Someday Is Closing In

Feb. 24, 2013, Los Islotes, Panama: Dennis Martinez and Christie Sweeney offer Chill Weekend visits to Kathleen Peddicord and Lief Simon’s Pacific Ocean-front community on the west coast of Panama’s Azuero Peninsula called Los Islotes.

Also This Week: Giving Back In Ecuador...Most Important Thing To Know About Starting An Import-Export Business In Ecuador (And Much, Much More)...Why Did Jerry And Helen's Living Expenses Go Up In Retirement?...Got A Grandparent? Get A Passport...

Dear Overseas Opportunity Letter Reader,

"Should I go right or left?" Lief asked. I was so amazed at what lie before us that I couldn't respond. I was speechless.

Right or left? A choice of directions?

move to panama

For some time, Lief, the kids, and I have day-dreamed about spending time at Los Islotes, the former cattle ranch on the western Pacific coast of Panama's Azuero Peninsula that Lief and a friend scouted and purchased about six years ago.

But, to tell you the truth, it was mostly a dream in theory. Boy, it sure will be nice to be able to watch the sun set over the ocean from the terrace of the house we intend to build there someday...Kaitlin will be able to ride horseback on the beach...Jack can scramble around the hills in an ATV...yes, man, someday, that'll be great...

We spent this weekend at Los Islotes, and it appears that someday is closing in.

Los Islotes Project Manager Gary Moseley has been busy. Since the start of the dry season, about two months ago, Gary has been on the property full-time, digging out roads and otherwise moving dirt around. His objective is to cut all the roads for Phase 1 of the development, cover them with select material, as it's called, and install the accompanying drainage before the heavy rains are upon us again.

"We should make it," Gary informed us. "It's always something, you know. I need a new tire for the dump truck, and I had to have someone out earlier this week to repair the dozer. But we're making very good progress."

Indeed. Thanks to Gary's efforts we're now able to reach formerly unexplored hilltops and ridges. It's like discovering the property anew. And the really good part is that the views, often 360 degrees, from so many points, are, as young Jackson put it, "awesome." In front is the sparkling, crashing Pacific Ocean; behind and all around, rolling hills. Our neighbor in one direction is the Cerro Hoya National Park.

"I had to cut down a sizable tree this week," Gary told me soberly, shaking his head. "Nearly killed me. I argued with the bulldozer driver for an hour-and-a-half. Finally, I had to admit that he was right. We had no choice. But just that one. Otherwise, we're working the roads around the big trees as much as possible. In some instances, we're creating roundabouts."

"Yes, that's the idea," we assured him. "We understand that you're going to have to cut some of the big old trees, but every cut should hurt a little. As much as possible, we want the property to remain just as it is right now."

Well, just as it is right now...but a little more fully appointed. The plan is to create, in this spot where Mother Nature has so outdone herself, a community where we, our friends, and like-minded others can appreciate and savor the natural beauty while enjoying the full support of 21st-century comforts. This is a family legacy undertaking for us that we expect to take 10 years to build out in full.

The master plan calls for underground utilities, fiber-optic internet, and a waste-water treatment plant, plus a colonial-style town modeled on Antigua, Guatemala...a clubhouse...three pools...riding and hiking trails...a boutique hotel and spa...tennis courts...stables...a boat launch...

First things first, though. Right now, we need a place to spend the night. As our architect reminded us when we brought him out recently to take a look at the site where we intended to build the property's first structure, "No road, no house."

No problem, Ricardo. Now, we've got roads! And, now that we do, we're reconsidering our construction plans. Instead of the little house on the little lot that we've discussed with Ricardo, now we're thinking a bigger house on a bigger lot with a much better ocean view. This "Founder's Lodge," as we're calling it, will feature a communal room for gathering and dining, plus a terrace for sunset-watching and four guest suites so that friends can come and enjoy Los Islotes with us. The lot we identified with Ricardo a few weeks ago won't do. For the Founder's Lodge, therefore, this weekend, we chose a new lot, on a hilltop, with remarkable views all around.

We'll get Ricardo started working on the Founder's Lodge plans this week; however, we recognize that our new lodge won't be a viable overnight-stay option for 10 to 12 months. We want to be able to spend time living at Los Islotes as soon as possible...

"How about if we build, in the meantime, a simple structure, with wooden beams and a palapa roof," Lief suggested.

"Ah, that's a great idea," I said.

"On that hilltop over there," Lief pointed...

"Yes, yes, but, perhaps, rather than palapa, we could build something with a clay-tiled roof," I proposed.

"Yes, and a Spanish-colonial tiled floor," offered our friend Christie, who joined us for the weekend's outing. "And maybe a built-in bar at one end."

