Sitting on white sand beaches, eating exotic curries, sipping a delicious cocktail, surfing on perfect waves, exploring picturesque mountaintops – all of these things are available to you. The best part is that these places do not have to be a once in a lifetime dream vacation either, once you have achieved a very moderate level of savings, living in your dream vacation home can be a daily reality.
In almost half of the world, living on under $30000 US ($37000 CAN) for a couple per year will give you a very decent lifestyle. Will this be drinking champagne and eating caviar every night? No, it most definitely will not. But will it be cutting coupons and eating cat-food to survive? It won’t be that either (not even close!)! In fact, many people are surprised at what level of comfort that $30000 US brings, and that it is on the higher end of the spectrum when it comes to living overseas.
For those of us interested in Personal Finance, the idea of picking up and moving off to a foreign land can be a difficult one to swallow. Especially considering many of us have spent years putting away money and carefully investing it to grow our nest egg that will keep us safe until we pass away…. The thing is, the money that we so carefully squirreled away will quickly get eaten by that squirrel if we are not: 1) extra careful with it and spend like a Scrooge, or 2) have a very large nest-egg so we don’t have to worry about the money (but then why would you be reading this blog??) or 3) move to a place where the buying power of our money is much higher.
Even twenty years ago, many people could not think much outside of living within Canada or the United States. If you were from Canada you might “Snowbird” in the States during the oh-so cold Canadian winters (if you could afford it). If you were American, you might do a trip or two to Canada, but often you stayed in the U.S. of A. Fast forward twenty years and things have changed. A lot.
We have had multiple major companies with supposedly “iron-clad” defined pensions collapsing, in Canada Nortel comes to mind, as well as the very real possibility of Sears in more recent news. We have had the major 2008 collapse, both with US real estate and with major stock markets, oil continuing to be very volatile, a revolution in social media technology, the resulting rebound and long bull stock market, and now the son of Pierre Trudeau, Justin Trudeau, has become Prime Minister, and Donald Trump the president of the United States. Could the world not get any stranger please?
And now we have life long workers retiring with not much to show for it – except for a government social security cheque (CPP/OAS/GIS), possibly a minor RRSP, and if they are VERY lucky, some sort of company pension. Now mind you, the CPP/Canadian Pension Plan payments are based upon what amount over your lifetime you have contributed towards it, so it is not really a social benefit per-se, but it rarely amounts to much (For 2017 the maximum single benefit is $13368) . And if you were in Canada for most of your life, you are also entitled to the OAS/ Old Age Security for a whopping $7020 a year. And if you managed to get your full CPP (which is hard to do, you have to max out your contribution room/ make over $55000/year for approximately 39 years), and get the $13000+ a year, you would still be under the poverty line and entitled to the Guaranteed Income Supplement for $2184 a year. But …. only if you don’t increase your income by having a pension or withdrawing from your RRSP! For 2017, once your income (not including OAS and GIS) hits $17,760, the GIS supplement is cut off. So … if you worked your whole life, contributed the full amount to CPP, but didn’t save anything to speak of (if it isn’t becoming apparent how important this is right now, we will speak about this later) your yearly income would be: 1) CPP-$13386+ 2) OAS $7020+ 3) GIS $2184. For a grand whopping total of $22,590 . That is not very much money to live on in Canada (or the US). Break out the can opener, it’s Whiskas time:
I sincerely hope that if you are living on the above amount that your debt is all paid off, and don’t have a mortgage. If this is the case, well then it really isn’t all that bad. What’s that? Oh, you do have a mortgage still? And other debts? It looks,like it may be game over for you my friend ….
But it’s not.
Living overseas can be the answer, and Marco Polo Money is here to help with that. Don’t get me wrong, it isn’t the answer for everyone. It does take an adventuresome spirit and an enjoyment of new things. It would also likely require that you sell the house, and get rid of those debts, and at the very least break even at the end of it (if not, you are in serious trouble – you need to start here ). But, if you want to sit at home all day and watch t.v., go right ahead. However, I think that many people these days want something new, and it isn’t just people who are retiring at 65 either. Many people are creating the world they want to live in by saving and investing hard for the amount of time it takes to have $30000 income per year (or whatever number they are comfortable with) – this is “FI” or Financial Independence (at any age). After this goal is achieved, they can then move to places that have a cost of living that is low enough to live on – sometimes called “Location Independent Living” by the more tech savvy crowd. . And then, as long as they stay within their financial limits, they can: DO. WHATEVER. THEY. WANT.
So where are these financial wonderlands covered in lollipops and unicorns? Do they exist? Or are we just talking about a shack on the river in a war torn developing country?
These wonderful places DO exist. And most of them are developed countries that in some cities are more advanced than most cities in Canada and the U.S. . And some of them are less developed, but you only have to go there, try it out, and then decide whether or not it suits you … some people can be surprised what a simpler lifestyle can bring them.
So what are these countries? Places like: Mexico, Nicaragua, Costa Rica, Panama, Ecuador, Chile, Columbia, ,Argentina, Brazil, Portugal, Spain, most of Eastern Europe, Italy, Greece, India, Thailand, Cambodia, Vietnam, Malaysia, Taiwan …. The list goes on and on. It is much of the World minus Canada, the United States, and Western Europe.
In this section of the blog, we will explore these different countries with spotlights on individual countries with the pros and cons of each. We will also look at specific areas of interest: Cost of Living, Rent vs. Buy, Language Issues (Is English spoken and how well?) , Ease of Travel, Healthy Living, How easy is it to acquire Western products, Health Care, Climate, Pollution, Culture, Music and Arts, and others.
Any there any particular places you would like to be covered? Any special topics? Let us know in the comments section.
Marco Polo Money – Be safe and travel far!