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RETIREES IN PERIL: REAL SOLUTIONS FOR THE CRISIS AT HAND
Imagine a life in retirement where you do not worry that you will live longer than your money lasts.
Prospective retirees contemplating a life of comparative privation should look south of the border, according to this writer and real estate developer, and thereby “enhance your lifestyle and spend far less.” Mike Cobb, Chairman and CEO of ECI Development (developments in Belize, Costa Rica and Nicaragua), is speaking from 7 years and change of experience.
Mike claims: “Our quality of life is truly phenomenal living here in Latin America. It is not just possible, it is actual.” And, later: “Can a couple live on $1000-$1200 per month? Sure. In fact we have a complete budget including actual recipes of North American meals to show just how simple this is.”
Of course being a developer he has some skin in this game. That said, he is just one of many people making an essentially similar claim, including plenty with nothing to sell who are just sharing their experiences.
It is still a very serious situation for retirees. Stories and reports of the economic crisis continue ad nausea in the traditional news media because bad news sells. “If it bleeds, it leads,” as they say. But the future is not fixed in stone.
Individuals are free actors and are able to make choices that impact their lives in positive ways. Whether they do or not is an interesting study in human nature. More on that below but for now let’s examine the current circumstances for retirees and explore options for a brighter future given the reality that currently exists.
Please stop and think about this for a second. Can you imagine a life in retirement where every day you worry that you will live longer than your money lasts?
Ernst & Young reported in July of 2008 that three out of five (60%) middle class retirees would outlive their financial assets if they did not cut back on spending significantly. Please stop and think about this for a second. Can you imagine a life in retirement where every day you worry that you will live longer than your money lasts?
What would you do? How would you allocate your precious resources? Would you cut back on food or medicine? Both perhaps? The thoughts of a life like this are just plain frightening.
Is the situation any better now, 18 months later? The markets are certainly up from their low points in 2008 and early 2009. The S&P was trading between 1450 and 1550 in late 2007. It lost more than 50% by March of 2009, down to 750. The math is ugly when it comes to gaining back a loss. (Note: a 50% drop requires a 100% gain to break even.) Today the S&P sits at 1059, up 40% from the March low but with 45% more to climb to reach the 2007 high. It is going to take a lot of earnings to justify that kind of rally.
Unfortunately, the news is probably worse long term. Stock prices are largely governed by supply and demand.
As the Baby Boomers begin to sell off their vast holdings of stocks, who is going to buy them? If the supply of shares in the markets goes up dramatically, surely prices will fall once again.
This is pretty simplistic analysis. But we agree one should not count on capital gains from here, or from any starting point, to finance your retirement.
They must unless the next generation is: (1) willing to pay more for them and (2) has the cash to do so. Both considerations are seriously doubtful.
The other major source of funding that people planned on for retirement was the equity built up in their homes. Retirees expected to sell their appreciated home asset and use those funds for a new acquisition in a warmer climate and then bank the rest for additional income in the golden years. We all know what has happened to the values of most homes in North America? Retirees planning to free up cash for a retirement purchase will likely find the amount they receive disappointing and not nearly what they anticipated or needed for retirement.
This analysis of the existing financial reality for retirees is short and simple and understandably hides many complexities and nuances. But it is generally the current state of affairs. How we deal with this reality us up to us as individuals.
My dear friend Susan Clancy, a Harvard PhD psychologist and professor at Harvard’s Business School in Central America, INCAE, says there are basically two types of people. The first externalize cause and blame others and outside forces for what happens to them. The second type of person internalizes cause and accepts responsibility for what happens to them.
Numerous studies show that people who accept personal responsibility are far happier than those who don’t.
Numerous studies show that people who accept personal responsibility are far happier than those who don’t. It just makes sense, doesn’t it? When we actively make choices, we set our course for a desired outcome. Sure, circumstances can get in the way, but when we set goals and work to achieve those goals, the odds of success are greatly increased.
The bottom line is that we do not have to leave our future in the hands of the uncertain and volatile real estate and stock markets. There are concrete things that we can do to take control and assure a higher quality of life in retirement (or anytime) for less cost. Forget cutting back on your quality of life as E&Y suggest. There are better options.
Enhance your lifestyle and spend far less. Sounds too good to be true doesn’t it? The simple fact is that my wife, two daughters and I have been doing this for the past 7+ years. Our quality of life is truly phenomenal living here in Latin America. It is not just possible, it is actual. Millions of North Americans are already living and enjoying this far better lifestyle. You can too.
Just one example is enough to highlight the incredible benefits of life “south of the border.” A full time housekeeper costs less than $5 per day. What this translates into for you, is no more chores ... ever.
Imagine never doing laundry, sweeping, mopping, washing dishes, and cleaning bathrooms ever again. Imagine the freedom you will have once released from these mundane, time consuming, menial tasks. Freedom to walk the beach, golf, bike, make new friends, dance under the stars, take up a hobby you never had time for, read, write, take a online university course, e-mail friends, create photo albums for the grandkids, volunteer several hours per week and find meaning in helping others. Just this one very affordable change will make a will make a huge difference in your quality of life.
Can a couple live on $1000-$1200 per month? Sure. In fact we have a complete budget including actual recipes of North American meals to show just how simple this is. E-mail us for a copy of the budget if you would like to see the reality of living a better life for less. Budgets@ecidevelopment.com
If you have $2000, $3000, $4000 or more per month for retirement, the quality of life you can enjoy in Latin America is tremendously enhanced. The Gringo Life stories written about our family’s seven years in Latin America hold a rich treasure of lifestyle observations and anecdotes for people considering a move overseas. You can find them at here.
Cost of living is one factor. Acquiring a new home is another. For some folks who are thinking years ahead, perhaps a home site is the easiest first step. For example, you can secure your future for as little as $29,000 for a ¼ acre lot in Belize, an English speaking country nestled in the Yucatan Peninsula with over 180 miles of Caribbean coastline. A residential condominium 150 yards from the beach starts at under $100,000. Top floor units with views of the ocean begin in the mid-$200’s
Perhaps a Southern California climate is more appealing with both beach and oceanfront golf. Homes near the club house and less than 3 minutes to the beach by golf cart start under $100,000. A home on a golf course, hole #8 to be specific, can be yours for less than $140,000. Luxury ocean front condominiums start in the high $200’s. Title insurance is available for the ultimate peace of mind. Financing is also offered to bring these properties into the realm of affordability for the vast majority of North Americans.
But please remember to use caution when considering property ownership overseas. Latin America is the land of buyer beware.
The ECI properties are world class with infrastructure and amenities already in place as you can clearly see. But please remember to use caution when considering property ownership overseas. Latin America is the land of buyer beware. Many of the standards in North America like hot water are extras or not even thought of south of the border. You need to be sure that your new home will make your quality of life the one you expect and deserve.
I encourage you to take charge of your life and your retirement future. Decide today that you want to spend less for a far better quality of life. If you know this is something you already want to do, e-mail us and reserve a home site or home today. If you are just starting out, request a free Informational Handbook so that you can begin your homework and the process of deciding what type of lifestyle, amenities and climate you’d like best.
But more than anything decide to do something. Your actions are what change your future and no decision is actually a decision to let the winds of fate carry you along. We owe ourselves more than that don’t we?
A simple set of 15 “must ask” questions are available to you by e-mailing email@example.com. If you are armed with this powerful information, you will make far better decisions about what is right for you. We have some excellent answers to these questions, so please be sure to hold us up the same scrutiny.
Until the next time, I wish you all the best and many successes.
Read the source article.
15 TIPS FOR SELECTING YOUR PERFECT RETIREMENT SPOT
The journey to a home in a new country begins with a single step. How to even begin to get your hands around all the factors to consider? If the move is some years off you may just want to start reading stories and reports until a picture builds up in your mind and you have a fair idea of what is called for. If a shorter time-frame is involved, or you have a predilection to methodically thinking things through, here are some key questions you can start with for each prospective destination.
In the current world of economic flux where retirees, and those considering such a move, feel that they have few options open to them when it comes to living a comfortable lifestyle in their place of birth. What to do?
Look elsewhere, of course. But that is easier said than done, especially for those who have never traveled outside of the USA or Canada (or any first-world birthplace) prior to retirement. That novice group does not necessarily have the knowledge needed to objectively select the perfect retirement spot, let alone traverse the world of selecting and buying foreign real estate (more on that topic next month).
For the most part, in the past, retirees have retired in the same town where they spent their final working years. This is just no longer a viable option to many – but where to find advice on picking the right offshore retirement spot? Is it that much more different in another country in the “south” than say, in the States, UK or Canada?
You bet it is! The considerations are “considerable” when it comes to finding the right retirement spot and then there are a different set of considerations when it comes to buying in the selected retirement spot.
