Where, oh where?.......Mexico

Mexico has a lot to offer potential retirees. Weather, culture, stability, safety, and low cost of living are big draws, but so is its proximity to the U.S and Canada for those who still want to stay close to family. From much of Mexico, going "home" could be as close as a day's drive. But even for those who live further away, or who don't have a car, or who don't want the long drive, all major airlines fly directly to most North American cities from the big Mexican airports.

The list of resources for Mexican retirement is immense, and I will cover specific topics relating to moving, buying property, pensions, taxes, and others in future posts. But I wanted to focus today on specific regions of Mexico that I have found attractive as retirement destinations.

You have a couple of general options. First, expatriate communities have sprouted up all over Mexico....small areas with a high concentration of American, Canadian, and, to a lesser extent, European, expats who have gathered together in communities that resemble small American suburbs. If that works for you, there is a lot of online data available to you. If you've read my previous posts you'll know I am not in favor of this arrangement, but for many people it provides the familiarity they need to feel comfortable. These small communities offer all the amenities of home at a fraction of the cost. If this idea appeals to you, you HAVE to check out Lake Chapala/Ajijic!

Your second option is to dive into the local culture and retire somewhere that isn't a carbon copy of your current situation. There are expats everywhere, so you can still get your "fix", but this option opens you up to a whole new world of experiences, and it is this option that I will explore in detail in future posts.

For now, I will briefly outline the areas that I have found most attractive based on the criteria I have set forth before. The top five on my list are:

1. Merida and vicinity on the Yucatan Peninsula. The Yucatan is still relatively isolated from the rest of Mexico, Cancun is near, as are the ruins of Chichen Itza, real estate is a bargain and readily available, it's a booming city with lots of culture, night life, and infrastructure that rivals North American standards. Plus, it's near the ocean.

2. Zihuatanejo, south of Ixtapa. Zihua, as it's known locally, is a quaint fishing village nestled in a valley. Living here would mean doing without some of the amenities you are accustomed to, but the charm and beauty far outweigh any negatives. Cost of living is extremely affordable here, and the locals are some of the friendliest in the nation. 

 

3. Oaxaca. The center of colonial charm in Mexico, Oaxaca is an intriguing mix of Mexican charm and European chic. Known as much for its exquisite chocolate as it is for its colonial architecture, Oaxaca is affordable, safe, and modern without losing its local charm.

4. Puerto Vallarta. I would not normally recommend a resort town, but PV is different. You have to do a bit of shopping to find real estate bargains because it is a resort town, but if you can find them it's definitely worth it. PV just has this "feel" to it that transcends the tackiness of most resort towns. It's nice to visit Cancun, Mazatlan, Ixtapa, Acapulco, and others, but PV is a place you could actually live. 

5. Guadalajara. The second biggest city in Mexico, Guadalajara offers affordability in a big city setting.  

Remember, for any of the above choices you don't actually have to live right in the city. The surrounding areas offer much of the same, and their proximity to these cities offers the dual advantage of small town living with big city amentities and attractions a short drive, or bus ride, away!  

Review of "Work at Home" Websites

I have spoken in many of my posts about the types of businesses you can operate from wherever you retire. The internet has provided us with a marvellous vehicle for generating revenue from any place you can find a reliable internet connection. That means you can make money to help support your retirement anywhere in the world.

But the internet is also full of "get rich" schemes that pretend to offer you ideas, but really just want your money. How many online ads, and spam emails, have you read that talk a lot, but don't really tell you anything unless you fork over some cash? And then when you DO pay, you find a lot of baloney and not much substance. I know it's happened to me many, many times, and I have spent the last few years scouring the web looking for good ideas. Frankly, nothing is free, so you can expect to pay for a service. But if you do pay, you should get your money's worth, and sadly that isn't often the case.

There aren't many good ones. But I have found a few, and I review them on another website, linked here: http://www.canuckretire.com/blog/. Check it out, and if one of the sites I reviewed piques your interest, click the link to it and see what you think. Oh, and let me know your opinion. I have ranked a few of these sites quite highly because of my experience with them, but I also want to know if yours isn't as rewarding. An important part of posting reviews is listening to what other people have to say about the products you are reviewing.

Have the Stock Markets Bottomed Yet?

Are the Dow closing of 8175.77 on Oct. 27th, and the session low of 7773.71 on Oct. 10th, the bottoms? Or will we see further capitulation over the coming weeks and months?

That depends on the overall psychology of the markets. If people have already accepted that we are in for a prolonged recession, then maybe we have seen the worst of the lows. I doubt there are too many investors out there who haven't yet come to the conclusion that we are in for at least several months, but more likely 1-3 years, of slowed economic times.

