With Kathleen Peddicord, Founder & Publisher, Live and Invest Overseas, Editor-In-Chief, “Overseas Opportunity Letter”
When Steve came across a Forbes.com article titled “Quit Your Job And Live Abroad, Eight Places So Cheap You May Not Need To Work,” he decided to go straight to the source quoted in the article, Kathleen Peddicord, who has covered the “live, retire, invest, and do business overseas” beat for almost 30 years and came up with this list of the eight most affordable places to live outside the U.S. She’s also the founder and publisher of Live and Invest Overseas and Editor-In-Chief of the Overseas Opportunity Letter.
What Qualifies The Eight Places On Her List
Steve kicks off the conversation by asking Kathleen what makes the eight places she chose so special. Kathleen says these are locations that are super affordable for most Americans and also places you’d enjoy living in. While lots of locales in the world are cheap, not all of them are interesting, cultured, pretty, safe and pleasant to live in. So, she focused on those which are amazing bargains for the quality of life they offer.
Budget And Basics
On the financial front, Kathleen looked at the cost of living per person, including rent for a one bedroom apartment. Because rent is typically the biggest chunk, she suggests doing your budget in two parts—one for rent and the other for everything else, with adjustments for whether you plan to live alone or as a couple because items such as rent and utilities do not double with two people in the same dwelling. Expenses also go down if you live more like the locals, provided you’re willing to learn their language and customs to smoothly fit in and have a pleasant experience.
Her numbers do not include travel, clothes, health insurance, nor other costs, so think of them as starter budgets. Beyond those basics, factor in more for the extras you’d want such as vacations, eating out, owning a car, etc.
#8 Kota Kinabalu, Malaysian Borneo
Getting to the countdown, Kota Kinabalu in Malaysian Borneo is #8 on Kathleen’s list of the eight most affordable places to live and her top pick in Asia, with a starter budget of $850 per month, per person. It’s a beach town that offers a local living experience in Southeast Asia that’s, of course, really different from living in the U.S.
#7 Granada, Nicaragua
Despite Nicaragua’s troubled political history, the country is working hard to attract foreign investment. Granada makes the list because it’s one of the region’s most appealing colonial cities with lovely Spanish architecture, central squares, and a big community of expats. Living in Granada will set you back $1,225 per month.
#6 Barcelona, Spain
#6 surprised Steve. Kathleen attributes Barcelona’s affordability to the strong dollar relative to the Euro. With a budget of $1,600 a month, it’s a great gateway to the rest of Europe in a very vibrant city.
#5 Chiang Mai, Thailand
Chiang Mai is another great place to live in Asia and is very affordable at $1,000 per month. The city has also developed as an expat retiree destination, offers a higher standard of services, and more like-minded people who speak English. Chiang Mai also has excellent healthcare facilities at a fraction of U.S. costs, making it even more attractive for retirees for whom health concerns are a big factor in where they choose to live.
#4 Santa Familia, Cayo, Belize
Kathleen says she’s a big fan of Belize. And while Americans are familiar with parts of the country that have been locations for Survivor and Temptation Island, Belize has another, very different face inland in its mountains, undeveloped rainforests, and rivers. It’s a place where you can unplug and disconnect from the rest of the world and offers a more rustic, basic, off-the-grid lifestyle. Living in Cayo will run you about $1,200 per month.
#3 Las Terrenas, Dominican Republic
Las Terrenas is an excellent Caribbean choice with white sand, beautiful blue water, swaying palm trees, water sports, and coastal bars and restaurants that offer a beach lifestyle. About 40 years ago, this little part of the Dominican Republic was settled by the French so it has a sizeable French community, good French restaurants and bakeries, and a distinctly French flavor. Its budget of about $1,250 also makes it one of the most affordable places to live in.
#2 El Poblado, Medellín, Colombia
With drug king, Pablo Escobar, long dead, Medellín is safe, beautiful, welcoming and one of the nicest places you’ll ever visit. El Poblado is the best address in Medellín and is a little high on budget at $1,650 a month.