Let’s take a look at the Top 15 Tips for Selecting the Right Retirement Spot.
Cost of Living
Moving to a place with lower housing, food, and entertainment costs is an obvious way to stretch your nest egg. “A lower cost of living is the major factor behind retirement mobility,” says David Savageau, author of Retirement Places Rated.
“I don’t know anyone moving from Kansas to Hawaii.” This does not mean that these people are not interested in settling a paradise. (Hawaii sure is one!) They would love to, but it is simply out of their financial reach. For instance, some 22% of Americans age 51 and older who moved between 1992 and 2004 did so to save money, according to a recent Center for Retirement Research at Boston College analysis.
Obviously one of your first considerations is your budget – estimate how your expenses will change if you move and come up with a workable cost of living budget that you can adhere to while living a comfortable lifestyle.
A No or Low Tax Locale
Tax rates vary considerably by location. For instance, not every state and province has the same tax structure – as a matter of fact seven U.S. states do not levy an income tax and five states have no sales tax. Some have special property taxes and state and local tax exemptions for seniors.
I recommend you get online and begin to study the immigration status requirements for the foreign countries that you are considering for retirement. Many countries have special tax incentives (meaning no tax on your overseas income, no property taxes, etc.) under special programs to attract first world retirees – and these are some truly terrific deals that virtually eliminate your tax burden in that country.
The income requirements to achieve the pensioner status are also very low – ranging from proof of $500 up to $1,500 a month in social security and other pension income in order to qualify for the special programs. Also one can import vehicles and personal household goods at no taxation in many of these countries, particularly under the pensioner’s programs available. Believe me, these countries bend over sideways to attract first world retirees to their little paradise.
One “tax” matter to be wary of is the country’s local duty – some countries charge scandalous amounts for the input of something minor. If you are someone who must have particular products, etc. shipped in be sure to conduct an in-depth investigation of duty charges, as well as permission to ship in the items, while on your buying mission to that country.
Your healthcare needs are bound to increase as you age. Make sure your prospective retirement spot has adequate health and elder-care facilities and a doctor who can treat any condition you may have. There are many articles online, and several have been published in the Caribbean Property and Lifestyles Magazine, offering excellent guidance, evaluation of various facilities, suggestions for which country or city offers the best priced quality services as well as providing a complete breakdown of costs for these services.
Most of the medical services are first rate and delivered by first-world trained medical personnel at one-fifth the cost for the same service in a first world country. There are top-notch hospitals and medical care available throughout the “south” region – and it is very easy to investigate all of the offerings on line. Medical tourism in this part of the world has become big business.
Once you have selected your potential retirement countries, be sure to visit these facilities when you make your buying visit to the country. Evaluate each aspect of the facility, medical staff, procedures available, costs, etc. just as you would evaluate the medical care in your home country.
Nearness to Family
Many retirees would like to become more involved in their grandchildren’s lives. But what if the children and grandchildren are in freezing, snow-bound Philadelphia where you cannot afford to live? And, even if you can afford it, who wants to freeze their arthritic knees in the cold of the U.S. and Canada? Fortunately points “south” have most major airlines connecting through with two to three hour nonstop flights back to the States.
And, these flights are competitively priced as well. Needless to say, if visiting family often – or having the grandkids visit you for summer or spring school break is your cup of tea – do a thorough evaluation of air service from your potential spot in to your family’s city. And of course, use one of the airlines on your buying journey to experience it firsthand.
Many people who have not saved enough or have seen their investments drop significantly in value will need to work during the traditional retirement years. More than a third (38%) of Americans between the ages of 62 and 74 worked in 2008, up 39% since 1993, according to the Census Bureau. So although difficult to find in points “south” look for a country that may offer part-time job opportunities or consulting work in a field that interests you.
Or, from a business perspective, look in to the potential of filling an existing need by opening a business. Many countries offer great incentives for this as they figure you will at least hire one or two locals. Tourism related business usually get major tax breaks (personal and business taxes breaks for up to 20 years!) ... and a tourism business is not necessarily a restaurant or B&B.
You can be quite creative with inventing tours, developing tourism websites, etc. Then too maybe you can continue to work from “home country” in a virtual office set up in your new retirement spot. Obviously, reliable and consistently excellent communications systems are a priority for that type of work.
Recreation and Culture
When you are no longer tied to a job, you have the freedom to live at the beach, tanning under a palm tree or hiking in the rainforest. Or perhaps your ideal retirement spot has plenty of art galleries, golf courses, and shopping. After the initial blush of falling in love you a particular paradise subsides you need to do something other than sleep 24/7 or just sit at the beach reading all day ... so your new retirement spot has to offer some amenities and facilities that will keep you entertained and culturally stimulated.
Put together your list, investigate online and of course explore and investigate while visiting those countries on your list of potentials. One cultural treat that cannot be beat in the “south” is exploring the archaeological sites and cave system. These rank are some of the top sites in the world.
Retirees often reach a point when they cannot or no longer want to drive. They do not want to ship in or maintain a vehicle. So investigate the two ways to get around: the cost and quality of the country’s public transportation system as some have better bus service than in the States at about ten cents roundtrip!
And, the first class deluxe air-conditioned buses in Mexico and Central America are the envy of most other countries. I can recommend them as the way to travel and enjoy your travel. These buses have clean restrooms and stewards to serve drinks, as well as very comfortable seats and television.
Your second choice is a car – and to buy one in the country can be a difficult choice. The choice depends on the type of pensioner package you can sign up for in your particular retirement spot. Buying local vehicles is generally an expensive endeavor, and used vehicles are in “iffy” condition at best. I always opt to ship my car in free where possible.
Again ... investigate you options! Last but not least is the lovely alternative – to drive or not to drive your vehicle as you can consider hiring a driver. Believe it or not, this is generally inexpensive and you can kick back and relax while being driven around enjoying the sites.
Downsizing into a smaller house or condo goes a long way in stretching your retirement budget in first-world countries, but moving down “south” means you can actually buy a place of similar size or bigger (if needed) for far less money. And of course there are also many resort retirement communities catering to baby boomers’ changing needs and whims. These communities all provide complete upkeep of grounds and public space at a monthly fee.
And, frankly, one of the great things about moving to points south is that you can now afford a housekeeper, gardener and/or driver. I just read one article recently about a woman living in Nicaragua and her monthly cost for a full time housekeeper, driver and gardener is $220 a month! That is about the norm for these services in this part of the world. And when I retire, it will be my pleasure to turn over all of those time-consuming chores to others.
As I see it I will be providing locals with employment and income to support their family as well as giving myself some free time (at last) to explore and have some fun. One tip is to always make sure that you are paying a proper, fair local rate for these services so as to not underpay a local.
My recommendation before buying (this, after you have selected and moved to your new retirement home) is to rent for about six months or so. This gives you time to explore other areas and small towns you may have initially missed on your buying trip, and to even move to a variety of areas for a few months at a time to test your liking of the neighborhood.
To some, it is important to not have to shovel snow or defrost a car. But warm climates also come with the downside if you are into air-conditioning – electricity costs tend to be higher in Central America than in some other regions. The good news is that air conditioning is not really needed if you rent or buy the right house. Obviously a place with plenty of covered outdoor living space and lots of cross ventilation should be at the top of your list.
I like hills and wind and breezes – and those sorts of areas are worth exploring as well. Think about whether you want more than one distinct season and explore accordingly. Obviously the higher the elevation the more spring-like weather one will encounter. And, if you do not want to live off of cistern water or experience high water bills from the local company, look for an area in the country that has excellent rainfall.
Your Social Life
A full social life and network of new friends is very important to most retirees. They are not retiring merely to lounge on the beach 24/7 (well, maybe a few do) but want to go to the opera, theater openings, browse libraries, museums, art shows, take music or art lessons, join clubs, see the ballet, be part of expat communities and their events, attend church, volunteer, join other organizations (Rotary for instance) and shop in malls (hopefully for great duty-free prices!) Is any of this possible to do in a foreign country to the “south”? Absolutely – all of this is available throughout Mexico and Central America.
And the best part is the ticket prices for ballet, opera and the theatre are a mere fraction of the cost found in first world countries. All of these countries are wonderfully diverse in culture, and most retirees find there is far more to do than they could ever accomplish during their retirement.
The world of communications is ever-changing everywhere, and the “south” is no exception. Whatever I quote here will probably change overnight so I will not waste the reader’s time. Suffice to say, every country have high speed internet, satellite cable, VOIP service, cell phone availability with local rates that are not backbreaking. One area to really investigate is mail. Some cities offer Mailbox Plus sort of services, some people deal with agencies out of Miami that air ship in mail and packages and some people just get a local PO Box. The latter is tough to find!
