Source: RussBowling at flickr

In my last post, See the World for $5,000, I outlined a 6 month trip to less travelled places in Asia that would run about $4,400 as an extremely cheap way to see the world.

I then realized I have enough air miles to fly for free.  So my budget actually works out to:

Lodging – $300
Food – $120
Travel – $75
Internet/Phone – $30
TOTAL – $525 per month reasonable budget

SUBTOTAL FOR SIX MONTHS – $3,150

Plus plan ticket to get there – $0

TOTAL FOR SIX MONTHS – $3,150

Now I realize not everyone has a lot of frequent flyer miles for a trip like this. But with a book such as Chris Guillebeau’s “Frequent Flyer Master“, you might be able to get plenty of miles just by applying for a few credit card offers.

This leaves a lot of leg room for more luxuries on the trip. Being $1,850 below the $5,000 target budget,indeed one can double the average nightly cost of lodging to $20 per night, and still be under $5,000 for six months. That seems like a sensible place to splurge, since for an extra few dollars one can get hot water, air conditioning, television, or WiFi Internet. Although these things often come at the lower priced places too.

Note: Purchasing Chris’ book through that link earns sabbatical.me a bit of revenue, to help fund my next sabbatical. Thank you in advance.

Related posts:

1. See The World on $5,000
2. How Much Does It Cost to Travel for One Year?
3. Setting a Date

Source: Marco Bellucci at flickr

There is a gentleman named Raam Dev who is currently managing to live 6 months, in 3 countries, for $3,000. Oh, and he’s counting the plane ticket to get there, so his all inclusive budget for seeing the world is $250 a month over a 6 month period, or $1500.

Of course, my gut instinct is to say, it can’t be done. To eat and sleep for a month requires more than $250 almost anywhere in the world. Well, anywhere I’d want to go I think.

Raam is oblivious, as he should be, to me calling this impossible, and is doing it successfully anyways.

That’s a mind blowing revelation to me. I am a guy who withdraws $200 from the cash machine once a week for lunches and dinners that week. And here’s Raam who will live an entire month on that including hotels. At the risk of sounding like an ass, $250 is such a small amount to me.

Here’s what $250 currently gets me:

- one week of lunches/dinners;

- one month of car insurance/home insurance;

- one month of cable/home phone/cell phone service;

- 5 nights rent in my apartment; or

- 1 month of gasoline for my car.

No, $250 doesn’t buy all that. Each of the above is costing me $250. So you can see how my mind is blown by what Raam Dev is doing. Hats off to him.

I am starting to form in my head a list of countries I would like to visit, that could comprise a six month trip. Surprisingly, I am now downgrading my total budget for such a trip from the tens of thousands, into the single digit thousands. Six months in a warm locale, on as little as $5,000. Can it be done?

It’s surprising how many good places to stay there are in India and Asia for the $7-$10 range per night. Budgeting $10 per night for accommodation averages $300 in lodging costs per month. You’ll notice right away that my $300 per month for hotels exceeds Raam’s entire monthly budget. (His secret, then, is to stay with people for free whenever possible.) $10 per night allows me to stay two weeks at $7 per night, and then splurge for a $13 place for two weeks at the next destination.

It’s also important to try to get deals whenever possible. If a place is nice enough to stay a couple of weeks, negotiate with the owner for a cheaper rate for that two week stay. Or for the month even. Always negotiate whenever possible. Only tourists don’t negotiate.

Once the sleeping arrangements have been taken care of, the second priority is food and drink. Food can be surprisingly cheap when you eat where the locals do. This might be where North Americans are ripped off more than any other place in the world. Even with wine or beer, a good meal can cost as little as $1. Especially if you are willing to buy food off a street vendor or in a food market. Even eating in a restaurant might only increase the price to $3. In my mind’s eye, 6 months in a warm locale will include a beer or two most nights. But this also includes buying food from markets, making my own food at home, and in general eating good cheap food whenever possible, I think I can get by on $4 a day average. That’s $120 a month budget for food and drink.

