"And it does bother me!" Senior Editor David Sexton responded quickly. "Because I've just spent three months researching every detail of every residency option available in every country we focus on, and I can tell you: Panama is the winner in this category. No other country competes."
Friday afternoon, starting at 4 p.m. in our office in Panama City, we interrupted our regular work. We mixed pitchers of margaritas, uncorked a couple of bottles of wine, and ordered pizza. Then Lief and I called our in-house editorial and marketing staffs together around our conference room meeting table with a specific agenda: To identify and, further, to quantify and to rank the best places to retire overseas in the world today.
For the past few months, our editors have been collecting and organizing data for the destinations we've targeted for this project--everything from the number of available residency options and the respective costs for each to the number rainy days per year and the average high and low temperatures...from cell phone coverage areas to availability of reliable internet...from the number of hospitals to the cost of a visit to the doctor...from the number of theaters and museums to the range of options for more outdoorsy entertainment...
A mountain of data.
Now what? How, we asked ourselves, do we convert those charts, tables, and lists to a useful where-to-retire-in-the-world tool? We knew that, over the collected data, we needed to layer some judgment and boots-on-the-ground perspective. Statistics can be misleading. They're a place to start but certainly not the beginning and end of the work required to make the determination as to where you might best reinvent your life. That decision, as we point out regularly, must be made with both your head and your heart.
So, Friday afternoon, we started with the objective intelligence that our editorial team had collected...then we entertained lively, sometimes heated discussions about how, where, and why the intel was wrong, based on our collective personal experiences living and doing business in the places being considered.
"You've got to look beyond the number and type of residency options offered," Lief cautioned, "and think about which ones are useful. Belize may offer but two residency options, but they are two of the most relevant and useful available anywhere..."
Then, later, when we got around to discussing infrastructure, "Ireland gets a 2 in this category," Lief declared.
"A 2?!" exclaimed our Irish-born Editorial Assistant Denis Foynes. "What are you basing that on? Are you considering roads?"
"Yes," I laughed, "we're considering roads as part of our infrastructure score."
"Ah, well, then, ok, the roads in my country are an embarrassment," our young Irish friend admitted. "Remember, the Romans never made it to Ireland.
"Also," Denis added, "we have no train service. But we have buses...and we're a good base for very low-cost travel throughout Europe..."
Everyone laughed. After some more back and forth and consulting the data that had been collected on this point, we agreed to increase Ireland's infrastructure score to a 4 (out of 10).
Next category: Safety. "Here," I offered, "is where we have to give Ireland her due."
For each country in our international living index-in-the-making, we'd decided to focus on one or two particular spots. Nobody is going to retire to Panama or to Ireland, anymore than anyone is going to retire to the United States. You're going to retire to a particular city, town, village, or beach, so that's how we've conceived this new index--to focus on particular places that we think offer the greatest appeal and the best advantages for the would-be foreign retiree. In Ireland, we're targeting the region of the country known as the Copper Coast.
"The Copper Coast gets a 10 for safety," I said. "Nothing bad is going to happen to you in that beautiful, quiet part of the world."
"Thank you," Denis agreed.
In Belize, we targeted the Cayo District, which is one of the best places in the world today to retire and embrace a back-to-basics, self-resilient lifestyle.
"In Ireland, there's little useful infrastructure," Denis observed, "and what there is is in a poor state of repair. But in the Cayo? There's no infrastructure there at all..."
"Yes, but that's the appeal," Lief replied. "That's the point. Once you're there, you don't care that there's no infrastructure."
"Well," I offered, "there are rivers. You could always take a kayak wherever you wanted to go."
"What taxes do we care about?" asked Special Projects Editor Brenna Labine.
"We should look at property taxes, sales tax, capital gains tax, and income tax," Lief offered.
"In my research," Brenna continued, "I've found that Chile is the only country on our list that does not have a double-taxation agreement with the United States."
"Good point," Lief said. "That's a big negative, of course..."
And on and on, for each of the dozens of destinations being featured in our new index, until we ran out of limes for the margaritas and the wine bottles had been drained.
"That's enough for tonight," I suggested when the hour grew late. "Let's regroup on all this Monday morning and make sure our determinations stand up to sober scrutiny...
