What Should Your Plan B Look Like?
When I left you yesterday, we were discussing diversifying assets offshore. I shared an insight from one of the speakers in Panama City with us for this week’s Global Asset Protection and Wealth Summit who got to an important point when he said:
“Physical gold is about as useful in an end-of-days scenario as my ability to make spreadsheets. You can’t eat gold. It’s the farmers who will rule the world if the banking, credit, and financial industries collapse… as they well could…”
No doubt you should be diversifying your assets offshore. The question is: What should you diversify into?
Traditional “go-offshore” wisdom holds that every portfolio should include gold. Some advisors say 10% of your assets should be in the yellow metal; others say 20%. I know one go-offshore guru who maintains that at least 50% of any investment portfolio should be invested in gold.
That idea has never sat well with me. I know a pile of gold in a vault in Switzerland, say, gives some people peace of mind. It’s a real asset, tangible, that, unlike paper currency, has intrinsic value.
Fair enough. But what good are my bars of gold going to do me if society so breaks down that other means of paying for things are no longer available or accepted? I fly to Zurich to collect my gold bars… and then what?
At lunch yesterday with attorney friends in Panama City for this week’s conference, we went around the table reminding each other of our preferred offshore asset strategies. You know mine—real estate.
“Yes, great, buy a condo on the beach in the Caribbean or a finca in Argentina,” one friend replied. “I agree that real estate is a best option for both storing and growing wealth long term. However, you’ve still got to be able to pay for things. You’ve got to pay your ranch hands… you’ve got to buy supplies.
“I also agree that gold isn’t practical for these purposes,” my attorney friend continued. “However, the poor man’s gold can make sense. I keep small silver coins. You could use these to buy things and to pay for services just about anywhere in the world.”
Lief and I have a small amount of gold that we’ve bought because we felt like we ought to. A sack of small silver coins seems more sensible.
Back to the bigger-picture point, though, what if the doomsdayers are right? What if the end of civilization and the total breakdown of the rule of law are just around the corner?
I come back to real estate. In this context, a bolt-hole. That’s why, in Panama City this week, we’ve spent time looking at options for where and how to organize a failure plan in a box that you could pull the trigger on now or at some time in the future.
The overriding objective is a backup plan that would allow you and your family to survive and thrive in case of a global systemic meltdown, but I like to think of the agenda less dramatically. None of us knows what the future holds, so it makes sense to take control of what’s within our ability to control. I recommend, though, you think about doing this in a place where you enjoy spending time. Maybe the end of days won’t arrive for a while. Why not enjoy your end-of-days plan in the meantime?
At this week’s conference, we’ve looked at two places in particular were you and your family could go off-grid and off the world’s radar, one in the Yucatán region of Mexico, the other in the Cayo region of Belize. Both are great failure plan options that double as great places to hang out in the meantime.
The off-grid project near Tulum, Mexico, that we’ve discussed with conference attendees this week offers relatively large lots, from 1.25 to 9 acres, in a jungle setting. Lot owners are permitted to clear enough to build their houses, but the plan is to keep the jungle setting jungle as much as possible.
Amenities planned are basic, including a community center with a pool and a picnic area. Nature trails will be cut, and an amphitheater is being built for outdoor events. Otherwise, it’s you and nature. The jungle is so thick on most of the property that you won’t see houses from the road. Living here, you likely wouldn’t even know you had neighbors unless you wanted to. This is true independent living.
The second sustainable project we like is in Belize and has been designed with a different objective. The property in this case was farmland rather than jungle, so there wasn’t much nature to preserve. It’s an open expanse on the banks of the Belize River.
In this community, you definitely will know you have neighbors. You’ll see them all around you. And, indeed, the community has been designed to facilitate interaction among neighbors. There are community gardens and orchards for owners to tend together (if you want… you’re not obliged to work in the gardens). The property even has what is suspected to be a small Maya ruin, and the plan is to invite owners to participate in its excavation under the oversight of the Belizean Archeological Society.
The first project, called Los Árboles, is only 15 to 20 minutes away from the beaches near Tulum, which is the nearest town. Cancún is the access point for international flights, and it’s about two hours to the property from the Cancún airport. Chetumal is about three hours to the south for big shopping trips if you want to avoid the tourists in Cancún. The climate at Los Árboles is tropical, though there’s some relief from the sun thanks to the jungle canopy.
The second project, in Cayo, Belize, is Carmelita. This property is about two hours from the international airport in Belize, but it’s up in the “mountains” of Cayo, meaning some elevation and somewhat cooler temperatures, especially at night when you don’t necessarily need air conditioning. To get to the beach, you could catch a flight to Ambergris Caye from one of the two nearby local airports. For shopping, San Ignacio is about 15 minutes away in one direction, Spanish Lookout about 15 minutes away in the other direction. Note, though, that nowhere in Belize does the shopping compare with that in Cancún or Chetumal. Big Box stores don’t exist in Belize. For that kind of shopping, ironically enough, people from Belize drive to Chetumal, which is just over the country’s northern border with Mexico.
Prices for lots in both projects are low compared with the cost of buying into a full-infrastructure development… because the developer doesn’t have that level of infrastructure cost. When buying into an “off-grid” development anywhere, though, you need to remember that, while the lot cost will be lower compared with a full-infrastructure project, the construction cost for your home will be greater, because it will have to include the costs of systems for solar power and waste management.
At both Los Árboles and Carmelita, the developers are working with the latest in solar technology, contained wastewater systems, and rainwater catchment systems. The construction design styles fit the locations. In Mexico, you find more Spanish-style homes. In Belize, the typical style is more Caribbean or Key West. Both developers are prepared to help with house designs and construction.
Prices at Los Árboles start at US$48,500 for the 1.25-acre lots and go up to US$78,500 for the largest lots. You get a 25% if you pay cash in full at the time of purchase. Carmelita lots are smaller (most are less than 1 acre) and start at US$28,000.
As I said, I like both these off-grid communities in the making. Which one might be right for you? Do you want river or jungle… Mexico or Belize… tropical weather or a bit of a cooler climate in the foothills… a large lot where you could live very privately if you chose or a community designed for interaction among neighbors? Like any property investment overseas, it comes down to your priorities and your preferences.
P.S. This week’s presentations to do with going off-the-grid and living a sustainable life, in Belize, Mexico, or elsewhere, have been recorded, along with every presentation and panel discussion over the three days of the event.
While the conference continues, you can purchase the complete bundle of Global Asset Protection and Wealth Summit recordings and presentation materials pre-release for more than 50% off the regular price.
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