Places Where You Can Retire on $200,000 and Feel Rich

[john61ct]

Let's all write letters to the editor

[hpeer]

Originally Posted by belizesailor

Yes, Volcan and Medellin are VERY different places and therein lies the flaw of articles like this...they are rather superficial on analysis and are based on someone else's criteria, not yours. A searchable database, where individuals could set their own criteria, would be useful.

My home base of many years was in a very small village (like 100 people) on the Rio Dulce. It was heaven for me (I still miss it), but would be hell for many others...including my current wife! [emoji849] On the Rio the nearest grocery store was a 30 minute skiff ride away (no roads) and provisioning was a half day event. When we visited Volcan the first time, we went to the grocery store(s!) several times a day just because we could! Volcan was pretty up-town for us, but cosmopolitan Medellin makes little Volcan look like hicks-ville.

We are now in Lisbon, another more cosmopolitan venue where most could live on $2K per month pretty easily. Loads of places in Portugal where you could live within that budget, but of course none are listed in that article.

I think most articles like this are just written to create buzz for marketting purposes with organizations like International Living drafting up whatever superficial criteria they need to pitch their destinations. For example, I suspect Volcan got on the list because there are folks associated with International Living who live there.

It’s funny you are in Volcan because I have an internet acquaintance/friend I want to visit in - VOLCAN. Well not exactly, he has a eco-lodge in the mountains. Mt Totomas if I did not totally wreck the spelling. I hope to visit him in a couple of years when we do the Western Carib. He speaks very highly of the area as you do, for similar reasons.

We have a summer cabin in Newfoundland, along with a smaller boat up there. It’s 3 miles to a gallon of milk and almost an hour to any kind of “super market.” The little town has about 50 residents, more in summer when folks “come home”. We greatly appreciate that low level of living; no radio or TV, Internet is more than enough. If it wasn’t for winter then that would be our retirement home. But also we have some meaningful family there now and are attached to the place. And the sailing is wonderful.

Still we are researching for a “retirement” location. Nothing jumps out at us. But I must say your mention of the Azores has piqued my curiosity quite a bit. I need to research that. Doubt I’ll get the wife to “pop over” on a sail to check it out. But maybe she will fly?

Portugal does well on that Cost of Living Index if those numbers map to the Azores.

It all keeps the mind active.

[belizesailor]

Originally Posted by hpeer

It’s funny you are in Volcan because I have an internet acquaintance/friend I want to visit in - VOLCAN. Well not exactly, he has a eco-lodge in the mountains. Mt Totomas if I did not totally wreck the spelling. I hope to visit him in a couple of years when we do the Western Carib. He speaks very highly of the area as you do, for similar reasons.



We have a summer cabin in Newfoundland, along with a smaller boat up there. It’s 3 miles to a gallon of milk and almost an hour to any kind of “super market.” The little town has about 50 residents, more in summer when folks “come home”. We greatly appreciate that low level of living; no radio or TV, Internet is more than enough. If it wasn’t for winter then that would be our retirement home. But also we have some meaningful family there now and are attached to the place. And the sailing is wonderful.



Still we are researching for a “retirement” location. Nothing jumps out at us. But I must say your mention of the Azores has piqued my curiosity quite a bit. I need to research that. Doubt I’ll get the wife to “pop over” on a sail to check it out. But maybe she will fly?



Portugal does well on that Cost of Living Index if those numbers map to the Azores.



It all keeps the mind active.

Ha! Jeffrey, the owner of Mount Totumas Cloud Forest Lodge, is a good friend of mine and the property is AWESOME! A group of us from Volcan usually spend NYE there. He has about 400 hectares of nature reserve which borders Parque La Amistad (a massive reserve). This in combination creates a an extensive and well preserved ecosystem. Miles of trails, loads of wildlife...just incredible what Jeff has created there.

The climate is pretty unique too, you are in the tropics, but at a high enough altitude that a fireplace and a blanket are very welcome.

Definately DO NOT miss it!

I sailed to the Azores and my wife popped over for a visit. We REALLY like the Azores and mainland Portugal as well.

[hpeer]

Thanks so much for that response.

