Some of the most popular old posts from this blog are the ones about the cheapest places to live around the world, something I started writing about back in 2003 and then continued each year thereafter.
The thing is, those posts tend to get out of date, except for the parts about seeking out current in-depth resources instead of looking for an easy quick-fix answer. I’ll say it again: if you’re serious about picking up and moving somewhere less expensive, do your homework and invest in knowledge. No, that doesn’t mean you have to attend some expensive seminar with guest speakers in some far-off city, but it does mean you should invest in some good books, e-books, and reports on the destinations that look interesting. Take a scouting trip on vacation. Subscribe to International Living for a while if you’re not sure where you want to end up. (They’ll bug you to death with breathless pitches for products and seminars they make more money from, but just ignore the noise and read the magazine.)
If you go for the free info you find on sites like EscapeArtist.com, make sure it’s current. Panama used to be a fantastic deal, especially for retirees. Now? Not so much. Good incentives still, but much higher prices. Parts of Europe that were a good deal before the euro appreciated by 45% are far more expensive now, especially for American buyers coming over with devalued dollars. If you’re reading an article about how good the buys are in Roatan or Boquete, check the date. You’re probably at least five years too late unless you’ve got a lot of capital. Seek out expat message boards for the country or city you like to get the current scoop.
While most of Latin America has stayed pretty stable against the dollar from a currency standpoint, there are notable exceptions. Commodity-rich Brazil and Chile are booming, with a strong economy and a resulting stronger currency. Prices have risen considerably in both countries over the past two years. Colombia’s currency has risen as the level of safety has improved. Meanwhile, anyone who invested in Venezuela has gotten hosed.
Some coastal areas in Mexico and Costa Rica saw ridiculous speculation spikes akin to the bubbles that have burst in the U.S. In fact, much of what has been driving the increases there is the influx of “crazy California money” from retirees who had sold their home for a frothy price and were perfectly willing to pay a frothy (but lower) price in Puerto Vallarta, Los Cabos or the northern Pacific coast of Costa Rica. Avoid those areas if you’re not flush from a recent sale.
In fact, avoid any place where you seem to see as many gringos as locals on the streets.
So, where are the cheapest places to live now? As always, cheap places to travel are usually cheap places to live, assuming they don’t make it next to impossible to do so legally. (I’m talking to you Indonesia!) If it’s a good value plus they make it easy to become a legal resident, that’s the ideal. To varying degrees, those candidates would be Malaysia, Honduras, much of Mexico, Nicaragua, Ecuador, Argentina, Uruguay, and parts of Belize (for now) for Americans, much of Eastern Europe for Europeans. But check out the other places in The World’s Cheapest Destinations too and remember that for short stays, you can usually get by with a few visa runs. For permanent residency, in some cases you either need company sponsorship or a local spouse. The U.S. and Europe aren’t the only places that are ambivalent about immigrants.
International Living’s new Top Retirement Havens issue is out now and while it’s geared to those who are done working, there are always plenty of examples in the magazine of those who have retired early or are laptop telecommuters who can do their job from anywhere. The only catch is that you usually need to be of a certain age (and have a verifiable income stream) to qualify for incentives. Or you have to invest in the economy there by starting a business. For nine of these countries, you can find overviews of the requirements in Traveler’s Tool Kit: Mexico and Central America.
The new IL report still ranks Mexico the highest overall, but noting that even they only got a score of 77 out of 100. “No place is perfect.” Some places that ranked highly overall, like Italy, France, and Australia, made up in other areas for a cost of living that was high.
In terms of costs for a resident, the data presented in this report is far from helpful. They mostly rely on cost of living reports put out by others, which are based on costs for working executives and state department employees rather than what you or I would spend living somewhere. The answer to, “What does it cost to live there”? depends on whether you live like a local, live in the exact same style you had at home, or somewhere in between. One couple profiled in the magazine lives in a small town in Ecuador for $600 a month. They eat out most of the time because their 3-bedroom apartment is only $150 a month. I’ve gotten e-mails from people living on Utila, Honduras for about the same. But an investment banking analyst sent to Quito or San Pedro Sula may spend five times that.
Based on what I’ve seen in my research, if I didn’t already have a little beach house in Mexico, I would be buying something in a highland town in Ecuador, Montevideo in Uruguay, or some not-overrun town in Colonial Mexico. The funny thing is, I’ve only been to one of the three. The numbers just look like “can’t go wrong” propositions in the others. If you rent though, purchase prices don’t matter. Just find a place you like, settle down for a while, and see how it goes. If it doesn’t work out, move on.
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