The Five Flags Approach

I’ve been inundated recently with e-mails from readers asking, “Why not?”

“Why not Honduras?”

“Why not Costa Rica?”

“Why not Spain?”

“Why not the Bahamas?”


Why do I focus in these dispatches on the countries I do…and give less (or no) virtual ink to others?

I have a Top 10 list. On it are my picks for the best places in the world right now to think about spending your time and your money. This list has been created based on more than 25 years experience traveling the globe and covering this live, retire, invest overseas beat…and it has been compiled with the help of dozens of correspondents and friends who keep in touch with me in real time from all corners of this earth.

I can’t be everywhere at once or know, firsthand, the situation on the ground in every country in the world at any given time. But I can stay well-informed, with the help of smart, savvy people I trust to provide me not only with information (information alone is a glut on the market…often not worth the virtual paper it’s printed on), but, much more important, with perspective and judgment.

In that context, here are my Top 10 picks right now:
#1: Panama
#2: Belize
#3: France
#4: Malaysia
#5: Ecuador
#6: Argentina
#7: Uruguay
#8: Croatia
#9: Dominican Republic
#10: Chile
The trouble with a Top 10 list is that it’s limited to 10. If I were to expand this list a bit, I’d add:

#11: Vietnam
#12: New Zealand
#13: Mexico
#14: Nicaragua
#15: Malta
Some of these countries make sense as full-time overseas retirement havens; some are more interesting for part-time living (because of the challenges and costs associated with establishing permanent legal residency).

All, though, offer particular advantages to the would-be retiree, adventurer, or investor.

That is not to say, however, they are the only places in the world that could make sense for you. You have your own agendas and circumstances, your personal experiences and priorities.

If you’ve been traveling to the Bay Islands of Honduras for years, for example, as has one reader who wrote the other day…have made friends in this part of the world…have begun shopping for a beach home on Roatan…don’t think you must adjust your plan and refocus your attention on Belize because I recommend that country over Honduras.

It’s true. Belize is generally more advantaged than Honduras. The whole of the country is English-speaking (while, in Honduras, it’s the folks out on the Bay Islands, only, who use English as their primary language of communication).

Belize is more stable politically than Honduras. Its currency is tied to the U.S. dollar. Its foreign residency program is one of the most user-friendly in the world right now. And Belize qualifies as one of the few remaining banking havens on the planet.

All of that is true, but it doesn’t mean Roatan, Honduras, couldn’t make sense for you.

This is such a personal decision. I offer my Top 10 list as a guide…as some stars to steer by. Based on my long experience and with the help of real-time intelligence from friends on the ground in each place, I recommend these places as worth a close look. But, again, I understand, and you should, too, that they are not the only places to consider considering.

The other important thing to understand about any Top Picks list is that, if it’s based on real-world experience and real-time intelligence, you can count on it to change.

Tax laws, visa requirements, the cost of real estate, the cost of living, and the availability of quality health care…as well as the political situation, the value of the local currency, and the ease of coming and going from other parts of the world…all these things change all the time.

Just as some U.S. states are more appealing today as places to live or retire than they were a decade ago, some countries are more interesting to the would-be overseas retiree right now than they were two or three years ago. And we can expect that others will become more interesting in the future than they are today.

Any list of the World’s Top Retirement Havens, including mine, is a moving target. One thing you come to understand when you begin considering the idea of spending time and money overseas is that you must be flexible and open-minded.

Just as circumstances are changing dramatically in the United States right now, so, too, can they and do they elsewhere.

One way to hedge the potential risks that this truth implies is to diversify…not only your investments, but also your life.

Just as it’s smart to invest in different markets and to hold assets of different types in different currencies, so, too, are there advantages to spreading your life among different jurisdictions.

Do your banking in one country (where you can feel reasonably secure your deposits are safe), reside in another (where you pay no tax), run your business in a third (where entrepreneurs are respected and incentivized) and hold a passport in another. If possible, hold a second passport.

I didn’t invent this strategy, of course, It’s written of often, as the Five Flags plan. It’s about organizing both your time and your money (that is, planting your “flags”) to your greatest advantage.

Plant your flags based on your current circumstances and agendas. But don’t plant them in concrete. You might want to be able to move them around from time to time.

Kathleen Peddicord

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