Kathleen Peddicord
P.S. The results of these months of research and evaluation, our First Annual Retire Overseas Index, will be featured in the special expanded March issue of our Overseas Retirement Letter, due in subscribers' e-mailboxes later this month. If you're not yet an Overseas Retirement Letter subscriber, you can become one here now in time to receive your copy of this important and one-of-a-kind resource, our First Annual Retire Overseas Index.
P.S. What else this week?
- The best way to approach the challenge of identifying where in the world might be the best place for you to live or retire overseas is comparatively. Nowhere is perfect, and nothing is absolutely true. Everything is relative.
Take Medellin, Colombia, and Panama City, Panama, for example, two of the best places on earth to think about spending your time or your money right now. While each is a top live-, retire-, invest-overseas choice, these two cities couldn't be more unalike. In many ways, you could say that these two choices are the retirement haven yin and yang of each other...
I was obviously there for the sex, at least according to the taxi driver who showed me around Medellín the first day of my first visit to this city back in early 2010.
That wasn't the reality, but I understood the confusion. Medellín has a reputation as a sex destination. Prostitution is legal here, and Colombian women are beautiful. It's these stereotypes that were, at the time, attracting a lot of guys my age to this city--the promise of a beautiful Colombian wife...or, well, sometimes, a shorter-term relationship with one of the city's beautiful women.
"If you were younger, it would be drugs," the taxisa went on to explain that first day I toured around. "The young ones want drugs...the older ones want women..."
Mid-Sunday afternoon, and the three of us were settled at our open-air table, enjoying Medellín's perfect weather, a good glass of cabernet, and softly playing tango music. Our waiter brought my juicy steak, perfectly done and still sizzling from the wood grill.
Turned out to be the best steak I've had in Medellin...which is saying a lot in a city with dozens of good restaurants.
Perhaps more interesting is that I was not dining in Medellín's famous Parque Lleras or Zona Rosa district. I was in Astorga, a much less-known part of this city that's beginning to draw international attention.
This is the fourth time in the past two weeks that I've walked over to explore Astorga. Each time here, I discover another hidden gem in this up-and-coming neighborhood...
A pleasant surprise was waiting for me early this morning. The sun was shining down through the trees, and two huge parrots were chattering among the broad leaves outside my window...but that's really no surprise in this area.
What was more unexpected was the pair of bank statements awaiting me when I logged online. One account showed an annual interest rate of 6.08%; the other showed a rate of 5.01%.
Now most of us remember when a passbook savings account earned these rates, or more...but we haven't seen those days for a while. And, given the Fed's current policy, we won't be seeing them anytime soon either.
For me, this is just one more benefit to living in Colombia--a fair rate of return on a secure deposit. And it can be available to you, too, even if you don't live here.
Most everyone knows that U.S. economic growth not only slowed but reversed in the final quarter of 2012. However, the most alarming news for me was why the economy shrunk--reduced government spending. Have a look at a recent article from the New York Times.
This is a big problem. One of the biggest concerns in the United States these days is the ballooning government deficit and mounting debt. The real spending cuts required to correct the situation haven't even begun.
Yet the economy has already shrunk in reaction to what little has been cut so far. This tells me that we're way too dependent on government spending...and that when the real cuts come, the economy will be in real trouble.
In contrast, present-day Colombia is a solid, stable, economic success story. Colombia enjoys a solid industrial base, abundant energy, and strong economic growth. According to The Economist, Colombia's 2012 GDP growth rate is coming in at a respectable 4.4%. That compares with 1.0% in Brazil, -0.1% in Britain, and -0.4% in the Eurozone.
As you're still earning healthy interest rates in Colombia, your money can work for you in ways that are no longer possible in the traditional powerhouse economies.
The accounts I mentioned above are offered by a Colombian financial institution known as a "fiduciary," where I have an account. These types of institutions serve as foreign exchange intermediaries, processing funds into and out of Colombia, and also as a broker on the stock exchange, much like a U.S. brokerage house. In addition, like many U.S. brokerages, they offer a number of their own financial products.
