March 16, 2011:
"Kathleen, I am a follower of your Live & Invest Overseas e-letter and love the information it provides. I have a question that has been bothering me for a while. I believe it should be directed to Lief Simon.
"Much has been written, particularly recently, about the precarious state of the U.S. dollar and the possibility of it losing its status as the world's currency of choice. We are seriously contemplating a property purchase in Panama, which, as you know, uses the U.S. dollar as its currency.
"What happens to Panama if the U.S. dollar tanks? And what would happen to Panama property values?
"I hope you can shed some light on this for me or direct me to a resource that can help. Thanks again and keep up the good work."
--Keith H., United States
Lief replies:
"The U.S. dollar has little to do with Panama's economy. It is simply the current medium of exchange in this country. If the U.S. dollar collapses, then Panama could switch to using its own currency or to using another currency as its medium of exchange. We've spoken with bankers and others in this country who agree that there's no way to predict how Panama might react should the U.S. dollar lose its position as the world's currency. Much would depend on the administration in power at the time.
"Frankly, the retiree depending on U.S. dollar-denominated income alone for his retirement would be better off if Panama retained the U.S. dollar as its currency. You'd still feel the effects of U.S. dollar-based inflation, but you wouldn't have any currency exchange risk to worry about day-to-day.
"If your retirement income is based 100% in U.S. dollars, you have these concerns anywhere you go. At least in Panama (so long as this country continues to use the U.S. dollar as its currency), again, you aren't also at the mercy of the exchange rate."Continue Reading:
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March 16, 2011:
"Last October," muses Euro-Correspondent Lucy Culpepper from southwestern France this morning, "I wrote about how I loved the fall in this part of France, in the Bearn. The crisp, clear days, richly colored leaves all around, and heart-stopping views to the snow-capped Pyrenees in the distance.
"As soon as my words were published, the weather turned foul, and we had three wet, miserable weeks.
"No views and everywhere cold and damp. Just as the blues were really setting in, out came the sun. The Pyrenees were covered in snow, and the ski resorts opened early. Unfortunately, the sun got carried away, and we had seven days of 70 degrees Fahrenheit!
"Needless to say, all the snow melted, and it was the skiers' turn for the blues.
"This was followed by a week of 'normal' weather...but, then, the temperature gauge dropped to 23 degrees Fahrenheit, way below the norm. We restocked our woodshed, ready for the true winter to start...
"Today we have a wood shed bursting to the seams, and so, too, is the garden. Spring has sprung!
"Yesterday I mowed the lawn for the first time this year. My husband is sneezing his nose off thanks to his spring allergies, and the garden is a mass of primroses, daffodils, violets, and tiny white strawberry flowers.
"Morale of the story: Be careful if you are choosing your dream destination based on the weather. Nowhere these days has normal or usual weather, least of all southwest France!"Continue Reading:
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"If you live in the developed world, you can leave for a year or two, and then, when you return, you'll notice small changes. A store may have changed hands, the road may have been improved...but the place will still be very recognizable to you
"Not so in Asia. Here, in this developing world, change comes at breakneck speed.
"Take Brickfields, for instance. Brickfields is a neighborhood of KL that includes the KL Sentral train station and is home to a large Indian population. For me, when I lived in this city, it was an ideal place to call home—great food, friendly people, and a slow and comfortable pace of life, despite the fact that the city's main transportation hub was just a few blocks away. The 'official' Little India was in another part of town, and that's where tourists would head, leaving Brickfields one of KL's best-kept secrets.
"Before I left KL in 2009, there was talk about cleaning up the area and giving it a formal Little India designation. There was some construction in its early stages, traffic was its usual mess, and the area generally was still mildly gritty, not a stop for the tour buses.
"On this return visit, I saw a Brickfields that didn't exist two years ago. Almost all the streets are now one-way, though that hasn't done much to improve the traffic, mainly because, in the intervening two years, this city has been discovered and traffic has increased markedly.
