I am retiring to Peru - TE AMO PERU!

[JimmySTLOUIS]

or maybe not

Here is my crazy plan. If there any bond traders on here I would love some feedback.

I need about $1500 a month to live in Peru and have a maid etc. JLO and I would like to have kids and I am need to get going on that asap. So "retiring" to Peru is my idea. I hvae very little family in STL and I would want some help with the kids etc.

I have enough money (today) to generate about $1400 a month if I invest the cash I have in high yield bonds. Junk Bonds if you will. I can build a bond ladder that goes out about 25 years. The bonds are rated in the mid B range and as each bond matures I would re-buy new bonds. The first bond would not mature for 5 years.

Inflation is the kick in the pants.
To keep inflation in check I would keep my house and rent it out. It would be paid off in 10 years and then I would have additional income that would keep up with inflation. This would be along with the $1500 a month.

The risk comes in if the bonds default. Also if the house is vacant I would make the payments out of the bond income money and be real poor that month or so.

I was hoping one of you guys might have some ideas on this.

TE AMO PERU!!!

jim

[Patrick]

I don't think an all bond portfolio is your best bet for long term income generation.  I'd suggest doing some reading.  William Bernstein's "Four Pillars Of Investing" is a good start.  I also like his "Intelligent Asset Allocator."  In terms of risk adjusted returns, neither all-equity, nor all-bond portfolios are best.

[Brainiac]

Jimmy, keep us posted as this develops, please.  Red Clay and I have talked about this from time to time.  What area will you settle into?  Are you going to buy or rent?  Are you considering starting an export business?

[JimmySTLOUIS]

Red clay and I have talked about this (for hours) but we are just dreamers

there would be a lot of risk with this plan - I need a real deal corp bond expert to review it

I already more or less own a 4 family bldg (in Lima) and a mini van - so the housing and car is in place

It might be just a crazy idea, but then again it might be a crazy idea that works

TE AMO PERU!!!

jim

[Brainiac]

One thing you'll never hear about but you absolutely must have is building security.  Some friends of mine lived in Peru for 15 years, and they became the favorite target for burglary because they were gringos.  They tell stories about people dropping fishing lines over the wall trying to snag a bicycle or whatever toys the kids left on the lawn.  You might want to consider paying for your own serenazgo as part of your security plan.  My friends' landlord did just that and my friends also had 2 dogs.

Hmmmm, you bought a minivan?  Going to start your own combi business?  jajaja

[Red Clay]

Hmmmm, you bought a minivan?  Going to start your own combi business?  jajaja

Don't laugh, he did mention a version of the combi business aimed at traveling Gringos, can't divulge any more info than that. 

[Brainiac]

The Gringo Combi?  Hhhhmmmmm...could be workable.  I think the money's in alpaca products: cheap in Peru, but expensive here.

[pan de bono]

no [snip]! why are you retiring in peru? why not brazil or colombia or florida?

[michaelb]

no [snip]! why are you retiring in peru? why not brazil or colombia or florida?

If I'm not mistaken, that's where his wife is from.

[Montrealer]

You can survive safely in Peru on $1500?  Are you sure that might not be a lowball figure?  I know most things in Peru are much cheaper than than the US, but not so much the day to day expenses.  Living in Colombia, my grocery bill hasn't really changed, or my clothing bill.  As well as leisure money.

There's one thing that is survival, but another one is called living.  Especially if you and the Mrs are planning on having children in the future, those expenses are going to get even higher.  I know Peruvians are able to do it on alot less, but I'm assuming you live somewhat of a decent lifestyle in the US and will not want to lower those standards too much.

Just something to think about.

As for me, I try to live off about 60K a year, and I always cheat and my savings every month and extra thousand or more, and I don't live too lavishly.

Best of luck if you do decide to go for it.

Monty

[Brainiac]

I had a chance to work in Peru for $800 US/month in 2002 and I almost took it.  I could have lived very comfortably: 2 bdrm furnished apt, cable tv, ocean view, good security.  Daily living expenses ARE cheap in Peru.  I believe the average wage is around $300US/month, so a little goes a long way.  It becomes an issue when planning for large purchases, travel abroad and retirement.  If Jimmy can keep his income at $1500US/month, he and his family can live like an american is accustomed to.