What could send things tumbling back to those lows, or worse? We've already seen a number of institutions fail...institutions that were a mainstay of Wall Street and Main Street. There may be more, but the shock is likely over. Credit markets are slowly unfreezing as countries around the world address them with bailouts and interest rate cuts. But if they freeze up again, and if more large companies fail, the bottoms could be tested again.

We are also beginning to see job cuts hitting hard. American Express today announced 7,000 job cuts. There have been many others, and there are many, many more coming down the road over the next few months.

The critical question will be whether investors the world over have already resigned themselves to the fact that economies are slowing, jobs are going to disappear for a while, and earnings will be dismal over the next several quarters. 

If no more big surprises hit that investors aren't already expecting, and we should already be expecting the worst, the markets may have seen their bottoms. Let's hope so.

Where, oh where?....Latin America

In my posts entitled "Where, oh where?....." I have listed the criteria I have used to narrow the field down to the regions where I will be researching retirement. I have also outlined their advantages and disadvantages as far as retirement destinations. Now, as I have made it clear that Mexico and Latin America are my focus, I want to begin digging deeper into the prospective countries themselves. Below I have listed the countries in a preliminary order of priority...an order that may change as I delve deeper into each.

One thing you may notice missing are the countries of the Caribbean...some of which are considered part of Latin America. For the most part, islands in the Caribbean have, by necessity, restrictive immigration policies. They also tend to be more tourist destinations than retirement ones. Having said that, I may look at them more closely in the future if time and interest permits.

1. Ecuador

2. Mexico

3. Uruguay

4. Panama

5. Belize

6. Costa Rica

7. Peru

8. Guatemala

9. Brazil

10. Bolivia

11. Paraguay

12. Chile

13. Argentina

14. Honduras, El Salvador, Nicarauga

15. Columbia, Guyana, Suriname, French Guiana

The Ups and Downs of Daytrading for a Living

The last 4-6 weeks has been a valuable reminder that daytrading for a living can be fickle. But it's a lesson you absolutely must learn if you plan to support your retirement by daytrading. And it's especially important if you plan to do so sporadically.....randomly choosing which days you will trade, and which ones you won't, based solely on a whim. It's appealing to think you can work whenever you want, and in some cases you can. But if you had chosen to take the whole summer off and start up again in September, you might be experiencing some financial difficulty right now. So what can, and should, you do about it?

First, you need a backup plan. You need financial resources that can carry you through periods when trading is simply too dangerous. The LAST thing you want is to have all your eggs in the daytrading basket, finding yourself taking riskier and riskier trades just because you need to make some money. Frankly, the whole idea of retiring offshore and living a simpler life is that you leave the day-to-day stresses behind. You want daytrading to supplement your retirement...you don't want your retirement to depend exclusively on trading.

Secondly, you need to stick to your plan. If you are a conservative trader like me, you're better off sitting on the sidelines when the market is acting up like it did today, and it has done most of the last month. Trades can turn on you in a split second, and take a big chunk out of your precious capital. This is where a backup resource is helpful. If you've got a decent nest egg of savings that you can fall back on for a short time, you don't mind sitting out the tumultuous periods.

Finally, you need perspective. Why did you retire? Why did you choose daytrading to help...and I stress the word help....fund your retirement? Everyone has a different answer. Since I haven't retired yet, mine is speculative. But I think I will be retiring to a quiet, peaceful, inexpensive South American life because I want to get away from stress and enjoy the rest of my life in laid back heaven. And I will likely choose daytrading to help fund my retirement because, if done right, it can provide a relatively consistent income that you can generate from anywhere in the world you can find an internet hotspot.

But the real gist of this post is that you must understand that there are times to trade actively, and times to watch from the sidelines. You have to plan, both mentally and financially, for those periods where you don't generate any income from your trading. 

Upcoming Trip - December 2008 - Yucatan, Mexico

I’m looking forward to my first trip since starting this blog, to the Yucatan Peninsula. The plan is to spend 3 weeks there.... a week in Cancun followed by 2 weeks on the road. I have a timeshare booked just off the Hotel Zone for 7 days, and I plan to mix in a few days at the beach with some exploration of downtown Cancun and the surrounding areas. After that, I’m going to hop a bus, head out to Chichen Itza for a day, then on to Merida for 3 days to look around, check out the real estate market, and get to know the area. Merida is one of the places I will be researching in detail in the future as a location for expat retirement.

That will give me 10 days to wander the peninsula by bus checking out other spots of interest, and I am currently in the process of planning that part of my trip. I look forward to updating you with my final itinerary, and then providing updates and stories of my adventure when it happens. Stay tuned!

What I WON'T do here.....try to sell you something!