#1 Carvoeiro, Algarve, Portugal
Finally, Carvoeiro ranks #1 on the list of most affordable places to live. For starters, Kathleen believes Portugal is the unsung jewel of Europe. It’s less developed, less crowded, less touristy and much less expensive as a result of being sort of ignored. It also has a beautiful and long coast line, the best weather in Europe, the best beaches in Europe, more sunny days than any other place in Europe, and lots of really interesting and historic places dating back to the Middle Ages.
Within Portugal, Carvoeiro is an upper-crusty, upscale beach town with great services at a bargain price of $1,150 a month despite being a high-class beach destination.
Disclosure: The opinions expressed are those of the interviewee and not necessarily United Capital. Interviewee is not a representative of United Capital. Investing involves risk and investors should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions. Content provided is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered tax, legal, investment advice. Please contact your tax, legal, financial professional with questions about your specific needs and circumstances. The information contained herein was obtained from sources believed to be reliable, however their accuracy and completeness cannot be guaranteed. All data are driven from publicly available information and has not been independently verified by United Capital.
Steve Pomeranz: You know, there are so many people who are thinking that, although the US is a fantastic and wonderful place to live and work, it just ain’t that easy to live here because it costs an awful lot. Then I saw this article, “Quit your job and live abroad, eight places so cheap you may not need to work.” You know, usually I’m very wary of these kinds of articles but this one is written by someone who knows what they’re talking about. Kathleen Peddicord has covered the “live, retire, invest, and do business overseas” beat for almost 30 years. She’s traveled to more than 50 countries, established businesses in seven, and invested in property in 21. She’s the founder and publisher of Live and Invest Overseas and also editor in chief of the “Overseas Opportunity Letter”. Let’s meet her, welcome to the show, Kathy.
Kathleen Peddicord: Hello, how are you? Thank you for the invitation.
Steve Pomeranz: My pleasure, it’s a great article. These eight places that you’ve chosen, what makes them special?
Kathleen Peddicord: Primarily, they are super affordable, but also they are places you would want to be. Lots of places in the world are cheap for a reason because there’s nothing there of interest and they’re not pleasant places to be. Some places aren’t safe in today’s world. Some places aren’t nearly as pretty or as pleasant or as cultured or as welcoming as other places. In putting together this list of top eight, I was trying to identify places that are great places to live all things considered and looking at the whole world map, but that are also amazing bargains especially when you consider the quality of life that you’re buying.
Steve Pomeranz: What is the financial budget for our discussion when we talk about cost? Is it per person, what type of living arrangements? Let’s go into the basics some before we start talking about numbers.
Kathleen Peddicord: Right, it’s per person and it includes rent. Rent is typically the biggest part of any budget, so I suggest to people you can do your budget in two parts. One for rent and then part B for everything else. These budgets are per person, including rent but I make that point that a budget for a couple is usually not that much greater than a budget for a single person because, assuming you’re a couple or you’re together in some capacity, you rent a one bedroom apartment. That’s again, the biggest cost or portion of your budget, and that’s a given whether you’re one or two people.
Groceries, are they that much more for two people? Entertainment is double, but that’s not the hugest part of your budget. Transportation, maybe you’re talking about taxi rides or metro tickets in some places for example. Again, not a big difference one person or two. Electricity, gas, water, those costs are all the same.
Steve Pomeranz: Is this for a one-bedroom apartment or a two-bedroom apartment that you’re quoting?
Kathleen Peddicord: This is a one-bedroom apartment.
Steve Pomeranz: Okay.
Kathleen Peddicord: In a comfortable place where an expat would want to live, and that’s another thing to think about when you’re thinking about moving to another country. How local do you want to go? That has a lot to do with both the experience of living there and also the cost of living there. The more local you go, the more affordable the place becomes, but also, if the local language is not English, you will have to learn the local language if you’re living in a local neighborhood, for example.
Steve Pomeranz: Now these budgets don’t include travel or clothes or health insurance and other costs, is that right?
