Retiring Abroad - Consider India and Kerala in Particular as a World Lesson In Economic Quality of Life

From the last post on Retiring Abroad - Or, Maybe Sailing Around The World for Free! I've received some mail and recommendations to dive a little deeper into consideration of India as a retirement location abroad.   There are quite a few resources and blogs dedicated to the subject.  A great post to dig into was at Retire To India by Nigel with his post last year 10 Best Places to Retire in India.  Nigel used the following guidelines in building his 10 best list:

  • Good location with interesting local activities and places to explore.
  • Good infrastructure, including medical facilities. A significant retiree population is a plus. This eliminates some of the more exotic locations.
  • Not excessively crowded. This rules out most of the bigger cities in India.
  • Safe, with a cosmopolitan outlook and open to outsiders. A sizable expatriate population is a plus.

In reviewing Nigel's list for myself I looked for one more guideline to be on the coast, because I love the water and I think others are of like mind.  This puts Goa at the top of my list and Kerala, Mangalore, and Puducherry as honorable mentions.

The former Portuguese colony of Goa is known for a fine climate and a cosmopolitan culture. Renowned for its beaches, Goa is visited by hundreds of thousands of international and domestic tourists each year. Located on the west coast of India in the region known as the Konkan coast, Goa is home to a growing number of Europeans and Indian expats from abroad.

Looking at cost of living in Goa and you'll find that the dollar does indeed go a long way.  Nomad4ever gives us this cost of living data and it is really helpful to see how far the dollar or euro will stretch.  I only wish we had this similar data for the other 3 coastal cities of interest.:


exchange rates 1.12.08 Avg price in rupees in USD in EUR
Cigarettes (10 Local Brand) 24.00 0.48 0.38
Cigarettes (20 Imported, Marlboro) 80.00 1.61 1.27
Clothes - FlipFlops ('Bata' or non-branded) 120.00 2.42 1.91
Clothes - T-Shirt (non-branded) 130.00 2.62 2.07
Clothes - Sports Shoes (non-branded) 200.00 4.03 3.18
Clothes - Pair of Jeans (non-branded) 200.00 4.03 3.18

From wikipedia we can see the coastal location of Goa. 

Located on the west coast of India in the region known as the Konkan, it is bounded by the state of Maharashtra to the north, and by Karnataka to the east and south, while the Arabian Sea forms its western coast.:

Finally I wanted to take a look at Kerala.  From wikipedia we can review the coastal location and climate variations of Kerala.

Kerala is wedged between the Arabian Sea and the Western Ghats[35]. Lying between north latitudes 8°18' and 12°48' and east longitudes 74°52' and 72°22',[36] Kerala is well within the humid equatorial tropics. Kerala’s coast runs for some 580 km (360 miles), while the state itself varies between 35 and 120 km (22–75 miles) in width. Geographically, Kerala can be divided into three climatically distinct regions: the eastern highlands (rugged and cool mountainous terrain), the central midlands (rolling hills), and the western lowlands (coastal plains). Located at the extreme southern tip of the Indian subcontinent, Kerala lies near the centre of the Indian tectonic plate; as such, most of the state is subject to comparatively little seismic and volcanic activity.[37] Pre-Cambrian and Pleistocene geological formations compose the bulk of Kerala’s terrain.


I found an interesting post Kerala: A Lesson In Light Living with a perspective on Kerala that goes beyond cost of living and dives more into quality of life. 

In conventional economic terms, Kerala is one of the poorest places in the world. Annual per capita GNP in 1986 was $182 (that's less than 50 cents per day in total economic production for every person in the state), compared to $290 for the whole of India and a whopping $17,480 for the United States. If Kerala were a separate country, those figures would place it 9th on a list of the world's poorest nations.

Yet in terms of quality of life, Kerala is an astonishing success story. In contrast to the rest of India and most other low-income countries, people in Kerala enjoy education and health at levels close to those in the West.

Kerala is actually quite an economic enigma for those that study such things.  A retired professor from California Polytechnic State University (San Luis Obispo), Will Alexander believed this so much that he setup up a series of Good Life Study Tours.  These were designed to try and convey the economic riddle that is Kerala.  Participants in the program live with a Family in Kerala for one month to try to better understand:

Kerala is a puzzle because the relatively high quality of life there simply doesn't fit with the tenets of economic science: "It's an absolute non sequitur that people could be happy and satisfied at consumption levels which are half that of Haiti."

Participation in a one month Good Life Study Tour sounds like an enlightening experience to anyone thinking about retiring abroad.  Whether they decide to retire in Kerala or not, there are valuable lessons to be learned from a community that is studied as an economic puzzle and gem of the world!

Investing for Retirement: Aspire To Be Worth Your Weight In Gold!

I'd like to propose an aggressive retirement investing aspiration that just might help to focus the vision on a rich and fulfilling retirement: aspire to be worth your weight in gold when you retire. 

