An Interview with International Man Jeff Berwick
- Details
- Category: IM Interviews
- Published on Wednesday, 06 April 2011 23:19
- Written by International Man
Originally from Canada, Jeff Berwick is a quintessential International Man who now spends the bulk of his time in Acapulco, Mexico. He was an early pioneer of the Internet and set up his first web site StockHouse.com back in 1994, just in time for the great dot-com bubble. Many of our Canadian readers will probably know the name - it's still the most visited stock site in Canada.
He divested himself of the company back in 2002 and has moved onto other projects, including a hotel and rental property management business in Acapulco, as well as being the publisher of an online investing trend newsletter called The Dollar Vigilante.
International Man: Welcome Jeff. Great to have you with us. Why don't we start with a little bit of your background.
Jeff Berwick: Well, I'm 40 years old now. I grew up in Canada, in the Northern most major city in Canada called Edmonton. It has a hockey team and is where Wayne Gretzky comes from - so that's how some people might know it. When I was about 20 years old, I moved to Vancouver which is a lot warmer. In Edmonton, it can be minus 40 for weeks on end in the winter. Minus 40 is the same in Celsius and Fahrenheit. So I moved to Vancouver where it's quite a bit warmer - a lot rainier, but warmer.
In 1992, after arriving in Vancouver, I started working at a bank - I wanted to get involved in sort of the money side of business, whether it be stocks or banking or investments.
Around 1994, someone at the bank came up to me and said, "Have you heard about this internet?" And I said, "No, what is it?" And he said, "Well, they basically connected all the computers together." I basically dropped everything I did, ran home, got on it, and said, "Okay, what am I going to do on this thing - I've waited my whole life for this."
Basically, I was always a computer nerd. Ever since the age of about ten, I had my own computer. That was back in 1980. My first computer was an Apple 2+ Clone, which I begged my Grandpa to buy from Vietnam and I had to build myself.
By the time 1990 rolled around, however, I was beginning to get a little bit bored of computers because they really hadn't developed that much. I kept saying that they should really try to connect the machines together. Now they had.
I was into stocks at the time, so I started up a website called StockHouse.com. Back in 1994, you couldn't even get stock quotes on the web. There was hardly anything on the internet at the time. So I thought I'd start up a site where you could get stock quotes.
It took off quite quickly because it was the only place where you could get Canadian stock quotes at the time. After a few years, it really grew and I got swept up in the dot.com bubble. By 1998, the little company I had started out in my house was worth about - on paper anyway - 250 million dollars - with 300 employees in eight countries around the world. And huge, massive expansion plans. Then, in 2000, it all fell apart when the tech bubble burst. Literally overnight, I had to layoff about 90% of our staff and just roll back everything.
By 2002, I was a mess. I had gone from being some guy who started a little website out of my house, to being a multi-millionaire, to losing a lot of my theoretical net worth within a few years.
I decided I needed to step away from this whole thing. I had been working on it for about 8 years - literally 18 hours a day, seven days a week. I was so stressed out that I could barely even walk up stairs anymore. I was only about thirty years old at the time.
So I sold the company. I still sat on the Board of the company till 2006, but for all intents and purposes, I was out.
After spending a year getting back to normal, I decided to look into what caused the dot-com bubble and its crash, because I had gone from nothing to huge, and then to almost nothing again in a few years. So I spent a lot of time just searching, reading and traveling. That's how I first found out about Doug Casey.
Doug Casey was one of the first writers I read on the internet who talked about free markets and how the government messes everything up. I went down that path and I found things like Austrian Economics and it explained everything that happened.
I never had anyone explain to me what happened before. People would say, "Oh, it was just a bubble!" Yes, well, why was there a bubble? What is a bubble? Why did it pop? No one had any answers to that. (And they still don't unless they understand Austrian Economics and things like free markets and libertarianism)
After that discovery, I spent a number of years just traveling the world. I decided to buy a sailboat and travel the world from port to port. I had no experience but learned fast, only to sink it a year later in bad weather.
After getting back on land, I grabbed a backpack and continued traveling - virtually non-stop - for the next few years, eventually settling in Acapulco, Mexico.