Kathleen Peddicord: Exactly. I think of them as starter budgets. You could live on this amount and you could live comfortably and have an interesting, full life, but you could definitely, in every case, spend a lot more. This is true anywhere in the world including where you’re living right now. How often do you travel? How many vacations a year do you take? How often do you go out to dinner? Do you own a car or not? These are big budget items that you control and if you’re living in a place, say in an interesting city or a beach town that’s walkable where you don’t have to own a car and you love the place where you are so you aren’t tempted to be spending lots of money on international travel, you’re living a very full life, but it’s a scaled-down budget. That’s how I would think of the numbers that we’re talking about here.
Steve Pomeranz: All right, well let’s get to the countdown. Number eight on this week’s list of the eight most affordable places to live that fit, I guess, the criteria for the American to live, safety and quality of life. The first one, and I’m going to try to pronounce this, Kota Kinabalu in Malaysian Borneo.
Kathleen Peddicord: Borneo, that’s it. You’ve got it exactly. This is a top pick in Asia, and when you’re looking at the world in this context, really there are four regions. The Americas, the Caribbean, Europe, and Asia. Each region has its pluses and its minuses. The big plus of Asia is that it’s super cheap. The budget that I reference for Kota Kinabalu is $850 a month per person. That’s pretty affordable. It’s hard to think about not being able to afford $850 a month and you would be living in a beach town. An interesting, beautiful place in the sun. You’d have a big adventure. At the same time, while this is a super affordable place meaning very tempting, on the other hand, what you have to remember is, this is going to be a local living experience in Asia, in Southeast Asia. That’s going to be really different from your current living experience in the United States
For some people, that’s exciting and they think, “Oh wow, this is going to be the adventure of my lifetime.” Other people think, “Oh my gosh. No, that’s crazy.”
Steve Pomeranz: Right, right. That’s Kinabalu, that’s what you said right?
Kathleen Peddicord: Yep, exactly.
Steve Pomeranz: Kinabalu in Borneo. All right let’s go to number seven, Grenada, Nicaragua. Now Nicaragua has a history, kind of a troubled political history.
Kathleen Peddicord: It does, for sure.
Steve Pomeranz: What’s going on there now? Why is that on the list?
Kathleen Peddicord: Well, I am a big fan of Nicaragua. I traveled to Nicaragua the first time almost 30 years ago, and at that point, it was not far off the troubles. It has had a lot of trouble over the past 100 years, including the civil war, and that was very publicized in the United States. Today though, that is definitely this country’s history and this country has worked hard to pull itself up by its bootstraps, get itself back on track. It’s working hard to attract foreign investment and foreign retirees. It has a very interesting and super affordable retiree residency program.
I highlight Grenada, Nicaragua, in particular, which I think is one of the region’s most appealing colonial cities. When the Spanish were in this part of the world, they built a lot of cities that I find very appealing as places to spend time. I love the Spanish colonial architecture and the city layouts, the central squares and just how the whole cities are designed. The whole city planning of the Spanish colonizers appeals to me a lot, and Granada is just an excellent example of the best of what the Spanish built in this part of the world. Today it’s home to a very big community of expats.
Steve Pomeranz: That’s great. What exactly is the monthly budget to live here?
Kathleen Peddicord: I would propose about $1,225. That seems like a very specific number. Of course, everyone’s budget is going to be different, but the point of these … and also they’re relative. In Kota Kinabalu, we talked about $850 per month. Here we’re talking about $1200. I tend to try to hedge $1200, $1300, but when we put a fine pencil on this, a fine point on this, we come up with $1225 a month.
Steve Pomeranz: Okay, that’s still pretty cheap. What about the number six counting down on our list of eight is Barcelona, Spain. That’s a surprise.
Kathleen Peddicord: Barcelona is a great city in Europe and very affordable. The big advantage right now that Americans have is the strength of the dollar versus the Euro. That’s been moving lately in the other direction, but over the past couple of years, we’ve had such a dollar advantage in Euro land and that makes a lot of interesting European destinations that historically, most Americans would write off as too costly, much more affordable. The budget I had proposed for Barcelona is about $1600 a month.