The third biggest expense might just be “getting around”. Taxis, buses, traveling between cities and countries. My feet might be my most used mode of transport, and most hotels have bikes that guests can borrow for free. But you just can’t avoid the occasional taxi or bus ride. These often cost just pennies – 25 cents or less to go from one end of town to the other. In order to see as much as possible in that time, I have to budget for travel. Let’s say $25 a month for all bus, taxi and other costs, plus $50 to travel any big distance between cities. That’s $75 a month for travel.

Lastly, I will need access to the Internet. I suppose I can travel 6 months without such access, but Internet access is so cheap it seems silly to exclude it. It is common now to be able to make international phone calls (over the internet), check emails, update facebook and twitter, and write blog entries. Setting aside $1 a day for this, that’s $30 a month for communications.

So what does that add up to?

Lodging – $300
Food – $120
Travel – $75
Internet/Phone – $30
TOTAL – $525 per month reasonable budget

SUBTOTAL FOR SIX MONTHS – $3,150

Plus plan ticket to get there – $1,250

TOTAL FOR SIX MONTHS – $4,400

If I budgeted $5,000 for the 6 months, that would give me $600 extra above the basic budget. That’s $100 a month that I can go over on lodging, food or travel. So if there’s a museum or culturally significant place that I want to see, that can come from there. Or even buying clothes to replace worn out ones (socks), or one night at a luxury hotel ($20) to take a hot shower and soak my bones in a jacuzzi. There’s flexibility there. It can be done.

$5,000 for six months. It can be done.

Related posts:

1. See the World For Even Less
2. Visiting Every Country in the World – In One Trip
3. See the World by Teaching It English

Source: Giorgio Montersino at flickr

There is a confluence (big word) between being a world traveller and being financially independent that is hard to ignore. In some ways it’s the elephant in the room – you can’t dream about visiting every country on planet Earth, or living 6 months a year in a sunny warm country, or being a photojournalist in war-torn or naturally beautiful locations without thinking about how you’re going to pay for it all.

So how ARE you going to pay for it all?

I have a friend who spent 9 months in India and China one year. It was the trip of a lifetime. I asked him how he did it, and his answer was “once my wife and I decided we were going to do this, we became so focused on it that we were able to save the money in about a year.” So simply by having a goal and cutting their lifestyle in North America way back, they were able to save the money ($20,000?) to do this trip. So the first option has to be “save for it”.

But more and more these days, we are seeing people who live this as a lifestyle. If travel feeds your soul, one trip of a lifetime is not going to do it. You need to spend a lot more time feeding that soul, and saving in advance becomes a bit less practical. I once met a person who would spend as much time as they could afford in Thailand. They would work their butt off for 6 months, scrimping and saving every penny they could get their hands on. They made a decent living as a contractor, but lived a poor lifestyle. And then they could afford to go to Thailand for 6 to 9 months before running out of money. Back here for 6 more months of saving, and back there for 6 to 9 months of “living”.

Certainly that’s part of my own plan. To spend 6 months somewhere nice, and spend 6 months somewhere I can make a decent living. That seems to be the trade-off. There are no good jobs anywhere nice I guess. There is the term “sunshine pay” which implies that a job in a desirable destination (ie: Hawaii) pays less than the same job in less desirable spot (ie: Alaska). And no, that’s not a dig at Alaska. Just that less people want to work there than Hawaii.

Alternately, you can get a job that pays for your travel. I have a friend who is a fairly specialized consultant, and his company sends him all around Canada and the United States. Now he may spend a few months deep in New Jersey, and then a few months in the heart of downtown Boston. He doesn’t always go where he wants to go, but he gets to experience “living” in various cities in North America at someone else’s expense. That’s an interesting lifestyle.