That’s not the reason I write this blog. So, you won’t see posts that are 10 pages long, full of teases but little information, and with a link at the bottom that promises to let you in on all my secrets for the bargain price of $19.99 plus shipping and handling. You won’t see flashy ads that pop up in your way, and prevent you from reading my posts unless you do something to get rid of them. Granted, I have a few unobtrusive ads that help support my site, and you are welcome to click on one of these sponsors if their tag line catches your eye. I also have a small National Geographic picture ad in the right of the page, that does offer some interesting links, if you are so inclined. But that’s not the purpose of this blog.

My purpose is two-fold….to do the in-depth research that will help me decide where to retire offshore, how to do it with the least amount of hassle, and how to support myself when I do it….and to pass my research on to you. I won’t be the only resource you will use, and I shouldn’t be. You should avail yourself to as much information as you can. But where my site will differ from the many larger “International Living”-type sites is I won’t give you one tidbit of information surrounded by dozens of attempts to sell you the latest get-rich-quick scheme, or claim I can outwit the worst bear market, or try to sell you my “book of secrets”. Not here, I won’t. I’ll just be presenting you with my research as I do it, my opinions, and hoping to hear your comments and ideas as well. Maybe something I say doesn’t seem right to you, and I am more than willing to accept that I won’t find everything in my research.

By the way, I DO have another site where my focus will be revenue-generation…..it isn’t fully ready to go yet, but you can find it at http://www.canuckretire.com/blog/  . The link is also in my “Other Sites of Interest” section. Go there if you want to see my analysis and opinions of some flashy travel, retirement, and income ads. Stay here if you want my opinions, my research, my advice, and my ear. They’re all free.

Daytrading in Retirement

In previous posts I have spoken about the fact that the majority of retirees, particularly those who are younger, will either need, or want, to have a way to generate additional income to supplement their retirement. This can range from regular employment in your newly adopted country (dependent on foreign employment rules, which vary widely) to running your own business. But having enough capital, and an idea or concept, to open your own business opens up a number of avenues that many will find especially appealing. It gives you control over your own destiny, may offer you the chance to work part-time (or at least set your own hours), can involve employing locals (which will ingratiate you to your newly adopted community), and can keep you busy and challenged (but remember the idea is to enjoy…so not TOO busy).

The business I want to address today is daytrading. I happen to daytrade for a living at the moment, although if needed I can also venture back into the IT consulting I have done over most of the last 20 years. Daytrading, if done right, offers not only a consistent, and sometimes lucrative income, but it is also an extremely flexible business.

In order to maintain a consistent income stream from daytrading you need a plan, and a system, that works, both in good times and in bad. There are a ton of systems out there, but I follow one from a very experienced, but conservative, site called “High Chart Patterns” (see the link under “Other Sites of Interest” in the column on the right). This system, explained in much more detail and with much more knowledge on the HCP site, seeks to detect clean chart patterns that deliver good risk/reward trades, and teaches subscribers how to read intraday chart patterns that determine what to do when a stock approaches an entry price. The system promotes safety first, using .3% - .5% stops and taking money off the table at regular intervals to bank profits with consistency. Traders who follow this system are encouraged to play it safe, and that is one of the hardest things for a daytrader to grasp. Many daytraders are more gambler than trader, but if you want to make trading your steady income source you need to conserve capital in order to take advantage of winning trades when they appear.

If you have a system that you can implement with consistency, you are on track to finding a great business that you can run from anywhere. This is the flexibility of trading. All you need is a good internet connection, and a decent computer. While it helps to have a powerful computer and 2-3 monitors to watch charts, news, and tickers, I have been very successful trading with just a laptop. And if you can do that, you can trade from anywhere in the world that offers an internet connection….including wireless hotspots. I have traded in coffee shops, at the library, in the town park, at the beach, in airports, and any other place I can find a hotspot.

The other aspects of trading flexibility are just as interesting. For one, you can trade on days you want to, and not on days you don’t. You can trade every day, or a few days a week, or take a few weeks off whenever you want to vacation. If trades aren’t happening, like the current market situation, you can take a few days/weeks away from work.  You can decide to trade six months a year, and travel the remaining six months. As long as you can achieve your income needs in the appropriate trading timeframe, you are free to determine how much time you spend at your business.

For another, while trading NYSE and NASDAQ stocks (or stocks on foreign exchanges) is limited basically to times the markets are open (which can be a problem if you’re many time zones away from the market you’re trading), trading foreign currencies on FOREX takes place 24 hours a day. The logistics are a bit complex, and beyond the scope of this post, and you have to know what times to trade specific currency pairs, but essentially FOREX gives you ultimate trading flexibility.

