--David Morrill, on the benefits of living in Cuenca
"Ecuador is unique in that foreign retirees living here with a pensionado visa are allowed to get a job if they want to. In most other countries, pensionado visa holders are prohibited from working..."
--Attorney Bruce Horowitz, on options for acquiring residency in Ecuador
"One big plus for us living in Ecuador is the medical care. It's so much more personal than in the United States. We have two young children. We can speak with their pediatrician anytime we want to, and he'll spend an hour or more at a time answering our questions. Of course, it's nice that health care is also so much cheaper here than in the States..."
--American expat-entrepreneur Jeff Stern, on why he and his wife have chosen to raise their family in Ecuador
"One thing I still appreciate very much about Ecuador is that it is a genuinely non-intrusive government. Nobody's reading your e-mails here..."
--Lee Harrison, on why Ecuador
"Americans are very trusting. This is partially a cultural thing, but it's also because Americans count on recourse. We come from a place where there's a functioning judicial system...and where the Better Business Bureau is always on our side. You need to recognize that Ecuadoreans don't come from the same background and don't approach life or business from this point of view..."
--American expat-entrepreneur Jeff Stern, owner of Gianduja Chocolate, www.giandujachocolate.com, on doing business in Ecuador
"One of my favorite things to do on a Sunday in Ecuador is drive to Ayanque beach, about 30 minutes north of Salinas, where I live, and have a lobster lunch. Tables and chairs are right on the beach. I take off my shoes and dig my toes into the sand while I crack open my lobster and watch the surf. I order a couple of beers and make an afternoon of it. Great day...for all of about US$8..."
--American expat Mike Sager, on the beach life in Ecuador
"If you buy a US$40-a-square-foot house, you're getting a US$40-a-square-foot house...remember that as you compare real estate prices and values..."
--American expat and property developer Mike Cobb, on investing in real estate in Latin America
"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..."
--American expat-entrepreneur Jeff Stern, owner of Gianduja Chocolate, www.giandujachocolate.com, on doing business in Ecuador
"Historically, the United States has taken a self-assessing approach to taxation. This has made the country unique in the world. We Americans report our own income and figure our own tax due. No more. FATCA is the end of this. Now the IRS is going to take the tax itself, pro-actively, at the border..."
--U.S. tax attorney Chris Braun, on preparing for the implications of FATCA legislation
"At first I loved the lack of regulation in this country. Then I realized that this is a double-edged sword. I could make a U-turn or go the wrong way down a one-way street without worrying about getting a ticket, for example. But I didn't appreciate it when I encountered another guy coming at me the wrong way down a one-way street..."
--Lee Harrison, on the pluses and the minuses of living in Ecuador
"My best advice for anyone going into the import-export business in Ecuador is to start small. Focus on a few specific products of really good quality. Avoid commodity items. You want a better margin than that..."
--Exporter Roberto Ribadeneira, owner of Ecuador Shop (aka Latin America Shop), www.ecuadorshop.net
"One big selling point for products from Ecuador is that they are handmade. This isn't China. We don't mass-produce things here. Everything is special and therefore more sellable...more competitive..."
--Exporter Roberto Ribadeneira, owner of Ecuador Shop (aka Latin America Shop), www.ecuadorshop.net
"Don't use the public health care...avoid the long-distance buses (because they have horrible safety records and crash regularly)..."
--American expat Jeff Stern, on things not to do in Ecuador
"Ecuador is definitely a 'pay-as-you-go' choice when it comes to health care. That is, I'd say that the cost of care is definitely so low you don't need to worry about investing in health insurance..."
--Lee Harrison, on considering your options for health care in Ecuador
Kathleen Peddicord
P.S. These are a handful of the topics, ideas, recommendations, insights, discoveries, and tips shared during last week's Live and Invest in Ecuador Conference in Quito. Every presentation by every speaker was recorded and is being edited now to create our all-new Live and Invest in Ecuador Home Conference Kit.
Today only, this everything-you-need-to-know-about-Ecuador resource is available at a pre-release discount that saves you more than 50% off the retail price.
This pre-release offer ends at Midnight tonight, Feb. 19. Go here now to take advantage of the prelease of our Live and Invest in Ecuador Home Conference Kit while you still can.Continue Reading:
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The lifestyles on offer are many and dramatically varied. Quito is a big city. Cuenca is a smaller city, more manageable, more welcoming. Otavalo is a small mountain town. Salinas is a beach town. All are interesting and appealing in different ways, for different people. When you are considering where to retire in Ecuador, it depends on what kind of lifestyle you're looking for and, also, important, on your budget. Otavalo is more affordable than Cuenca, which is more affordable than Quito, for example.
