Tag Archive | "Business/Finance"

International Investing Clue


A recent New York Times article gives us an international investing clues.

Here is an excerpt:

WASHINGTON — Reacting to the violent swings in oil prices in recent months, federal regulators announced on Tuesday that they were considering new restrictions on “speculative” traders in markets for oil, natural gas and other energy products.

The move is a big departure from the hands-off approach to market regulation of the last two decades. It also highlights a broader shift toward tougher government oversight under President Obama.

When a government becomes heavily involved in commerce we can expect a loss somewhere. In this case the loss will be in the value of the US dollar.

One way to beat a falling dollar is to but real estate.  Merri and I are always searching for more real estate to but in Ecuador… like this. We (and two of our daughters) have six of these units just 133 steps to the beach.

international-investments

History has proven that governments do not run businesses well.

Take for example, the recent US government commercial decision to bailout numerous failed US businesses.

The bailout was the first error.

The idea of profit, loss and accountability is to weed out businesses that are not productive, competitive or are no longer needed due to change.

When governments invest in infrastructure… this can be okay… even productive for a nation as a whole.

When governments interfere in commerce and spend billions on losers… expect little good.

As soon as those current bailouts began… the question of bonuses and high salaries of the bailed out executives arose.  Is it fair for executives of failed companies to get big bonuses?

Of course not.

This is why failed businesses normally go broke… so the executives do not get paid at all.

Since the government provided bailouts… the executives who led the business into disaster are still employed.  They have all this government money and since many of them are by definition, losers…  they’ll use the losing strategy of spending that money in unproductive ways…  like with big, personal bonuses.

That’s wrong… unless the government once again steps in.

But is further involvement right?

The current solution has been to create a pay czar.

The word Czar is derived from the name Caesar and originally an meant Emperor in European medieval times. The word has since been used to define rulers with a rank like a Roman emperor… a title with an imperial connotation like a King.

Most of modern North America and Europe are nations founded on revolutions that struck down people like that, who claimed to be czars and kings.

Why do we now let our government create new ones?

This cannot be good economic news.

The US has war czar Lute, energy czar Browner… and now pay czar Feinberg.

In fact a recent Fox news article entitled “Obama’s Czars Draw Criticism From Both Sides of the Political Aisle” says: By some accounts, Obama has nearly three dozen czars in his administration, managing everything from closing the Guantanamo Bay detention facility to ending the genocide in Darfur.

So many Czars… all spending US dollars.

Government spending is the least productive type of of expenditure… because Czars  spend taxpayer’s money… not their own.

international-investments

Merri and I are look for more real estate in Florida as well. Values are getting better. One lake front property that was listed at $799,000 two months ago is now offered at $349.

Lots of unproductive spending by a government will cause its currency (in this case the US dollar) to fall.

This is my belief… in the continued long term fall of the US dollar.

If you also believe that the greenback will weaken from current levels, this could be a good time for you to borrow US dollars and invest the loan in other major currencies like the euro, Norwegian, Swedish and Danish kroner, British pound and Canadian, Australian and new Zealand dollars.

You can do this at Jyske Bank or Jyske Global Asset Management.

When using leverage with an advisory account clients living in the US are limited to currencies and US registered securities.

Such investors can use ADRs and ETFs.   These US securities have a collateral value (equities have a 67% value i.e. 2x leverage).  When using US securities JGAM requires a W9.

ETF’s traded on the NYSE can be used as collateral if Jyske bank accepts the paper and allocates an collateral value (normally not a problem but this can depend on liquidity).

US citizens living outside of the US have no limitations whatsoever and can buy any security with leverage as long as the bank has a collataral value associated with the security.

Gary

Merri and I are also looking for more property in Ashe County North Carolina where there is plenty of fresh water.

international-investments

There are several large tracts (40 to 100 acres) near our farm now for sale. A broker up here recently sent me this note.

