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CONSIDERING A MOVE TO ANOTHER COUNTRY?

This past year I’ve been getting a lot of e-mails from readers who ask about leaving their native land. Unlike a Level Three Escape, where you’re on the run, this chapter is for those of you who currently have no serious problems, but are just fed up with such things as the Patriot Act, Homeland “Security,” and/or the current or incoming administration.

WHERE MIGHT YOU MOVE TO?

No easy answer to this one, folks. How much money do you have put away? Will you have to work in the new country? Do you speak the language of the new country? If not, are you willing to learn? Are you allergic to extremes in the weather? Worried about crime? Beautiful scenery a must? Good air travel connections? Do you have children and if so, what about schools? Are you sure you’re familiar with all the laws that apply to expats?

Want to hear a horror story? One of my entrepreneurial clients I’ll call Harry moved to Europe in 2005. He started up a small company, sold it, and started up a second company, which was immediately successful. Within months, hundred of thousands of euros were flowing into and out of his bank accounts. A local accountant helped Harry file U.S. tax returns, and he dutifully reported—as required by law—all of his overseas earnings. In the fall of 2011, he returned to the states and only then did it come to light that one tiny detail had been overlooked.

TDF 90-22.1

Treasury Department Form 90-22.1 must be filed every year if you have an interest in any foreign bank accounts that at any time of the year are worth $10,000 or more. This report is separate from your income tax return. The penalties for not filing it are brutal. Harry was faced with a total penalty of more than $800,000, and it must be paid.

Keeping Harry’s experience in mind, I’ll now mention several of my favorite places.

READ THIS FIRST

Do not be deceived when you read about living well in a foreign land on as little as $1,000 or $1,500 a month. Sometimes the prices date back to previous years, sometimes it’s what the natives pay, and sometimes it just pure hyperbole.

Exception: Our good friends Chad, Gretchen, and their son, Chase, work as volunteer missionaries in a small town along the Ecuadorian coast for ten months each year. The other two months they come back to the states, working long hours in a janitorial business that allows them to save $10,000 in that short time—more than enough to return to Ecuador for another ten months because they squeak by down there on $800 a month. That even includes keeping an old Land Cruiser running. However, the village is remote, the climate along the coast is hot and humid, and they live with the bare basics. Don’t expect to imitate their lifestyle.

PERPETUAL TOURIST (PT)

If you have a fixed income, or if you can do business from anywhere via the Internet, then the most private way—by far!—is to travel abroad as a perpetual tourist. The limits of how long you can stay in a country as a tourist are often just ninety days, after which you must leave for at least ninety days, so you need to plan ahead. For example, you might enjoy Baja California Sur in the winter, Cuenca, Ecuador, in the spring, San Miguel de Allende, Mexico, in the summer, and Las Palmas de Gran Canaria, Spain, in the fall.

LEARN THE LANGUAGE

I cannot emphasize this too strongly. The biggest single mistake expats make, no matter what country they move to, is to not learn at least the basic phrases in the language of their new home. Expats from the UK are the worst, but many Americans aren’t far behind them. I once asked a world traveler from London, who’d lived in the Canary Islands for more that twenty years, why he had never taken a single lesson in the Spanish language.

“No need, old boy. If some clerk or agent does not understand me, I just step back, look around, and say in a loud, clear voice, ‘Does … anyone … here … speak … English?’”

WHY CHOOSE SPANISH?

Well, for one reason, it is the language of Mexico, Central America, South America (except Brazil), and Spain—some of the prime places for setting up a new home. Further, I know of no language easier for an English-speaking person to learn. Do you know why there are no national spelling bees in Spanish-speaking countries? It’s because words in Spanish are spelled exactly as they sound. Even kids can correctly spell words they hear for the first time. Therefore, be sure to learn phonetics at the very beginning, as we did when we moved to the Canary Islands. Within a few months I could read most anything out loud and my listeners could understand it, even if I could not!

BAJA CALIFORNIA SUR, MEXICO

Most of Baja California Sur is peaceful, far from the drug wars in the state of Sinaloa on the far side of the Sea of Cortez. My favorite small town is Loreto, on the inland coast (Sea of Cortez). It’s a relatively clean town with a great airport (nonstop flights to/from Los Angeles) and a terrific marina just to the south. If you like deep-sea fishing, this is the place to keep your boat.

However, if you wish to be closer to the American big-box stores and/or an expat community, consider La Paz, the capital of Baja California Sur. This is a cultural center having a university, a theater, and a number of museums. The per capita income is among the highest in Mexico. North Americans have not yet overrun La Paz, although my guess is that there are several thousand expats here.

Winters in Baja California Sur are great, but the summers are hot. If you can’t stand prolonged heat, head for:

SAN MIGUEL DE ALLENDE, GUANAJUATO

This small city (80,000) is in the central highlands of Mexico, between Leon and Querétaro. If you must have heating, air conditioning, and a central location, then your rent will be similar to that in the United States. Prices drop dramatically when you move to one of the small villages thirty to forty minutes away from the city, but once again—few Americans are willing to do this. (Our friends Alex and Laura are Mexican nationals who spent seventeen years in the states before returning to Mexico last year and settling down in a village about a half-hour out of San Miguel. They live in an old motorhome alongside a relatively new home they use as an office for an Internet business. The rent is just $90 a month, but Alex himself admits it’s a steal, and it was very difficult to find.)

