Part of Holistic Survival may be in escaping your country. Jason Hartman talks with Kathleen Peddicord, Founder and Publisher of Live and Invest Overseas/International Living, as they discuss retirement and better living destinations worldwide. Have you ever considered a move to Panama, Europe, Argentina, Ecuador, Belize or other low-cost high-lifestyle destination? More at: http://holisticsurvival.com/category/audio-podcast/. For more than 22 years, Kathleen was Editor and Publisher of International Living. In 2007, she decided to take a break, during which she did two things. First, Kathleen began work to launch a new publishing group, Live and Invest Overseas, and a new free e-letter service, the Overseas Opportunity Letter. In addition, during her recent sabbatical, Kathleen and her husband, Lief Simon, made an important geographic decision. Specifically, they decided to make a third international move with their family and Kathleen’s new business. In the summer of 2008, Kathleen moved from Paris to Panama City, where they’re currently reside.
Some thoughts on Panama… On Nov. 30, Panama and the United States signed a U.S. Tax Information Exchange Agreement (TIEA), granting the IRS the power to request information related to the accounts of any U.S. citizen who has taken advantage of the bank secrecy laws in place until now and deposited money in a bank in this country.
What does this mean?
If you have a bank account in Panama but have been compliant…no worries. If you have declared your account and filed the necessary related forms with the IRS, you should be fine. If you’ve been considering opening a bank account in Panama as part of an offshore privacy strategy, you may want to reconsider. Banking privacy is not what it once was down here in the Hub of the Americas. If you’ve been planning to open a bank account in Panama because you intend to live, invest, or do business here, you should proceed. If you need a local operating account, you need a local operating account, the fact that the U.S. IRS can now, in theory, ask the bank about its existence notwithstanding.
Which brings us to an important point. Bank secrecy is one issue. An important one, maybe a critical one for you. But one issue.
A reader wrote last week, the day after the exchange-of-information treaty had been signed, to say, “This treaty, in effect, eliminates Panama as a safe haven. The country gave in to the Marxist IRS and to the socialist U.S government. Now what, time to move to Andorra?”
I’m as disappointed as the next girl by Panama’s decision to sign this agreement. But we’ve got to keep things in perspective. Panama is no longer a place to seek banking privacy. But it’s still got a lot going for it. More on this in a minute.
First, what was Panama thinking? What’s the benefit for them of signing this agreement?
Two benefits are being floated. First, now that Panama has cooperated with U.S. demands and signed away bank secrecy, chances are good that the U.S. Senate will approve the 2007 U.S.-Panama Free Trade Agreement, a deal very much longed for by Panama business interests.
Second, Panama is now one step closer to having its name moved off the notorious OECD “gray list.” As the Patriot Act and other laws have abolished any notion of financial privacy in the United States, many Americans have since looked to Panama, especially, as a safe haven, not for tax evasion, but, simply, for a little privacy. But should you, as the reader I quote above suggests, write Panama off entirely and move on…say to Andorra? No. That’d be throwing the retirement haven out with the information treaty.
The fact that Panama’s banks are no longer able to tell the IRS to go jump in the Canal when they inquire about account-holders’ details doesn’t affect the country’s status as a tax haven (this is 100% intact). It has no effect on the advantages of starting and running an international business here (Panama remains our #1 doing-business haven).
And it has nothing to do with the experience of living in this country, as a retiree or otherwise.
First World health care, developed infrastructure, services, and amenities in the capital city, an affordable (even dramatically so, depending where in the country you decide to settle) cost of living, eternal summer, the world’s best program of special benefits for retirees, established expat communities, user-friendly options for establishing foreign residency, political stability…
Plus a great diversity of lifestyle options, from cosmopolitan Panama City, with its five-star restaurants, nightclubs, and high-end shopping malls, to cooler climes in Boquete and any kind of beachfront you could be in the market for, from Caribbean to Pacific, island to mainland, developed to untouched.
Panama is a melting pot of cultures and populations, meaning life here is diverse not only geographically but culturally, as well.
And always improving. This little country is making tremendous investments in its future, and the mega public works projects currently under way are keeping the economy buoyant and expanding.
The current president, millionaire businessman Ricardo Martinelli can seemingly do no wrong. He took office in July 2009, and the latest November poll shows him with a combined approval rating 73.1%, a support level for which Barack Obama could only pray.
Bottom line, the sun is still shining, the future still bright.