Or you can get a regular job in a place you would like to go. Certainly countries like Taiwan bring English teachers from overseas and you could be one of them. Offshore software development takes place in Bermuda or Bahamas, and you could go live there for 6 or 9 months living the island lifestyle while working. Plenty of opportunities exist for you to go somewhere and work. Heck, you can become a tour guide or a waitress, and if it pays your bills and gives you a lot of free time to enjoy living in your new location, then that’s great.

Finally, there seems to be a new category of worker, although it might not be all that new. There is the individual who can work from anywhere – what Lea Woodward calls Location Independent Professionals or LIPs. These are generally knowledge workers (writers, creative professionals, programmers) who can make their living from anywhere. They are not constrained by location. One attribute that is essential to successful location independent work, I feel, is the idea of having multiple sources of income. Lea and her husband certainly live this in their books, courses, and web sites. But lots of other people do too such as ProBlogger or Chris Guillebeau or Ittybiz.

The idea is you have a website that brings you advertising. You earn money through affiliate programs (selling other people’s products). You create your own products and sell those (eBooks). You may earn a bit of money as a speaker – again travelling the country or the world on someone else’s expense account. You may also be sponsored to travel somewhere (especially in the travel blogging space), whether it is Princess Cruises doing a Bloggers at Sea event, or a country’s tourist board sponsoring you to come visit and paying for your trip. There are lots of opportunities for income, and you have to go after ALL of them, not just one.

Some couples do both. They might have one partner who has a stable income stream from a regular job, while the other works on their growing business. So you have the stability and can live off one income, but you have the potential for greatness when the business takes off. I recently heard ProBlogger say he makes six-figures (approaching seven-figures) income from his online activities. And Leo Laporte is famous for saying he makes about $1.5 million a year (and now claims that its actually higher than that) from doing online podcasts, which is a location independent business.

So what is the best option for you? For many, its the save-save-save and then go on that dream trip every year or two. For others, it’s trying to get their income into being more location independent – whether it’s working at a job in different locations, or earning revenue almost entirely online. Everybody is going to be different. The important thing is finding something that works.

Note: Purchasing Chris’ book through that link earns sabbatical.me a bit of revenue, to help fund my next sabbatical. Thank you in advance.

No related posts.

Source: jonrawlinson at flickr

Iceland’s economy was the first to fall. All three of the country’s banks collapsed, and the stock market fell 96% from it’s high in a matter of days.

Greece is grabbing headlines now for its financial problems, needing a record $150 billion bailout from other European governments and the IMF. Greece currently has an annual government deficit of 13% of GDP, meaning the government has to borrow one-eighth of the size of their entire economy this year. There’s a very interesting article on how it all started.

And those might only be the first two European countries to be in trouble. Ireland’s deficit is 14% of GDP, and economists are worried that it could be next. Spain has had troubles for years (mostly relating to its real estate collapse) and is running an 11% deficit. Portugal is also under the microscope with 9% deficit. Besides the level of government spending, these countries have high unemployment rates, increasing debt service obligations, and falling credit worthiness making it more difficult for their governments to borrow.

I don’t mean to make light of their problems, and the long term solutions to the world’s financial crisis aren’t clear. But the thought did occur to me…

I wonder if this is a good time to move to Greece? Or Spain?

The Euro is actually at a historic low against the Canadian dollar – and has fallen 15% in the past year. (The US to Euro exchange has been about break even in the past year although very volatile, given America’s deep financial crisis as well.) But against Canada, Australia, India, Indonesia, Sweden, and  other countries that have not had as deep an economic crisis, the Euro is 10% down from year ago levels.

So to start, the (non-US) dollar goes farther anywhere in Europe. You can expect 10% to 20% cheaper prices just from the changing exchange rate.