This should be something that you investigate while on your tour. In some countries your mail may not arrive for three weeks. So if you have a higher level of expectations you will need to find an alternative mail system. And, those exist, just investigate. And, particularly if you insist on keeping your current cell phone plan, find out what those roaming fees will be.
Obviously you must feel secure about the banking system and banks that you will have to deal with in a retirement spot. Some spots have really well-known first-class banks and services (Panama, for instance), but most countries do offer professional banking services. The main concerns with banking in foreign countries include what may seem to be minor matters such as:
Obviously, you must investigate all of this with the local bank as well as the company that provides your pension check and the government agency that provides your social security check. Do not assume anything. Investigate all of this thoroughly.
- What are the ATM fees,
- Can one withdraw funds in their own countries currency,
- What is the exchange rate in the bank between local and home country currency,
- Can I have my pension and my social security check deposited in to my local account from my home country?
To obtain a local bank account is a different matter however, as each country has its own regulations. And, just in case you decide on your retirement spot during your tour, and may want to open a bank account to facilitate advance portions of your move, there are a few documents worth obtaining prior to your trip:
Importing of Goods
- One document to have and to keep current until you are settled in to your new retirement spot is a letter of reference from your bank back home,
- Also, it really helps to have a current police clearance from your local police department back home,
- Last but not least, lots of picture ID and extra passport size pictures.
As noted earlier there are always duty charges on importation of anything in to a foreign country. The charges vary country by country. It is important to check out duty charges and import regulations for any country you consider to move to as assuming you can ship in something could lead to major disappointment.
For instance, some countries may have restrictions on the import of your medications. It is best to put together a comprehensive list of what you will regularly have shipped in (books, hair dye, make up, magazines, your favorite wine) – and find out what you will have to pay for duty and if indeed, you are even permitted to ship the item in.
You will not necessarily find a lot of people speaking your “home” country language in the countries of Central America and Mexico. What you will find is a lot of people speaking Spanish and Spanish dialects. However, English is the language of Belize, and in Panama, due to its ongoing American influence and interaction, most people speak a fair level of English. Within Mexico and the other Central American nations one finds that people in the business, government and tourism communities usually speak enough English to be of major assistance. But as the saying goes,“qWhen in Rome ...” – it is a terrific idea to learn Spanish when in Mexico and Central America. It is a much easier language to learn than English.
And, one of the fun activities you can become involved in as a retiree is attending classes at the local language academy or through expat community classes. Try it, you’ll like it! The nice part too is that unlike going to a French-speaking nation where one is looked down upon for not speaking fluent French, the citizens in Latin countries are among the warmest and most friendly on earth and really appreciate it when someone at least tries to speak their native language (even if slaughtering it while doing so!)
Crime and Revolution
To make it quite clear – the countries to the south are no longer those “Banana Republic” spots of many decades past. None are overthrowing their governments with violent military coups each week; none are devaluating their currency each month and all offer comparable services and lifestyle to first world countries. And, these countries are much safer places to live and travel than the USA and other first world countries.
No, I am not making it up. I invite you to check these facts out at the U.S. Department of State’s Travel website. Hopefully, these top fifteen tips for selecting your perfect retirement spot will help you to narrow your choices down to a top three list of countries to consider. So then, what next? Next you need to take a vacation or two or three and explore each of these spots.
After all, your initial investigation was no doubt done via google or yahoo; then you have discovered some expat forums to join and monitor, and finally moved on to all types of websites raving about the wonderful life, lifestyle, cost of living and joys of retiring to your selected countries.
Now you must visit these spots – not as a tourist, but as a savvy, highly-critical potential buyer. (Think back to the many once-overs you put the potential boyfriends of your 15-year old daughter through and triple it!) Time to see if these countries walk the talk as you like it!
But before you head out on your tour to your choices, please read next month’s issue where I present another 15 tips which will guide you on what to look out for when buying a property in your retirement spot. ... After all, it may be paradise, but it is still a foreign country.
Read the source article.
EL PINO: PUTTING MY MONEY WHERE MY MOUTH IS
Carter Clews buys fully furnished house near Honduras’s Caribbean coast, for $26,000.
Carter Clews has been writing a column we never fail to read since early last year. His Clews’ Views column promises to offer “my best take on your best buys throughout Latin America.” It is oriented towards “middle-income type people ... like myself, who really don’t have time to waste on long-term, land-banking, or money to waste ...”
Clews has now taken his own medicine and purchased a place – in Honduras, per his previously announced intention. One read through the description of the area, the property classified ad, and the price, and it is not hard to see why.
Honduras’s climate is summarized here. We are told that the Caribbean and Pacific lowlands are known as tierra caliente, with daytime highs averaging between 28° C and 32° C, or 82° F and 90° F, throughout the year. Further, “In the Caribbean lowlands, the only relief from the year-round heat and humidity comes during December or January when an occasional strong cold front from the north [blows in].” El Pino is only a few miles from the Caribbean coast.
As for any residual concerns anyone might have regarding the Honduras polical situation, check out the next posting below.
This column will be a slight departure from the usual Clews’ Views fare. Oh, I will talk about someplace I think you might want to live. But, this time ew for the first time – I will be inviting you to join me as a neighbor, rather than sending you out on your own.
So, first, let me set the stage. Then, you can decide for yourself whether you want to join me in the cast of characters up on the proscenium.
Regular Clews’ Views readers may recall that back at the outset, a little more than a year ago, I promised that this column would give you “my best take on your best buys throughout Latin America.” And I added: “First, and foremost, please keep in mind that I’m writing to middle-income type people. These are folks, like myself, who really don’t have time to waste on long-term, land-banking, or money to waste as “risk capital.”
“Let me put it this way: If you are a Clews’ Views reader, your idea of ready capital is somewhere south of one-hundred grand. And you would not mind topping out at $5,000 or $10,000 for some secluded Caribbean property you could see yourself settling down on to personally enjoy in the not-too-distant future.
“My personal goal now is to own beachfront and inland homesteads in four Caribbean countries within the next five years. And my commitment to you is to scout out the very best buys and report back to you in this column.”
I wanted you to understand from day one that I am not a “travel writer;” I am a “destinations writer.” The difference? Well, it is pretty well summed up above: Clews’ Views is not just another travelogue about someplace pretty you might want to visit. It is a nuts and bolts resettlement guide to places where you – like me – may want to set up housekeeping, retire, refire, and maybe even raise a family.
Since that first column, back in January of 2009, we have considered properties in towns, cities, villages, and vistas all over Latin America. Early on, we went to Chichicastenango, Guatemala, where (as Xavier Cugat once advised us) “They have bread and wine/And they don’t divine/Words like yours and mine.” We stopped by Riohacha, Colombia, with its quaint sidewalk cafes and broad, palm-tree lined beaches. And in Bariloche, we even skied in the “Argentinean Alps.”
Through it all, we meticulously adhered to our primary objective: to find a place to live. If not cheaply – certainly economically. If not luxuriously – by all means comfortably.
And that brings me today to El Pino, Honduras – where I just bought my first home in Latin America. Situated about 15 minutes outside of La Ceiba (population 120,000), El Pino is a tiny village snuggled in the rolling foothills of the towering Sierra Nombre de Dios mountain range (reaching more than 8,000 feet at its peak).
The town is surrounded by pineapple fields, rain forests, and, as the name implies, the occasional pine tree. The people are friendly, the tiendas are remarkably well-stocked, the dogs roam freely, and the bus leaves for La Ceiba every half hour, or so.
To get to my new home, you leave La Ceiba traveling southeast and turn onto the gravel road on your right just as you pass the “Tienda Aleman.” Then you proceed down the gravel road through a tiny 10-home neighborhood (highlighted by a 3-window tienda and the village blacksmith). When you see another gravel road on the left, turn in, and the Casa Clews is the first cottage on your left.
Now, I hear some saying, “Why in the world would anyone want to buy a home that far out in the middle of nowhere?” That is a good question – so let me give you what I trust is an equally good answer. Then, you can decide whether, perhaps, you just might want to become my neighbor.
The fact is, “middle of nowhere” in this case is actually the center of someplace special. It is in the middle of all that many of us could ever hope for, and most of us could learn to live with quite comfortably – and even enthusiastically – in fairly short order. Let me explain.
Regular readers will know that I am a dyed-in-the-wool city boy, raised on the hard-scrabble streets of Baltimore, Maryland. So, the fact that the Casa Clews is only 15 minutes from La Ceiba is a major selling point. La Ceiba is a bustling sea-side city with an ample number of spacious hotels (offering comely two-bed suites for as little as $50 a night), well-stocked super markets, a wide variety of restaurants, cinemas, and two modern malls. Plus, it has a massive sports stadium for its professional soccer team (okay, they ain’t the Ravens or the O’s, but when in Rome ...)
