Announcer: Welcome back, America, to Sound Retirement Radio. Where we bring you concepts, ideas, and strategies designed to help you achieve clarity, confidence, and freedom as you prepare for and transition through retirement. Now, here is your host, Jason Parker.
Jason Parker: Seattle, Tacoma, Olympia, Gig Harbor, all the good people right here in Kitsap county, thank you so much for tuning into another program, another round of Sound Retirement Radio. Remember, you can find us online at SoundRetirementRadio.com. If you’re driving and you’d like to catch the rest of the program once you get home, you can download this program from iTunes as a podcast. Really, I think there’s a lot of different places you can download it, but that’s our primary source. After five years of doing the program, we are like in the third slot. If you do a search on iTunes for retirement, Sound Retirement Radio is one of the top podcasts. Thank you for helping us get into that position, for being one of our loyal listeners. It means a lot to me.
I also want to let you know, I’m really excited that my new book is going to be coming out pretty soon. I believe we’re shooting for a May 5th launch date. I’m going to keep you in suspense here. Not give you a whole lot of information, but you can find out more at SoundRetirementPlanning.com. That is where I write a blog every week and we try to add significant, meaningful value to your listeners lives. As you can imagine, I hope, my hope is, if you’re preparing for retirement and you’re listening to this program, that one day you will look back and you will say, “I made better retirement decisions. I am more secure and I have more confidence because of this program.” I hope that we can do that. For those of you that have already retired, I hope the program has helped you do just that.
We have a great guest to bring on the program, and I can’t wait to get started here because he’s one of my favorite people. I’ve interviewed him a couple of times in the past and he always has great insight for your listeners. Today, I have Phil on the program. Phil did something that’s very unique in that … We have a lot of people that talk about doing this. We have people come in and they say, “Jason, we’re thinking about retiring abroad. Maybe living outside of the United States of American when we retire.” Phil and his wife did this. I’ve had the opportunity to know them over the years. I wanted to bring them on to the program. Phil, I don’t know if it was okay to say your last name so I kind of caught myself right before I said your last name. I didn’t ask for permission. Do you want to just go by Phil?
Phil Newbold: Sure, or Phil Newbold. N-E-W-B-O-L-D. Either way.
Jason Parker: Phil Newbold. There you go. All right. Cat is out of the bag. Now you’re going to have all kinds of people contacting you asking you how you did this.
Phil Newbold: Terrific. Glad to help.
Jason Parker: Phil, before we get started, I want to share a joke. We’ve been doing a joke just to bring something kind of fun to our listeners ears before we get started with the program. Here’s my joke. Why do the French like to eat snails? Because they don’t like fast food.
Phil Newbold: How do I top that?
Jason Parker: It puts a smile on my face and darn it, that’s what matters. Phil, my first question for you, what were the retirement objectives that lead you to consider moving outside the United States?
Phil Newbold: Sure. That’s really probably the dominant questions I guess. Let me spin this just a little different way than I have in the last couple of times you’ve talked about it. During my career, I did a few things. One of the assignments I had was chief financial officer in a pretty good sized company. I always had the belief, strange as though this may be in the particular line of credit driven world, that you need to size your expenses to your revenues. As a result of that, when I talk about one of the criteria, one of my biggest criteria is affordability. But again, being a former CFO, I said, “You know, I got to size my lifestyle to my revenues. Is there someway that I can size my lifestyle to me revenues and have a much better life than I had before?” That’s what drove it. If you were to ask me what are some of the objectives, my first one was affordability. That was the question of where can I live as well or better than I lived today and basically have it affordable so I’m not constantly drawing down on my IRA’s or 401K’s or savings or any of these other things, but living fairly comfortably. Affordability was one.
Second was lifestyle. I was looking, Jason, for something a little but more relaxed. I had gone through like so many people do, and like you’re still doing, kind of the treadmill form of life. I can remember many mornings being on the 605 ferry heading into Seattle and then being logged in and on my smart phone and doing these things. So, I wanted to kick back a little bit. I know this will be really hard for your audience to ponder, but I was actually looking for a little bit better weather. Not that the Seattle area weather isn’t fabulous, but I just wanted something that involved a little bit more sunshine, a little but more warmth and some consistency. That, too, was a factor.
One of things that’s been important to me and I should give your listeners the back drop, I’ve lived abroad in Germany, and I’ve lived in Belgium. In both of those things, I was living in expat communities. I wanted to be in a place with a sense of community. One thing I’ll say to your listeners, if they haven’t lived abroad is, when you live in a place where pretty much everybody you meet is from someplace else, there’s a real tendency to want to unite together, join, bond, and so on. That was one of my objectives also, and wanted a little bit of adventure, and I’ve certainly got that where I retired to. Being able to travel. I have a new pallet to travel to. America is fabulous and I’ve been a lot of places there. I’ve been to a lot of places here.