[cherylchecheryl]

Originally Posted by Mike OReilly

Ah, but in most cases the banks DON’T take any real risk. Most of the time they allow you to borrow against established assets which are put up as collateral. For large loans they buy insurance (often at the borrower’s cost) to cover any default. And they are first in line for repayment in the case of bankruptcy.

The fact is, banks take absolutely minimal risk on most loans, yet they reap most of the rewards.

If banking was such a minimal risk business, then more people would sell their homes/cars/other assets directly to the purchaser themselves and supply financing. Even those people who have funds enough to do this rarely do because they recognize the risks and potential headaches involved.

While I can't speak to other countries' bankruptcy laws, the US has a legally defined order for getting repaid. It has nothing to do with whether or not the creditor is a bank. It does depend on whether or not the debt is secured by an asset.

No one is holding a gun to anyone's head to take out a loan. Thanks to advertising, today, people have a whole different perspective as to "what" is a necessity. I was raised by parents who were depression-era childen who experienced what really going without was like, as this was well before today's extensive social welfare programs. I learned not to spend money I didn't have on things I didn't really need.

Is someone doesn't have the cash to acquire something and takes out a loan to finance it that is their choice. Banks are just providing a service. If you don't like the terms of that service, don't use it.

[Mike OReilly]

Originally Posted by cherylchecheryl

If banking was such a minimal risk business, then more people would sell their homes/cars/other assets directly to the purchaser themselves and supply financing. Even those people who have funds enough to do this rarely do because they recognize the risks and potential headaches involved.

While I can't speak to other countries' bankruptcy laws, the US has a legally defined order for getting repaid. It has nothing to do with whether or not the creditor is a bank. It does depend on whether or not the debt is secured by an asset.

No one is holding a gun to anyone's head to take out a loan. Thanks to advertising, today, people have a whole different perspective as to "what" is a necessity. I was raised by parents who were depression-era childen who experienced what really going without was like, as this was well before today's extensive social welfare programs. I learned not to spend money I didn't have on things I didn't really need.

Is someone doesn't have the cash to acquire something and takes out a loan to finance it that is their choice. Banks are just providing a service. If you don't like the terms of that service, don't use it.

I stopped paying attention to this thread some time ago, so I don’t even know what I was responding to, nor why you’re picking it up now.

I’ve never know a bank to NOT be a secure creditor. If you have examples of data that suggests otherwise, I’d be interested to see. Banks are usually near the front of the line to get their money back. And all loans of any size are hedged with insurance, with the premiums often paid for by the borrower. And when the sky really does fall, as in the 2008 implosion, the tax payer bails them out anyway.

So no … I stand by my comments. Banks take very little risk, but still reap most of the rewards.

[Buzzman]

Depends on who and what they are lending for/against.

With bricks and mortar, or portable assets (like cars boats) there is some security. So usually a mortgage or a chattel mortgage, with the asset held by the bank (as in 'owned' by the bank) as surety for the loan.

With 'business loans' the risk is MUCH less secure.

Assets can be inflated - or, being kind, over-estimated - or, they can suddenly fall in value as the stock market loses confidence in a business, and industry, or the economy generally.

So if a business puts up it's own stock or 'insubstantial assets' (like IP) as 'collateral', and the market shifts, or the business plan 'bombs' like 'estimated returns' turn out to be more than a fig leaf) then the bank cops losses as there's noting to 'realise' and get a return on, or what is there may be in 'negative value'.

This was/is the issue with US mortgages, which more often than not are 'walk away', leaving the bank with a depreciated asset that may or may not be worth what the borrower owes.

In Oz, banks are much safer as they are guaranteed repayments. You forfeit on a home mortgage, you're still into the bank for the sum borrowed AND you lose the house. Bank wins, you lose.

Similarly, if a bank has loaned capital to a small biotech, say, and its stock suddenly increases in value due to them getting an approval for something, then the stock the bank holds is worth much more than its book value, and so the bank cashes in and profits. Bank wins again. But...maybe...

It's swings and roundabouts for banks, and they have fairly high on-costs due to high staff numbers and ground rents for branches.

Banks are basically gamblers who take a punt on someone's ability to repay, and hedge themselves as much as they can.

