< Magazine Index > < Index For This Edition > < Subscribe >

Retire In Mexico - Live Better For Less - While there are some people who come to Mexico for a week’s vacation and end up living here for the next twenty years, most people adopt a more prudent course and do some homework first.  Dru Pearson is a person who did her homework and she is someone who knows about retirement in Mexico. While there may be a few expatriates scattered in a dozen villages throughout Mexico, most Americans and Canadians settle in one of five locations:  San Miguel de Allende, Mazatlan, Oaxaca, Guadalajara, or Lake Chapala. Dru Pearson visited all these areas before settling in Lake Chapala. Dru gives sound and thoughtful advice on retirement in Mexico. Everything from how to pick your location to Mexican paperwork is covered.  If you've ever considered retirement in Mexico please read this report first. It has the information that would otherwise take you months of frustration to acquire.  Click Here for details

Edmund Pankau is a nationally recognized author and expert in financial fraud examination and international business investigation. He is a Certified Legal Investigator, and Certified Protection Professional, and has formerly served with the U.S. Treasury. His experiences have been featured in such publications as Time Magazine, The Wall Street Journal, USA Today, Business Week, New York Times, and Entrepreneur, and has appeared on radio and television on ABC 20/20, MacNeil-Lehrer Report, and BBC-TV. Additional Resources Unique Lifestyles  Second Passports  Pankau Consulting

There are real advantages in doing business offshore and there are tremendous opportunities in developing and emerging countries that are ready to benefit from the wonders of “Bypass Technology”, the ability to piggyback off of the wireless world.  Many emerging or third world countries are rich in natural resources, land, minerals and a cheap labor pool, but don’t have the technology or financing to develop the infrastructure needed for major undertakings like utilities, telecommunication systems and financial services, until very recently.

Countries like Belize, Honduras, and Costa Rica haven't been able to build a national telephone system using pre-satellite technology, which required a major investment in cable and equipment, but now, they will soon be able to provide every resident and visitor with a digital cellular phone for a fraction of the cost of the conventional wired telephone systems that require a huge investment in infrastructure, manpower and capital financing.

With this new technology, combined with the graying of America, many of the emerging countries around the world have become the home of choice of the retirement, as well as the expatriate community. Why? Let me count the ways! 

The primary promise that brings new residents to third world countries is the ability to live on a fraction of what is costs in the more developed (and therefore taxed) countries of the world.

Fortune Magazine reported in 1998, that over 600,000 American have become expatriates, mainly for this reason, they just want to maintain their lifestyle or get away from a society that does not meet their goals.

Most Americans, “the poorest retirement savers in the world”, approach retirement with the shocking realization that they will have to live on the meager benefits allotted by social security.  Even those who can supplement this pittance with an IRA, 401K, or company retirement often fall far short of their goal of living in the lifestyle to which they have become accustomed. Could you live on $1000 per month, tomorrow, if you had to? Could you even do it on $2000?  If you live in the US, Western Europe or Australia, fat chance! But if you take that same money (as 50,000 shrewd retirees in Guadalajara have done) and emigrated south to Mexico, Belize, Honduras or Costa Rica, you could do just fine, thank you!

In recent years, Central America has become the Florida, California and Arizona of the 1950’s.  Remember when you could buy beachfront property in Florida for a song? When prices in California were dirt cheap?  Well, those days are now in full bloom just a little further south of the border.  The slower paced climate of Central American has awakened to the realization that is can revitalize its economy by becoming the retirement center of the western world. 

All of the things that made Florida and California boom are now happening in Belize, Honduras and Costa Rica, as is starting to emerge, Nicaragua, Panama, El Salvador and Guatemala.

As I sit here, writing this article in Hawaii, I look around and see the future of development in Central America.  The hotels, retirement communities and resorts surrounding me were just a dream in the 50’s and 60’s when I first came here as a soldier.  Today, well, you know the story!  You try to buy a piece of the rock in Hawaii!

The lower cost of living is the lure that attracts the outside world to the emerging countries.  It will also be the fuel that feeds their growth and development, creating tremendous investment opportunities as well.

If you have ever spent an hour on the freeway driving to and from work (do it every day, do you?) or waited in line behind an army of screaming shoppers, you know the frustration and anxiety of what that civilization can bring to your life.