Narrator: Welcome to the Holistic Survival Show with Jason Hartman. The economic storm brewing around the world is set to spill into all aspects of our lives. Are you prepared? Where are you going to turn for the critical life skills necessary to survive and prosper? The Holistic Survival Show is your family’s insurance for a better life. Jason will teach you to think independently, to understand threats and how to create the ultimate action plan. Sudden change or worst case scenario, you’ll be ready. Welcome to Holistic Survival, your key resource for protecting the people, places and profits you care about in uncertain times. Ladies and gentlemen, your host Jason Hartman.
Jason Hartman: Welcome to the Holistic Survival Show. This is your host, Jason Hartman, where we talk about protecting the people, places and profits you care about in these uncertain times. We have a great interview for you today and we will be back with that in less than 60 seconds on the Holistic Survival Show. And, by the way, be sure to visit our website at HolisticSurvival.com. You can subscribe to our blog which is totally free, has loads of great information and there’s just a lot of good content for you on the site. So make sure you take advantage of that at HolisticSurvival.com. We’ll be right back.
Narrator: Here’s your chance to catch up on all of those Creating Wealth shows that you’ve missed. There’s a 3 book set with shows 1 through 60, all digital download. You’ll save 94 dollars by buying this 3 book set. Go ahead and get these advanced strategies for wealth creation. For more details, go to JasonHartman.com.
Interview with Kathleen Peddicord
Jason Hartman: It’s my pleasure to welcome Kathleen Peddicord to the show today. She is the founder of Live and Invest Overseas. She has a long history in the business of publishing and teaching people about living abroad and all of the different destinations around the world that may be intriguing to you from an adventure perspective, a cost of living perspective, and a tax haven perspective if I may say, business perspective, etcetera. So I think you’ll really enjoy this interview with Kathy and welcome to the show, Kathy. How are you?
Kathleen Peddicord: I’m good. Thank you very much for inviting me to speak with you today.
Jason Hartman: My pleasure. So you’re talking to us from Panama City. You’re in Central America. And tell us what’s going on in the world of living and investing overseas?
Kathleen Peddicord: Well, in very exciting news, not very good news but very exciting recent news here in Panama is that the country signed an information exchange treaty or agreement with the United States. This was a big deal because Panama has been one of the top jurisdictions around the world. From a lot of points of view it’s a top place to think about retiring, about living, starting a business, investing. But as well it’s been a top banking haven. And this has changed with the signing of this agreement which really I think probably means the end of the banking industry in Panama. So that’s the bad news from down here in Panama and it’s the news on everyone’s minds. We had a conference here earlier this month and it was a conference on going off shore. We called it our off shore summit. So we were talking about all these issues to do with tax havens and banking overseas and asset protection and asset protection strategies, etcetera. So it was literally the day before that conference began that Panama signed this agreement with The United States. So it was a very much hotly debated topic throughout the conference.
And it is a shame from my point of view and a lot of other people’s point of view that Panama did this. But to keep things in perspective, Panama remained really a very appealing place still from a lot of points of view, especially from the point of view of a place to live or retire. And I would say that Panama is probably the best place in the world right now to start a business, an international internet business for example.
Jason Hartman: So now can you be a little more specific on the banking issue? Because I know that the Obama Administration has really been going after…I mean there was the big thing earlier this year with UBS and the Swiss bank accounts and so forth, and I heard that after January 1st of 2011 Americans will not be able to open foreign bank accounts?
Kathleen Peddicord: No. That’s not true. It’s not that you can’t open a foreign bank account. It’s that the reporting requirements are becoming more rigorous and you better be very careful that you’re following them to the letter of the law. But, in fact, it’s always been the case that had to report a bank account in another jurisdiction, an off short bank account. So the fact that you need to report an account is not the same as saying that you can’t have one. The trouble, though, is because the United States has been taking this issue up so aggressively and causing trouble and making things generally difficult for havens with a history of supporting bank secrecy and banking privacy like Switzerland, they’ve been making things so difficult for banks and the financial industries in general in those jurisdictions. Those jurisdictions have gotten to the point, in some cases, including in Switzerland, of saying “Okay, enough. We just won’t take Americans as clients. It’s just not worth the hassle.”
I think this is important for Americans to understand. It is not at all illegal for you to have a bank account in another country. The trouble from a practical point of view is that it’s becoming harder and harder to find a country that will open a bank account for you. Because Switzerland, to give one example, has said they just won’t anymore. They don’t want any more American clients.
