Three distinct statements will now follow.<\/p>\n
\u201cFor that price\u2026you can buy a place in Florida!\u201d<\/p>\n
\u201cThere are a multitude of reasons why relocating or retiring to Ecuador makes sense.\u201d<\/p>\n
\u201cDetroit files for bankruptcy, in the largest city government failure in USA history!\u201d<\/p>\n
I know what you are thinking.\u00a0 Huh?\u00a0 What can these three things possibly have to do with one another.\u00a0 Nothing\u2026yet everything.\u00a0 I know\u2026believe me, I am reasonably sure that my editor has the exact same headache right now that most reader\u2019s likely do.\u00a0 Bear with me.\u00a0 We are going to get there.\u00a0 It just may be a long and winding road.<\/p>\n
In clear violation of all that is sacred in journalism, instead of writing 3 separate reports, which I could readily do, I am instead going to combine portions of the topics raised in my \u201cthree statements\u201d, into one fluid piece. Why? Am I some kind of masochist\u2026or\u2026worse\u2026sadist? Nope.\u00a0 Just really think it is time to play \u201cconnect the dots\u201d, while time remains.\u00a0 If that last statement sounds \u201cominous\u201d, well, let me throw out even one more curve.\u00a0 This article may be one of the rare occasions I cross the line to sound\u2026dare I say it\u2026alarmist.\u00a0 Let\u2019s begin this journey.<\/p>\n
Come on, with interest rates dirt cheap and the bottom dropping out of the USA real estate market in most regions, you know you have that friend who says, \u201cEcuador? Why Ecuador?\u00a0 For those prices you can buy a place in Florida!\u201d Stop right there.\u00a0 No you can\u2019t.\u00a0 Not an equivalent place, let alone under equivalent circumstances, even less so with equivalent prospects.\u00a0 Allow me to explain.<\/p>\n
<\/p>\n
Buying real estate, if done correctly, is about a lot more than just looking at a price.\u00a0 Sure you can find a condo or run down single-family home in Florida and likely pay what you might in Ecuador, if you pay full retail in Ecuador.\u00a0 However, are you really getting the same thing for your money? Same ocean view? Same quality of construction and finishes? Same square footage? Same low real estate tax rates? Same low insurance costs – including no need for hurricane coverage, because the coast of Ecuador has no hurricanes? Same low condo assessment fees?\u00a0 Same freedom to enjoy your abode, without intrusive association policies? Same opportunity at property appreciation over the next year\u20265 years\u202610 years?\u00a0 Is what you are getting in Florida really the same as what you are getting in Ecuador.<\/p>\n
Think on just a few bulleted points:<\/p>\n
1)\u00a0\u00a0\u00a0 A posh 1,800 sf condo, on the oceanfront likely will carry a yearly property tax rate of somewhere near $180\/year. No need to blink. You got it right the first time\u2026per year! Going to pay that in Florida?<\/p>\n
2)\u00a0\u00a0\u00a0 A normal HOA fee here will likely run you $125-$150\/month for a well run building or HOA.\u00a0 There are some exceptions, mostly in gated communities, where the fees might run north of $200\/mo. and, even ever so more rarely, north of $300\/month\u2026but rarely.\u00a0 I know run down condo complexes in Orlando right now charging $500 – $600\/month in condo fees.<\/p>\n
3)\u00a0\u00a0\u00a0 You might get 1,000 sf for $150,000 in Florida, but here on the Ecuador coast that same $150,000 will likely get you anywhere from 1,500 to 2,000 sf, depending on where along the coast you buy.\u00a0 Might that extra room not be more comfortable than \u201ccramped quarters\u201d in Florida?<\/p>\n
4)\u00a0\u00a0\u00a0 Homeowners insurance costs? Post Katerina, from 2005-2007, insurance premiums costs in Florida rose 41%!\u00a0 In Ecuador, an all-perils coverage policy, plus reasonable content insurance coverage, might run you $1,200-$1,300\/year from a reputable carrier, spec based on an 1,800 sf property.<\/p>\n
5)\u00a0\u00a0\u00a0 Construction in Ecuador\u2026solid concrete throughout.\u00a0 Construction in most USA homes built, especially in places like Florida which work under BOCA Code (one of the weakest in the USA), razor thin walls, where a child could likely drive a fist and make a dent.<\/p>\n