Trading isn’t for everybody. There are also lots of other ways to generate income. But if it works for you, it can offer amazing flexibility that allows you to trade on your own schedule, and from virtually anywhere in the world you happen to be. 

Where, oh where?.....the World Regions

So, you want to retire offshore, for a myriad of reasons.....taxes, climate, adventure, culture, a more relaxed life......whatever. It's a big old world out there, with a lot of possible destinations. And you have a lot of decisions to make. Do you want to settle in one place, or sample several places for months at a time? How much can you afford? Are you willing to learn a new language? Do you want to be surrounded by the familiar...including many other expatriates, or would you prefer your neighbors to be locals?

Those are just a few of the factors you must consider, and in future posts I will try to address many of them in relation to specific countries. But before I do that, I wanted to look at larger, more general, regions of the world and talk about what they might offer, and the hurdles they might present.

North America - Hey, it's possible you might just want to move out of the city and live on the beach, or a small town, or near a ski hill. You might want to head up to a remote area of Vancouver Island in Canada, or out to the Oregon coast, or a small town in Maine. There's nothing that says you HAVE to move offshore, and familiarity, with language and culture, might be a priority for you. Costs will be a bit higher, as may taxes, and the beauty of experiencing a new culture might be missing. But maybe you want to restrict your cultural exploration to vacation time. I won't be covering North America, but you will still get a lot of information from me on other countries you might want to travel to on vacation, particularly Mexico and Central and South America.

Western Europe - Much of what I talked about regarding North America applies here, particularly with cost of living, but Western Europe gives you lots of opportunity with great culture, a new language, and some climate advantages in the southern countries. The diversity here is almost endless...from snow in Sweden, Norway, Denmark, and Finland, to sun in Portugal, Italy, Greece, Spain, and southern France. Mountain ranges abound in Switzerland, Austria, Italy and France, and forests in Germany. That diversity applies to every facet of life in Europe, and while I would love to provide details, this would require a whole new blog and a lot of research. There are plenty of great sources of info on Europe, and I wouldn't discount it as an excellent place to retire.

Eastern Europe - Eastern Europe has opened up immensely since the end of the Cold War, and opportunities abound for retirement havens. Eastern Europe boasts many of the same advantages as Western Europe without the accompanying high costs. This is a rapidly developing part of the world as the grip of communism has weakened and capitalism has crept in. It also has a deep and varied cultural background. As with other regions I won't cover in detail, there are many great online sources of info to be found.

Australasia - Australia and New Zealand offer tastes of European life mixed with dashes of backcountry adventure. Cost of living can be as high, and immigration may be as difficult, as that in Europe and North America. This region ranks as a place I definitely want to visit, but not a place I would consider retiring...not that it has anything wrong with it, but it also doesn't strike me as all that different in many ways from North America.     

Asia - Asia offers a host of countries where retirement can be inexpensive, like Thailand and Vietnam, as well as many where it is not, like Hong Kong. Living in Asia can induce real culture shock, as it differs vastly from what you would see in North America or Europe. But true adventurers may want to keep their options open regarding Asia, and I would definitely advise a trial period here before making a longer commitment. Besides the countries mentioned, Asia also includes countries that may be fine for visits, but not so fine for retirement, like India and Bangladesh, for example. Asia is also too wide a topic for me to cover in detail.

Africa - Africa is a tricky one. It rarely surfaces as a retirement destination, but sits high on the list for fantasy vacations. There are certainly some countries that engender images of possible retirement, like Morocco, Kenya, Madagascar, and South Africa, and others that definitely do not, like Chad and Senegal. If you want to retire here you'd better bring a real, serious spirit for adventure and cultural difference.

Arabia - In general, the Arab world isn't particularly appealing to North American retirees, especially women. It tends to be a world of glaring contrasts between unimaginable opulence and deeply depressing poverty. Having said that, there are a few countries that may appeal to North Americans as retirement options, like Israel. Immigration is likely a serious obstacle, but I say this from a point of relative ignorance about the topic, as there doesn't seem to be a lot of available informational resources, and I admit I haven't really dug for it. I would love to visit, and will some day, but I have no plans to retire there and wouldn't be much of an advocate for anyone who does. If you do, you need to do some homework and make sure you know what you're getting yourself into.

Latin America - Depending on who you speak with, the term may mean several different things. I will use it to encompass Mexico, and Central and South America. Many people include the Caribbean here...at least some of those nations.....and while my focus will not be on the Caribbean, it certainly deserves some looking at. But Mexico, and the countries of Central and South America, will be the target of the majority of my posts. This area of the world boasts an appealing climate, a low cost of living, generous and simple immigration policies (for the most part), amazingly diverse culture, a mostly laid back lifestyle, a rapidly developing infrastructure, relatively stable governments, safety, inexpensive healthcare, and a host of other advantages that I will cover in my posts from this point forward. As this blog progresses I will be researching the countries of this region, and providing you with valuable insights and resources that will help you make a move, either temporary or permanent, to this area.

