What we've learned in 25 years of International Living

  At our 25th Anniversary Live Overseas Conference in San Diego in March, Founding Publisher of International Living William Bonner shared insights into what we have learned in 25 years covering this beat. Here are highlights from his presentation to the group:

If I had to name one thing we've learned in 25 years of International Living, it might be this: When you set out on any journey, you don't always end up where you expected to go-you end up where you ought to be.

The idea for International Living came from my aunt. She was a romantic and loved traveling-she always dreamed of going overseas and starting a new life. What we have found, all these years later, is that, through International Living, you can do that. You do get another life, a second life. To make this happen you need romantic vision and practical knowledge-remember to use your head as well as your heart.

The thing to realize before you start, though, is that when you make the move, you often discover that the new life you end up with is not necessarily the one you expected or even, maybe, the one you wanted.

This has been the case in my own life. Ten years ago I went to France with my wife. We were in Paris starting a business and heard of a house for sale in the middle of the country, outside Paris. We looked at a picture of the house-and thought, wow, that's great. And it wasn't expensive at all. We didn't even know where it was, but we rented a car and drove out to take a look.

Our idea at the time was to get a place we could use for conferences, for meetings, and also a place to spend time with our family, especially in the summer. Now it's 10 years later, and we're still there. I didn't intend to be in France this long, but that's what has happened. When you make a move like this one, you do not go alone -you go with your family, for example, and they have ideas of their own. When I wasn't looking, my wife was putting down roots. Pretty soon we were attached, and, after a while, we couldn't leave at all.

Follow your instincts

When we saw this house, we wanted to buy it immediately, but we were forewarned not to be so hasty. So we hired somebody to do some research for us. He went and looked at all the properties around Paris that were similar to the one we had seen and loved, and then rated them. He concluded that the house we had our heart set on was the worst of the whole bunch he had researched for us. He warned that we were going to need to spend a fortune fixing it up…and that it was too far from the center of Paris. Instead, he had 10 other places he wanted us to look at.

So we went and looked at them. The trouble was we didn't like any of them. They were all better, supposedly, but this is something you do with your head and your heart, and these kinds of decisions you can't rate on a scale of 1 to 10. It's like choosing someone you're going to marry. You can rate them on paper, but that's not the same thing as what you feel.

We ended up buying the original house we saw. When we bought it, the owner told us that it never rains in this part of France in the summer time…and that the roof didn't leak. However, one day in July, soon after we moved in, we discovered that he had lied twice. But that's what you run into when you go overseas-it's a different mentality. In France you don't hold lying against somebody-it's a quality.

When we moved in I was expecting to just spend the summer here, but my wife was secretly putting down roots -taking the children to church, enrolling them in a school program… The next thing you know it's 10 years later, and my life is entirely changed. I am still in France. Not only do I spend time in France, I have French children-two of them are French, two are American, and two don't know what they are.

What am I doing in France?

I wouldn't say I'm political, but I was once the director of the national taxpayers union…fighting taxes. I don't like taxes. I don't like regulation. I don't like government. And here I am. I have a major part of my business, my life, and my finances in the most highly taxed, highly regulated country on earth. This is what I mean. You end up where you didn't expect to go.

In France it's almost a joke. We have a business in France, and things don't work the way you think. For example, they have this rule about the 35-hour work week. Thirty-five hours is crazy, because the French have six weeks of vacation every year, plus lots of paid sick leave. But this law says they can only work 35 hours. There are inspectors to check. Seven o'clock at night they look in buildings to see if lights are on, and if they are, they come into the office. They want to know why the employees are there. If the employee explains that he is trying to catch up on work, he is told he can't do that. I tell the inspector that I didn't ask the employee to stay late, but that's not good enough. You're not allowed to let employees work more than 35 hours. It's crazy.

Occasionally you might have problems with an employee you have to fire. But you can't fire anybody in France. It doesn't work that way. You have a meeting with them. At one such meeting, the employee didn't show up alone. We looked at the person with our employee and asked, who the heck are you? It was a union representative. We had six staff. We didn't know we had a union. The other employees didn't know it either.

Even though there are all these cultural differences, I have to say I love the French, and I love spending time in France. I have a book published in the U.S. called The Day of Financial Reckoning. My friend and publisher in France liked it and had it translated into French, but we wisely changed the title to The Inevitable Destruction of the U.S. Economy. It was a bestseller in France.

Stress

Here's something else we've learned in 25 years of International Living: A move to another country comes with a lot of stress. When you think about moving overseas, you think about all the nice romantic evenings in cafés and walks along the beach. But that's only part of the picture. I see this all the time. Paris is a wonderful place to be, but there are a lot of Americans who don't want to be here.

Several things can destroy a marriage. One of them is building a house…another is moving overseas. You can see how that happens. Typically, if you move overseas as a couple, one of you integrates-learns the language, meets new friends, develops a new life, etc.-while your partner may feel left out or left behind. He or she may not like the new situation as much as you do. This can lead to stress for both.

I've been lucky. My wife integrates easily. She picks up languages, and she has done something remarkable in Paris -she has cracked the rather closed French society in the bourgeoise 16th arrondissement. That is a real achievement. As a consequence, we're invited out to dinner parties regularly. The key to surviving French social life is stamina. At these dinner parties, you can't leave until 2 a.m. You start at 8 p.m., and there's hours of small talk.

Booms and busts

One of the benefits of being an International Living reader is that you have choices. You can choose the currency you're in. You can chose the country you're in. The economy. The stock market. And since we've been publishing International Living we have seen booms and busts almost everywhere. We've been publishing for quarter of a century. During that time, we've had a boom and bust in Russia, in Hong Kong, in Japan, in Argentina.

We've had booms and busts in the U.S., too. At one point, property in New York fell as much as 80% in price.

