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!
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.