Investing for Survival

 Investing for Survival

Going Abroad: Why "Cheap" isn’t Always Better
By Suzan Haskins

I’m often asked why my husband Dan and I chose to live in Ecuador. Why we made our home in the small, mountain town of Cotacachi, a two-hour drive from Quito, the capital city.

Our response is always the same. We’re here because we love the people and culture. We feel fortunate to have a majestic pine-and eucalyptus-covered volcano right outside our window. The cool mountain climate suits us perfectly.

We even love the controlled chaos of it all...the church that blasts its electronic bells at 6.00 a.m...the loud, laughing children that flood the streets and sidewalks every afternoon when school lets out...the malodorous, over-crowded buses on market days...the slow-moving trucks with loudspeakers that blast info about community events or the price of mangos.

And yes, another reason we live here is because Ecuador is so affordable. Here at International Living, we say Ecuador is the most affordable retirement haven there is. Delicious, more-than-you-can-eat meals (plus beverage) for $2.50...$1 taxi fares...25-cent bus fares...$10-a-night hotel rooms...$3 pedicures...$10 artisan crafted wool sweaters and $2.50 for two-dozen roses.

Life is good.

But keep in mind: "Cheap" isn’t always better. If you’ve ever bought a $10 souvenir T-shirt, you know what I mean. Wash it once and it shrinks so much you can’t wear it. In the long run, it’s better to buy the more-expensive $30 T-shirt that you can wear forever. And one size fits all? Unless you’re an "average" person (and I don’t know anyone who is) there is no such thing. Similarly, there is no "one size fits all" when it comes to choosing the perfect retirement destination.

"Cheap" should never be the only factor to consider when it comes to something as important as choosing where to spend your time. After all, you’ve got to live in the place. And it’s important to like where you live.

What strikes us as part of the appeal of living in Cotacachi, for instance, might just drive you to distraction. We shrug it off when fireworks blast at 4.00 a.m. We look the other way when someone drives the wrong way down a one-way street. Our town can’t afford a police staff to enforce such trivialities. We don’t even mind that for two weeks every June shopkeepers board their windows as rowdy revelers flood the town to celebrate the summer solstice.

This charming disorder suits us. But life in a tiny town in Ecuador isn’t for everyone. And I’d be willing to bet that if you move somewhere simply because it’s cheap, you might well be miserable.

In little towns like ours, for example, few zoning laws exist. Our neighbors’ patch of land has been home to kids, dogs, roosters, goats, cows and horses. At night we just crank up our rain machine to drown out the wildlife sounds...

Go in search of cat litter, roasted peppers in a jar, size 18 women’s clothes or size 14 men’s shoes, or a selection of imported wine or flavorful cheese, and you’ll be disappointed. But don’t worry—you’ll adapt. You can serve cream cheese covered with ají (the local hot sauce) and save your shopping for your next visit back home.

"There’s nothing to do here," said one couple that left after a few days. That’s true if you’re looking for art galleries or shopping malls or sports bars. Our local economy can’t support that type of entertainment. But if you want to shop the local mercado and artisan’s markets, hike the perimeter of a crystal-clear mountain lake, or spend the day soaking in a natural hot spring, this is your place.

So how to choose the retirement destination that’s best for you? First and foremost, you must spend time there before making any long-lasting decision. Try before you buy.

Before you even get on a plane, profile yourself—ruthlessly. Make a list of your priorities—whatever they might be, and in the order of most importance to you.

If low cost of living tops your list, so be it.

But also consider things like weather and climate, the local real estate market, the personality of the local expat community, cultural and other differences, leisure activities, language issues—all these should get some weighted consideration when making a decision about where you’ll live.

One area where price matters but quality is even more important: health care. In many countries of the world, when you become a resident you can buy local private health insurance at a fraction of the cost back home. This entitles you to top-notch care in excellent, medical facilities.

Alternatively, you may be able to join a public health care system, which can cost as little as $50 a month. Or you can forgo insurance altogether and pay as you go.

But keep in mind that more often than not, when you use a public system you’ll suffer long waits and "unconventional" service. If you can afford it, spring for the private insurance. Invest in a rain machine. Bring your specialty products with you. But don’t choose a place for the cost of living alone. Choose it because it fits your profile.

Chances are you’ll still come in spending far less than you might in the U.S. or Canada these days.