"Where's that US$6.50 steak you wrote about the other day, Kathleen?" one attendee here asked me last night. "The steak listed on the hotel's room service menu is US$20!"
The US$6.50 steak dinner I recommended earlier this week is to be had from a small restaurant in the center of the historic district of Cuenca. Right, a room service steak in a five-star hotel in the middle of the business district of Quito is going to cost more.
That was my first recommendation to attendees here in Quito for how to approach the discussions to come over the next three days--remember that Ecuador is many places, many options, many lifestyles, many budgets. You can't try to process it as one choice. It's many.
My second recommendation was to think comparatively.
"Nothing is absolutely true," I pointed out. "So, as you consider options for living, retiring, investing, or starting a business here in Ecuador," I told the conference-goers gathered with us this week, "focus on the comparisons."
There's no such thing, for example, as perfect weather. And what qualifies as ideal weather for me is likely different from what qualifies as ideal weather for you. Maybe ideal weather for you is no rain, ever. Or maybe you want to live with flowers and greenery all around...everything growing...and you understand that, for that to be the case, you're going to have to put up with some rainfall.
When you consider your options for living or retiring overseas, you must address a handful of key issues--weather, yes, and, as well, cost of living, cost of real estate, health care, taxes, infrastructure, etc. And, again, I recommend that you consider all these things comparatively. Is the cost of living in Cuenca higher or lower than in Salinas? Is the quality of the available health care better or worse in Otavalo than in Cuenca? Is Loja more or less accessible than Vilcabamba? Is the per-square-meter cost of real estate in Cotacachi more or less than in Manta? Etc.
Then, to help you layer some perspective over things, draw comparisons between Ecuador and other countries you're considering. Compare the cost of living, of real estate, and of health care...the tax situation...the options for and ease of establishing foreign residency...the accessibility...the opportunities for recreation and culture...etc., between places in Ecuador and places in Colombia, Panama, Belize, Nicaragua, Uruguay, etc.
There is no perfect retirement spot, and no single retirement option is ideal for everyone. Everything is relative...so think relatively.
And, while you're doing that (I offered as my third recommendation to attendees at this week's event in Quito this morning), remember what's most important to you.
Before you begin the work of considering all your good options for living, retiring, and investing overseas, first identify and prioritize what matters to you most. What kind of life do you want? Start there.
"The world is alive with opportunity," I told attendees here in Quito this morning. "That sounds like rhetoric," I admitted, "like so much marketing speak..."
But it's the truth. It's the reality of the world we live in. There's more opportunity all the time.
The problem with so much opportunity is that it demands you make some decisions. You can't do everything at once, and we've each of us got only so many years to do anything at all. So you've got to make choices. Make them based on what you like, what you prefer, what you enjoy.
More on current opportunity in Ecuador tomorrow...
Kathleen PeddicordContinue Reading:
Image source: Annom
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I landed in Guayaquil late at night and went straight to the hotel and to bed. The next morning, stepping into the hotel elevator for the ride down to the restaurant for breakfast, I found myself surrounded by five or six extremely tall and extremely beautiful women. I had to wonder if I was in the right country. Aren't Ecuadoreans descendants of the Incans, I wondered to myself? That is, aren't they all short? Who were these six-foot beauties?
The elevator doors opened into the lobby, and I was greeted by dozens more tall, beautiful women. I wasn't sure what was going on, but I wasn't complaining either.
It turned out that some Miss Latin America pageant was being held in the hotel. Unfortunately, I was leaving after breakfast with my guide and driver to see what the southern coast of Ecuador had to offer. Still, the country had managed to make a nice first impression.
While waiting for my guide, I dragged myself from the lobby and the beauty pageant girls to take a look around Guayaquil. Stepping out onto the sidewalk in front of the hotel, the hairs on the back of my neck stood up.
That has never happened to me before or since, and I've been places most people wouldn't go without an armed guard. My reaction to Guayaquil was instinctive. I sensed danger, but I didn't have time to figure out what that danger could have been. My driver arrived.
(Arriving in Guayaquil this trip, I didn't have quite as strong a negative reaction. Still, this isn't a city I'd spend time in, given a choice.)
Back in 1999, my driver and guide took me first west to Salinas, a coastal resort area where the well-to-do from Guayaquil escaped for weekends and holidays. The weekday I was there, the place seemed a dreary ghost town. I could tell, though, that Salinas must get crowds at least sometimes, given the number of restaurants and night clubs shuttered up for the day.