Jason Hartman: It’s just not worth the hassle. One of my colleagues is very interested in Belize for example. And he said if you want to open a bank account in another country, you better do it before January 1st. So that’s not the case. I mean is it that if you do it before January 1st, you don’t have to do the reporting?
Kathleen Peddicord: All along you’ve been meant to be reporting any account in another country. And a recent change I think within the past couple of years was that in addition to simply reporting the existence of an offshore account, you had to report the highest account balance throughout that year, that proceeding year. So if you have an account in Panama today and at one point during the year it had a balance of $100,000, that was the highest balance it had, you had to report that bank account in Belize – there’s a certain form that the IRS provides for this. And then you had to indicate that at one point during the year it had as much as $100,000 in it. From an international banking point of view, it really isn’t that anything is changing for Americans. There are other laws coming into effect, other things changing that I think have some dire implications, looking ahead to say 2013, but not to do with just the simple fact of having a bank account in another country.
Jason Hartman: Since you left that out there and we’ve got a lot of stuff to cover but do you want to just mention some of those dire things coming up real quickly.
Kathleen Peddicord: Yeah. The trouble is the stuff gets complicated very quickly. I’ll try to address it as succinctly as I can, but starting in 2013 the United States is going to require that anytime an American wires money from a US bank to a foreign bank or from a foreign bank to a US bank, any time a US bank is involved in a wire transfer by an American, that that bank has to determine if tax is owed on that money or not, if it’s pre-taxed or post-tax money.
Jason Hartman: Oh my gosh, what a giant burden.
Kathleen Peddicord: There’s no way for a bank to make that determination. There’s no way a banker can know that. And I’ve spoken with many bankers in many jurisdictions and they agree there’s absolutely no way for us to know that. So what we’ll have to do, what this means in practice, is that all banks will simply have to start withholding this tax at the point of the wire. It’s a 30% tax. It’s a withholding. It’s not a new tax. And in theory, you should be able to get it refunded, rebated, returned, when you file your tax return for that year.
But say in January of 2013 you sent a wire to Belize. Well, the US bank is meant to decide is that money taxable? And if it is, they’re meant to withhold 20%. Now, that’s January. So the next year, by the time you file your taxes for that year which will be a year later, you presumably theoretically can get that 30% back. But imagine the burden that is now on the banking industry, the global banking industry, to deal with this.
And no one even understands how to deal with it in the banking industry. But the poor American who has, for example, saved up a few hundred thousand dollars to buy the beach home of his dreams in some overseas retirement haven, now when he goes to send that money, to wire the money to make the purchase, he’s at risk of having 30% of it chopped off the top. And if you negotiated to buy a house for $300,000, well the seller is going to want the $300,000, not $300,000 minus the 30% that the banks are going to withhold for the IRS, which means you’re going to have to make up that amount in advance while the IRS takes your 30% and holds onto it. So we’ve spent a lot of time talking about this. It’s part of the new HIRE Act that was enacted this past year. And it’s a crazy thing because it doesn’t have anything to do with the point of the act itself, of the piece of legislation. But it was bundled in there. So these were the kinds of things that we talked about during this offshore summit.
Jason Hartman: Amazing. It’s getting really tough. I think, Kathleen, the message here is that if you want to do stuff internationally, if you really want to be a citizen of the world and maybe diversify your wealth, the thing to do is really act quickly, isn’t it? Because the direction we’re going in…
Kathleen Peddicord: A friend of mine who spoke at the conference, he said “If you’re standing on a railroad track and you can see the freight train coming at you from a few miles down the track, well you ought to be able to get out of the way and not get hit.” And he said “The freight train is coming. We’re standing on the track and if you look down, it’s coming. So more or less you’ve got about 2 years before the terms of this HIRE Act for example in 2013 come into place.
Jason Hartman: Amazing. Well, let’s talk globally if we could about the world. Maybe we’ll just talk about some different destinations and see what your take on them is. I’d like to start if we could because when I read your newsletter and I read other newsletters and so forth about the international climate and where the great real estate deals are and etcetera, it seems mostly focused on Central and South America. Why is that?
Kathleen Peddicord: It’s because that is the part of the world that’s most easily accessible. It’s close, it’s easily accessible, there’s a lot of sunshine. Ad for the most part, you can live for less than you can in the United States. So it has all those big pluses going for it. And that’s not to say that there aren’t other parts of the world, Europe and Asia, where there’s a lot of sunshine, where there’s a great lifestyle where you can live very cheaply. In fact, you can live cheaper right now in Asia than in Central or South America, but it’s halfway around the world, so that’s a tradeoff for many people.