The problem with the notion of 'borrowing to pay for something' (as opposed to paying cash you've saved) is that LARGE purchases (like houses for sure, and to a lesser extent cars and boats) are not easy to fund for the average person on an average salary.

"Most" people can only afford to purchase a home through a mortgage. The bank lends a HUGE chunk of capital up front, and then gets repayments in dribs and drabs over a lifetime (23 years is considered a "generation" in terms of births/deaths). And with inflation, they need to get a decent return or end up going out backwards, being repaid in dollars that are woirth less than they were when the loan commenced (i.e. buying power of dollars decreases over time).

I've heard that in Tokyo there are now banks who will lend on double-lifetime mortgages, so you sign your kids up to finish paying the mortgage off.

Who'd be a banker, seriously..?

[Mike OReilly]

Thanks for this Buzz. I believe the context here is on the level of personal loans up to home mortgages. The machinations of big corporate financing is way over my pay grade, and not especially relevant to most of us little folk .

But I appreciate your comment about multi-generational mortgages these days. With the median house price being just shy of $1/2 Million here in Canada, while family (two person) incomes are around $70K, it’s easy to see how kids won’t be inheriting homes, they’ll be inheriting mortgages.

I too am a firm believer in buying what you can afford. I’ve been debt free for at least many years now. And I mean for real, not this “I have no debt except my mortgage” kind of thing. I mean zero.

But you’re right, of course. Most people can’t afford to buy a house without going into deep debt. Heck, with the price of cars these days most people can’t afford them either without going into serious hock. It’s crazy...

I can live inexpensively here in Canada, largely because I am debt free. So the answer to where you can retire on $200K is probably just about anywhere, as long as you’re not shovelling money out the door to pay for something you probably can’t really afford.

[john61ct]

Rent makes more sense anyway if you need to live in a high-employment high-salaries metro area.

Buy the retirement home in a depressed rural or Pittsburgh type area, maybe on a 10-year mortgage after 40% cash deposit, long as property taxes there are low.

[Mike OReilly]

Originally Posted by john61ct

Buy the retirement home in a depressed rural or Pittsburgh type area, maybe on a 10-year mortgage after 40% cash deposit, long as property taxes there are low.

The houses I’ve bought here in Canada have cost me less than what the typical new pickup truck or SUV costs. Good houses. The best guide to inexpensive real (at least here in Canada) is to get away from of the big cities.

[Matt Johnson]

Originally Posted by hpeer

Still we are researching for a “retirement” location. Nothing jumps out at us. But I must say your mention of the Azores has piqued my curiosity quite a bit. I need to research that. Doubt I’ll get the wife to “pop over” on a sail to check it out. But maybe she will fly?

Portugal does well on that Cost of Living Index if those numbers map to the Azores.

It all keeps the mind active.

Cost of living for the Azores is low just like in smaller town on the mainland. Unfortunately, while rentals are still cheap, housing purchase prices have jumped way up in the past few years. When we looked in 2014 we could have bought an ok house for 40k. It is now 75K for the same exact place.

They really are spectacular islands with a wonderful way of life. We've spent a total of about a year on the islands, and while we're not ready to buy a land house, we can see ourselves permanently there someday.

It's too late to sail there this year, but you can get really cheap flights from Boston, Toronto and LA and check them out the easy way. I'd suggest starting in Sao Miguel.

Funny, the three locations we've looked into buying a house were Rio Dulce (across from the Castillo), Medellin and Azores (Horta). Apparently we have the same taste as Belizesailor.... except I do not like isolation much.

Matt

[Buzzman]

LOL....

Even "away from the big cities"in Oz real estate is still (IMHO) massively over-priced.

I currently live mid way between two of our Major cities, in a regional town that is not on the coast (but not too far away) and has a substantial indigenous population (and perception more broadly that this is not good) so real estate here is about as cheap as it gets for a place where *some* jobs and work are available or not far away - and even here it's pricey for an "average" family. But the nearby larger city/town is 50% higher again - because the jobs are mostly there and my town is more of a dormitory town, 35mins drive away.

I paid cash for my home here 10 years ago, but I couldn't afford to do that today as it's almost doubled in price.

