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SOVEREIGN MAN

Is New Zealand on your radar? Maybe it should be.

December 6, 2010
Auckland, New Zealand

Someone asked me recently, “Simon, if there are so many great places in the world full of opportunity, why don’t you just pick one and stay there– why keep traveling?”

Simple. I wouldn’t be much good to you if I sat in one place and speculated about the goings-on in various countries without frequently putting my boots on the ground. The world changes quickly, and it’s important that I see these changes with my own eyes so that I can give you the most accurate information.

Also, it’s true that the world is full of amazing places, and I travel so much -because- of this fact, not despite it. I enjoy the travel, getting to know people, and sniffing out the best lifestyle, business, and investment opportunities in so many different countries.

New Zealand is one of those countries, and I’m pleased to be back here, spending a few weeks touring the countryside before heading on to South America later this month.

I’ve been to New Zealand before and I always enjoy it… if nothing else than for its picturesque beauty. If you’re an outdoors type, New Zealand will make you feel like a kid at the circus– completely exhilarated and inspired by the natural spectacle before you.

In fact, New Zealand’s natural beauty and diversity is the chief reason why there are so many Hollywood movies shot in New Zealand (along with government financial incentives); perhaps the most famous was Peter Jackson’s Lord of the Rings trilogy.

Tour operators even sell “Middle Earth” excursions for a mere $4,500 (USD) per person!

Edoras Is New Zealand on your radar? Maybe it should be.

It turns out that Middle Earth's "Edoras" is on New Zealand's south island...

Despite eye-popping costs to walk in the footsteps of the Hobbit, New Zealand is reasonably priced, particularly when compared to other rich nations. For Canadians, Europeans, and Australians, prices are definitely cheaper in New Zealand than what you are used to at home.

For Americans, New Zealand is roughly the same price as the US at roughly 75 to 80 US cents per New Zealand dollar (right now it’s 76.5 cents). At less than 70 cents per NZ dollar, it feels very cheap.

When I was last here in March 2009 at the height of the financial crisis, the NZ dollar was valued at only 50 US cents, and New Zealand was the cheapest civilized country in the world. Since that low point in the financial crisis, New Zealand’s currency has appreciated more than any other OECD country.

Property prices are also reasonable– it’s not uncommon to find furnished 2-bedroom apartments in the major cities that rent for $500 to $700 (USD) per month (though Kiwis generally quote prices by the week). Property for sale varies dramatically, and I plan on reporting more over the next few weeks.

I have my eye out in particular for agricultural land and small farms outside of the major cities and on the south island; because of its remoteness, English-speaking population, and agricultural wealth, New Zealand is an interesting option for people who are considering a move off the grid.

Conveniently, there are a number of options for obtaining residency here, and ultimately a passport after five years. Permanent residents (and citizens who live here) are obliged to pay tax on their worldwide income.

The tax rates just fell in October, and the maximum rate is now 33% in most cases, down from 38%. Furthermore, New Zealand does have an ample library of tax treaties (including with Singapore and Malaysia) which can be used to mitigate the taxes even further.

As for the downside, New Zealand suffers a bit of a brain drain, especially among the young. Talented, creative youths typically flee to Sydney, London, or Los Angeles to seek fame and fortune, though they tend to return eventually to raise their families and retire.

Case in point, the current Prime Minister John Key skipped off to Singapore for several years as Merrill’s head of foreign exchange. He returned to New Zealand in his late 30s to pursue a career in politics, and he became Prime Minister after six years.

It was under Key’s influence that New Zealand’s individual income tax rates declined so substantially this year– his intention was to provide an incentive for the country’s talented workers to stay in the country instead of moving overseas to pursue lower taxes. Time will tell if his idea works.

Other negative points about New Zealand include the country’s Internet infrastructure; it’s slow, to say the least… so don’t be surprised if you don’t hear from me for a few days.

Overall, though, if you’re looking for a beautiful, quiet, remote, English-speaking paradise to lay low for awhile, New Zealand should be on your list for consideration. More to follow.

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

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About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • SRVPGC

    Unless I’m missing something, there is absolutely no residency or citizenship probram in NZ for any American over age 50, except possibly buying your way in. No combination of talent, education, job offer, and character cannot trump being “old”, even though, as you know, there are many people over 50 and even over 60 who are extremely fit and energetic (and outdoorsy) and who would not be a drain on their medical and other support systems. That is why my wife and I have scratched NZ off of our escape list, except for vacations of less than 3 months. Do you or your NZ advisor know of any exception to the over 50 rule? Thanks.