I recently opened two new accounts with the fiduciary agency I've worked with now for more than two years. One account is totally liquid. You can withdraw money from it at any time, on a few hours' notice. The current interest rate is just under 5%. This is actually not a bank account, but rather a portfolio of AAA or Sovereign investments, mostly notes to other banks. The portfolio too, has a Fitch rating of AAA. Minimum deposit is less than 500,000 Colombian pesos (that's about US$300 at current exchange rates).
The second account is a 90-day instrument, with a minimum opening deposit (and minimum balance) of just under 3 million Colombian pesos (or US$1,700). This too is a portfolio of investments, mostly fixed-income. They're all investment-grade but can be less than AAA. The portfolio's own Fitch rating is AA.
In my case, I use these accounts to generate a good rate of return for cash I have in Colombia. I also have an account for cash that was earning almost nothing in my self-directed 401k.
Also, as these accounts are in Colombian pesos, these accounts provide another benefit that is very important to me. They help to diversify me outside the U.S. dollar.
These days in the United States, there's generally no one at the bank (any bank) who really tries to earn your business. And, once you're a client, there's no one who actively works to keep your business, especially if you're a small investor.
But that's not the case here. I have a dedicated, English-speaking contact to answer questions and to move money to and from my accounts for me in response to my e-mail requests.
Lately, I seem to spend a lot of time looking for ways to make my cash work harder. So it feels good to get my daily e-mail update of what these cash accounts are earning.
Editor's Note: Lee details these high-interest-earning account opportunities and options in greater detail in the current issue of the Simon Letter, in subscribers' e-mailboxes this week. If you're not yet a Simon Letter subscriber, you can become one here now.
Also, both Lee and representatives from the fiduciary agency where he holds his interest-earning accounts will be speaking about these accounts and other investment opportunities in Colombia at our upcoming Live and Invest in Colombia Conference, taking place in Medellin in May. Registration for this event has opened this week, meaning you have a chance to claim a VIP spot at the Early Bird Discount price...if you act right now. Details on our our upcoming Live and Invest in Colombia Conference are here.
I knew I would one day live in Cuernavaca the first time I brought a group of students from freezing western New York for a study-abroad program and found I could dine outdoors in January. After many winters directing college programs here, it was a no-brainer where I would retire.
Often overlooked and underappreciated, Cuernavaca has more to offer tourists and retirees at lower cost than most anywhere else in Mexico. The resort city lies just 90 minutes south of the capital, and, thanks to its near-perfect climate, this "city of eternal spring" has attracted vacationers since the days of the Aztec emperors and the captains of Cortés.
***
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 credit: Ayaita
Read more...
This is January in Panama.
We left the country mid-December for our holiday travels and couldn't wait to decamp. December is the end of the rainy season in this country. Don't believe anyone who tells you the rains end by Dec. 1. They don't. Through December, skies are cloudy and grey and rain can fall in deluges. December in Panama City is hot, humid, and wet.
But, then, ah...January. Thanks to all that rain, this country is bursting with color this month. This is the time to be in Panama, to appreciate all she has to offer. The rains are over, the humidity is down, and the great outdoors and beautiful beaches beckon.
We're glad to be back and ready to dig in. Alas, we won't have much time for fun at the beach. Too much work to be done.
Live and Invest Overseas enjoyed a year of tremendous growth in 2012, welcoming more than 100,000 new readers. We recognize that this is a function of the times we're living in. Options are more important right now than they have ever been, and, here at Live and Invest Overseas, we're all about options. In 2013, we intend to deliver both more options and opportunities, and, as important, the support you need to act on them.
Specifically, here's what's planned for this New Year:
January
Live and Invest in Belize Conference (Jan. 30-Feb. 1)--Not surprisingly, this event is sold out. Belize offers some of your best options for a new life and an investment in the Caribbean...plus our favorite place on earth to live the self-sustaining life (in the country's Cayo District). Belize is also one of the easiest places for an American to open a bank account right now.
February
Live and Invest in Ecuador Conference (Feb. 13-15)--This event is on its way to selling out. As of this writing a handful of places remain available in the room. Ecuador is our pick for the best place to live well even on a very modest retirement budget. Latin America Correspondent Lee Harrison, one-time resident of Ecuador himself, will be center-stage for this important conference to show attendees how to get the biggest return possible from whatever retirement budget they have to work with in this beautiful, welcoming country.
