Posts tagged as:

panama

The best places in the world to meet like-minded expats

By Simon Black · 12 comments

March 3, 2010
Pattaya, Thailand

One of reasons that a lot of people are hesitant about making a move overseas is because they’re concerned about being isolated. The world can be a cruel place, especially to newbies.

Sure there are the nomads out there who want to be left alone with their little slice of paradise in the middle of nowhere… but most people crave some human interaction from time to time, especially from like-minded souls.

I’m one of those people. I enjoy the company of interesting, like-minded, and well-rounded individuals.  This is the chief reason that I’ve encouraged kindred readers to join us in the private Atlas 400 group, whose next gathering is coming up next month in Panama. I’ll be there.
Read More…

Tagged as: , , , , , ,

{ 12 comments }

Gold in Uruguay, Swiss francs, Polish citizenship, Moody’s

By Simon Black · 3 comments

February 26, 2010
Bangkok, Thailand

It’s “Judgment Day” in Thailand. I wrote about this on Monday– a Thai high court will rule today on the disposition of ousted former PM Thaksin Shinawatra’s frozen assets valued at several billion dollars.

According to the mainstream media, the entire country is supposed to erupt in chaotic and violent protests today. Even BloombergTV, which I normally respect, has been running sensationalized stock footage of fires, vandalism, and Thai soldiers shooting semi-automatic weapons in the street.

Without doubt, there will certainly be renewed political turmoil in time… this happens in Thailand about every other Thursday, and they present great buying opportunities. But the reality of the situation on the ground here is anything but chaos. Thais are going on about their everyday business, and today is like any other day.

It just goes to show how unreliable a lot of information out there can be.

On to the questions for this week–
Read More…

Tagged as: , , ,

{ 3 comments }

Questions: Jobs update, a dollar crisis, gold banking in Singapore, sustainable community

By Simon Black · 7 comments

February 19, 2010
Bangkok, Thailand

I really need to start out today’s letter by expressing how truly humbled I am to be part of such a fantastic community.

Matt and I have spent much of the last few days combing through resumes (200+ so far) for the job openings that I posted on Monday, and the caliber of talent and energy is really impressive.

Applicants vary in age from 17 to 70. They come from all stations of life– corporate executive, successful entrepreneur, student, homemaker; and they  hail from at least 18 different countries, from Guyana to China to the Netherlands to South Africa.

I’ve read every email with great interest and have made difficult choices to narrow down the pool of candidates. If you submitted an email, you might just be hearing from me in the next week or two.

Now… on to this week’s questions.
Read More…

Tagged as: , , , , ,

{ 7 comments }

Secrets of a Panama real estate insider

By Simon Black · 4 comments

February 18, 2010
Bangkok, Thailand

Panama is one of those countries that registers a lot of interest from potential expats… and with good reason. It’s cheap, it’s close to North America, it has a strong and stable economy, and it’s full of opportunity for an ambitious investor and entrepreneur.

Over the past few months I have received numerous requests for more information about Panamanian property– it seems that people are finally starting to take action and getting prepared to internationalize themselves.

Of course, buying overseas property is one of the best ways to do this– property transactions are not reportable, and the capital that you park in real estate cannot be forcibly repatriated– once it leaves your home country, it’s much safer.

One of the major pitfalls of foreign property transactions that I’ve noticed over the years is when people entrust their capital to an incompetent or shady real estate agent.

It happens more often than you think– someone who looks good and sounds good, but whose opinion absolutely cannot be trusted. Panama is unfortunately full of people like this– charlatans who masquerade as real estate professionals.

In fact, I published a case study several weeks ago describing the experiences of a woman who trusted the advice of a real estate agent in Panama that sold her into a building with a condemned sewage system.

The right advice truly makes all the difference in the world, and that’s why I want to share with you some insider information about the Panama real estate market courtesy of the person who I have found to be the absolute best in the business.

His name is Ulrich Schwark; he and his partner Peter run one of Panama’s most successful real estate agencies, and they are hands down the most knowledgeable real estate professionals I have come across in the country.

Why? Because they are sharp investors themselves… they understand value, they understand risk, they understand long-term trends. And as Europeans, they can relate to foreigners and high standards of quality.

