World’s Top Retirement Havens

The World Map This First Of The New Year

Jan. 1, 2012, Baltimore, Maryland: On this first day of New Year 2012, here’s how the world map looks from the perspective of the foreign retiree, global investor, and international entrepreneur.

Dear Overseas Opportunity Letter Reader,

Looking at the world map as we launch New Year 2012, here's what we see:

Perennial Bests

• World's Top Retirement Haven: Panama

Yes, still, Panama. Panama City is no longer cheap, but elsewhere in the country sure can be. And, for such a little country, Panama serves up tremendous diversity, meaning you can find almost any retirement lifestyle you might be looking for, from cosmopolitan Panama City to Caribbean island hideaways, Pacific coast fishing villages, colonial cities, mountain towns, and expat enclaves.

In addition, Panama offers more than a dozen options for establishing residency, international-standard and very affordable health care, downright cheap health insurance (if you qualify), and the best infrastructure in the region. This country is safe, stable, and accessible...everything a retiree could be looking for.

• World's Most Affordable Retirement Haven: Ecuador

We don't rank Ecuador best retirement option overall, because it's less developed and more Third World than Panama. Also, technically, this country taxes residents on their worldwide income. (I say technically, because, though the law is on the books, it isn't currently enforced. But it could be...if the local tax collectors ever got around to it.)

All that said, Ecuador offers diverse and appealing lifestyle options, from big-city Quito to Andes mountain towns and (our favorite choice) colonial Cuenca, where a couple could retire very comfortably on less than US$1,000 per month.

• Best Luxury Beach Retirement Choice: Puerto Vallarta, Mexico

If your budget is a bit bigger, and you've dreamt your whole life of retiring to the coast, our perennial pick for luxury coastal retirement remains Puerto Vallarta. This stretch of Pacific coast offers the best of the Southern California lifestyle, supported by marinas, golf courses, international-standard shopping and dining, a charming old town center, and a growing expat base. Puerto Vallarta isn't a super-cheap choice but a best-lifestyle-for-the-cost choice. A couple could retire here and enjoy all the amenities and diversions on a budget of US$2,500 to US$3,000 per month, depending on your rental expense.

• Best Caribbean Retirement Choice: Ambergris Caye, Belize

Quintessential Caribbean, established and growing expat community, and an affordable cost of living and of real estate, certainly compared with more developed Caribbean options.

• Best Old World Retirement Choice: France

Not everyone is looking to retire to the tropics or the developing world. For the best of life on the Continent, look to southwestern France, where life can be as good as it gets and more affordable than you might think.

• Best Place To Escape The World: Cayo, Belize

Back-to-basics. That's the mantra of this beautiful, off-the-radar region of rivers, ruins, and rain forest.

• World's Best Place To Start A Business: Panama

Again, as we've been reporting for the past five years at least, Panama has been and remains the best place in the world to base an international or Internet business. Set yourself up properly, and your business will pay no local tax (and, perhaps, depending on your situation, no tax, period).

Panama also offers a good pool of educated, English-speaking labor (evidenced by our own Panama City-based staff) and international-standard telecommunications and is a global travel hub. The country checks every box on the would-be entrepreneur's wish list.

• Best Place To Open An Offshore Bank Account: Belize

You don't even need to travel to Belize to do it. This is one of the few places in the world where a non-resident can open a bank account from a distance. It's also one of the remaining jurisdictions that respects banking privacy (though we don't think this will last much longer). The process of opening an account is straightforward and relatively hassle-free. Also important, Belize remains an under-the-radar choice. No one is paying much attention to what's going on with Belize banks (or Belize anything else). That has its advantages.

Emerging Bests

• Top Property Investment Pick: Medellin, Colombia

We're not the only ones who've identified Colombia, specifically Medellin, as an emerging top investment haven. Legendary real estate investor Sam Zell says "Colombia is the next star of Latin America." His company has invested US$75 million and is looking to invest more.

We're not Sam Zell, but we've bought, too, for the yield.

• Top Resort Investment Pick: Philippines

The Philippines offers many good resort rental investment options from Manila to Cebu to Boracay, and its appeal as a vacation destination for Asians, especially South Koreans, continues to expand, giving the Western investor diversification in currency and economics.