    • lrm

      Yes,a nd even if you are under 50, NZ is not an option unless you are a skilled migrant or buying your way in, as you said. True, the skilled migrant visa is there, but in recent years [after several years of NZ actively recruiting particularly Californians], the options are limited. But for some education, medical and engineering type jobs, you will have possibilities. It’s also not cheap to pursue skilled migrant visas—which are usually the first step to resident visas for americans in NZ. And, i’m not sure how simon got these rates for cost of living-but in our research, we found it appreciably higher, and even australians consider nz expensive now.

      Also, be aware that many properties do not have central heat and can be downright cold, esp. south island. This has been a major problem for many foreigners buying housing there.

      There’s an expat forum/site called ‘real new zealand’, I think that’s the name…it has valuable info about what to expect from numerous on the ground ppl who live there full time….many are brittish, but some american. it dispels the myths and affirms the positives.

      I recommend searching NZ expat forums in general. SM is a great site, but by no means the only one.

  • Iain

    I like your balance Simon. As someone who leads an Auckland based company that has helped many thousands of people settle in New Zealand (we are NZ Government licensed immigration advisers) we caution everyone that while NZ is a great place to live and do business (and we are surprised more Americans haven’t worked that out yet), it isn’t all roses here. We have our own economic problems – mostly brought upon ourselves through ten years of tax and spend big Government. While we embrace socialism (America – this just means we give a damn about our next door neighbours and it isn’t really a scary as you like to imagine) we at least have a Government now that recognises there is no such thing as a free lunch. If you want your fellow citizens to help you pay for your kids education and your health we all, between us, have to earn the money first. Unfortunately this is a lesson New Zealanders now have to learn because the debt pigeons are coming home to roost here as well as in places like Europe and the US. New Zealanders have a stark choice to make in pretty short order – continue to borrow and consume or save and pay down debt. If we make sensible choices now, our future looks bright. If we don’t, well, there’s real potential problems ahead for us. There is no escaping the choices.

    Regards

    Iain MacLeod
    Director
    Immagine New Zealand Limited
    http://www.immagine.co.nz

  • http://justen.us Justen Robertson

    Despite being beautiful, NZ has harsh censorship laws. That makes it a no-go for me, and is probably driving away a lot of ‘bright talented young minds’ who just want to play modern video games and watch R-rated movies in their leisure without some bureaucrat accusing them of terrorism.

    • Kevin

      I didn’t find censorship at all. In fact, most of what is sent to cable TV (Dexter, Californication, Weeds, etc.) is shown on the national tv stations. Makes America look dreadfully puritanical in comparison.

      • http://justen.us Justen Robertson

        The government there maintains the power to ban media at will, making it illegal to import, buy, sell, or own in the country. The list of actual banned materials is fairly short, however it is also illegal to allow children under 18 to watch or play restricted media. Given that it is an explicit inversion of my ethical position that -actual-, not -imaginary-, violence is wrong, (and thus doing actual violence to me for participating in imaginary violence is a big, big problem), and that I have an underage son, the country is a no-go. I won’t be fined or jailed for playing Call of Duty with my own child.

        They also maintain a national block list of internet content and have to date declined to release a list of what they’re banning, which is another huge no-no to me. This is “voluntary” at the moment (although afaik most ISPs are in compliance), but it’s still crossing the line for me.

        It’s not that I can’t just disobey this nonsense, or that I would obey it if I was already a resident, but I won’t throw in with a regime that thinks that they have the right to choose for me at gunpoint what kind of media I can consume.

        Also mind you NZ is far from the worst, however censorship is toward the top of my issues list. Your mileage may vary.

      • http://justen.us Justen Robertson

        (note “restricted” is roughly equivalent to “rated R” in the U.S.).

    • HB

      I think you may be thinking of Australia, our censorship laws in NZ are actually very relaxed. Some movies have age restrictions on them, apart from thet pretty much anything goes, with the obvious exceptions of things like child porn…!! If that makes it a no-go for you, then we’re quite happy not to have you, thanks.

  • Mark

    Hi Simon,

    You stated that you have your eye out for agricultural land and small farms in NZ. I know you’ve mentioned the same about Latin/South America as well. This is something I’m interested in doing in the future, but I’m curious how you go about starting a farm in another country. How do you find people to build and run your farm? You must also be worried about it’s operations and finding someone you can trust to run it for you. Very interested to hear more. Keep up the great work.