March
"How To Buy Real Estate Overseas--A Guide For Investors And Retirees" available in bookstores near you. Last year, I spent six months compiling and recording my experiences and recommendations, successes and, yes, failures, buying and selling real estate in more than 20 countries over the past 20 years. The resulting book is being produced by Wiley & Sons now and will be available in bookstores across the United States (and on Amazon, too) starting in March.
April
Retire Overseas Conference in San Antonio, Texas--This is the event you want to attend if you're considering the idea of living or retiring overseas but don't yet know where you want to go. Over the three days of this conference, the only U.S. event we'll hold this year, we'll showcase the world's top 20 retire overseas options, with the help of foreign retirees and expats with firsthand experience living in each one.
June
Live and Invest in Panama Conference--Panama remains the world's top retirement haven and the best place in the world today to start and run an Internet business. The entire Live and Invest Overseas team pitches in for our Panama events, to make sure you come away armed with everything you need to realize whatever dreams you have of a new life in this remarkable little country.
July
Live and Invest in Europe Conference in Dublin, Ireland--Depending how you look at things, Europe is a basket-case right now...or a land of opportunity. We prefer to focus on the latter and have planned our first Europe event in five years. We're basing this conference in Dublin, but we'll be showcasing opportunities not only in Ireland but also in France, Spain, Italy, Croatia, and beyond.
August
Asia tour--Lief and I will travel to Kuala Lumpur, Malaysia, then from there to Singapore and Thailand, reporting from the road. Asia offers tremendous opportunity right now for the retiree on a budget. As Intrepid Correspondent Paul Terhorst, with decades of experience in this part of the world, puts it, "All of Asia is more affordable right now than the most affordable choices in Latin America."
In addition, as it becomes harder and harder for Americans to open a bank account overseas, Singapore banks continue to welcome foreign, including American clients. We think it's worth making the trip to speak with them in person.
September
Global Property Investing Summit in Panama City, Panama--An investment in foreign real estate is the smartest thing you could do with your money right now and an important part of any plan for taking control of your own life and your family's future. We've persuaded Lief Simon, therefore, to host a special event this year focused on where and how to buy property overseas. Details as soon as they're finalized.
In addition, this year we'll also host another conference in Medellin, Colombia, and, if we can pull the program together in time, an event on the Caribbean coast of Mexico.
Options and opportunity. We're all over it.
Kathleen Peddicord
P.S. One more very important thing on our calendar this year:
Construction of the first houses at Los Islotes.
Lief and I have been chomping at the bit for more than three years, putting all the pieces in place behind the scenes to begin the work toward realizing the vision we hold for the community we intend to create on the Pacific coast of Panama's Azuero Peninsula. Lief is at the property today inspecting the work of Project Manager Gary Moseley, who spent the month of December preparing the way (rains notwithstanding!) for the infrastructure required to begin construction of the first three houses, one for our own use and two for other lot owners.
I'm meeting with project architect Ricardo Arosemena this week to review his plans for these first structures. After that meeting, I should be able to set a date for the groundbreaking.
To say that we're excited about all this is an understatement. As I said, we've been working quietly, patiently, with Panamanian review and planning boards, crossing every "t" and dotting every "i," for three years. At last, the fun is about to begin.
P.S. What else this week?
- Fiscal cliffs and tax hikes...lost home equity and the rising cost of health care...in the face of it all, how are you ever going to be able to afford to retire?
You've got the answer to that question in front of you right now.
Economies collapse and then recover...values--of real estate, of stocks--fall and then rise again...financial meltdowns come and go...
When the living becomes intolerably difficult in one place...move to another! I'm not being flippant. I'm giving you the secret to realizing the retirement of your dreams.
The first move is the hardest, I understand. You need options, and you need help. We're here to deliver both. Let's start with this: The situation is far less desperate than you may fear. You do not have to resign yourself to reducing your standard of living during this important phase of your life. You do not have to plan for two or three decades of scraping by and making do.
