Imagine waking up on a tropical mountain setting as the sun rises over the valley below.
You take a dip in your infinity pool before eating a breakfast complimented by fresh mango and papaya from your own garden. And the beans for your morning coffee came from a farm just down the road.
You could spend the day surfing. Or you might drive ten minutes into town to meet up with the American and British expat community that hangs out at a local bar.
During this visit, you’re relaxing on a two-week vacation. But you were especially grateful to own this home during the pandemic, when you and your family escaped here for several months to work remotely and wait out the insanity.
It’s fortunate that you had applied for legal residency a few years before, which gave you the right to enter the country, even when most governments closed their borders to tourists in 2020.
And when the time for retirement comes in a few years, the low cost of living here will help stretch your fixed income.
Is this an idyllic vacation home or a Plan B?
Quite often people start by traveling abroad somewhere and finding a place that they really, really enjoy spending time. At first it might just be a few days, then a few weeks.
But after several trips, they start looking at the real estate market… then eventually pull the trigger after finding an idyllic property that fits their needs.
Initially they might only use it as an occasional vacation home for a few weeks each year, renting it out to other tourists the rest of the time to generate a decent income stream.
But as the years go by and the world starts to become even more bizarre and conflict-prone, they start spending more and more time there, just to escape the madness.
Ultimately, they realize that, if things ever got truly crazy back home, they could always come here to their private safe haven. And just knowing that they have that option gives tremendous peace of mind.
This is just one way to look at a Plan B, and it’s not exactly radical or drastic. The idea is to start with something that you really enjoy… and then grow from there.
If you really like a particular destination, there’s no downside in cultivating roots there, buying a really nice, undervalued property that you love, or going through the process to establish legal residency.
Legal residency is great, because it means that you have the right to go to that country and stay indefinitely, even under extreme circumstances like COVID.
This is different from being a tourist, where you can be shut out of a country… and be limited in how long you can stay.
(Having legal residency in a foreign country also makes things a lot easier if you ever want to open a local bank account, buy a car, obtain a driver’s license, etc.)
Each country has its own residency rules. Some places are notoriously difficult to obtain residency— like the United States unless you walk across the southern border.
But most places have fairly simple requirements, and a number of countries have set up specific programs to attract foreigners who might be willing to spend some money in the country and/or buy property.
In Panama, for example, you can obtain residency by purchasing real estate for roughly $300,000. And that money goes a long way in Panama, where there’s plenty of quality property for sale between $100 and $200 per square foot.
In Mexico, you don’t even have to purchase a property to obtain legal residency; you just must prove that your income or savings meets a modest threshold.
These are just a few examples; we have a ton of other research on our website since everyone has his/her own desires and priorities.
For some, their Plan B might be a remote farm on the South Island of New Zealand. For others, a chic condo in the city center of Lisbon. And for others, a beachfront villa in Latin America or the Far East.
The world is an enormous place, and it’s full of options. Most likely there are several out there which could work for you.
Again, what we’re talking about here is not exactly a radical idea.
It’s hardly controversial to assert that there is a lot of conflict in the world… and way too many Inspired Idiots running the show.
We’ve mapped out how, in the United States for example, the government’s own baseline forecast for the next ten years estimates $20+ trillion in NEW debt. There will be consequences galore from this debt explosion.
But as we wrote yesterday, it’s not just about the dollar and the financial consequences. It’s also about personal risks stemming from ‘mostly peaceful’ protests, political clashes, culture wars, or even an actual shooting war.
These aren’t exactly long-shot risks anymore, and any rational, thinking person ought to be considering a backup plan.
Having a second residency is a great insurance policy to protect against those sorts of personal risks.
And if you choose wisely, i.e. select a place where you actually enjoy, it’s hard to imagine there’s any downside in having an additional place to go.