So, that's the world in a nutshell....so to speak. The wide range of possiblities is daunting, as are the sources of information. Beyond this summary, much of the insight and research you would need to make a retirement move can be found online and in libraries and great sources like Lonely Planet. What you'll get here from me is a concise and detailed look into what Latin America has to offer the potential retiree, a plethora of information and choices that will help you narrow your targets down, and the kind of research that will hopefully make retiring here easy for you.

Business Opportunities in Retirement

A main concern of retirees is "will I have enough money?". Just as important should be "what will I do with all my free time?".  Only a small fraction of people looking to retire, especially those looking to retire early, will be able to live off their savings, pensions, social security, etc. And most people adventurous enough to seriously consider offshore retirement are also likely to be active, intelligent, and real go-getters....the kind of people who need something to do besides sit on the beach. 

While the opportunities for "getting a job" in a foreign country can be quite limited, the opportunities for starting and running your own business are endless. In many of the countries I target as potential retirement havens, any decent amount of money you have to start a business will likely place you near the top of the food chain. Remember, you're moving to a relatively poor country compared to the US or Canada, where people can be making less than $500 a week in wages.....often MUCH less. If you can start up a business with a small amount of capital, and employ local workers as a bonus, you're providing a much needed service to the community and are well on your way to establishing yourself as a person worth knowing in your new home country. Best of all, almost any type of business is a sure way to achieve resident status in your new home, with all the perks that come with it (I will tackle this subject in detail as I explore specific countries in future posts).

So, what are the kinds of things you can do to provide yourself with a steady income, keep yourself occupied and challenged, and still have lots of time to travel, play, relax, and enjoy? Here are a few ideas.

Daytrade, Swing Trade, Invest - This is one of my favorites, although admittedly it doesn't use local workers. All you need is a decent computer system (especially important for daytraders..less so for the other two), a reliable internet connection, and a good, consistent, winning system. Most developing countries, especially the ones I will be covering, already have a significant investment in internet infrastructure, or are just on the verge of getting it. If you can making a living trading in the US, you can make a great living trading and living in a cheaper country. 

Import/Export Business - Many retirees make excellent contacts in their new countries, and find interesting local items that would be popular back home. Local artifacts are especially sought after. If you're an antique hunter or love shopping around for local artifacts and relics this might be a really fun career. Plus you are injecting money into the local economy, and are bound to meet lots of interesting locals in this line of work.

Real Estate Investor - Granted, this might require significant capital, but the opportunities are endless in the developing world. Prices for developments are dirt cheap in many places, and developers are very open to investors with deep pockets. The kind of money that might buy you a luxury home in a big US city might get you an entire development project in a developing country.

These are just a few ideas. I'm sure you can think of many, many more. The point is that any idea you might have for a business, but can't raise the kind of capital needed to make it a success in the US, becomes much more realistic when you start it up in a developing country. And the local ecomony will welcome you with open arms!

First World, Second World, Third World, Fourth World

These are the four general classifications of countries. Some "standard" definitions, somewhat controversial, are as follows....

First World refers to developed, capitalist, industrial, technologically advanced nations whose citizens have a high standard of living.

Second World refers to communist, socialist, industrial, technologically advanced nations whose citizens have a medium to high standard of living.

Third World refers to underdeveloped economically, but emerging, nations.

Fourth World is a relatively new term that refers to LDC's, or "less developed countries", and consists of mostly poor African and Arab nations. 

So, what do these terms have to do with us and our discussion? I really wanted to put this out there, because I want to make it clear that ANY country in ANY of these categories is a potential retirement haven. It depends what you're looking for. I want people to think outside the box, and realize that what a country has to offer a potential retiree isn't always based on where that country fits into an artificial model.

I want you to open your mind, and disregard all the usual biases and sources of misinformation. I expect most of my current, and future, readers will be "First Worlders". We "First Worlders" live in a sheltered world, with little understanding of countries unlike ours, and a long list of mistruths, biases, and unwarranted fears about things that are different from that to which we are accustomed. I can't count the number of people who react to my statement that I'd like to retire to Ecuador, for instance, with "WHY?!?!? Why would you want to live in a dirty, backwards, dangerous third world country? I've heard that everything is corrupt, that you can spend hours in line waiting at the bank, that you can't drink the water, that Americans get kidnapped there all the time."

It's that kind of misinformation that closes people's minds to wonderful opportunities. I want my readers to think outside the box, and to be open to the many wondrous adventures that await us in a diverse world.