The only places where real estate is "cheap" in Oz are in the deep boondocks where no-one but a dead crow or a dingo would want to live.

The largest inland 'city' that is somewhat cheap is Broken Hill, in the dry western desert region of NSW, where tiny ex-miners' cottages can sometimes be had for less than AU$100K. But there's no work as the mine is virtually closed, and so all the ancillary businesses are also closed. And it's 600-1000km to the nearest source of employment.

Occasionally, some timber and fibro shack in an even smaller 'ghost' town might come up for under that. But again, no work for miles around, and not a desirable area for 'tree change' or 'sea change' retirees, who are largely responsible for driving up real estate prices anywhere near the coast.

But the big cities are totally unaffordable unless you have at least two $100K + salaries as they start at $600K for a dump in a crap suburb.

US (and I guess Canada also) still has homes in regional areas (and depressed inner cities of former manufacturing towns) that are under US$100K. But same issue as here - no industry, no jobs, no market for homes.

By contrast, north-west West Aust, the iron-ore mining region, had a boom right through the Nineties and Noughties, but this has now ended, so lots of latecomers to the area are in negative territory with their mortgages, and no work, and no demand for homes either to rent or buy, as the mines have automated and cut jobs to increase profits for their city-slicker 'investors'.

I regularly watch "reality" TV shows from the States where people are buying and renovating for a profit - often paying well under $100K for a run-down 'fixer upper'. Worst house in the best street sort of thing. And these shows spend a fortune renovating and then still make a profit from some hipster who wants a 'modern makeover' of an older classic home.

I've also seen reports of local authority auctions, selling off older homes for back taxes, for peanuts, but not in areas anyone with any ambition would want to live - i.e. largley black/hispanic areas with drugs and realted criminal issues either in the street or not too far away, hence the depressed price of real estate.

A handyman could buy the same home and renovate over a cuppla years and end up with something nice for less than $100K but requires BIG commitment. OR a steep learning curve. And potential disaster.

There's an interesting UK reality show, Kevin McCloud's "The Street" currently screening where a local (UK) borough Council has invested in the groundworks of a new suburb and is encouraging first or second home buyers keen to self-build to step up.
The prices are approximately "average UK price" for a small 3br home once completed, not including the considerable 'sweat equity' by the owners, but the owners end up with something "architect-designed" that suits their specific needs and wants. i.e. it's not a cookie-cutter home from a major developer, built down to a price not up to a standard. They've been quoting moved in cost of around GBP$250-300K - or AUS$400-500K. So similar pricing to here for a modern self-build. Banks are lending on for self-build on 20% deposit for house/land 'package'.

Another Kevin McCloud show a few years back followed the (sometimes painful) progress of a bunch of welfare recipients - mostly single parents - who built a 'community' in Bristol utilising a not-for-profit model and govt funding, with sweat equity by the 'owners' who ended up either with a cheaper 'Council rent' or a lesser mortgage which they otherwise could not possibly have qualified for on the open market.
They built them all roughly the same, using the principles applied by a revolutionary architect (who designed the 'model' to be easy for unskilled self-builders). They went back for a visit 10 years later and the familes were all still there, small kids grown to teens, everyone in a "better place" then pre the commuity build project.
Big tick for 'success' from govt. But it's not for everyone.

And most govts these days aren't interested in providing so-called "social housing" but, at the end of the day, how do the less well off, or the less able, or the less capable, find a home...???

The waiting list for social housing in anything like a desirable area in Oz is something like 10 years - and then you need to be a female, abused by your partner, have children under 10, and no prospect of employment, to qualify for what few homes do become available.

Is it any wonder homelessness is on the increase everywhere?

Interestingly, the largest percentage growth in homelss stats here is "women over 50". They've raised the kids, not worked, and then been booted by hubby (or had to boot hubby due to issues) and find themsleves unemployable, on the "dole" (minimum welfare payment of $275/wk) and unable to afford rent, never mind a mortgage. Add mental health - or physical health - issues, and it's no wonder they are a growing proportion of the homeless here which, by the way, is *nothing like* the homeless "problem" in cities like San Fran and LA. We don't "yet" have encampments of hundreds of homeless, just a few dozen 'rough sleepers' in parks (mostly with mental health issues) and lots of people 'couch surfing' and in not-for-profit welfare org 'shelters'.

