How To Build The In-Country Network Of Reliable Contacts You Need
Jan. 13, 2013, Panama City, Panama: Key to the success of any move overseas is building an in-country network of reliable resources, starting with a local attorney.
Also This Week: Why Ecuador's Rafael Correa Is Good For Expats...Where To Afford A Luxury Lifestyle Even If You're Not A Rock Star...A Solution To The Euro Crisis And Appreciating Property Markets--What We See Coming In The Year Ahead...The Best Places To Retire Overseas In 2013, Part 2...
Dear Overseas Opportunity Letter Reader,
This week we finalized the program for our Live and Invest in Ecuador Conference taking place in Quito Feb. 13-15. Doing so reminded me of one of the most important challenges you face when planning a move overseas--building a network of reliable in-country contacts. You'd be foolish to undertake a move like this all on your own. You need help. But how can you find local resources you can trust?
If you're planning to move to a country where we host a conference, I say confidently and without hesitation that the best way to establish the in-country infrastructure you need is to attend that conference. Over nearly 30 years of covering this beat, I've watched and helped tens of thousands of people (no kidding) make this kind of move. Trust me. The most cost-efficient way to arm yourself with all the expat information and resources you need to make a success of whatever move you're planning is to spend three days with us at one of our live events. We'll introduce you to everyone you need to know, and each of these introductions will be based on personal experience and come with our personal endorsement.
The first resource you need is an attorney. Your attorney in the country where you're planning to live or retire is your most important ally, and finding a good local attorney, one who speaks English and who has had experience with expats and foreign retirees, should be your number-one priority once you've figured out where it is you intend to relocate. In Quito, we'll introduce you to two, our two preferred Ecuador attorneys based on years of personal experience in this country.
Next you need a banker and a local bank account. Again, in Ecuador, we'll put you in touch with the two banks we recommend.
You need help understanding and deciding among your residency options. In some countries, your residency application must be made for you by an attorney. Not so in Ecuador. In this country, you can manage the process entirely on your own if you'd like. Our residency experts will show you how.
Wherever in the world you decide you'd like to relaunch your life, you'll also need contacts to help you shop for a home (either to rent or to buy); to help you consider your health insurance options; to show you how to get your mail and set up utilities in your digs; to learn a little of the local lingo if you don't speak it already...
In Quito next month, we'll introduce you to real estate agents you can trust, as well as folks we trust to help you shop insurance (health, homeowners, car, if you need it) and put all the other pieces of your new life into place.
We'll also introduce you to the savviest Ecuador expat you'll find, Lee Harrison, with more than 11 years' experience considering and comparing the top retirement options not only in Ecuador but throughout all Latin America. Lee was one of Ecuador's pioneer expats 11 years ago when he and his wife chose to settle in Cuenca. He'll tell you why he still believes this city is the best choice in the region for the retiree looking to enjoy as comfortable a retirement as possible even on a very modest retirement nest egg.
In Quito next month, you'll also meet Mike Sager, who, like Lee, considered all the diverse lifestyle options Ecuador has to offer before making his move. Mike, though, chose to settle on the country's coast, at Salinas. He'll tell you firsthand about the life of a beachcomber expat in this beautiful place.
You'll meet David Morrill, another pioneer expat in this country, who has not only retired to Ecuador but started a successful business, too.
And you'll meet Jeff Stern, who moved to Ecuador with his wife and two young children in 2007. As Jeff explains, "We sold our house just before The Great Recession, packed up everything, and relocated to Quito."
Jeff and his wife weren't ready for retirement. They were raising a family and looking for business opportunity.
"After searching for market opportunities in Ecuador, both on-line and on-the-ground during numerous visits to Quito, we finally hit upon chocolate. I was an aspiring chocolatier and professional cook before we came. Our plan was to be the first high-end producer of sophisticated bonbons and other chocolate products for the local market..."
Nearly six years later, Jeff and his family are still in Ecuador enjoying this great adventure. I'll let Jeff tell you more about it tomorrow...
