Plan B

plan bSo why wouldn’t you have a “Plan B”?

If you screw around and screw up you can get a “morning after pill” so why would you leave your future to chance and the whim of whatever politician comes into power?

There are thousands of Venezuelans living in Panama, mostly around Panama city, who were smart enough to see the writing on the wall and made a “Plan B” moving money and resources to the safety of Panama and it’s currency which is the US dollar.  Now, when Venezuela has clamped down on folks taking the money they earned out of the country, the folks who were smart enough to have a “Plan B” are enjoying a better life in Panama.  Most still pride themselves in being Venezuelan and hope, and pray, for the day when reason rules and they can return home … or maybe just stay in their new-found Panamanian paradise.

As Brazil seems to be making all the wrong moves more and more Brazilians are looking for a “Plan B” … and the same is true for Canadians, whose sliding dollar has made the move more costly now than it would have been earlier … and Europeans who watch their homelands sliding into chaos.

When we moved to Panama 12 years ago we moved everything.  I foresaw the time when the US government would more and more start treating my money as if it were their money and restricting individual freedom to move one’s own money, or so we thought, abroad.  I was right!  It’s much tougher now than it was 12 years ago.

Having a sensible “Plan B” that’s thought out and makes financial sense doesn’t mean that you are locked into that plan for the rest of your life.  You may choose to live in permanent exile, but you may just choose to live as an expat until conditions improve “back home.”  Nothing remains the same forever.  Things change.  The key is to grow with the change and have a plan so that you’re not making knee-jerk decisions.  Most of us are able to make financial, investment decisions based on analysis of what is the best investment and we can move from one investment to another as circumstances change, but a lot of times when it comes to running our lives we lock ourselves in and don’t realize we can change the ways in which we invest our lives and money and where we can get the best return.

Darwin said, “It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”

Heraclitus

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So What About Ecuador?

If you’re thinking about an expat lifestyle and/or retiring abroad and you are on any of the mailing lists of the outfits who make a big business off promises of cheap and easy living abroad, you’ve probably heard about Ecuador.  Or Belize. (I had dinner with a couple just a week ago who moved to Belize to retire and can’t wait to leave and come to Panama.  “The only plus about Belize is that they speak English.  Other than that … and the government is very anti-foreigner.).  Or Portugal. (With the EU in a mess and taxes up the wing wang?  Come on!)  If you’re getting all this stuff on living abroad just take it all with a grain of salt. Realize these folks are in the business of promoting living internationally and selling books (OK, I do sell my book), conferences selling all kinds of “opportunities” to take your money and need I mention 15% “guaranteed” returns.  If you live in Washington, Colorado, Oregon, California or places that have legalized marijuana in one form or another, you’ll understand where these folks are coming from and getting their information.  Jackie Lange of Panama Relocation Tours has put together this great post about Ecuador …

Why I Did Not Move to Ecuador

whynot2-760x300During the Panama Relocation Tours I am often asked why I did not move to Ecuador, Costa Rica, Mexico or many of the other places popular with expats.  I did visit all those countries and more but, in my opinion, Panama was SO MUCH better.

It’s time once again to take off the rose colored glasses.  Learn why I did not move to Ecuador.  You will not read about any of these issues in live overseas or international magazines.  Keep in mind that many of these live overseas organizations have an objective to sell you a conference then sell real estate or other investments so they will paint pretty picture of the country but leave out important details that you need to know to make an intelligent decision about relocating.   At Panama Relocation Tours, there is no hidden agenda to sell real estate or investments.

I enjoy visiting Ecuador but I could not live there because….

For any country close to the equator, you can pick your ideal climate based on the elevation.  The weather does not change much regardless of the time of the year.  The average daytime temperature at sea level is 85-95 degrees.  For every 1,000 feet increase in elevation you can deduct 3-4 degrees.   So, at 3,500 feet (the elevation in Boquete Panama), the average daytime temperature is 75-83.

