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I've long considered becoming an Expat when I retire and there are lot of financial considerations regarding such. I don't see that TMF has a board that is either dedicated to this discussion or that has a strong bias toward such. Might those that visit this board be interested in a focused discussion on:

1. Favorable destinations
2. Tax implications
3. Healthcare as an Expat
4. How to invest as a resident in a foreign country
5. Own or rent and any challenges to ownership
6. Language training

Etc.

Thank you for your consideration.

If there is a board already for this, please direct me to it, thank you.
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I will be subscribing if someone starts it. Of course, it might work better divided into countries.
Or put the countries name in the title which will allow selective viewing.

I know Costa Rica has a ton of Facebook Expat pages.
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If you search over at the Bogleheads web site, they have a wiki and also a lot of threads concerning this topic.

https://www.bogleheads.org/
https://www.bogleheads.org/wiki/Main_Page



Rich
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I'm totally interested in something like htat.
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In reply to all, great feedback so far. Request submitted.

I am barely a novice as it pertains to this topic so I am hopeful that if this new board is approved, those of you with greater knowledge will continue to share your links and resources. If approved, I will create a FAQ that includes those additional websites.

I also like the dedicated country thread idea. I was thinking much the same thing. Perhaps a thread naming convention like "CR: Immigration process" or "CR: how to buy property as a non-citizen"
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No. of Recommendations: 13
I also like the dedicated country thread idea. I was thinking much the same thing. Perhaps a thread naming convention like "CR: Immigration process" or "CR: how to buy property as a non-citizen"

A (now-defunct) financial blogger used to say "Always look at a transaction from the viewpoint of the other party."

The citizens of the country you are in may view you as "that rich non-citizen American who comes here and ruins our country by paying way too much for property thus driving up prices for us, and making all sorts of demands that we should change our ways to accommodate him. He is an outsider. Not one of us. He can't even speak our language very well (or at all)." In any sort of high-stress SHTF situation--earthquake, political unrest, etc.--you might well be looked on poorly.

You will always be looked on as "the other", and will often be viewed as a mark to be fleeced.
In economic terms, you will be rich compared to them, and the natural tendency will be that you can afford to be taken advantage of.

When we were traveled to various places around the world, my wife had a couple of things she looked for. Did the banks have rifle-toting guards standing near the entrance? Did the (upscale) department stores have a bouncer/concierge at the entrance? Did a lot of buildings have bars on the 1st floor windows? How about the second floor windows? Did the grocery stores have their door(s) set up so that when you came in you HAD to exit via the checkout lanes, you couldn't just leave the same way you came in?

That's my rain on your parade. Sorry.
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No. of Recommendations: 9
The citizens of the country you are in may view you as "that rich non-citizen American who comes here and ruins our country by paying way too much for property thus driving up prices for us, and making all sorts of demands that we should change our ways to accommodate him. He is an outsider. Not one of us. He can't even speak our language very well (or at all)." In any sort of high-stress SHTF situation--earthquake, political unrest, etc.--you might well be looked on poorly.

You will always be looked on as "the other", and will often be viewed as a mark to be fleeced.


I have lived in other countries and have never had the issues you list. Then again, I always approach where I live with the idea that I will soak up what the area has to offer, not impose what I am used to on the new location. When we lived in the USVI there was even a bumper sticker I saw that said "We don't care how you did it at home," so I guess a good number of people don't have that attitude.

I would love a board that deals with sharing info and questions on becoming an expat. I don't know that I would do it full time but I sure would enjoy it for half the year.

IP
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No. of Recommendations: 11

When we were traveled to various places around the world, my wife had a couple of things she looked for. Did the banks have rifle-toting guards standing near the entrance? Did the (upscale) department stores have a bouncer/concierge at the entrance? Did a lot of buildings have bars on the 1st floor windows? How about the second floor windows? Did the grocery stores have their door(s) set up so that when you came in you HAD to exit via the checkout lanes, you couldn't just leave the same way you came in?

This sounds like a lot of places in the US....
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I would love a board that deals with sharing info and questions on becoming an expat. I don't know that I would do it full time but I sure would enjoy it for half the year.

That's our plan as well. For us it has to be outside the Schengen area due to the 90-day rule.
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We just spent some time in Central America, cruising the Panama Canal and stopping in several countries briefly. Costa Rica and Panama in particular intrigued me as possible expat sites. One of our Costa Rican tour guides, when asked about American expats, simply said “Too many!”

Isewquilts2
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One of our Costa Rican tour guides, when asked about American expats, simply said “Too many!”

Would have loved to ask why he felt that way. Though in truth, I have some idea. The American tourist abroad has a valid reputation of being loud and flashy, opinionated. Wherever I was people were surprised to find I was American, because I understood how to be part of the culture and blend in. My languages obviously did not hurt. Can't tell you how many times I found myself apologizing for my fellow American's behavior.

IP
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I would be interested as I am living that life. Bob
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I guess I should ask if present expats would be welcome?

My wife and I are two years into living in Thailand. So far it has been much more than satisfactory. It still is normal life, all the tasks, chores, errands and hassles of life are present along with some challenges unique to living abroad. I do find life interesting here and that is a very big positive factor as far as I am concerned, the constant challenge to preconceived ideas, the struggle to communicate I think have been very good for me.
Bob
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I guess I should ask if present expats would be welcome?

Best source of information, IMO.

IP
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That's my rain on your parade. Sorry.

Considering the fact that there are many thriving expat communities in many countries, I don't share your concern.

Hawkwin
Has a big umbrella
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Best source of information, IMO.