But you've already figured this out, I think. By signing on as a reader of these dispatches you've opened your mind to the possibilities. You've allowed yourself to begin to think outside the box and beyond your own borders. As you read this, because you're reading this, you are launching a new phase of your life...maybe the best one yet.
Where will your explorations and considerations lead you? You'll have to figure that out for yourself, but, in these virtual dispatches each day, we'll introduce you to the top possibilities worldwide...and then we'll lead you, step by step, your hand in ours, from wherever you are now to where you'd like to be.
As we stand today on the eve of a new year, where should you be focusing your thinking and your search? I made recommendations yesterday for some of the world's top options for 2013, including Panama, France, Belize, Ecuador, and Thailand...and I'll share more top picks for this New Year later on this week.
I realize, though, and I want to make sure you realize, too, that you aren't going to retire to Panama or Belize, to France or Thailand...and not to any other country either. You're going to retire to a neighborhood or a community, a region or a seaside town in whichever country you identify as your personal Shangri-la. Once you get serious about re-launching your life overseas, you realize that you've got to thin slice your options. You can't think about retiring to "Ecuador" anymore than you could think about retiring to the "United States."
What would that mean, to retire to the United States? What would the weather, the cost of living, the cultural distractions, or the scene outside your bedroom window be in the US of A? No way to answer that question, right? You could determine what the weather would be like in Scottsdale, Arizona...the cost of groceries for a couple of retirees in San Diego, California...or the view from your poolside patio in Naples, Florida...but you couldn't possibly answer those questions for the United States as a whole. Anymore than you could determine those particulars for any other country as a whole.
That's why our editorial mandate for 2013 is all about thin-slicing. With this in mind, some introductions are in order.
I've been moving around the world with the focused agenda of identifying its best opportunities for living better and retiring well for coming up on three decades (yikes). I know a little not only about this beat, but also about this world of ours in this context. But I know some places better than others, and, I understand, I can't know everywhere well. That's where my far-flung, ever-on-the-move, and ever-expanding network of correspondents comes in. With the help of these savvy souls, this New Year, we're going to bring you more boots-on-the-ground, real-world, real-time, firsthand, and very thin-sliced glimpses of the world's top live, retire, and invest overseas havens.
If you've been reading for anytime, you probably know these folks already. Still, New Year's Eve is a time for reviewing and regrouping, so I'd like to take this chance to present...
The world didn't end last month despite all the End Of The World hullabaloo in the Yucatan and Belize. The Mayan calendar simply ended. They ran out of stone. The Gregorian calendar ended yesterday, and we had more parties, but the world didn't end overnight either, despite the Fiscal Cliff, FATCA, tax hikes, and autonomous vehicles being allowed on the roads in California (for testing purposes only so far).
January 2013 is here. Time to throw away the paper calendars for 2012 and put up new ones for the New Year.
What if you didn't get your offshore life organized before the end of 2012? It's not the end of the world for you either...
When is the right time for you to retire and move abroad?
Right now.
Okay, I don't know you personally, but I know some things about you.
You've likely traveled overseas, and you've got good reasons for thinking you'd like to relocate beyond your own borders. You've likely even already created a short list of places where you think you might want to spend time.
So what are you waiting for? I figure you should go for it, sooner rather than later. Why? Because odds are, your retirement will work out fine...
There's almost never any debate, when the subject comes up, over which is the finest colonial city in Colombia. Nine out of ten people will tell you it's Cartagena...and with good reason. But in my travels around the country, I've come across some small but quite-vocal pockets of disagreement on this point. And the dissenters make a good case...
PLUS--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 20 years ago. I took my family on a little tour yesterday to show them the first real estate investment I ever made, a three-flat building I bought (with only US$5,000 cash) in an up-and-coming neighborhood just a couple of miles from Navy Pier. I lived in the ground-level apartment and rented out the other two for two years, then flipped the building. It was a crazy successful first-ever investment. I was able to sell the building for 80% more than I'd paid for it!
The U.S. real estate market is at a dramatically different point today, however, than it was 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 20 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.
Read more...
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.)
Belize
"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.
Buenos Aires
"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.
New Zealand
"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.