"Well, with a bar, you'll need running water," Gary added. "Plus, it'd be nice to have a bathroom. I could build one..."

"Great idea. But not too small," I suggested. "Allow room for a small piece of furniture, plus maybe a trunk where we could lock away supplies.

"And the wooden beams shouldn't be clean-cut or sanded," I continued. "They should be thick and natural, distressed..."

"I'm distressed," Lief cut me off. "My simple US$2,000 palapa structure is now something else entirely."

"Don't worry, dear," I assured him. "You'll love it."

Kathleen Peddicord

P.S. We spent this weekend at Los Islotes in the company of the new sales and marketing team we've engaged for the project, Dennis Martinez and Christie Sweeney. Dennis and Christie are planning a schedule of regular visits to the Azuero coast to tour the property. First dates are March 21-24 and April 25-27. You can request more information about the plan for Los Islotes and the weekend tours here.

P.S. What else this week?

"It's important to learn at least a little Spanish before you start working in the local community where you decide to volunteer," explained Pamela Guachamín, representative for the foundation, to the group assembled in Quito last week. "That's why we start every volunteer experience with language classes."

The programs are highly customizable. You can volunteer on your own, with your family, or with a group of friends. You could organize a two-week program to include your children or grandchildren over one of their school breaks, for example.

Some programs include home stays with local families, with indigenous families in the north of the country, for example, where you could spend a couple of weeks helping them to manage their farms or other activities related to generating a livelihood. You could volunteer in a woman's shelter, maybe helping to teach the children of the women staying there while they regroup on where to go and what to do next.

You could volunteer as a teacher's aid or even a teacher in a village school. "It's not necessary that you have experience or any special qualifications," Pamela explained. "It's very difficult for these remote schools to find teachers. With your backgrounds, you would be very welcome to teach primary-age children.

"And the children will love you. To them, you'll be like a figure out of a fairy tale..."

  • American expat-entrepreneur in Ecuador Jeff Stern writes:

"Running a business in Ecuador, you learn that you have to pick your battles. Things work the way they work here. You'll run out of time and energy before you'll change anything. You need to accept that..."

  • Retirement Planning Correspondent Paul Terhorst writes:

About 10 years ago, my friend Jerry and his wife Helen retired. Before the big day, Jerry and Helen consulted their financial planner and concluded that their living expenses would go up in retirement.

By contrast, Vicki and I took extreme early retirement in 1984. When we did, we cut our living expenses by about 70%.

Why the big difference in retirement living costs? Simple. Vicki and I relocated; Jerry and Helen continued living in their home of 30 years...

  • Senior Editor David Sexton writes:

Nationality laws aren't known for their simplicity, but the options for gaining second citizenship can be broken down, big picture, into two categories--active and passive. The active approach requires some action on the part of the recipient--maintaining legal residency, marrying a local, or investing in real estate, for example.

Passive citizenship, on the other hand, is a matter of birthright, either jus soli (right of the soil), jus sanguinis (right of blood), or a combination of the two.

About 16% of the world's countries, nearly all of them in the Western Hemisphere, grant jus soli citizenship. If a child is born in the territory of one of these countries, say, the United States, Argentina, Mexico, or Canada, boom, he or she is a citizen of that country.

Most of the rest of the world grants jus sanguinis citizenship. Rather than as a result of country of birth, jus sanguinis citizenship is passed through blood relation. That is, the parents' citizenship(s) determines the child's.

So if a child is born in a jus soli country...say, Canada...to parents from jus sanguinis countries...say, a Thai mother and an Irish father...right out of the womb, the newborn would have jus soli citizenship from Canada and jus sanguinis citizenship from Thailand and Ireland. Lucky kid...

PLUS--From resident global real estate investing expert Lief Simon:

One of the presenters at last week's Live and Invest in Ecuador Conference spoke about bribery and corruption in that country, citing statistics from a relevant local study. I don't remember the specific stats, but something close to 80% of the people surveyed had at some time been asked either directly or indirectly for a bribe when dealing with an Ecuadorean government official. The survey didn't stipulate what kind of official--could have been anything from a police officer to a clerk in a government office or a minister.

The more interesting thing for me was that, according to the study, of the people who were asked for a bribe by a government official but refused to pay, some large percentage still got what they wanted. Further, a not insignificant percentage of people who did pay the bribe when asked did not get what they wanted.

Paying and still not getting what you're after would be frustrating. What recourse would you have? You couldn't go to the guy's boss and complain, saying, in effect, "I paid this guy to do something for me that he shouldn't have done...and he didn't do it."

Most retirees living in a foreign country won't ever encounter a direct request for a bribe. The exception might be a request from a traffic cop about to issue you a citation, for example. Otherwise, unless you are doing business in a country, you are, again, very unlikely to have to grapple with this issue.