IT IS TOO COLD!!!!

lady-with-shawl-195x300In Ecuador, the most popular mountain towns are at a much higher elevation so they are too cold for me. Cuenca is at 8,500 feet.  Cotacachi is at 8,000 feet.  Daytime temperatures are in the mid-60s.  Evening temperatures get down to mid-40s.  Add a little wind or after a rain it will feel even colder.  Brrrrr!  When I visit these towns I need long sleeve tops, a sweater, jacket and scarves but I’m still freezing.   It feels like winter is just around the corner.  Most hotels and houses do not have a heater but you really do need one.  A few hotels have a fireplace in the room or they will put a hot water bottle in your bed to warm in up.  Even the locals have to bundle up to stay warm.

Vilcabama is at 5,000 feet so it is a little warmer but after the sun goes down it feels very cold.  And it is a really small town (population of 2500) with a lot of strange people.  Drinking beer and wine seem to be the most popular past time there.

Quito is at 9,350 feet and surrounded by active volcanoes.  It gets quite cold. The air quality is terrible because of fumes from the volcanoes.   And crime is a huge problem in Quito.

ACTIVE VOLCANOES

There are 25 active volcanoes in Ecuador.   They spew ash into the air which causes poor air quality not to mention the threat of lava flows which could destroy property and kill people.  It is common to see people walking around with a mask to prevent breathing the fumes.

HIGH ALTITUDE SICKNESS

Many people experience high altitude sickness at altitudes over 4,000 feet.  This can be as mild as a headache that won’t go away to extreme breathing problems.  Just walking around town can cause you to have shortness of breath.  High altitude sickness can kill you.

te-coca-300x225While in Ecuador, you can buy coco leaves to suck on or drink coco tea to ease the high altitude sickness symptoms.  The leaves of the coca plant contain alkaloids which—when extracted chemically—are the source for cocaine base. However, the amount of coca alkaloid in the raw leaves is small. A cup of coca tea prepared from one gram of coca leaves (the typical contents of a tea bag) contains approximately 4.2 mg of organic coca alkaloid. (In comparison, a line of cocaine contains between 20 and 30 milligrams.) The coca alkaloid content of coca tea is such that the consumption of one cup of coca tea can cause a positive result on a drug test for cocaine.

Some who live in Ecuador need to take daily medication to combat altitude sickness.  All medications can have side effects.

TOO EXPENSIVE!

Rents in “some” areas are affordable.  In Cuenca, you can get a nice 2 bedroom apartment for under $800 in some areas of town.  The price to buy real estate has gone up substantially.  If you eat Ecuadorian meals they are affordable but many restaurants are quite expensive.

vat-taxThe Ecuadorian government puts a huge 43% tax on everything that comes in from a foreign country PLUS they have a whopping 12-14% sales tax on all items (called a VAT tax).  So you are less likely to find items imported from your country and if you do, they will be really expensive.  A good example is a simple cell phone in Panama is $15 to $20.  The exact same phone in Ecuador is $70!   Electronic items like TV, radio, or computers are very expensive.  If you ship them in through Amazon, you still have to pay the 43% tax + 12% tax.

There is talk of increasing the sales tax to 15% on all purchases to help pay for the recent destruction from a massive earthquake along the Ecuadorian coast.

There is also a tax on any money that leaves the country.  If you open a bank account then close it to move the money to another country you will pay a 4-5% penalty for moving the money out of Ecuador.

If you sell a house in Ecuador, you will pay a tax of 10% tax on the total sales price PLUS if you want to move the proceeds out of Ecuador, you will pay an extra 4-5% tax.

Inheritance tax is at 35% after $72,000.  There is no inheritance tax in Panama.

So, why is their sales tax so high?  It is because Ecuador has serious economic problems.

NOT DIVERSIFIED ECONOMY

A huge 65% of the Ecuadorian government income comes from oil exports.  Oil prices are way down so the income of Ecuador is way down.    The poor economy has created high unemployment which has created more crime.  It’s a vicious cycle.

See this article about their economic problems

The average income in Panama is more than TWICE as much as the average income in Ecuador.  Low income leads to other problems like crime which I will discuss below.

Panama has multiple streams of income with no one source exceeding more than 20% of GDP.  Even the Panama Canal is less than 10% of the income in Panama.  This makes for a much more stable economy.

When you are looking for a country to relocate to, the stability of the government and strong economy with low debt should be of major concern.

NO FREEDOM OF SPEECH!

If you say or write anything bad about the Ecuadorian government, you can go to jail.  If anyone questions the government’s decision to put someone in jail, then that person can be sent to jail too.