• Top Currency Investment Opportunity: China

Correspondent Paul Terhorst says you should consider getting a piece of the yuan action...and he has an interesting strategy for how. Read more here.

• Top Retirement Haven Of The Future: China

Correspondent Paul Terhorst, who has spent more than three decades perpetually retired, much of that time in Asia, also says that now is the best time in our lifetimes to see this part of the world...and that China, specifically, is emerging as one of the world's best retirement options.

Paul tells you more here.

Kathleen Peddicord

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This Is Your Final Call

Uncle Sam is working quietly, behind the scenes, to put obstacles in place that will make it more difficult for you to broaden your horizons overseas. And much more difficult for you to be in the driver's seat of your own future.

It's not just the banking arena that's under threat.

In 2008, changes to the Veterans Act allowed for an "exit tax" on U.S. citizens who choose to leave the country and end their citizenship.

What other countries have done this in the past? Nazi Germany. Communist Russia. Apartheid South Africa...

This is your civil liberty at stake. How long before you just won't be able to get your assets out of the States?

I'm not an alarmist. I'm a pragmatist. And, as a pragmatic investor, I've seen the writing on the wall for some time. I've worked all these years and with an added sense of urgency more recently to take control of my own life, my own financial future, and, most important to me now, the future of my family.

Now I'd like to offer you a chance to do the same.

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P.S. What else this week?

• Standing in line in Target earlier this week, our cart overflowing with super-discounted stuff we'd decided we couldn't live without and had to buy to lug back to Panama with us, Lief asked me the question that we can't help but return to from time to time:

"Why do we choose to continue living overseas? Wouldn't it be easier and maybe even cheaper to move back to the United States?" he wondered.

Some things would be more affordable, yes. (Thus the Target shopping spree.) Important items in our budget, though, would become dramatically more costly, especially health care and health insurance.. And, returned Stateside, we wouldn't be able to afford little luxuries like full-time help around the house.

The real point, though, is that, after more than 14 years living outside the States, we've learned not only that we can control our cost of living, within parameters, anywhere we decide we want to live...but also, more important, that cost of living isn't the best reason to think about moving to another country in the first place...

• There may be an un-nice person in Stowe, Vermont, but we haven't found him or anyone who's heard tell of him. The folks in this part of the world are strikingly welcoming, gracious, and helpful.

Our families thought we were nuts, but, last Thursday, we left sunny, sultry Panama and traveled north to Stowe, with the kids, in search of a white Christmas. When we arrived, all was green, and temperatures were relatively warm. Then, Friday morning, we awoke to flakes falling and thermometers dropping. All's been frozen and white ever since, just as we'd hoped.

Arriving in Stowe village this time of year is like being dropped inside a Christmas garden. Every house, church, porch, lamppost, streetlight, timber fence, and wooden bridge is dressed with fresh wreaths, white lights, pine garland, red bows, and sleigh bells. It's Norman Rockwell come to life...

• "Dec. 26, officially St. Stephen's Day in Ireland, is traditionally known as 'Wren's Day,' or, more colloquially, 'The Wran,'" writes Ireland Correspondent Lynn Mulvihill.

"Dating from the 1800s, early celebrants would have hunted a real wren, killed it, and tied it to a holly branch or pole to parade around town. From door to door these 'wran boys' went, wren on display, begging for money to bury the 'evil bird.' The funds were then used to hold a dance for the whole town.

"Why the lack of mercy to one of the most innocent birds?..."

• "When looking around the world in search of a place to base your business," writes Simon Letter Editor Lief Simon, "these are the factors to consider:

• Corporate tax rates
• Availability of qualified labor
• Import and export duties
• Infrastructure (including options for air and/or sea transportation, internal roads, and telecommunications)

"Each of these factors will be more or less important depending on the business you want to operate.

"Taking a very big-picture perspective, considering all these criteria, Panama comes out on top in Latin America. That's why we chose Panama, four years ago, as the place to base our Internet publishing business, and it's why many, many other businesses, including many very big international operations, are also choosing to settle in this country..."

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

I write today from Chicago, Illinois, the U.S. city where I got my start as a global property investor about 19 years ago.