Jason Hartman: And so when you say that, you’re addressing largely US centric or North American centric audience probably, right?
Kathleen Peddicord: Exactly, excactly.
Jason Hartman: Now, Kathleen, within Central and South America, you’re based in Panama. Just a quick snippet on why you like it so much. I’ve got several countries and destinations I’d like to ask you about.
Kathleen Peddicord: Panama we like because for all the reasons I just said, it’s nearby the United States. It’s a travel hub. It’s very accessible from all over North America but it’s also a good jumping off point for travel to Europe, even Asia, and certainly throughout Latin America. It’s sunny, great weather, summer year around, lots of beaches, great diversity of lifestyle. There’s Panama City which is a city without compare in the region. There’s no other city in Central America that compares to Panama City in terms of infrastructure, banking infrastructure, telecommunications, etcetera. It’s affordable. It’s not super cheap. It’s not as cheap as it once was, but it’s certainly affordable. And for us, two big important reasons why we’re here ourselves, it is really the best place to run a business because of the infrastructure, because of the English speaking educated affordable labor pool, and because of the tax advantages, both corporate and personal.
Jason Hartman: Now, last time I was in Panama, I remember looking at properties there and so forth, and they had these fantastic deals where you could get a 10 or even 20 year exemption from property taxes?
Kathleen Peddicord: That’s true. The property tax exemption law, it’s kind of funny. It’s almost a joke here because it’s been renewed and renewed and renewed and reconsidered and then renewed. And so, yes, but it in fact did finally end last year, but there are still many properties available with some time remaining on the property tax exemption. So, for example, the property, the condo or what have you, it would carry the exemption with it. So if someone bought a place with a 20 year tax exemption 2 years ago and you buy it from him today, you inherit the remaining 18 years of exemption.
Jason Hartman: Ah, okay. Oh, well that’s pretty good. Now, I’m wondering when that exemption went away for say new properties or properties that didn’t have that exemption with him because it goes with the properties you mentioned, did that have a chilling effect on values and real estate market?
Kathleen Peddicord: Not really. Property taxes aren’t that big of a deal here anyway, so it didn’t have a huge effect. But the market here in general, just coincidentally, but not at the same time, has changed dramatically. So the real estate prices have fallen over the past 2+ years. And Panama City especially have fallen probably 25%, in some cases even more in the past 2 years in Panama City. And the market has slowed dramatically. But this is a function of what’s going on in the world and in general and really not anything to do with the property tax situation.
Jason Hartman: Kathleen, what about Argentina? That’s the other big one I always hear people talking about and I’m always reading about it.
Kathleen Peddicord: Oh. Argentina is a great place. The trouble in Argentina right now is it’s experiencing very high rate of inflation. And so the cost of living in Argentina has gotten much more expensive over the past 2 to 3 years. And if inflation continues, frankly, the cost of living could become outright expensive in the next few years. That said, right now, because remember cost is a completely relative thing, cost of living. And so while I say there’s been a great rate of inflation and the costs have increased in the past couple of years, it would start it at a very low point.
2 to 3 years ago, the cost of living in Argentina was one of the world’s best bargains until the rate of inflation has increased the cost of living, but not to the point where you would go down there and be struck by how expensive it is. It’s just not as cheap as it was. But, again, the inflation continues. The fundamental thing about Argentina to remember is that it’s a basket case of a country and I believe it always will be. I think that’s almost part of Argentina’s charm and I think the Argentinians like it that way. But if you just hold that aside, Argentina has so much to offer. Buenos Aires is such a great city. And then Argentina is huge and has such diversity of geography and many beautiful areas and cities.
Jason Hartman: What about Brazil?
Kathleen Peddicord: Brazil is a great choice for living at the beach, great cheap choice for living at the beach. I’m not very bullish on it from a personal private real estate investor and I think it’s just too complicated of a market for the little guy to go into. There are exchange controls. It’s very difficult to get a bank account. The currency fluctuates always. It’s always moving. So there are just a lot of risks for the little guy. I’m not a proponent of going and investing in a condo on the beach, thinking that you’re going to make a lot of money that way. I think that there are just too many risks. And, frankly, it’s a very hassle filled investment for the potential return. But, on the other hand, again, Brazil has beautiful beaches and it’s just a really affordable great place to escape to the beach.
Jason Hartman: Let’s move up a bit and I want to ask you about Belize since we mentioned it before.
