So far, we’ve explored the main components of Unretirement Planning, and why it’s a smarter move than playing the increasingly unattainable retirement game.
Generation X continues its lifelong run as the middle children of history. Every advantage enjoyed by those who came before us, ranging from stay-at-home moms to corporate pensions, has been unceremoniously yanked out from under us.
Oh well, whatever. We’re tasked with leading the way for younger generations in the reinvention of the stage of life formerly known as retirement, and we’re making it up as we go along.
But that doesn’t mean we won’t succeed. We’re the most entrepreneurial generation, and we’re entering the phase of life where the odds of success are greatest. I like our odds.
Unretirement Planning boils down to these essentials:
- Retirement isn’t all that great, even for those who can (seemingly) afford it. Wealthy retirees are also stressed about outliving their money.
- Desperately hanging on to a job you hate (or merely tolerate) for the next 10 to 15 years is a terrible waste of the best years of your life, and you may be laid off regardless.
- Starting your own thing is less risky than trusting an employer, and when that “thing” is a location-independent way to make a living, the whole world opens up to you.
- Choosing to live outside of the United States can lower your cost of living, drastically improve your quality of life, give you access to affordable quality healthcare, and lower your taxes.
It all begins with that location-independent income, whether from freelancing, consulting, or some other form of digital business. The personal enterprise approach strategically positions you for all of the above.
But the economic opportunities don’t end with the business, no matter how many revenue streams you develop. In fact, it opens an international door to an abundant array of opportunities that most people back “home” will never see.
Leaving Retirement Accounts Behind
Among other labels, we’re called the 401(k) generation. That’s because we are the first group who largely didn’t get corporate pensions, and were required to save for retirement ourselves through employer-sponsored, defined-contribution, personal savings accounts.
The primary benefit of the 401(k) and other retirement savings plans like IRAs is the tax deferment. Once you realize that there are multiple ways to save on taxes by becoming location independent, these accounts lose much of their luster.
Nevermind that failing governments tend to raid these accounts at the expense of their citizen savers via nationalization. Argentina, Hungary, Poland, and Cyprus have all done it. Can’t happen in the U.S.? Are you not watching what’s happening right now?
When you truly live in another country — not just visit on vacation — you see opportunities everywhere. This is the key to the “Untourist” approach, which means you see with the eyes of a savvy local who left the world’s bastion of unrestrained capitalism for places that are ripe for new ideas and investments.
Let’s explore some of the more common vehicles for investment. This list is in no way exhaustive, as new angles emerge all the time.
Investing in International Real Estate
Being location independent means being able to live and work in some of the most beautiful places in the world. And that means you can decide to invest in real estate in some of those places as well.
Contrast this with the way most people dabble in overseas real estate. They fall in love with a place based on one or more vacations, and decide to buy a condo (or worse, a time share). It often doesn’t go well, because they don’t truly understand the market,
That said, the most basic way to smartly start with international real estate is essentially a lifestyle investment strategy. You spend some time scoping out various countries and regions by spending significant “untourist” time there, and then make an informed decision to buy property in one or more of those places.
For example, you decide you want to split your time between Cabo and Costa Rica, or France and Panama. Some people select up to three locations that they rotate between, buy condos in each place, live in the property when they’re there, and list the other properties on AirBNB, VRBO, and other short-term rentals sites when they’re not.
Because of the rotating occupancy aspect, you don’t necessarily have to be as disciplined as you would with a traditional real estate investment strategy. But by spending the time to truly understand the market, you make smarter decisions.
Plus, you can use your investment in real estate to become a legal resident in that country.
For example, you can gain residency status in Panama and Costa Rica by purchasing real estate valued at only $200,000. If you have significant equity in your current U.S. home, you might be able to buy more than one international property that also gives you the legal right to live in those countries.
This provides you with more security during, say, the next pandemic. You have somewhere to go when things get dicey back home. Plus, foreign residency can eventually lead to citizenship and a second passport, which is its own smart strategy.
House Sitting as a Lifestyle Upgrade
During my last visit to Cerritos Beach on the Pacific coast of Baja Sur, Mexico, I hung out with Dustin Meeker. Dustin is co-owner and executive chef of Shaka’s Cantina, a must visit spot if you’re ever in Cerritos. Before that, Dustin worked for 15 years as Executive Chef for Sammy Hagar’s Cabo Wabo Cantina down the coast.
Dustin and his girlfriend live in a spectacular multimillion dollar beachfront home at Cerritos, but it’s not because of their day jobs. It’s because they house sit the property for the wealthy owners, who are only there for a few weeks out of the year.