It was important to me to see the world through my own eyes. After visiting a few countries, I realized that nothing is how you think it is when you just read what they say in the mainstream media, listen to government travel alerts or anything like that.
And that very roughly is my story.
IM: Very interesting. Can you tell us a little bit about the steps to internationalization you have already taken, be it financial, second citizenship, residence, etc?
JB: I prefer to stay vague about these things because you never know who is listening.
I really consider Doug Casey a mentor and one of the things that he's said - and I'm paraphrasing here - if you have the choice, you want to set up your life to be able to live in a place, but just be a tourist there. Countries always treat tourists really well.
You also want to be a citizen of another country, but you don't really want to be there too much. You want to keep your business and money in different countries and basically keep them all separated.
So that's sort of how I basically set up my own life.
I still have a Canadian passport and I'm working on getting another passport. I'm a resident right now in the Dominican Republic. And I currently live all over the place. I say I live in Acapulco, but I really still live out of a suitcase.
I have a business here in Acapulco that renovates and sells condos and then rents them out for the owners. As a side note, that's actually a really interesting venture that we can maybe talk about a little bit later. It's an excellent way to start a business with virtually no capital. You end up basically owning your own hotel.
When I come here to Mexico, I'm just a tourist. The great thing about Mexico is that if you enter with a Canadian or US passport, you get a six months tourist visa. That works out perfect as I'm always traveling anyway so I'm never here longer than six months.
IM: What do you like best about the international lifestyle?
JB: I don't even think of myself of having an international lifestyle, but that's I guess how a lot of people would think about it.
The world is a big place - it's small but big at the same time. We just have a short lifespan here on this planet - anywhere from a few years to eighty or ninety - at least for most people. To live in just one place your whole life is pretty scary to me - especially Canada. Canada is another fan of socialism up there. It's very hard for me to even spend time in the country, just because you meet all these people who tell you how great the free health care is. You just have to bite your tongue - you know it's not free but they don't get it.
A lot of people have this misconception that a lot of the world is dangerous. I've been to almost 100 countries now and that simply isn't the case… If someone were to ask me which places are the most dangerous, I would probably have to say, the US and Canada.
I once met this woman in Aruba. I was having one of those Japanese dinners - where they cook in front of you - with a bunch of other people. There was this woman, who was from New York City, and she said to me, "Oh, so you've traveled to almost 100 different countries, you must have just some crazy, scary stories." And that question took me aback because I never thought about it that way.
So I sat there and I thought, you know, I don't have one crazy, scary story. And she said, "Oh, you must have one. Think harder." And suddenly I remembered two different stories I had completely forgotten. Both times it was in NYC. She thought I was joking.
Unless you're going to parts of Afghanistan or such places in the world that the US government has really destroyed, the world is a really nice, happy, easy-going place. The hardest places in the world for me to live are places like the US, Canada, or Australia. The really western sort of Anglo-Saxon countries. They are so uptight. No one is really friendly. Their whole life seems to be around work, but no one ever seems to have enough money because it all gets taken away by taxes.
There are probably twenty or so countries I'd live in before the US or Canada - including Mexico. I say Mexico because, to this day, it is the safest and freest (by far) country in North America.
This whole drug war thing is an issue but it's caused by the US government and the anti-freedom drug laws. If it wasn't for that, Mexico would be paradise on earth. Many of these problems you hear about are centered in the north. There is one town on the border called Juárez that sounds pretty crazy and probably a place to avoid. But overall, it's beautiful.
I consider the country to be safer than most big US or Canadian cities. Of course, it depends on which part of the city you live in and that sort of thing.
Not many people know that Acapulco is a big city of almost 800,000. It's also about 500 years old. Some early global trade came out of here. They used to run Spanish galleons from here to the Philippines. It's got an amazing history, tradition and culture.
Lately, it has had some drug problems, but I have never seen anything or heard of anything in the part of town where I live. I live more in the tourist area. A few days ago, I visited another part of town which looked like a more dangerous area - I don't think as bad as some ghettos in part of the US. Chicago has a horrible violence problem and yet Americans still go there.