But perhaps more importantly is the deals. Inflation is expected to fall when economies stall, although if the government is forced to print money to pay its bills it can cause inflation. But in the simplest sense, when the economy gets tight, people are more careful about what they spend their money on. More unemployed means less people with disposable income. Prices fall. Can you find a cheaper place to rent in Spain than in years past? Why yes! Are restaurants offering coupons and more specials to bring you in? Yes. Are the locals less likely to travel and spend, and so the foreign tourist becomes even more valuable and prized? Possibly yes too.

In countries outside the Euro zone, the deals might even be better. The Icelandic Kronur has dropped by half in the past 3 years since their crisis began. Even accepting a certain amount of inflation, the foreign tourist can live there for half the price as he once did. The British Pound has dropped by a third in that time. Heck, even the US Dollar itself has become at par with the Canadian, which could be seen as a 30% drop in a mere 2 years. To countries whose currencies have remained steady, the world is having a 10%-50% off sale, for a limited time only.

The biggest appeal from the travelers point of view has to be how happy these countries now are to have outside tourists spending money there, how desperate they are for outside funds to fuel their faltering economic engines. The opportunity for deals is there. In fact it’s a win-win – they need your money, and in return you get a great deal on a long-term vacation.

It would be even better if Greece and Spain hadn’t adopted the Euro, as their independent currencies would have fallen even more by now. But it’s quite a feat when someone can marvel at how cheap Europe is getting.

Related posts:

1. The Downside to Travelling to Economic War Zones
2. Traveling, Writing and Programming

Source: Keith Roper at flickr

Perhaps the biggest thing stopping people who dream of taking a sabbatical is that they do not know how they are going to survive without an income for an extended period of time. That is why I spend a lot of time on this site talking about how to develop a location-independent income. Of course, you don’t have to have an income while you are away if you have sufficient savings to live off of, or an investment income of some sort.

If I asked you, “How much would it take to live in Spain for six months?”, what would the answer be?

You might run some numbers in your head based on your experience with European vacations. You might say, “My last trip for my wife and I cost us $5,000 for two weeks in Paris. So it seems logical that six months would probably run $50,000-$60,000. European hotels run about $200 a night even for basic accomodations, so that seems logical.”

And you’d be wrong.

Because when you travel for more than a couple of weeks, you have to live a different way. You would then rent a house or an apartment instead of staying in a nightly hotel. You buy food at the grocery store and cook at home. You find a good restaurant that serves tapas and a beer for under $5 a person and go there a couple of times a week for lunch instead of the more touristy places which are 5 times the price. You rent a place a little out of the core tourist spot but is close to good transit. You don’t go on an unlimited shopping spree trying to max out your customs limit with shoes and designer purses.

You live different. You live like a local.

So I put together some rough numbers for my own 6 month adventure. Hopefully the total will surprise you in how low it is.

Airfare - $2100 Canadian or 1300 Euros

Rent – 600 Euros a month for a furnished apartment with Sea views, 3600 Euros total

Food – 30 Euros a day for groceries and/or eating out, 5500 Euros total

Transportation – 1200 Euros, might be low

Optional Spedning - more than just restaurants, shopping, seeing shows, living – 10 Euros a day or 1800 Euros for the trip

So the grand total for a 6 month adventure in Spain? 13,000 Euros or $21,000 Canadian dollars. That’s only $19,000 in US funds.

So if the original guess for such a trip was $50,000, the actual total of $21,000 is quite signficantly lower. It’s still a lot of money by some standards. But in the context of the average salary for a middle class couple in North America, it’s quite reasonable to think that money can be saved in less than a year. If you currently make $80,000  a year as a couple, can you live on only $60,000 a year? Most certainly you can.

One year of sacrafice here for 6 months of stress-free life in Spain. Not a bad trade actually.

And with a bit more sacrafice, maybe the money can be saved in only 6 months?

And that’s how you do six months here and six months there. At least one way.

Let me know in the comments what your experience has been on how expensive it is to live overseas, or if you think my budget numbers are off.