Those who enjoy the night life will be pleased to know that La Ceiba is widely regarded as the “Entertainment Capital of Honduras.” Each year, for a full week leading up to the third Saturday of May, the city hosts its internationally renowned “Gran Carnaval Internacional de La Ceiba,” a Mardi Gras-style celebration honoring its patron saint, San Isidro. An estimated 500,000 tourists crowd the streets, parks, restaurants, and bars during the Carnaval to rock around the clock to the festive sounds of salsa bands.
For those (like me) who take their pleasures in a more relaxed manner, at lower decibels, fear not: For us El Pinians (if that’s what we’re called) relief is just a sea shell’s throw away.
Ten minutes from the front door of Casa Clews is the Porvenir Playa – the beach at Porvenir. Surely, God in all His grace has not made a more serene spot for whiling away the hours basking, bathing, and bloviating.
Porvenir Playa defines pristine. In the 2-to-3 miles I strolled along the endless shore during my initial visit, I saw, perhaps, 20 other sun worshippers, each absorbed in his or her own playful, private endeavors. As I listened to the sounds of the rolling waves washing up on the white sand beach, only the distant echoes of cawing birds broke the rhythmic cadence.
Dotting the beach, some 50, or so, yards inland are a series of placid, warm-water lagoons, crystal clear to a depth of 5 to 10 feet. When I ventured into one of the larger lagoons to ask a group of anglers what they were fishing for, I found that the rays of the mid-February sun had warmed the swirling waters to the enticing temperature of a tepid bath. And even for a landlubber like me, the temptation to wade in waist deep was too strong to long resist.
But, even so, I could not relax for long – because 10 minutes in the opposite direction from Casa Clews is the Sierra Nombre de Dios mountain range, punctuated by the towering Pico Bonito and the surrounding national park.
To visit Pico Bonito, one poet wrote, is to “walk with God through Eden unspoiled.” Its 130-foot Zacate Waterfall, cascading down from the mountain peaks will take away your breath. Its churning, turning Cangrejal River white water rapids will hold you spellbound. And, dense tropical rainforest will lure you in with promises of antediluvian sites few have seen.
Pico Bonito National Park offers more than 20 miles of rainforest trails. It hosts more than 400 varieties of tropical animals, including tapirs, jaguars, and howling monkeys. More than 200 species of exotic birds (my favorite of which is the brightly colored Blue-crowned Chlorophonia) call Pico Bonito their home. And the aquatic life includes caimans, crocodiles, and the rare West Indian manatee.
Imagine all of that – from the bustling city to the rolling sea to the cresting mountains – a mere 10 to 15 minutes from your front door, and you begin to see why for many of us, the “middle of nowhere” is actually the center of the action. Yet, there is even more (as I used to say during my infomercial writing days.) And for some, this may be the best part of all.
Remember, I promised that with Clews’ Views, I would help you find some inexpensive “secluded Caribbean property you could see yourself settling down on to personally enjoy in the not-too-distant future.” That being said, here is the actual listing of the house I just bought – including what you can expect to pay to live there. I think you will soon agree: It is simply amazing:
“This house is fully furnished and ready to move in. Foreigners can buy property and have 100% legal ownership in their own name. This is a rare opportunity to buy a true turnkey home in Honduras. Since the house is furnished and the motorcycle is included, literally all you need to bring is you and your clothes.
“The house includes a motorcycle, refrigerator, stove, microwave, dining room set, couch, 2 televisions, washer, 2 beds, water pump and cistern. There is city water hooked up to the house. When you want to use city water, you just turn on the water like you would anywhere else. If the city water is not working or you want more water pressure such as when taking a shower or doing laundry, you can simply turn on the pump and you have a 750 liter (190 gallon) back up water supply with high pressure.
“Free and clear title. You OWN this property. There are no homeowner’s association rules, liens, or monthly fees placed against your title.
Monthly bills are only $30 per month for everything:
Honduras is a beautiful country and a great place to visit or live. With the house paid for and the small monthly bills listed above, this is a great opportunity to live in a wonderful place without spending much money while at the same time living in a nice and comfortable home.”
- Water $2.50 per month unmetered.
- Cable $15 per month with 120 channels including about 20 in English.
- Gas (for stove) $10 fills the tank and lasts 2 to 4 months.
- Electric FREE. If you use less than 150 KWH per month, the Honduran government pays the entire bill. My biggest electric bill was last month and I owed $12.
- Taxes: $24 per year
- Grass Cut: I pay a neighbor $7 once per month
That is it. Lock, stock, and barrel – kit and caboodle. And how much did I pay for Casa Clews. Well, brace yourself – because for Clews’ Views readers, this really is the best part of all: the asking price for all of the above was $26,000. Can you say, “Sold!”
In closing, let me add that the gentleman from whom I bought the house, Brian, has written what I can guarantee you is the finest book yet penned on how to live well in a Latin American country. It is called Facts not Fiction: Honduras on $1,000 per Month or Less. Short, fact-filled, fun to read, the book tells you everything you need to know to live well for less then you may ever have imagined.
If you want to book – and I heartily recommend it if you are thinking of moving to Honduras – you can buy it directly from Brian for just $10. You can reach him at firstname.lastname@example.org. (FYI, I get no cut; virtue, as they say, is its own reward.)
There we go. I have kept my promise to put my money where my mouth is – and I couldn’t be happier. My next low-cost, “live there” purchase will likely be either further south, or on an island. Either way, I will keep you posted on my “best take on your best buys throughout Latin America.”
See you next month.
Read the source article.
NEW STUDY SHINES LIGHT ON AMERICANS RETIRING IN MEXICO COASTAL COMMUNITIES
International Community Foundation is a public charity working to benefit under-served communities throughout the Americas and Asia. Among their initiatives is “Retiring Responsibly in Mexico,” through which the Foundation “seeks to inform, educate, and engage would-be retirees, targeted buyers, real estate developers, nonprofit organizations and policymakers at the local, state and federal levels of governmental in both the United States and Mexico” about various financial and environmental issues.
As part of that initiative they recently released a report, “U.S. Retirement Trends in Mexico’s Coastal Communities.” Those communities included Puerto Vallarta, the Riviera Maya, Cabo San Lucas, Rosarito, La Paz, Loreto, Puerto Peñasco, and many smaller villages. The Foundation had over 840 survey participants, resulting in a high degree of confidence with the statistical findings. We found the section of the report below to be interesting.
Respondents are ... financially comfortable by Mexican standards. Almost 70% have an annual income over $25,000, giving them over $2,000/month allowance. This is higher than the $11,410 average per capita annual income of a Mexican citizen or the U.S. Department of State country estimate of $14,200. Even so, our respondents signaled that although they spend less in Mexico (nearly 70% spent less than $2,000/month on household expenses), a majority feel their quality of life is actually higher than in the U.S. Nearly 75% stated that the cost of living was a major factor in their decision to retire to Mexico.
Survey respondents reside in Mexico, but are also active international travelers. Approximately 47% identified Mexico as their full-time country of residence. In fact, 71% stated that they live more than half the year in Mexico. 78% of respondents have lived in their adopted community three years or longer; 52% have lived there over five years. Nearly 80% still visit the U.S. at least once per year. Yet, most respondents enjoy traveling, and consider their favorite destinations to include the U.S. (55%), Europe (34%), Canada (12%), and Central America (12.5%).
Survey respondents enjoy the cultural and social interaction and want to learn more about their adopted communities. Although the overwhelming majority of respondents are Caucasian, over 48% consider themselves to be either fluent or intermediate Spanish speakers; only 7% commented that they spoke no Spanish. 46% get their news from Mexican news sources in Spanish or English. Despite the perception that there is not a language barrier for many retirees in their adopted communities, it is also important to recognize that Mexican tourist destinations often have many fluent English speakers in the service sector, and therefore, speaking Spanish may not be essential for a retiree’s daily life.
88% of our respondents feel that they are either somewhat integrated or very integrated into their adopted Mexican community. And 91% said that they found it easy to adapt to their new life in Mexico. In fact, a full 29% only return to the U.S. once a year or even less frequently, while another 20% go back just twice a year.
In focus groups, U.S. retirees commented that their Mexican neighbors, slow pace, and interesting culture were all reasons they enjoy their “adopted” community. Yet, U.S. retirees admitted to a “respectful distance” from their Mexican acquaintances. The Mexican social fabric and civil society are still evolving; and it was felt there are not many opportunities to publicly interact, except in church, philanthropic clubs (e.g., Rotary), or during cultural festivals. Yet, because most of these retirement destinations are also tourist destinations, there are many immigrants (from other parts of Mexico and elsewhere) that are more open to establishing new relationships with U.S. retirees.