I’ve been operating in Panama for over 7-years, and I’ve met hundreds of ‘agents.’  Most of them are simply cheerleaders riding the wave. Ulrich and Peter understand the ebbs and flows of the tide and how to make money across the entire cycle.

I recently conducted a short interview with Ulrich in which he discusses the state of the market, where the best value and investments are, and a handful of really undervalued deals that he currently has available.

You can access the 30-minute interview here in mp3 format:

http://media.libsyn.com/media/withoutborders/Panama-property-interview.mp3

If you have any interest in Panamanian real estate, you should absolutely get in touch with Ulrich. The best way to reach him is to fill out this short form that describes the sort of property you might be looking for:

http://www.sovereignman.com/panama-property-interest

The information you provide is completely confidential and will go directly to Ulrich’s desk.

Tagged as: , ,

{ 4 comments }

This survey will make you want to leave immediately

By Simon Black · 7 comments

February 17, 2010
Bangkok, Thailand

I couldn’t believe what I was hearing… and I found myself wondering out loud- “Are these people insane??”

Apparently, yes.

I was watching Richard Edelman this morning on Bloomberg Television discussing the latest results of his research and PR firm’s annual “trust survey.”  Edelman takes a scientific poll each year, drawing on a global pool of educated, well-informed people from G20 nations.

The theme is always the same– trust.  Edelman’s research gives an indication of the public’s confidence in the private sector, the banking industry, NGOs, the mainstream media, and of course, the government.

For example, I wasn’t surprised to hear that public trust had fallen for corporations and the financial sector since last year. Edelman’s data suggest that people are more leery of business than in the aftermath of the Enron scandal, and only 29% of respondents trust what a CEO says about his/her company.

Given what has happened with the Goldman/AIG sweetheart deals, the Toyota recall, the socialization of Chrysler and GM, etc., this sentiment is to be expected.

What was shocking to me, though, was that the US public’s trust in their government and political leaders actually increased from last year– 46% of Americans trust in their government to do the right thing, which is more than the French (43%), German (46%), British (38%) and Russian (38%) believe.

What’s more, Americans’ trust in their government increased by over half of 2009’s level– a 53% increase, proportionally, from last year.  Who were they interviewing?? Barack Obama’s kindergarten teacher? The guy who owns a warehouse full of “Real Change We Can Believe In” bumper stickers?

Among major nations, only the Chinese at 74% had more confidence in their government.

Economically, 65% of respondents worldwide, including 61% in the United States, said that they want governments to *increase* control over all industries, and fewer than half of the Americans polled believe that the free market should be allowed to operate without significant government influence.

These indications are really unfortunate, because when the people ask for more government control, they will absolutely get what they deserve.  And once power has been vested to the government by the people, it almost takes a revolution to wrestle it back.

If you’re one of the minority who can properly identify runaway governments as the problem and not the solution, you should really think hard about your options.

Expatriation is often too radical a concept for most people, especially those who find themselves chained to geography by factors like job, money, and family.

Personally I would argue that family is one of the chief reasons to expatriate, and that most people would have more financial success and live a better, cleaner lifestyle overseas.

If fear and uncertainty are preventing you from making a move, I would advise that you at least get your feet wet by internationalizing yourself in baby steps.

For example, definitely consider purchasing foreign property as a first step– buying property is definitely the best way to move money between countries.  It also makes for a great investment, provides you with an emergency landing pad, and frankly gives you a reason to travel from time to time.

Do your research and buy in a free country that has a stable economy and fiscal discipline.

Panama is an excellent example– the country’s debt level is currently a manageable 45% of GDP, and the government is astutely borrowing a bit of very cheap money to make lucrative infrastructure investments that will yield a soundly positive ROI.

Furthermore, as the country continues to experience a solid growth rate and manage its debt levels, Panama’s proportion of external debt to GDP should continue to decline in the foreseeable future.

In fact, Panama is one of just a handful of countries that experienced positive GDP growth last year, and you can see evidence of this on the ground. There are currently some attractive investment opportunities in the property market, as well as fairly straightforward bank financing available.