It’s not just freedom of speech!   There are many other reasons people can lose their freedoms.

Read more about what else can land you in jail in Ecuador

TOO FAR!

If you want your friends and family to visit you in your new country, it better be a short flight and affordable or they will not come!  Panama is less than a 3 hour flight to Miami and about 4.5 hours to Dallas Texas.  Flights are usually less than $600 and often less than $400 round trip.  There are many non-stop flights to Panama from the United States, Canada and Europe.

If I lived in Cuenca Ecuador, it would be a 16-24 hour flight and cost over $1200 with multiple stops to get to the United States.

THE PEOPLE

The people in Ecuador just don’t seem as friendly as the people in Panama.  In Panama when you walk down the street everyone will make eye contact, smile and say Hola or Buenas Dias.

Not so in Ecuador!   In Ecuador it is rare that they make eye contact, smile or say hello.

It is less likely in Ecuador that English is spoken.  You will need to learn more Spanish.

CRIME AND SAFETY

When you fly in to a foreign country, you always have to go through Immigration to get your passport stamped and let them know how long you plan to be in the country.  I was absolutely shocked the first time I flew in to Ecuador. Immigration gives out a pamphlet warning about the crime problems in Ecuador and how to avoid abduction, what to do if you are confronted with armed robbery, pick-pockets, someone snatching your purse, or other crimes.

This is not exactly a nice welcome!

At least 13 U.S. citizens are known to have been victims of kidnapping since 1998. In October 2009, an American citizen was kidnapped in Tulcan and held for ransom. After 21 days, the victim was rescued after an intensive investigation involving Ecuadorian, Colombian, and U.S. law enforcement. In 2012, two Americans were held, one by an indigenous group and later released and one for ransom by a paramilitary group near the Colombian border in Sucumbíos, who later escaped. Two Canadians tourists were also held and assaulted in the Cuyabeno National Park near Lago Agrio and later released.

quitotaxibutton-225x300Taxi cabs are equipped with cameras and a red panic button because security is such huge issues in Ecuador with express kidnappings and robberies. If you find yourself in a cab without a security camera, you’re probably in an unauthorized taxi.  An express kidnapping (“secuestro express”) is where the taxi driver and their accomplice(s) take you to an ATM machine to get cash for them.  These express kidnappings could end with an assault too.

The panic button will notify police but they cannot always respond fast enough.

Every time I go to Ecuador, a tourist or expat living in Ecuador tells me how they were held up at knife or gun point to give up their purse or wallet.  Some have reported being held up for the cash they just got from an ATM machine.   You should not carry back packs around Ecuador.  You could become a target if you look like a tourist with the usual camera around your neck, iPad taking photos or a fanny pack.

IN CONCLUSION

There are many other reasons why I picked Panama over Ecuador or any other country.  In Panama I don’t have any of the problems discussed in this article.  Panama is safer!  The Panama government and economy are stable.  In fact, the Panama economy is the strongest in the entire western hemisphere.

Living in a foreign country is not right for everyone. Before you make the decision to relocate to any country, you really need to spend some time exploring the country (not sitting in a hotel conference room watching slide shows).

Panama Relocation Tours will give you a 5-day all-inclusive boots-on-the-ground tour of Panama so you can visit various areas and discover if Panama would be right for you.

By Jackie Lange

Hearing What You Want to Believe

Several years ago University of Illinois psychology professor Dolores Albarracín, led the study, later published in Psychological Bulletin, the journal of the American Psychological Association, that analysed data from 91 studies involving nearly 8,000 participants, focused on seeking a definitive answer to a longstanding debate. “We wanted to see exactly across the board to what extent people are willing to seek out the truth versus just stay comfortable with what they know.” Or one might also say, “what they think they know.”

Not surprisingly the research found that people were in general twice as likely to select information that supported their own point of view as to consider an opposing idea, with two-thirds going for supportive views as opposed to a third going the other way. Some people, particularly those with more close-minded personalities, were even more reluctant to expose themselves to differing perspectives, opting for information that corresponded to their views nearly three-quarters of the time.

