David Sexton is his American counterpart. David relocated, on our offer of employment, from the U.S. capital to the Panamanian one, about two months ago. David is a few years older than Denis but shares the same approach to life and work.
This morning, when I checked my e-mails, I found one from David that read:
"Kathie, attached is something I've just written. Maybe you could work with it...find some use for it..."
Reading on, I was delighted with what David had to say. I thought you might appreciate it, too.
Here you go--David's open letter to retirees back in the States:
"My grandma--Nanaw, as I call her--retired recently for the second time. The first time was from the federal government nearly 15 years ago. More recently, she retired from a voter registrar's office in small-town Virginia.
"Nanaw 'gets' this whole retire overseas beat I'm covering now, but she's got a few years on the average retiree. Plus, she's too drained from the latest election cycle to earnestly consider relocating her life to a new country right now.
"This doesn't stop me from daydreaming about where I'd want her to move--that is, where I'd be most excited about visiting her if she were ever to retire overseas.
"I am 26, which makes me part of the Millennial generation. Sadly, we Millennials struggle to find time to visit dear old grandma and grandpa. I don't make excuses for our behavior, but it occurs to me that I would probably be more likely to visit Nanaw more often if she were enjoying her retirement overseas. What follows, therefore, are five excellent international retirement options, and why, if you move to one of these, you may see much more of your Millennial-generation grandkids.
Italy or France
"Why you'll see more of us: Millennials enjoy food, wine, and high culture.
We're fairly sophisticated, if we do say so ourselves. We're well-educated, and, when given the opportunity, we like to enjoy the finer things in life. So consider a country known for its world-class food, wine, and culture. Italy and France top my list in this regard. Be advised, though: The debt from that art history degree we wound up with is killing us, so you may need to pick up the tab at all café outings we enjoy together. (Side note: our impractical, liberal education is one of the chief reasons we'll appreciate your new home in either Italy or France and look for any chance to visit.)
"Why you'll see more of us: Millennials need a break.
"Millennials do a pretty good job of managing the vast interconnectedness and dizzying speed of modern life, but it does overwhelm us at times. And I can think of no better place in the world than Belize to get away from it all. How sweet it would be to have an off-the-grid retreat or a Caribbean island hide-a-way in the family to run to whenever the need to unplug the iPad and recharge the soul overtakes us.
"Why you'll see more of us: Millennials love cities.
"Millennials are attracted to things they didn't have growing up. As we enter adulthood, we're choosing adventure over safety, connectedness over isolation, convenience over inconvenience, car-independence over car-dependence.
"Put another way: We despise the suburbs from whence we came. Downtown, with its excitement, intimacy, and ease of living, is our preferred habitat. I put Buenos Aires on this list simply because I like it, but you can replace it with any of the world's brand-name cities, and, I promise, the grandkids will show up.
"Why you'll see more of us: Millennials love natural beauty (and hobbits).
"That Millennials are city-dwellers does not preclude an appreciation for natural beauty, particularly the unspoiled variety. Even the least outdoorsy of us loves snapping Facebook-profile-worthy photos in front of striking, natural landscapes. And, thanks to 'The Lord of the Rings' movies, when Millennials think 'striking, natural landscapes," we think New Zealand, and we really want to go.
Why you'll see more of us: it's Thailand.
Thailand seems to be either the Millennial's favorite country or at the top of their travel bucket list, so it's a great way to lure the grandkids to you. Bonus: It would be fun for us to say, 'Phuket, I need a vacation; I'm going to visit my grandparents in Thailand!'" Kathleen Peddicord
P.S. What else this week?
"Always keep Ithaca in your mind. To arrive there is your ultimate goal. But do not hurry the voyage at all. It is better to let it last for many years; And to anchor at the island when you are old, Rich with all you have gained on the way, Not expecting that Ithaca will offer you riches. Ithaca has given you the beautiful voyage. Without her you would never have set out on the road. She has nothing more to give you..."
-- Constantine Cavafy, 1863-1933
"What?" I asked, barely registering his question, trying to tidy up the bathroom before we headed downstairs and out the door.
"What are we doing, here in Panama?" he asked...
But...what does it cost to get there in the first place?...
But there's a world beyond these Americas that can also offer good weather and a low cost of living...plus, in some cases, some things you won't find here...
Having lived in both Montevideo, Uruguay, and Medellin, Colombia, I think I can help compare the two...
PLUS--From resident global real estate investing expert Lief Simon:
Agricultural land has taken a priority position among real estate investors over the last few years. Yield-generating investments are a critical part of any portfolio right now, and agricultural land not only throws off a yield, but it also can be expected to appreciate in value as arable land around the world becomes scarcer and demand for food increases.
