Tag Archives: retire

Ecuador – Permanent or Temporary Move

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I took a hiatus from writing specifically about Cuenca, Ecuador because I have been mulling over whether our family trip this summer will be a permanent versus a temporary move.  I have always been a “just do it” kind of gal, and I find the leap before you think approach to life very invigorating.  So why am I becoming more hesitant as the weeks roll past?

Because being on vacation is like being drunk at a party – your normal walls and insecurities come down, your hair is loose (be it yours or store-bought) and your soul is free and open.  Then you return home and after a few weeks of the normal routine, that vacation feel starts to wear-off.   That said, the best quick-fix solution I have come up with for reminding me why I am considering making this trip a more permanent move, is a visit to any McDonald’s between the hours of 8:30-10:00 am.

Is it the incredibly gross “beef” products they sell?  No. Is it the $1  any size coffee? No.  It’s all of the older, retired Americans who have made McDonald’s the new hotspot.  Yes people, if you are in your 70s and 80s and looking for a vibrant social scene of your peers….McDonald’s is the spot!!

This is both an interesting and distressing fact, depending on where the McDonald’s is located.  If in the wealthier suburbs, then you see groups playing cards, bingo, and being rather jolly. However, if in an urban or lower social economic center,  well then the scene is just depressing.

Depressing, because it is so clear that so many there simply crave human connection. Another person to hear their voice and know that they exist.  They sit and complain about the family members who no longer care about them, the friends who are awaiting open heart surgery, the medications they take, their aches and pain, their past glories, and the latest in local politics. It is depressing because their communion with the world happens for the few hours they are within the overly fried, mass-produced confines of Micky D’s.  Then it is back to home.

Now…granted, I am under forty, so bingo at Micky D’s is a way off…but it reminds me of how wonderful it is to live in a place where age is considered a privilege and not a purgatory, where friends and neighbors are family and your life is filled with the sight and sounds of young people (if you so choose). It reminds me that there are so many beautiful places and people to experience in this world and I am very blessed to have the opportunity to explore it.

So, we are looking forward to making Ecuador our home for a while and really learning about the country, its history, and its people.  We are looking forward to getting really good with our Spanish, growing our base of wonderful friends, and continuing to live a life rich in adventure, communion, love and laughter.

Yup, this a permanent move for us…well, about at permanent as we get.

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Aside

This is the question that each of us is faced with when we stand at the cusp of change.  How do you determine the answer?  How much time does it take you to decide?  My own process is random and spontaneous.  I find the more time I spend ruminating and debating a decision, the less likely I am to actually make a decision.  And indecision equates to remaining in the status quo.

That said, the question of whether I should stay in my country of birth and venture forth into the world, is one that recurs every time I am required to use my passport.  That fantastic little blue book, with its battered and worn edges, that allows me, without prior approval (visas), access to so many parts of the world.  It is the only asset I own that I can not do without, the one document that I can locate no matter how disorganized my space may become.

When I travel, the pull not to return to the US is strong if:

  • I am surrounded by beautiful natural landscapes and joyous and happy people;
  • I feel relaxed and the pressures of work melt away;
  • My greenback dollar bills actually have significant buying power; and
  • My travel partner is not protesting for a quick return home.

This time around however, I have a specific goal in mind and if I find the spot that meets my few requirements, then I am there.  That simple.  Of course my 24 year-old sister thinks I am experiencing a mid-life crisis and my mother thinks the same, but I just think that I am unafraid of change.  In fact, I crave it.

What about you, would you stay (where you are) or would you go? And what would be the triggers for making that decision?  Inquiring minds would like to know!

As a side note – I was singing this title song in my head this morning, when my 8 year-old started singing it in the shower.

“Should I stay or should I go now. If I go there will be trouble, if I stay it will be double. So come on and let me know. Should I stay or should I go!” – The Clash

Should I Stay or Should I Go?

A Word on Banking in Ecuador

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The benefit of Ecuador being a US dollar based economy is that, for the US investor, it eliminates the inherent risks associated with foreign currency exchange fluctuations and it allows us to take full advantage of significantly higher short-term interest rates.

I am still learning about the Ecuadorian banking system and I am not an investment professional; however, if you are considering a long-term stay in Ecuador, there are some clear advantages to short-term (1 year or less) investing there.  Just compare the interest rate on your current savings account or any CD’s you may own.  The rate is probably somewhere close to zero versus 6.0% (on average) for a one year CD in Ecuador.

I have a particular focus on CDs (certificates of deposit) because I like the fact that it is a relatively liquid asset and I know exactly when my money will be available to me, without any withdrawal penalties (however, early withdrawal penalties can be about 2%).  CDs are like temporary savings blocks.  You can invest for a minimum of 30 days to 1 year and you earn interest as a reward for locking up your money with the bank for that amount of time.   The reward, or interest rate, increases with the amount of time you are willing to let the bank(s) in essence “borrow” your funds.