Related posts:

1. How to Spend Six Months in Thailand
2. Two Months? What Happened to Six?

Source: viZZZual.com at flickr

It would be really interesting to me to see some type of study that compares the following two people from age 20 to 40:

- Person A, let’s call him Todd, who spends his entire paycheck every time he gets it, always having the newest computers, cell phones, cars, etc.

- Person B, let’s call her Sally, who never spends her entire paycheck and is happy to use older computers and may not even own a cell phone

Just based on those two descriptions alone, is there some way to predict the overall success of their respective lives? Or is it still completely 50/50 random chance until we know more about their habits?

First, let me define success: success in this instance is being free to do what you want, not bound by financial constraints. Failure in this case is being forced to do things because you need the money or stopped from doing things cause you don’t have enough money. Is that a fair definition of success? I think so.

Now it is certainly possible that Mr. “Spend First Ask Questions Later” will either meet a rich heiress while he’s away on some vacation and will go on to marry her and live a fabulous life of the rich and famous. Or perhaps he will luck into a lotto win, or his prolific spending and risk taking will propel him to start a new online business and make a billion dollars.

But it’s more likely that he’ll end up broker than broke 5 years later, with $100,000 in credit card debt and most of his income going to make the payments. He’ll then be in a situation where he will need to stay in a miserable high paying job, or not be able to take a once-in-a-lifetime backpacking trip through China that will make his heart sing.

So the more I think about it, the more I would say that my number one advice to all young people who are leaving school and entering the workforce for the first time: resist the temptation to live beyond your means in your early years. Always set 25% of your paycheck aside in an account you can’t touch - half of it tax-sheltered and half of it not. Learn to live on only 75% of your income. Set that as a goal you must always keep for the first 10 years of your working life.

Then when you hit 30, you’ll have options. Lots and lot of options. Want to spend a year travelling? It’s an option. Want to quit a miserable job to go do something more fullfilling? It’s an option. And after living frugally for 10 years, you will likely be disgusted by the thought of spending $3,000 on a television even when you do have the money to do so.

No related posts.

Source: Fosforix at flickr

OK, in Part One, I outlined a business idea I had to sell t-shirts online. This is part of my plan to create an income that will sustain me while I am spending 6 months a year in a warm locale.

In the part, I will decide which of several ways to create a web site for it, and how to sell it.

Step Three: Decide How to Sell Them

I have several options for running my t-shirt business

a) Have someone do all the work, and only get a few dollars of per-unit profit from each sale

b) Take on the retail sales job and let someone else produce the shirts, getting a bit more of the per-unit profits

c) Getting a company to produce the shirts for me in bulk, taking on the up front risk, for the most amount of per-unit profit

There are pros and cons for each approach. My approach right at the moment is to take the least amount of risk, prove that this is an idea worth doing, and then move progressively down the scale as the business gets popular.

To briefly outline the options for each of the above:

a) Utilize a site like CafePress to do all of the work, including hosting, order management and fullfilment

b) Create a web site front end for ordering, and use a back end company for print-on-demand order fulfillment

c) Contract a company to produce a few dozen shirts at only a few dollars per item, and sell and ship the items myself from home

The easiest and most appealing option right now is to use a t-shirt (and other product) company that will allow you to create custom designs and sell them in their marketplace. This serves as a proof of concept. I am not trying to make a lot of money right now, I am trying to prove to myself that this is an idea worth persuing. The most popular of these is CafePress. I will start by opening a CafePress account and selling some custom products there.

Step Four: Register for CafePress

Registering for an account was easy. In fact, dead easy. There are not a lot of customization options on their free account however. For $5 a month or so, I can get a premium account. I am not even ready to do that yet. Let’s start with the free acount and see how it goes.

Step Five: Upload the Design

This part is simple. In step 2 I created a simple design in PhotoShop. I export it to a transparent GIF format, and upload it to CafePress.  I then choose which products I would like my graphic to appear. For now I am sticking to t-shirts. Mousepads and coffee mugs are great too, but I don’t think my Your Mom idea translates as well to those things.

