IL Postcard

Be Aware of Long-term, Fundamental Trends

Date: 11/22/2008

Saturday, Nov. 22, 2008

Dear International Living Reader,

During the quarter of a century that we've been publishing International Living, we have seen booms and busts almost everywhere. 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.

The point is 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—especially big, long-term trends. 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 is 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. 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.

If you go outside the U.S., rich people in Europe and Asia want beautiful places by the sea, too. 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.

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. There are 3 billion Asians who are getting richer all the time, and they, too, want brand-name properties. They want an apartment in Paris, or in London, or in Rome.

People all over the world want to be in these places—and there are precious few of them. That's why they have gone way up in price, and quickly.

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

Buy What You Like

This brings me to one more point I want to make: 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.

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 onto? Something you want to pass on to your children? Those are the kind of questions I ask myself, and that I recommend you ask.

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

Despite the problems.

Don't Be Afraid to Open the Door to Another Way of Life

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.

Reading International Living can certainly help you make the final decision...the where. The idea behind International Living is that you have a lot more choices 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 is 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.

Bill Bonner
Founding Publisher, International Living

Editor’s Note: This article was excerpted from a speech that Bill Bonner gave at the 25th Anniversary Live Overseas Conference in San Diego in March 2005. At next year’s Ultimate Event—to be held in Quito, Ecuador—we’ll tell you where you can find the best beach-side properties as well as city living in our favorite parts of Europe and Latin America. You’ll find more details here.

Remember, too, that you can try France: The Owner’s Manual for only $2.95… but hurry, this test-drive offer is only available until next Saturday.