So don't discount a country I review just because of the title. Read what I have to say, do a lot of your own research, talk to people who have been there, and let's go for an eye-opening world tour!

Where, oh where?.........The criteria

This is a first of a series of posts on places to retire, which will all be entitled "Where, oh where?". For this first installment, I am going to list the criteria I would use to decide whether a country was worthwhile, or not.

Cost of Living - Face it...this is the number one reason people....we....are looking to retire offshore. Housing, food, gas, utilities...the basics of life..... are incredibly expensive in much of the first world. Oh, and lest we forget....TAXES! It can cost $3000 - $5000 a month to live the US or Canada (or England...Ireland....etc.), and that's with just the basics. How nice would it be to have toiled for decades to earn the kind of money you can earn in the US or Canada, and then turn around and retire somewhere that each $1 you earned gets you $5 of goods and services? It's not out of the question. There are many perfectly good places where you can rent (or buy) a 3 bedroom home in a city or on the beach, eat out when you want, employ a full-time maid, cook, and gardener, and live basically the same kind of life you could live in the US for under $1000 a month!

Weather - OK...so maybe weather might creep up to first place in the list of criteria....especially for those of us who suffer wet and/or cold winters. How about year-round spring temperatures in Quito, Ecuador? Or, if you're only going to spend half the year "away", balmy winters in Merida, Mexico and pleasant summers back north? 

Infrastructure - This means telephone and internet connectivity, because even if we may dream of leaving these behind, they have become important ways of keeping in touch. It also means having clean water, easy access to airports, a decent transportation (bus and road) system, dependable utilities, hospitals, libraries, acceptable shopping, safe streets, etc. If you're adventurous enough to even consider offshore retirement you are already prepared to give up a few of the amenities we consider essential, but you still want to be comfortable and safe.

Residency Requirements - These differ considerably country to country. In some, residency is initially limited to 90 days, but permanent residency can be as simple as proving $40,000 in liquid assets. In others, it is next to impossible and home purchases must be done through "trusts". None of these is insurmountable, but you need to know what you're going to face if you want to stay in a country more than 90 days. For some who wish to travel constantly, this isn't an issue, but many of us see ourselves spending at least 6 months at a time in one country, and others will want to stay permanently.

Cultural Diversity - I place this here only because it is something you need to acknowledge. Frankly, most places in the world have some degree of cultural diversity. It's one reason we like to travel, right? But the question is what type of diversity are you looking for? Do you want to live in an English-speaking country, or are you willing to learn Spanish, or Greek, or French? Do you enjoy mingling with people of differing backgrounds and cultures? Are you a culinary adventurer? Do you enjoy a laid back lifestyle, or do you need some daily excitement?

Healthcare - In the first world most of us have become accustomed to excellent healthcare. Many people are also under the illusion that second and third world countries suffer in this area. The facts show anything but. Most civilized countries have excellent, and incredibly affordable, healthcare, administered by doctors trained in the US or Europe at the finest medical schools. In most cases the treatment is so affordable you are likely to pay cash rather than use your insurance. But this is a tricky topic with many factors to consider, and one that will call for it's own post sometime in the near future.  

Safety - This is a mildly amusing criteria, mostly because the US (and to a lesser degree, Canada) is statistically one of the most dangerous and crime-ridden countries in the world. Per capita crime in the US vastly outnumbers that in any other country in the world. Sure, you hear the occasional horror story from vacation spots, but that's because they are so rare and make the news. It would be phycically impossible for the news to report every murder, kidnapping, robbery, and assault that takes place in the US or Canada...there are simply too many of them. Having said that, though, you also want to avoid war zones, and areas where drug cartels hold sway.

So, those are the criteria I will use over the next several months as I focus on world regions, and then the individual countries within those regions. It's a lot of info, so I hope you're patient. Check back often, as I will be adding to this analysis frequently over the coming months (and years?).

Day Trading vs. Swing Trading

This question arises often......what is the difference between day trading and swing trading?

The fundamental difference is duration. A day trade is always, without exception, closed before the end of the day. Nothing can eat into your capital like holding a stock overnight, and waking up the next morning to find the market down sharply, or that some overnight news has devastated the price of your stock. Daytrades can last anywhere between several seconds and several hours, but you always close them before the end of trading on any given day.

Swing trades, on the other hand, are meant to be held for a longer period, between several days and several weeks. The intention of a swing trade is that the stock is in a general uptrend with momentum that you expect to last more than one day.

Past the fundamental difference, though, are the logistics of each type of trade. A day trade is usually a large position, because you expect an immediate run on the stock. This necessitates a tight  .3% - .5% stop loss when entered, which can later be adjusted upwards as the stock moves up. As profits are taken off the table, the stop loss follows the price upwards. (Note: after the stock has made 3% - 4%, and you have taken several profits on the way up, you may be left with a smaller position. At this point you may decide that the stock has legs for a longer term, and allow the day trade to become a swing trade.)