Steve Pomeranz: Well, a few months ago, the dollar to the euro was about…it got as low as about a $1.05. It’s now $1.17, so I guess you can kind of inflate those by maybe about 10%. $1600 a person to live in Barcelona. Close to, I mean you’re in Europe, you’re close to all these other wonderful places in Europe.
Kathleen Peddicord: Exactly, exactly. That’s one of the big advantages of being in Europe, it is a relatively small region and there are lots of low-cost ways to move around. Low-cost airlines, train, etc.
Steve Pomeranz: That’s wonderful. All right, place number five that’s nowhere near Europe and I don’t know if I can say this properly either but I’m going to try, Chiang Mai, which is in Thailand?
Kathleen Peddicord: That’s it, yep, Chiang Mai. That’s another top pick in Asia. Like Kota Kinabalu, it’s very affordable, $1,000 a month. Again, that’s the big advantage of this region. Chiang Mai is also more developed as an expat destination, as a choice for foreign retirees and other expats, then Kota Kinabalu. In Chiang Mai, you’d have a higher standard of services and more company. Like-minded, foreign expat company.
Steve Pomeranz: More people that speak English as well.
Kathleen Peddicord: Exactly, exactly.
Steve Pomeranz: Yeah, that’s important. What about healthcare in Asia or in this particular place?
Kathleen Peddicord: In Thailand, it’s excellent and in Chiang Mai, specifically as well, there will be great facilities. I have a couple of very good friends, they’re retirees who live most of the year in Chiang Mai, and they talk about the excellent healthcare they get and how personal it is and how caring it is. The way that we think of healthcare back in the 1950’s in the United States, and in the United States, of course, this is a hot topic, healthcare. In certain parts of the world, it’s just so far superior, frankly, the quality of care you can get and the cost is a fraction. My friends who live in Chiang Mai, they talk about seeing a doctor for $10 or $12, and a doctor who speaks English.
Steve Pomeranz: Yeah, that’s pretty special. For the retirees who have to consider health concerns as a pretty big part of their decision, something like this might work for them?
Kathleen Peddicord: It would for sure. That can be one of the big advantages of moving to another country. You know, there are pluses and minuses as with everything. Your US health insurance isn’t going to travel with you, so you’ll need to either invest in some international or local health insurance or, like my friends who live in Chiang Mai, consider going without health insurance at all, which to most Americans sounds like a terrifying, crazy idea. “What do you mean have no health insurance!” When a doctor’s visit costs $10 and a hospital stay costs $70 overnight stay for, example, why would you insure against that cost?
Steve Pomeranz: That’s exactly right. All right, we’re moving on. Now I’ve heard of this country but I haven’t heard of this particular part of the country. Santa Familia Cayo, Belize. Belize.
Kathleen Peddicord: Yeah, I’m a big fan of Belize, and most people know its cays, its offshore cays in the Caribbean. It’s little Caribbean islands including Ambergris Cay, which was the location for a series of Survivor and Temptation Island—I think it was called—episodes. It became very well-known because of that, but Belize has another very different face inland in the mountains on the mainland, which is rain forest and rivers and very undeveloped, back to basics. This is a place to go to unplug and disconnect from the rest of the world, whereas Belize’s Caribbean face is quintessential Caribbean. It’s like what you’d expect of the best of a Caribbean destination, which is great. If that’s what you’re looking for I think Ambergris could be a great choice too, but Cayo in Belize is for someone who’s looking for a more rustic, basic, maybe even off-grid kind of lifestyle.
Steve Pomeranz: Okay well, when you mention those TV shows, I hope you’re not talking about Naked and Afraid because that’s a place … Those kinds of places I wouldn’t want to live. How much is the cost to live in Belize?
Kathleen Peddicord: In Cayo, I’m talking about $1200 a month.