Wouldn’t you rather spend that time walking on a pristine beach or staring at a beautiful sunset, sipping on a Cuba Libre or a Pina Colada? You can, you know; it’s a hell of a lot less stressful, let me tell you. Besides that, you will probably live longer, as well as enjoying it more. Consider that the average life span in Costa Rica is 76 years, that’s four years longer than in the US, and that is done WITHOUT heart surgeons, super drugs or so many face lifts that you wear a goatee! Nine out of ten people that go to Central America to retire stay there.  This is a clue! You couldn’t drag them back with a Caterpillar!

Cool ocean breezes, hammocks in the shade, sandy beaches, and crystal clear waters. What else is there, amigo?

Contrary to what you think you hear in the media, crime (especially violent crime) is lower in Central or South America than it is here in the US (We are probably the most violent society in the world).  Every since Russia went broke and quit sending Castro money to finance his “revolutionary ways”, the guerilla wars have vanished and democracy is the word of the day.

Nicaragua, one the hotbed of discontent in Central America, now has a democratic government and is actively soliciting retirees and investment capital.  International Living now rate Nicaragua as a “strong buy” and conducts exploratory tours that expose tourists and investors alike to the exciting opportunities in real estate and commercial development there, as well as the ability to live like a king on $1000 per month” in one of the least costly countries in the world.

If you make the big bucks and want to keep them, or if you plan to get there someday, this is another reason to consider the lure of offshore.

Many of the Caribbean Islands and several mainland governments, such as Panama, Belize and Costa Rica have seen the light to their economic future in offering wealthy investors and high-risk entrepreneurs the ability to shelter their assets and lower their taxable income through financial friendly trusts, corporations, banking institutions and government legislation.

If Leona Helmsly had set up her business empire through an offshore holding company, the IRS would not have had a prayer of putting her in jail.  Why? Because, they wouldn’t be able to touch these incriminating documents, they wouldn’t be able to trace her financial transactions beyond the US and, if she had taken citizenship from one of these friendly financial havens, they wouldn’t even have jurisdiction over her body.  (Sorry Leona, see me when you get out).

When set up properly, offshore financial planning can minimize personal or corporate tax liability and even give substantial tax breaks that do wonders for the bottom line.
 

So how do you do it? Is it really that easy? One way to take a chunk out of your taxes is to declare your primary residence in a foreign country and live (more than 181 days per year) outside your former home country and earn your income internationally (through a foreign corporation that you own or work for).  All the big rock stars have done this for years.

When you follow the government’s guidelines, you can legally deduct the first $70,000 of your income, your spouse’s income, your children’s income, etc… and the rest of the money, well that stays in the corporation in a tax free zone. Get the picture, Vern? How do you think all of the doctors and engineers that work in Saudi Arabia got so rich so quick?

You want to still play in the market, managing money or day trading? Look at Mark Mobuis and see how he did it.  Mobuis gave up his US citizenship, his multi million dollar taxes and graciously accepted Bahamian citizenship, not missing a stroke in his business.  His clients are even happier, because their money is now offshore, too.
 

Another asset is the ability to sleep at night and know that neither the government nor civilian creditors can tie up your assets through liens, judgments or litigation, IF you move them BEFORE you suffer or contemplate financial business problems.  By making sure that your offshore planning pre-dates your liabilities, your assets can be “bullet proof” against the courts, lawyers and litigants alike; simply by moving assets into offshore asset protection vehicles customized to your specific needs.

One of many expat neighborhoods along the shores of beautiful Lake Chapala, maybe the oldest expat living offshore haven in Mexico.

Through the wonders of magic technology, we can now have our cake and eat it too.  We can reside in Honduras, invest in the US and Europe and bank in the Isle of Mann, if we want too.

We can live in an emerging country offering substantial financial benefits and still day trade, videoconference and watch our CNBC and Moneyline.  With the help of “Bypass Technology” such as satellite systems and digital cell phones, we can literally be or live anywhere in the world and conduct our affairs when, where and how we see fit.

How about jobs? Employment and business opportunities are waiting for the taking!

When you put entrepreneur and sales skills abilities in a country rich with natural resources and technological needs – good things can happen.  Many opportunities that we often take for granted, McDonalds, movie theaters, mini storages and coin laundries are begging to burst on the scene in emerging countries with a small investment in real estate and construction you could quickly become the mini warehouse mogul of Belize, Costa Rica, or any one of a dozen similar countries.

Every successful US product manufacturer and distributor wants and needs sales reps who can do business in rapidly growing third world marketplaces.  Speaking the language is a plus, but not always necessary as English is the language of business around the world.

What do they need? Valves, pumps, washing machines telephone systems, filtration systems, satellite dishes, computers and any other product of state of the art technology.