Contrarily, a swing trade is a much smaller position, which allows you to carry a much looser stop loss. I personally prefer a stop loss between 7% and 10%. This allows for intraday deviations in the stock without stopping you out, but still offers some protection in case you were wrong about the stock's short term prospects. With a smaller position your capital is less exposed, and you can afford this type of stop loss.

Interestingly, the charts for day trades and swing trades look remarkably similar. Charts, though, are the subject of a whole post to themselves. Suffice it to state the obvious....for a day trade you expect an extremely short term run, while for a swing trade you expect the run might sustain itself over a period of weeks.

The Markets October 2008

Yikes! This has been the most amazing 2 weeks of volatility! Sounds exciting for traders, right? I happen to disagree. If you are a gambler, sure it's been a roller coaster. But any of us who are trying to make a consistent living trading are not playing right now. I haven't made a trade in over 2 weeks, and I won't again until the markets settle down a bit.

I follow a very conservative system of trading that uses a very simple template. Long trades happen at resistance, and short trades at support. The stock has to sit right below (for longs) or above (for shorts) the number and volume needs to pick up significantly. As soon as the price crosses the number, I place my trade, with an accompanying .3% stop loss. If the stock gains .5%, I move the stop loss to within $.03 of the number. Once it gains 1%, I take half my stake out. If it makes it to 2%, I take half again out, and replace the stop loss with a 1% trailing stop. If it makes 3% I will take half out again, and then just let the remainder ride, or stop out.

As you can see, this system doesn't allow for volatility. A simple reversal of .3% at the number stops me out. Even worse, the way stocks are swinging back and forth these days, that .3% can see some significant slippage. What happens if I place a buy at $50.01 with a stop loss at $49.95, and the stock price crashes 2% quickly to $49 before my stop loss can be filled? That kind of slippage could mean a 2% loss despite my .3% stop loss! That's not capital preservation, it's a formula for bankruptcy.

I would rather sit on the sidelines for 2-3 weeks than make a couple of mistakes that each cost me 2% of my capital. Sure, the exact opposite could happen and I could see a quick 2% gain, but that's not how you make consistent earnings. Anybody who wants to make a living daytrading needs to preserve capital above all else, and make smart trades that work consistently.

For that reason, I'm currently on vacation!   

How Much Will it Take?

How much do you need to retire? That all depends on several factors....where you will live, the lifestyle you need to support, how often you will travel back home, whether you buy or rent.

Where you will live - if you live in expensive countries.....Canada, US, "expensive" Europe (England, Ireland, France, Italy), you can expect to need pretty close to what you earn now. But you also have to ignore the dire forecasts of money managers who want you to believe you need $millions in order to retire. Once you retire, or daytrade for a living, you can eliminate many expenses...gas, car, clothes, lunches, etc. You may also own your own home, and if it is near payed off you suddenly free up a $ thousand a month, or so. But you can still expect to have a relatively hefty monthy earnings requirement in order to live in many first world countries.

If you live in inexpensive countries......"inexpensive" Europe (Spain, Croatia), South America, Central America, you might be surprised at how little you need. There are certainly plenty of places in the world where you can live in a 2 bedroom condo, eat out several times a week, own a car, have a full-time maid and gardener, and keep your monthly expenses under $1,500...and many places you can do the same for under $1,000!

The lifestyle you want to support - Will you travel, and stay in nice hotels, and eat in nice restaurants, or does budget travel suit you better? Will you buy (or rent) in a big city, or are you happy to live on the beach, or the country, or a small town? Do you buy at supermarkets when you do eat at home, and prefer restaurants, or do you like to cook at home, and buy fresh and cheap at street markets? Do you need all the amenties of your current life (new car, 60-inch plasma tv, expensive furniture, top appliances), or are you looking for a simpler life (old, or no, car, no tv)? 

Many people feel they need to live the same lifestyle they currently live, and for those you can expect to pay a bit higher monthly. But many others, myslef included, are looking for a simpler life. I like to cook, I want to buy my meals every day in a street market. I would rather spend 3 hours with a good book than 3 hours planted in front of a massive television. Give me a choice between nightclubbing or a nice, quiet walk, and I'll take the walk every day. I would probably want a car, but I would do most of my local travel by bike, bus, or on foot.

Whatever you choose, you have to be realistic. How many people who "claim" they want a simpler life would be happy in one? I will cover this topic in a seperate post, but my suggestion is you should try living a simpler life for 4-8 months somewhere before you jump in. You might find you need more amenities than you thought.