I've been reading a number of posts lately that piqued my curiosity about the familiar phrase: "Worth Your Weight in Gold".  Something inside was telling me that there was some kind of inspirational analogy here to motivate would be investors.  We've heard the lines in movies before where the sultan or the king will pay the winner/  knight/ warrior/etc. their weight in gold.  It's an unbelievable sum of money when you first think about it.  But, with a little help from our finance bloggers out there you'll see that it is actually within reach.

How much would that be for the average US man and woman?  Well, let's take the average height and weight.  The average man is 5'9" tall and weighs 185 pounds.  The average woman is 5'4" tall and weighs 163 pounds.  Let's just average out that weight and we get an average human weight of 174 pounds.  So, the magical Your Weight in Gold calculator tells us that is worth $2,234,243.52 based on the latest spot price of gold.

This one aspiration can lead us in the right directions to a happy retirement.  To aspire to be worth your weight in gold is to aspire to be healthy, wealthy and wise in retirement. 

Healthy because if you aren't healthy and happen to be gaining a few extra pounds, you need to work hard to save up enough gold for each pound, namely $12,000 per pound.  So, you keep in shape because it makes you feel great and happens to help you achieve your new gold aspiration.  So a few extra pounds isn't so bad, but more than that and we just may need that extra savings for more medical bills. 

Wealthy because you've aspired to knock the socks off of the average American's retirement savings nestegg ($250,000). While some are forced to make due with social security and meager savings, you're probably investing, mentoring, giving to family/friends/community, and thriving in retirement.

Wise because you're a student and a teacher of personal finance philosophies.  You're a reader and likely even a blogger of personal finance ideas.  Most definitely a practitioner of the some of the very best advice and philosophies in personal finance. 

Ok, you're asking: "It sounds great to have that aspiration, but just thinking it isn't going to make the numbers work.  That sounds like a hefty nestegg to prepare.  How to do it?  Some numbers please?".  Well, luckily I stumbled upon a blog that got me to thinking about all of this, Hunter Nuttall of outlines How To Create A Seven Figure Residual Income.   Take a look and I think you'll be inspired that this is quite doable.  Now Hunter's goal was to show you that it's possible to build a portfolio that paid you a seven figure income from it's returns annually.  We don't have to go that far into the horizon to get our weight in gold, so let's see how that would work out. 

Play around with this handy compounding calculator using 11% as S&P 500 annual return on a $12,000 annual investment to tweak for your horizon.  You'll find that it only takes us 27 years to get to our magical weight in gold ($2.3 million).  So, you say "I definitely am a believer in the power of index fund investing for S&P, Small Cap and EAFE (foreign index)."  That's great, me too, but I propose that you get aggressive in your savings and take advantage of all the free money around you.  When I say aggressive, I don't mean to get into risky investment vehicles.  Stay with the standards and easily managed index funds.   Facts are that every other mutual fund tries to beat the S&P500, so why not stick with the S&P500 :-)...

Read up on all the financial blogs where they detail about maxing free money and this could possibly add 1%, 2%, 5% or more to that compounding calculator, if not, it will certainly add some dollars!  Keep with the safe index funds of your choice.  So, let's play with the magical compounding calculator again and see what our horizon would be with a few extra thousand a year and a point or 2 of added return (because we took advantage of low-risk super high return opportunities to help us).

Simply adding 2% points and $3000 a year to our numbers so that your investing $15000 a year at 13% we reach $2.28 Mil in 23 years.  At $20,000 and 14% a year you reach $2.35Mil in 20 years.

I've outlined some strategies for maximizing your returns and free money available to you that has lots of jumping off links to other great blogs.  This is just a kick start in that direction of 'Wise', I think these concepts can really invigorate and open up an avenue for more aggressively having funds avail for investing and increasing overall returns on your investments.  And when I say increasing returns, I don't mean do risky investments I mean taking advantage of ideas like below where you have free money and cheap money that brings you almost guaranteed returns (401K matching at 50%, espp discounts, Uncle Sam paying 1/3 of your retirement = instant 30% returns, etc.):

HELOC + ESPP (or 0% Credit Cards) = FREE MONEY (15% to 60%+ returns)! - This was my latest revelation that I'm trying to take advantage of this year.  I'm kicking myself in the butt for not thinking of this before.  All that cheap money sitting in my HELOC that I could have been getting free money from my ESPP, darn!  Better late than never!  These are some seriously big % returns potential.

You Are A Great Investment, Don't Be Stingy! - This is a topic you hear about on many blogs and it's so valuable.  You can seriously increase your yearly savings potential by increasing your salary through education.  Now this doesn't mean you have to go back to school.  In this post I outline and list a multitude of certifications and the increased salaries they will bring.