One downside to a free account is that you can only sell one of any individual type of product. This will be my first major problem. I want to create 20 or 30 different sayings and see which one is popular. I do not want to only be able to sell one type of white t-shirt.

The other ideas will have to wait I guess. Let’s give this a month to see if I can sell any of my first idea before committing to the money to upgrade to premium. Once you have upgraded to premium apparently you can’t downgrade to a basic account any more. So it’s a pretty hefty decision.

In the next post, I will talk about how I plan to market this new store far and wide. This is not a “build it and they will come” scenario. I need to get the idea out there.

And for the curious, here is the store.

Related posts:

1. Create a Business Web Site in One Night: Part One
2. On the Road: If It’s Raining in Shanghai, What Time Is It in Toronto?
3. Breaking the Roots, Part 1

Source: mesq at flickr

Part of the process of preparing to spend 6 months a year travelling, I need to establish some type of residual income that won’t take too many hours to manage while I’m away.

Can it be done? Can an idea strike you for a new business at 6pm, and by the end of the night you have something up and running?

We’ll see. I’m confident it can. Once it’s up and running, the job of marketing begins. Things can be tweaked and improved with the site once some sales come in and the business concept is proven.

Step One: The Idea

I’m one of those people who are always having ideas for starting web sites or businesses. When the same idea keeps coming back to me again and again, I feel it is probably good enough to register a domain name for. That’s only a fraction of the total number of ideas at this point. And a fraction of those domain names are good enough to spend time and money developing. That means for every 100 ideas, I might register 10 domain names and end up with 1 web site.

Bu what if I tweak that formula a little. Made it quicker and easier to get a web site up and running, therefore being able to get something going for 5 or 7 of the 10 domains I register. I would be able to see right away if the idea is worth investing additional time and money in. The faster something gets up, the cheaper it is, and the more of them I can do in a year. The cream rises to the top, and the winning business will show itself.

My idea this time around is a simple one: funny t-shirts. Yes it’s been done before. Selling t-shirts on the Internet is as old as dirt. But that doesn’t mean I can’t make some money on it. People will continue buying t-shirts, and buying t-shirts on the Internet is easier than almost any other type of clothing. In fact, buying t-shirts online is in some ways better than buying in a store, because regular retail stores rarely have an extensive selection of funny t-shirts. Gap, Hollister, Abecrombie… might have one or two clever shirts and the rest are plain.

I’ve come up with a pretty clever concept I think. I have a target market in mind. And I’d like to take a chance on it. And I’d like to do that start to finish in one night.

My idea is called Your Mom T-Shirts. The target market is high-schoolers, and college kids. 16-21 years old. Male. “Your Mom Helped Me With My Homework“, “Your Mom Made Me Breakfast“, “Your Mom Says Hi“, stupid sayings like that.

Step Two: The Design

Well, I’m tempted to jump right into web development, but the better way to start is to design my first shirt. Once I have the design in my pocket, I can figure out how to sell it.

The t-shirt designs are going to be simple. Perhaps a little too simple some might say. But the t-shirts are meant to be read, and hopefully will be funny with just words and no real graphics on there. I’m going to try it like that, and can always add some flair once things get going.

So I open up Photoshop, pick a nice stencil font, and whip something up.

There. Nothing too amazing. But the goal here is to get a product out the door and see what people think.

In part two, we’ll figure out how to turn this into a t-shirt and sell it.

Related posts:

1. Create a Business Web Site in One Night: Part Two
2. On the Road: If It’s Raining in Shanghai, What Time Is It in Toronto?