Yes, there are services that act as matchmakers between property owners and those who are willing to house sit, which often involves caring for pets as well. But discerning owners prefer to make arrangements with someone from the community who they’ve come to know, like, and trust.
It’s not your typical economic opportunity. But it can be a fantastic lifestyle upgrade that further reduces your cost of living. And it’s all due to living like a local with an “untourist” mindset.
Starting a Local Business
On my first visit to Nosara, Costa Rica, I noticed a familiar vibe — and it was that of Boulder, Colorado, where I had lived for a decade at that point. Turns out that the yoga and wellness scene in Nosara had in fact been started by Boulder transplants, and maintains ties with the front range town due to certifications and philosophy.
In other parts of Costa Rica I ran across expats who owned bars, breakfast restaurants, gyms, and a host of other small businesses. Cerritos Beach in Baja has been almost entirely developed by expats who started restaurants, convenience stores, and surf shops. Same for Boquete, Panama.
In some ways it pays to be early in an up-and-coming location. But even established tourist and expat destinations have room for establishments and services that are common in the United States, but absent elsewhere. And these opportunities will only grow as the nomad and expat population increases throughout the world.
Agricultural Investments
Over the years I’ve heard numerous tales of people moving to Costa Rica, buying a lush piece of land covered in abundant fruit trees, and living the dream. It’s a romantic notion with an economic aspect to it.
But there are other options in farm and agricultural land that are a bit more passive.
For example, Uruguay is an advanced agricultural economy, welcomes foreign investment, and has a transparent farmland evaluation system. Uruguay produces enough food to feed 28 million people (eight times its population). The play here is to buy land and lease it to a farm business or hand it over to a specialist farm management company who would farm it for you.
There are three basic kinds of farmland to own: cropland, forestry land, and cattle/grazing land. According to farmland broker Ignacio Gonzalez from Terramar Farmlands, the biggest yields now are in forestry, given that Uruguay is home to the world’s two largest paper mills.
Panama offers passive forestry investments as well. Essentially you invest in land (starting at a cost of $138,000) that is reforested with teak and professionally managed for 25 years. In addition to earning a return, you can use this investment to obtain residency in Panama if the real estate option is not for you.
International Stocks and Currencies
Trading international stocks and foreign currencies is something you can do from your desk right now. But there’s a big difference between the Untourist’s level of local awareness compared with the opinions of other people sitting at desks on Wall Street and in London.
We’ve already talked about geographic arbitrage in the context of spending more valuable U.S. Dollars in countries with a weaker currency. But you have to understand that this situation could reverse rapidly if the Dollar takes a dive. If the value of the U.S. dollar plunges. the result would be significant economic instability, increased prices of goods, and heightened anxiety among the American people.
Since leaving the gold standard in 1972, there is nothing backing the currency of the United States other than faith and its role as the bedrock of global finance for decades. But critics argue that mounting inflation, the staggering U.S. federal deficit, and government obligations to Social Security and Medicare could bring down the USD’s dominance from within.
Add to this that much of the rest of the world would rather not be tied to USD. With advancement in financial technology and increased political will in response to Trump’s erratic policies, we may see the end of dollar dominance in the coming years..
In this sense, holding other currencies is smart diversification, just like you want to own real estate in more than one country. But there are other advantages as well, such as extraordinary interest rates with cash accounts in emerging markets. That said, you definitely don’t want to go into that sort of investment with a “tourist” mentality.
Do You Have that Pioneer Spirit?
Bringing things back around full circle, getting your location-independent business up and running is the most important thing. It opens the door to both the lifestyle and the opportunities I’ve touched on above.
And perhaps that’s enough. There’s nothing wrong with that at all, given that you’ve taken control of your life and destiny in a way that most people won’t. Maybe investing in a property or two sets you up for the days when you have to slow down a bit.
Frankly, that’s all I’m aiming for right now. But I also know myself, and not only am I good at spotting opportunities, but if it’s the right one, I have trouble ignoring it.
It really comes down to how much of a pioneer you’re willing to be, both in where in the world you choose to spend your time and what risks you’re willing to take. As they say, if it doesn’t feel risky, it’s too late.
But given how wide open some parts of the world are, it’s not as risky as trying to start a brick and mortar business in the States with insane levels of hyper competition, regulation, and ever smaller niche markets.
The first step is to get out there, and understand another part of the world like a local. Begin to embrace the Untourist mindset as a new lens for opportunity, and your economic perspective changes for the better.