Your Personal Stock Market Army - The Stop Loss! - OK, this strategy working with ESPP above, or anytime your investing in stocks will have a profound effect on increasing your returns and minimizing your losses!

Solving Our Savings and Budget Issues - The No-Budget Budget Way - I think this is a good read for getting the juices flowing about the tweaks you can make on a monthly basis for finances and budget to maximize savings.

Do You Have an Emergency Fund? - If Cash is King, Then Don't Neglect His Good Looking Brother, the Prince of Credit! - This concept, is a must see if you're in a dilemma about building an emergency fund.  It's an option, if chosen, can free up funds for investments and again maximize that aggressive compounding schedule!

Now, this is a handy aspiration that you can share with your grandchildren, niece, nephews, children.  When you think about it our grandchildren have a time horizon that every investor only dreams they had.  How about the next time you give the grand kids some cash in their birthday cards, you write a little note like: Johnny, this is a magic $100 bill that will bring you 'Your Weight In Gold! ... ask me how my next time, my little sweetie!'

Explain to your 5 year old grandchild that weighs 40lbs, with your friendly Your Weight In Gold calculator, their weight in gold would equal $513,619.20 dollars.  Now you explain to little John or Jane that $100 added every year and compounded in an index fund for s&p 500 avg return of 11% for the next 60 years will equal: $518,218.03 (their weight in gold from one little $100 bill as the starting point).


This week plonkee money hosts: carnival of personal finance: photo quiz edition you'll find this post from Teaspoon there:

Investing for Retirement: Aspire To Be Worth Your Weight In Gold!

Plonkee takes you on a visual picture quiz-tour of British People and Buildings, have some fun and see if you can guess them ... answers at the end of the carnival!  There's a good number of posts to read.

My Favorites - from the Carnival of Personal Finance #134

This week MrsMicah hosts: Carnival of Personal Finance 134: Building on the Basics you'll find the following post from Teaspoon:

Retiring Abroad - Or, Maybe Sailing Around The World for Free!

There's a good number of posts to read. Here's some of my favorites:

Patrick from Cash Money Life has a new take on your assets. He believes that Your Greatest Asset is the Ability to Create Income. Really enjoyed this post. I really like to review ric edeleman’s articles every now and then I find something that makes a new paradigm shift. He did this same topic from the point that you need to get your disability insurance before any other type of insurance … cause like Partick says, you’re protecting your most important asset! I never thought much about disability insurance until this concept hit me, afterwards I’ve maxed out my, virtually free, disability insurance offered at work and learned more about the short term vs. long term disability insurance. Definitely an eye opener, kudos on a great perspective. Morale of the story: Educate and insure yourself … you’re worth more than your weight in gold and maybe more! At 190lbs I’m worth at least $2,402,208.00 in gold :-)

David from My Two Dollars gives us some Tips On How To Avoid Internet And Financial Scams. This post is especially timely as I've been helping my mother lately clean up her computer from all the crazy internet ads.  It's sad that there's such a plethora of these scams and advertising adware (which is another scam to get you to click and make other people money).  Like David, I'm familiar with what not to click on for pop-ups and ads and mail internet scams, but our parents and loved ones might not be.  It's frustrating that they're held hostage from breathing easy when they use their computers.  David has some great suggestions to watch out for.  I even suggest that folks look up more info on PF Bloggers on scams and identity theft to help get even more educated.

Marcus Hochstadt tells us how to Pay Business Expenses Wisely And Travel For Free.  Great post.  I was a total late bloomer to this concept but am a believer now.  My card of choice is the Alaska Miles Visa.  I push all bills and expenses through that card and pay it off and get great miles for it.  Recently I was looking for a refi and found that they give 1300 miles for every 10K that you finance.  I thought it would be bad choices, but all mortgage companies were premium choices and quotes gave my bank a run for the money.  I've been able to do a lot more free/discount flying as a result.  Love it!

Hunter Nuttall of Hunter outlines How To Create A Seven Figure Residual Income.  You'll like this post.  It's fun with numbers and puts the power of aggressive savings and investing into perspective.  All you whipper snappers out there, take a look, you've heard it before saving early and not that aggressively will pay off handsomely!  This is the other half of the equation that makes sure you are worth your weight in gold!

MoneyNing from Personal Finance Blog with Money Ning reminds us all to Increase Your 401k Contribution Rate During the Beginning of the Year.  Great post to read right away and get yourself started on the right track with your 401k for 2008!!! I like the concept of squeezing the 401k tournip a little at the beginning of the year. Like you say at 2% you’ll hardly notice (especially as it’s often pre-tax contribution). Goes along with my 2008 resolution to max my ESPP to get all of it’s free money out and try and max my 401k (which isn’t an easy task!).

Retiring Abroad - Or, Maybe Sailing Around The World for Free!