Because of the interest of the U.S. retirees in establishing a sense of community in their “adopted” home, they create their own social networks that grow in size and strength over time. Church masses in English, bingo games (instead of the Mexican lotería), and English-speaking gathering places like restaurants and cafes have gained popularity in more established retirement communities such as Mazatlán and Puerto Vallarta. English speaking newspapers, magazines, listservs, and websites are also common throughout Mexico’s coastal communities. These comfortable and culturally familiar interactions make it difficult for retirees to later reach out to their Mexican neighbors, further restricting the potential for social integration.
The respondents that chose Mexico’s coastline did so for its quality of life and they plan to stay. They selected their retirement destination because of lifestyle (79%), cost of living (75%), weather (69%), and proximity to the U.S. (63%). 31% stated that they already owned property in Mexico when they decided to retire there, but 77% own their home now.
They also prefer coastal living and enjoy recreational activities that center on the water. Nearly 56% take pleasure in coastal leisure activities such as fishing, swimming, surfing and boating. Just walking along the beach was mentioned by 70% of respondents; and relaxation was a major “activity” mentioned by 65% of respondents. Notably, only 14% mentioned golf as a desired pastime. ...
We know that retirees are still considering their options. 41% had considered retiring in the U.S. instead. Respondents also cited several factors that would prompt them to consider leaving Mexico – among them, escalating drug violence in their local community (43%); declining environmental quality (45%); or a declining quality of life because of increased urban growth (30%). 39% stated that an increase in the cost of living would cause them to reconsider Mexico.
Public safety is another key factor in retirees’ decision to stay in their “adopted” coastal communities in Mexico or move on. ... only 39% own property in a gated community, and U.S. retirees insist that Mexico is safe. ...
Economic security is a factor as well. Almost 44% of Americans residing in Mexican coastal communities were able to live comfortably on less than $1,000 a month for household expenses; 15% indicated that they live on less than $500 a month. This is significantly different from the U.S. where in California, a senior might need $21,000-27,000/year, and in New Jersey, a senior could need up to $43,000/year just for food, shelter, transportation and health care. Low property taxes are also an attraction in Mexico; most focus group participants reported paying a fraction of what they paid in the U.S., but recognized that with additional taxes, infrastructure and services would likely improve.
So we have some dry (kind of) survey statistics to go with the personal narratives usually featured in expatriation-related posts. The quality of life and low costs usually trumpeted seem well backed up by the results found in the survey discussed.
Read the source article.
MOVING ON – HONDURAS RECOVERS
This past December Carter Clews wrote: “I believe that since June 28th of this year, the independent and sovereign Republic of Honduras has endured the most vicious, sustained, and unjustified assault from a foreign government the world has witnessed since the days when the Soviet Union subjugated the Captive Nations.”
He continued: “That assault came from the government of the United States. It was orchestrated by U.S. President Barack Obama, working hand in hand with Venezuelan President Hugo Chavez. And the purpose of the assault was to reduce Honduras to “Banana Republic’ status by violating the Constitution of Honduras in order to reinstall a Marxist despot.”
On June 28 of last year, the government of Honduras – following the proper procedures of its Constitution – impeached Manuel Zelaya. The Honduran Congress voted that he had violated constitutional safeguards against dictatorial takeovers. And the Supreme Court of the land ordered his immediate removal. “Case closed – until Barack Obama and Hugo Chavez decided that they would go to whatever extremes were necessary to override the rule of law in order to reinstall Zelaya in power. There then followed the sustained assault on Honduran sovereignty ...”
You get the idea. So how has this played out since then? OK, according to this piece. The U.S. government has deigned to recognize the current government. The Honduran people are looking ahead.
The hope and spirit of Honduras rose with the sun on the morning of January 27th, 2010. This was the day when the Presidency of the country passed from the interim Presidency, caused by the removal of a corrupt and hugely unpopular president back on June 28th, 2009, to the newly-elected Porfirio Lobo.
For seven months Honduras had suffered the indignity of being ostracized by most of the world, having critical aid cut off, and visas canceled ... and through all of this Hondurans stood strong against the most powerful country in the world in their passion to uphold their constitution and freedom.
An amazing feat of strength and sacrifice, which is now paying off as a new government and a new focus fuels the train to recovery.
“Pepe” Lobo, as he is known here, cites his priorities as eliminating crime and corruption and encouraging private investment to create jobs.
His first action was to escort the disgraced President Zelaya from the Brazilian embassy, where he had taken refuge, to the airport and onto a private plane for the Dominican Republic, the country that had agreed to take him.
So, Pepe’s first act was a begin his new term in the right direction for Honduras.
Born on December 22nd, 1947, Pepe was first elected to Congress in 1990 and served as President of the National Congress from January 2002 to January 2006. In 2005, he was the National Party candidate for President, narrowly losing to Mel Zelaya.
In December 2008, his party again made him the presidential candidate and this time he was successful, taking office on January 27th, 2010. The U.S. has already recognized the Lobo government.
This week, Hilary Clinton, U.S. Secretary of State, is attending a summit of Central America Presidents in Guatemala, and has invited President Lobo to attend; he accepted. This is seen as a first step for Honduras to be re-integrated into the world community.
So what does all this mean for Honduras and the Honduran people? A month and a half into the new Presidency life seems to be as normal as ever in the country. There have not been any particularly controversial announcements or actions and the events of last year seem well behind us.
Last month, I met President Lobo as he was on Roatan to attend the inauguration of Mahogany Bay, the new Carnival cruise ship port. He announced his support for foreign investment and said he was expecting to sign new legislation which will protect that foreign investment. See a recent article on investment confidence on Roatan.
On the island of Roatan, where 80% of the country’s tourism money emanates, tourists are coming back and real estate investors have their confidence back. While not at previous years’ levels, hotels are filling up again and property sales are up.
The new mayor of Roatan, elected in the national election in November last year, is a prominent tourism businessman, who just happens to be a first cousin of the new President, and islanders are hoping that this connection will at least mean that Roatan has better access to the ear of central government.
In a recent interview, Julio Galindo, the new mayor, stated that his goals for Roatan mirror Pepe’s goals for the country; to clean up crime which in turn helps investment and tourism and to create jobs. The other cruise ship port on Roatan, operated by Royal Caribbean Cruise Lines, is in the heart of the main town, Coxon Hole, and young children often target the cruise ship passengers for a handout ... usually by helping tourists find gift shops, grocery stores, etc.
The problem with this is that the children should be in school, and often they get “tips” from the cruise ship passengers which equal or are greater than their father’s earnings for the day, thus perpetuating the cycle of uneducated youth. Julio has plans to round up these children and take them to a social center with a school for the day. It is an ambitious project and hopefully it will have good success.
The people now know they have a voice that will be heard in the capital city of Tegucigalpa.
For now, Honduras slowly moves forward again; the people now know they have a voice that will be heard in the capital city of Tegucigalpa. Hondurans staged a peacefully strong revolution last year – they fought for their constitution and freedoms with peace rallies and white shirts, not violence and guns ... and they stood up to those who chose to believe hysterical news reporting of riots which were not there.
And now, the country is on a mission to prove to the world that it can quietly and peacefully regain its place on the world stage. They do not do things here in a flashy manner, so don’t expect grand headlines about drastic measures to force foreign acceptance ... but look for Honduras to prove itself, and to put last year in the rear view mirror.
Read the source article.
RUSH LIMBAUGH PROMISES TO GO TO COSTA RICA IF OBAMA’S HEALTHCARE PLAN PASSES
If that happens, he will find Cadillac-style private hospitals at Chevy Aveo prices.
Shout-radio host Rush Limbaugh threatened to bless Costa Rica with his presence if Obama-care healthcare “reform” passed. We are unaware whether that led to any desperate attempts by Costa Ricans to prevent the bill’s passage. What would Rush have found if he had made good on his promised action?
Costa Rica has parallel heathcare systems. The government-run one, Caja, features what you expect from government-run heathcare systems: Decent enough care at a low cost to the user once you get it. Wait times are long, as time replaces money as a rationing system when the latter is not allowed to play its normal market role. Every pays into the system whether they use it or not, including retirees. Also standard fare for government ... anything.
Private hospitals and clinics offer high-quality medical care at a fraction of what one would be charged in the U.S. (Admittedly this is not saying much.) Thanks to the caliber of its medical personel, Costa Rica has become a prime medical tourism destination. It is especially known for as a destination for dental care. Private health insurance can be had for $50-100 per month through the government-owned insurance monopoly. Under this system the user has a 30% co-pay for most expenses, except for certain ones like surgeon and aesthetician.