Kathleen Peddicord: I’m a big fan of Belize. Belize is a tiny little country that nobody paid any attention to forever and then Temptation was filmed on one of its little Caribbean islands and suddenly people thought this was just a paradise escape in the Caribbean. And in many ways it is. Belize has something else going for it which is, that it’s still intact, a very strong bank secrecy law and tradition. And so Belize is one place where an American can still open bank accounts in a jurisdiction that supports banking secrecy. So I do recommend Belize from that point of view. And the reason it so far has been able to maintain its bank secrecy status or position is because it’s so under the radar, because really it’s so small and there’s not much money at stake in the scheme of global banking and nobody just pays it any attention. That could change if too many people figure out that it’s just an undiscovered banking haven. And if too many people cop onto that and more money starts to flow through Belize, then The United States government might start paying attention. And, in the meantime, Belize is just a great place to be, a great place to opt out of 21st century life.
Jason Hartman: Right, okay. So it’s sort of the Club Med vacation where you really get away from it all. When you were talking about this stuff, Kathleen, what about the real estate markets and these various places? We sort of talked about the banking climate, the business climate, and you did mention it when it came to Panama. Of course Argentina’s got the inflation. Are we at the right time in the cycle of the Belize market for example?
Kathleen Peddicord: I think that Belize is a good place to invest in land. And I’m very bullish right now on investing in land. But now I’m not the only one. That’s not really a new idea, but I think we are at the time in the cycle for investing in land, especially productive land, and that’s something that Belize has at very, very low prices. In the interior of the country, Belize is so tiny it’s funny to realize that it’s in fact two very different places geographically. It’s the Caribbean coast, an island, and then inland it’s beautiful rainforest covered mountainsides with rivers and waterfalls and less jungle. And in that part of the country, there is a lot of land available for sale, very undeveloped and very cheap and very fertile. So I do recommend Belize from a land buy point of view.
Jason Hartman: And when you say productive land, do you mean farm land?
Kathleen Peddicord: Farm land, exactly. So to grow all kinds of citrus products, fruits, hardwoods, timber is a big product in Belize and they raise cattle as well.
Jason Hartman: Right, right, interesting. Costa Rica, I was just there two months ago, and my impression of Costa Rica is it’s sort of like everybody discovered it and the opportunity has disappeared to some extent. What do you think?
Kathleen Peddicord: I would agree completely. I first recommended Costa Rica. It was one of the first countries I wrote about and recommended when I started my career which is more than 25 years ago covering this. And back then, Costa Rica made a lot of sense for one important reason: It was so unbelievably cheap. And they were in the business of attracting foreign retirees at the time. They had their famed Tensionado program full force and they were working very hard to make it as easy and attractive as possible for foreign retirees, especially American retirees to relocate there. It was very undeveloped and the coastlines, the country itself, very undeveloped, the infrastructure very, woefully undeveloped, the roads in bad state of repair, the bridges collapsing. But you didn’t mind all that because it was so cheap. But then what happened was a tremendous rate of inflation in every regard, in cost of living and especially in real estate, especially in the cost of beach front real estate. So throughout the 80s and 90s, the cost of real estate in Costa Rica just appreciated at dramatic rates. The cost of living went up and up. The Costa Ricans decided, alright, we’ve got enough American retirees. We don’t want anymore. We’re tired of all these gringos among us. And I was there in Costa Rica recently as well. I think that these days you get almost an anti-gringo feeling in the country that the chicos are kind of tired of the gringos among them and they’re happy for you to come and spend your money, but then they’d really like you to go home. So you don’t feel so welcome there. It doesn’t feel so friendly anymore. The Costa Ricans have become a little jaded with their whole experience of the past 30 years. The place is still expensive, far more expensive than Panama for example. Yet the infrastructure hasn’t improved at all. The country of Costa Rica didn’t build a new road for almost 40 years until last year.
Jason Hartman: I’ll tell you something. I could not believe how bad the roads are there. I mean, literally, Kathleen, pot holes the size of a Volkswagen Bug.
Kathleen Peddicord: Exactly, yeah.
Jason Hartman: It’s unbelievable.
Kathleen Peddicord: So then when it’s not so cheap, you look around and thing, geez, there’s no point here. If it’s cheap, you put up with a lot. And the cheaper it is, the more you’ll put up with. But if it’s not cheap, then it’s also not nice. Well, you want to move on.
Jason Hartman: We’ll be back in just a minute.
