Ecuador and global business ideas are important because the economic downturn has thrown many curves at most investment and business plans.
For years my advice to young people who have asked me for a good way to earn in a business has been to buy a fixer upper… fix it, live in it for two years and sell it on. Then do this again and again.
US tax law allows for an exemption of $250,000 on one’s residence ($500,000 for couple filing jointly). Where else can you earn up to $250,000 a year tax free?
I double checked with my friend and tax attorney Joe Cox to make sure this exemption still works. He replied:
Gary: You are correct. One or two projects at a time will not make them a
“developer”. If they have too many projects, at the same time, they can become a developer and would be subject to ordinary income tax. There is a $500,000 exemption. There is capital gain tax on excess. This is still lower than ordinary income tax which maybe is going to 39.5%. Joe
There are some excellent additional tax benefits for those who conduct genuine business abroad. You can read details in my “International Business Made EZ” course which comes free with our “Tangled Web… How to Have a Web Business” course. See how to get this course at the end of this message.
My advice to retirees who wish to live in Ecuador is live on your pension and overseas income which is not taxed in Ecuador. Then if you need extra income buy, fix up and sell a bit of Ecuador real estate. This is tax free income as well… if like in the US you are not involved in too many projects… and become a developer.
For example, on our last real estate tour we saw these houses in Otavalo… brand new. This Ecuador real estate ranges between $65,000 and $95,000 for very nice houses overlooking Otavalo. New import regulations in Ecuador and inflation mean that like in the US new homes will cost substantially more.
The house we visited was 3.5 bathrooms, 4 bedrooms, two dens, living, dining and kitchen areas plus small back yard. The one we saw was of a very high standard, about 2,300 square feet and had a $95,000 asking price.
Here is our group inspecting the kitchen. There are also great views.
This is the type of Ecuador house you could buy and live in, or rent, then sell for a profit in a couple of years. I suspect that if this is your residence there would not be US tax (up to $250,000 or $500,000 for a couple filing jointly) either.
You can get direct tax advice about this the US tax law and benefits of an overseas business from Joe Cox at JCOX@COXNICI.COM
In addition we recommend that everyone become involved in a business that they have a passion for. Here is an example of a reader who moved to Cuenca Ecuador and is doing just this. He sent me this note.
The last two days of columns about Ecuador and the dollar have been extremely informative and I believe accurate. That is not just because I agree with you.
We are doing very well in Cuenca. We have recently become 40% non-operating partners of the local CURVES franchise which went into the black in its first month.
Next month sees the opening of VILLA NOVA INN, located on Avenue Third of December on the city side of the Tomebamba River. It is about 20 yards from SAKURA SUSHI, the best Japanese restaurant in Cuenca, perhaps in all of Ecuador. This is a new 12 bedroom hostal in which we are 25% non-operating partners that will open next month.
VILLA NOVA INN will have two suites w. cable TV, 9 double/single rooms, and 1 dormitory w. 4 bunk beds. Prices will range from $8 a night for a bunk bed to $45 a night for a suite. There will be cable TV and high-speed Internet in the lobby. The entire hostal overlooks the Rio Tomebamba and has a large outdoor deck with tables overlooking the river. Breakfast is included in the price of the room or bunk.
You can get more information on the inn from Fernanda Cueva at firstname.lastname@example.org
These small cash generating businesses along with fully paid for condos in Cuenca and Puerto Gaviota, an adequate amount of gold & silver coins and bullion, and government secured US pension funds make us feel very secure and capable of handling whatever the present financial/economic crisis throws at us.
Like you, I believe that Ecuador is actually one of the few ideal places in the world that will handle this crisis with relative ease and grace. To support that belief we are looking for additional small local business investments.
All this investment activity helps support our South American Fund for Enlightenment which in addition to supporting students in Ibarra has just completed its first significant project in Cuenca. We recently completed the delivery of 12 new full sized computers to Escuela Adbdon Calderon. The computers with 17″ flat screen monitors were assembled by skilled local labor right here in Cuenca. The project which cost just over $5,000 was a wonderful joint effort by contributors from the United States along with ex-pats and locals here in Cuenca.
The Fund is now working to raise the final $1,500 which will supply the Escuela with a much needed copier and projector plus a couple of printers which H-P locally will toss into the mix. We hope to finish this aspect of the project before we take off to spend the summer cruising the Greek Isles, driving around Greece and Italy and finally spending most of July and August in our condo in Puerto Gaviota.
