International Living is one of the best news/media/information resources for living, traveling and investing overseas. I get a lot of good information from them. My other favorite is Live & Invest Overseas. I had the opportunity to meet Kathleen Peddicord and Lief Simon in Panama City not long ago. L&I Overseas has an impressive staff of really good people researching the world, literally, to provide us with the information we need to help us make decisions about where to visit, invest or retire abroad. I am sure LI's staff is just as good.
I debated whether or not to write this post because in all fairness to International Living, it is very difficult to create a ranking system on where to retire overseas. The reason why I decided to write this is because many thousands of people this year will use IL's information to base their decisions on where to live, invest or retire overseas. If you are one of them, then this article is very relevant to your situation.
I am not going to go over every single detail about what I consider a flaw, just the material, important factors.
MOST IMPORTANT FLAW: EVERY CATEGORY GETS EQUAL WEIGHTING
This ranking list is broken down to decimal points, as you can see #1 Ecuador gets a final score of 91.9. That gives the impression that this system is quite scientific. But here is problem #1. The cost of real estate and the cost of living, two very important factors, get just as much weighting as subjective, arbitrary categories like "integration", "special benefits" and "retirement infrastructure". I had to google what these things meant. Long story short, something like "integration" is so subjective and arbitrary that it comes down to your own ability to fit in to your new country, if you know the language, understand the culture, etc. There is no way that "integration"should be as important as "cost of living". Yet if you calculate the way IL comes up with the final score, they simply add all 8 numbers, divide by 8 and.... voila!!!.... 91.9 or 73.2. I don't know one person who is going to live abroad who would consider integration as important as cost of living.
This is important because this flaw alone twists the real value of the entire ranking system. Right now I live in the Dominican Republic, at the bottom of the list. I have lived in or been to 16 of the other countries (some many many times) and I can tell you from my experience that my ranking would be very different based on what I know about these places.
FLAW #2: VARIANCES WITHIN EACH CATEGORY ARE GIGANTIC!
I just moved from Panama. The real estate market there is all over the place. In the city, there are no bargains. The high-end market is scary (lots of inventory, but still at prices higher than many good cities in the US), but the middle and low-end markets are on fire, with very little inventory. However, if you are like me and want the tropical beach life, you can find deals so cheap outside of PTY- in the Azuero Peninsula that you wouldn't believe me if I told you I saw a house for sale, beachfront, for $500/sq. meter (apx.$50/sq.ft). Long story short, I would say Panama City should get a poor ranking in real estate, but plenty of spots outside the city should get very good ratings.
Same holds true for climate. IL crushed Chile (would be in my top 5 or 10 in the world) on climate with a score of only 57. Are you kidding me? First of all, the climate in Chile is all over the place, from desert in the north to freezing snow/rain in the Patagonia. But many of the places you would want to live in Chile are central, which has a Mediterranean-like climate... almost perfect.
Panama is #2 mostly because it gets high marks in almost every category, but the climate in the city sucks, yet IL gives it an 88 score. It rains almost every day in PTY 8 months a year. You can't plan outside activities like golf or pool in the city because there is a good chance you will get rained out. 88? Maybe in Coronado or Punta Chame.
FLAW #3: SOME CATEGORIES ONLY LOOK GOOD ON PAPER
Panama has, by far, the best special benefits program I have seen. I totally agree with IL's score of 100 here. Panama has really rolled out the red carpet for retirees and investors looking to do business there. As a "pensionado" you get all sorts of benefits, including discounts 10% or more on everything from groceries to healthcare to movie tickets. I now live in the Dominican Republic. Long story short, there are few, if any, of the "special benefits" being marketed here like in Panama. But I don't need them. My cost to get a citizenship is CHEAPER and FASTER in the DR than Panama, despite Panama's marketing machine to attract foreigners. I don't need discounts in the DR because, even with the discounts that pensionados get in Panama, my costs to live in the DR are still much cheaper, everything from the price of a house or rent to groceries. For example, filet mignon is roughly $6.50/lb in Panama (was only $5.30 a year ago at Rey Supermarket... lots of inflation there). So with a pensionado discount, minus 10%, its $5.85. With no "special benefits" in the DR, I buy filet mignon for 180 pesos/lb, which is about $4.25. Yes, some things in the DR are dysfunctionally higher in price, like electricity and gasoline, but when it is all added up, my cost of living dropped nicely from Panama to DR, yet IL says that Panama gets an 86 score on cost of living while DR gets only 70. My real life factual experience is that the opposite is true.
Having identified these flaws, how is it possible to organize a ranking of the world's best places to live or retire? If I was on the IL staff, I would make next year's list weight-adjusted and sub-categorized. Everybody I know cares a lot more about cost of living than "integration".
If you are looking to live or invest in a foreign country, the best advice I can give you is this: Use IL and L&I Overseas as an information resource. But when it comes to making a decision on where to visit first to see if you like it, ask yourself what is important to you most. You can't find this on their ranking lists. For me, I chose the DR because I wanted to live in the tropics in a beach community. Panama does not yet have this product, where people actually socialize at the beach, on the beach, with shops and restaurants. I live in Cabarete, a true beach community. The price of beach-front real estate is as good as anywhere. I also chose it for some of the unique business opportunities available. What are your motivations? Pursue them first, and leave these rankings for the herds who need someone else to think for them.