It does not stop there. In looking at healthcare systems outside the U.S. one quickly realizes how badly Uncle Sam has messed things up and needlessly driven up costs. In Costa Rica drugs are generally available without a prescription. Pharmacists are fully qualified to diagnose and treat many common problems, and they are allowed to act on their knowledge. No prescription needed, no time and money wasted on a visit to the doctor.
So Rush knew what he was talking about ... for once. He should make a habit of it.
Conservative talk-show host Rush Limbaugh said this week he would go to Costa Rica for medical treatment if Congress passes proposed reforms to the U.S. healthcare system.
That might sound like an unusual choice, since this is a country with one of the longest standing socialized healthcare systems on the planet. Everyone here (including resident foreigners), are required to pay into the government-run health system, whether they use it or not.
But Limbaugh’s choice may also serve to advertise what many Americans traveling here for medical treatment already know: Costa Rica is a fabulous place for medical tourism.
Life expectancy in this little Central American country surpasses that of the United States and at one point, back in the early 2000s when the World Health Organization rated countries’ general health, Costa Rica ranked higher (#36) than its northern neighbor (#37), despite spending 87% less on health care per capita.
Some who have studied Costa Rican health care consider it better overall, and attribute that to the fact that free coverage extends to 86.8% of the population.
But the Cadillac-style private hospitals at Chevy Aveo prices are what really draw 25,000 Americans to Costa Rica every year.
“People travel to Costa Rica (and) receive the same quality of medical services for a fraction of the cost,” said Jorge Cortés, president of the Council for International Promotion of Costa Rica Medicine and medical director of Hospital Biblica, one of three internationally-accredited private hospitals in Costa Rica. “When people see they can get the same surgery for three or four times less, they decide to get medical care abroad.”
Lower labor costs and fewer malpractice suits keep the prices down here. In Costa Rica’s private system, a teeth-cleaning might run $40 and a general check-up costs $50.
More extensive surgeries? A facelift averages $2,800 to $3,200 in Costa Rica, compared to $7,000 to $9,000 in the United States. A knee replacement may cost $11,000 in Costa Rica, but can be as much as $45,000 in the United States.
But there is another arm of the country’s medical system – the public system – which is relied upon by a majority of the population. While celebrated by Costa Ricans for “universal access,” it is often criticized for long wait times and delays in treatment.
“There’s a difference between the healthcare system that serves people living in Costa Rica verses that which is known to foreigners,” said Robert Book, a healthcare economist for the conservative think tank, the Heritage Foundation. “It’s the private option for foreigners that Mr. Limbaugh was referring to when he said he would go to Costa Rica.”
[Mr. Limbaugh later] clarified his comment about leaving the United States, after “the liberal media” celebrated his vow of self-imposed exile, viewing healthcare reform as a way to rid themselves of the conservative talk show host.
“If I have to get thrown into this massive government health care insurance business and end up going to the driver’s license office every day when I need to go to the doctor, yeah, I’ll go to Costa Rica for treatment, not move there,” he told listeners ... according to a transcript on his website.
Mr. Cortés said Limbaugh would not be alone in traveling abroad for medical care. He is expecting medical tourism to increase by 5-7% over the next year, regardless of what happens with the U.S. healthcare reform bills. Booming Business
And that increase is building upon a growth Costa Rica has already seen. Since the recession forced many Americans out of jobs, Costa Rica has seen a surge in the number of their northern neighbors coming here for health services. In fact, there is an entire industry catering to the medical tourist, including post-surgery spa services, sightseeing packages, hotels, and transportation.
But, if Limbaugh did move to Costa Rica and chose to initiate the process of residency, he would be required to pay into the government-run social security system – which runs the health care system too. Under law, all people employed in Costa Rica must contribute 5.5% of their salary to the state-run social security system and employers are required to match their payment with 9.25%. Even those here for retirement are obligated to contribute under new immigration laws, regardless of whether they hold private insurance.
“The strengths of our health system (is) that it is universal, that it’s based on the idea of solidarity and that it’s fair,” says Dr. Ana Morice, vice health minister in Costa Rica. “What we need to improve is access to health services. Many times someone requests an appointment and doesn’t receive it until a year later. In that area, we have much to improve.”
Yeah, like, hello! This is what you expect from any government service. There is always a need for “improvement,” which never comes despite the “reform” of the year. Socialist boondoggle that it is, Caja surpasses the U.S. fascist boondoggle.
Of course, if Limbaugh decided to move to or buy real estate in Costa Rica, he would not be the first celebrity. His neighbors might include actor Mel Gibson, model Gisele Bundchen, AOL executive Steve Case, or Vice President Joe Biden’s brother, Frank.
Read the source article.
Market Medicine in El Salvador
As is the case with Costa Rica, El Salvador has parallel state-run and private healthcare systems. As characterized here: One uses state-of-the-art technology, qualified doctors, and physicians spend ample time with patients. The other employs third world technology, treats severe illnesses superficially, and doctors are overworked. No extra points for guessing which of these systems is the privately run system. Unfortunately the private system is unaffordable to many native El Salvadorans. But it is a good deal for medical tourists, or American expats, as the author here is.
The El Salvador private system sounds even more pure free market than Costa Rica’s. No mention is even made of insurance, never mind insurance purchased from a state monopoly.
In the United States, the current debate over healthcare reform is really no debate at all. Both sides of the argument accept the fundamental principle of government intervention. Today few can recall a time when healthcare was not considered an entitlement. Americans caught up in this racket would do well to look south, to El Salvador. It has been a half-century since medical care in the United States could be described as a business. In El Salvador that is exactly what it is, a business. There, the customer (patient) meets the service providers (doctors, labs, hospitals, pharmacies) at that voluntary, mutually beneficial place known as the market price.1 ...
The author summarizes instances of his family’s good experience with the El Salvador private medical system here.
In El Salvador numerous pharmacies, national chains and independent stores alike, compete in a vigorous marketplace that places high value on customer service. Pharmacies routinely post the prices of popular medications, the majority of which are available without an MD’s prescription. Often two or three stores from competing chains are in the same block, sometimes in the same building. If they are out of stock on any given medication, the clerk will phone another location nearby. The pharmacy’s motorcycle delivery man will ride over, retrieve my prescription, and deliver it right to my front door. As always, customer service comes first.
Quality, low overhead, excellent service, payment when services are rendered – these are the hallmarks of a market system. If only the would-be healthcare reformers would use El Salvador’s market medicine as the example of what could be in the United States.
1 El Salvador also has a state-run healthcare system. Since I have had no personal contact with that aspect of Salvadoran medicine, I can offer no information on that subject.
Read the source article.
IRS MAKES IT TOUGHER TO RENOUNCE CITIZENSHIP TO BEAT TAXES
Exit taxes get more onerous.
Following in the illustrious footsteps of Nazi Germany, the Soviet Union and apartheid South Africa, the United States in 1998 instituted an exit tax on departing citizens. The most burdensome provision of the tax is that all unrealized capital gains for all assets – including real estate and art – are taxed as if a sale had occurred. One can easily imagine cases where a sale of the assets is forced in order to pay the tax, similar to heirs having the sell the family crown jewels in order to pay inheritance taxes.
The law applies to anyone with a net worth of $2 million or more (presumably on a marked-to-market basis). The real question is, how long before you are just told to hand everything over if you want to leave? Thus our advice to safely move your assets into other jurisdictions, using appropriate means and legal structures, while you still can.
It is perfectly legal for a U.S. citizen to renounce citizenship, and each year nearly 600 Americans do so for a variety of reasons. One of those reasons is to escape paying what they see as onerous U.S. income and inheritance taxes. But a new law makes it much more costly to give up tax obligations with citizenship.
This new tax is complicated, like most IRS codes. But the basic provisions are that anyone renouncing U.S. citizenship will immediately be taxed on all their “unrealized gains.” That is, all stock portfolios, real estate, art, and most other kinds of property and assets will be taxed as though they were immediately being sold at current market rates.
What is more, anything given or left to any heirs by ex-U.S. citizens will immediately be taxed at U.S. gift rates, currently 45%.
The tax not only applies to U.S. citizens renouncing citizenship but also to long-term foreign residents (green card holders) who give up their residency.
This new tax was signed into law by President George W. Bush in June, 2008, but according to Bob Bauman, Legal Counsel to International Living and to The Sovereign Society, it went largely unnoticed because it was buried in a bill calling for tax benefits for U.S. soldiers and veterans.
“This law was passed under the misleading title ‘The Heroes Earnings Assistance and Relief Tax Act of 2008,’” said Bauman. “That sounds very patriotic, but it puts the U.S. in some bad company. Hitler’s Nazis, apartheid South Africa and the Communist Soviet Union each imposed an exit tax that robbed persecuted departing citizens (Jews, gypsies, political dissidents) with similar confiscatory taxes.”