It's just the media focusing on what they want to focus on. They want to make Mexico look scary and that's what they're doing. People here don't talk about these things.
The world is not scary at all. It's crazy to allow such fear to stop you from traveling. The amount of benefits it offers you in terms of education and how you think is huge.
Living in one city, or one town, or one country for your entire life tends to make you very closed and concerned with things that don't matter.
IM: How did you end up setting up your primary home base in Mexico?
JB: When I originally started traveling on my sailboat, I spent quite some time traveling through Mexico. I spent about six months just getting through the country's west coast because I’d stop at every city and town. I loved it. The Mexican people and the lifestyle down here is just amazing. It’s currently about 30 degrees Celsius (85 degrees Fahrenheit), I look out my window and see the bay, palm trees and tropical birds outside of my window.
My maid just came in, a service that’s included with the condo fees in the building I live in. Daily maid service doesn't cost much compared with where I came from. She usually brings some mangoes from her tree at home.
Anyway, back to my story. So I spent about six months going from harbor to harbor and after my boat sank in El Salvador, I backpacked the world for about four years. At the end of it all, I was exhausted. I had traveled completely spontaneously, literally just going to airports and saying, “What’s your next flight.” Or I’d meet someone and they’d say we’re going here and I’d just go with them. It was amazing. And to travel that way, that’s the way to travel.
I love it when people make plans for vacations a year or two years ahead of time – and it’s all screwed up. You can’t plan the world. You just have to go with the flow and not try to make it all fit into a schedule. That’s just not the way life works.
Eventually, towards the end of my travels, I started looking for a place to live for a while and get back to being healthy – proper food, going to the gym, and so on. If I remember correctly, at the time I was in Cambodia. By then, I had already been to 80 countries and started thinking about which ones I liked best.
Two came to mind: Thailand and Mexico. I had a crazy Thai girlfriend in Thailand for a while and I wanted to get away from her, so I chose Mexico. And specifically Acapulco, because it has all the amenities of a tourist town without really being a tourist town.
Places like Cabo and Cancun were literally built for tourists fifteen years ago. Before that, there was nothing there.
As I said earlier, Acapulco is a 500 year old city, with a lot of culture and mix as well.
For example, my girlfriend here is one quarter Filipino, one quarter African, one quarter Spanish and one quarter Mexican native. And that’s fairly normal for this part of Mexico because of that old Spanish trade four hundred years ago.
A lot of Asians came over – there are a lot of Filipinos and a lot of Chinese too. They even celebrate Chinese New Year here. I believe most of the Africans originally came over as slaves, which makes for a lot of very dark skinned African type people. There’s even one town nearby that’s just French people. I don't know how or why they are here, but it's an interesting place.
For those reasons, I decided to buy a place and live here for a while. That was about three years ago.
IM: Would you recommend your country choice and what kinds of people would that be a good fit for?
JB: Well, definitely I would recommend it for people like me. I love it here. But it's not for everyone.
For example, if you’re the kind of person who wants to see perfectly paved sidewalks, perfectly manicured lawns and everything running on time, you won’t be happy here because you won’t see that. They don’t really care about stuff like that here. They care about life and being happy.
They work hard here but it’s not as big of an issue as in places like Canada and the US, where work is one of the biggest priorities. It’s just a different way of living here. They work to live. Not live to work.
And for those potential expatriates, don’t try to force the style of living you’re used to on them. It won’t work. I see that all the time. Americans or Canadians come here and complain that their taxi driver was supposed to be here at 3pm and it’s now 3:10pm… They don't think that way.
The ones that do the best are those that try to assimilate.
IM: How important is it to know the local language before you arrive – where you’re now.
JB: It helps but is not necessary. You can always get by almost anywhere in the world without knowing the local language because English is the international language and someone always knows it. However, if you really want to get into doing something like business, that’s when you’ve really got to start picking up the language, otherwise you just end up getting ripped off all the time.
When I first came here to Mexico, I didn’t speak any Spanish. Now I speak well enough that I can actually do business and it makes a big difference.
IM: How cheap is the cost of living in where you’re now vs. Vancouver? What would a nice dinner with wine cost for you and your girlfriend?