6)\u00a0\u00a0\u00a0 Ecuador current economic outlook\u2026more growth, real estate price appreciation, increased credit agency ratings and a manageable debt. The USA? Stagnant growth\u2026real estate prices still facing a massive foreclosure overhang, credit agency downgrades and a debt standing at $17 trillion USD and counting.\u00a0 Still think that friend of yours makes sense, pushing Florida over Ecuador?<\/p>\n
<\/p>\n
Now, let\u2019s look at what Ecuador has to offer the expat and\/or retiree, in the most concise manner possible. Some advantages over buying a condo or home in a place like Florida might well include things like living expenses can be cheaper, the relaxed lifestyle more satisfying, and cultural experiences more rewarding.\u00a0 More tangibly, one has to look at factors such as:<\/p>\n
1)\u00a0\u00a0\u00a0 The cost of housing in Ecuador is far below the USA average and that of Canada and most European countries;<\/p>\n
2)\u00a0\u00a0\u00a0 Ecuador\u2019s property taxes are exceptionally low and homeowners over the age of 65 can get further discounts;<\/p>\n
3)\u00a0\u00a0\u00a0 Ecuador doesn\u2019t tax Social Security income or similar foreign government program payouts;<\/p>\n
4)\u00a0\u00a0\u00a0 In Ecuador, quality healthcare is very affordable, particularly in comparison to costs in the USA;<\/p>\n
5)\u00a0\u00a0\u00a0 Retirees in Ecuador, over 65 years of age, get 50% off cultural and sporting events;<\/p>\n
6)\u00a0\u00a0\u00a0 Retirees in Ecuador, over 65 years of age, get 50% off electric and water bills;<\/p>\n
7)\u00a0\u00a0\u00a0 Retirees in Ecuador, over 65 years of age, get 50% off airfare costs;<\/p>\n
8)\u00a0\u00a0\u00a0 Retirees in Ecuador, over 65 years of age, get a significant portion of all sales taxes paid refunded;<\/p>\n
9)\u00a0\u00a0\u00a0 Ecuador offers geographical and biodiversity like few countries on the planet, ranging from snow.capped mountains to tropical rain forests to idyllic beaches;<\/p>\n
10) The people of Ecuador are welcoming and inviting, in sharing their native land with expats<\/p>\n
The combined impact of all these factors could explain why in a country the size of Arizona, there are already a minimum of 10,000 expats permanently residing in Ecuador.\u00a0 Those numbers are growing, literally, by the day.<\/p>\n
<\/p>\n
At this juncture, we are two-thirds of the way there.\u00a0 Hopefully, even if only a smidgen, we\u2019ve gotten you to reconsider that a purchase in Florida (or similar) is not the same as buying in Ecuador.\u00a0 Hopefully, we\u2019ve gotten you to consider some of the advantages of Ecuador discussed here (there are many, many more).\u00a0 Now\u2026now comes the alarmist part.\u00a0 Here is why I think our readership should seriously consider the Ecuador option sooner, rather than later.\u00a0 While this is a broad statement, aimed at a global readership audience, I do think it is of particular urgency if you reside in the USA or certain parts of Europe.\u00a0 Frankly, Canada is not too far behind.\u00a0 The USA example will serve to illustrate the broader point.<\/p>\n
Detroit, Michigan –\u00a0 Ford – The auto industry –\u00a0 The heartbeat of the industrial age and USA global dominance.\u00a0 The same Detroit, Michigan, which as of July 18, 2013 filed for bankruptcy.\u00a0 Yes, the entire city, making Detroit the largest city government failure in USA history!\u00a0 How did we get there?\u00a0 Honestly, long\u2026complicated, way beyond the scope of this basic report.\u00a0 What you need to know is that in the USA and quite probably in many other parts of the world, other \u201cDetroits\u201d are waiting to implode.<\/p>\n
What you also need to know is that Detroit\u2019s financial insolvency and plea for subsequent bankruptcy protection means that , if granted, the city will wipe its slate clean of all financial obligations.\u00a0 All of them\u2026including\u2026retiree pensions.\u00a0 Of all the debt held by Detroit, the $3.5 billion in retiree pensions, both current and future debt, represents its largest single debt obligation.\u00a0 Detroit simply didn\u2019t have the $3.5 billion to pay the pensions.\u00a0 It didn\u2019t exist. Long squandered and reduced to a ledger entry in an accounting book.<\/p>\n