I often ask myself what sort of a society leaves grandmothers on the street, with little or no support, no home and no hope?

I find myself not liking the answer....

[Mike OReilly]

Originally Posted by Buzzman

Even "away from the big cities"in Oz real estate is still (IMHO) massively over-priced

Wow Buzz, guess you’ve been thinking about all this for a while. One thing is clear, you watch way too much “reality” TV . As we all know, these shows have little to do with actual reality.

But point taken; real estate is insanely expensive in Oz, as it is here in much of Canada and the USA. But when I speak of getting away from big cities, I mean away. I’m talking about moving into small towns hundreds or thousands of km away from the big cities. Maybe that doesn’t work in Oz, but it’s certainly possible here in NA.

It’s true, these places have fewer jobs. But people still live there. That means there are businesses providing services and products. Jobs exist, or you can start your own business. The wonderful thing about a smaller community is that it’s a lot easier to become a big fish. And of course there is the growing reality of working remotely. We talk about it all the time here with people working from their boats. If you can work from a boat, you sure as heck can work from a small town.

The point is, much like crowded anchorages, they key is often to go where fewer people are.
….

Originally Posted by Buzzman

I often ask myself what sort of a society leaves grandmothers on the street, with little or no support, no home and no hope?

I find myself not liking the answer....

And I would add, societies that have never been wealthier and that have greater capacities. It is a badge of shame that, in Canada, the richest 86 families have more wealth than the bottom 11 million people. Yet despite this stupendous wealth, we still can’t find a way to share enough so everyone can stop worrying about their basic necessities.

[cj88]

Originally Posted by Mike OReilly

And I would add, societies that have never been wealthier and that have greater capacities. It is a badge of shame that, in Canada, the richest 86 families have more wealth than the bottom 11 million people. Yet despite this stupendous wealth, we still can’t find a way to share enough so everyone can stop worrying about their basic necessities.

It's not that societies have never been wealthier, rather that a few within society have never been wealthier to the detriment of a large and still growing proportion of that society.

[Buzzman]

cj, I'm not sure that's 100% correct.

The data absolutely shows and supports the notion that we are wealthier (as a society) than we hav eever been, and this is spread thoughout society.

So, for example, 200 years ago, an urban worker was barely able to survive on their wages, much less purchase a home or start a business.

These days the middle class has spread, and only the very bottom of the food chain now struggles - people who have been abandoned by society (mentally ill, ex-cons, homeless older people etc).

Even in the States those on 'basic wage' jobs can survive (although not so much in larger cities any more).

And yes, the top 1% owns more than the bottom 60%, and that wealth is concentrating year on year - so "equitable distribution" of wealth is slipping.

But, overall, the *whole* society is still way better off in terms of health, education, access to employment etc etc etc than the *whole society* was 200 years ago.

Of course, one of the issues is that capitalism - the entire global economy - has, per se, grown dramatically, as has inflation, so purchasing power is less now than it once was.

This is why the lack of *real growth* in wages, pretty much across the board in devloped countries, is so harmful, as people's wages are being eroded by inflation, and so purchasing power is falling.

It is this stagnation of wages growth that is most troubling for economists and central bankers across the globe.

Our own central banker, Reserve Bank governor, Phillip Lowe has, of late, been admonishing our conservastive govt for not doing more to stimulkate growth with fiscal spending.

They have a *political dogma* position to reduce the deficit and get the (Oz) fed gov budget back into surplus, and look like achieving that in this current term, something the US govt has not a snowballs chance in hell of achieving any time soon.

But Lowe wants them to drop the "must achieve surplus in this term" position and begin borowing and spending to stimulate the economy and achieve some actual growth in real wages, as otherwise he's going to be soon in the same position as the US Fed Reserve with nowhere else to go but "fiscal stimulus" (i.e. printing money) which doesn't actually help much in the longer term.

At least the Oz fed gov has some fuel in the tank to increase borrowing and spending. The US deficit is like how many trillions these days....?????

Recession is coming.

That's my prediction.