This is one that’s really hard probably for your listeners and Americans to listen to, I wanted to be in a place that had outstanding health care. I moved to a place that had outstanding health care. Not that it’s any more technical in the U.S., but it’s a cultural thing where it’s compassionate, it’s caring. You always have your doctors cell phone number. He’ll respond day or night. They make house calls. Those were kind of the general objectives that I was trying to seek. That took me to a number of areas, in terms of how I was looking at it. Those were pretty much the objectives.
Jason Parker: That’s awesome. You said a couple things that just really caught my attention. Have you ever read that book by Tim Farris called The Four Hour Work Week?
Phil Newbold: You know, I have read that. It’s been a long time ago. I’ve also read your book twice, so there you go.
Jason Parker: Thank you. The Four Hour Work Week, one of the things that Tim Farris says in that book, which has caught with me, and it just reminded me when you were speaking. He talks about making dollars and spending pesos. How from a lifestyle design standpoint, if you can make dollars and spend pesos, that’s a pretty neat equation, at least in today’s currency world.
Phil Newbold: Although the banks are trying to make that a lot harder right now, by the way. They’re putting 3% fees on ATM withdrawals and things like that. Snarky guy that I am, I will find a way around that pretty quick.
Jason Parker: Yeah. The other thing that I love about what you do is … I’m big on budgeting. You were talking about matching up the assets you have to your expenses. Your resources to your expenses. I think cash flow is such an important component for people as they’re transitioning for retirement. Making sure that you have enough income to be able to live comfortable. When we’re working, like me, I’m budgeting because I’m trying to save more money. When people retire, it shifts to more, people aren’t trying to save money in retirement, now they’re budgeting to say, “How much can I spend every month and not run out of money before I run out of life?” Budgeting becomes a little bit of a different exercise. It really becomes more about how much can I spend rather than how much can I save. I’m still in that phase where I’m like, “How much can I save every month?” That’s why I budget.
You took this to an extreme level. Instead of just … I guess it’s not really extreme, but you just looked at it different. So many people budget and they say, “Well, if I have this much income living in Kitsap county, this is how much lifestyle I can afford.” You said, “This is how much income I have. If I choose to live somebody else, I get this quality of lifestyle that can be significantly more.” I just think that is a really powerful way of thinking of things.
Phil Newbold: Let me just add one thing, Jason, just real quickly here. In the four years we’ve been retired … Now this is not going to sound like a work, but in the four years we’ve been retired, we have the same amount of money today we had when we retired four years ago. As you know, we’ve taken some pretty nice trips. We’ve done some pretty nice things. We pretty much dynamically monitor that in terms of what are we earning through our investments? What do you have coming in? We pay pretty close attention to that. In terms of budgeting, I have several pieces of software that I use every month that keep track of what I’ve got, what I’m going to have, what my expenses are. I get a little bit geeky on that, because it’s not that I’m afraid of running out of money, but I’m afraid of compromising my lifestyle too early.
Jason Parker: Yeah. What kind of research, travel … What were some of the steps that you took to determine if and where you were doing to retire when you were thinking about retiring abroad.
Phil Newbold: Sure. Let me start with kind of an anecdote here. I can’t tell you how many times I’ve heard the pearl of, “Many people spend more time planning their vacation than retiring, their retirement.” Again, kind of a counter cyclical kind of guy in that I spent probably the last three years of my work life, in my spare time, it become my avocation of reading books about retiring abroad. Keep in mind, it’s a little easier for me because I’ve lived abroad twice, but that was on other people’s money. Running away from home. There’s so many books out there. That was a start.
One of the things I’d really encourage your readers to do, or your listeners to do, if they’re interested is do kind of an analysis of some of the places they think they might like to retire in. Form some networks there. With the internet now and all of these networking groups, it’s really easy to kind of link up with some people who live in other areas that you think you might want to live in. I certainly did that. I joined a couple of expat groups, ironically, in different places. We eventually narrowed three places down to one. I attended some in-country seminars. Which I would really encourage people. If they’ve got some runway before they’re going to retire. Take some vacations at some places you think you might like to retire. If there’s some seminars, a lot of places now offer seminars where you get to meet the local doctors, the lawyers, the butchers, the candlestick makers, you name it. Do that. You’ll get a much better form …
We spent a lot of time talking with family and friends, Jason. We didn’t do it from the standpoint of, “Hey. Gee Whiz. What do you think of this place versus that place?” We talked about it from the standpoint of how will our relations be after we’re living abroad and what’s going to happen. I don’t want to say that was a perfect process, but I’m certainly glad we have those discussions.
Jason Parker: That’s great. What a great thing to bring your family into that kind of conversations and make sure that everybody knows what you’re thinking and what you’re doing. You mentioned you read books, there’s different networking and internet websites. Any books or website in particular stand out to you or come to your mind as people are researching this?
Phil Newbold: Actually, I don’t remember the name of it, but there was one book called Running Away From Home that I thought was very good. It talked about a lot of the mental aspects to that and the though process you go through. I don’t recall the author. If you want, I can do a little bit of research and go back and look back and just send you an email on that, Jason. If somebody wants to get that, obviously we’re happy to share that.
