If you have ever considered relocating to or investing in Panama, and you do not know, or at least know of, Bob Adams, you are behind the curve. It is impossible to sum up in one sentence who or what Bob is, but suffice it to say he is an American who has lived and worked all over the world for many years, with foreign aid programs, humanitarian agencies and international businesses, all dealing with economic development. As such, he has his finger on the pulse of global economic news, and his eye on the implications of world events.
Bob is best known to expats, retirees and internationalists as the creator of Retirement Wave, a website dedicated to Panama. I met Bob in 2008, when my husband and I were in Panama City, considering the pros and cons of taking up residence in Panama. We had encountered Bob's web page while doing our research on the country, so we gave him a call and had dinner together. We live in David, Panama now, and still rely on Bob's posts at Retirement Wave for analyses of current events. When the Managing Director of IM asked me if I knew anyone to suggest for an IM interview, Bob Adams immediately came to mind, and he responded positively when I wrote to him about answering a few questions.
Here is Part One of our interview with Bob Adams, in which he explains why he chose Panama, and introduces us to Retirement Wave. He also discusses retirement issues, and concerns of the "Baby Boom" generation.
Demystifying Panama - Part 1
International Man: Tell us a bit about yourself.
Bob Adams: I'm a 66-year-old American who has spent almost all of the last 45 years working around the globe, primarily as a consultant to aid agencies, private businesses, and non-profits, but also as a project manager. In 1996, I pulled out my many passports and counted 36 nations where I had worked. I have added more since then, but I don't bother counting anymore. I got a reputation as being analytical and telling it like it was (aka, tough). That hurt me sometimes in finding follow-up work, especially with government bureaucrats, but it meant I could sleep well at night. I have implemented or consulted on a wide range of projects from agriculture to health to business development, but they all fall under the category of "economic development". I have been published in a number of publications, been interviewed on CNBC and Reuters Television, but am probably best known, in terms of journalism, for my four articles and a guest editorial published at Barron's, the weekly sister publication to the Wall Street Journal.
IM: Why did you choose Panama as your base of operations during retirement?
BA: For starters, I am not retired and have no intention of doing so until I either have to or really want to, but probably because I have to. I enjoy helping retirees, but I enjoy working too much to give it up (one of the fall-outs of being a serial entrepreneur).
I chose Panama for a host of reasons that can be summarized as follows:
Reasonable proximity to the US where I still have many ties, although I avoid it as much as possible.
No history of civil war, no "far right" militias, no "far left" guerrillas, a functioning democracy with freedom of the press, religion, speech, assembly, and so forth.
No military and no need for one. I have worked in too many nations with militaries who have never needed to fire a shot outside their borders, so they're put to work domestically. Plus they suck up taxpayer dollars. Not a good idea. I'm fine with police. They're enough.
A country whose economy was not dependent on seasonality (agriculture and tourism are good examples). They're fine, but they should not dominate.
A country with a steady source of national income that can weather (as Panama did) a severe economic shock like the financial crisis up north. We call that steady source the Panama Canal, but it also includes the world's second-largest free trade zone (only Hong Kong beats us out), plus a number of other, lesser-known factors. Panama has become a regional hub for logistics, transportation (air as well as sea), finance, communication and more, as well as home to dozens of international corporations who have set up their regional headquarters here.
A country that welcomes foreign investment, foreign business, and foreign residents, rather than repel them. All this has been true and remains true in Panama.
A country whose GDP is growing substantially faster than its population. If the "pie" grows fast enough, everyone's slice can grow too, even if the income is not equally distributed, as it never is. Panama has led the Western Hemisphere in average annual GDP growth for several years. Last year's 10.6% was not our highest, but beat the heck out of the rest of what I call, the Old World of the North Atlantic (US/Europe), as well as pretty much everyone else. That's more than four times population growth. All signs point to continued solid growth.
- A country that neither unrealistically "worships" America (very few of those left anyhow) nor hates America. Panamanians and Americans have known each other intimately for more than a century. We get along fine.
There's a lot more, but that's some of the main points.
IM: What is the "Retirement Wave"?
BA: I set up RetirementWave.com seven years ago because I found (and still find) too many Panama websites were ridiculously positive (I call them the "Paradise Pixies") or ridiculously negative (I call them the "Boo Birds"). I do all the writing and only when I have something worthwhile to add. I do no advertising or promotion. Ending up with 5,000 members never occurred to me when I started, but such is life. Actually, most of my time is spent answering member emails and talking to them, if they like, when they visit Panama.
IM: Can you describe the services that you offer?
BA: My services are informational. My most popular commentaries are those providing a quarterly update on Panama, including its real estate market. There's a pile of other pages too, but those are the biggest draw.
IM: What makes your website different from other websites that share retirement and expatriation information?
BA: I treat members as I would clients. I tell it like I see it. And I do it without charging them a single penny for membership, allow no paid advertising, accept no fees or commissions, and don't sell books, pamphlets, seminars and so forth. That leaves me completely free to write what I believe. That's probably the biggest difference and it is the foundation for another difference - my independent commentaries.
As I tell my members, I don't care whether you move to Panama or not. It is entirely immaterial to me. You do what is right for you. All I can do is to provide my perspective.
IM: Describe the common concerns you have encountered that Westerners have regarding retirement.