According to Bauman, the tax applies to any expatriate:
“It is your right to end your citizenship if you so desire,” said Bauman, “but if you decide to exercise that right and any of these rules apply you’ll immediately be taxed on everything you own anywhere in the world, as if all your assets had been sold for their fair market value on the day before your citizenship or residency ended.”
- with an average annual net income tax liability that exceeds US$139,000, adjusted annually for inflation for the five preceding years before the date of termination of U.S. citizenship or permanent residence, or
- with a net worth of US$2 million or more on the termination date, or
- who fails to certify under penalty of perjury compliance with all U.S. federal tax obligations for the preceding five years or who fails to submit any other proof of compliance the IRS demands.
According to the U.S. Department of State, anyone wishing to renounce his or her U.S. citizenship must voluntarily appear in person before a U.S. consular or diplomatic officer in a foreign country and sign an oath of renunciation. You cannot renounce citizenship by mail, through an agent, or while in the United States.
At an InternationalLiving.com conference held last February in Quito, Ecuador, Bauman addressed a packed house of attendees and held an overflow workshop for those seeking ways to legally lower their U.S. taxes.
Grant Perry, director of the Ultimate Event V in Quito, said that the event drew more attendees than any event in the 30-year history of InternationalLiving.com.
“Attendance at this event and the incredible interest among the attendees about Bob’s presentation and workshop seems to show that people in the U.S. are more concerned than ever about conditions in the States,” said Perry. “More people than ever are looking for ways to preserve what little they have left after this global economic crisis and afford a decent lifestyle that includes low taxes and good, affordable healthcare.”
“More and more,” said Perry, “that quality of life seems to be priced out of reach for the average American.”
Read the source article.
THE BEST SECOND PASSPORTS IF YOU ARE INTERESTED IN ASIA
Once we discovered the Sovereign Man blog (see top post in Short Takes below) we started poking around. Here is an interesting blurb about why Asia should be considered in your quest to obtain a second passport.
For one, getting a passport in one of the Asia-Pacific Economic Cooperation (APEC) coutries makes it very easy to travel to any of them: “[T]he APEC Business Traveler Card (ABTC) ... entitles cardholders to visa-free travel for at least 59 days throughout the APEC sphere, as well as expedited immigration clearance at airports and other ports of entry. ... in many cases, the ABTC is as powerful and useful as a diplomatic passport, but without the cost ... and since APEC includes several countries like China and Vietnam that normally have a stringent visa process, the additional travel freedom is substantial.”
So how hard is it to get a second passport in one of the APEC countries? “[T]he most straightforward ones to obtain are Chile, New Zealand, and Singapore, as well as Hong Kong permanent residence. ... With each of these countries, the residence and naturalization process takes anywhere from 2-7 years, and in each case, the process is unmistakenly clear and leaves very little to subjective interpretation. ... In Singapore, citizenship can be obtained in as little as 2-years”
About 20-years ago, many of the world’s sovereign nations started down an interesting path. Region by region, governments formed supranational free trade blocs in order to facilitate economic growth.
Supranational organizations were nothing new ... from the failed League of Nations after the Great War to the UN and NATO, large multi-country blocs had been formed in the past, but usually for political purposes or military alliances.
Conceived in 1989, the Asia-Pacific Economic Cooperation (APEC) was among the first international forums specifically designed to boost trade and enhance economic growth in the region, politics be damned. After APEC came MERCOSUR in South America, NAFTA in North America, the EU, and finally the African Union.
A few years into the new millenium, most of the world was covered in trade blocs that were supposed to throw politics out the window ... Today, though, only APEC remains as a pure financial body, and the rest of the world could learn some valuable lessons from that region.
Aside from reduced trade restrictions that are standard for these organizations, APEC has come up with a few really brilliant ideas. Their goal is to make it easy for businesses to engage in commerce with each other – and by facilitating business at the individual level, more deals get done, and more wealth is created.
One of the ways that they have done this is by creating a program called the APEC Business Traveler Card (ABTC). It is literally a small plastic card that entitles cardholders to visa-free travel for at least 59 days throughout the APEC sphere, as well as expedited immigration clearance at airports and other ports of entry.
At major airports in the region, for example, you will see signs all over the place for “ABTC FAST TRACK” which gives priority clearance at customs, immigration, check-in, and security to ABTC card holders.
Actually, in many cases, the ABTC is as powerful and useful as a diplomatic passport, but without the cost ... and since APEC includes several countries like China and Vietnam that normally have a stringent visa process, the additional travel freedom is substantial.
This is a great tool for PTs and anyone who does a lot of business in Asia.
So how do you obtain one? You need to be a passport holder from one of the participating countries – so if you are from Australia or New Zealand, for example, I highly recommend going through the application process; check your respective country’s immigration website.
If you are not already from the APEC sphere, you need to obtain another passport ... which you should be thinking about already. Of the participating APEC countries, the most straightforward ones to obtain are Chile, New Zealand, and Singapore, as well as Hong Kong permanent residence.
With each of these countries, the residence and naturalization process takes anywhere from 2-7 years, and in each case, the process is unmistakenly clear and leaves very little to subjective interpretation.
For example, obtaining a Hong Kong permanent residence card (which qualifies for the ABTC program) requires 7 years under one of the various residency schemes, such as the investor visa or professional worker visa.
In Singapore, citizenship can be obtained in as little as 2-years; it is 5-years in New Zealand, and 5-years in Chile.
Frankly, I will need to write entire letters specifically on the subject of second passports from these countries; for now, though, you should definitely be thinking in that direction – and if you are interesting in eventually planting a residency flag in Asia, those are the countries you should consider for second passports.
Read the source article.
WHICH COUNTRIES WILL COMPETE FOR YOU?
Smaller jurisdictions, particularly those which lack cash cow natural resources, will continue to compete with each other to attract the most productive people through ultra-low taxes, residency/citizenship incentives, and top quality standard of living.
Simon Black characterizes the attitude of aging superpowers like the U.S. thusly: “If you are bright and motivated, we expect you to provide for everyone else. You should be happy to do this because it is your patriotic duty, in our sole opinion. There will be consequences if you fail to comply.”
Sounds about right. And pretty much the opposite of that of small, economically up-and-coming countries, who cannot afford to indulge in such arrogance. Black suggests that these countries are actively seeking bright and motivated types, and one of them may well have an offer out there that you shouldn’t refuse.
One of the worst things that can happen to a country is to experience a brain-drain. The loss of productive people who create new technologies and companies means the loss of the jobs and wealth that they create.
The long-term aggregate effects of this can be truly devastating, and history provides no shortage of examples.
By nature, though, people are generally creatures of habit – inert beings. They must be acted upon by a tremendous force to uproot them and get them moving ... but everyone has a breaking point.
In aging superpowers, governments seem to be doing all they can to exert enough force to push people beyond their breaking points.
I have seen, from my own vantage point, a flood of new, fed up expats arriving to places like Hong Kong where the jobs and opportunities are plentiful, and they have strong incentives to be productive.
In fact, though it does not have the same songs and bombastic statement as other countries who think they have the lock on “freedom,” Hong Kong is one of the most economically free places in the entire world. The level playing field ensures that everyone has a chance to succeed.
Do you remember how the world thought that Hong Kong was going to turn into yet another communist graveyard when it reverted to Chinese authority in 1997?
The exact opposite happened. Rather than force Hong Kong under its totalitarian authority, mainland China learned from the island’s success and adopted increasingly free market policies.
Hong Kong shows how far free market policies can go in transforming an entire society; 100 years ago, it was just a rock, devoid of any natural resources, and populated by largely illiterate fishermen. Only decades later, the island had risen to prominence as a global financial center.
How did this happen? By allowing businesses to freely compete with each other for consumer dollars, and by attracting the best and brightest minds across the entire world to come and become wealthy from their hard work and ingenuity.
Essentially, this is the concept of “America” that has worked so many times in the past.
Today, Hong Kong has matured, along with the rest of Asia. It is no longer the only free-wheeling boomtown of the “wild, wild east,” and the island now finds itself competing for financial primacy with the likes of Singapore, Tokyo, Shanghai, and even Labuan.
This competition is good, though, and I think it is a sign of things to come.
Smaller jurisdictions, particularly those which lack cash cow natural resources, will continue to compete with each other to attract the most productive people through ultra-low taxes, residency/citizenship incentives, and top quality standard of living.
The theme is simple – “If you are bright and motivated, we want you to live here; and, because your ideas and hard work will make this a better place for everyone, we will let you keep most of what you earn and enjoy the fruits of your success.”
In aging superpowers, it goes something like this – “If you are bright and motivated, we expect you to provide for everyone else. You should be happy to do this because it is your patriotic duty, in our sole opinion. There will be consequences if you fail to comply.”