Ditto.
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Considering the fact that there are many thriving expat communities in many countries, I don't share your concern.

Y'know, things are okay....until they are not. Ref: Venezuela. Ref: Haiti the day after the earthquake. Ref: Sarajevo ca. 1992

It's all a matter of how much risk you are willing to take on, vs. the upside of being an expat.

You may think you fit in and the locals don't even realize that you are an American. You are wrong. They know darn good and well that you are not one of them. Why would you want to live as an expat in XYZ country? Cheaper cost of living mainly, right? Your money goes a lot further there, and you have a LOT more money than the average local. Do you think that the locals are unaware of that?

At one time I mulled over moving to one of those countries for a few years. Then my wife asked me, "Why do you think that travel insurance covers medical evacuation back to the US?"
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rayvt: "You may think you fit in and the locals don't even realize that you are an American. You are wrong. They know darn good and well that you are not one of them."

I want to be tactful but sometimes posters reveal more about themselves than they do about their intended targets. Psychological projection.
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This would have been a better response:

"The Two Travelers and the Farmer

A traveler came upon an old farmer hoeing in his field beside the road. Eager to rest his feet, the wanderer hailed the countryman, who seemed happy enough to straighten his back and talk for a moment.
"What sort of people live in the next town?" asked the stranger.

"What were the people like where you've come from?" replied the farmer, answering the question with another question.

"They were a bad lot. Troublemakers all, and lazy too. The most selfish people in the world, and not a one of them to be trusted. I'm happy to be leaving the scoundrels."

"Is that so?" replied the old farmer. "Well, I'm afraid that you'll find the same sort in the next town.

Disappointed, the traveler trudged on his way, and the farmer returned to his work.

Some time later another stranger, coming from the same direction, hailed the farmer, and they stopped to talk. "What sort of people live in the next town?" he asked.

"What were the people like where you've come from?" replied the farmer once again.

"They were the best people in the world. Hard working, honest, and friendly. I'm sorry to be leaving them."

"Fear not," said the farmer. "You'll find the same sort in the next town."
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At one time I mulled over moving to one of those countries for a few years. Then my wife asked me, "Why do you think that travel insurance covers medical evacuation back to the US?"

Probably because nobody wants to be buried in a foreign country away from their loved ones. I know Canadians that will always go back home for medical treatment.

Andy
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Then my wife asked me, "Why do you think that travel insurance covers medical evacuation back to the US?"

</snip>


We had a case here in Washington State where a single mother sent her 15-yr-old to Band Camp in Canada. Kid got sick and she brought him home to disastrous financial consequences at the hands of the US health care system (and she had insurance).

It would have been far cheaper if she left the kid in Canada until he got well.

https://www.columbian.com/news/2019/jan/24/health-care-stick...

</snip>


intercst
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"I guess I should ask if present expats would be welcome?"

Best source of information, IMO.


In the interest of completeness, it would be good to also get information from former expats (ex-expats?). "Why did you leave and come back to the US?"
You don't want to get just one side of the story.

Aside: I worked with a number of Indians (dot, not feather), some immigrant and some on H-1B visa. Every once in a while the topic of becoming an expat after retirement would crop up. When talking about how much pension and SS a retiree would get, the Indians told us that we could live VERY WELL in India on that. Very well=large house and having a full-time cook/housekeeper and butler. I always thought that that would be cool.
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See, whenever I evaluate something I like to look at the potential downsides & risks, not just the upsides & benefits.

That was a lesson learned very hard, at considerable personal cost.

Every rose has thorns. Doesn't mean you should avoid all roses, just means that you should be aware of thorns and have all the information necessary to make an informed decision.
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Why would you want to live as an expat in XYZ country? Cheaper cost of living mainly, right?

Wrong. Sad to say you are exhibiting a serious lack of imagination.

I have loved being immersed in other cultures, taking an apartment, shopping at food stores and seeing what daily life is like for a local. One of the things it has taught me is that warts and all, living in the USA is pretty great. Don't think I would ever fully leave it, but I am up for adventures overseas that extend way past a tourist visa.

I confess my preference for travel has never been the "If it's Tuesday it Must be Belgium" method of a day or two to see a whole country, nor the modern day approach to that which seems to be your favorite mode of travel...cruises. 3-6 months in one place is much preferred.

IP
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Billy and Akasha Kaderli & Paul & Vicki Terhorst are perpetual travelers. Both couple quit working in their late thirties. They will stay months in a locale soaking up the culture, eating where the locals eat etc.

It works for them. It wouldn't work for me. I would suffer from culture shock. They relish the differences in culture. Me. I prefer the familiar.

https://retireearlylifestyle.com/aaa/benefits_of_globe_trott...

After traveling the globe for almost thirty years, we have found that in many cases “less is more.” For one thing, we have outgrown the need to purchase souvenirs for ourselves, families and friends. Now we have intriguing stories of serendipity, humorous anecdotes of lost luggage or personal bungles, and priceless essential moments with human beings on the other side of the planet.

Years ago we figured it was going to cost us a certain amount of money to “stay home” – whether it was food, entertainment, rent, or transportation, we spent "X" amount per day. In choosing to travel, we still paid for these items, but now we were in some exotic place creating memories.

The difference between what we spent at home and our journeys to Asia, Guatemala, pristine beaches in Mexico or a tour of both islands of New Zealand seemed miniscule for what we received in return. Many times the difference in expenditures was just the cost of the airfare.

In our case it's been almost three decades of global wandering, harvesting our stories. We prefer experiences over stuff, and it is one of the reasons we travel.


https://www.getrichslowly.org/cashing-in-on-the-american-dre...
Terhorst advocates a life of “responsible pleasure”: Do what you love, but don't spend a lot of money to make it happen.