The market is wide open and the need is there.  Go look at the international want ads and see what I mean.  They even need stockbrokers and investment advisors to meet the needs of a growing investment community of retirees.

Last but not least, US business is migrating to the suburbs. Intel has opened in Costa Rica, Barclay’s Bank and Citibank smile in Belize, and the hotel industry is expanding everywhere!

One of the best, if not THE BEST offshore investment opportunity is in the purchase and sale of real estate.

The market in the Caribbean and Central America is red hot and has been the best kept investment secret in the world for years.

Consider that:
 

Central America, being both mountainous and having water frontage on the Atlantic Gulf Coast and Pacific Coast oceans has a great variety of climate temperatures and spectacular views, for just pennies on the dollar compared to its US counterpart.

You like San Diego, consider San Jose, Costa Rica.  If Denver is your dream, but a bit warmer, then the valley of the Angels in the Honduras highlands is for you. If you were an alligator in a previous life, a sun and water loving creature, Belize and the island of Roatan is your paradise. If you like California's high chaparral, but you don't like California's high prices, Panama's Chiriqui mountain province is waiting for you.
 

In all but the major cities, land can be bought in the mountains and highlands from $1000 to $5000 per acre, ocean views for $10,000 to $30,000 per acre and beachfront for $50,000 per acre or more.  If you buy in volume, say in the 10 to 50 acre parcels, the prices drop and make a fine investment through subdividing into lots that will often double your value as soon as the first for sale sign is put up. If you missed out on the boom in Costa Rica, and Honduras is still a little pricey, there are still rock bottom opportunities in Nicaragua, Guatemala, and Panama.

Panama's Hidden Valley in the cool highlands of Chiriqui Province. This is the next Expat Haven.

Five years from now, I expect these prices to be up substantially with returns that any stock market would be envious of.  This is an investment you can hold in your hands!

You can AVOID many of you taxes and defer much of your income, IF you follow the rules religiously.  Tax avoidance is perfectly legal and many are the ways to shave points through trusts, annuities, and International Business Corporations (IBC’s).

Trusts can help their founders avoid probate, capital gains and certain income taxes.

Annuities can defer income from high earnings years to retirement and dramatically lower their owner’s income tax bracket.

Corporations, domestic and foreign, can hold and own assets in their own right and pay expenses that would otherwise be wasted on post tax dollars from an individual return.  Foreign corporations (IBC’s) are taxed less than US based companies and have other advantages such as privacy and asset protection from nosy lawyers and their courts.

The key to minimization is proper planning.   A good plan may sound Greek to you, but imagine what it does to the IRS! If you can lower your income tax bracket two notches, bulk up your retirement through tax deferred investments and perfect inheritance taxes lurking in probate court, the results make the difference between retiring and runny dry.

Don’t be fooled into buying a trust or IBC in a box, it’s nothing but a shell until you breathe life into it through funding and management.

All in all, there are many advantages to using the offshore advantage.  But there are more than a few potential liabilities and dangers as well.

Edmund Pankau is the author of several notable books. Hide Your Assets and Disappear is an acclaimed source of information for people who still believe in individual rights, privacy, and ultimate asset protection.  The book is available through Amazon.com, and has received rave reviews, worldwide. REVIEW -- Amazon.com In Hide Your Assets and Disappear, a master gumshoe gives some straight information about how to cover your trail and protect your money from the government and creditors. Edmund J. Pankau, a writer and acclaimed private investigator, believes that individual rights, privacy, and benefits are slowly eroding in the United States, but that there are ways--legal and illegal--to beat the authorities. "The choice is yours to make," writes Pankau, "Don't be the one that someday says, 'I wish I could have done that.'" Pankau despises domestic tax laws. He urges people to hire a good attorney to help plan a move offshore to a sunny clime with low taxes, bank-privacy rules, and simpler, cheaper living. He recommends New Zealand, Belize, Costa Rica, and Honduras, where the island of Roatan is his own personal hideaway. And for those who truly need to disappear, Pankau explains how amazingly easy it is to obtain a second or third passport, become a new person or stage a phony death. Pankau is also a powerful advocate for asset-protection planning. The book features some nifty moves to block creditors with bankruptcy laws. There are also methods to maximize state and federal tax exemptions and maneuvers to shield a personal residence, real estate, stocks, or pension accounts from taxes and potential creditors or lawsuits. -- Dan Ring To order this book directly from Amazon.com - Click Here -