Retire Overseas, lets all move to Colombia, Uruguay, Costa Rica or maybe stay in the USA

I have been following the current trend of emails from Live and Invest Overseas and others encouraging people to flee the USA and retreat to the inexpensive environs of places like Colombia. I do not want to bad mouth Colombia, I personally like the country and each time have visited I have enjoyed my experience, for me it is a nice place to visit but I would not want to live there.

Permit me to provide a little guidance to some who are being convinced to flee the USA and move to Latin America. I do not want to discourage you, I made the move more than five years ago and do not regret the decision. I do want to provide some sobering factoids you should consider to make an intelligent decision.

If you are leaving the US or Canada because of economic reasons, Latin America is still a good choice. Many things are more expensive here including cars and most imports, other things are less expensive. Anything created locally is less expensive, if you are not a victim of Gringo Bingo, that is because labor is still inexpensive. That makes local foods, local construction and locally manufactured products less expensive. Imports by and large are more expensive due to transportation and tariffs. Land is still a bargin but as always that depends upon location.

Gringo Bingo is the game of some locals who have learned that Gringos often buy before they research and pay too much, so they roll up prices on anything from food to land as soon as they see you. It is fun to play it right back if you do your homework and know what something should cost.

The current venues that seem to be enticing people are Panama, Columbia and Uruguay. I have visited all three and each has it’s virtues and which might be best for you depends upon you, your goals and needs.

If the climate, having four distinct seasons is your top criteria then look south to Uruguay, it might have more cows than people but it also has four seasons. If cheap is the top criteria then think seriously about Colombia, for now it is the best buy in town. If you still believe all the marketing about Costa Rica and have lot’s of money you can think about paradise for Colones. Finally if you are looking for the best infrastructure, most rapid growth, lowest tariffs and a currency that is the US dollar, Panama is the place.

I want to point out the currency issue first, it was one major consideration for me when I selected Panama. When I started searching for a retirement destination I considered the Netherlands, I know the seemed crazy but the dollar bought 1.24 Euros when Bill Clinton left office and I wanted a base in Europe. I watched the Euro trash the dollar as I continued looking. I decided since my retirement income was dollars it would be safest to be in a dollar economy. The chart below is the dollar vs the Colombian Peso for five years.

Dollar vs Colombia Peso 5 years

As you can see there is quite a range. We have an influx of retirees from Costa Rica coming to Panama now because at least a few months ago the combination of inflation in Costa Rica and appreciation of the Colon vs the dollar was making it too expensive to live there. The dollar has appreciated a little so the pain is not as bad, but as you can see from the graph on the Colombian Peso things go up and things go down. If your retirement income is in dollars you must consider the dual bite of currency valuation and cost of currency conversion.

I have historically discouraged people from moving out of their sphere of comfort and I will reiterate some points that apply to every country in Latin America. The cultures here are different, each country is different, the people are different and most significantly the language is different.

Unless you plan to live in an all English speaking colony you must learn some of the local language and culture. Too many people come here not understanding that fact and they leave within a couple of years with rancor. This is not Kansas, although speaking Spanish there might help also.

Another major parameter is not trust people just because they are expats and befriend you. All of the countries listed above are havens for some of the living refuse of other countries. Because the law and culture is different south of Texas these human ectoparasites profit from exploiting newcomers and do it over and over with no consequences. Please do not check your brains at the airport.

I have seen people turn over hundreds of thousands of dollars for the purchase of real estate without a lawyer or even documentation that the seller is the owner. You will find the legal system will not protect your ignorance and I am sure you would never do the same thing in the US. For some reason people forget all they learned in life when they visit any of these paradises.

If you plan to immigrate please use your head, visit, stay extended times in rentals and be sure before you invest in anything. I am glad I did what I did and hope that if you do the same you are also grateful for the new life you can live. Just do not buy all the hype, buy the reality.