When one mentions growing things in Colombia, the first thing that comes to mind is coca leaves...the raw product for cocaine. While the end product might make some people big bucks, the crop itself doesn't make the farmers much money.
However, Colombia has another major commodity crop: coffee, which offers big potential both short- and long-term.
This country is known for producing some of the best coffee in the world. Surprisingly, though, the industry is not nearly as efficient or as developed as you might expect. There are two major problems. First, the high-quality "specialty" beans are combined with lesser quality ones, at both the picking and the packing stages, meaning the end result is far inferior to what it could be.
In addition, farmers aren't incentivized to care about growing better coffee. They have been trained that they get paid the same going rate for their beans, regardless of the quality, good, bad, or somewhere in between. The local co-ops come around and tell the farmers that they are paying X per pound today...take it or leave it. So the farmers take it and carry on with their farming as best they can. They've got families to feed, after all.
Colleagues who have been researching the coffee business in Colombia have identified some interesting statistics. Colombia has more than a half-million coffee farms. The average size is a bit more than 1.5 hectares (that is, less than 4 acres...or very small). Within those half-million farms are what are referred to as "lots," or areas, of different types and qualities of coffee beans. In total, there are more than 9 million "lots" in Latin America, only 10% of which qualify as specialty lots (that is, high quality). The specialty lots are the good stuff, but, again, most are blended in with everything else, thanks to how the industry works.
Between underutilized land, thanks, in many cases, to farmers not having the money to invest in modern farming methods, and a lack of pricing incentive, a big potential exists to improve both the quantity and the quality of coffee farm production across Colombia. That's the opportunity that the guys behind Coffee Latin America (CLA) have conceived a strategy to take advantage of, a strategy that translates to a chance for you to own your own coffee farm in Colombia, professionally managed by the Coffee Latin America team. It's an opportunity of great interest, I believe, to the individual investor right now, as well as of great benefit to coffee farmers and the entire coffee-growing industry in Colombia.
Here's how this works:
Coffee Latin America identifies farms they believe they can help, by increasing both the yield of the land and the quality of the beans being grown. Investors purchase those farms (or parts of them), and CLA sends in its management team to get to work.
Implementing modern farming techniques--including using fertilizers, organic pesticides, and better planting techniques--CLA expects to be able to increase the average yield of farms from the current less than 50% of maximum potential to a more optimum level over the course of 10 years. Meantime, they will get better quality coffee from the current trees...and new plantings will be of higher-value plants, such as the geisha that Starbucks recently announced being available in some of its high-end stores.
The critical variables in CLA's plan are increasing total farm yield and raising the per-pound price for better-quality beans. Harvesting more coffee is relatively easy--you simply plant more trees. Right now, many farmers don't farm all the land they have available because they just can't afford to. Plants, pesticides, fertilizer...it all costs money.
Raising the coffee price is a less straightforward objective. CLA expects to accomplish this by taking better care of the trees, planting better coffee varietals, and using the direct marketing channels that CLA has created online to support its investment efforts.
The bottom line of all this is a turn-key opportunity for the investor. An investor buys a piece of property that CLA identifies, and CLA's coffee farm management company, Tiera Cafetera (TC), takes over from there. The selling farmer is given the option to continue to work the farm at a decent salary if he likes. TC provides the materials and tools required to improve yields immediately and puts a plan in place to increase the quality of the coffee beans being grown.
The coffee is harvested and packaged for sale through the CLA product chain, which targets both professional and home roaster markets directly, online, providing for an immediate increase in price.
As Colombia places no restrictions on foreign property ownership, you can buy as little or as much land as you like. The minimum investment is currently US$10,000, which buys a half-acre of an active coffee farm. That minimum will go up as CLA finds more farms and will vary depending on the size of farms available.
As the farms being purchased are already producing coffee, cash flow is generated from day one. However, it will take up to a year to make the necessary investments and see the accompanying improvements in yields and quality.
Projections show that investors should begin to receive small cash returns after the first year. As both yields and quality are improved, cash flow should increase, eventually resulting in an annualized return on investment of 19% per year.
Note that, while coffee plants live for up to 40 years, they produce effectively for but up to 12. A regular replanting schedule is required to keep a farm at optimum productivity. The cost of this is factored into the projected returns.
Remember, further, that this is an investment in the land itself. You own the farmland, meaning you could sell it at any time. TC asks a right of first refusal to be able to buy back your coffee farm should you decide to sell, so they can keep the high quality trees they are planting in their retail coffee system. While they can't guarantee they will buy back your farm when you want to sell, you can be sure they will be motivated to try to accommodate.
That said, you should plan to hold your investment for at least five years to allow the cash flow to increase enough to support a sales price that translates to a nice capital gain.
For more details on what I see as a very appealing productive land investment opportunity in a growth market, inquire here.
Kathleen Peddicord'sNew Book
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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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