A new perspective on Retirement immigration

Posted by Lee on October 19, 2009

Life is a journey. The only sure thing is that if you get to start you will get to finish at some undetermined, unpredicted point in the future. What makes each of our lives different is how we play out the time between beginning and end. The “golden years” a euphemism for retirement, are a goal for many.

After returning from a week in Ecuador I attended a three day seminar in Panama City about International Real Estate Investment. The seminar was put on by Lief Simon and I was reluctant to go, I thought I would be hearing another Tony Robbins or 5% down and you can inherit the world seminar. I know people who took those paths and depending upon their time of entry they either had some success or went down in flames. This seminar was entirely different. I planned to stay one day, I stayed through the final cocktail party.

The conference was to offer international investment opportunities in emerging markets; speculating developers looking for speculating buyers and investors. The magic was not so much in the smorgasbord of offerings as in the reason why. Why in a time of economic contraction these companies are investing and seeking investors in massive projects focused on luring North Americans and Europeans to Latin America.

Lost in the xenophobic fog in the United States are some interesting facts about the American middle class.

“Title Facts about Wealth that every American should know
Source: Office of Social Justice, Archdioeces of St. Paul and Minneapolis

This page defines wealth as, “what you own minus what you owe. In other words, it is net assets.”

Selected quotes from the page:

• The [richest 1% of Americans] now own more than the bottom 90% [of Americans].
• The top 10% [of Americans] own 71% of all private wealth.
• Over 86 percent of the value of all stocks and mutual funds, including pensions, was held by the top 10 percent of households. In 1998, the top 1 percent of Americans owned 47.7 percent of all stock.
• Bill Gates alone has as much wealth as the bottom 40% of U.S. households.
• In the 22 years between 1976 and 1998, the share of the nation’s private wealth held by the top 1% nearly doubled, going from 22% to 38%.
• In 1982 the wealthiest 400 individuals in the “Forbes 400″ owned $92 billion. By 2000 their wealth increased to over $1.2 trillion.

The concentration of wealth is accelerating…”

More here, here and here for the quote below.

“Compared with other OECD countries (for which data is available) the US is the most unequal:
..the United States exhibits the highest degree of wealth concentration, with the largest shares of total wealth in the hand of the richest percentiles of the wealth distribution. The lowest values are found in, among others, Australia, Italy, Japan and Sweden, and intermediate values in Canada, France and the United Kingdom.”

These numbers are from2004, now with the economic crisis in the US you could factor out a lot people who had net worth due to inflated home prices. The problem for the declining middle class in the US is exacerbated.

The nutshell is that a HUGE number of baby boomers who worked and spent all their lives to maintain their social positions are missing the value of their largest net asset, their homes. Also missing a chunk of their retirement income and will either enter the workforce as a greeter at the local Walmart or never be able to retire, at least not in the US.

An increasing number of Americans who face this situation are looking overseas to developing countries, what used to be called the third world for retirement options. The third world wants them, more exactly the third world wants the money, jobs and infrastructure they will bring with them.

Lief’s conference was of developers looking for those who still have capital to invest into developing North American style projects in counties where the investment opportunities are in the opinion of the developers still viable. Countries not yet hit by tomorrows theme, the Ripple Effect of retirement immigration.

Comments

2 Responses to “A new perspective on Retirement immigration”

1. Greg Tice says:

   October 20, 2009 at 9:57 am

   IMHO
   The collapse of the real estate market in the states (and elsewhere) is the extreme example of a redistribution of wealth. The money that was financed and refinanced out of real estate went somewhere. It went to a seller, or to purchase other items. It didn’t disappear. Look at who was getting rich from the real estate mess and you might identify some of the culprits who orchestrated it. Now the government is trying to redistribute wealth again by taxation and bailouts. This mess is going to continue for a while.
   Greg