Comparing Best Live, Retire & Invest

What In The World Are You Supposed To Do With This List?

Jan. 8, 2012, Chicago, Illinois: The only way to make a decision as to where best you should live, retire, or invest overseas is to compare and contrast your options.

Also This Week: When Is The Right Time To Retire Overseas? Right Now!...How To Retire Sooner Than Never...How To Figure A Budget For Your New Life Overseas...at Least You Won't Likely Get Bit By A Cobra--And Other Predictions For The Year Ahead...

Dear Overseas Opportunity Letter Reader,

Depending on your budget, here are my picks for the best places in the world to move on, to start over, to reinvent yourself, to launch a new life, and to live better, perhaps for less, in this New Year...

Super Cheap

#1: Cuenca, Ecuador
#2: Leon (cheapest), Granada, or San Juan del Sur, Nicaragua
#3: Nha Trang, Vietnam
#4: Chiang Mai, Thailand

Affordable

#1: Las Tablas (cheapest), Panama City, or Boquete, Panama
#2: Medellin, Colombia
#3: Ambergris Caye or Cayo, Belize
#4: Montevideo, Uruguay
#5: Kuala Lumpur or Penang, Malaysia

Luxury Lifestyle on a Budget

#1: Puerto Vallarta, Mexico
#2: Southwestern France
#3: Buenos Aires, Argentina

Now...what in the world are you supposed to do with this list?

Ecuador is cheap, but is it really cheaper than Nicaragua? Chiang Mai could be the cheapest choice of all, depending exactly where and how you choose to live, but it's also the most exotic. That could be a minus for you...or a plus.

And, of course, cost of living is but one consideration. Maybe it's a critical one for you, but it's certainly not the only thing you need to think about as you try to identify the overseas retirement haven with your name on it.

In addition, you've got to understand options for establishing foreign residency and the available standards of medical care...

You want to know about health insurance plans and costs...safety concerns...infrastructure...the language...the climate...taxes...accessibility...

Would you find more interesting ways to spend your time in Buenos Aires, Argentina, or Montevideo, Uruguay? Would you enjoy more reliable Internet access in Chiang Mai, Thailand, or Kuala Lumpur, Malaysia? Where would a beachfront lot for building a house be cheaper--on Ambergris Caye, Belize, or in Puerto Vallarta, Mexico?

Panama's pensionado residency program is user-friendly and packed with benefits, but is it easier to qualify for residency in Panama than in Belize, for example? The standard of available medical care is top-notch in Panama City. Is it as good in Medellin? Better? How does medical care in Uruguay, Argentina, Malaysia, Thailand, Mexico, and France stack up in comparison, one country to the others? And where is international-standard health care more and most costly?

Where is it easier to open a bank account as a non-resident? Uruguay...or Belize? Where will you find more fellow English-speakers? Boquete or Cuenca?

Boquete, Cuenca, and Medellin are all mild-weather choices, but how does the climate compare one to the other?

Formulating a plan to retire overseas is all about making choices. Knowing that the cost of living in Cuenca is cheap doesn't help you much. Knowing that the cost of living in Cuenca is cheaper than in Granada but not as cheap as in Chiang Mai might.

In other words, my telling you that Granada, Nicaragua; Cuenca, Ecuador; and Chiang Mai, Thailand, are the world's most affordable places to think about relocating for a comfortable retirement right now doesn't really do you any good.

To take action as a result of any recommendation on my list, you need, first, to carry out some comparative analysis.

When I say, "you"...I mean, "we."

We need to help you compare and contrast not only cost of living, but also ease of establishing residency, ease of settling in and of setting yourself up, availability of medical care, cost of health insurance, concerns over safety and stability (including currency stability), risks associated with investing or doing business (exchange controls, for example)...

And we need to show you how options for ways to spend your Friday nights and your Sunday afternoons in Retirement Haven ABC compare with those for Retirement Haven XYZ.

We need to draw out both the pluses and the minuses, the advantages and the disadvantages, so that you can connect the dots and make your choices.

This, therefore, is our editorial mandate for this New Year. More comparative analysis, one country, city, town, beach to another.

This will be a driving thread in these daily dispatches, in my monthly Overseas Retirement Letter, where we consider specific destinations in full and focused detail, in my Panama Letter, where we thin-slice the best current options and opportunities in Panama, and in our conferences, where we take a warts-and-all, no-place-is-perfect, here's-what-your-new-life-in-Country ABC-would-really-be-like approach.

Here's to making 2012 the year you make all your live, retire, invest overseas dreams come true.

With our help.

Kathleen Peddicord

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P.S. What else this week?

• "When is the right time for you to retire and move abroad?" asks Overseas Retirement Planning Guru Paul Terhorst.

"Right now.

"Okay, I don't know you personally, but I know some things about you. You've likely traveled overseas, and you've got good reasons for thinking you'd like to relocate beyond your own borders. You've likely even already created a short list of places where you think you might want to spend time.

"So what are you waiting for? I figure you should go for it, sooner rather than later. Why? Because odds are, your retirement will work out fine. In the past 25 years, I've heard from literally hundreds of people who've moved overseas, many in their 40s and 50s. I wrote 'Cashing In on the American Dream: How to Retire at 35,' a hard-cover business bestseller in 1988. I got hundreds of letters then and still get e-mails today. I hear the stories, the investments, the choices these people made.

"With only a few exceptions, those who retired even very early retired successfully..."