I promised a few weeks ago to bring you some inside information about Panama’s property market, and I intend on doing that tomorrow. More to follow.

Tagged as: , ,

{ 7 comments }

Questions: Travel, buying property, moving gold, second passports

By Simon Black · 6 comments

February 12, 2010
Pattaya, Thailand

I’m happy to report that I seem to be in the final throes of my Asian jet lag– I finally managed to go to bed and wake up at a reasonable hour.

I appreciate the emails that I received giving me advice about how to deal with it more effectively… honestly though, I think time is the best remedy for everything.  With jetlag, I take a “sleep when you’re tired, eat when you’re hungry” approach, and it will work itself out eventually.

Anyhow, as I am out the door and headed to the beach in a few minutes, I’d like to spend some time addressing your questions this week:

Kevin asks: “Simon, I want to purchase a round-the-world plane ticket in order to get a sense of which country I would feel most comfortable living in / retiring outside the US.  Do you have any recommendation on how to find an open-ended round-the-world ticket on the cheap?”

“Round the world” fares are a flexible, cost-effective way to explore the world. Each of the major airline alliances (Oneworld, Star, and SkyTeam) has an around the world program, and the rules are generally the same.

You have to establish your route in advance, i.e. start in Vancouver, travel to Tokyo, then Singapore, then Mumbai, then Abu Dhabi, then Istanbul, then Kiev, then Krakow, then Madrid, then Miami, then Los Angeles, and finally back to Vancouver.

The nice part is that the dates for each flight are completely flexible. If you start in Vancouver and fly to Tokyo first, you can spend as much time as you want in Tokyo. When you get tired of it and are ready to move on, you just call the airline and they will book your next leg of the journey (to Singapore).

There are a few rules– the entire journey can only take up to 1-year, and there’s usually a maximum of 16 stops in total.

Now… here’s how you save money: If you live in North America, try to start your journey in South America. Buy a 1-way ticket to Colombia or Brazil, for example, and begin the routing from there. You will save about $1,000.

Peter asks: “Simon, I’m really interested in Panamanian property; given where I see my country headed, Panama seems like a great place to set up, and I want to get out while I can. I bought the Black Paper, and I am considering going to this International Living conference in April. Do you think it’s worth it?”

Yes. I was friends with most of the IL staff in Panama over the last few years, and I knew the conference organizers quite well. They routinely put on informative events, and if you’ve been strongly thinking about buying property in Panama, the conference is a great way to pack a lot of objective exposure into a short period of time.

Incidentally I may be back in Panama by April, in which case I might attend the conference myself to meet with some subscribers and old friends.

Helen asks: “Simon, when can we hear back from you about the sustainable community, and on the second citizenship programs?”

We have about 750 survey responses from subscribers telling me what they would like to see from a sustainable community in Panama. Clearly this is something that needs to be done. My partner Matt and I are digesting the data and strategizing how we would execute this. I will provide details next week.

In regards to second citizenship opportunities– I plan on rolling out quite a bit of information later this month, probably the week of the February 22nd. Stay tuned.

“LookingToLeave” asks: “Simon, do you have any suggestions for someone who plans on possibly using physical gold as a way to move their wealth out of the U.S.?”

Transporting gold is a great way to move wealth– a mere six pounds is over $100,000. There are three things you need to keep in mind:

First, the US government (and Canada too) does not consider gold to be a monetary instrument, so technically it would not be reportable… but be prepared to tap dance in case some Neanderthal government agent becomes suspicious about it.

I say this because in my travels recently, nearly every border guard I’ve come across has wanted to know one thing: “How much money are you carrying?”

Second, don’t forget to check the regulations on your destination country. Some places, like Uruguay, require you to declare gold upon arrival.

Third, do not underestimate security. If you’re confident, you can carry it yourself, but consider engaging a company like ViaMat to securely transport it for you.

Have a great weekend, and we’ll talk again on Monday.

Tagged as: , , ,

{ 6 comments }

Your questions: anarchy, healthcare, mortgages, China

By Simon Black · 8 comments

February 5, 2010
Mexico City, Mexico

Greetings once again from Mexico; I’m sure many who listen to the mainstream press would be amazed to find that I have spent 48 hours on the ground here with nary a swine flu infection nor simple mugging to report.