“I am convinced that someone will make some money on this property. The Bank is eager to sell and will consider all offers.

Also, concerning other properties — right now there are entire subdivisions just sitting there unsold, with roads and underground power in place, that are being offered at steep discounts by developers who need to get out from under their mortgage commitments.

Some of these are river front properties that will be quite valuable in the future.

There are also some larger undeveloped tracts available for pretty good prices compared to two years ago.”

Our 2009 course and tour schedule.

Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 9-11 IBEZ North Carolina

Oct. 21-24 Ecuador Import Export Tour

Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

Attend any two Ecuador courses or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.

Retire in Ecuador – Beat Inflation


A good reason to retire in Ecuador or away from your home is to beat inflation.

Yesterday’s message looked at reason why inflation is not a problem now… but it will be… probably in a serious way.

See below three ways to beat inflation.

First… live or retire in Ecuador or any country where the cost of living is low.

These nice houses in Cotacachi were offered at $49,000.  That beats inflation when you retire in Ecuador.

retire in ecuador

Costs are low. This fixer upper in Cotacachi has an asking price of $30,000 with…

retire in ecuador

a huge yard filled with mature fruit trees and…

retire in ecuador

this view.

Second, invest in land or commodities.

A long time friend Steve Rosberg whom I first met when he was my banker in Ecuador recently sent me this note as he operates a timber plantation and real estate development in Argentina.

Gary, During our visit to New York two weeks ago, a friend and former colleague from my banker days pointed out that Latin America had been the perfect training ground to succeed in the current investment environment. I agree 100%.

In case there was any doubt, California’s  issuance of IOU’s to settle short term debt was the final confirmation, and was rapidly followed up by other corollary events, such as banks stating that these could not be accepted as deposits. This would be obvious to anybody thinking about it, but apparently, most people weren’t.

Those IOUs are a different ‘currency.’ They are a currency which you will see more of in the future, as the issuer (the CA government) is still running deficit budgets, and no new voluntary lenders are rushing in to fund them.

Decidedly a  scenario familiar to those of us who have been through a number of LatAm crises. If an Argentine president tried to pass those IOU’s off, nobody would be foolish enough to take them in the first place, and the international press would ridicule the plan as another example of LatAm fiscal impropriety.

Meanwhile, the debate seems to rage between “Are we going deeper into recession? Are we going into high inflation? Are we going into stagflation?”

The answer is yes, absolutely!

How do we position our portfolios to make the best of this without taking on more downside risk?

This is the crux of why we have developed our business as we have:

– to have growth even if there is recession (the trees keep growing, the vineyard too),
– to have value even if there is high inflation (timberland, vineyard, hotel, all real, appreciating assets that will both protect the real value of your initial investment from inflation’s erosion and generate cash flows that will also increase in this scenario),
– to have current revenue originating in the sustainable production of real assets,
– to do so in environmentally responsible ways, and
– to enjoy what we are investing in.

In short, what you want now for the long run.

We continue to believe that debt free assets producing real commodities and generating solid returns are the antidote to portfolios stricken by the poor performance of supposedly safe, “mainstream” assets, and will continue to be so going forward.

Yes, we’re from Argentina, that means we’ve been preparing for these markets for decades. Our customers didn’t lose money last year-they made it.

Visit our website and write back for more information, it’s always our pleasure to be in touch with you.

With best wishes, Steve Rosberg  www.ushay.com

Third, invest in commodity based equities.

The excerpt below is from our Multi Currency course and shows why global inflation is a problem.

A recent article in the Economist showed that the US deficit could be three trillion dollars in 2010.   Half of this would come from borrowed funds.  Normally this would cause the US dllar to fall versus other currencies.

A free fall in purchasing power of all currencies is also more likely than in previous recessions (1970s and 1980s), because then, the US overspent but other major governments, especially Germany and Japan, were still conservative and fiscally prudent.

This is no longer true. West Germany unhinged fiscal common sense when it absorbed Eastern Germany.