The bankruptcy trial is over, but the judicial decree is pending.\u00a0 Will Detroit be allowed to default on its debt obligations or not?\u00a0 You may have the answer, before you read this report. However, there is something worse. The answer doesn\u2019t matter.\u00a0 Detroit submitted a \u201cwork out\u201d proposal offering to pay pension holders $0.16 on the USD.\u00a0 That\u2019s right, 16% of the value of what pensioners were counting on receiving would be the proposed settlement.\u00a0 Imaging breaking your back your whole life, slaving, scrimping\u2026all in the hopes of enjoying a few retirement years and\u2026bam\u2026gone.\u00a0 You might get $0.16 per USD owed.\u00a0 What can be worse?\u00a0 Easy.\u00a0 What I just described is a best case scenario.<\/p>\n
If the judge rules in favor of the bankruptcy plea, they may allow the \u201cwork out\u201d or determine that Detroit is not even responsible for $0.16 per USD.\u00a0 If the judge rules against Detroit\u2019s plea and suggests full restitution for pensioners is required\u2026Detroit still doesn\u2019t have the money with which to pay.\u00a0 None of it.<\/p>\n
<\/p>\n
So, we\u2019ve reached bottom here, right? Not so fast. Not even close.\u00a0 Chicago owes $19 billion in pension payments alone and, by most accounts, could be in worse financial shape than Detroit.\u00a0 Like our Federal Government, too many USA states and USA cities are borrowing from Peter to pay Paul. You don\u2019t know how bad the hand held is, until the check kiting scheme ends.\u00a0 By all projections, Chicago may be holding a losing hand worse than Detroit.<\/p>\n
However, this is not a midwest USA problem.\u00a0 Los Angeles is more than $30 billion in the hole for pension fund debt obligations.\u00a0 It\u2019s an across the country issue.\u00a0 Some of the worst culprits include Philadelphia, deemed in worst shape by most, because its unfunded $9 billion liability indicates that in one year, pension accounts will be empty (I still think Chicago is in worse shape, just the walk to the gallows will take longer).\u00a0 Cities such as Boston, Cincinnati, Jacksonville, St.Paul, New York, Seattle, Baltimore and Fort Worth, are all awaiting the hangman\u2019s noose, merely jockeying for position, not to be next after Detroit.<\/p>\n
If you have been waiting on your pension funds to serve you in retirement years, how safe is that bet? Instead of more funds, you might wind up with less\u2026or\u2026none.\u00a0 In the meantime, prices in Ecuador and throughout the world, where high demand exists, tend to trend higher.\u00a0 Not exactly a rosy picture.<\/p>\n
The best Detroit and other cities can hope for is a Federal Government bailout of pensions, whereby the debt of the mismanaged cities will be passed on as further debt obligations to USA taxpayers?\u00a0 But where is a Federal Government, already $17 trillion in debt, going to come up with the funds to pay? Crank up the printing presses and watch the value of the USD further corrode, leaving all of us with less purchasing power.\u00a0 Even worse, this \u201csolution\u201d will send a ripple effect across ever state in the Union and every city that says, \u201cNo worries about financial mismanagement, Uncle Sam is here to bail you out.\u201d\u00a0 No repercussions for bad decisions and poor\u00a0 fiscal behavior. Politicians will buy the vote and leave the USA taxpayer the bill.<\/p>\n
Sure, most folks can sympathize, but those in the private sector, in a barely audible whisper, will simply shrug and say, \u201cThat\u2019s a problem for public pension funds.\u201d Not so fast. Just two words. Stroh\u2019s Brewing.<\/p>\n