JB: Mexico isn’t as cheap as some people think.
You can get by if you just want to eat at little restaurants. In that case, you can definitely eat a good meal with a glass of wine for $5 or $10. However, at a restaurant last evening, I spent over a hundred dollars for my girlfriend and me. That included two glasses of wine, an appetizer and dessert. There are many such restaurants here and you can spend lots of money if you want.
You can live quite cheaply here though. Labour is really inexpensive. For example, I’ve got a maid who works in my place for an hour or two a day and it costs almost nothing. Things like fruits and food that you buy at the farmers’ markets is also quite a bit cheaper.
Electricity is about the same as you would pay in Canada. A car, gas and so on is basically the same.
You can go to the Walmart here and will spend as much as you would at the Walmart in Canada or the US.
For those of you who are looking for a really cheap destination, places like Argentina, Cambodia or Paraguay are better options.
My recent trip to South America took me through Argentina, where we went to so many restaurants and had really world-class meals for like ten or twelve dollars. And it was world-class.
IM: Was it difficult for you to set yourself up in Mexico, specifically buying property?
JB: It’s all fairly simple. Most countries in the world don't make it too difficult. They want to accept your money by letting you buy their real estate.
Of course, there are some places that get xenophobic – Thailand, for example. They don’t really allow foreigners to buy property. But there are always ways around it. As you know with anything that has to do with governments, the free market always finds another way. People who want to do things will always be able to do things.
Here in Mexico, they do have something sort of similar. They don’t allow foreigners to officially buy property within something like 50km / 31 miles off a shoreline, but you can get around that with something called a “fideicommiso” or a “bank trust.”
I have a condo here right on the beach, which didn't cost very much. The property taxes for this condo come to $150 dollars per year, which is much less than people in the US or Canada would pay.
The government realized that they had literally hundreds of thousands of foreigners buying property in Mexico and wanted to cash in on more than the small amount of property taxes. They needed to keep the taxes low enough for the locals to afford, so they just started requiring the foreigners who wanted to buy within 50km / 31 miles of the ocean – which is most – to get a bank trust. These trusts cost about $500 a year and can be done really simply. It's just another way for the government to make some money.
For example, my company actually renovates and sells condos. It’s called acacondos.com. Our company helps you buy property without even coming down. [Editor's Note: International Man recommends you always do proper due diligence before investing in properties outside your own country, including a proper visit]. We set it all up for you, including the bank trust.
You can find services like that in almost every country that you go to nowadays. Places that don't offer such services present great opportunities for entrepreneurs. You can set up a business catering to Westerners that want the benefits of the area but still be able to conduct business as they are used to.
I started this particular business just for the fun of it. I was sitting here, looking at these condos on the beach that were available for under US $60,000 – I figured I could renovate them and sell them for a lot more. Then, since most owners wouldn't live here all year round, I would rent them out for the owners as needed in a “boutique hotel concept.” All the condos are in the same building and I renovate them to all look similar.
It's great for someone who wants to just go somewhere and start their own business. A lot of people talk about starting up a Bed & Breakfast, and while that’s also not a bad idea, you generally need a lot of upfront capital.
With my business, I had to basically put no money down. I found some condos that were for sale. I offered them for sale myself on the internet – because the sellers didn’t even know how to do that in English. They might have them in Spanish sometimes, but never in English. Very quickly I sold a few and I said to the new owners, “I can renovate them for you.” And they were happy to have me do it.
So I made some money, first on the sale and then on the renovations, without using any of my own capital. After the renovations, I offered to find renters for the times when the owners wouldn't be there, which is great for them. It's another source of cash for me.
That’s how it started and now, with zero dollars down, I have a company that renovates and sells condos. Every time I sell a condo, I add another room in the “hotel.”
You can do these things in many parts of the world – not so in Canada and the US. There you have to get your real estate license to sell the property. That takes a few months. And if you set up a hotel, you need all sorts of licenses.
I've done all this without even setting up a company. I use Paypal and no one here cares. No big government getting in the way.