Announcer: What’s great about the shows you’ll find on JasonHartman.com is that if you want to learn about investing in and managing income properties for college students, there’s a show for that. If you want to learn how to get noticed online and in social media, there’s a show for that. If you want to know how to save on life’s largest expense, there’s a show for that. And if you’d like to know about America’s crime of the century, there’s even a show for that. Yep, there’s a show for just about anything, only from JasonHartman.com or type in “Jason Hartman” in the iTunes store.
Jason Hartman: Let’s jump on a jumbo jet here if we could and let’s go across the ocean and let’s talk about Europe. Anything you want to talk about, but France I’ve heard about these lease option programs. Eastern Europe of course has kind of had its run up and its crash. Are there good opportunities in Eastern Europe or west? Anywhere you want to talk about, in Europe, Ireland, whatever.
Kathleen Peddicord: Oh, Ireland, well there’s a place to start. Ireland is a market that I pay attention to because we live there. When I left the states about 13 years ago and we moved first, my family and I, to Ireland, we lived in Waterford for 7 years, and we were there at the height of the Celtic Tiger. So we were there in the actual boom years when this little country was just a wash in money. People were making so much money so fast that they didn’t know what to do with it. There was so much construction. Property prices were ridiculous. In some parts of the country, they were appreciating it at rates of 100% a year for year on year on year. It was craziness. And the whole time we were there I was thinking this can’t last because it doesn’t make any since. There’s nothing in Ireland. There’s no industry. Ireland has no economy of its own. The Celtic tiger, even my Irish friends would admit, it’s not a Celtic Tiger, it’s an American Tiger. It was just an imported part of the American boom because they lured American companies to set up call centers and to invest otherwise. That’s why we were there. We moved our business there as part of an investment program that the Irish government was offering at the time. And so we took advantage of tax incentives and other benefits. So the country was importing all of this investment, but still not creating any economy of its own. Then it got very expensive. When we moved there, the cost of doing business and of labor was affordable if not cheap. It accelerated quickly. And by the time I left, the cost of doing business in Ireland was very expensive. We weren’t the only ones to notice that. So the other big companies who had moved there to take advantage of the business benefits were moving on, even back then. So this would have been 5 or 6 years ago the big companies were beginning to move on and they moved in large part to Eastern Europe and set up their call centers and factories in Eastern Europe where the call center business was much lower. And so then it was watched ever since we left Ireland and waited because you just knew it couldn’t continue and it has unraveled in just a cataclysmic way really. The country has imploded. I have good friends there who if the stories they tell are hard to believe, the houses that I know, for example big old men are houses or even the castles in Waterford that I knew when we were there, that traded hands for millions of euros when we were there, now can’t be sold for hundreds of thousands of euros. There’s just no one buying anything. So Ireland, it would seem, could be heading towards the point – because the market is still falling – but I think it could be headed to the point where it would be a buy. Because in another year to two years, we’ll likely be so cheap that especially if you just have always dreamed of a place of your own on the Emerald Isle, I would say that in another year to two years would be a really good time to start looking. The place I recommend most strongly is France. And I lived in Paris for 4 years and loved it and eventually we’ll go back to Paris and hope to live there more or less full time again at some point. But Paris is not a bargain destination. It doesn’t have to be super expensive but it’s not a bargain, but southwestern France is. So the region around Long Duck and West is very affordable. I have a good friend who’s living there with her family. And they live on a budget very comfortably and it’s just quintessential French country life and it really isn’t expensive at all.
Jason Hartman: And with France, though, anti-American feeling still or what do you think?
Kathleen Peddicord: No. I would say not at all. And we never experienced anything like that in Paris. And if you were going to experience that, I guess it would be in Paris. They have a reputation I guess for being snobbish and elitist, as you suggest, for not really liking Americans. I don’t think those things are true. I think that Parisians are very discrete and careful and so extremely well-mannered and proper that their behavior is interpreted as rude. But they’re not at all in my experience.
Jason Hartman: What’s going on with Estonia, Romania, Latvia, places like that? I know Romania was really being promoted for a while there.
Kathleen Peddicord: Yeah. And I have a friend who’s doing a very big development, a ski resort development in Romania. And he’s struggling because markets generally around the world are so down in the past couple of years and Eastern Europe included. So if you are looking to buy in that part of the world, I do think that there are very good buys to be found in Romania, Poland for example, because prices had started to appreciate before the kind of global fall-off, and now are stagnant or down and certainly very soft. And in all of those kinds of market where there just isn’t much activity at this point, the sellers would be very negotiable.