Thailand
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 are we doing?" Lief asked me yesterday morning as we were dressing for work, rushed, hurried, pulling ourselves together, while, meantime, making breakfast for Jackson, pushing him out the door in time for his school bus, collecting papers we might need in the office, grabbing laptops and cell phones, feeling already that the day was getting away from us, as, frankly, we feel most mornings...
"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...
- We write regularly about how much it costs to live overseas, providing detailed budgets for expenses in different locations we recommend around the world.
But...what does it cost to get there in the first place?...
- In these dispatches, I give a lot of virtual ink to Latin America. That's because it's nearby to North America (where most of our readers currently reside) and because it can be cheap and sunny (two things most would-be expats and retirees abroad actively seek).
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...
- Latin America Correspondent Lee Harrison writes:
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.
Read more...
Then we'll move on to Europe.
Because not everyone is cut out for life in the tropics or the developing world. I appreciate the many delights, benefits, and opportunities associated with living and doing business in Latin America, but, for my money, the best quality of life in the world is to be found on the other side of the Pond.
For me, life in France, specifically in Paris, where we lived for four years before moving to Panama City, is as good as it gets. But that's me.
If you, too, are tempted by the idea of launching a new life in the Old World, this part of the program we're planning for Scottsdale will be of great interest...
#1 Haven On The Continent: France
France is a land of superlatives...from its capital, the most beautiful, most romantic, and most touristed city on earth, to its wines, cheeses, restaurants, shopping, castles, gardens, parks, beaches, museums, cafes, galleries, vineyards, country villages, medieval towns, art, and architecture, all among the best that this world has to offer. The typical concern for anyone who has ever dreamed of a new life in France is that it's too expensive for the average guy (or gal) to consider seriously.
Not so. Paris isn't cheap (though, speaking as one who lived in the city with two small children, I can tell you that it can be much more affordable than you might imagine, depending how and where you choose to live), but elsewhere in France you can find realistic options even if your retirement budget is modest.
Euro-Correspondent Lucy Culpepper has researched France end to end and coast to coast. She can direct you to its more and most affordable corners. After scouting options in the Americas (from Mexico to Costa Rica to Panama) for a year, Lucy and her family decided that life in the New World was not for them. They sought out instead the traditions and the charms of life back on the Continent. When they decided to focus on Europe, they could have settled anywhere. They chose France, specially a region of France that Lucy and her husband found to offer all the best of French country living at a very reasonable cost, even for their family of four. Lucy will be in Scottsdale with us to tell you all about it.
#2 Haven On The Continent: Italy
Rome, Florence, Venice, Tuscany...what more can I say?
Except that, right, the cost of living in those places might be beyond the limits of your retirement budget. That doesn't mean you should take Italy off your list entirely if this is the country that stirs your imagination and speaks to your soul. Our Italy Correspondent Nikki De Girolamo, a British expat who has been living in Italy full-time for the past 14 years, will join us in Scottsdale to show you affordable Italy. Specifically, Nikki will introduce you to her chosen corner of this country, a place where a retiree can live an enormously full and rich life even on a modest budget. From this beautiful Old World base, within a half-day's drive of both the coast and the mountains, you could plan excursions to Italy's better-known and more expensive outposts as often as you liked.
#3 Haven On The Continent: Ireland
At last year's Retire Overseas Conference in Orlando, when the time came for Lief and me to take the stage to present Ireland, we were near the end of Day 2 of the event, and, I have to admit it, I was feeling a bit tired. So I asked Lief to kick off our discussion of expat life and retirement in this country, based on our experiences living there for seven years, raising our children (in fact, Jackson was born in Waterford and is a dual citizen by birth), running our business, making a home and a life, as expats, parents, and entrepreneurs...
Lots to discuss, that Lief could cover as well as I. So I stood off to the side and listened as Lief opened...
"Ireland is the Latin America of Europe," he explained. "The Irish don't have a word for manana, but they sure do embrace the concept."
Everyone laughed.
Behind Lief, on the screen, showed photos of rolling green hills and old stone houses...St. Stephen's Green, Dublin Castle, central Dublin townhouses with their colorful Georgian front doors...the Cliffs of Moher, the Ring of Kerry, the Bay of Bantry...Galway, Clifden, Wexford...forts, gardens, beaches...