Sante Fe Panama beautiful but ... Panama Relocation TourIt is my opinion that many times people are so anxious to find the “paradise” that they believe Panama to be, that they accept only what they want to hear, what confirms their existing beliefs. Now I am all for Panama as “paradise,” after all it’s been our experience, and I wrote the book THE NEW ESCAPE TO PARADISE: OUR EXPERIENCE LIVING AND RETIRING IN PANAMA. But … BIG BUT HERE … some of the organizations who promote expat living in Panama selectively offer information that glosses over the realities of life in Panama. And of course they do a very profitable business.

OLYMPUS DIGITAL CAMERAWhat I try to do is give the REAL story and encourage people to move ahead cautiously, checking out things as they really are, spending time actually in the real Panama, not just a fancy hotel room somewhere, with boots-on-the-ground. If you do that there is a good chance that your will decide moving to Panama is right for you, but you’ll know what you are getting into. We all know you take a big risk when you leap before you look, yet it amazes me how many people will pick up and move to another country, usually one that’s hyped as the latest, greatest place to retire, without doing their own due diligence. In the end they head back home embittered, frustrated and having lost lots of money in the process.

Those who do the research and carefully check things out are the ones who come to Panama, love it, and thrive on the adventure!

I didn’t say these things, but here’s what others have to say about THE NEW ESCAPE TO PARADISE, and if you doubt it, just check out the comments on Amazon.

The Most Beautiful House in Boquete, Panama FOR SALE 12 A good honest outline of what Panama is really like. I was very impressed with this book, very well written and very informative. Having lived in Boquete, Panama for almost 6 years, travelled around the country and worked here, I have never seen such an honest, complete and straightforward representation of what it is like to live here. Richard writes the truth about subjects that many won’t, and shows very little bias throughout the book. In all of his chapters explaining life, real estate, services, construction and retirement in Panama, he hits the nail on the head and isn’t afraid to outline the fact that Panama may not be for everybody.” Conner

“5.0 out of 5 stars worth every penny, Well written, and informative.” Big Al

“What a fantastic resource from someone who has been living in Panama and knows the eccentricities and nuance of the culture. Whether considering Panama or anywhere else to retire abroad, Richard provides a lot of food for thought. Thanks for sharing your knowledge, Richard!!” khfitz6311

“Great Job Richard!“I could hardly put this book down, even though I’ve lived in Boquete for seven years. Richard tells it exactly like it is … how I wish this wonderful tool were available before we moved here. It would have saved a lot of frustration trying to figure it all out for ourselves. This is an awesome book for those thinking of retiring in Panama.” Kathy Donelson

“5.0 out of 5 stars Must-read for anyone contemplating a move to Panama – Richard once again “nails it” with his straight-shooting comments, No rose-colored glasses here – Panama is not for everyone. If you’ve never lived outside the US before, particularly in a developing country like Panama – don’t even think about making a move without thorough research. Richard’s book is one of the best. Extremely valuable advice – take it to heart!” AKD

“Great book! This book is like reading a letter from a good friend who answers the most important questions you would ask if you were thinking of moving to Panama. Like a good friend, he gives you honest answers.” Jubal Atencio

“Reading Richard’s book paralleled the thoughts we were processing trying to determine where to retire and if Panama is a viable option. His book answers the questions about affordability and the mind shift needed for a life outside the USA, and the sacrifices (really just tradeoff’s, good/bad) we’d need to make if we chose to live in Panama. I don’t think there’s anything he missed in his book! From obtaining a Visa, to moving with a pet, to finding the best for an Expat place to fit in and live in Panama. It’s a big book but a fast read. I couldn’t put it down. A must read if retirement in Central America is on your mind.” Margie Casey

“I have to say that what and how you laid out the details is outstanding. You covered the reality of pros and cons. It is by far the best book out there for folks that want to relocate to Panama. We will arrive in April and rent for a year or so.” John & Susan Pazera

018THE NEW ESCAPE TO PARADISE is an updating of one of the best books about moving to and living in Panama. Detrich has lived in Panama for a decade and he still thinks of it as paradise. The New Escape to Paradise is a pragmatic and thought-provoking guide if you seriously contemplate moving to a new land. After researching living in Central and South American for more than fifteen years, including some tourist visits, I thought that I knew a great deal of things. As it turns out, my impressions were superficial. If you have plans to live in Panama you certainly should be prepared with this book!” James Fletcher

