NEWS/BLOG

Costa Rica Presents a Dilemma

It’s hard to talk about Costa Rica without talking about nature. Its varied landscape includes 12 different ecosystems, ranging from tropical rain forests and cloud forests to snow capped mountains. It boasts 9000 types of flowering plants, including 1200 species of orchids, some 850 species of birds and 250 species of mammals. More than 5% of all known species of plant and animal life are found in this small country, about the size of West Virginia.

Nature is what draws travelers and expats from Europe as well as North and South America here. Those who want to live amid the flora and fauna, however, face a dilemma. Should you make a home here knowing that such an action contributes to the destruction of some part of the ecosystem?

The director of sales at one development says, “If we wanted to do the right thing, we would all tear down our homes here, reforest and leave.”

The Tamarindo Preserve is one real estate development trying to have it both ways. It’s a low-density development in the seaside town of Tamarindo in the northwest of the country. A laid back community known for its turtle watching tours, Tamarindo draws visitors and foreign residents from all parts of the world. The Tamarindo Preserve calls for 235 villas and 40 condos on just 8% of a 600-acre parcel of land. Some of the proceeds from the housing will go toward protecting the wetlands and estuary that make up the rest of the parcel.

Increasingly, too, resorts and hotels here try to attract clientele by showing that they can be environmentally friendly. Although 25% of Costa Rica’s land mass is devoted to parks and reserves, the country lacks the necessary money to maintain them properly and enforce the laws to protect them. Developers can play a positive role here.

Trailing Husbands

Your spouse gets an offer of a job overseas and you get to go along. That’s what most people think of when they hear the term “trailing spouse.” But sometimes the spouse getting the job offer is the wife, not the husband. What does he call himself? Well, for some, the answer is “stud.”

Stud or rather STUDS is an acronym for “Spouses Trailing Under Duress Successfully,” a social club for stay-at-home husbands and fathers living abroad. The first chapter was founded in Brussels in 1994 and currently has 40 to 50 active members. The original members are scattered throughout the world. Some of them organized a chapter in London which now has about 40 members.

The guys meet as often as once a week to talk politics, sports, and, just maybe, child-rearing. In Brussels, they play golf and go biking. In London, they have lunches and pub walks as well as golf games.

Mostly they speak English but they welcome speakers of other languages. The Brussels club hosts an annual dinner dance for themselves and their wives. The London chapter invites wives frequently so they can meet other couples where the wife is the working spouse.

For more information, check out www.belgiumstuds.com and www.studsoflondon.com.

Living in the U.K. Just Got More Costly

“Non Domiciles” or non-doms are what U.S. expats living in the U.K. are called. Like other U.S, expats, they’re facing increased U.S. income taxes because they cannot offset their income by deducting their living cost abroad. Now they’ll have to pay an additional fees to the U.K. and these charges cannot be used to offset U.S. taxes.

Under the new law, the U.K.will charge an annual £30,000 (about $59,000) flat-rate fee on non-doms who have had this status for seven years. This includes all those living in Britain who declare that their home is in another country. The U.K. is not calling it a tax and the U.S. isn’t recognizing it as such, which is why it can’t be used as a tax credit in the U.S.

Until now, non-doms have not been taxed on their worldwide wealth, just on the money they earn in Britain or bring into the country. This has made London a mecca for the very wealthy and for high earners, who have lived here virtually tax-free, at least as far as U.K. taxes go. U.S. citizens are taxed on their worldwide income.

Many of these non-doms are investment bankers working in “the City,” London’s financial district. All in all, some 115,000 currently have non-dom status. Only about 10,000 are estimated to be from the U.S.

In today’s global economy, multimillionaires and billionaires are minted every minute. Some are from the BRIC countries - Brazil, Russia, India and China - but many are from France and Germany as well as elsewhere in Europe, Latin America and Asia. London has been a favorite destination until now, which is one reason London real estate has become so expensive.

For the richest of the rich, paying the fee won’t be a problem. However, the new rules will most likely mean that many of those with wealth will chose to live and work elsewhere. In addition, private banks will probably move their income offshore and London will cease to be the financial center it is now. It’s not just non-doms who’d like to see the new laws repealed.

Foreign Stocks, ETFs and the Descent of the Dollar

The shrinking dollar makes moving from the U.S. to many other countries expensive, as would-be expats know.  Investing in foreign markets, however, produced highly impressive gains during most of 2007, but some of those gains result from how much the dollar has lost against foreign currencies.

For example, the greenback lost 9.6% against the Euro and 16.7% against the Brazilian real in 2007. Other currencies that have made investments look good are those of Canada and Australia. If the U.S. dollar becomes stronger, investments in ETFs or stocks of these countries will decrease in value. But is the dollar apt to show strength any time soon?

If you think the dollar is about to make a comeback, you might want to invest in counties where the currencies don’t move as much against the dollar. Some currencies showing stability against the dollar include the Chinese Yuan, the Hong Kong dollar and the Mexican peso.

Many experts currently expect the Euro to continue its gain against the dollar.  From 2001 through 2007, the greenback has declined at a compound rate of over 7% per year against the Euro. There’s an ETF that allows investors to profit as the decline persists, Rydex Euro Currency Trust or FXE. For the year ending January 31, 2008, it had increased in value 17.9%.

As the dollar dips, commodities rise. If you’d like to participate in profits in grains such as wheat, soybeans, corn, etc., then consider PowerSharesAgriculture Fund or DBA, up 44.77% for the year ending last January 31.

Whatever the investment, do your own research.