The point is, there are major trends to be aware of. You can't time these things. When you're ready to go somewhere, you can't think, well, I'm not going to go now, because they're in the middle of a major secular boom. A boom could last 12 years, or 25 years, so you have to take things as they are.

Still, you need to be aware of fundamental trends. The Berlin wall came down in 1989. It opened up a big part of the world. Four years later, I bought an apartment in St. Petersburg with friends. At that time you could get an apartment in St. Petersburg for a pittance because it was before the wave of new money, of new development. It cost us $30,000. That was a great affair, but it was mostly just luck.

Britain almost went bankrupt in the 1970s. Back then, you could buy an apartment in London for almost nothing. In 1985, the dollar was almost equal to the British pound. I remember looking at a house for sale on the Isle of Man, priced at $25,000. Now it would probably cost at least $250,000. These are the big trends to be aware of.

This secular trend-this boom-is no accident. It's part of the Federal Reserve policy of inflating the world economy to keep things moving along. That's a long story. I won't get into that here.

The Baby Boomers grow up

But there are a couple of other trends I think we should all be aware of. They're big, big, long-term trends. Many of us are reflections of that trend. One of them has to do with this huge population of what we call Baby Boomers. I'm one of them.

The Baby Boomers are getting older. They have been successful in their lives and are thinking about what to do next. They grew up with this vision of living on the beach-having a free and easy kind of lifestyle. That vision and these people are not going to go away. That's one of the reasons why beachfront property has generally been such a good investment in the U.S. First of all, there's not that much of it. Beach is like gold. You can't make more of it. You can't print it. There's less and less of it all the time, and more and more people who want it. There is a major trend going on-the rest of the world is getting rich.

If you go outside the U.S., one thing you are struck by is that there are a lot of rich people. Not only in Europe, where you'd expect them, but also in Asia-there's a lot of new money in Asia. And the richest people in the world are not necessarily in California. Last year, the biggest, most expensive house ever purchased in London was bought by an Indian man.

So, there is a lot of money. What do these people want? Well, they don't want things so different from what you and I want. They want beautiful places by the sea, too, and there aren't many of those. Most of the coastline of the world is not a place you'd want to live. There's a limited amount of it that's beautiful, warm, accessible, safe.

Brands and beaches

So one of the major trends that I see is an increase in value in real terms in these limited resource spaces by the sea. Now there's another thing that I think is important. I call these two trends "brands and beaches." Because there's something else going on, which I think is fascinating-cities have become brands. If we met, and I tell you I live in Dubuque-what would you think? But if I say I live in London, that communicates something. That's a brand. It's like a Rolex watch or a BMW-people know immediately that this is a mark of status.

San Diego is a brand name. Santa Fe is a brand name. They're known worldwide, and it's not just you and I-it's the rest of the world, too, that recognizes these brands. People in Tokyo know those names, and they, too, want those brand-name properties. They want an apartment in Paris, or in London, or in Rome. There are three billion Asians who are getting richer all the time. They have the same idea. They, too, want a piece of these precious few resources.

We have seen two major real estate trends worldwide. One of them is that these cities have gone way up in price, and quickly. The other is that beachfront is expensive. A part of this is the major trend that people want to be in these places. They make sense to people.

If you think about these trends, do you think they have run their course? Are we at an end? Are they going to bust? We don't know. Remember, things go up and down.

I'm familiar with Nicaragua, and there I've noticed what looks like a kind of boom mentality. Frankly, as an owner, buyer, and investor, I look at the market, and I'm confused. Because, on the one hand, if you consider the price of beachfront in Nicaragua, you conclude that it's low compared with anywhere in North America, compared even with Costa Rica next door. At the same time, it's much higher than it was before.

So I would be a little concerned- and I want to warn everybody-there can be hiccups on the road to wealth. It's not easy-things do not go up and up all the time. They can also go down.

Are you afraid to succeed?

This brings me to my third rule: When moving overseas, buy what you like.

If I were to buy an apartment in Paris, I'd buy something that I'd want to keep and want to live in. I don't care if it goes up or down in price. And in Nicaragua, when I first bought, I certainly felt that way. I'm looking at more property in Nicaragua with the same analysis. Do I care if this thing goes down in price? And if I don't care, well then I think it's a good deal.

Does it produce some earnings if it's a rental property? Does it produce enough earnings to make it worthwhile? If it's not a rental property, does it produce enough pleasure? Is it something you feel good about owning, something you want to hold on to? Something you want to pass on to your children? Those are the kind of questions I ask myself, and that I recommend you ask.

Remember, managing property from afar is no picnic. I've done this for years, and it's amazing the kind of problems you run into. So you need a structure. You need people in place, you need systems set up. It takes a lot of time, it can be expensive, and you may have problems -currency problems, economic problems. You never know how it's going to play out.

Here's my point: You don't want to get involved in managing property long-distance unless you're into something that really matters to you, something that you really like, something you really want to hold on to.

There are only three major decisions you make in your life. You decide what you're going to do. You decide with whom you're going to do it. And you decide where you're going to do it. Each of those decisions is critical because your life changes entirely based upon how you make them. International Living can certainly help with the final question… the where. The idea behind International Living is that you have a lot more choice than you may realize. Its intention is to open the door to many possibilities that might not exist for you otherwise.

You hear it said that people don't do things because they're afraid of failure. I don't agree. I think it's because they're afraid of success. When you open these doors, if you fail, you end up right back where you are now. You haven't moved. Everything is the same, familiar, comfortable.

If you succeed, though, if you open the door and go through it, taking up an international lifestyle, then everything changes. And that's pretty scary. That's why you have to be careful which doors you go through and with whom.

Be careful. Be choosy. Watch these major trends. And keep reading. IL