Jason Hartman: Anything else in Eastern Europe you want to mention?
Kathleen Peddicord: Not in particular. No. Frankly, we haven’t been paying that much attention to that part of the world, except for Romania. And I’m hoping to be able to visit in 2011 because I do think Romania especially is interesting from an investment point of view.
Jason Hartman: Okay, great. And do you want to talk about Asia a little bit?
Kathleen Peddicord: Asia is the world’s big bargain right now. Asia is cheaper than Latin America. Latin America grows more and more expensive. There’s a lot of inflation in this part of the world and depending on the country. And the standard of living is improving and the cost of living along with it in much of Latin America. Asia is still very cheap and I have good friends who kind of thought well they’re retired. They’ve been retired for 25 years but not retired to any one place specifically. They, for 25 years, have been moving around as their interest and their imaginations drive them, but as well kind of going where the living is good and very cheap. And so when they first retired, for example, they went to Paris and they lived very well and very cheaply. Then they came to Latin America and they spent 15 years or so bumping around Latin America, especially Argentina was a place they spent a lot of time when Argentina was very cheap. But they had spent the past few years, like say 3 or 4 plus years, in Asia, especially in Thailand and India. Those are places, not in Bangkok for example and not in say Kuala Lumpur, not in the big developed cities, but in more remote cities and certainly outside the cities, in that part of the world, say in Thailand, you could live very comfortably. It would be a very basic lifestyle but comfortable on well under $1000 a month.
Jason Hartman: That’s amazing. So is Thailand really the place to consider in Asia or should people be thinking about Malaysia, China, or are there any other places in KL or is it really Thailand? Sort of the good bargain there.
Kathleen Peddicord: It depends on how exotic you’re up for because Thailand is a good cheap choice and it’s kind of a well-paid expat haven. For decades, Americans and others have been spending time in Thailand so that there are established communities. That said, it’s really not possible for a foreigner or foreign American to get a full time residency permit for Thailand. So unless you want to do the border run thing which is to leave whenever your visa expires, go somewhere for three days and then come back to Thailand and start over on a tourist visa, unless you want to play that game, it’s not a long term choice. It’s a place to go for a few months a year and then move on somewhere else. The one place in Asia where a farmer, including an American can come a full time residency permit relatively easily is Malaysia. They have a program called Malaysia, my second home. And they make it very user friendly for an American to get a full time legal residency permit to live there.
Jason Hartman: Well how does, summing everything up…First of all, just before we go here, I’ll ask you is there any place that I didn’t ask you about that you’d like to mention in particular?
Kathleen Peddicord: Oh, yes. In fact, there is. A place that I’m very, very keen on and it’s where I’m going to spend New Year’s, we’re going to spend the first week of the year there, in Medellín, Columbia. And Medellín is just the most beautiful, charming city I’ve discovered in a long time. I was there for the first time this year. I’ve been wanting to go for years because friends have been telling me how nice it is. And it really is just disarmingly impressive. It’s also very affordable. Real Estate is a super bargain. Real Estate prices in Medellín remind me of prices in Panama City 10 and 12 years ago when I first started traveling here to Panama City. It’s also very safe. I know you say Medellín, people think drug war.
Jason Hartman: They think kidnapping. That’s what they think.
Kathleen Peddicord: Yeah. And it’s not the case. It’s a very safe place. I spent a lot of time there this year traveling around with my husband but also on my own and I’ve never felt uncomfortable, much less unsafe. You’re kind of blazing a new trail. You’ll find that there aren’t many Americans there but that the people of Medellín will welcome you and they’re very happy to discover you and to chat with you if you can chat with them. But there are some downsides. Because it’s so undiscovered by outsiders, no one speaks English to speak of. So you really have to have some Spanish to get around. And it’s not a user friendly place, because it is just so off everyone’s radar. And, more than that, people have avoided it consciously. So for eventful things like residency permits and opening a bank account, these things are very difficult. But you can either just ignore them by not trying to move there full time, a residency permit only becomes an issue if you want to live there year around – so don’t, just go now and then. And that’s our idea, we’re hoping to buy an apartment there so that we can go over from Panama City regularly and just go back and forth.
Jason Hartman: Fantastic. Well, you are really a wealth of information, Kathleen, and it’s just awesome to hear all this. Maybe, to sum things up, why is it that an American, for example, or a Canadian, why is it that someone in a highly developed North American country would want to consider this international perspective? Why would they want to consider looking overseas? I mean what are really some of the drivers for this type of thing? Maybe people listening haven’t considered it before and you’re talking to them.