In fact, that’s one of the big reasons why things are getting so bad now in the US – the government has so many rules and regulations that to start a company and to keep it going is a huge endeavor. Oftentimes, it's not even worth the effort. That’s why you’re seeing a lot of major problems in the US now.
In many areas of the world, they don’t have such rules.
The opportunities nowadays are not in the places they used to be. They used to be in the US, Canada, England and those sorts of places. The opportunities are now in the rest of the world. Latin America and Asia, in particular, have a lot of potential.
IM: Going back to the discussion of your condo projects… because this is one of the questions that people will have… I internationalized myself, I travel the world, but now I have a condo project and have to be a manager. How do you handle that?
JB: With any business that's small like this one, you have to be hands on in the beginning. There are no two ways about it. However, I’ve been doing this now for about a year and a half, and I basically had my girlfriend manage it for me. That was really nice.
We've got about six rooms now and just sold another one or two in the last few months. By the end of the year, we'll probably have around ten or twelve rooms.
But now it’s actually grown to the size where I've been able to hire a manager who will start in the fall and will oversee almost everything. I’ll be almost completely hands off by the end of the year.
It’s the same with any business. Usually you have to be fairly hands on in the beginning and then, after you grow it into a real business, you have some options. You can give it to someone to manage it or you can sell it.
In my own case, I could sell this business once it gets up to 20 or 30 rooms, at which point it will be a decent, real enterprise for a decent amount of money.
IM: How difficult is it for you to find a bank, access cash and have a bank account?
JB: Fairly simple. I just went to Scotiabank, which is actually a Canadian bank with a big presence here. I also have an account with HSBC.
IM: Are there a lot of expats in the area where you’re living and do you hang out with them?
JB: There aren’t a ton of expats but there are a few.
There’s a Canadian-Italian guy who runs an Italian restaurant here in town and it’s one of the best restaurants here. He makes a ton of money, probably about a million dollars a year. His restaurant is always packed.
But do I hang out with them? Not necessarily. I’ve met some local expats almost everywhere I've gone, but I don’t make an effort to hang out with them necessarily. To me, that’s kind of missing the point if you go to these new places and then don’t experience all these new things. I'd rather hang out with the locals.
IM: What’s the single biggest difference between the life you used to live back in Canada and the life you live now?
JB: I don’t see it as being that much different. I’m basically an entrepreneur – so when I was back in Canada, I was always starting up companies. Wherever I am now, I’m still always starting up companies… It's mainly the lifestyle that is different.
Here it’s almost always sunny. I go to the beach here every day. I go for a jog or walk every day. I eat fresh fruits every day. It’s just a very healthy lifestyle. So that’s a main thing. When I lived in Canada, I’d spend a lot of time in traffic and other unhealthy situations.
IM: How often do you return to Canada to visit your family?
JB: As little as possible. Generally now I speak at a lot of conferences, but if I didn’t have to go for business, I’d go less than once a year probably, and only in the summertime, obviously.
IM: What do your friends and family think of you becoming a citizen of the world?
JB: I don’t know what they really think. I imagine they are confused. It's like they wonder why I'm doing this and I think that I couldn't be doing anything else. Almost all my friends and family are almost all still in Edmonton and Vancouver.
IM: Is there anything you miss about living in Canada?
JB: Not really.
One of the reasons why I like it here in Mexico is because you can still get US and Canadian TV this far south through Shaw Direct. You know, I’m Canadian and I don’t hate everything about Canada. I don’t like a lot of things – mostly government related stuff and how people have been trained to believe that all this government stuff is good. And there are some things I like, hockey being one of them. I’ve got my giant 60 inch flat screen here on the beach and I watch the hockey playoffs every year. That’s something I would miss if I didn’t have it.
There are other things you can do. There is something called SlingBox.com. Let’s say you’re living in China but you really want to watch the TV from your home country. You put one of these boxes in one of your friend’s houses where you’re from, and it transmits the television over the internet to wherever you are. If the internet connection is good, it can be very good quality. You can change the channels and everything.
Whenever I go to Canada, I like to hit all the restaurants I love that I can’t get in other parts of the world. Basic things like [fast food place] A&W. I don’t like fast food that much but you kind of miss it after ten years. Or The Keg or Boston Pizza in Vancouver. I usually get quite fat when I go back.