Many thanks to Millionaire Mommy Next Door and her post on 10 Ideas on How To Retire On Less.  It's a great read and will give you some ideas of how to enhance your situation so that retirement is a little more comfortable.

One of the ideas was to 'Retire abroad'.  This really struck a chord with me, as I've always been interested in what it would take and if it was possible for the average Joe?  I had the perception that this was for those with big cash and resources.  So, thanks to Mommy's initial research links I wanted to dive in and uncover the high level requirements for this goal.  The bottom line is that for many Americans it will be impractical to retire on small savings and your social security check in the US.

OK, there's so much to research about this topic of retiring abroad, that I'm sure I'll be putting together a few more posts.  For now I wanted to focus on a quaint retirement dream that I've had and perhaps others as well...

At EscapeArtist you'll find a plethora of information about every related topic to living and working overseas.  They have 4 different ezines and all are free with tons of great content.  I've always thought that a great way to retire is on a large sail boat and sail around the world.  Although my expectations were that you'd probably have to be rich to do that realistically.  There was a really interesting article at EscapeArtist called Sailing Around the World For Free.  Wow, now we're talkin!  There's a method to this mad goal, that you should prepare ahead of time getting some experience.  Of course, that makes sense:

There are many different positions that crew can choose from on boats of all sizes.  At the bottom of the crewing job pile (and the easiest to get) is a position on a cost-sharing boat.  This is where the crew pitches in some money (usually $20 - $70 dollars a day) to help the owner cover food, fuel, and marina costs.  Beware of the boat that advertises “cost-sharing” of $1000 or more for a week. In this case, the boat owner is usually trying to make money and calling it a cost-share instead of a charter.  In a true cost-share arrangement, you are simply paying your own way and the owner makes no profit from you.

Ok, this is actually a pretty nice deal.  Paying from $560 to $1900 a month for all expenses paid for living the life sailing the world is pretty tempting!  But, it get's better.  With some planning and learning you and your significant other can gain experience and certifications that will elevate you up to fully PAID living on the sea, without a lot of super hard work:

The next step up for crew would be a totally free ride, where the owner covers all costs.  In this situation, the captain can sometimes be a professional skipper, or the owner.   This free ride arrangement is frequently available when boats need repositioning or delivery.  In exchange for your help moving his boat, the owner covers food, boat costs, and some will even pay your return airline ticket home.

OK, getting better.  Definitely, but looks like you need a little experience to get to this point, right?

A delivery is a great way to gain experience and sea time, without having to pay for it.  Sea time is needed if you wish to pursue any sort of a career on boats, racking up certifications such as the coveted Yachtmaster; which allows you to pilot a commercial vessel.  In addition, after a delivery, you are no longer inexperienced!

Hey, looks like you might even be able to add some cash to your little nest-egg while enjoying the rolling sea:

Should you land a paying job, keep in mind that since many boats are registered offshore your wages may be tax-free. Since all your living expenses are covered, you can save almost all your paycheck.  The top paid yacht captains on large private yachts over about 200 feet can make $1,000 per foot, per year, totally tax-free.

Stop by and check out the article in it's entirety.  Perhaps it will be the seed to get your sailing research going :-).

Here's plenty of other links on living abroad that go all aspects of this endeavor.  So far, I still seem to have an itch and there's so much information in these links that I'll be doing a few more posts on the topic.

Retiring Abroad

Retire to the Sun

The Top 5 Places to Retire

Living Without Borders

A Radical Retirement Plan

My Favorites - from the last Carnival of Personal Finance for 2007

This week wereindebt hosts: Carnival of Personal Finance #133 - Last of 2007 Edition you'll find the following post from Teaspoon: - My Favorite Site for Everything on Mortgages

There's a good number of posts to read. Here's some of my favorites:

Free Money Finance takes another look at paying off your credit cards versus investing.  I like this post and agree with Money that you should try and fund both 401k and paying off credit card.  Especially if you get a 50% or more match from employer on 401k, since that would be likely greater than any credit card debt.

My Dollar Plan has 181 personal finance accounts. Talk about complex. They do have a strategy for managing all of those accounts though.  Now this was the followup post that I was looking forward to.  Remarkable to see how Madison manages money finances and credit card arbitrage.  Keep up on her site, as she continues in a series of posts to go into additional detail of her unique personal finance account management strategies.

The Financial Blogger looks at adding your property into your net worth calculations.  I agree with Financial Bloggers message: that your equity should be included in your net worth calculation.  Especially since it's readily avail via HELOC, Cashout Refi, Homesale as tax-free capital gains.

Millionaire Mommy Next Door has 10 tips to help you retire on less.  Lot's of good ideas to think about in this post.  The one idea that hit a chord with me the most was 'Retire Abroad'.  I've always been interested in this and had never taken the time to research.  Millionaire Mommy adds some great links for more info on researching this option.