Jason Parker: We’ll put it in the show notes. People can visit SoundRetirementRadio.com afterwards and then we’ll put links in there for any follow up. You know Phil, I’m realizing here, we are at this point we need to take our first break. We’ll be back in just a minute.
Phil Newbold: Great.
Jason Parker: All righty, folks. Welcome back to another round of Sound Retirement Radio. I’m your host, Jason Parker. It is my good fortune and good pleasure to bring Mr. Phil Newbold onto the program today. Phil did something that so many people I meet with today are talking about, which is retiring abroad. Living abroad once you retire. Phil, you were just sharing with us some of the steps you took. What would you recommend? If people are seriously considering retiring abroad, what are some of the things you would advise people to do before they made that leap of faith?
Phil Newbold: Sure. We had talked just before the break about going to some in-country seminars for some targeted places. I think one, if you can do it objectively … There’s a Mark Twain Quote, “After all is said and done, much more is said than done.” I think for people talking about retiring abroad, I think you need to realistically asses, what’s your sense of adventure and your ability to tolerate change and risk?
One of the things when I talk to people, I tell them, don’t be impetuous. Don’t make the crazy move, but embrace the change and be willing to take some risks. I know that sounds contradictory, but I’m just saying, if you study it, research it, don’t me too compulsive. Also, one of the things, and I think this plays into what you do a lot, really spend some quality time with your financial advisor, your cash professionals, and figure out what financial resources you’re going to have, what your life is going to look like, how your tax position changes, if at all. For many people it’s really not going to change. Know these things and know what the different country taxation policies are. Is your retirement taxed in that country? Not taxed? Can you move your things in duty free, et cetera?
Then you have to figure out, also, to what degree are you ready to disconnect a little bit from some of your U.S. assets. Are you ready to leave behind your boats, your cars, your furnishings, your home, for a different kind of world that may have a different kind of home, different kind of furnishings, may or may not have boats, depending on where you are. I think that’s worth doing. I think if you can, try to spend a month in the areas you’re looking at retiring to. Get a sense of the culture. I don’t mean the culture by hanging around a bunch of Americans. What are some of the locals like? What’s the process for paying bills? Going to the bank? Driving? Getting a hair cut? You name all of these things. In my wife’s case, where do you get your nails done? Where do you get your hair done? How do you feel about those people? The more you can go into this with, I think the better off you’re going to be when you finally make the decision, if that’s the decision you’re making.
Jason Parker: That’s some great, great advice from somebody who can wear the t-shirt proudly, “Been there. Done that.” He’s living it right now, Phil. Phil Newbold. Phil, share with our listeners your journey from selling your house here in the United States and then moving to another country.
Phil Newbold: Sure. One part of the journey has to start with my career. We moved down here in about 2009, 2010 now. I was leading a consulting group for a large company that shall go nameless. As the economy declined, their consulting declined, so the company decided that we needed to do a significant downsizing in the area. I was given the opportunity to work on the downsizing plan, which I figured I was going to retire in less than a year. I’ll downsize myself here. One of the things I got coming out of that was a little but of a goodbye kiss. Not a great goodbye kiss. I knew that if we could sell our house and make our move within a year, we won. If it took us more than a year, we’d lose. I would tell you that selling your house in a down market, and we were living in a very nice house in Kitsap county. The number of housing sales going on there could fit in a big thimble. That took a little bit of [inaudible 00:17:07] doing that one. That worked out okay. We had some fine people that liked our house.
The thing that was really tough for my wife, and I think guys are less oriented toward thinks, but my wife had a life of building wonderful household goods and the house was beautiful. We decided to leave most of those possessions behind because it was formal things and we were moving to a less formal area. Make sure you and your wife or your wife and your husband, whatever that works out to be, really have that discussion about what possessions do we really … What do I have to really, really have? As opposed to, what do we want to save money on by not moving? Even though, I would tell you that when you put things into consignment, things like that, you’re not going to get much money on it.
Just keep in mind that when you’re moving, the mover part of the thing is the easy part. The hard part is figuring out what you’re going to move because these guys charge by weight, they charge by distance, and they charge by size. For example, something we did that was absolutely stupid is we have this big seven-foot tree that you plug the thing in when you take out of the box and it’s beautiful. We had to move that and we had to move our five boxes of Christmas things. Well, in the four years we’ve lived here, we have yet to take the Christmas tree out of the basement, look at the boxes and things. Sometimes you make some goofy decisions.
Jason Parker: Now, on that same little line of thought though, what were some of the things that maybe you wish you would have brought with you that you didn’t. Is there anything that you look back and you say, “Man, I wish I would have moved that.”
Phil Newbold: Yeah. Barbecues. We had this big barbecue thing outside. Beautiful barbecue on our back patio there, back deck. Wish we would have done that. We figured these things are a dime a dozen. We’ll get them there. Well, it turns out that the Webers and some of the others are about twice the price where we moved to than they were in the United States.
Jason Parker: That’s interesting.