P.S. Next month's Live and Invest in Ecuador Conference is nearly sold out. In fact, last week, it was sold out. However, Conference Director Lauren Williamson contacted the hotel and managed to arrange for a bigger meeting space. We were able to add 20 seats in the room. Of these, a handful remain available. Details on the Live and Invest in Ecuador are here.
P.S. What else this week?
Although Rafael Correa has been a controversial figure in his six years as president of Ecuador, most of the country's English-speaking residents will tell you that their lives are better because of him.
Almost certain to be re-elected to a second full term, Correa has pledged to continue the extensive agenda of public welfare and infrastructure projects already under way. These include expansion and reconstruction of the country's highway and bridge system, construction of new hospitals and hiring more doctors to support the country's Social Security health care system, and a top-to-bottom overhaul of public education. In all, spending on public projects has increased 300% since Correa was first elected.
Frequently criticized for his left-leaning politics, opposition to free trade agreements with the U.S. and the EU, and, more recently, his grant of asylum to WikiLeaks founder Julian Assange, Correa says he is working to reverse years of neglect of the country's public services and infrastructure.
He frequently invokes Alexander von Humboldt, the early 19th-century Prussian explorer and naturalist who described Ecuador as a "beggar sitting on a bag of gold." Ecuador must use its resources, he insists, to improve the lives of its citizens. With his background in economics, Correa knows that because those resources, especially oil and gas, are finite, the country needs to build a future based on an educated, healthy, and prosperous citizenry.
The government's public projects, in fact, are funded primarily by oil money. After Correa restructured contracts with oil producers in 2007 and 2008, he dedicated billions of dollars to public works. Other public funds are the result of increased revenues generated by higher levels of tax collection. Although his critics say he is spending too much, Correa points to a healthy national balance sheet that shows a growing GDP and a low level of debt in Ecuador...
With that budget, you'd be enjoying a good but simple life, living more like a local than an expat.
On the other hand, at the other extreme, Panama is also a place where you can enjoy what could be described as a luxury lifestyle, the kind of life you could embrace in Manhattan or London, Miami or Dubai. The "penthouse life" you might call it, complete with waterfront two-story penthouses in buildings with saunas, spas, massage rooms, squash courts, and 24-hour concierge doormen and supported by five-star restaurants, trendy bars, and international-brand shopping (Tiffany, Hermes, Cartier, Rolex, etc.) nearby.
We spent four days in Manhattan over Christmas, indulging in that kind of life. We ate at steak houses with white-glove service, stopped for champagne cocktails, shopped Fifth Avenue, and ate US$20 hamburgers for lunch (once). By the end of the four days, Lief and I both were eager to move on. Who could afford to live like that indefinitely? Not us.
At least not us in Manhattan. However, here in Panama, we're realizing, not only is that standard of living available, but it comes at a price that many more of us can absorb.
Specifically, this kind of living is on offer on a little peninsula in the heart of Panama City called Punta Pacifica. On this spit of land, the highest-end of any high-rise towers in this city of high-rise towers have been built, including the infamous Trump Tower. In addition to ultra-modern, ultra-amenity buildings, this area has been developed to include real sidewalks (uncommon in this city), grassy medians (non-existent elsewhere in this city), park areas, and lots of trees and shrubs. As the final few of the towers to be erected here (it's a small area, so only so many buildings are possible) are nearing completion, it's also one of the least congested and quietest spots in the city. Everywhere in Panama City is under construction or renovation in some way, including in Punta Pacifica, but, again, the work in this small region is nearing an end, making Panama unique and accordingly appealing...
In predicting 2012 last January I said, "I've been investing for 40 years, and I've never seen a tougher call."
So naturally I went ahead and nailed nearly all my predictions.
I said the stock market would go up, and it sure did go up. We had a terrific year. In the United States, the S&P 500 climbed 13%, the NASDAQ a whopping 16%. International markets did nearly as well. Dividends largely cover inflation these days, so those numbers amount to real returns. Since the stock-market bottom in March 2009, the NASDAQ has climbed almost 140%.