    • Kevin

      I’m lucky enough to have obtained NZ permanent residency, but don’t have a lot of experience with ag/farming. But what I did notice is that many people purchase land and then lease it out for cattle (dairy has become very popular) or sheep farms. Land is often listed as already being leased out to farmers as well. Another possibility is tree farms. Fast growing pine is seen cultivated on quite a few acres in the South Island.
      If you are really serious, I have a contact that helps connect investors interested in buying and starting businesses and can help you through the process.
      Thanks,
      Kevin

      • TheGooch

        I am interested in NZ farmland, how can I reach you directly?

      • Kevin

        Woah, really late reply here, but you can contact me at kevinscenter-lists at yahoo dot com if you are still in the market for farmland in NZ and I can point you to my contacts there.

  • http://inhumanexperiment.blogspot.com/ JLL

    Simon,

    What do you think about the Wikileaks “scandal”? Apparently Julian Assange’s Swiss bank account has now been frozen. I guess Switzerland is not as secure as it used to be?

    • Sam

      Simon,

      Assange opened a Swiss Post account (the finacial arm of the Swiss post office) and it is a bit different than a bank account. The objection was that he opened the account with the local address of his lawywer and they used this to close the account. I’m sure the Americans applied pressure.. He instead should have opened an account with one of the local Swiss banks and he would not have had this problem (i believe) because the rules are different

      As an ex American living in Switzerland since 2000 I can really say that this place is heaven.. Low taxes, very high wages, very skilled labor and the best is that we are not part of the EU and have our own currency.

      The infrastructure is the best in the world.. good schools, best public transport system (all run privately) and so far a fair society where privacy is valued. Also a big empahasis on individual development and against central control (most of the taxes paid stay local as opposed to going to the federal gov.)

      everything is available.. any consumer goods to great health care (there is no socialised medicine). Also You can order Gold right at the bank and they will give you the physical stuff. I did just that a few years ago

      Small businesses provide most of the jobs and hard work is valued and compensated for. There is no minnimum wage law in switzerland!! However, generally people here are fair and realise good wages for good work are necessary so the lowest wage anyone gets (on average) is about 18 swiss franks per hour (that would be about 18 bucks at current exchange rate)

      One can even argue with the cops here without the fear of being given a “wood shampoo”

      Only problem is the weather in that it rains here like Seattle. And of course things are not cheap but it works.. you tend to buy less junk and more quality. We eat out less and as a result have a healthier lifestyle

      Also it is a multilingual country where almost everyone can speak 2 or 3 languages (german, french english) So it is difficult with only english but it can be done.

  • Kevin

    The process for immigration is really easy, lots of steps to go through and some weirdness, but it can be done all online. My interview was conducted over the phone and I had residency within 10 months of expressing interest. Immigration has been done, mostly due to what I believe to be incompetence in the immigration office, but I still find NZ a great country with a lot of opportunity.

    I don’t have any affiliation with this site, but http://www.move2nz.com/ was one that I turned to when making my decision.

  • Darr33

    Sailed down there from California and spent 18 months.
    My thoughts in a nutshell:

    –(for the most part) Kiwis have their head screwed on better than Americans
    –Economy is weaker…. you’ll earn less and pay more is the bottom line
    –Compared to Southern Cal — the weather sucks (can’t seem to go 72 hours without precipitation)
    –Yep, over a certain age –then forget about it unless you’re a brain surgeon or a millionaire.
    –there’s a reason the North Island has the bulk of the population (better job opportunity and more cosmopolitan)

    Great place to be a sailor though, I’ll admit I felt comfortable with kiwis sharing that bond. And no property tax on boats.

    Still, I’m back in CA (and tomorrow – a winter Dec day) — is forecasted to be upper 60’sF/19C and cloudless blue skies, with light winds.

    Hard pressed to find that in NZ

  • LeChat

    Well, I’m 65 with a nice pension and other financial assets. However, if NZ won’t take me, I’ll just have to stay here.

    • Dr-Go

      You are eligible for the Temporary Retirement scheme. Info is on the government immigration web site.

  • Mrtudo1975

    What are the pot laws in NZ? If they lock people up for a weed then they have work to do in the human rights department before I would even consider a visit much less relocating. Anyone know?

    • Tasman88

      The pot laws are strict and ridiculous. BUT they aren’t enforced that much.

      Lots of potsmokers here – in fact about half the population. And it’s amazing stuff. Just don’t blow it in the face of a cop and you’ll be all right.

      Move here and you can help us fix the stupid pot laws. There are plenty of other positives for living here meanwhile..