Excerpts from a May 14, 2009 article in the Financial Times entitled “Germany set to suffer record deficit” by Bertrand Benoit says:

The German government will record its biggest post-war budget deficit this year as the economic crisis sends tax revenues plummeting, Peer Steinbrück, finance minister, said on Thursday.

Mr Steinbrück admitted the federal deficit would exceed €50bn in 2009 and rise to €90bn next year, more than twice the previous record of €40bn set in 1996 as Germany was absorbing the huge cost of its unification. In contrast, the federal deficit last year was only €11.9bn..

Germany and Japan have both been hit especially hard by this recession because their economies have been so dependent on exports and global trade.

Germany has a huge amount of short-time working and its exports have fallen dramatically.  Like almost everywhere, government income is dropping as spending is on the rise.

If the German economy were to continue to shrink at its current pace, it will be a 20% smaller by the end of 2009.

This means Germany remains in default (as does France, Italy and Spain) of the three per cent limit in the EU stability pact.

All eurozone countries, but especially those with larger deficits, such as Italy and Spain, face a similar problem…  rising costs… aging populations… growing pension and health costs while faced with reduced income.

Asia Troubled As Well

This year, Japan suffered its first annual trade deficit in nearly three decades and business has slowed dramatically there. Global demand for Japanese products plummeted in 2008 and exports were down 16% in the year to March 2009 compared to 2008.

Hong Kong’s economy gives a glimpse into China’s economic soul and here business also contracted at the fastest rate since the Asian financial crisis.

The first three months of 2009 had the biggest drop in more than half a century.

The Hong Kong government predicted that GDP would contract by up to 6.5 per cent in 2009.  Total exports dropped 22.7 per cent in the first three months of 2009 compared with the previous year – the biggest drop since 1954. Overall investment fell by 12.6 per cent and private consumption by 5.5 per cent. The unemployment rate also rose to a 38-month high of 5.2 per cent in the first quarter.

Huge Economic Problems

Huge economic problems create huge investment opportunity and one of the greatest problems facing the world is that education has not evolved as fast as democracy.  Too many poorly educated voters expect their government to do more than they can… or should.  The voter’s desires and expectations are ill informed and generally incorrect… yet their vote is as powerful as an educated one.

This forces politicians to act (spend) more than they have.  This tends to create inflation.   This rather predictable fact has become increasingly global so choosing a strong currency becomes increasingly hard.  Most currencies are at risk to inflation.

This is why stocks, commodities, real estate and your own business makes so much sense now.   There is a caveat.  Always invest in good value in these things.

This is why my attention was really captured when I read about the ALTIS Global Resources Fund.

This is a fund that invests in commodity backed equities and is advised by value guru Michael Keppler.

If you are a new reader learn about Keppler Asset management here.

This creates a powerful combination for opportunity.  The figures below support this.

Michael Keppler recent sent me this note:

Gary, Attached please find the latest Fact Sheet and Performance Review (as of April 30, 2009) for the ALTIS Fund Global Resources, a global sector fund we advise, which was featured in an e-fund journal report of May 4, 2009 as one of the “top 10 natural resource equity funds” based on its 5-year Sharpe Ratio calculated by Lipper.

This fund seeks long-term growth of capital by investing primarily in equity securities issued by companies located anywhere in the world with business operations in the energy, natural resources and precious metals sectors.

You can learn more about this share and read this entire multi currency report as a subscriber to our multi currency course.

Economic fundamentals suggest that the price for ending the current recession will be inflation.

Three ways to fight inflation are retire in Ecuador or some other country with a low cost of living or to invest in real estate, commodities or commodity based investments.

Gary

Join us at our North Carolina farm this July or October for our International business & investing seminars below. Learn more about how to fight inflation and retire in Ecuador.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 21-24 Ecuador Import Export Tour

Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

Ecuador Retirement Lifestyle Shift


Retirement in Ecuador can shift lifestyle towards simplicity.