Kathleen Peddicord: A big one is cost of living. And this is a tough one at the same time. It’s possible to live a very comfortable, even a well-appointed life in a lot of very nice places around the world on a budget. But there are trade-offs. You can move to a beautiful spot on the ocean, on a river, in a colonial city for example, and live a very comfortable life on a budget much smaller than you’re probably used to wherever you’re living in The United States right now. But there’s gonna be no Wal-Mart down the street. Dominoes isn’t going to deliver at 10 o’clock at night if you decide you want a pizza. You may not get cable TV. There are definitely trade-offs. So I like to point that out because I talk about how cheap it can be to live. To say you can live in parts of Thailand in well under $1000 a month, it’s true, and I know people doing it and they’re very happy. And they have everything they need, but they might not have everything that sometimes they want. They don’t have dominoes and Burger King and Wal-Mart for example. So the cost is an important issue and as the baby boomer generation gets ever closer to actual retirement, then you’re really panicked, in fact, wondering “Alright, I had a bigger nest egg over the past couple of years. I maybe lost some of it in the form of losing X value of equity in my home or investments haven’t worked out, things have gone kind of south, so now my nest egg is smaller than I thought, maybe much smaller than I thought it was gonna be. Can I possibly afford to retire in the United States?” Baby boomers are looking at not 10 years of retirement life, but 20 or more years of a couple of 3 decades of retirement. They’re relatively young and healthy at this stage of their lives. So cost is an important one. But I like to balance that immediately with quality of life and experience of life because not only does moving overseas maybe reduce your cost of living dramatically but it increases your quality of life in ways that you can’t even expect or predict. Your life just becomes very adventure-filled and full of the unexpected. And at this point in their lifetime, baby boomers not only look around and think well can I possibly afford to retire on my nest egg, but what is that retirement going to look like? What am I gonna do for 20 or 30 years? And when you start to think that way, you realize “Well, geez, I’d like to do something new.” And you look around and think “Well, maybe there’s something new and different and more fun somewhere else.” So it’s a phase of life where you can, rather than just kind of living out your life, you’re launching a whole new life, it can be remaking yourself entirely. Then there’s another side to it, which some people are keen to get out of the United States right now for more kind of political reasons, more ideological reasons. They’re unhappy with what’s going on with things like health care and new legislation aimed at restricting American’s rights and freedoms to deal with managing their own financial future for example. And that’s a growing issue and it’s very American to think you can’t tell me what to do and if you try I’m going to go somewhere else. And so I think that plays for a lot of Americans right now too.
Jason Hartman: Yeah, no question about it. Well, Kathleen, where can people find out more? Give out your websites if you would.
Kathleen Peddicord: My group is called Live and Invest Overseas, so it’s LiveandInvestOverseas.com. And if you go there, I publish a free daily e-letter and talk about all these things we’ve been talking about, all these topics, all these countries and many others. And you can sign up on the home page if you’d like to hear more about these ideas.
Jason Hartman: Excellent. Well, Kathleen, thank you so much for sharing all of this information with us. We really appreciate having you on the show and we’d love to have you back. You’re like an encyclopedia of international affairs.
Kathleen Peddicord: Well, thank you very much. I appreciate being invited and I’ll look forward to talking to you again.
Jason Hartman: Thanks, much. Bye-bye.
Kathleen Peddicord: Alright, thank you.
Narrator: Now’s your opportunity to get the Financial freedom report. The Financial Freedom Report provides financial self-defense in uncertain times. And it’s your source for innovative forward thinking investment property strategies and advice. Get your newsletter subscription today. You get a digital download and even more. Go to JasonHartman.com to get yours today.
Thank you for joining us today for the Holistic Survival Show, protecting the people, places, and profits you care about in uncertain times. Be sure to listen to our Creating Wealth show, which focuses on exploiting the financial and wealth creation opportunities in today’s economy. Learn more at www.JasonHartman.com or search “Jason Hartman” on iTunes. This show is produced by The Hartman Media Company, offering very general guidelines and information. Opinions of guests are their own and none of the content should be considered individual advice. If you require personalized advice, please consult an appropriate professional. Information deemed reliable but not guaranteed. (Top image: Flickr | Hector Garcia)
* Read more from Holistic Survival
The Holistic Survival Team
Transcribed by Ralph