The U.S. real estate market is at a dramatically different point today than when I was living in the Windy City nearly two decades ago. Pundits say that property markets across this country are at the bottoms of their falls. They've been paying closer attention than I have, but I'd agree. Right now seems like the time for an investor to be scouting in this part of the world.

I'll follow that recommendation with another: If you're not a seasoned real estate investor with experience across a number of different markets, don't jump in just because everyone else is. Take time to get your bearings.

Don't think you need to move quick to get in at the absolute bottom. The chances of that are small no matter how fast you move, because an absolute bottom doesn't stick around very long. When a real estate market starts to turn, it generally turns quickly. Within a few months you can begin to see an increase in prices, but that doesn't mean that you've missed the boat.

When I bought in Argentina after their financial crisis of 2001, I missed the absolute bottom of the market (which was around July 2002). In fact, I didn't make my first research trip until October 2002. I bought my first apartment in Buenos Aires in February 2003. It was a new market for me at the time, and I wanted to move carefully.

Prices fell rapidly in B.A. from January 2002 to July 2002, but the upswing was a gentler slope. I probably paid 10% to 15% more in February 2003 than I would have in July 2002, but I was still able to buy at a huge discount to December 2001 prices. Over the next five years, the values of all three apartments I bought shortly after the bottom doubled.

In the United States, you have many different localized markets affected by different aspects of the economy. Miami, Phoenix (where I grew up), and Las Vegas were terribly overbuilt, and I'd say prices in these cities will fall further. Areas affected by high foreclosure rates still have inventory to unload, which will slow any price rises. Mid-sized cities that didn't see such run-ups in values, though, have already leveled out, and I'd say this is where we're going to begin to see some appreciation.

And, if you're an investor with cash or great credit, this is where I'd recommend you shop for investment property assuming (and this would be my overall caveat) you want to hold U.S. assets long-term. As in most all markets right now, I'd focus on rentals with the potential to generate a decent yield.

People have to live somewhere. An investor-friend told me recently about a U.S. foreclosure he'd bought from the bank, a house still occupied by the seller...who is now a tenant paying the new investor-owner a rent high enough to generate an acceptable yield. Plus the seller-tenant has an option to buy the house back in two years.

This isn't uncommon. Many properties are available with renters in place. This would be an obvious choice for an investment purchase. Short of this, you want to shop for a rental with strong fundamentals--near to schools, shopping, and where people work. This is how I shopped in Chicago 19 years ago when my eventual purchase was a three-flat building. I lived in one of the three apartments and rented out the other two for enough to enjoy a strong yield during the two-and-a-half years I owned the building before reselling it for 85% more than I'd paid. (Those days are over, but it's a nice memory.)

Before you head out to your local real estate agent to look for an investment property, do your own due diligence on the areas where you are considering investing. And, again, unless you've got experience across a number of markets, I strongly recommend you start out close to home. Don't let a tip from an agent or a friend send you off too far afield. If you live in Chicago, shop in Chicago...not Phoenix over the Internet. When starting out, buy what you know.

My biggest investment mistake was made on the recommendation of someone I was working with at the time who convinced me to buy in a market I didn't know before I'd taken time to get to know it. Had I done even a little independent due diligence, I never would have bought what I bought...and it wasn't long before the mistake was evident. This buy became the biggest loss of my property investing career...and one of the most important lessons learned.

No matter where you're considering investing, in the United States or abroad, I recommend that you visit the location yourself if you don't know it well already, walk around, ask around, talk to agents and attorneys, waiters and taxi drivers. It can be a big mistake, as my experience shows, just to show up and buy whatever someone shows you...or, worse, to buy from a distance over the Internet.

Get your real estate investing legs under you in your home town if you can (as I did in Chicago years ago). Then making the step to investing in real estate overseas should be much smoother.

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You Are Not Responsible For Getting Yourself Into This Mess...

But you are the only person who can get yourself out.

Right now -- and for the next 12 months -- only you can:

Stop the government squeezing more from your hard-earned cash...
Safeguard your assets and actually grow your wealth (even in tough economic times)...
Guarantee a prosperous future -- for you and your family -- and allow yourself the freedom you were born to enjoy...

Because today, I'd like to send you FIVE FREE AUDIO PRESENTATIONS designed to make it possible for you to rise above this economic meltdown and set yourself on a path to financial and personal freedom.

Read here for complete details.

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