It takes less money than you think to retire early. “Millions could retire right now,” Terhorst says. But many folks are bound by “golden handcuffs”. Their high incomes fund lavish lifestyles, which means they remain voluntarily shackled to their jobs.

“When you retire you have time to pursue any and all of your interests,” Terhorst writes. But getting retirement off the ground takes a bit of time. There's an adjustment period.

Financial independence changes your perspective. It allows you to break free from — and to see — the Matrix. “When you retire you change your frame of reference. You move from a world with work at the center to a playful, almost make-believe world with your life at the center.”

Early retirement isn't about an indolent life of leisure. Terhorst believes it's important to move from an active work life to an active retirement. He has a rule: Do what you want but you must do something. “The idea,” he says, “is to live, not dissipate time.” Have meaning and purpose.

Terhorst calls homeownership “the great American ripoff”.
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Terhorst calls homeownership “the great American ripoff”.


To each his own. I have never, ever regretted owning my own home. I LOVE having that one place to call mine where I can do pretty much anything I want.
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We prefer experiences over stuff, ...

Preach! Except when it comes to real estate. Chose well and it will pay for itself.

Terhorst calls homeownership “the great American ripoff”.

When we are gone for 3-6 months a year both of our homes will rent very well as short term rentals and more than pay for themselves. Looking for a third right now as a long term rental. Real estate done stupidly will cripple you, but done well, it's a pot of gold.

IP
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I would as well. Looking to retire in about 5 years, after getting my son through college. Been perusing some articles on expats for about a year now.

Kristi
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Y'know, things are okay....until they are not. Ref: Venezuela. Ref: Haiti the day after the earthquake. Ref: Sarajevo ca. 1992

With respect, just how tortured are you trying to make your argument? Has Haiti ever been known to have a thriving expat community? Sarajavo?!? Really? Surprised you didn't mention Rwanda.

I gather you will not be an active participant of such a board of community, so why the continued interest? You are not going to convince any of us that it is a bad idea.
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Demographics hit real estate market.

McMansions take price hit:
https://boards.fool.com/mcmansion-prices-down-34163412.aspx
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Probably because nobody wants to be buried...

That is as much as the sentence is relevant to me. Beyond that, what happens to my body is irrelevant. Perhaps find a nice spot to scatter my ashes - probably near where I am living.
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Thought I would provide links to 2 forum that have some discussion of the desired topic. One has to search through to find applicable subject. Both free to read. Just require registration to post.

http://raddr-pages.com/forums/
http://www.early-retirement.org/forums/
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Interesting responses to the concept of choosing a
to live as an expat. My thinking is that the worst primary motive for choosing to live abroad is to lower one's cost of living. As with all choices cost is a factor that must be considered but it should be a thresh hold item, an answer to the question "Can I afford it?"

One key component of affordability is health care cost. In our case it is feasible for us to live in Thailand. We both maintain Medicare A & B and the most inexpensive high deductible supplement as a health care backstop. Excellent health care is available in Thailand. My routine office visits usually cost less in total than an office visit co-pay in the US. For most routine old age treatments such as cataract surgery with lens replacement it is less expensive to get treated in Thailand. We live in a city with an excellent government university medical school which raises the standard of care throughout the community. In each specialty we utilize we have a choice of doctors with medical degrees from the US, European countries, Australia, China, Thailand or others.

Our financial risk management plan is to have all our assets except a small sum in local bank invested at reputable US financial institutions. Funds for living expenses are transferred a few times a year. So far the system works well.

The plus side for me is that I enjoy Thai culture. Thailand is not an easy country to live in but it is interesting to me. I am a little introverted, enjoy solitude and would rather have a few good friends than many acquaintances and socially I have that here so life is good. We'll be off on a jaunt through Scandinavia for the month of may so will enjoy cooler weather for a bit, among other things. My siblings have come to visit and we will return to the States to visit them and our daughter and grand daughter every few years.

If one likes a little adventure and challenge in retirement an expat life might be for you. It is a challenge, not all comfortable all the time but for some of us it is rewarding.

Bob
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The bleak scenario you paint is surely possible. However, so are others, and many people offering anecdotal evidence for more positive ones.

In my case, the main source of such anecdotes is my wife's father, who's retired in a small town in the highlands of northern Ecuador. A very different case, to be sure: after a fascinatingly colorful mix of careers, he spent his last several working years in the North Ecuador highlands, owning and managing a small-ish farm producing gourmet organic coffee; at one point, when he was starting to think about retiring, he had the opportunity to sell the farm on good terms and retire on the proceeds (plus social security and other savings), and his decision to sell and retire "right there" (actually in the nearby town) was based on sound local knowledge acquired over the years, including plenty of friendships and acquaintances with locals, thorough familiarity with such things as local health providers, banks, &c, total command of the language (that family, including my wife, has an innate gift for languages -- they all speak several very well), ... several years later, he's very happy with the decision; he does fly to the US once or twice every year, mostly to visit family (he has over a dozen between siblings and cousins, spread all over the US and Canada).