My main objective that trip was to scout real estate investment opportunities. I was hoping to find a great beach where oceanfront property was on offer super cheap. Salinas was cheap, but I wasn't impressed by the beach or the town, so, after lunch, we moved on up the coast.
The coastal road was in bad shape. La Niña (or El Niño, I can't remember which) had hit Ecuador hard, and the rain and ensuing flooding had done a number on the roads and bridges. In some places, temporary bridges had been installed by the U.S. military.
None of that deterred my guide. He drove those roads like he was in a Formula One car in Monte Carlo. Granted, we had a lot of miles to cover, and the guy was making this trip as a favor to a friend of mine.
As we sped up the coast, getting my new friend to stop to take a look at any property we passed along the way was a challenge. Eventually, I persuaded him to take some time in a small town so we could see what might be for sale and get an idea of pricing. He had told me that 10 cents a square meter should be the going rate for beachfront, but that seemed too cheap to me. To put things in perspective, productive land in the mountains at the time was going for 50 cents a meter or more. I wanted to speak with someone actually trying to sell his beachfront property to confirm my driver's estimate.
As it turned out, my guide was in the ball park. Beachfront property along the coast of Ecuador at that time was as dirt cheap as he had represented. Some beachfront property (that is, land directly along the water's edge) we stopped to ask about was being farmed to grow watermelons. Yes, that's right. The land that would be considered the most valuable most anywhere in the world was being used to raise watermelons.
What I came to understand that trip was that the money in Ecuador was in the Andes. No one valued the beach areas because the land wasn't as agriculturally productive. This has changed a bit in the 14 years since, but it's something to bear in mind as you shop for property here.
The watermelon farmer I spoke with on that first visit quoted me (not surprisingly) gringo prices, but even the prices he represented were downright cheap compared with the price of beachfront property anywhere else in the world I was familiar with.
Bidding our watermelon-farming friend "hasta luego," we were back on the washed-out 'highway' heading north.
Next stop was Manta, a large port city where some expats had, even back then, begun to settle. Manta had the shopping and access that expats wanted, whereas the other towns we'd passed along the coast from Salinas were all more rustic and remote.
The big deal in Manta at the time was the rumor that a U.S. naval base was coming to the city. That rumor was driving speculation that real estate prices would boom. The base did come but has since left. Real estate prices have increased in Manta over the last 14 years, but I wouldn't say that this area experienced a boom.
The other big excitement for me while in Manta was the one and only real live police chase of my life.
As we pulled up to a stop light in the center of town, I noticed a taxi cab pulled off to the side of the road just next to us. Two cops got out of the cab and, without a word of introduction or explanation, climbed quickly into the back of our SUV. They started chatting away to my guide in rapid Spanish, and, when the light changed, he took off quickly, with the two cops now in back as our passengers.
My Spanish was much more limited back then, and I wasn't able to follow the conversation. My driver explained that the cops were after some guys who had just robbed a convenience store…and the taxi they had commandeered for the chase had broken down. They wanted my guy to catch up to the robbers and had instructed him to speed his way through traffic.
As we neared the car with the suspects, the cops took off their hats (so as not to be noticed) and drew their pistols. Up to that point, I was enjoying the excitement, but, having grown up around guns and law enforcement friends in the United States, I started to wonder how well trained in gun safety these Ecuadorian cops were. I didn't want us to hit a bump and accidentally get shot in the back of the head.
When we caught up to the suspects, the cops lowered themselves in the back seat and told my guide to pass the suspects' car. Shortly after passing them, we came upon a truck broken down in the right lane of a four-lane road. The head policeman had my guide pull up next to the broken-down truck and stop. The cops hopped out and drew down on the robbers.
Unfortunately, there was enough room for their tiny car to fit between our SUV and the truck, so they only slowed down, drove through, and then sped off again as the cops continued to fire their .38s at them.
Then the cops hopped back in, and we were on the chase once more. When the robbers turned off into a residential subdivision with dirt roads, my guide had had enough and slowed down enough to "lose" the suspects. After a minute or so of "looking" for them again, the police officers had us take them back to the main road, where they got out. They said they'd hitchhike back to their station.
The experience livened up an otherwise uneventful real estate scouting trip. It also, though, more to a point, highlighted the serious lack of infrastructure in this country at that time. The cops didn't have a vehicle to call their own.