“This is a comprehensive, boots on the ground book about what it is like to live in Panama. The only way to learn more is to come here and stay awhile. I can’t think of anything Richard didn’t cover.” Judy Sacco

“A must read: great book, especially helpful if you are considering moving or retiring to Panama. I loved all the insight to their experiences and can’t wait to experience the country myself.” Joan Egizili

“I gave this book 5 stars because it answers all the questions about living and retiring in Panama with the pros and cons.” Gillberto Smith

“Excellent. An outstanding, insightful book about the author’s experiences in Panama. It is a very sobering look at his and his family’s experiences, both the good and the not so good. The reader can tell they’ve landed in their paradise. My wife and I are considering relocating to Panama and we’re using Richards book as one of our primary sources of information for an anticipated visit to the country next year. Because Richard does not sugar coat life in Panama, rather he tells it like it is, we feel like we have a more realistic expectation of what life is like in Panama. He most definitely has us studying up on the many aspects to be considered.” Daniel Bridges

“Richard really knows what he’s talking about. Down to earth, no sugar coating. The book lays out both the good and not so good of living in Panama. I highly recommend it.” Steve McVicar

“You provide a lot of useful information. Overall it led me to decide against Panama, except maybe as a tourist for a month or two. Too bad! I had high hopes.” Ida Freer

THE NEW ESCAPE TO PARADISE is a must read for anyone thinking/dreaming about retiring to Panama. We’ve been researching for two years and will be retiring to Panama in six months. The information in this book is highly informative, current, and down to earth. Richard tells it like it is about Panama and retirement in Panama, and, I enjoyed reading about his life and his family.” Allison Guinn

“Part philosopher, part psychologist, part historian, part travel guide, and part economist, all describe Richard Detrich as he weaves his tale of life in Panama. He tells it ‘like it is’ without the hype. THE NEW ESCAPE TO PARADISE is a must read for anyone who is considering relocating to another country whether it’s Panama or somewhere else. Interactive exercises will give you insight into what you want out of your life and your next adventure.” Kristin Stillman
“Extremely helpful. No bunnies and rainbows here, both sides of the coin are exposed. Like any country, Panama has it’s issues and beauty and Richard gives insight to the reader/expat on both so we don’t arrive and end up shocked to find bugs in our paradise. Good job.” Dorothy

“What a wealth of information. This is the perfect book to read if you are considering a move to Panama or just want to know all about Panama from an insider. After living in Panama for just a few months, this book addressed aspects of life here that I am experiencing or will experience as times goes on, giving me insight as to what to expect. For my friends who live in Panama vicariously through me, I have highly recommended they read this book.” Lorelei

“This book has everything and more than original book had. It is so current, that you will think you are reading the morning newspaper. If you have the original book, now is the time to upgrade. The book itself is also much improved over the original book with very few typos left for us nitpickers to pounce upon. Once you start reading this book, it is extremely hard to put down until you have finished it. If the book wasn’t so entertaining to read, I would say that it should be considered as the text book for Relocating to Panama 101. Panama is not for everyone, this book may save you thousands and thousands of dollars down the road. Get it! Read it!” Larry H

“Besides almost living in Panama for ten years, building a home in Panama and owning a business in Panama, Richard has traveled extensively lecturing about Panama on cruise ships. His second book, an updated version of the original, has more insight into the good, bad and sometimes even ugly about expats living and retiring in Panama as well as wonderful stories about his life along the way. I thoroughly enjoyed this book and found it very useful in regards to my future retirement to Panama. Highly informative, entertaining and a great read!” Allison W. Gunn“Thinking of moving to Panama? Read this book first! It could save you a lot of time, money, trouble, and worry. Not only is the book entertaining, it’s full of really important information for people considering making a move of this magnitude.” E. Bolton

Mr and Mrs Claus Come To Visit“He’s amusing and informative. He doesn’t write seriously, yet covers all necessary ground to give us an accurate picture of life in Panama without blinders. All pertinent questions are covered informatively and accurately, giving you a clear understanding of the reality you would experience.I strongly recommend The NEW ESCAPE TP PARADISE. It’s a great read!” Doug Tyler