In a moment, let’s look at the current way to earn more income with greater safety for retirement, in Ecuador or anywhere, for now or for future retirement.

First, let’s look at how many North Americans are learning to make whatever income they have go farther… with simplicity.

When you retire in Ecuador one great benefit is being surrounded by a culture that understands and lives simply.

There are many simply pleasures in Ecuador like…

retire in Ecuador

Don’t get me wrong.  You can enjoy  luxuries when you live or retire in Ecuador.

This excerpt from a recent article at Ecuador Living entitled “Retire in Ecuador Guide – Communications” shows how to eliminate long distance telephone charges in Ecuador:

When you retire in Ecuador enjoy new but different luxuries. Luxury differs in every culture and country. For example in Ecuador, tile roofs, hardwood and ceramic floor tiles  (luxuries in North America) are low cost, standard building supplies.

A regular maid, to do dishes and laundry, costs little.

Yet washing machines and dishwashers are expensive luxuries in Ecuador.

Cars cost a lot in Ecuador.  Cabs and drivers with their own cars are cheap because personal cars have a high duty.   Commercial vehicles can be imported into Ecuador without tax.

People who couldn’t afford housekeepers or gardeners in North America can do so when they live or retire in Ecuador.

Take time to understand the system and compare costs before setting your lifestyle. Hold off on the big fridge. This will cost a lot.  A maid buying fresh food in the market every day creates employment and costs less!

Read all of  Retire in Ecuador Guide – Communications

retire in Ecuador A simple Ecuador pleasure is the good humor man on the waterfront.

Excerpts from a recent USA TODAY article  for Boomers, recession is redefining retirement  by Christine Dugas, explains more:

Life changes are becoming a focus, along with retirement-expectation changes.

“People are stepping back and asking themselves truly, ‘How much is enough?’ ” says Sheryl Garrett, a financial planner in Kansas City, Mo. It’s more of a movement to simple living than just a temporary spending cutback. “People are taking ownership of what they can control.”

Many Boomers are so busy dealing with their daily lives, from monthly bills and vacation plans, to doctor appointments and children’s college hopes, that they seldom considered their futures. And they often believe that life sort of ends with retirement.

The financial crisis has forced them to look ahead. In reality, they will live much longer and be healthier than their parents’ generation. And retirement may be filled with much more than playing golf or cards.

Retirees get married, they move, and some even have children, says James Richardson, a financial planner in Raleigh, N.C.

“In many cases, people feel more productive if they continue to work during retirement,” he says. “That was true even before the financial crisis.”

“We have to look at retirement differently,” she says. “They always say that if you are going to work in retirement, do the things that you love to do. So I’m not going to complain. I love teaching.”

Baby Boomers such as Neilson may change retirement. “They may re-create themselves so that they can do something that is productive and still earn a paycheck,” Garrett says.

People are not living on an extraordinary gravy train, he says, and they can’t use their houses as ATMs any longer. And they can’t count on buying a new refrigerator just because they want one, as opposed to when they need one.

See more on this at Wild Health & Profit.

retire in Ecuador

A simple Ecuador pleasure is a just caught fresh from the sea….fish for a dollar.

If you are planning a simpler life, you may want to consider retiring in Ecuador.

Create Extra Investment Income the Simple Way

If you plan to retire in Ecuador or are saving for a later retirement, you’ll want to increase profit and safety.

This is possible even in the recession because for the first six months of 2009 JGAM’s low risk strategy has been their best performing strategy.  With a 100% loan their low risk portfolio has risen 11.4% or at a 23% per annum rate.

Here is an excerpt from our latest multi currency lesson:

JGAM believes that this low risk strategy will remain productive for the rest of 2009 for several reasons.

First they do not believe that the economic recession is over yet.  JGAM expects the turnaround to be L-shaped (not V-shaped). This means economic growth is not expected to return to normal levels in a foreseeable time.