Those are really the only things that I miss. So I don’t really miss much at all.
Nowadays, with the Internet, it’s almost like no matter where you are in the world, you log on, and all your friends are there. It doesn’t feel like you’re living far away from people.
I have a story about that… I happened to be in Vancouver after traveling the world for a few years on a stop over. I decided to walk into town. As I was walking, I saw my friend – we hadn’t seen each other in about a year and we’re like best friends – and we just said “hi” and kept walking. Then, we both turned around and said, hey, I haven’t seen you in about a year. It didn’t seem like it because we talked almost every day on the Internet.
A lot of people feel they will miss their family and friends. With the Internet, it's like you still live down the block. You can still have these connections from long distances.
IM: Many people think they need a lot of money to start traveling the world. In your experience, is this true?
JB: It’s a little difficult to answer this because I sold my internet company before I took off. I wasn’t a multimillionaire, but I had some money. I never really used a lot of it but every now and then I came into a situation where the only place to stay was a Hyatt at $300 a night. In those situations, yes, it’s nice to have some money, because it’s more comfortable.
In general, for someone to leave and live with like 10 dollars in their pocket is challenging, for sure. It is possible, but obviously more difficult.
It goes without saying that if you don't have a lot of money, it's best to go to places where things are very cheap – Cambodia for example. It's no trouble to live there for 5 dollars a day - a hotel room for around 4 dollars and food for another buck or two. It’s unbelievable how cheap a place like that really is.
There are risks. I’m not saying you’re going to go somewhere with no money in your pocket and everything is going to work out fine. But for me, the risk is living in some place you’ve lived your whole life and not learning and not changing and not opening your mind to the world.
A lot of people call me a risk taker. But I wouldn’t go somewhere with less than 20,000 dollars in the bank. I want at least that much as backup. I wouldn’t feel comfortable going somewhere with just a few dollars. I’m sure I’d probably be alright because I’m just that kind of person who always figures things out, but it’s definitely easier with money.
But it’s not like you need A LOT of money. In this area of the world, Nicaragua is probably better than Mexico, which contrary to stereotypes, is generally not that inexpensive. There are a number of places in South America that are also really cheap – Argentina and Paraguay come immediately to mind.
Ultimately, it comes down to doing your research – first on the Internet, but also by going there in person. You'll find the best opportunities by visiting.
IM: If you could go back and do it all again, are there any mistakes you would avoid?
JB: No. I’m sure I have made thousands but nothing really sticks out. I expect to have issues and challenges because of different cultures but I never call them a mistake. It’s almost like a learning experience, it’s something good.
IM: Are you happy?
JB: Oh yeah, definitely. I’ve never been happier.
IM: Any last words of wisdom?
JB: I don’t have too much to say other than just do it. I’ve heard and talked to a number of people who’ve been planning for years and years. To me, that is a little bit crazy because you can’t really plan these things too much
You can definitely plan but more than a few months of research online is sufficient… No matter how much research they do about a certain place, until they've been there, they don’t really know anything. It’s never what you think it is.
Even if you get information from all the best people, it will still be different than making a visit – they have different backgrounds and so you see it through their view of the world. One man’s paradise is another man’s prison.
Canada is that for me. It’s my prison. For many people it’s paradise. But the only way you can ever know is just to get out there.
IM: That makes a lot of sense. Alright, if someone would like to know more about you, how can they find out more.
JB: Right now it’s just DollarVigilante.com – it’s basically a free-market financial newsletter. You can sign up for our free blog if you like. You can see our general content and we write that almost every day. We write about a number of things, including freedom, expatriation, how to invest, how to start up businesses in other countries, and all sorts of things.
Basically the concept of the Dollar Vigilante is to survive and prosper during the coming dollar collapse, which is a big theme that we believe in. And that’s another reason why it’s probably a good idea to get outside of places like the US and Canada for a while and see other areas of the world.
They call some of those other countries emerging economies, but I call places like Canada and the US submerging economies and that’s what we’re going to see over the next few years. It’s probably a good idea to get out anyways.
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