BA: I don't use the old term, "Westerners", any more. It doesn't make any sense now. My members come from all over the world. Americans are the largest group, but far from the only group, and I have quite a few members who do not come from the "West".
Thinking in terms of foreigners (expatriates) without regard to nationality, the common concerns are 1) weather, 2) cost of living, and 3) "getting away from the craziness back home." Each member has his or her definition of what is good or bad regarding each of those three, but nearly all share at least one, if not all three, of these basic concerns.
IM: In what ways are those of the "Baby Boom" generation who are approaching retirement different from other generations?
BA: There are several nations with post-WWII "baby booms", but if you mean the US, on average, they tend to be poor copies of their parents' generation and certainly their grandparents' generation. They have been sucked into the "entitlement" mentality, including too many who insist they hate entitlements. They mean other people's entitlements, not theirs. But this is also true of many from the years prior to the baby boom. How's that for being blunt?
On the other hand, if they are willing to do the work, they are way ahead of their predecessors in their ability to deal with a change in life. The key is flexibility. Wherever you go, you need to understand that your new nation has no obligation to adapt to you. You have every obligation to do your best to adapt to it, while maintaining those traits that make you who you are. A happy median (or "medium", take your pick) can be found and will be found, if you're willing to seek it.
Boomers who make up their minds to do that do a far better job than earlier generations, probably in good part because they have already moved more than once in their lives, as well as being more likely to have at least traveled outside the US. Money is helpful, but it is not the key. Again, flexibility is the key.
IM: Can you explain to our readers what you mean when you say that "paradise is only for dead people"?
BA: Too many people are looking for some kind of paradise, usually a "tropical paradise," where the local folks will all adore them, the cost of living will be inconsequential, the sun will always shine, and they can spend every evening on their terrace drinking Cuba Libres or Tequila Sunrises, etc. If you want paradise, you will have to wait until you die. In the meantime, do your best to be worthy of it when the time comes, and look for a place where you are happy to live, but cut it a break and don't expect it to be perfect.
IM: How can internationalization enhance one's standard of living in retirement?
BA: This varies greatly depending on the individual's approach, from where he comes, and to where he is going. So I sum it up very simply.
When you move to another nation, you are truly the new kid on the block. You can reset your life. You can live up to your own expectations, not just those of your family, your old friends, your old co-workers, or your old society. It ain't easy. We all have bad habits that can be hard to break, but this gives you a shot at being successful doing it, a shot you are not likely to get in your old home nation. You can start fresh.
IM: You have mentioned that there is a shift underway for people, particularly in the USA. Can you elaborate more about this shift, and is it inter-generational?
BA: One of my firms has done the only professionally-conducted, statistically-valid surveys of the American public on the subject of relocation outside the US, and we have done nine such surveys since 2005, including the latest in 2011. It is the subject of another of my Barron's articles, "The Great Escape," published last November. That article and some of our findings can be freely read at our site, America Wave.
In a nutshell, more Americans are heading toward relocation than at any prior time since we began surveying. Every age group, with the exception of the youngest (18-24), has hit new highs. However, the most dramatic increase has been among those 25-34, much to the surprise of many people.
It was no surprise to me. There is a thriving group of young Americans here in Panama, although they are typically ignored by commentators who think only in terms of retirees or older businesspeople. They are very entrepreneurial and, overall, they have been at least as successful, very possibly more so, than their older counterparts. They have great strengths not as frequently found in older age groups. On average, with the normal exceptions, they are 1) more flexible, 2) work harder, and 3) are willing to live cheaper until they can afford something more. They also network with each other and with their Panamanian counterparts far more frequently than older Americans. They speak better Spanish too.
IM: Can you share the impact that demographics in the West will have on retirees' standard of living as they enter retirement?
BA: I wouldn't worry too much about demographics. I would worry about politics. The impact of demographics is a huge topic in economics, but politics is what should scare you.
IM: What differences are there between the demographics of the "East" and the "West" and how can people profit (or at least lose less wealth) from understanding these demographics?
BA: There is no "East". There is no "West". There is no "First World" or "Second World" or "Third World". Those existed in the 20th century. Too many people still think the world is in the 20th century. To put it gently, they are all out-of-date. Sure, there are remnants of each to be found, but they are not the future, they are the past.
Regarding wealth preservation or increasing it, I stick by what I consider to be the basic concern. I wrote this back in 2008 at Retirement Wave and it still sums it up:
"I moved here, in part, four years ago (2004) because I was concerned that a global recession was on its way and that it could be pretty serious. I live here today and intend to continue to live here, in even larger part, for the same reason. Let me put it this way. If I am standing in the middle of the tracks, as I felt I was in the US, watching a huge freight train coming right at me, ever faster, ever closer, I may jump the in the wrong direction. I may not jump in time. I may feel some of the pain even if I clear the tracks. But I'm going to jump. I have no intention of staying in the center of the tracks. I believe I would have felt the same way had I been living in Canada, Europe or any "wealthy" nation. But neither was I going to jump into some kind of isolation, depriving myself of so much that makes life worth living. I'm not trying to hide. I don't think that's possible. I'm just trying to get out of the center of the tracks."
If you want to preserve your wealth or increase it, get out of the center of the tracks.