• "My 40-year-old friend Bill told me that he believes he needs US$5 million to retire," writes Overseas Retirement Planning Guru Paul Terhorst.

"'Part of that will be equity in my home,' my friend explained. 'But I'd like to have US$4 million invested. With today's low interest rates, even with US$4 million I'll barely have enough to live.'

"Bill figures that, even if he can earn 5% on his US$4 million stash--tough to do these days--that's still only US$200,000 a year. If he pays half that in taxes, he'll have to live on US$100,000 a year, in an expensive house, in the fast lane he's used to. Also tough to do.

"Bill ran some more numbers by me and asked me how soon I thought he'd be able to retire.

"'That's easy,' I said. 'Never...'"

• How much will it cost you to live in the overseas Shangri-la that's calling your name? Here's how to figure your retire overseas budget...

• "A few weeks ago," writes Retirement Planning Correspondent Paul Terhorst, "three friends and I went to look at birds in northern Argentina's jungle, near the Brazilian border. We stayed at a cabin in a nature reserve. One of the young workers there, Jorge, noticed my accent.

"'You're not from here,' he remarked.

"I said, in Spanish, 'I'm from the United States. California. Ever heard of it?'

"He shrugged. 'I'm not really up on that kind of stuff. Is there a jungle in California?'

"I later learned that Jorge left his rural school in the third grade.

"These days Jorge has a wife and a couple of kids; they've never wandered farther than 100 kilometers from home. They've never been to Iguazu Falls, one of the world's great natural wonders, only a short distance away. They've never heard of California.

"I mention the above in the context of the New Year tradition of making predictions, which I'm doing this year, as I do each year, just like everyone else. You and I may find it useful to think about what might happen next year. You and I may find it useful to know what will happen in the stock markets, exchange markets, real estate markets. But Jorge's life will change very little. Jorge will continue to do his chores, maybe have a few more kids, ride his horse, maybe get bit by a cobra, and die.

"Here's our reality as we head into 2012: The U.S. government faces staggering budget deficits. A Wall Street Journal editorial estimated that, to balance the budget, American household earnings above US$75,000 would have to be taxed at 100%.

"America's education system rewards failure. Lawyers and courts, the government, Greens, and unions punish productive work. Government refuses to get serious about energy, about Social Security and Medicare, about the 50% of Americans said to be poor or nearly so.

"Many believe we're witnessing the collapse of Western civilization, and I tend to agree.

"Yet I remain optimistic about investment opportunities this New Year. Why?"...

Also This Week...from Resident Global Real Estate Investing Expert Lief Simon:

Here's my best advice for this New Year: Whatever flags you're planning to plant offshore, plant them sooner rather than later.

Last week, a client wrote to tell me he was in St. Kitts trying to decide which of their two economic citizenship options to apply for. He had made this trip, between Christmas and New Year's, because the St. Kitts government had decided to increase the costs of its economic citizenship program as of Jan. 1, 2012. The powers that be on this island nation gave very little notice about the planned increase, having made the decision in September or October.

The offshore world is an ever-moving target. Governments change the rules of the game regularly. Residency and citizenship options, requirements, benefits, restrictions, etc., change often. Panama made wholesale changes in 2008 that had people clamoring to get in before the new rules took effect. Fortunately, Panama grandfathered everyone who had already obtained legal residency. Costa Rica has changed their residency rules over the years without grandfathering current legal residents. (No more hate mail from Costa Ricans, please. Your country doesn't want more foreign residents...just tourists. It's time you faced this fact.)

Ireland had a constitutional referendum in 2004 to change the allowance for automatic citizenship-at-birth if you were born on the island. It was the last EU country offering such automatic rights of the soil. The impetus for change, as is generally the case with something like this, was abuse of the system. Pregnant women from Africa (mostly Nigerian, as I remember...we were living in Ireland at the time and watched this play out in real time) were coming to Ireland under refugee status.

Once they were on Irish soil, and had had their babies, they switched their status from "refugee" to "parent of an Irish born child," which allowed them to stay in the country indefinitely to support the child. It also allowed them to then bring the father of the child into the country, too.

In response, rather than changing the rules associated with refugee status, Ireland changed the rules related to citizenship by birth.

I'd guess that St. Kitts has increased the investment minimum for economic citizenship because business is booming. So many people are buying St. Kitts citizenship that they decided they were leaving money on the table. Russians are big clients for this offer, because the St. Kitts passport allows visa-free travel to many more countries than does a Russian passport.

Not only residency and citizenship rules, but tax rules, too, change often. The U.S. is in the midst of making big changes as a result of the HIRE Act. The new FACTA rules related to individuals and corporations will take effect after Dec. 31, 2012; the new rules related to foreign banks and banking are currently scheduled to go into effect Jan. 1, 2014.

Costa Rica has proposed changes related to how it imposes income taxes. Meantime, they've already increased their gas tax. Panama went from having no capital gains taxes to imposing one at the rate of 10%. Uruguay changed how they tax resident citizens in 2011 (taking separate action to exclude non-citizen residents).

One very recent tax change I find interesting took effect just this week, Jan. 1, 2012. It is a new tax on soda products in France that is expected to bring in 120 million euro in revenue this year.

So what is a global citizen to do? First, take action. Don't allow the ever-changing landscape to paralyze you. Do something. Start now.

Second, remain flexible. You can't possibly predict or prepare for all possible eventualities in any one country, much less on a global scale. No one can. So keep your mind open and create options for yourself. You want to be able to bob and weave.

Happy New Year.

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