Phil Newbold: Then, somebody else said, “They don’t have lamps where you’re going.” We said, “What? What? What?” We took all kinds of lamps. We took enough lamps to light half the western world. It turns out there’s lamp stores everywhere that have lamps that are every bit as nice, less expensive. You do some of these things. Then we moved seven boxes of pictures, family pictures. A discerning person would say, “Maybe you should have gone through the boxes before you moved them.” In the four years we’ve been here, the same packing tape is still on those boxes. Anyway.
A couple things on the journey, I’ll tell you that renting the place was easy. There was just a plethora of nice places, so we rented for a while. Then buying a house was … It took a little time just like it does in the states. It was a very pleasant experience. Everything worked out fine. It turned out it settled in U.S. dollars through the states. Where we live, we’re in a NAFTA country, so we’re in a fee simple world. The same rules you have in real estate in America, we have here.
You were talking about the journey. Our stuff was packed up for a couple of months. Even when you’re living in a furnished rental, when you don’t have your stuff that you’re bringing for a couple months, that takes a little getting used to. The positive of all of that, Jason, which was so important, is everybody, and I mean everybody we met when we first got here, made us feel welcome and wanted to help us. That was the locals, the other expats, et cetera. The journey was harder psychologically than it was physically.
Jason Parker: Would you say that one of the reasons that that community is so inviting is because it is expats? It’s people from all over the world that are settling in this one area. Would it have been as comfortable of an experience if it wasn’t that type of established community?
Phil Newbold: Frankly, it was real easy here because of the type of community. I think if I were moving to certain parts of the U.S., it would have been more difficult. Again, as I said earlier, everybody that’s an expat wants to form friends and meet people and get involved an things. That’s just an aspect of making that move that makes it easier. Now, when you’re doing that, you want to move into a country that has a good expat community. I don’t think living in Basra, Iraq would be probably the place I’d recommend. Even though I’m sure the housing is inexpensive.
Jason Parker: You get settled in this new community. What were some of biggest positives and negative surprises once you got there?
Phil Newbold: Sure. I think on the positive side, I’ve been very impressed … We’ll let the cat out of the bag, I happen to live in Mexico. The culture and respect of the Mexican people, it’s a country that almost evolves around the culture of family, the culture of respect, and those were very appealing things to me. There still very appealing. You treat everybody kindly and the kindness that they show is just extraordinary. Also, even though I came down here with some Spanish, I’d say I probably speak about a fourth grade level, so there’s a long way to go. There’s language resources here everywhere. You can hire a person to teach you one-on-one. There’s language schools everywhere. There’s just things everywhere. At the risk of “rubbing it in,” we have 350 days of sunshine a year.
Jason Parker: That is rubbing it in, actually.
Phil Newbold: That is rubbing it in, isn’t it? I’m always amazed. By the way, I love the time we lived in Washington. I have to tell you, I was always amazed, when I see these companies advertising solar panels and I always kind of thought, “Huh?” Solar is all over the place here. We don’t have full solar, but we have solar hot water. If it comes up a little later, I’ll just share some of the comparative expenses. A lot of our bills are just a [inaudible 00:23:05] that used to be kind of big. Weather was a factor. Climate is a factor. We typically average, year round, we’ll be in the 70’s somewhere. Winter it gets kind of cold here. It will get down to the low 70’s. Summer, there’s two months it will get up to 90. You have to endure those.
Jason Parker: It’s a rough life, and somebody has got to do it. I’m glad it’s you.
Phil Newbold: There’s a lot of people in the world living that, but we don’t have the pine trees you have. We’re on the same latitude as Hawaii, so we have palms and a bunch of other things. We don’t have the nice pine trees you have.
Jason Parker: There’s a trade off.
Phil Newbold: Yeah. Pace of life, I wanted a slower pace of life. I would tell you, and I think maybe some of your listeners will relate to this, my wife likes a high level of activity. She likes to be busy. I don’t want to say she likes to be frantic. She’d hit me on the side of the head if I said that. The pace of life for me is a wonderful positive. For her, not quite as positive. Every time we get back to the states, she just over doses on shopping malls and things like that. Not my thing, but hers.
A positive is just embracing the attitude of retirement. I never wanted to be in a retirement community, and I’m not knocking the Del Webbs of the world or these other things. That just wasn’t me. It’s a retirement community, but it doesn’t feel like you’re in a retirement community. I know that sounds kind of odd, but we have our own house. It’s beautiful. We have pretty much all my neighbors are retired. Yet, it doesn’t feel like some kind of a special facility. Anyway, that’s part of it.
Healthcare was a factor. I mentioned that before. Real estate taxes, if we get into it I’ll talk about a comparative. That will be the point where you’re listeners will either feel good or start growling. Food cost, that will also be either a smile or … And the level of social activities. You also have to make plans here to stay in. There’s so many things going on between plays, and music, you name it. Going out with friends. One of the things that nice here is it’s so inexpensive to go out to dinner, you almost … And my wife is a wonderful cook. I can’t remember the last time she’s turned on the stove except to do something simple. Those were some of the big positives.
Jason Parker: Before we get into the negatives, we’re at the point again where we need to take our next break. We’ll be back in a minute just to talk about some of those negatives.