Steve Pomeranz: Okay, not too bad. All right, you talked about Nicaragua having a troubled history. All right, let’s count down to number three, Las Terrenas, Dominican Republic.
Kathleen Peddicord: Yeah, this is a great Caribbean choice. I mentioned that if the Caribbean is the lifestyle you’re looking for, Belize’s Ambergris Cay could be a good choice. The other location in the Caribbean I would recommend would be Las Terrenas. This is, again, everything you want from the Caribbean itself. White sand, beautiful blue water, swaying palm trees, water sports, and all of the coastal bars and restaurants and that kind of beach lifestyle, but what makes Las Terrenas really interesting, I think, is that it’s all of that typical Caribbean, but also it has French and European undertones.
Steve Pomeranz: Yeah.
Kathleen Peddicord: Starting about 40 years ago, this little part of Dominican Republic was settled by some French, who in the 40 years since, have attracted lots of other French, and there’s a sizeable French community here, so French is spoken commonly on the street. Some signs are in French. People kiss on both cheeks in greeting, you’ll find lots of good French restaurants, a great bakery with great French baguettes, for example. So, to be in the Caribbean but to have this French flavor is, I think, very cool and unexpected in that part of the world. Then again, Las Terrenas is on the list because it’s really affordable. Some places in the Caribbean are great, much more developed than Las Terrenas would be and much more expensive. The budget I propose for Las Terrenas is about $1250 a month.
Steve Pomeranz: Okay. All right, you talked about a troubled area before, we were talking about Nicaragua. Now Medellín, Columbia also has a troubled history. We’ve got about a minute left and we definitely want to get to number one so, Pablo Escobar is gone and the city has changed, I gather.
Kathleen Peddicord: Exactly. It’s safe and beautiful and welcoming and I think that you just have to go to see it to believe it because it really is one of the nicest cities you’ll ever visit. My budget for living in El Pobado, which is kind of the best address in Medellín, is $1650 a month.
Steve Pomeranz: Wow, right. Now number one with a bullet, the best place to live, the least expensive, and I guess the best highest quality. I don’t even really know if I can say this word but it’s Calvario Algarve, Portugal.
Kathleen Peddicord: Calvario Algarve.
Steve Pomeranz: Okay. I was close.
Kathleen Peddicord: It was close, it was good.
Steve Pomeranz: Let’s just start with Portugal. What’s so special about this place?
Kathleen Peddicord: Portugal is the unsung jewel of Europe. Americans thinking about going to Europe think about France, Italy, maybe Spain, maybe Ireland, which is today, pretty expensive. Few people think about Portugal. It’s kind of ignored, which I think has benefits. It’s less developed, it’s less crowded, it’s less touristy, and it’s way less expensive as a result of being kind of ignored. It also has a beautiful and very long coast line, the best weather in Europe, the best beaches in Europe, more sunny days than any other place in Europe and it has, along this long Algarve coast, lots of really interesting, and sometimes historic, going back to the middle ages. That’s the other thing, you’ve got this beautiful, coastal situation with centuries of history behind it. Calvario is a great beach town that has … It’s kind of an upper-crusty, an upscale beach town, which is great from an amenities point of view on services, but at a bargain price for anywhere in the world to be thinking of a high-class beach destination. The budget I propose is $1,150 a month.
Steve Pomeranz: That’s amazing. These are amazing amounts considering what it costs to live in the US, and from the way you describe it, which is really beautifully…these sound like incredibly attractive places to live. My guest is Kathy Peddicord and, Kathy, what website can people reach you at?
Kathleen Peddicord: At liveandinvestoverseas.com. I do a free daily e-letter and they can sign up and that’s a great way to start thinking about these ideas.
Steve Pomeranz: Okay, and don’t forget to hear more about Kathy, to hear this interview again, and to even see this transcript or a summary of this interview, don’t forget to join the conversation at stevepomeranz.com. Thanks so much, Kathy.
Kathleen Peddicord: Thank you, great to talk to you.