In my case, I'd already be "an expat" if I retired here in the US, since my native country was Italy (I've lived here just for the last 14 years) and I'm still a citizen thereof. I'm probably going to stay in this country, which has several aspects I love deeply, but it's certainly possible that I'd go back to Italy (in which case I wouldn't be an expat... but my American wife would be!-)... or somewhere else again. Both anecdotes and data on retiring in various countries are thus of interest to me, to help me shape my decisions in the matter...
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For a few years now, I've had a membership with International Living

https://internationalliving.com/

CAVEAT! this site is a SALES PITCH for seminars, etc for Expat Lifestyle.
It includes all kinds of 'attend this seminar', 'buy this book by our professional', etc and learn about buying real estate, earning a living, etc, etc, etc in some foreign country.
Costa Rica
Ecuador
Colombia
Panama
Nicaragua
Belize
Mexico

Thailand
Vietnam
Micronesia

Ireland
France
Italy
Greece
Spain
Portugal

Those are just some of the countries I remember reading about.
If you visit that site, and sign up for a membership... you WILL get information about potential destinations. But, there's a 'sales pitch' price, too. :-) You been warned! LOLOLOL


To answer Rayvt's wife's question about 'why does travel insurance cover evacuation back to the US?'... because USians believe the propaganda that US medicine is 'best', and will pay for insurance to be brought back to the US. USians are AFRAID of getting health care in 'that country'. etc.

I've read that less than 50% of folks who attempt the expat lifestyle actually stick it out for more than a couple years. Many things influence it? Friends and (especially) family back home? Culture shock? Medical issues? Other considerations?

I could live at least a while in several countries!
:-)
ralph
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To answer Rayvt's wife's question about 'why does travel insurance cover evacuation back to the US?'... because USians believe the propaganda that US medicine is 'best', and will pay for insurance to be brought back to the US. USians are AFRAID of getting health care in 'that country'. etc.

I can think of a much simpler answer to Rayvt's wife's question on why travel insurance covers evacuation back to the US - because when I am sick, I want to be home, and I want to be where the doctors are familiar.

I once had a medical issue while visiting family in FL, and opted not to visit the ER because they would have kept me and done the necessary medical procedure ther extending our stay and forcing my recovery to be someplace other than home. I waited until we got back home, which was scheduled for the next day anyhow, and went to my own doctor, had the necessary medical stuff addressed, and did my recovery at home.

And that was just between MA and FL.
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"- because when I am sick, I want to be home, and I want to be where the doctors are familiar."

" I waited until we got back home, which was scheduled for the next day anyhow, and went to my own doctor, had the necessary medical stuff addressed, and did my recovery at home."

I definitely agree that that is a major reason for why travel insurance covers evacuation etc.

However, anyone who is that concerned about the comfort of 'home' and 'familiarity' is probably not really cut out to be an expat. They're more of a tourist (although maybe a long-term one).
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I can think of a much simpler answer to Rayvt's wife's question on why travel insurance covers evacuation back to the US - because when I am sick, I want to be home, and I want to be where the doctors are familiar.

Mine covers medical evacuations to my choice of care but it also includes bringing a family member to me if need be(which is good since he is the one who can authorize treatment). Even biking in New Zealand, there are places where is it likely be a helicopter transport. I did couple of years annual subscription for this. (No idea how this would work in the coming weeks when I will be in SE Asia and my son will be in Peru but it's as good as it gets.) Also, watch the movie The Impossible - sometimes local health care can get overwhelmed so it could be good to have a choice.
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I agree 2gifts. Many folks are on vacation and just want to be "home": familiar surroundings, familiar people, available to address "work" issues... All that.

When US people move from one city or state to a distant US city or state, do they return to their previous "home" for health care?

Then again, there's the "fear" of being ill/injured and treated by the "unknown"- I.e the trope that "US is best".

These are potential answers to Ray's wife's question.

What's an expat to do when they move to a new place?

I've an expat friend who is about 20 years in Portugal. She WILL NOT return to the US for medical treatment. She's had at least equal care for less out of pocket. She anticipates assisted living, nursing home, and death in Portugal.

I've gotten dental in Mexico. I'll get more, too.

As has been mentioned up thread, there are many expat communities around the world, suggesting that acceptable health Care is not an issue?

🙂
ralph
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However, anyone who is that concerned about the comfort of 'home' and 'familiarity' is probably not really cut out to be an expat.

Oh, I completely agree. I was just pointing out a simpler reason on why they sell travel insurance, as it seemed that Rayvt's wife was using that as an excuse on why not to be an expat. If I want to be in familiar surroundings, that has nothing to do with the level of care available in another locale whether that is moving from MA to CA or moving from MA to some other country entirely.

My niece is an expat as she and her daughter moved to London a good 20 years ago.She loves it there, and her mom is about to move over as well.

I've always had trouble getting DH to move from the Boston area to anywhere else within MA, and could not get him to leave the state at all, so moving to another country is not something that is likely to happen for us, but for entirely different reasons that had been mentioned in this thread.
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Seems to be a lot of interest in this topic--to return to the original question, is someone starting a board for it?
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My wife and I have been doing some research on the topic. We spend about a month abroad in Europe annually and have been doing so for more than a decade. I'm increasingly unhappy with much of life in the US: the relentless racism, the small-mindedness of too many 'Muricans. Even if Trump were to resign tomorrow, that wouldn't change the fact that a majority of white Americans still support his deeply ugly vision of what this country should become. It depresses me, and at age 70 I admit to becoming tired of spending my life fighting against it.

My wife's grandparents on her mother's side were born in Ireland. There's a process for acquiring Irish permanent residence (and, eventually, citizenship) under such circumstances, but we lack the documentation. We visited Ireland last year and could easily see ourselves living there.

There's a somewhat similar process available in Hungary (from which I trace my roots on my father's side). Budapest is an attractive place to live in many respects, and I have some friends there. But Hungary has its own version of Trump, an even worse one.