Yes, Stroh\u2019s was a Detroit-based beer maker, but not for a long time.\u00a0 It sold beer operations to Miller Brewing back in 1999 and converted the new funds into a bevy of real estate assets.\u00a0 Probably not the wisest choice to follow beer, with real estate. Sort of like setting up a real estate operation, out of a pub.\u00a0 Long story short, as Detroit decayed so did the new Stroh\u2019s Corporation.\u00a0 The result should have been predictable: On November 8, 2013, Stroh\u2019s announced that it can\u2019t afford the pensions for 3,000 former Stroh\u2019s Brewery employees. Stroh\u2019s has asked for a Federal Government bail out.\u00a0 Ominous is the first word that comes to mind.\u00a0 As more cities crumble under the weight of pension fund obligations, the companies that rely on those cities for a client base, or for production or investments, may well follow suit.\u00a0 Not a public pension disaster, but a true \u201cpublic-private partnership\u201d into the decadence of uncontrolled excesses.<\/p>\n
Now\u2026for sure\u2026things can\u2019t get worse, correct? Not so fast.\u00a0 Not by a long shot.\u00a0 As bad as unfunded pension obligations are, they pale in comparison to unfunded healthcare liabilities.\u00a0 The latter is far worse.\u00a0 Try a hole ten times deeper than the pension fund fiasco.\u00a0 Yes, ten times worse!<\/p>\n
To all our loyal readers, your individual situation may turn out much better or much worse.\u00a0 No way to tell.\u00a0 Every individual situation is different, therefore, every outcome will be different.\u00a0 However, to say that alarming trends are not \u201cin the wind\u201d would be irresponsible.\u00a0 If one believes that this is a \u201cUSA-only\u201d problem, just consider that unemployment rates in Southern Europe are even higher than real unemployment rates in the USA.\u00a0 Just consider that nations, like the UK, on a per-capita basis, actually have a higher debt load than the USA.\u00a0 Many of the former dynamic capitalist economies have seen years of fiscal mismanagement and excessive debt weigh down their progress and push them to the brink of financial collapse.\u00a0 So, how safe are your retirement funds?\u00a0 How wise is it to put off tomorrow, what you can buy more cheaply today?<\/p>\n
It may be time to look at hard assets in Ecuador.\u00a0 The time might be more fleeting than any of us would like to think.\u00a0 If nothing else, the diversification into a strong growth, low value economy like Ecuador can\u2019t hurt.\u00a0 Alarmist is not something I like to be, but irresponsible is something I like to be labeled even less.\u00a0 Analyze carefully and choose wisely.\u00a0 Maybe you should enjoy the Ecuador lifestyle now. This is one instance, where time may not be on anyone\u2019s side.<\/p>\n","protected":false},"excerpt":{"rendered":"
It may be time to look at hard assets in Ecuador. Analyze carefully and choose wisely. Maybe you should enjoy the Ecuador lifestyle now.<\/p>\n","protected":false},"author":308,"featured_media":38738,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3],"tags":[],"yst_prominent_words":[31930,31923,31929,31921,4777,16532,12776,7731,31925,31928,15763,3512,31927,31922,31926,28459,1878,31924,31920,12773],"acf":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/staging.escapeartist.com\/wp-content\/uploads\/2020\/08\/Why-You-Should-Invest-In-Ecuador.jpg","_links":{"self":[{"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/posts\/38783"}],"collection":[{"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/users\/308"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/comments?post=38783"}],"version-history":[{"count":1,"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/posts\/38783\/revisions"}],"predecessor-version":[{"id":38795,"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/posts\/38783\/revisions\/38795"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/media\/38738"}],"wp:attachment":[{"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/media?parent=38783"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/categories?post=38783"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/tags?post=38783"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/staging.escapeartist.com\/wp-json\/wp\/v2\/yst_prominent_words?post=38783"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}