I did, however, miss my flight to Canada.

What can I say… Mexico City traffic has got to be the most dangerous thing in this country. I was able to change my plans and will be in Vancouver this evening.

Before I get started on answering your questions from the mailbag, I wanted to mention a brief administrative note– if you ever have difficulties opening or reading the daily email in your inbox, you can always read it online at www.SovereignMan.com; in the meantime, my staff is working on resolving all readability issues.

Moving on to questions.

To start off, John asks: “Hi Simon- you don’t talk about politics much, though I have a feeling where you stand by reading your letter each day. Can you give me a better idea of how you see the world, politically?”

First and foremost, I want to make an important distinction. I am an avowed anarchist. Just the word itself has an incredibly negative connotation– it conjures images of subversion, treachery, and treason… or at least crazy guys hoarding guns in Montana.

People too often confuse ‘anarchy’ with ‘chaos’, usually citing examples like “if there were no laws, what would keep people from driving on the wrong side of the road?” or “who would come and put out the fire when your house is burning?”

These arguments are weak and only serve to indicate the extent to which governments have brainwashed people. Most citizens now believe that the political establishment is vital for their own survival, as if we would all spontaneously combust were it not for the FDA.

Anarchy is not chaos. The political establishment is chaos. Politicians have a horrific track record managing wars, finances, education, health care, and just about everything else they put their hands on… all at the expense of public resources.  Very little changes for the better, at least thanks to the government.

And yet, every few years, we still put on a charade to cast our vote, as if this ridiculous exercise has any meaning whatsoever. It’s an unpopular thing to say, but participating in the political process is a complete waste of time… particularly since we have a much more powerful voice.

The most important votes we cast are as consumers, not constituents… we vote with our dollars every single day. The best candidates, i.e. the producers, win our votes, and the worst candidates go bust. No amount of baby-kissing can save a defunct company.

Hell, not even a government bailout could keep Chrysler and GM alive.

Personally, I would prefer to have all of my tax dollars back in my pocket and pay a usage fee for privatized roads, or an annual subscription for a privatized library, rather than have some bureaucrat funding pet projects with my hard-earned money.

I recognize that this is all just a pipe dream, at least for now. Political institutions are here to stay, and the trend is bigger government, not more limited governments.

That’s one of the reasons why I have chosen this lifestyle– with a multiple flags approach, I minimize the impact that any single government has on my life.

Betty sends along the following comment: “You wrote that hospitals in Boquete, Panama were substandard. You are badly misinformed. Hospital Chiriqui is a modern hospital with excellent doctors who speak English for the most part; I should know, I was in intensive care there for three weeks and had five specialists attend to me.”

Noted, Betty. Thanks.

Captain asks, “Simon, do any ex-US real estate markets employ US-style mortgages?”

Yes. Panama is one of them; foreigners can get a 50% to 70% mortgage, and a better rate if you become a resident. Many European countries also underwrite mortgages for foreigners.

The other thing to consider is developer financing instead of bank financing. This tactic is being used in a lot of places around the world to mop up extra inventory. I see this everywhere now– Spain, Thailand, Morocco, and here in Mexico.

Standard packages generally require 10% to 30% down, and will finance the balance on a 30-year amortization schedule for a 5-year term.

Nathan asks: “Simon- Regarding China, I know a lot of people have been high on the country for some time. But what is the real analysis here?”

To be clear, I am not a blind China bull… but I’m happy to call a spade a spade. The ‘good’ part of the analysis is fairly simple. In the long run, there are two things needed for sustained economic growth: technology and savings.

Technology makes production (i.e. wealth generation) more efficient, and a large pool of savings becomes investment capital to create businesses, build factories, etc… things that add value to an economy.

China has both, and so the foundation for its economic growth is sound. However, there are a LOT of potential problems with China– the economy succeeds despite its government, and I’m concerned about future political instability.

Furthermore, I expect one day that China will go through significant challenges as it finds that it can no longer compete with its neighbors for low-skill manufacturing. The country will have to develop entirely new industries, and that could be painful.