We "hide out" in Hawaii for half the year, and that helps a lot.
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Hi Misterfungi,

My wife's grandparents on her mother's side were born in Ireland. There's a process for acquiring Irish permanent residence (and, eventually, citizenship) under such circumstances, but we lack the documentation. We visited Ireland last year and could easily see ourselves living there.

How is the Catholic, Protestant thing? Are they still having problems with that or has that all subsided.

Andy
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MisterFungi writes,

My wife's grandparents on her mother's side were born in Ireland. There's a process for acquiring Irish permanent residence (and, eventually, citizenship) under such circumstances, but we lack the documentation. We visited Ireland last year and could easily see ourselves living there.

There's a somewhat similar process available in Hungary (from which I trace my roots on my father's side). Budapest is an attractive place to live in many respects, and I have some friends there. But Hungary has its own version of Trump, an even worse one.

</snip>


I got my Irish passport ten years ago as a hedge against racism, bigotry, ignorance and innumeracy degrading both life and finances on this side of the Atlantic.

A passport from an EU country allows you to live anywhere in the EU, you're not limited to residing in the nation of citizenship.

intercst
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I got my Irish passport ten years ago as a hedge . . .



+++
+++



That might work until the the Irish finally have their fill of the EU overlords & commit their own version of Brexit which I shall name "Irexit".



sunray
a man happy in the USA
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"We visited Ireland last year and could easily see ourselves living there."

How is the Catholic, Protestant thing? Are they still having problems with that or has that all subsided.


Another funny thing. Back in the day, people knew there was a difference betweeen West Germany and East Germany, and never confused one with the other.
Yet lots of people allatime confuse Ireland and Northern Ireland, and often kinda think that there is only one "Ireland".

Anyway...we were on a bus tour through Belfast a couple years ago. The guide/driver said that the bad times were pretty much over. There were lots of blocks of row-houses. He pointed out a couple where there was a tall rolling fence gates that they used to pull out at night across the street, to have a hard gate between the Catholic end of the block and the Protestant end. He said that they don't need to do that anymore---but they also did not dismantle or remove the rolling fence gates. HOWEVER, to cross over the dividing line after dark was taking ones life in ones hands.

He pointed out lots of famous spots where bombs went off. And pointed out many large murals painted on sides of buildings depicting people with machine guns, celebrating various actions and keeping thoughts alive. My wife asked him why they didn't simply paint over the murals. He ignored the question. Seveal times, the question was asked. And ignored.

Every problem is easy to the person who knows nothing about it.

But another kinda funny thing----some of the ladies worried out loud about if they (we) were safe. He said, "No, you're fine. You are Americans, as long as they knoe you are Americans or Canadian nobody will bother you."
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Seems to be a lot of interest in this topic--to return to the original question, is someone starting a board for it?

I submitted a request a little over a week ago.
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Why not expand it? Not just "Future Expats," but Retirement Expats. I've lived 20 years outside of the USA, but I plan to return for 10 years, then retire. There are a number of issues regarding retirement that are unique to having spent half my life abroad. If anyone else is in a similar situation, it could be relevant. I could also help those that plan to retire in the part of Europe I know quite well.

--JC
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The more the merrier. The name was chosen mostly to make it aspirational.
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Thanks Rayvt,

Yet lots of people allatime confuse Ireland and Northern Ireland, and often kinda think that there is only one "Ireland".

I am not an expert on Ireland but I do know that England sent the protestants to Ireland to cause dissent. So at one time it was one Ireland. But if you are interested here is a little information.

https://www.enotes.com/homework-help/how-did-protestants-fir...

I have always wanted to visit Ireland and Scotland. Hopefully in a few years I will make it over there.

Andy
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"The worst time to retire since 1929 turns out not to be the Great Depression, as most people would believe. In fact, the worst time to retire in history was 1966, followed by the Great Depression year of 1929. The SWR (safe withdrawal rate) of 4.39% for a 70% stock 30% bond portfolio is solely determined by the retirement results of the 1966 retiree. Of course, we care about the present not the past. How are the year 2000 and the year 2008 retiree doing compared to those who retired during these worst of times? The table below shows the year by year progress for 4 retirees; the 1929 retiree, the 1966 retiree, the 2000 retiree, and the year 2008 retiree. It uses a starting portfolio value of $1M, with a 70% stock 30% bond portfolio, which yielded a max SWR of 4.39%."

https://seekingalpha.com/article/2826286-revisiting-the-wors...



t
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"What Made 1965 So Terrible?

In the years after 1965, the perfect storm of retirement killing conditions took place. Inflation grew rapidly over the following decade, exceeding 10% in several years in the 1970’s and averaging 6% a year from 1965 to 1985. Interest rates rose rapidly, from ~4% in 1965 to ~8% in 1970, up to 15% in 1982, causing bonds prices to plummet. The combo of fast rising high inflation and rising interest rates destroyed bonds.