This economic stall creates a lack of growth that will limit corporate earnings potential and keep inflation in check.

A slow economy, without inflation, favors bonds and leaves equities at risk.   JGAM does not expect inflation to be a real threat in the near future.

Short term rates are also likely to be kept artificially low by governments to help the banking industry.   Banks are making huge profits by paying low rates on client deposits and lending the funds at higher long term rates.

Here is an example of how leveraged bonds work. Two bonds available now are:

US$ 5% Korean Electric Power  (A rated ) due 17 – 01 – 2017 paying a yield of  5.05%

GBP 5% Rep. of Hungary due 06 – 05 – 2014 price paying a yield of 10%.

Assume an investment of $100,000 in each bond… from a $100,000 investment plus a $100,000 US dollar loan at 2.75%.

The average yield per annum is 7.52% or $15,050, less $2,750 loan costs.

That leaves a $12,300 return or 12.3% per annum instead of a 7.52% return on an unleveraged $100,000 investment.

Both managed and advisory clients with JGAM can invest in a leveraged low risk portfolio but managed portfolios can obtain the greatest advantage of the strategy.

The two benefits of a managed portfolio are JGAM’s active monitoring make international investing simple plus gives the ability to invest in a wide range of global securities that are not available for most advisory clients.

Americans who live in the US but have advisory accounts cannot buy most overseas bonds.  US advisory clients who live outside the US can buy these bonds.

You can get more information from Thomas Fischer at JGAM. His email address is fischer@jgam.com

Enroll in our Multi Currency Course here

Gary

Join Merri, Thomas Fischer of JGAM and me in North Carolina this July and enroll in our multi currency course free. Save $175.

Learn more about early retirement and Ecuador.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 21-24 Ecuador Import Export Tour

Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour

Read the entire USA TODAY article For Boomers, recession is redefining retirement at www.usatoday.com/money/perfi/retirement/2009-06-16-retirement-boomers-recession_N.htm

Retire With Ecuador Real Estate Value & IRAs


One great reason to retire in Ecuador is the real estate value. Plus you can own Ecuador or other overseas investment and retirement real estate with your IRA.

Retirement costs of in Ecuador are low because the cost of a home and utilities are so low.

There is great value, plus enormous beauty in the Andean and coastal countryside.

The wonderful crafts markets of Ecuador create export opportunity to supplement income when you retire in Ecuador.

There is so much beautiful property and…

homes seem so inexpensive like these houses at San Miguel (under $100,000) and…

cotacachi-ecuador-san-miguel

Primavera condos (under $46,000) that…

multi-currency-Ecuador-condos

it becomes easy to misunderstand value. Take for instance Ecuador’s empty beaches.  This is a shot of a wonderful coastal land in Ecuador.

What is this property’s value?  Prices on some Ecuador beach property are really low!   When you find a beautiful piece of property like this at a really low price, how can you lose?

Here is how you can see your Ecuador retirement wealth shrivel.

Our friend Todd Smith recently sent me some photos of a trip he made down California’s coast.

Imagine buying land on the beach in California 30 years ago.

You couldn’t miss.

Right?

Todd’s photos reminded me that you can.  Todd photos was scripted with this text:

If you ever want to get away completely, visit the Lost Coast of California.

retire-in-ecuador-real-estate

In Humboldt County, head south on Rt. 211 from Fortuna, towards the ocean.

You’ll follow a winding, narrow almost-one-lane road for about 30 miles before you reach the Pacific, and you’ll be lucky if you pass a single car.

Be sure to fill up before you go because you’ll be almost completely on your own.
a coastal island in the trees.

The Lost Coast gets it’s name from the fact that Rt. 1 and Rt. 101 completely bypass this section of about 100 miles of shoreline.

Except for signs of ranching and an occasional hamlet you would think you were the only person on this lovely, godforsaken planet.

retire-in-ecuador-real-estate

See all of Todd’s photos of the lost coast.