All the best to both you and Merri.
Turn your passion into profit… earn extra income… become independent… and do more then just make money…do some extra good as the reader above is.
The four ways to profit in this economic downturn are to:
#1: Invest in shares.
#2: Invest in real estate.
#3: Invest in commodities.
#4: Invest in your own business.
This reader and his wife are doing all four recommendations.
Here is one more point about Cuenca. After a decade of searching, Merri and I settled on Cotacachi and San Clemente as the places where we would live and focus. However, many want a more urban atmosphere and the city we find our delegates like most is Cuenca.
Cuenca is a forty minute flight south of Quito and there are to 2 to 3 flights a day, although no late evening flights. It is some 8 to 12 hours south of Quito driving depending on the state of the roads. It is a beautiful drive that Merri and I have taken many many times. For many years, Cuenca was isolated from the rest of the country so it has followed its own course all these years, which gives it a unique flavor. Here is Cuenca.
Cuenca (the actual full name is Santa Ana de los cuatro ríos de Cuenca) is the third most populous city in Ecuador and is the capital of the Azuay Province.
It sits at about 8,000 feet altitude and is a most beautiful small city. The center of Cuenca is listed as a UNESCO World Heritage Trust site because of its may historical buildings.
The readers above purchased a spacious and modern condo in Cuenca within walking distance to the historic colonial city center.
They bought their Cuenca condo pre-construction three years ago and I expect have seen a nice rise in their property value. They upgraded their condo from the original specifications, adding hardwood floors and fittings and extra lighting.
Their 1,690 square foot condo only cost $84,800 with the extras pushed the price to around $90,000.
There are great views and…
A great boutique hotel in Cuenca is the Boutique Hotel Mansion Alcazar.
Boutique Hotel Mansion Alcazar is a beautiful sample of the unparalleled Ecuadorian Republican luxury style. The 19th-century house was restored to its original splendor and has been designed to be a home for visitors staying in the city for business or for pleasure.
The hotel looks a lot like our hotel Meson de las Flores from the outside. Here is Meson.
Here is Boutique Hotel Mansion Alcazar.
But Boutique Hotel Mansion Alcazar is much more luxurious inside.
This is true luxury.
Our good friend of over a dozen years, Jorge Espinosa (one of the owners of the Relais & Chateaux La Mirage Garden Hotel & Spa) used his talents to renovate this charming hotel.
Ecuador Living subscribers can enjoy a discount. More details on how to subscribe are here.
The global economy may throw you some curves… but there are ways to hit economic home runs anyway. We look forward to sharing ideas for profits in this new economic paradigm with you.
To help you learn how to earn income anywhere, I am making a special offer that ends tonight, April 3 at midnight. (I extended this deadline due to our web site crash).
You can have the “The Tangled Webs We Weave”…our course on how to have a Web Based Business… FREE..
I launched this course earlier this year and am making a special offer…that gives you this course free…and more.
Now you can learn everything that I do to create income and have fun and fulfillment in a web based micro business. Here is a special offer.
This new course entitled “Tangled Webs We Weave – How to Have Your Own Internet Business” is available at $299.
This is a bargain. Merri and I have been traveling and doing international business for 41 years. We have had a web based business for over ten years. You can share everything we have learned.
However when you sign up for Tangled Web in March 2009, I’ll include two of my other emailed courses, How to be a Self Publisher and International Business Made EZ FREE as well.
My webmaster is joining Merri and me at our two North Carolina courses this year for our first Tangled Web seminars.
July 24-26 IBEZ North Carolina + Tangled Web
Oct. 9-11 IBEZ North Carolina + Tangled Web
Nov. 6-8 IBEZ Cotacachi + Tangled Web
If you have ordered Tangled Web, I will reduce any of these course fees by $299!
In all you receive the emailed “Tangled Web” course, International Business Made EZ” and “How to be a Self Publisher”, FREE when you enroll in either the July, October or November seminar.
or enroll for any of the three courses above. I’ll send all three emailed courses free right away.
We provide our standard, full guarantee. Enroll. Try the course for 30 days. If not satisfied we’ll give you an immediate, full… no fuss refund. This offer expires at midnight April 3, 2009.