Stocks also performed horribly. Adjusted for inflation, the stock market didn’t rise above its 1965 value until 1992, 27 years later. Dividends moved sideways over 2 decades"

Reviewing all periods in the Trinity Study, the year 1965 was amongst the worst.



https://www.gocurrycracker.com/the-worst-retirement-ever/
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The above discussions were based on rolling 30-year periods from the historical data. Bogleheads Forum member Dick Purcell used the “Portfolio Pathfinder” software to investigate this issue using Monte Carlo simulations, which are simulated data based on the same underlying characteristics (means, standard deviations, and correlations) as the updated Trinity study. He reported the following results through private correspondence:

Applying Monte Carlo with the Trinity return-rate-probability data you provided, I get success probabilities well below what I’ve seen reported from historical-sequence simulation, and remarkable insensitivity to allocations. Here is a summary of what I get:

30 years, withdrawal 4% inflation-adjusted (no fees):

Considering all allocations, the best success probability is 87%.
That 87% success probability is achieved at any allocation that is at least 60% stocks.
An 86% success probability is achieved with stocks allocation 40% or 50%.
Reduce withdrawal to 3.5% inflation-adjusted (no fees):
Considering all allocations, the best success probability is 92%.
That 92% success probability is achieved at any allocation from 20% stocks to 80% stocks.
Reduce withdrawal to 3% inflation-adjusted (no fees):
Considering all allocations, the best success probability is 98%.
That 98% success probability is achieved only with 0% stocks.
A 97% success probability is achieved with any allocation from 20% stocks to 80% stocks.

https://www.bogleheads.org/wiki/Trinity_study_update


t
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How are the year 2000 and the year 2008 retiree doing compared to those who retired during these worst of times?

</snip>


We were lucky in 2008 that Fed Reserve Chairman Ben Bernanke literally got his PhD in analyzing the policy missteps committed by Herbert Hoover during the Great Depression. He at least was able to persuasively explain to nutters like Mitt Romney that letting the Detroit auto industry go bankrupt and crash the entire economy wasn't likely to be successful.

It could have been a lot worse.

intercst
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telegraph, do you have a point other than to tell yourself scary stories and scare yourself?

That article you linked:
https://seekingalpha.com/article/2826286-revisiting-the-wors... said some interesting things, but some absurdities as well. Nobody talks about 4.39% SWR or 70/30 portfolios, The standard is 4% SWR and 60/40.

You seem to have picked out the bad news from it and ignored the rest. "the worst time to retire in history was 1966"
and
"the year 2000 retiree is way better off than their 1966 and 1929 cohorts. I would even go as far as saying that the year 2000 retiree is pretty much home free."
and
"In summary, the year 2000 and 2008 retirees, the two worst cases since 1966, are doing just fine."

Anyway...
Yup, the 4% SWR with 60/40 starting in 1966 wasn't a bed of roses, although it did survive for 30 years, ending on Jan'96 with $113K (for an initial amount of $100K).
But what killed that retirement period was not the investment returns. What killed it was the 12% annual inflation in 1979, 1980, and 1981. These push the withdrawals way up, setting a ticking time bomb. The annual returns for a 60/40 portfolio were about 10%--pretty good.

If we set the withdrawal increase to be a constant 4% instead of actual inflation, it ended up with $450K.

So, now, there's two things we could do. We could:
1) Luxuriate in the thrill of finding scary failure, or
2) Try to find some _simple_ stratagem(s) that would prevent the failure.

First simple stratagem might be to set a ceiling on the annual inflation adjustment for the withdrawals.

Second simple stratagem might be to use a variable adjustment to the withdrawals. For example, the Guyton-Klinger method using 4.5% target withdrawal rate and 20% tolerance guardrails.
That has a 30 year (Jan'96) value of $466K.

In fact, that article you linked (above) specifically talks about a flexible spending model! Did you stop reading the article as soon as you got to the bad news part?

Third simple stratagem might be to use a simple timing rule to decide when to move from stocks to cash when the market is bad, and back to stocks when it picks up.
That has a 30 year (Jan'96) value of $491K.

Fourth simple stratagem might be to do both #2 and #3.
That has a 30 year (Jan'96) value of $800K.


So it depends what do you want to do? Bemoan "Woe is me, I can find one historical period that is bad."?
Or take some simple steps that will mitigate the bad times?

Because you are starting to come across as "It's Not About The Nail" https://www.youtube.com/watch?v=-4EDhdAHrOg
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Rayvt writes:

So, now, there's two things we could do. We could:
1) Luxuriate in the thrill of finding scary failure, or
2) Try to find some _simple_ stratagem(s) that would prevent the failure.


Agree on #2 and the stratagems Rayvt points out for consideration.

In addition, there are option B's for preventing failure that one should entertain. Working longer, taking some part-time work in the early retirement years, preparation of your diversity of income streams in retirement in the years leading up to retirement that are non-correlated with the stock/bond markets, reduction of spending (or variable withdrawal rates rather than a strict SWR percentage rate as mentioned), reverse mortgage, downsizing and cutting spending by moving to a LCOL area, etc... .

Quote from Your Complete Guide to a Successful & Secure Retirement...

Those actions might include remaining in, or returning to, the workforce, reducing current spending, reducing the financial goal, and selling a home and/or moving to a location with a lower cost of living.

Larry Swedroe. Your Complete Guide to a Successful & Secure Retirement (p. 45). Harriman House. Kindle Edition.


Love the constructive discussion on preparation and steps to take to prevent failure. At least it seems to be a more beneficial discussion for moving forward for all of us than focusing on failure rates based on certain time periods or cherry picked hypothetical situations in the past.

BB
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"You seem to have picked out the bad news from it and ignored the rest. "the worst time to retire in history was 1966"

Rayvt:"Yup, the 4% SWR with 60/40 starting in 1966 wasn't a bed of roses, although it did survive for 30 years, ending on Jan'96 with $113K (for an initial amount of $100K)."

---------

If you look at the inflation adjusted amount after 30 years, it was a pittance.....

-------
---------


Rayvt:"But what killed that retirement period was not the investment returns. What killed it was the 12% annual inflation in 1979, 1980, and 1981. These push the withdrawals way up, setting a ticking time bomb. The annual returns for a 60/40 portfolio were about 10%--pretty good."

T: Not so good when you have 12% inflation for years and years!