But what was that Lief was saying?
"The infrastructure will make you think you're in Latin America, too. Despite all the money that flowed through this country during its Celtic Tiger days, they never managed to build a real highway system or bring their railroads into the 21st century. The health care system is in near-chaos..."
More laughter...more uncertain this time.
"And, while we were living there, the cost of living increased exponentially. We moved to Ireland because it was an affordable place to run a business. But prices rose so high so fast that Ireland priced itself out of the world market, and many businesses that had moved to Ireland to open call centers, for example, moved on to Eastern Europe. They just couldn't afford the Irish labor force anymore.
"Real estate in Dublin became more expensive than real estate in Paris. How does that make sense?" Lief asked his audience.
Which responded with a few confused chuckles.
What was going on here?
"Maybe you're not the best one to be giving this talk," I said, taking center stage from Lief, as the room erupted in laughter.
"We promise warts and all," I said, "but not warts...and more warts.
"There are reasons Ireland is on our list of Top Havens in Europe," I explained to the crowd in Orlando last year, "but I fear that, if I allow Lief to continue on as he has been, we'll never get to them..."
Everything Lief had been reporting about Ireland was true, but it was only one side of the story. Only one face of this beautiful country.
Americans have long dreamed of retirement on the Emerald Isle and with good reason. What Mother Nature has accomplished on this little island competes with her finest work anywhere. Even Lief and I, as frustrated as we were trying to run a business in this country, recognized and appreciated how extraordinarily and diversely beautiful it is.
It's also safe, peaceful, relaxed, welcoming, friendly, hospitable, and English-speaking. Making it an ideal retirement choice for many.
That, then, is the distinction we went on to make for those in the room with us in Orlando last year...and that we'll draw out again for everyone who joins us in Scottsdale next month. Ireland has long been and remains today one of the world's top retirement havens. It is also, I'm happy to be able to report, more affordable today than it was when Lief and I were living there. And its property market has fallen off a cliff. Real estate prices are down 50% and more...and still falling by all accounts.
Meaning that, if you, like so many others, have dreamed of wiling away your retirement years on your own little piece of the Auld Sod, this could be the best time in your lifetime to think about making that purchase.
Again, more on the charms, appeals, and current property market of Ireland when we meet in Scottsdale in April. (Yes, Lief will be on stage to help present this country, but I don't think I'll let him lead off again...)
#4 Haven On The Continent: Spain
Spain is known among expats for its coastlines, Atlantic and Mediterranean, especially its infamous (and wholly unappealing in our view) Costa del Sol. But there's more to this country than its costas. Barcelona, for example, is a world-class city on the ocean, perfect if you're looking for a cosmopolitan life near the water.
Great beaches, great cities, great people...but why Spain right now? Because real estate prices in this country have fallen tremendously since the highs of four or five years ago, meaning that, if retirement to Spain appeals, this could be the time to go in search of a great deal on Spanish retirement digs.
Euro-Correspondent Lucy Culpepper and her family, recently resident in France, also called Spain home. She'll share the delights and the attractions when we all assemble in Scottsdale next month.
#5 Haven On The Continent: Croatia
Seven years ago, Lief, the children, and I spent a week touring around Istria, Croatia, with a focused agenda. We were in the market for one of the old white stone houses you find across this peninsula. We wanted to stake our small claim to this beautiful and historic region that, during previous visits, had so captured our hearts and our imaginations.
On that trip seven years ago, Kaitlin, 15, Jackson, 5, Lief, and I followed our property agent from one stone farmhouse to another, up and down the narrow winding roads of these mountainsides, through the medieval villages, and past the expansive fields of olive trees, grape vines, and sunflowers, more infatuated with the region with each passing day.
We had recently made our move, at the time, from Ireland to France, and, one rainy morning of that Istrian family adventure, standing in one muddy Istrian farmyard, Kaitlin observed, "But haven't we done this already? Haven't we already bought an old stone house surrounded by mud? Isn't that what we just did in Ireland? Why do you guys want to do this again?"