Phil Newbold: Sure. Super.
Jason Parker: All righty, folks. Welcome back to another round of Sound Retirement Radio. I’m your host, Jason Parker. You can find us online at SoundRetirementRadio.com. If you’re interested, we will be sure to post links and show notes there so that you can get more information. Sound Retirement Planning is the blog that I write on a regular basis. I have a new book coming out that I’m very excited about. I’m hoping that you can all help me make that a successful launch, when it comes to fruition here very soon.
I do want to remind our listeners, one of the most important aspects of retirement is cash flow. How to make sure you have enough income in retirement. A core component of cash flow for most people who are retiring is going to be social security income. We teach strategies, concepts, and ideas, especially for married couples, to really maximize lifetime benefits from social security. There are little known, they’re becoming more known, tricks and strategies. If you’re getting ready to retire, you’d like some feedback, some advice on how to do that, visit my website, SoundRetirementPlanning.com. We’ve written some articles. We can also run that type of report for you and make available some resources that you should know before you elect social security.
I have Phil Newbold on the program Phil was just talking with us about some of the positives of living abroad. Phil, I want to get into the negatives, but before I do, you chose Mexico. I know that you looked at several different places. What were some of the other places you considered?
Phil Newbold: We considered Panama. We considered Ecuador. I considered Italy, and I considered France. France and Italy, I was a little … This is going to sound a little nerdy to you. I was a little concerned about the inflation, which means deflated value of the dollar versus the Euro at the time. If I were living today and looking at that, I’d still be worried about that. Ecuador was my place of choice, but my wife dropped the hammer on that one. She kind of thought everybody was a rain forest person with a bone in their nose and [crosstalk 00:27:56] or something. That didn’t work out. In terms of Mexico, there were a number of places in Mexico we considered. We ended up in a place called Ajijic, which is on Lake Chapala which is up in the mountains. That was our place of choice. We had quite a few places we analyzed in depth.
Jason Parker: One of the things I think you said there that really is probably shocking a lot of people that have never heard you speak on this topic before, but an important criteria for you was health care. You speak very highly about the health care experience that you’ve had there. You want to take just a quick second and share with our listeners that story?
Phil Newbold: Sure. Let me put it in perspective. I’ll tell you a story and I think this story is incredible. There’s a friend I have, not a real good friend, but a friend, and he needed to get a multi-bypass, like a quadruple bypass. He saw one of the cardiologists here and he was concerned. The cardiologist said, I think you ought to do it here. He said, “Okay.” The guy said, it’s $21,000 all in if you have it done here. He said, “I’m not comfortable with that. I’m thinking of going … ,” I think it was Rice, their medical school. He wanted to go back across the border. The doctor said, “Really, really, really, really. I think you ought to have it done in Mexico.” Well, [inaudible 00:29:16] story, he goes to the U.S. Who do you think the cardiologist is?
Jason Parker: No way.
Phil Newbold: Same guy. The price is not 10x as opposed to the other. The point is, very good doctors. Tremendous medical schools here if you were to research it, you’d find one of the top 10 medical schools in the hemisphere is in Guadalajara. A lot of the doctors are board certified in both countries. The doctors here and the dentists are just fabulous. The prices are incredible. Hospitals are a little expensive.
Now, getting back to the insurance. My wife is a retiree of Kaiser Permanente, which group health is part of. We have free medical when we’re in the U.S., but we don’t have free medical here. We’ve joined the, kind of what I will call the peasants medical things, which means great doctors, crummy hospitals. That’s only on an emergency basis. A stroke, heart attack, we’re covered and then we file a claim back to the U.S. and we get our day to day health care for our regular doctors. Our doctors made house calls on things. We’ve got his cell phone number and that’s true of every provider we have. Very sensitive, very caring providers here. Look it over. If you don’t have a free retirement thing on healthcare like my wife did, you might find some kind of a gap policy here. I will tell you, your listeners, when you get over 75 years old, it gets a little bit tricky to buy health coverage. If you’re under that, you’ve certainly got a good run at it. As hokey as it sounds, do everything you can to keep yourself healthy.
Jason Parker: All right. We were just about, before we took that break, we were just about to talk about the negatives. Negative surprises once you got settled.
Phil Newbold: Sure. I’ll give you one. The police force here is referred to by the locals as banditos con uniformas. In other words, bandits in uniforms. You’re going to get shaken down a few times. I just think of it as a toll every now and then. They like to target Americans on things. You’ll get a fair number of humble reminders, pretty much in any country you’re in, you’re really not a citizen of the country. Speaking the language, which I do a little bit, is fine until I get to a place where it’s a really in depth topic, like you’re talking to a mechanic who doesn’t speak English. You’ve got to get used to that a little bit. It costs you some money to set up for a while. You’ve got some immigration costs, your moving costs.
Then one negative I’ll throw out there that is not a major negative to me, if you read the U.S. papers or Canadian papers, you think that every other day there’s 10 people getting murdered right in the streets. I will tell you this, if you look at the data, the data, you’re safer here than you are there. I’m saying that for the most part as a Caucasian or an African-American, you’re going to be safer here. Most of the violence is directed toward Mexicans on Mexicans.