Ecuador was (and is) a poor country. The cost of living was and still is extremely low, as are real estate prices in most regions. That's what has attracted expats and retirees to this country in ever-greater numbers for the last 15 years. They come for the cheap prices, but they stay for the beautiful mountains and the colonial cities, especially Cuenca, where you can, legitimately, enjoy a cosmopolitan life on a very small budget. They stay for the clean air and the great weather (in the mountains; the coastal areas are mostly hot and humid, like coastal areas anywhere in the world).
I've been to Ecuador dozens of times over the past 14 years, but that first visit stands out for all the characters I encountered, from Miss Venezuela, Miss Colombia, and Miss Peru to watermelon farmers on the beach and cops who packed pistols but had to commandeer the vehicles of strangers at random to pursue bad guys.
This visit so far has been extremely dull by comparison. But it's early days still...
Lief SimonContinue Reading:
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Created in 2008 by a small group of Cuenca expats, GringoTree began as an e-mail subscriber service reporting local events and offering tips and recommendations about products and professional services to English-speaking residents. This fall, GringoTree added a website, providing even more information through searchable databases.
GringoTree partners with an on-line newspaper, Cuenca High Life, which offers hard news, features, and opinion columns.
According to Deke Castleman, managing editor of the project, GringoTree has about 5,500 subscribers, some expats living in Ecuador and some considering relocating to the country, mostly North Americans.
Castleman, who moved to Cuenca three years ago after retiring from a career as a travel book writer and senior editor for a U.S. publishing house, says he has been amazed by GringoTree's growth. "We've added more than 1,500 subscribers in the past year alone, and we continue to grow rapidly. Even more impressive, the GringoTree website now ranks number one among English-language sites in Ecuador even though we've only been online since October."
Castleman says there are two reasons for the growth: "The first is Ecuador's and Cuenca's popularity as expat destinations. The second is that we provide useful, reliable information and have become the 'go-to' source for those living here and those thinking about coming."
Cuenca expat and former British foreign correspondent Sylvan Hardy agrees. "GringoTree really knits the community together and is unique in the expat communities that I'm familiar with. If I want to know when the symphony is playing, what new restaurants are opening, or find a good dermatologist or Spanish teacher, I check GringoTree. If I need to know what the government in Ecuador is up to, and if it affects me, I can read Cuenca High Life. In every case, I know that I am getting information that has been vetted by professionals."
Hardy adds: "One thing you discover early as an expat is that a lot of what you hear, either by word-of-mouth or on the Internet, is inaccurate, and often nothing more than rumor. Due diligence is required to get to the truth. This is why GringoTree is so important to Cuenca."
In addition to offering daily community postings, recommendations, and news, GringoTree has recently launched a series of subscriber forums that ask readers about how they handle their money, why they decided to expatriate, what their monthly expenses are, and what's the best coffee in town. "Our mission is to interact with the community, to find out what expats are thinking, and to offer them a forum to share their experiences," says Castleman. "Another part of our mission is to involve subscribers in the larger community. One of the great advantages of living in Cuenca is the opportunity to interact with the local culture and local people. We want to offer an escape from the 'gringo bubble' that you see in so many other expat communities."
Hardy says that GringoTree is not only an invaluable resource for English-speaking residents, but also for those considering relocating and purchasing real estate in Cuenca. "Given all the hype and overstatement out there about Ecuador, as well as about the expat experience in general, it's good to have a place that accurately describes life 'on the ground,'" he says.
Although GringoTree currently focuses on Cuenca, there are plans for expansion into other Ecuadorian communities, as well as to those in other parts of Latin America. "We've built a good communication model and are eager to share it with the world," says Castleman.
To check out GringoTree for yourself and to sign up for the daily newsletter, go to GringoTree.com. For local news, go to CuencaHighLife.com. If you want to talk to Deke Castleman or make a comment about GringoTree, write to feedback@gringotree.com.
David Morrill
Editor's note: You can meet David Morrill at our Live and Invest in Ecuador Conference on Feb. 13. He will be hosting his ever-popular (and always booked) Cuenca real estate and orientation tour immediately after the event. To sign up early, reserve your tour spot for the Live and Invest in Ecuador Conference here.Continue Reading:
Image source: Alex Proimos
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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.
Jeff continues:
"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...
Kathleen Peddicord
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?
- Ecuador Correspondent David Morril writes:
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...
- We report often on the best places in Panama to retire well on little, spots--on the coast, in the highlands, and in Panama City, too--where you can enjoy a comfortable lifestyle on a modest budget, pointing out that, in some parts of this country, it's possible to retire on as little as US$1,000 a month or even less.
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.
Looking forward to 2013 I find market trends to be a much easier call...
- If you could retire anywhere in the world, where would you go?
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.
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