Probably Kaitlin wasn't the only one to wonder why we'd decided to make this investment. But we believed in the future of Croatia, a country with an extraordinarily complicated history and an extremely open-minded, forward-looking population. We recognized that Croatia was at another turning point in its long history, and we wanted to be part of it.
Plus, the Istrian Peninsula serves up some of the most delightful scenery on this planet. The land seems to rise up to embrace you. Everywhere you look, something nice is growing--olives, grapes, figs, tomatoes, pumpkins, blackberries, wildflowers... Even the buildings seem to be of the earth, built of its white stone and red clay.
In some parts of the world, Nature outdoes herself. In others, that which man has built is impressive. In Istria, Nature and mankind have worked together over centuries, starting with the Romans, to create a land of delights you have to see to appreciate.
One rainy morning on that trip seven years ago, we found one 200-year-old white stone house that we particularly liked, perched as it was on a mountainside above a long valley of olive trees and grape vines, made an offer to the Istrian owner, and agreed the terms with a handshake. The seller sealed the deal by making a gift to us of lavender oil his wife had bottled.
We returned to visit this part of the world and the little stone house we bought here last summer, to see how things have changed in the intervening years.
I'm happy to be able to report that we were as taken with this sun-soaked region as ever. Croatia, specifically its Istrian peninsula, offers one of the most appealing lifestyle options in Europe today. We'll tell you all about it in Scottsdale next month...
Kathleen Peddicord
P.S. Tomorrow: The best of Asia on the program for this one-of-a-kind Retire Overseas Conference taking place in Scottsdale, Arizona, April 30-May 2.Continuing Reading:
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None of these places felt right, and, finally, Lucy and her crew realized that that fact was less to do with Mexico, Costa Rica, and Panama and more to do with a fundamental personal preference:
Her family prefers Old World living. So they recalibrated and launched a new search on the other side of the Atlantic. This time, they landed in the south of France, which, Lucy reports, is perhaps the best value lifestyle option on the Continent today.
As Lucy explains, this region is "colorful, eclectic, always changing, never following a formula, and very open to retirees."
This is wine country, with a long history and a lot of heart.
And, as Lucy and her family discovered, this region can be far more affordable than you might imagine. Certainly this isn't the cheapest place in the world to retire. However, Lucy calculates that a retired couple could live comfortably here on just about 1,200 euro a month, including 500 euro a month to rent a two-bedroom apartment.
Lucy will be joining us in Scottsdale late April for our next Retire Overseas Conference, when she'll present top current retirement and lifestyle options in Europe, including in this region of France.
In preparation for that event, Lucy has been researching the local property market in this part of the world. She wrote this week to share some of her discoveries...including:
A 91-meter-square stone house just outside the Cessanon-Sur-Orb village center, with a garden, a terrace, two garages, and a pretty view across the Orb Valley, on offer for 112,000 euro...
A typical winemaker's home...a 200-square-meter house with five bedrooms and many original features, including stone floors and large windows, in need of renovation and updating, with an asking price of 180,000 euro...
A five-bedroom house with a large garage plus an independent apartment with a private terrace and street-level access, both with 125 square meters of living space...plus the property has an enclosed 600-square-meter garden with space to create a swimming pool...asking price is 180,000 euro...
A charming, fully renovated, 90-square-meter, two-bedroom stone village house (with a new roof and double-glazed windows) with a vaulted cellar and a pretty living room with a beautiful fireplace, ready to move into, on offer for 117,000 euro...
Another completely renovated two-bedroom, two-bathroom, 80-square-meter house with a roof terrace and open views across the Orb Valley, again, no work required, ready to move into, for 168,000 euro...
Or, if your budget is a bit bigger, a spacious four-bedroom villa, with 280 square meters of living space, a 100-square-meter terrace with summer kitchen, a swimming pool, and a 7,280-square-meter landscaped garden with a view to the mountains, turn-key and beautiful, for 990,000 euro.
Lucy recommends two local property agencies as good places to launch your search in this part of the world:
She'll have much more to share, about her experiences as an expat in France and Spain, about the current best lifestyle and retirement options to be found on the Continent, and about buying, owning, and renovating your dream home in the Old World, in Scottsdale late April.
Kathleen PeddicordContinue Reading:
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