Here’s the thing if you live in any country, and this is true when I live in Germany, true when I lived in Belgium, lead your life in a way that doesn’t invite trouble. Don’t be out til 2 in the morning night clubbing in bars. Though, I’m guessing a lot of your listeners are like me and don’t do that. We live in a gated community which is quite nice. I don’t want you to think I’m in Fort Knox, Kentucky here. There’s a guy at the gate and he’s there all the time. The crime rate here, which gets an incredible amount of publicity in the United States, is the de minimis compared to a lot of the big cities in the United States. I wouldn’t think of offending anyone in Tacoma by comparing data with Tacoma, so I won’t do that.
Jason Parker: You feel safe.
Phil Newbold: Yeah, very safe. Things happen. Usually there’s a back story to what happens. There were two Canadians killed here recently which has gotten a lot of press up in Canada. I won’t get into now for interest of time, but believe me, there is a back story on that that’s very interesting.
Jason Parker: Okay, all right. It’s really fascinating. You’ve been at this now for some time, too. It’s not like … The first time we had you on the program, this was all still pretty fresh. Here you are a couple of years into it.
Phil Newbold: Three years. Four years.
Jason Parker: Still feel at this point, good decision? You’re still happy with the choice that you made?
Phil Newbold: Absolutely. I don’t know if you planned on going there but one of the things that brings some sunshine in my life is the tax investment and [inaudible 00:33:43] implications. I don’t know if that’s an area you wanted to cover.
Jason Parker: Yeah, lets talk about that since you brought it up.
Phil Newbold: Okay. Federal taxes, that’s a wash. The United States and Libya are the two countries that tax you no matter where you are or what you’re doing, so that’s a given. I will tell you that my property taxes, since I own a home here, which is a palace for what I paid for it, property taxes for me went from 6,000 a year to 300 a year.
Jason Parker: That’s going from the United States to Mexico. You were paying $6,000 per year here in the United States, now you’re paying $300 per year.
Phil Newbold: That’s correct.
Jason Parker: How would you compare homes, though?
Phil Newbold: The home I have here and what I paid for it would be … I paid 270. It’s a 350, 400 home up in your neck in the woods.
Jason Parker: That seems like a lot of money for a home in Mexico, 270.
Phil Newbold: You know, again, you can get a lot of stuff for a whole lot less than I paid for this. This is a very nice home in a very nice community. Beautiful landscaped yard. All marble floors. It’s not a dirt floor kind of hacienda deal.
Jason Parker: Real estate is obviously … Is that because you’re in an expat community that real estate is a little but more expensive and it’s a gated community kind of thing? Is it less if you’re living in downtown Guadalajara?
Phil Newbold: Oh, yeah. I would say you can get a decent place here from about 150.
Jason Parker: That’s in the community that you’re in?
Phil Newbold: Close by. Right in the [inaudible 00:35:14] community to where I’m at. It all depends on what your listeners want. I would suggest anybody that they rent for a while and just kick tires. Some people like to live in the heart of a village. You couldn’t get me there at gun point. Some people like to live here and the people in the village wouldn’t live here at gun point. You need to figure out what you’re tastes are and just find a place. There’s pretty much a place for any price bracket you’re going to be in. You could rent a really, really nice place for between 1200, 1300 a month.
Jason Parker: Wow. That’s great. What are some of the other price comparisons? I’m curious to hear. We talked about property taxes.
Phil Newbold: Propane. Since it got a little cold where we lived. We weren’t right on the coldest passage. Our propane expenses went from 6,000 a year to 120 a year. That may seem a little outlandish, but when you have solar hot water and you live in a place where you don’t have air conditioning or heat, you can save some money. Our gardening … Only my wife could do this, by the way, in Kitsap County. We paid a gardener 5,000 a year. We had a half acre that was fully landscaped. Crazy. We pay a guy here 1500 a year because once again, we have a fairly elaborate garden. 5,000 to 1500, we did okay. We have a maid that comes in once a week and we pay her $20 a week. You can eat a really, really nice meal here for about $20 or lets say $25. What’s a really nice meal? Could be a filet, potato, green beans, corn, glass of wine, and small dessert. You can eat out there. That’s kind of nice.
Jason Parker: You’re making me hungry now.
Phil Newbold: You were invited down here, Jason. You can’t back out of that one. I think that one thing that is a financial things that’s really, really important and I can’t stress this enough. Not just plugging Jason here. You really, really want to actively manage your investments in concert with your financial advisor. The fact that you’re out of the country doesn’t mean you should be plugged in. I think that relationship can be more important than it ever way. Make sure you have a financial advisor you really feel good about. In fairness of reporting, my wife and I each have separate financial advisors. I loved mine and she loved Jason, and I loved Jason. Jason doesn’t know mine, but he’d love her, too. Really, work closely with them. The relationships that we have with Jason and our other financial advisor are just … They’re really one of your greatest assets.