And yes, the Trinity Study (and all the other SWR studies) say you adjust your SWR up each year to handle the inflation. You adjust it up BY THE INFLATION AMOUNT. That's the rule.

- -----
---------

t:So you want to change the rule because of some inflation? Sorry, you don't get to do that.

- -----
--------



Rayvt:"If we set the withdrawal increase to be a constant 4% instead of actual inflation, it ended up with $450K.

t:You don't get to set it arbitrarily to 4%. What, are you planning on eating dog food for dinner and not paying all the rent? Your cost of living has gone up by 12 plus 12 plus 12 =36% and you suggest that you only get a 12% increase over those years? Hmmmm....

That violates the 4% SWR rule! You take out an inflation adjusted amount every year. Every year.

- - ------
---

Rayvt: Third simple stratagem might be to use a simple timing rule to decide when to move from stocks to cash when the market is bad, and back to stocks when it picks up.

Oh, so now you suddenly have a crystal ball, do you?

No, the Trinity Study and others REQUIRE you to rebalance your portfolio yearly by keeping the allocation you have. You don't get to suddenly shift because 'the market is bad'. And shifting from 'stocks to cash' in those years would kill you unless you had longer term bonds/CDs/treasuries. At one point, US 30 year Treasury Notes were yielding 13%.

and 'when it picks up'. Sorry.....the SWR rule require you keep your allocation.

- - ------

So suddenly you have a crystal ball and can tell us ahead of time when we have 'good or bad years' and when to buy in?


Yes, there are other models including variable spending, spending X amount of your current portfolio value, but when you talk about 'the 4% rule' you go with what it produces.

Bengen and others have suggested that currently up to 4.3% would probably survive with long enough periods for better than 95%....and that planning to higher survival rates is an exercise in futility.

You want to protect against rampant inflation? Buy some TIPS in your IRA/401K.

And remember..the SWR is based upon past history, and it was in MY lifetime that inflation hit those 12% numbers....and of course, the cost of living/rent/ house prices/mortgage rates, rocketed upward.

It only lasted , fortunately, till do nothing Carter got booted and Reagan took over, tamed inflation, and set the stage for the fantastic stock rise of the 1990s.

However, we could have had a DECADE of high inflation.......

t.
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BB:"In addition, there are option B's for preventing failure that one should entertain. Working longer, taking some part-time work in the early retirement years, preparation of your diversity of income streams in retirement in the years leading up to retirement that are non-correlated with the stock/bond markets, reduction of spending (or variable withdrawal rates rather than a strict SWR percentage rate as mentioned), reverse mortgage, downsizing and cutting spending by moving to a LCOL area, etc.."

Fine if you are NOT retired yet.

But once you are retired, you are sitting there with your retirement income streams. Maybe you have a pension Good. Maybe you bought an annuity - probably not inflation adjusted. try seeing what the 1970s would have done to the 'purchasing power' of your annuity. You'd get creamed and have less than half the purchasing power in 7 years. Same for fixed pension with no COLA.

As to 'diversity of income streams', unless you get involved in real estate, and like being a landlord and all the hassles of property ownership........you probably don't have much other than SS (and a pension or other plan like a pension).

you are what you are in retirement.

You can trim your expenses......

But when you plan...have XXXX in your nest egg....and use the 4% rule or a similar rule.....that's it.

t.
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BB:"In addition, there are option B's for preventing failure that one should entertain. Working longer, taking some part-time work in the early retirement years, preparation of your diversity of income streams in retirement in the years leading up to retirement that are non-correlated with the stock/bond markets, reduction of spending (or variable withdrawal rates rather than a strict SWR percentage rate as mentioned), reverse mortgage, downsizing and cutting spending by moving to a LCOL area, etc.."

t: Fine if you are NOT retired yet.


There may always be an option to re-enter the work force be it part-time, consulting, etc... depending on your age, skillset, willingness, and ability to get hired in hourly wage jobs that may or may not have anything to do with your prior career niche/industry. Some do this anyway regardless of need for income, but simply for sense of identity/purpose, social contact, mental challenge to keep sharp, etc... . However, even a small contribution from part-time work during retirement ages can slow the amount needed to be taken from the risk portfolio to cover basic expenses and extend the longevity of the portfolio.

I've written about it before, but I saw my parents as well as my FIL and MIL earn income in their retirement years via part-time, consulting, etc... work whether they needed the income or not. The same with grandparents (they did retire in the 1960's and lived successfully through one of the periods quoted above as being unkind). All ended up with diversity of income streams throughout their retirement years.

t: But once you are retired, you are sitting there with your retirement income streams. Maybe you have a pension Good. Maybe you bought an annuity - probably not inflation adjusted. try seeing what the 1970s would have done to the 'purchasing power' of your annuity. You'd get creamed and have less than half the purchasing power in 7 years. Same for fixed pension with no COLA.

SS has a built in COLA which covers that portion of one's income streams. Not every pension or annuity does, but hopefully one should be planning (if not retired) and has planned (if retired) for that during the decades leading up to retirement. None of us were retired in the 1970's (my grandparents were). No crystal ball can predict if we will experience a combination of the messes of the 1970's again or not in our remaining lifetimes. One could plan on laddering SPIA's, CD's etc... to add protection for inflation.

t: As to 'diversity of income streams', unless you get involved in real estate, and like being a landlord and all the hassles of property ownership........you probably don't have much other than SS (and a pension or other plan like a pension).

Human capital could be one income stream (as mentioned above via part-time work or consulting work). The gig economy another [ https://www.cnbc.com/2018/04/22/gig-jobs-could-boost-your-bo... ]. Oil & Gas royalties another. Dividends another. Rental income another (active or passive). Muni bonds, laddered CD's and fixed annuities another. RMD's another. Reverse mortgage another.

https://money.usnews.com/money/blogs/on-retirement/articles/...

