reminded of all this by a reader who wrote yesterday to say that he believes he could build a house cheaper in the States than in either Costa Rica or Panama. I guess that could be true--some places in the States, for some kinds of construction--though, frankly, I find it hard to believe. Not when you compare apples to apples--comparable kinds of construction and comparable levels of finishing.
"Kathleen, firstly, let me congratulate you on what is a very truthful and informative broadsheet.
"However, I'm writing now because your article on living in rural France for US$1,300 per month including rent is a little over-egged, I think.
"I have been living and working in La Belle France for the last 20 years, in beautiful Normandy, one of the poorer and cheaper parts of this country. I don't think you could manage here on US$1,300 a month. Average living costs in the last two to three years have increased by 15%, invisible costs such as insurances and service charges such as electricity and gas, Internet, and telephone have increased out of proportion to inflation. Compared with many countries in Europe, France has the highest costs for both new and secondhand cars.
"I can only speak from personal experience and my own lifestyle, but I'd say that, to have a 'reasonable' lifestyle here, you'd need a budget of 1,200 to 1,500 euro a month. That's about US$1,500 to US$1,900.
"With the euro falling against the dollar and house prices static here at the moment, I do agree that now is a god time to invest here if you are dollar orientated.
"I also agree with your reports that health care is exceptionally good and cheap, provided you are within the system. Even if you have to pay out of pocket, the care is first class plus and affordable.
"You can still get fixed-price meals for 10 to 12 euro, including wine.
"Crime is very low. We do not lock the doors at night or the car when it is parked at home.
"French neighbors can be wonderfully helpful and also quite reserved. A polite 'bonjour' will get you invited for an 'appero' (a drink and snacks with your neighbors). Living in the country, you will be invited to all the local do's, and the locals will welcome you without reserve, regardless of your nationality and regardless whether or not you speak French.
"This time of the year is exceptionally beautiful. The countryside looks and smells magnificent. The weather is pleasant and to sit outside at a small French village cafe and watch the world go by whilst sipping a glass of cold white wine must be one of life's greatest pleasures. Winters can be another story.
"This is a great country to retire to. Not an easy place to work. But there is still a respect here for the older generation. If you wish to enjoy the culture, the history, and the excellent wine and food, and you do not need to work, you could do a lot, lot worse."
-- Bob H., France
It seems you know whereof you speak, dear reader, and we much appreciate the feedback.
Another reader wrote to report that his cost of living in another region of France is considerably more than our US$1,300-a-month figure.
It's all in how you live.
Whenever someone asks me how much it costs to live in XYZ Country, I respond: I have no idea, and neither does anyone else.
It's costing us more than US$5,000 a month to live in Panama City. We have dozens of friends living on half that amount or less. And we know dozens of others living on US$1,500 a month or less. We have one friend living here on his Social Security check of $800 a month. He's comfortable and contented.
As I said, it's all in how you live.
It cost us more than US$10,000 a month to live in Paris when we lived there...but, again, our budget was bigger than most everyone we knew.
Except for one good friend who was probably living on US$15,000 a month...
The truest point is that your cost of living can be as much or as little as you want it to be anywhere in the world, within very broad ranges. You control your cost of living more than most people realize. You have a car or you don't have a car. You employ a maid or you don't employ a maid. You shop for imported foods and wines or you shop at the local markets. You run your air conditioning throughout your entire house 24 hours a day or only in your bedroom when you sleep. Etc.
This is why an important part of our Live & Invest in France Conference will be given over to a close look at a series of budgets representing different lifestyles in different parts of the country.
More details here.
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"Kathleen, your Live & Invest in France Conference sounds great. We are trying to make plans to attend with the thought in mind of a possible relocation next spring or as early as November. My husband's 15-year-old would be moving with us, and I am interested in information on schooling options for him. This could be a great opportunity for him to attend a culinary arts program, too. He's not out of high school yet but is interested in getting his GED and then attending a culinary school in France. I think that would be amazing for him.
"We understand it might take us a few years to learn the language!"
-- Hope B., United States
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"Kathleen, my husband and I are looking to retire overseas in about a year and find your posts helpful as we compare and narrow possible locations that meet our interests. We want to be near water to enjoy those pursuits, but we want to have other interesting and beautiful options nearby to explore, as well.
"While Central America seems to be on its way up, offers QRP programs, and seems to have much natural beauty and beautiful Caribbean or Pacific beaches, Croatia, particularly the Dalmatian Coast, seems to be coming out on top of our list, for the water as well as for the architecture, history, and charm.
"We have read your book, but we still have questions about the feasibility of having a business in Croatia should we be interested in pursuing that option while living there. I also have questions about the tax/investment advantages. Would love to hear more from you about this."
-- Angela B., United States
Croatia is one of my favorite places in the world, for the reasons you cite. It has a gloriously long coast, plus a long and interesting history that has resulted in both a sophisticated, eclectic, and open-minded population and many architectural treasures.
As a lifestyle choice, Croatia is tops. As a doing-business choice, not so much. You can set up a business in Croatia as a foreigner, but the language and legal requirements make it more difficult than other places.
Further, there are no tax advantages to doing business in Croatia on the Croatian side. All the U.S. advantages remain, of course--the Foreign Earned Income Exclusion, etc.
More on Croatia here.Continue Reading:
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