April 15, 2011
I’ll be in Paraguay again for the next week. This is a country that has quite a bit to offer… it’s incredibly cheap and they sell property for nothing. I’ve seen land in the Chaco region for as little as $25/acre.
Investment deals are also fairly interesting; companies here generally trade at book value and pay double-digit dividend yields in local currency, and with just a small deposit in a local bank, you can obtain residency and an eventual second passport.
Paraguay isn’t the place that you would go if you’re a professional looking for a well-paying job (try the Cayman Islands, Qatar, Bermuda, Singapore, Russia, etc.), but for a bright mind, there are several ways to create value and make money.
Fundamentally, long-term financial security is about the ability to create value, or at least investing in others who create value.
In simplest terms, I often define this as solving problems, perhaps performing critical tasks for employers (as opposed to simply shuffling papers around and collecting a paycheck), or creating a unique product that solves a problem for a large market of consumers.
This is something that absolutely everyone is capable of doing. We’re all good at something, and most people are good at a lot of things… hence, plenty of possibilities to create value.
I’ve written extensively that there are even more ways to add value overseas. Rapidly developing countries depend on the intellectual capital and professional experiences of talented foreigners to take them to the next level, and as these places are experiencing rapid wealth creation, the market is growing quickly.
On that note, I’d like to start off with a note from reader Demetrius, who writes: “Simon- you need MONEY or access in order to internationalize and head overseas. This is the largest flaw in your posts.”
Actually, you don’t. Sometimes not having money is the best reason to internationalize… when you have very little, you have little to lose by taking a risk and heading overseas.
Just this morning I received an email from my friend Sam, a recent university graduate from Michigan. She wasn’t going anywhere and decided that she wanted a change… so she applied for a teaching position in China and was accepted at Sichuan University in Chengdu.
She leaves in a few weeks. Poof. Internationalized. Total cost? A few hours.
I know a lot of people who got their start this way– they moved overseas for a small job, made their own connections on the ground, and eventually found lucrative opportunities where they could add value.
Anyone… absolutely anyone… can do this. You just have to be willing to consider the opportunity.
I’m fond of saying that there are two kinds of people– those who see solutions, and those who refuse to see the solutions. Bottom line, the solutions are there, it’s just a question of whether you’re willing to open your eyes, or just make up self-defeating excuses.
The truth is, most people who have money don’t start out with money. We have to earn it. Making money is a skill. You can learn to make money in the same way you can learn a foreign language or to play a guitar. As I’ve said, it’s all about creating value.
If you think you lack sufficient skills to create value, then learn new skills. Look at ways to generate an independent income, especially online. One of the best resources out there is my friend Craig Ballantyne, a true teacher in the skill of making money.
Craig’s recent post “American Dream Internet Success Story” is definitely worth a read, as well as his 27-page report on how to triple your productivity and double your free time. Again, it’s a skill. You can learn it.
Next, John asks, “Simon- Although I’m young, I’ve worked and lived abroad for several years and have also built up a significant amount of savings. My chosen country to bank in is Singapore; would you recommend opening an account with a large international bank or a local one?”
Great question. Singapore is a fantastic place to bank… they’ve never had a banking failure there. Ever. You can sleep well knowing that your money is safe and that the banks aren’t making wild bets with it.
Given the spate of regulations that the US government is trying to impose on foreign banks, US citizens ought to consider the large multinationals; they already have a presence in the US, and they’re accustomed to dealing with the regulations already.
Local banks are more likely to turn away US citizens unless the account is sizeable enough for them to warrant extra compliance hassle.
Of course, citizens from other countries don’t have this burden, and my recommendation to you is go where you get the best service. At smaller local banks, it’s easier to develop more personalized relationships.
Last, Pascal from Belgium asks, “Simon, I really like this info, and I have a question regarding silver. If I buy Chinese panda silver coins with 10 yuan face value [editor's note: roughly $1.50], is that both a diversification in currency as well in precious metals?”
No. Since the market value of the silver coin will probably always be higher than its legal tender face value, the panda coin doesn’t really have any function as Chinese currency. And, incidentally, your Panda coin will actually command a higher dollar premium in San Francisco than its yuan premium in Beijing.
At some point, it may once again be commonplace for gold and silver to be used around the world as a medium of exchange. Even at that point, though, the coin won’t have any currency-specific advantage in its country of issuance.
The idea behind precious metals is that they are the anti-currency. They take normal fiat currencies out of the equation and mirror (or front run) the price of ‘stuff’– food, gasoline, coffee… just about everything except iPads.