    • Hedgeboar

      It is illegal to possess and supply it. However, minor possession charges are often overlooked and would certainly not result in jail time on their own. Possession with intent to supply (like having over 30g on you) is treated more seriously.

  • meridian105

    Does anyone know if it is easier to emigrate to NZ if your spouse is a citizen of the British Commonwealth?…I’m U.S., my Wife is Canadian – permanent US resident…both over 60.

  • Bob2356

    NZ is a great country to live in but it’s far from perfect and its very far from cheap.

    I’m not sure what exactly Simon bought when he was in NZ, but even with the exchange rate at .75 it’s at least 20-40% more expensive to live in NZ compared to the US. Wages in NZ are about 30% less than the same job in the US. If you live and work hear without bringing in outside wealth you will have a very reduced lifestyle.

    Oil change? That’s $150 please. Pair of sneakers same exact pair as I bought in Walmart for $55 US last time home, that $220NZ thank you. Little plastic hook for my bathroom door, only $7 at the superstore. Children’s toys? fugeddabotit, they’ll learn to play with cardboard boxes like we did.

    Real estate is reasonable? Not very. Construction is very poor here and if you want to live in a good area or have a house with things like heat (not common in NZ, most people spend the winter huddled around a small wood burning stove. Many expats leave NZ because they are tired of freezing their asses off) or insulation, or windows that keep out wind and water then prices go up very, very fast. An apartment in Auckland for 500 US? Only if you don’t mind sharing with gang bangers and drug dealers. My last 2 bedroom apartment in a small regional town was 1400NZ. Prices in Auckland are a lot higher.

    I’m very happy here but I’ve seen some pretty disappointed people over the years. Look very closely if the trade offs are what you are willing to accept. Read expat exposed for the downsides so you have a balanced view.

    FYI the temporary retirement visa is a 2 year visa, requires a 750,000 investment with a 500,000 backup. You have to carry your own health insurance, a very big factor if you are over 65.

  • Jj1045

    Simon,

    New Zealanders are constantly leaving their country & coming here to Sydney to find work, not just young people. There’s high unemployment & the wages are low. That’s a negative you left out.

  • Domlanic

    Just a word of caution- I migrated to NZ from UK 30 yrs ago and spent 7 happy and successful years there UNTIL… Roger Douglas (yet another “World’s Best Treasurer”) and the Lange Government removed import tariffs OVERNIGHT and bankrupted thousands. Interest rates rose to 24% on one of my 3 home loans and forced us to move (to Australia) to save what was left of our hard earned. Been here ever since but now looking to move again for retirement as I fear this Govt will be looking for ways to reduce or eliminate age pensions. Once bitten, ….

  • Robertryanson

    Hello Simon

    I read your article about NZ with interest. I am an American who moved to New Zealand last year with my UK partner. While I agree with some of the things you say, I could offer you quite a different take on the costs here (we both find it much more expensive than the US or UK in almost every area). In addition to your comment about internet, I would add cell phones. There are 2 major carriers that charge both the caller and the call receiver NZ$0.70-0.80 PER MINUTE. That’s double dipping in my book. And if you don’t live in a city center, forget cell phone service altogether. Yes there are some cheaper alternatives, but if you can’t get cell phone coverage anyway, what’s the point?

    We’re on the fence about whether we’re happy we moved to NZ. Yes, it’s a drop-dead gorgeous country. And apart from the everyday cost, I find that we are often subject to the American tax or the British tax (i.e. you pay more because you are American or British). We’ve tested this numerous times with New Zealand native speakers and the result is consistently the same: we are asked to pay more because of our accents. Kiwis also seem to rip each other off regularly. My banker says opening a grocery store in NZ is like a license to print money.

    The best (only) true benefit of being in NZ is not being subject (as much) to punitive US and UK systems.

    Robert R

    • jayd

      “2 major carriers that charge both the caller and the call receiver NZ$0.70-0.80 PER MINUTE.”
      Which 2 carriers are they? I’ve lived in NZ for many years and I think you might be mistaken about that. Neither of the 2 major carriers charge anything to receive a call (unless you’re roaming outside of New Zealand).

      “we are asked to pay more because of our accents.”
      I’d be surprised if this were true.

  • Ansonmacdonald

    Can I bring my guns to New Zealand? Can I even OWN guns in NZ? This aspect is overlooked in many articles IMHO.

  • Ansonmacdonald

    What a preposterous reply Viretarmis! Every human has “business”, not only having guns, but keeping them close.

    Submit easily to your chains if you wish but don’t attempt to hold others to your weak standard

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