Source: Vlastula at flickr

“Life takes on meaning when you become motivated, set goals and charge after them in an unstoppable manner.” – Les Brown

“Many people fail in life, not for lack of ability or brains or even courage but simply because they have never organized their energies around a goal.” – Elbert Hubbard

“Nothing worth having comes without sacrifice.” – Unknown

One of the reasons most people are content to work 40 hours a week with 2 weeks of vacations a year is that it’s easy. As long as you make a respectible income and can afford to pay the house and the car, you can just keep doing that week after week, month after month, for 40 years. And at some point down the road, you can safely retire on your $1,000 a month pension as long as you don’t expect to live too extravigantly.

But what if you choose instead to live life a bit differently. Instead of living in a bigger house with a newer car, you live in a more comfortable but smaller place. You hang on to your car until it becomes unreasonable and then pick up a good quality used one. You live your life by making sacrifices, so that you can take 2 months a YEAR off of work. Or so that you can take a WHOLE YEAR off for a life-affirming trip around the world. You give up the a few joys from today so that you can truly live life later.

I may have learned this lesson myself a bit late. I wish I could sit my 20 year old self down and have a long serious talk about things. But it’s not too late. It’s never too late. I’ve woken up, I have a goal, I’m willing to make sacrifices, and I’m willing to do what it takes to succeed.

Related posts:

1. How Much Does It Cost to Travel for One Year?
2. See The World on $5,000

Source: Kenzoka at flickr

After going to the same place on vacation two or three times in a row, it’s unavoidable to start thinking about buying your own place in such an idyllic place. Especially if you can see yourself visiting several times a year, or for an extended period of time, there are many benefits to buying versus renting or staying in a hotel:

• Cheaper annual ownership cost compared to renting the same unit (some units rent for thousands of dollars per week, when they only cost hundreds of dollars per month to own)
• Ability to profit from the unit, or at least offset your maintenance costs, by renting it out when you’re not using it (especially in popular tourist areas)
• Ability to profit from the unit when the property values of the area go up
• Increased level of comfort in having your own place compared to “borrowing” someone else’s (pillows, towels, linens, bathrooms, showers, kitchens, utensils, and other personal items)
• Ability to customize the unit to your tastes
• Ability to make friends among a consistent set of neighbors/local restaurants
• A place to eventually retire to

Those are just some of the potential benefits to property ownership in a vacation destination. These are usually the only things mentioned in the property developer’s brochure as well.

Buying a timeshare property has it’s own set of benefits:

• Ability to have access to a property for only a fraction of the cost of ownership
• Professional property manager, not having to worry about security, cutting the lawn, etc.
• Other rights, such as being able to trade your timeshare unit for another in another country

There are some drawbacks to home ownership in a vacation spot as well:

• Property security when you are not there
• Dealing with foreign builders, legal system, city government, taxation, etc.
• Being responsible for property maintenance, such as cutting the grass and fixing the roof
• Losing the flexibility to travel to other countries or even within the same country
• The risk of property values falling
• The risk of exchange rates falling (like some British people are experiencing with their Spanish vacation homes)
• Political risk (such as foreign property owners in Cuba in the 1960′s)
• Taxation issues (owning land in a country may make you a resident, and becoming a resident may make you eligible for income taxes on your worldwide income)
• Immigration issues (again, being a land owner might make it more difficult to obtain a tourist visa, if the country thinks you fit better into the definition of resident)
• The hassles of selling when you no longer wish to visit

As you can see, there are a lot of (scary) risks! Many of these items are as a result of the vacation property being in another country, compared to just buying a cottage in your own.

You may want to do some research on the “Spanish Land Grab” as an example of the types of things that can happen when you don’t expect. Keep in mind that the property laws you are used to in your home country can be radically different than the property laws in your dream locale.

I don’t want to scare anyone with this list of risks. Just things that can happen.

Many of the scary legal problems can be avoided with a competent lawyer. Many of the financial risks can be avoided  by having a solid personal financial situation. If a 25% fluctation in the exchange rate is going to make living and owning outside the country a problem, you may not be ready to own yet.

Related posts:

1. How Long Can You Stay in One Place?