With Ecuadorian bank investments, CDs are a great choice because you can stagger your investment across different periods of time and in varying amounts, based on your comfort level/risk tolerance.  In addition, the minimum investment is low, $1,000 or less.  This flexibility can be a safeguard so that you know, for example, your money will not be tied up at the end of 60 or 180 days.

To understand how to calculate the amount of interest you can earn in a given period, take the following steps:

  1. Determine how much your initial investment will be, for this example let’s say it is $5,000
  2. Determine how long you want the CD in place for, let’s say 30 days at a rate of 3.50% (Banco del Austro as of Jan. 2012).
  3. Multiply your investment amount by the interest and divide by the number of periods in 1 calendar year (30 days = 12, 60 days = 6, 180 days = 2, and 360 days = 1) So,  $5,000*3.50%/12 = $14.58
  4. This means your interest earned at the end of the 30 day period will be $14.58
  5. You can then decide if you want to do another CD or just take your money and do something else.

Two final thoughts

  • The difference between banks and cooperatives is similar to the difference between banks and credit unions in the US.  Both are financial institutions offering similar products, however cooperatives (like credit unions) are governed by a different set of laws and regulatory bodies.  As a result, cooperatives may be perceived as inherently more risky and they therefore offer the highest interest rates on CD investments.
  • The requirements to open a bank account will vary between institutions. Some require only a passport, others require an Ecuadorian resident card and a utility bill.  All require you to open the initial account in person, so get to know your bank and the investment professional you will be working with, because when you are away, they will typically be able to help via phone or email.

For a list of some of the banks and cooperatives available in Cuenca, Ecuador and their respective interest rates, click on the Ecuador Investments page.

Cuenca Day 4 – In the land of English

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Today, outside of speaking to ourselves in English, saying hello to our neighbors, and spotting someone we had met on the plane ride over, our entire day was spent in Spanish.   That said, I did spend some amount of time speaking with Cuencanos about the growing community of English speakers and visitors.

Two of these conversations centered around the frustration that it is sometimes  difficult and frustrating to provide Americans with the highest level of service because of language barriers.  While welcoming everyone, the lack of communication seems to have frayed some nerves. However, people here are so patient and nice that being able to  attempt some Spanish (even if you completely butcher it) it makes all the difference in the world.  It makes people feel like you have a stake in them personally, as well as in Cuenca.  Some words to learn –

  • Buenos Dias- good morning, Buenas Tardes-good afternoon, Buenos Noches – good evening
  • Perdonna-me – excuse me, muchas gracias -thanks very much, por favor – please
  • Cuanto cuesta – how much is it
  • Perdonna me por favor mi espanol no es bueno – please excuse me, my Spanish sucks.
  • Donde esta el bano – where is the restroom

Another conversation centered on not understanding how a person can move to a new country but (in essence) refuse to learn/speak the language.  This was different from the first set of conversations because it had nothing to do with wanting to provide better service to the expat community.  It had to do with a distaste for the imagery of complete buildings filled with expats who want nothing to do with the larger Cuencano community (except as domestic workers, taxi drivers or other service providers).

This certainly does not mean that these conversations mirror a brewing resentment in the local community; rather, it displays the need for expats to be more sensitive to the language situation. Everyone I speak to is happy with the increasing numbers of Americans and Europeans here because the city as a whole benefits.  I just think that people wish the Americans would be more social with Ecuadorians.

Americans complain about people not learning English and not integrating with the larger community when they live in our country. Then we move to their countries, refuse to speak their language and we stay in our own communities. Ironic, isn’t it.

Ecuador has Amazing CD Rates

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[PLEASE NOTE THAT THE POST BELOW NOW HAS ITS OWN PAGE TO FACILITATE THE VIEWING OF CD RATES BY BANK. THE INFORMATION FOR INDIVIDUAL BANKS IS POSTED ON THE BANK SPECIFIC PAGE IN THE DROP DOWN MENU ABOVE (SEE ECUADOR INVESTMENTS)]

We are all concerned about extending what we have financially into the future.  If you are starting late or just looking for a higher rate of return, why not consider investing in Ecuador?  This post is inspired by a comment I saw on a blog asking about CD (certificate of deposit) rates in Ecuador.  The response was a bit vague, so I have decided to make it my mission to go into the banks here and get the real deal.

Over the next few days, this post will be updated as I get more information; however, it is all accurate as of the dates given.  All information posted was received first hand  based on me going to the banks and speaking directly to the investment representatives. Next to the posted rates, I am listing the current rates at Chase bank (in the USA) as of the same date (min. deposit is $1,000).  For those that do not understand the numbers, at the end of each bank entry I provide a line that shows what happens if you invest $5,000 over 10 years and $10,000 over 10 years based on the 366 day/1 year rates (assuming the given interest rates are constant).

Please note that as of the date of this post, you are able to open an account in any Ecuadorian bank, as long as your passport and entry stamp are current. In addition, all accounts are held in US dollars. CDs will be found under Inversiones (investments) and the word for interest rates is Tasas.