I said energy costs would rise. During the year, the oil price shot up, then fell sharply, then nearly recovered by year-end.
I predicted a tough time for Europe but that the euro would survive. I went out on a limb on this one; most observers predicted the euro would disappear or that some countries would leave the eurozone. Instead European leaders bought euro bonds without limit, avoiding a crisis.
I predicted Obama would win the election, and that Congress would remain gridlocked. In the event, the House stuck with Republicans and the Senate with Democrats.
Finally, I saw a grim economy with slow growth. The U.S. economy grew by only 2% for the year, almost costing Obama the election.
As we find ourselves at the start of a brand-new year, that's a question worth asking yourself, because we also find ourselves in a time when it's not only possible but easier than you might ever imagine to launch the retirement adventure of your fondest day dreams almost anywhere on earth that appeals to you.
Last week, I provided five suggestions for the world's top retirement havens for 2013. Now, here are five more beautiful, welcoming, and affordable places for expats to consider this New Year...
PLUS--From resident global real estate investing expert Lief Simon:
Assuming the seven countries still to vote grant approval, Croatia is finally set for entry into the EU. The admission of a new country to the union must be ok'd unanimously by all member countries, creating lots of opportunity for political dealing. Slovenia, for example, wants Croatia to drop a lawsuit demanding that Slovenia make good on €172 million in deposits lost by Croatia when a Slovenian bank went bust.
Croatia is a beautiful country with an energetic population, but right now it's also an economic mess. Over the past eight years or so, the country has worked tremendously hard to improve its infrastructure and to put its ducks in a row for EU ascension. At long last, the effort is nearing the intended payoff. If the vote goes as hoped (and expected), Croatia will enter the EU on July 1 of this year.
When I first visited Croatia in 2004, the country was expecting to be accepted into the EU by 2006. Then the date was pushed to 2009. Now it seems imminent but anti-climactic. Romania and Bulgaria managed to jump ahead of Croatia, entering the EU in January 2007. They were considered more important politically.
Back in 2004, when EU entry was anticipated for 2006, the country's real estate market (which is priced in euro) saw big activity and big gains. Of course, it was a different world back then. This was coincidentally also the height of the global real estate boom. Everyone in Western Europe was interested in owning in Croatia...including me. We bought a shell of a stone farmhouse built in the early 1800s. It's still waiting to be renovated. We last visited it about a year ago, and I was very happy to find, when we did, that my enthusiasm, both for Croatia and for the spot where we decided to buy (on the side of a mountain in Istria), were as great as ever. This is a place where I can imagine settling in happily and long term.
Croatia still has many challenges to address, including reducing corruption and lowering its unemployment rate, which sits around 20%. But the potential is there, a lot of it, both for tourism and as a retirement destination.
As in all markets worldwide, real estate values in Croatia have fallen since the 2006/2007 highs. However, as the mortgage market in this country was very limited, it hasn't experienced anything like the collapses that Ireland and Spain have been suffering through. Tourism is the shining star of the economy and continues to expand. Bottom line, I expect real estate prices to remain steady, especially in the key tourist destinations. Buying a small apartment or house to put up for short-term rental might net you a reasonable 5% to 6% return.
Thinking longer term, this country, once it has finally entered in to the EU, likely will have to streamline its residency permit process, which right now isn't easy to navigate. This will help the country to develop as a retirement option, especially among the Brits and West Europeans, who are always in the market for coastal sunshine. This is one asset Croatia has in abundance. Indeed, anyone looking for a sunny, mild coastal destination would do well to consider this country, which is very competitive in terms of both pricing and amenities on offer. With a long coastline and more than a thousand islands to explore, it's a boaters' playground.
If you had to choose among the distressed countries of southern Europe--Spain, Greece, Italy, Portugal, and Croatia--for a place to park some money in real estate, I'd say that Croatia offers the best short-term yield potential and long-term upside. Focus on the tourist regions.