One other thing I would mention, I live in a cash economy. Boy, does that take some getting used to. Once you get used to it, oh boy is that kind of nice. You know where you’re at every second of your life. It’s not like you had a great time and all of a sudden the credit card bill comes in and you want to drink yourself into a stupor. One other aspect of the financial thing is you want to figure out the banking and the bill paying. Pretty much anything you can do in the states, you can do here. You need to figure out what you’re doing. I have all my money in the United States except for an account I have here that just pays the bills automatically and all that. Figure out how you’re going to do that. Anyway, that can work out just fine.
Jason Parker: That is awesome. Folks, if you’re just tuning in, we’ve got Phil Newbold on the program. He’s sharing with us his experience of this choice that he and his wife made to retire abroad. Phil, we need to take another quick break. We’ll be back in just a minute.
Alrighty, Folks. Welcome back to another round of Sound Retirement Radio. Find us online at SoundRetirementRadio.com. Follow my blog at SoundRetirementPlanning.com. I have Phil Newbold on the program if you’re just joining us. Phil and his wife did something that seems very adventurous to many of us. It’s easy to get in your comfort zone. My wife and I were talking about this the other day. We go out to dinner, we tend to go to the same place over and over again. Buy a bottle of wine, we buy wine that we like. It’s just really easy to get comfortable and sometimes I’ve found that when I get uncomfortable, life just gets so interesting and fun and exciting. When I talk to Phil and I hear this enthusiasm in his voice … He and his wife decided to live abroad for at least a couple of years now in retirement. Hard to say if you’ll stay there forever, huh, Phil? What an adventure it’s been it sounds like so far for you.
Phil Newbold: You bet. Absolutely. We’re actually four years into this now.
Jason Parker: That’s incredible. Time is just flying. When you think about living in a foreign country, what are some precautions people should take?
Phil Newbold: Let me run through a few of these. I touched on one which was don’t look for trouble because you’ll find it. We don’t do a lot of late night night clubbing. Couple of things [inaudible 00:40:16]. Live under the radar. Don’t be a big activist. Don’t run around telling everybody your country is better than their country. Live in a secure area. By secure area, it doesn’t mean you have to live in a compound, a gated community. Just live in an area where there’s good police protection, which most places around here. Rely on your neighbors and community. I can’t stress the importance of neighbor and community enough. That’s very important. A third world country, second world, which is really Mexico, which by the way, before we [inaudible 00:40:46] it, in the next 15 years, it will be a top 10 economy in the world. Drive the main roads. Don’t drive the remote areas at night. I could be saying that about a zillion places I’ve been to in my life. Follow all the local driving rules. Make sure you do that. If there was one rule that I would say for Canadians and Americans, when you get mad at somebody, whatever you do, don’t threaten to sue. That is the equivalent of in the 1800s slapping somebody across the face and asking for a duel.
Jason Parker: Is it?
Phil Newbold: That always ends up going sour. Learn the rules of driving. For example, an accident in Mexico is a criminal offense. In the U.S. it’s not. You don’t move your car. You wait until the insurance adjusters and the cops get there. Always have with you your cell phone with you attorney’s number in there. He’ll give that to you. A camera. Know a few emergency numbers. I know I ran through those quickly but those are pretty much the things I recommend anybody. This isn’t Mexico. This could be Mexico, it could be Panama, it could be Italy. You name it. I think those are good guidelines.
Jason Parker: I think that that’s an important thing for people to understand, too, is that you guys are traveling all over the entire world. Even though that may be your new home base, you guys are … One of the things I love checking in and getting to read some of the travel updates. By the way, did you ever start a blog so that the rest of the world could plug in to some of this traveling you’re doing, or is it still just for family and friends?
Phil Newbold: It’s still for family and friends. The day may come. It’d be kind of a humorous blog if I did it.
Jason Parker: It is humorous. It’s great. I wish you would. You should publish that for everybody else to read. It’s really a lot of fun.
Phil Newbold: We can talk about that offline one of these days.
Jason Parker: All right. If you had to do it all over again, what would you do differently?
Phil Newbold: Not much. I would probably travel the globe a little bit more rather than jump into a retirement area. I might just spend three months just kind of going around to a few places and kicking some more tires and doing things. Something I didn’t mention earlier, one of the reasons I wanted to come up with a place that was really affordable is my wife and I love to travel a lot. When you live in a nice area that’s less expensive, you have more disposable income to do some travel. I wouldn’t have brought a nice car down. I brought a luxury car down here. That was really a dumb idea because you have something called topes which are speed bumps. There’s one about ever six inches it seems sometimes. I think I would have researched the laws in more detail. Not that it’s been problematic for me, but I would have done that. Overall, I think we made the right decision. In fairness to your listeners, I love it. My wife likes it. There’s more sunshine in me about it than there is in my wife.
Jason Parker: It’d be fun to have her on the program with us one time just to get a balanced approach to this whole experience. I wanted to ask … I had something there regarding this idea of what would you do differently and it just totally slipped my mind. Under what circumstances would you consider returning back to the United States?
