Boomers Outside The Box—The Secret To Saving Your Retirement
Ten years ago this month, Kathleen Peddicord launched her Live and Invest Overseas publishing group. What started out as a kitchen-table operation is today an overseas business success story with its headquarters in Panama City, Panama, and correspondents, contributors, and satellite presences across the globe.
To mark LIOS’ 10th anniversary, we are revisiting the first editions of this Overseas Opportunity Letter.
And we’re finding that the stories, opportunities, ideas, and recommendations that Kathleen shared with her first readers all those years ago are more relevant today than ever…
Including, for example, the story of Jay Snyder and his wife… a couple of retirees from Vermont who mustered the courage to reinvent their lives at this important stage by retiring way outside the box… in Granada, Nicaragua.
You could call Jay and his wife a couple of retire overseas early adopters…
What in the world is a nice, retirement-aged couple from Vermont like us doing building condominiums in Granada, Nicaragua?
It started about five years ago. After some 40 years building and operating the Landgrove Inn in Vermont, our thoughts turned to semi-retirement and change. We intended to sell our country-inn business, and that prospect put us face-to-face with the big “What Next?” question.
About this time, I started reading International Living. Its articles on Central and South America caught my attention. I wanted to see these places. I wanted to know them firsthand. It was as though I could hear a voice saying, “Go south, old man.”
Something in particular that Kathleen Peddicord had written really got to me.
“Live your dreams,” she urged. When I read that, I felt like she was speaking to me directly.
I made a list of countries to explore. At the top was Nicaragua, partly because it was the shortest flight time (!), but also because, by all accounts, it was a very inexpensive place to live.
I planned a visit to Granada, where I enrolled in a Spanish-language immersion program. I lived with a local Nica family and went to Spanish classes (where no English was allowed… exhausting but also exhilarating) each day for a week.
Then I took off to see the rest of the country—remote villages, coastal towns, planned developments…
With only three days remaining on this first visit, I felt a strong desire to return to Granada. So I did. And, back in the city, I took the plunge. I began speaking with real estate agents.
Walking around Granada with the agents, I realized all my senses were satisfied. I liked what I saw, what I smelled, what I heard, what I tasted, what I felt…
I place a lot of value on the sixth sense, too—on intuition. And I liked what my gut told me about Granada. The place felt right, and I felt at home.
Why continue looking and waste precious time? I asked myself.
There was no reason I could come up with, so, the next day, just before leaving for home, I made an offer on a piece of vacant land in town.
I didn’t come to Granada with the idea of buying land to build condos. Not at all. But that day walking around the city with agents, I asked each of them if they could show me condos with rental management programs in place. They all insisted that no such thing existed.
I figured that I couldn’t be the only retirement-aged guy considering Nicaragua and interested in that concept. It’s really the most sensible option for active retirees and second-home owners.
The truth is, retirees in the States right now face a serious dilemma. It’s impossible, really, for them to live on Social Security. And the cost of quality retirement living options has exploded. The current meltdown in U.S. housing costs doesn’t change this fact. Most retirees can’t afford a retirement home.
I thought about all this walking around Granada during that first, life-changing trip. It seemed to me that I’d found an alternative… a viable and appealing option for Americans trying to figure out how in the world they’re going to make it in retirement.
Nicaragua seems to offer exactly what people like me are looking for—an affordable, quality lifestyle bundled with the chance to start over… to make a significant change in your life.
Plus, in Nicaragua, you’re not too far from the States, so you can get back and forth easily, and the medical care is both inexpensive and excellent (I speak from experience).
I found a suitable piece of land, and I decided to design and then to build what I was looking for. If it works for me, I figured, it’ll work for others just like me. Something like, build it… and the retirees will come.
Then I prepared myself for battle. I rehearsed responses to the incredulous stares and raised eyebrows I expected from my wife and family.
But they disappointed me. Instead of “Are you out of your mind?!” my plans were met with enthusiasm, excitement, and encouragement. The support I’ve enjoyed from family and friends has had a lot to do with my being able to follow through on the plan I hatched those first days in Granada.
Once I’d settled on Granada, Nicaragua, and conceived the idea to build a small condo community, I faced another important decision. Should I try to sell my condos pre-construction… or should I build them and then offer them for sale, as a finished, turnkey product?
Selling pre-construction would have provided immediate and ongoing cash flow. But there was the risk that the project could stall, maybe indefinitely, and I’d feel responsible to all the early buyers.
Building in full before trying to sell, on the other hand, meant much greater financial risk. What if nobody liked what I’d built? It’d be too late at that point to make adjustments in design or pricing.
I remembered something Lief Simon had written, more than once:
“Buy what you see,” Lief said.
I decided to build. This way, my potential buyers would be able to see what they were getting.
I won’t ask people to use their imaginations, I thought. I’ll show them what they’re getting into.
Three years ago, when I made my first trip to Nicaragua, the market was hot. Today, activity has slowed considerably. There was a pullback just after Ortega was elected, but the Señor Daniel fears seem to be settling down. Meantime, economic and investment market worries are escalating in the States. Investors, especially American investors, seem to be looking for a bottom… or a shakeout. They’re taking a wait-and-see attitude.
Nevertheless, our Condominiums de Xalteva are selling. We’ve set up our own management team and are renting units for their owners. Remember, this is the first product of its kind in this city, so it’s hard to project prospects for the rental program. However, tourism numbers are up, and Granada is perhaps the biggest tourist attraction in the country. All available units were rented over the Easter holiday with no advertising.
My goal is to provide a 6% net return for owners, which is 1% or 2% higher than typical. I don’t think this is unrealistic. We’ve built a quality product, and I believe that, given the chance, the discriminating investor, buyer, and renter will appreciate it.
I don’t have a solution to the problems facing Americans right now. It’s too frustrating to contemplate. I do feel, though, I’ve found an alternative that works for me and that could work for many, many others, as well.
You’ve got to think outside the box—the box being the United States. I realize this isn’t a new idea, but it’s truer and truer. Statistics show an increase in the numbers of Americans leaving the States and a big increase in the numbers considering the idea.
It’s tempting to continue living the way you’ve been living. It’s easy. Certainly easier than making the kind of change I’m talking about. It can be very frightening to think about creating a whole new life for yourself in a foreign place.
That fear can keep us from acting on chances for fun, for adventure, and for possible profit.
All I can tell you now is that I’m thrilled with this project. It has been one of the most satisfying experiences of my life.