In San Miguel, you’ll find Office Depot, Starbucks, Blockbuster, and McDonalds. In Celaya (forty-five minutes away) you can visit Costco, Sam’s Club, Walmart, and Home Depot. There are some 10,000 part-time or full-time North American expats in this small city—quite a number of them painters, sculptors, and writers.

CUENCA, ECUADOR

Guayaquil, on the Pacific coast, is Ecuador’s largest city, with a population of 2.3 million and another 800,000 in the metropolitan area, but do not move there—too big, too dirty, and too much crime. Instead, check out Cuenca (population 350,000), a much quieter, safer, and cleaner city up in the highlands. (The September 2009 edition of International Living, named Cuenca the world’s number-one retirement destination, although it was a bit of a puff piece.)

Days are generally warm the year round, but not hot. Nights are cool enough so that sweaters or jackets are needed. Below is an e-mail from Mark and Ruth, Spanish-speaking friends who moved from Texas to Cuenca last year:

Living here is very nice. It’s very peaceful. We never feel afraid. The buses only cost 25 cents. They also use a swipe card that works like a debit card. You pay $1.70 for the card and then load it with whatever you want, $1, $5, $10. Then you don’t need change for the bus. The Ecuadorian embassy has info on retiring here. There are a lot of gringos moving/living here. Also, they are building new condos everywhere.

I asked Mark what he currently pays for their furnished apartment, and how much an upscale condo would cost, with a great view.

We pay $375 for a 2 bedroom/2 bath in a decent part of town (we pay our own utilities). Some of our local friends pay $300 or less. However, the majority of retired Americans here pay $500 or $600 a month. We looked at a beautiful condo yesterday. Called “Linda Vista,” it had a great view of the city, price was $150,000. That was for a lower floor, the ones higher up were around $175,000. All were about 1,400 square feet.

As for medical expenses, Mark writes:

Most doctors here charge $25–35 for an office visit. An American neighbor of ours got her gall bladder ultrasound here and it cost 1/10 of what they wanted for that in the states. I got an abdomen scanned in Peru for $330 and in the states they wanted over $3,000.

Friends in Spain tell me that many Spaniards fly to Ecuador to get cosmetic surgery done here, as the work is said to be excellent and prices cheap.

Ecuador uses the U.S. dollar so no need to worry about calculating exchange rates. There are currently about 1,000 expats in Cuenca. The general consensus is that the cost of living is about half of what they paid in the United States, Canada, or the UK.

THE CANARY ISLANDS, SPAIN

In 1959, we left the Midwest and moved to the Canaries (two Spanish provinces off the coast of Morocco). At that time it was a great place to raise children. Under Generalissimo Francisco Franco, prices were low, girls were chaperoned until married, drugs were almost nonexistent, and my wife and daughters could walk the streets of Santa Cruz de Tenerife at midnight in perfect safety.

When Franco died in 1975, all that changed. Elections were held and the Socialists, desperate for votes, promised the young people they would not be punished for using small amounts of drugs. The Socialist Party won and all Spain was the loser. Near the end of 2011, however, the Socialists under José Zapatero were finally kicked out of office. Mariano Rajoy (People’s Party) gained an absolute majority with 16 percentage points over the Socialists, so hopes are now for somewhat better times in the years ahead.

RENTS

Until the recent recession, rents were quite expensive. However, Spain has the same real estate problem as the United States, or worse. Sales have virtually stopped, and so owners of villas and apartments—unable to sell them—are renting them out at lower-than-normal rates. “It’s better to have a little income,” says one owner, “than nothing at all.”

Friends in Puerto Rosario, Fuerteventura, report monthly rentals of two-bedroom apartments to have come down to the 300- to 400-euro range. This price range also applies to villages away from the main cities on most of the islands.

The Canaries enjoy a subtropical climate, with mild to warm temperatures throughout the year. Sunshine is abundant and it seldom rains. For this reason, villas and apartments often have neither heating nor air conditioning.

Medical and dental expenses are somewhat lower than in North America, although office calls are similar, usually about 80 euros.

LAS PALMAS DE GRAN CANARIA

This is a cosmopolitan city of about 400,000, with direct air connections to the main cities of Europe as well as to South Africa. The absolute best place to live in Las Palmas is in an apartment building overlooking Las Canteras, a beach as well-known in Europe as is Waikiki to North Americans. (Topless bathing here is common, as is the case with all beaches and hotel pools in the Canary Islands.) Apartment rentals along the boardwalk start at 750 euros, down from double that a few years ago. Not bad, considering the location and the beautiful view of sand and sea.

There are no North American expats here, but you will find small, well-established communities of German, British, Scandinavian, Russian, Chinese, Arabic, and African people living here.

CONCLUSION

Wherever you live, your country is not perfect, but neither is any other nation on the planet. If you plan a future move, the best advice I can give you is to first visit there, before you cut any ties with the states. Rent a modest apartment for three months. Check out the prices of everything from food to real estate. You may end up deciding that where you live right now isn’t that bad after all.