City Of Light Delights At A Post-Punt Discount
We were living in Ireland when the euro was introduced. In January 1999, 11 member states of the EU, including Ireland, agreed to sign on to use the euro as their currency. Until that time, we and everyone else in Ireland had been using punts. We all had a window of opportunity to exchange or deposit our punt cash for euro cash at a bank, 1 punt for 1.27 euros.
I wondered how drug dealers would cope.
In fact, this transition from punts to euro likely helped expand the Celtic Tiger property bubble. Drug dealers, off-the-books bookies, terrorists, and under-their-mattress savers were sitting on piles of cash, as those folks usually are. They couldn’t take their hundreds of thousands of punts to a bank without good explanations for how they’d gained them. To avoid potentially awkward conversations, they bought real estate instead.
Meantime, Lief and I were earning our income in U.S. dollars. We watched with appreciation as the new EU currency, introduced at 1.16 to the dollar, fell steadily over the coming two-plus years, bottoming out at 85 euro cents to the dollar. Our Irish country lifestyle and our Waterford, Ireland, euro-expense business seemed like bargains.
What goes down comes up and vice versa. By the time we moved from Waterford to Paris in July 2004, the euro stood at 1.23 to the dollar, its strongest position since its conception. It wasn’t nearly as much fun under those circumstances to be earning an income in dollars while paying rent and staff in euro.
We bid au revoir to euro-land in 2008, when the EU currency was flying high. By this time we were living in Paris and happy to trade euro expenses for dollar ones in Panama. Our Paris apartment, which we held on to, we rented out to earn euro income.
These past seven years we’ve been in Panama, the euro has traded between a high of 1.58 and a low of 1.22 to the dollar, up and down. We haven’t paid much attention. The euro rent we continue to earn in Paris we deposit into a euro bank account, accumulating a little currency diversification.
The past three months, though, the euro has grabbed us by our shirt collars and demanded we pay it heed as it has fallen, fallen, fallen steadily downward so that it stands now against the dollar more or less where it did at birth 16 years ago. It’s looking like the fall will continue until dollar parity is reached, even breached. Deutsche Bank is predicting 85 euro cents to the dollar by the end of 2017.
Ah, ha! Takes us back to those happy times when post-punt pints came so cheap. And inspires us to seize the currency opportunity and get ourselves back to euro country.
That is, this summer, Lief and I will be repositioning ourselves, returning to Paris from whence we came to Panama City seven years ago. The opportunity to enjoy City of Light delights for what will feel like a discounted rate is too great to pass up.
We aren’t the only ones noticing the opportunity. Roving Correspondents Paul and Vicki Terhorst, who have spent the better part of the past half-dozen years in Asia, are on their way to Europe, too, for an extended adventure. Other friends have written to say they’re shopping for property in Spain, Portugal, and elsewhere in euro-land. As one put it, “Europe may not be doing so well, but, at the end of the day, Europe is still Europe. It’s impossible to get that level of variety, culture, and stimulus anywhere else in the world.”
When we were preparing for the move from Paris to Panama City, Lief created budgets to compare our relative cost of living, one city to the other. What he predicted, seven years ago, was that our life in Panama City would cost more or less what our life in Paris had been costing us.
He was right. In Panama City, we run our air conditioners around the clock, we own two cars, we eat out often, and we buy a lot of imported foods at the grocery store. All those things add up to a monthly nut on par with our total monthly budget living in Paris… back when the euro was trading at a buck-and-a-half.
Returning to Paris will mean lower utility costs. It will mean trading the expense of two cars for the cost of two monthly Metro passes. It’ll probably even mean lower grocery bills, because we won’t be buying so many imported items but local French goods.
Layer on top of all this the down euro, and Paris is looking like an irresistible bargain.
Kathleen Peddicord
P.S. We’re not walking away from Panama City for good. Our Live and Invest Overseas business is well established here, meaning we’re connected for the long haul. As affordable as France is right now, it’s still no place to run a business.
Lief and I are taking this return to Paris as a first step toward pulling the trigger on our own “retirement plan,” which doesn’t really have much to do with retirement. I don’t know what I’d do with myself if I didn’t get up each morning and draft a dispatch to you, dear reader. Lief and I will continue working and writing. Our dream is to be able to do that while moving around the world among places we enjoy most.
We’ve had a great time getting to know Panama up close, and we’ll be returning regularly, every month or so for the indefinite future. Between visits to check in with our LIOS team here in Panama City, you’ll find us in Paris, Medellin, Buenos Aires, Istria, and beyond. This next stage of life for us, which we’re excited to be able to launch, finally, this summer, will be about perpetual motion, change, contrast, and discovery.
We’ve needed to be full time in Panama these past seven years. I’m pleased and proud to say that our Panama City team is now strong and independent. Increasingly, Lief and I are obsolete. Time for us to hit the road…
Continue Reading: Establishing Permanent Residency In Ireland, France, Spain, Italy, And Portugal