"The old paved street has been covered with bricks decorated with lotus buds. All of the storefronts along the main street have been painted in lavender, yellow, and orange. (Plants and flowers are displayed along the sidewalks. Take a look. A beautiful fountain, decorated with lotus buds and elephants, now sits in a small park that, not long ago, was just a dirt plot. It's quite attractive and does lend an Indian feel to the area (albeit a bit contrived, in my opinion). You can decide for yourself. New hotels have sprung up throughout the area, and several massive construction sites, with dozens of towering cranes, dominate the skyline.
"Rents in Brickfields, now that it is being promoted as the new Little India, have increased. Many of the small shops have closed or moved, as the costs of doing business here have increased beyond the means of many shop owners. Rents for condominiums have risen, as well. Units similar to the condo that I rented for 2000 RM (US$665) per month are now renting for around 2500 RM (US$833) per month.
"Of course, KL is a big city and has even bigger suburbs, so housing bargains can still be found. By Western standards, KL remains an inexpensive city.
"All through KL, change is evident. New malls are being built, new high-rises and sky-scrapers are appearing. This is all good for Malaysia, of course, as they strive toward reaching their objective of developed nation status by the year 2020."
Kathleen PeddicordContinue Reading:
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"Then look no further than these top investment markets for 2011.
"Each of the following cities is a location we expect to continue to perform well in terms of rental yields (all receive solid numbers of visitors every year). Investing in any one of them would be a chance for you to diversify your investment portfolio while testing the waters in a new location that might just turn out to be the overseas retirement haven with your name on it...
- Kuala Lumpur, Malaysia
[myHabitat2] is a development in the heart of KL. It comprises a shopping center, offices, and residences. Serviced studios range from 603 to 1,141 square feet, and every suite is broadband-enabled and furnished with kitchen cabinets, stove, washing machine, dryer, and built-in wardrobes in all bedrooms. Onsite facilities include a 45-meter infinity pool and children's pool; squash court; gym; poolside café; and a children's playground.
Price: US$255,000 and up
- Puerto Vallarta, Mexico
Located in the heart of La Cruz, "La Joya Huanacaxtle" is a low-rise condo development on the bay. Each 1,600-square-foot unit has two bedrooms and two bathrooms and is finished with ceramic floors and mini-split air conditioners in the bedrooms, living room, dining room, and kitchen (optional). Amenities include a swimming pool, fully equipped gym, snack bar, community area, business center, and gardens. Rental program available.
Price: US$199,000 (reduced from US$240,000)
- Panama City, Panama
This sixth-floor apartment is in the El Cangrejo neighborhood of Panama City in a building with just two apartments per floor. The 2,017-square-foot unit has three bedrooms and three bathrooms and has been totally revamped. All bedrooms are equipped with fans and air conditioning. The apartment comes with one covered parking space. Close to movie houses, restaurants, casinos, fitness centers, and a lovely park.
Price: US$199,000
- Medellin, Colombia
Located in the El Poblado neighborhood in the heart of Medellin, this 915-square-foot, one-bedroom apartment has views of the adjacent Campestre golf course, woods, and the city. It also has a maid's bedroom and bathroom, an office, balcony, 24-hour gated security, parking space, and a storage unit. Nearby are malls, supermarkets, restaurants, and shops. The homeowner's monthly fee is US$90.
Price: US$103,467
Kathleen Peddicord
Editor's Note: Each monthly issue of our Overseas Retirement Letter features property picks in key markets. More here...Continue Reading:
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Feb. 2, 2011:
"Kathleen, I'm a retired American attorney living in Ecuador, and I wish to commend you for your services.
"It's really difficult to educate Americans about these ideas because we are understandably influenced by negative media reports. However, with the current economic dilemma in the United States, it's important to think hard about diversifying our portfolios and placing a portion of our assets offshore. Your advice is very valuable in this regard..."
--John M., Ecuador
***
"Kathleen, I live in rural Missouri. I'm retired and living on a fixed income. With all the political uncertainties in this country, I have started to investigate the option of moving.
"Every Saturday morning, I sit with a cup of coffee and type into Google, "Retire in ____."
"I sure am learning a lot about other countries.
"This is how I found your newsletter, and it is terrific. I sure like your style and the platform you have.
"I do have a suggestion. What are the chances that for each country you could provide a link to an expats' blog or bulletin board so we could get some real behind-the-scenes gossip?"
--Steve W., United States
Great idea. We're on it.Continue Reading:
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