How often will you travel back home - this could be a big one. Do you have family....children, grandchildren, friends...that you would want to visit monthly, or bi-annually? A trip back to the States from Europe, or South America, might blow your budget out of the water. Or maybe you decide to make one country your home base, but want to travel the world. You must factor in travel costs if these situations arise. 

There is another travel cost you might need to factor in if you decide to live offshore half the time, and the remainder of the time in the US working to support your offshore life. Remember you will need to pay for flights, the cost of renting a new apartment, perhaps staying in a hotel while you look, setting up utilities, etc. Much of this can be done online before you return, but some will need to happen once you get back.

Botton line...BE REALISTIC. Factor in some of these before you finalize your budget.

Buy or rent -  this is a big one, and very personal. There are countries out there where you can buy a top end 2 bedroom condo in a big city, or a 4 bedroom home in a smaller one, for under $60,000. Prices run the gamut, from under $25,000 to well over $300,000, depending on what you want, and where you want it. But buying usually means staying put. If you buy a home in Ecuador, you aren't likely to move to England a year later. On the other hand, buying means your monthly expenses are reduced to a bare minimum.

Renting offers flexibility. You can spend several months in one city, or country, and then move to a completely different environment months later. If you decide to travel for an extended period you can give up a home base altogether. If you have to return to the US to work half the year, this might be your best option. It means a slightly higher monthly budget, but nice 2 bedroom apartments are available in many very nice places for under $300 monthly.

So, how much will it take? Only you can answer this for yourself. But you should sit down and do some serious number crunching, and some serious self-examination, before you come up with a budget. There are a lot of factors to consider, and the last thing you need is to underestimate your needs.

My Philosophy on International Retirement

In a perfect world, I would be rich, able to retire wherever I wanted. I could afford to live in any country in the world, buy a house there, and not have to work. But I see two glaring holes in that fantasy....first, I'm not rich, and second, do I really want to "retire" in the literal sense of the word? 

On the first note, my lack of unlimited wealth, I think most people will agree with me. There aren't a lot of people who can just retire, especially at an early age, and never have to work. In fact, if you fit in this category, this blog likely isn't for you. I expect to have to work for many years to come, at least part-time. A big part of this blog is talking about a way I can do that and still see the world for more than 1-2 annual 1 week jaunts to the hottest beachside resorts, struggling to get that last minute of glorious sunshine before gloomily heading back to the rain or the snow, and the daily grind.

I want to travel to countries, get to know their people, see their culture, eat their food, experience life the way they live it. And you can't do that in one week. I want to spend several months in a list of dozens of different countries, and I want the time to get to know the country and the people.

But I am also pragmatic. I need to make money to do this. I also don't believe I can be satisfied without challenging myself mentally...going beyond just travelling around the world. Can I ever see myself completely stopping work? No, I can't. I enjoy the challenge....the testing of my abilities. I don't believe I can just play until I die...I think I need to combine playing with working to fully balance my life. I don't ever see myslef "fully retired", either for financial reasons, or for the need I have to remain relevant and mentally active.

So, what do I see as options? With daytrading I have the ability to be flexible in my work and in my travel. Here are a few of the choices I would like to discuss......

1. Live internationally 4-8 months a year, and return to daytrading the remainder of the time. That would mean being fully committed to travel and semi-retirement for those 4-8 month stretches, and then being fully commited to earning a living to fund my travels the subsequent 4-8 month stretches.  This would mean either renting a home base, or being on the move and living in hostels/hotels while I travel, and then renting when I returned to the US (or Canada).

2. Live internationally full-time, and daytrade from wherever I am living. Logistically that means committing some of my time in other countries to trading. It also means I would be more likely to buy a residence than in the previous example.

Each has its advantages and disadvantages, and it is these I will discuss over the coming posts.

Food for thought.

My first post

This blog will focus on the dual goals of discussing daytrading in the current market environment, and incorporating daytrading as a means of generating income while living, and eventually retiring, in another country. I will talk about ways to make a living while seeing the world, and to do so with a relatively conservative approach to both topics.

Let's face it.....daytrading conjures up images of fast profits, and even faster losses. But the fact is that if you can make consistent 1% or better returns on your trades while minimizing your losses to .3% - .5%, you can earn a decent, if not above average, living without risking your capital. And preserving capital is crucial to using trading to finance your world travelling lifestyle. If you can't minimize the damage of a bad trade, you will never make a living trading, and if you can't do that, you need to find another way to generate consistent income.

So, join me in a lively discussion! I'll have input on conservative but consistent trading strategies. I'll also be talking about the different countries in the world that I feel are the best places to retire affordably, but comfortably, and how to combine your daytrading with an international living lifestyle.