Large, debt-ridden nations will likely continue down their path of self-destruction. I fully expect smaller countries, however, to choose a different direction and join the competition to attract the intellectual and financial capital of productive people.
This is good news for the productive who will find that they have increasing options for residence, better lifestyle, and the accumulation of wealth.
I am seeing the signs of this already – for example, there is a very interesting new business and employment incentive program in Chile that I will be discussing soon, and a variety of new measures to boost entrepreneurship in countries as diverse as Guatemala, Cambodia, and Lithuania.
In the meantime, if you find yourself in the “fed up” category, I would strongly encourage you to look in places like Hong Kong for new beginnings ... obtaining residency is a straightforward process, and within the island’s strong economy is a multitude of jobs and business opportunities.
Read the source article.
SIX TIPS FOR LONG-TERM INVESTMENT SUCCESS
Every investor’s worst enemy is him or herself. Noone should be surprised by that. Moreover, just about everyone “knows” the right and wrong ways to invest – do diversify, don’t buy or sell based on your emotions, etc. Yet people easily get lost in the moment any fail to do what they know they “should” (or do what they know they should’t).
In so much of life, finding and sticking to a simple set of good rules will get you far. We have become convinced, as the decades mount, that a mediocre discipline is better than no discipline – sometimes much better. This applies in the investment arena. Be disciplined and you will outperform the vast majority of investors, including professional ones.
Here are some simple and good rules. Now the hard part of actually following them begins.
Bank savings accounts currently offer paltry rates of interest. If you put leave all your money in banks it should be safe but will not grow much. The stock market offers much more interesting returns but because of the element of risk many people avoid it. Worse still they might enter the market at the top and then sell out later at the bottom. Here are some simple rules to help you navigate the market and build a large stock portfolio over a long period.
1. Diversify. Spread your risks by investing in a number of stocks in different markets and in mutual funds, bonds and other instruments. A good rule is that no one stock or other investment should be more than 10% of your total portfolio. Invest in different geographic areas such as U.S., Europe, Asia and emerging markets. Diversify into property funds, commodity funds and hedge funds. This should give you protection against a collapse in any one particular sector.
2. Do your research. Take advice from various sources. Invest in some companies whose products and strategies you like. There are a multitude of comparison sites and other resources on the internet to help you to analyze and understand investments. Past performance is no guarantee of future performance but I would generally prefer to choose a mutual fund or unit trust that had been a strong performer over the last two years and which offers low management fees.
3. Run the stars and sell the dogs. Monitor your investments and compare their performances against the market index. If some of your holdings do well then the temptation is to cash in and take a profit. It seems natural but if you are in this game for the long term then you want investments that grow over the long term so when you find winners cherish and retain them. On the other hand you should ditch the dogs that significantly under perform the market. The temptation is to hold onto them in the hope of a rebound or worse still to increase your holding at the lower price. This is generally a poor strategy and it is safer to take a small early loss rather than a large one later on. Do not cling onto stocks for emotional reasons. Sell the dogs and run with the stars.
4. Reinvest dividends. A surprisingly large part of the overall growth in most portfolios comes from reinvested dividends rather than in appreciation of the stock prices. A yield of 3% may appear small but over a period it makes a big difference. Choose some investments with a solid history of dividends and use them as the ballast in your ship.
5. Be contrarian. This advice is much easier to give than to observe. When the stock market is low buy stocks. When the stock market is high sell your worst performing stocks and buy other investments such as property or bonds.
6. Take the long view. You are in this for the long term so do not make frequent trades – the commission will eat into your funds. Do not follow fads and fashions. Diversify in a sensible way. Do not panic when markets occasionally crash – these are buying opportunities for the brave.
Finally be prepared to sell when you eventually need the money. You invested it to build financial security for you and your family so it is better to use it when needed rather than to scrimp along in order to become the richest man in the cemetery.
Read the source article.
Winning Friends and Influencing People
This promotion from the Escape From America people is for a short publication from a site/person we include in the Overseas Living & Expatriation section of our Resource Directory: Sovereign Man/“Simon Black” (a pseudonym). In exchange for your email address (you can create a temporary email using mailexpire if you want), you get Mr. Black’s Network Infiltration: The Secrets to Becoming a Welcomed Member of the Most Exclusive Networks in the World, aka “The Network Infiltration Black Paper,” which allegedly takes Dale Carnegie to the next level.
Mr. Black runs a very interesting blog, Sovereign Man, which has become one of our favorite websites. We like his philosophy: “I believe that in order to achieve true freedom, you have to be able to make money, control your time, and eliminate the mindset that you are subject to a corrupt government that is bent on degrading your personal liberty.”
How to Win Friends and Influence People by Dale Carnegie has become one of the most famous and successful self-help books in the world ever. First published in 1936, this incredibly influential guide to being successful in every facet of life quite simply works! So much so that the concept of “how to win friends and influence people” has become the exact and driving theme behind many additional and valuable guides and resources over the decades.
The original book focuses on all elements of an individual”s life – from their relationships with partners and spouses to building business relationships. From handling managerial and entrepreneurial positions to leading, influencing and positively “manipulating” people to motivate and move them forward. It forms a great base read for anyone at a stage in their life where they would like to be able to move forward more positively or more easily ... which let’s face it, applies to most of us most of the time! ...
[O]ver the decades the concepts behind this great book have been developed upon and expanded by many excellent authors – so that today, if you want to guarantee your path to economic freedom and personal success for example, your reading, research and learning needs to go far further and far deeper.
This does not mean that you need to buy a library of self-help books if you are to find a way forward ... rather, if you are in a position in life where you would like to learn how to positively network, “infiltrate” exclusive business niches, discover or create opportunity and begin to forge your own way forward through creating your own positive destiny, one man’s teachings in particular will be right up your street ...
Introducing Simon Black ...
Interested parties can take it from there.
Read the source article.
Open Source Money Management and ERP Tools for Business
It is amazing what you can get in the way of free software these days. And a lot of free (as in no monetary cost) software is also open source, which means – theoretically – that if the program gets abandoned or made un-free that you are not locked in as with proprietary, closed source, solutions. (Modulo some license finepoints, which we will not address here.)
Open source financial management software for businesses has evolved to the extent that firms are able to ditch expensive proprietary solutions and use free solutions. We have been experimenting with GnuCash (portable version here) ourselves, and find it a perfectly good replacement for QuickBooks, if slightly rough around the edges.
Here is a review of eight open source finance solutions for businesses, which provides a useful starting point for an investigation of one’s options in the domain. It was written almost two years ago, but all that means is that the solutions referenced have become still more powerful since.
For more than 10 years, I have covered financial management software applications for business use, on the proprietary side and in the open source arena. The availability of robust open source financial applications for businesses is now at a point where many firms are saving a lot of money by turning to free solutions. In particular, open source ERP (enterprise resource planning) applications, which feature strong financial modules, have taken a bite out of the software cost structure for many businesses. In this post, I will round up eight open source finance solutions that can save your business money.
Read the rest of the article.
5 Types of Emails You Should Be Automatically Filtering
Tips or how to pre-process your incoming email.
How many emails do you have in your inbox right now? Are you an inbox zero freak like me? Or do you have emails piled up and unread that you are hoping you will get time to get to?
I am not judging – I used to have as messy an inbox as anyone. And even now, if I go on vacation or do not check my email for too long, I can get in a heap of trouble: The email piles up, and it can be a real chore getting back to my empty inbox.
I have got a few tips up my sleeve though to make dealing with email a little less painful – and I have found the best defense is a strong offense. In this article, I am going to give you some concrete tips and examples to reduce the number of emails in your inbox instantly – and help you keep it that way long term with the use of filters.
What Are Email Filters?
Email filter is like my own little army single purpose email virtual assistants. You tell each one to check each email for a specific set of things and then tell it a specific action to do with it. Some criteria you can check on include:
Some actions you can typically take are:
- Who is it from?
- Who is it to?
- What words are in the subject?
- What words are in the body?
I use GMail and I know Outlook (and most desktop program) have this capability, you will have to check with your webmail provider for how it is done. With that brief introduction, here are the five types of emails I always filter. ...
- Delete it
- Mark it as read
- File it somewhere
- Send an automated response
Read rest of the article.
Great Little Program Displays “Everything You Want to Know about Your Computer”
SIW is an advanced System Information for Windows tool that gathers detailed information about your system properties and settings and displays it in an extremely comprehensible manner. There are free and paid-for versions; the free version is quite useful and powerful.
The system information is divided into few major categories:
SIW is a standalone, “portable”, utility that does not require installation – one less installed program on your PC and you can run the program directly from an USB flash drive or network drive. Works on all Windows versions from 98 to Windows 7.
Get program here.
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