But then again, what do I know? I am only drgringo!
I debated whether or not to write this post because in all fairness to International Living, it is very difficult to create a ranking system on where to retire overseas. The reason why I decided to write this is because many thousands of people this year will use IL's information to base their decisions on where to live, invest or retire overseas. If you are one of them, then this article is very relevant to your situation.
I am not going to go over every single detail about what I consider a flaw, just the material, important factors.
This ranking list is broken down to decimal points, as you can see #1 Ecuador gets a final score of 91.9. That gives the impression that this system is quite scientific. But here is problem #1. The cost of real estate and the cost of living, two very important factors, get just as much weighting as subjective, arbitrary categories like "integration", "special benefits" and "retirement infrastructure". I had to google what these things meant. Long story short, something like "integration" is so subjective and arbitrary that it comes down to your own ability to fit in to your new country, if you know the language, understand the culture, etc. There is no way that "integration"should be as important as "cost of living". Yet if you calculate the way IL comes up with the final score, they simply add all 8 numbers, divide by 8 and.... voila!!!.... 91.9 or 73.2. I don't know one person who is going to live abroad who would consider integration as important as cost of living.
This is important because this flaw alone twists the real value of the entire ranking system. Right now I live in the Dominican Republic, at the bottom of the list. I have lived in or been to 16 of the other countries (some many many times) and I can tell you from my experience that my ranking would be very different based on what I know about these places.
FLAW #2: VARIANCES WITHIN EACH CATEGORY ARE GIGANTIC!
I just moved from Panama. The real estate market there is all over the place. In the city, there are no bargains. The high-end market is scary (lots of inventory, but still at prices higher than many good cities in the US), but the middle and low-end markets are on fire, with very little inventory. However, if you are like me and want the tropical beach life, you can find deals so cheap outside of PTY- in the Azuero Peninsula that you wouldn't believe me if I told you I saw a house for sale, beachfront, for $500/sq. meter (apx.$50/sq.ft). Long story short, I would say Panama City should get a poor ranking in real estate, but plenty of spots outside the city should get very good ratings.
Same holds true for climate. IL crushed Chile (would be in my top 5 or 10 in the world) on climate with a score of only 57. Are you kidding me? First of all, the climate in Chile is all over the place, from desert in the north to freezing snow/rain in the Patagonia. But many of the places you would want to live in Chile are central, which has a Mediterranean-like climate... almost perfect.
Panama is #2 mostly because it gets high marks in almost every category, but the climate in the city sucks, yet IL gives it an 88 score. It rains almost every day in PTY 8 months a year. You can't plan outside activities like golf or pool in the city because there is a good chance you will get rained out. 88? Maybe in Coronado or Punta Chame.
FLAW #3: SOME CATEGORIES ONLY LOOK GOOD ON PAPER
Panama has, by far, the best special benefits program I have seen. I totally agree with IL's score of 100 here. Panama has really rolled out the red carpet for retirees and investors looking to do business there. As a "pensionado" you get all sorts of benefits, including discounts 10% or more on everything from groceries to healthcare to movie tickets. I now live in the Dominican Republic. Long story short, there are few, if any, of the "special benefits" being marketed here like in Panama. But I don't need them. My cost to get a citizenship is CHEAPER and FASTER in the DR than Panama, despite Panama's marketing machine to attract foreigners. I don't need discounts in the DR because, even with the discounts that pensionados get in Panama, my costs to live in the DR are still much cheaper, everything from the price of a house or rent to groceries. For example, filet mignon is roughly $6.50/lb in Panama (was only $5.30 a year ago at Rey Supermarket... lots of inflation there). So with a pensionado discount, minus 10%, its $5.85. With no "special benefits" in the DR, I buy filet mignon for 180 pesos/lb, which is about $4.25. Yes, some things in the DR are dysfunctionally higher in price, like electricity and gasoline, but when it is all added up, my cost of living dropped nicely from Panama to DR, yet IL says that Panama gets an 86 score on cost of living while DR gets only 70. My real life factual experience is that the opposite is true.
Having identified these flaws, how is it possible to organize a ranking of the world's best places to live or retire? If I was on the IL staff, I would make next year's list weight-adjusted and sub-categorized. Everybody I know cares a lot more about cost of living than "integration".
If you are looking to live or invest in a foreign country, the best advice I can give you is this: Use IL and L&I Overseas as an information resource. But when it comes to making a decision on where to visit first to see if you like it, ask yourself what is important to you most. You can't find this on their ranking lists. For me, I chose the DR because I wanted to live in the tropics in a beach community. Panama does not yet have this product, where people actually socialize at the beach, on the beach, with shops and restaurants. I live in Cabarete, a true beach community. The price of beach-front real estate is as good as anywhere. I also chose it for some of the unique business opportunities available. What are your motivations? Pursue them first, and leave these rankings for the herds who need someone else to think for them.
But then again, what do I know? I am only drgringo!
Nice insight. Thanks.
ReplyDelete