Money Secret #4: Happy Retirees Have Multiple Income Streams:

https://www.thebalance.com/multiple-income-streams-1289876

t: you are what you are in retirement.

You can trim your expenses......

But when you plan...have XXXX in your nest egg....and use the 4% rule or a similar rule.....that's it.


Yes, trimming expenses, downsizing if need be, seeking a LCOL are if need be can all add some flexibility if and when needed.

My belief is that one's IPS (which is a living document) has to be able to have built in flexibility based on the circumstances. A list of option B's and strategies to implement them if and when needed seems to be wise if looking for solutions to a problem. Planning and being stuck so rigidly to a 4% rule only from a nest egg and not being flexible or not planning more diversity may lead a retiree to be forced to think outside of the box if things don't go according to plan. So, in that essence, it is true you "are what you are in retirement". I don't want to narrow it down to either being "rigid" with your plans vs. or "flexible" as there is room for plenty of hybrid of the two for consideration.

Beyond that, there's the old joke of "How not to outlive your money in retirement? Smoke 5 packs a day!

Then again, those cost about $6-$13 a pack these days...
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How the hell did my OT Expat thread morph into another endless debate on the SWR?

Not blaming you Bruce, you were just the last one to reply.
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FWIW, I've been contemplating 6 months Greece (March through September), 6 months New Zealand. On the former, my wife qualifies for Greek citizenship. I don't, but Greece allows for 5 years residence (with the right to apply to renew every five years) if you purchase a residence for €250,000 or more. In addition, I could petition to be "reunited" with my citizen wife. Given the Greek bureaucracy, they'd ask how I expect to support myself without relying on the state, I'd show them my retirement account balances, and they'd smile and say "Welcome to Greece!"

On the latter, New Zealand has become far more difficult to move to over the years (damn Peter Jackson movies, followed by Silicon Valley tech bajillionaires looking at it as their prepper refuge), but we could probably swing a way to stay there for at least a few months during the Greek winters.

I've also considered getting EU citizenship through Portugal's "golden residence visa" program, so both wife and I would be full EU citizens. This make it easier for both of us to hop from country to country and probably also make it easier to receive medical care.

I have a fair amount of research to do on that latter issue.

There are far worse things in life than owning a place in one of the dozens of coastal towns of the Peloponnese, curing one's own olives and making olive oil...

-synchronicity
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The little bit I've seen of Greece and Portugal definitely make me want to go back there. Please keep us posted on what you find out!

IP
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FWIW, we've spent sizable chunks of two of the last 4 summers in Greece, and enjoyed it greatly.

Regarding some of the issues that have been brought up regarding living as expats, the fact that my wife speaks fluent Greek and that most of her relatives live in the country makes it a little different than just up and moving to "someplace else". That said, there are still lots of adjustments one must make in order to truly assimilate (and in many places, that is more difficult even if one tries to be the opposite of the stereotypical "American Traveler").

-synchronicity
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Regarding some of the issues that have been brought up regarding living as expats, the fact that my wife speaks fluent Greek and that most of her relatives live in the country makes it a little different than just up and moving to "someplace else". That said, there are still lots of adjustments one must make in order to truly assimilate (and in many places, that is more difficult even if one tries to be the opposite of the stereotypical "American Traveler").

I think Greece would be more difficult for me than Portugal, though I remember the people in both places as warm and inviting. I was at one point pretty fluent in both French and Spanish and could at least be understood in Portugal. Lived in France for 15 months and almost didn't come back, but I was raised in a much more French way than American so it honestly felt like home. Spent an extensive amount of time in the Andalusia part of Spain as well, and developed some strong friendships there, but sadly they did not withstand the time and distance. Also lived in the Caribbean for 8 years, which though it was a US Territory, it was culturally quite different than the mainland. The idea of the ability to buy into a Portuguese citizenship is pretty fascinating, given the ease of travel and extensive country hopping it would allow.

For now I am a Yankee experiencing life in the South. You don't actually have to leave this country to experience cultural differences, but I confess I love it here too. I don't like being restricted to living in one place though. A friend we made recently has been changing towns every couple of years since he retired. I think that would be pretty cool to do on an international level.

IP,
part gypsy
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For now I am a Yankee experiencing life in the South.

Same here! Eight years now, longer than I lived in Portland, OR, but I'll never fully adjust to it.

FWIW, this is the fifth city I've lived in (Chicago, Portland, Boston, New York, and now DFW). You're darn right about cultural differences without leaving the country.

-synchronicity
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FWIW, this is the fifth city I've lived in (Chicago, Portland, Boston, New York, and now DFW). You're darn right about cultural differences without leaving the country.

Which was your favorite?
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FWIW, this is the fifth city I've lived in (Chicago, Portland, Boston, New York, and now DFW). You're darn right about cultural differences without leaving the country.

Which was your favorite?

Portland. That said, there was a lot to like about Boston, and Chicago and New York are great food cities. New York for me epitomizes "nice place to visit, wouldn't want to live there".

I remain a huge fan of the Pacific NW, in spite of its foibles. Mountains, trees, and coast are a difficult combo to mess up.

-synchronicity
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I remain a huge fan of the Pacific NW, in spite of its foibles. Mountains, trees, and coast are a difficult combo to mess up.

And this is part of why I am in no rush to take off travelling internationally. I have so much here to see.

IP,
hoping to do a grand circle of USA and Canada in a year or two
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