What if you do, though? What if you find yourself in a situation where someone is asking you for a few dollars (or more) to grease the wheels? You have to weigh the pluses and the minuses of paying and your own tolerance for the idea in general. Me? My position is: Don't pay. Ever.

Others look at a bribe to a traffic cop as an expedition fee...pay the mordita (or "little bite"), as it's called, and you won't have to deal with the speeding ticket, say. As I said, it's up to you to make the call. My advice would be that, if you're open to the idea of paying a bribe, know in advance how much is appropriate, situation to situation.

In Panama, gringos generally overpay for traffic stops. They get nervous when they hear that the ticket will be US$65 and hand over a US$20 bill when five bucks will usually do. That said, the government here in Panama has been cracking down on police corruption. It still exists, for sure, but you may not be given the option of buying your way out of a ticket. More and more, traffic cops are simply writing out the citations.

A couple of years ago, when the anti-corruption push started, I was pulled over on the Pan-American highway driving back to Panama City, and the cop started writing the ticket practically before I got out of the car. He apologized as he handed it to me, saying, in Spanish, that he had no choice.

I'd never thought about it before that day, but it struck me then that ticket-writing quotas for cops must have started as an anti-corruption strategy. If you weren't writing tickets, you must have been taking bribes. Of course, in the United States today, ticket quotas are simply a revenue stream for municipalities in need of cash.

What about bribes related to doing business in another country? Again, my recommendation is: Don't do it. Besides the fact that it's illegal, paying a bribe marks you as a payer. "Pay once, and you pay forever," as a business associate in Nicaragua puts it.

Thinking more pragmatically, you also need to remember, as the survey in Ecuador highlighted, paying the bribe is no guarantee that you'll get what you want anyway.

In all my years of living, traveling, investing, and doing business all over the world, I've never paid a bribe. I've been pulled over by traffic cops maybe a dozen times in a bunch of different countries. I follow a simple strategy. When a cop pulls me over, I smile. I greet him politely. I try to appear a bit ignorant but not arrogant. Even if I speak the local language, I wait to determine the demeanor of the cop before letting him know I speak the local language.

When I was pulled over in Montenegro a few years ago, I rattled off a few options to the police officer through the window of the car--Parlez vous Francais? No. Sprechen sie Deutch? No. Habla Espanol? No. Finally, he suggested, "Italiano?" I said, sure, we can muddle through in Italian (though I don't speak it).

I got out and went to the back of the car where he and his partner tried to explain to me that I had been speeding. Writing with their fingers in the dust on the back windshield, they managed to convey that I had been doing 80 KPH in a 50-KPH zone.

Then they indicated in the dust how much the ticket would be (€125). I continued to smile and nod. Okay, okay, I told them over and over, pleasantly. Finally, they gave up, looked in the car at my family, and asked, "Vacacione" in some mix of English, Italian, and Serbian. I nodded yes...and they sent me on my way suggesting that I slow down. Easier to move on to the next victim, I guess they figured.

That strategy has worked all over the world.

I know others, though, who don't want to waste time with that kind of chit-chat. They get pulled over, they get out of their car, and they hand the cop their driver's license and passport with a US$5 bill stuck inside. The officer "inspects" their documents and sends them on their way. For them, the US$5 is an expediting fee.

And I've never heard of someone giving a cop 5 bucks and still getting a ticket.

I have only once been asked for a bribe outright. It was a police officer in Panama. He and a partner were working as a team with one clocking the radar and the other signaling for people to pull over. They were making a production line out of it. When the cop got to me, he stated flat out, in Spanish, "You can pay me or you can pay the ticket." I told him to write the ticket and was on my way within a few minutes.

Editor's Note: This week's essay from Lief is reprinted from the "Offshore Living Letter," Lief's twice-weekly dispatch on how and why to diversify offshore. If you aren't reading the "Offshore Living Letter" yet, get on board here now. It's free.

***

Kathleen Peddicord's New Book "How To Buy Real Estate Overseas" Available Now Pre-Release!

Kathleen Peddicord's latest book, published by Wiley & Sons, hits bookstores April 8. Starting now, though, you can buy a copy pre-release and save 36% off the release price!

Go here now to place your order for "How To Buy Real Estate Overseas"!

Image source: BeanZull

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Kathleen Peddicord

Kathleen Peddicord is the founder of the Live and Invest Overseas publishing group. With more than 25 years experience covering this beat, Kathleen reports daily on current opportunities for living, retiring, and investing overseas in her free e-letter.

Her book, How To Retire Overseas—Everything You Need To Know To Live Well Abroad For Less, was recently released by Penguin Books.

Read more here.

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