Phil Newbold: Let me say that people come here. They come here from England, Germany, all over the place, U.S., and sometimes people go back. We would go back for the same reasons that someone else did. If I were to die and predecease my wife, I think she’d probably want to go back and be close to her family. That would be one. Two, if the country went to pot. Although I recognize that’s a great pun here in Mexico.
Jason Parker: Wow, that’s a great pun for Washington State these days, too.
Phil Newbold: Yes, it is. Isn’t it?
Jason Parker: By the way, you can grow it here, you can smoke it, but you can’t sell it. If for some reason, another reason would be lets say we had something that would take prolonged hospitalization. I can’t tell you today what that would be, but something where we wanted to be there. Because of our retirement benefit coverage that my wife has, we would go up there and hang out so that we could be very close to that.
Family situation. We have some friends, we don’t know them well, but his son and daughter-in-law were in a terrible accident, automobile accident. The son died and the daughter-in-law is in pretty bad shape. They went back to the U.S. to live with her and help her through whatever period of time we want to do that. Who knows. God willing, that won’t happen. Another thing I’d say we’d go back to the United States is if for some reason we just got in the mood where we wanted to blow all our money. We were just in the U.S. about a month ago for two months. The amount of money we spent just hanging out there and just doing the things you do there were amazing. For example, a movie, the same movie you’re going to watch at your regular show is $2.50 here. Up there it was $12.50 and that was the senior rate I was getting.
Also, if we could sell our house at a great profit. No need to worry about that for a long time. Just as you had a soft market, that’s caused this market to soften because the game of old was people would sell their houses and just take the equity and pay cash on their house there. That would be another reason. Those are some of the reasons that would come to mind.
Phil Newbold: I just had my question pop back into my mind. Your hand was forced a little bit here because of this downsizing that was happening. As you look back and you think back about your choice to retire, obviously you’re having a great time and you’re really loving this experience, if you had to do it all over again, would you have done it any earlier than you did?
Jason Parker: That comes into the world of 20/20 hindsight. If I had known the housing market was going to go to hell, I would have sold my house in 2007 when it was worth a whole lot more. Yeah, I would have taken off then and would have lived just fine because we had a pension, we had some other things. We would have done that. Ironically, if you look at the data, now this doesn’t work for social security maximization benefit planning, but people that retire earlier actually can live longer. I might have retired earlier. I had a time in mind, Jason. The company giving me a goodbye kiss only accelerated the process by about seven or eight months.
Phil Newbold: That was your time frame anyways.
Jason Parker: I had the playbook absolutely down to the T and we just accelerated it a little bit. We couldn’t afford to basically come here, buy a house, do everything else, without selling our house in Washington. 20/20 hindsight, I suppose, maybe we could have. I would have considered that just bad planning.
Phil Newbold: In some ways, it was really a blessing that the position you were in was coming to an end. One of the things that I find, there’s a lot of reluctance. People are afraid of this transition into retirement, and for good reason. It’s a big life event. You’re going from working for a living to having to live off of your savings. Most people, that can be pretty scary, especially with all the turmoil that we’ve seen in the financial world the last 15 years or so. As you’ve done it, you’re happy with the decision. You don’t think you would have done it any earlier except for because of the housing market, you would have been able to cash in more.
Jason Parker: I don’t think so. Although, one thing I should mention in full disclosure, I still have a couple of clients I had in the United States that I do some work for them. I don’t do a lot of work for them. Maybe it’s two, three days a month and that’s plenty for me and plenty for them. I keep my hand in a few things. I’m retired but I’m not retired. One of my clients is always amazed when I tell him I’m going on vacation. He says, “How do you take a vacation from vacation?” I said, “Well, it’s a different place.”
Phil Newbold: We only have a couple minutes left. Any closing recommendations or summary thoughts you want to share with out listeners?
Jason Parker: I’m going to get philosophic here. None of us know how much time we have, so make the most of this, whatever you’re doing. I said earlier, don’t be impetuous but be willing to take some risks in your retirement. Whether that’s moving abroad or somewhere else. We got a lot more runway behind us than we do ahead of us. Plan it out as well as you can. I think you want to analyze facts. I tend to be analytical. At the end of the day, you have to trust your instincts. Stay tightly plugged into the U.S. and your local country service provides, financial and tax people, and stay plugged into your family. The fact that you’re moving here is just to be part of life’s transition. Always have a fallback plan. The plan B. We have a plan B and hope we don’t have to execute it, but we have one. Those are pretty much things that come to my mind.
Phil Newbold: Great, Phil. I can’t tell you how much I appreciate having you on the program. I know there’s a lot of people out there that are going to be inspired by your story. Your sense of adventure, your willingness to go out and do what so few people are willing to do, and that is to really live your life and not live in this constant state of fear. I’m inspired by it and I’m sure our listeners will be. Thank you so much for the work that you’re doing, the life that you’re living, the example that you’re setting, and for being a guest here on Sound Retirement Radio.
Jason Parker: Thanks for having me on.
Phil Newbold: All right. Take care.
Jason Parker: Bye.
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