What value does this California real estate have…

retire-in-ecuador-real-estate

beyond building a barn?

Real estate has two values… the value for you as a user… and what someone else will pay for it.

If you retire in Ecuador and want to live in an isolated place in the mountains or on the coast… great. You can find some incredible real estate values.

If you buy to resell and plan to profit… beware! Some Ecuador real estate will appreciate dramatically as pressures of modern life shift agricultural land to residential, recreational or commercial.

However some beach property and mountain land like this…

retire-in-ecuador

in 10, 20 and 30 years from now will look like this.

retire-in-ecuador

The value will have increased due to inflation but great appreciation is not likely.

Investors who are ready to retire in Ecuador should look closely at the likely time frame of land appreciation.  Be careful to make sure that your retirement liquidity needs do not come before appreciation.

You can also buy Ecuador real estate through an IRA… if you or your family are not going to live in or use the property.

This site has been helping people retire in Ecuador and to invest their IRAs abroad for years.

You can own real estate in your IRA, including non-U.S. real estate. Over the years, advisers have wrongly convinced many people they cannot own real estate, as well as a number of other alternative investments, inside their IRA’s or other retirement plans. Nothing could be further from the truth. In actuality, the IRS allows a great deal of flexibility when it comes to investing the assets of your retirement account.

The trouble comes if you don’t have a “self directed” IRA or if you work with a custodian who imposes his own investment restrictions. Most of these restrictions have nothing to do with the code governing retirement accounts but are instead employed to make life easier for the custodian.

Here is what is allowed:

• Raw land

• Condos

• Office buildings

• Single-family homes

• Multi-family homes

• Apartment buildings

• Improved land

The IRS defines prohibited transactions and self-dealing that you cannot do in your IRA.  Your retirement plan is meant to benefit you at retirement… not earlier so you cannot directly or indirectly, deal with yourself or a family member.

You cannot lend money, extend credit, or furnish goods, services, or facilities to yourself or a disqualified individual. In other words, you can invest in any type of real estate you want as long as it is an investment and not for your own use currently.

However if you find your dream Ecuador retirement home  that you want to live in when you reti you can buy it in the IRA, rent it for now and take it as a distribution from your plan when you retire.

You can have a full report and contacts with a custodians who can help you own Ecuador real estate in your IRA.   Subscribe here.

IRAs at Jyske Bank

It is now easier to invest your liquid IRA funds safely overseas as well.  Jyske Global Asset Management can invest your IRA investments offshore in coordination with GoldStar Trust!

This makes it easier for you to give your IRA International investing and currency diversification.

Here is how the JGAM IRA plan works.   Your US custodian will be GoldStar Trust in Texas. Your offshore custodian bank will be Jyske Bank in Copenhagen (Denmark).  Jyske Global Asset Management will be your asset manager.

This setup is in accordance with IRA regulations. JGAM sends quarterly and annual statements as well as standard IRA statements from GoldStar Trust.

You can get further details from Thomas Fischer at JGAM. Email Thomas at fischer@jgam.com or call toll-free in the USA at 1-866-602-5426

Gary

Join Merri and me with Thomas Fischer at our North Carolina farm this July or October for our International business & investing seminars below. Learn more about early retirement and Ecuador.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

July 24-26 IBEZ North Carolina

Oct. 9-11 IBEZ North Carolina

Or join us in Ecuador and learn more about living and retiring in Ecuador.

Sept. 17-21 Ecuador Spanish Course
Sept. 23-24 Imbabura Real Estate Tour
Sept. 25-28 Ecuador Coastal Real Estate Tour

Oct. 21-24 Ecuador Import Export Tour

Nov. 6-8 IBEZ Ecuador
Nov. 9-10 Imbabura Real Estate Tour
Nov. 11-14 Ecuador Coastal Real Estate Tour