Lastly, the Chinese are become cultural consumers… shop-a-holics really. This consumption depletes the pool of savings, and if sustained, will create long term structural issues.

That’s all for today, I’m off to Vancouver.  Have a great weekend.

Tagged as: , , ,

{ 8 comments }

Three real estate traps in Panama

By Simon Black · 3 comments

February 3, 2010
Panama City, Panama

Panama is a popular destination for expats, and for good reason. But there are some critical property traps that you should be aware of if you’re looking to buy.

The first trap to watch out for is the tax law; for years, the government stimulated the real estate industry by promising property tax exoneration for up to 20-years. In order to qualify, a project must have been permitted no later than July 1, 2009.

For this reason, you see a lot of empty pits in Panama City where developers were technically within the law and are now frantically trying to pre-sell units.

One of their key sales points is that if you buy their condo, you won’t have to pay property tax for 20-years… what they don’t tell you is the plain and simple truth– in order to qualify for the tax exemption, the building must be completed by December 31, 2011.

The chances of all these new condo developments being completed by December 31, 2011 are slim to none… and slim’s out of town. That will leave new buyers stuck paying extra taxes.

The other thing to keep in mind is that even if a building does qualify, the property tax exemption only applies to the actual construction, not the land value. Condo owners must still pay their share of taxes on the value of the land that the condo tower was built upon.

Ordinarily this would seem like a trivial sum… but many developers are now petitioning the government for a substantially inflated land value; this increases the developer’s cost basis and lowers their income tax while simultaneously increasing the government’s tax revenue at the buyers’ expense.

The second trap to watch out for is title– a lot of the land in Panama has cloudy title, meaning that multiple parties often have claim to a single parcel. These disputes grow from generations of sloppy record keeping, shoddy land surveys, squatters’ rights, and the neighbors’ ever-encroaching fences.

In Panama, possession truly is 9/10 of the law, and judges uphold this standard.

Title insurance companies now operate in Panama, which makes the transaction less risky… but a lot of property for sale is actually untitled, what is known as “Right of Possession” property, or ROP for short.

ROP landholders are not registered with the government, and the buyer is effectively paying for use of the land, not ownership.  A lot of buyers are OK with this distinction, but that will now surely change.

The government has recently stepped in with a new mandate that will effectively stick ROP landholders with an enormous fee for recording ROP as titled ownership. The fee applies to ROP land above 5-hectares and will cost anywhere from $10,000 to $625,000 per hectare.

My guess is that there will be a flood of sellers trying to unload their ROP land to unsuspecting buyers who don’t know about the new law. Don’t be one of them.

The third trap in Panama is unreliable information.  In developed countries, property transactions are a matter of public record. In Panama, however, most sales are kept private.

How? Many properties in Panama are owned not by an individual, but by a Panamanian corporation. When it comes time to sell, the parties exchange shares of the corporation, not title to the property. In other words, the owner of the property is still the corporation, but the corporation’s shareholders have changed.

As there is no public database of shareholders for Panamanian companies, the property transaction is effectively kept private, and no one will ever know how much the property actually closed for.

The lack of reliable information in Panama generally gives rise to unsubstantiated rumors, especially from real estate agents. Naturally, it is in their best interest to spread rumors about how properties are still selling for high prices because there is always a greater fool willing to believe it.

Most Panamanian real estate agents are notorious for this, and if you’re in the market for property I would advise you to exercise extreme caution, regardless of how slick s/he may sound.  As a foreigner, it’s very easy to get steered into overpaying for the wrong deal based on rumor and misinformation.

That’s why I’m going to be introducing you soon, through an audio interview, to one of my most trusted contacts in the business. He’s a savvy investor who understands long-term value and knows the market inside-out.

During our interview, he’ll be discussing these property traps in more detail, as well as the most undervalued properties and foreclosures he’s working on. If you’re interested in Panama property, you won’t want to miss it.

Out of fairness, I will make the interview available exclusively to Black Paper subscribers at first, and then to the rest of the community at a later date.

Tagged as: ,

{ 3 comments }

← Previous Entries