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Ecuador Q&A

Here is our Ecuador Q& A

To see this Q & A with pictures click here

Questions this week:

#1: About Ecuador Hotels.

#2: The importance of Spanish

#3:  Investing in Iraqi Dinars

#4: Emerging Bond Investments and Ecuador Relocation

#5:  Ecuador Scams

#6: Ecuador Real Estate Flipping

#7: Ecuador Bank Safety

#8: US Real Estate Safety

The masses can be wise… or a stampeding herd thundering towards a cliff of oblivion.  We as individuals need to discern the importance and wisdom of a massive move.  Our responsibility is to decide whether the masses are on a “massive positive evolution” or “heading the wrong way”.

The repetition of a untruth does not make it truth!

So we spend our Saturdays sharing your (the readers) questions and comments. I hope that this dialogue is of personal value!

Reader Ecuador Comment. My wife and I are in Cotacochi today and checked in this morning to The Land of the Sun hotel you had mentioned. We must say we are completely impressed with the accommodations. After a week in Ayampe and points along the coast, this is by far the nicest. It has made our trip. (Before arriving here, my wife wanted to move our flight up and go home). My wife is pregnant and the staff here has been very gracious. The setting and the comfortable room has made us reserve 4 more nights here.

I appreciate your recommending it and wanted to say thanks for making my anniversary vacation one that will bring us back to Cotacochi. Muchas Gracias!!

Reader Spanish Question: Hi Gary and Merri-I am interested in attending the upcoming Spanish class but my time is so limited that I must use it wisely.  Obviously no one is going to learn a language in four days. I wonder if the technique is truly helpful. Do you have positive feedback from previous attendees?

My Reply: We have many raves from seminar delegates. One just wrote yesterday:  “The seminar was enjoyable and very informative.  We didn’t expect so much info to come are way i.e.  The theanine has been very helpful and we found our perfect baroque station on the internet. It was all I expected and more.”

We receive so many raves like this because of these three little known, but scientifically proven, ways to enhance the speed, accuracy and efficiency of the mind, memory, recall, retention and decision making process.

These are not gimmicks or tricks… just advanced enjoyable ways for the mind to create/process/utilize knowledge.

The first tactic is to use Baroque music in the learning process. At least three best selling books, “Superlearning”, the “Mozart Effect” and “Superlearning 2000” have revealed insights about how to learn and think more powerfully based on systems drawn from the Bulgarian educational master, Dr. Georgi Lozanov.  Merri, over 35 years ago, was among just a few who learned and was licensed directly.  She has practiced and worked with this system all these years.

Then she enhanced the learning of Spanish with the second tactic which is to make slight alterations in digestion. This alone can make anyone a startling 25% smarter.These two tactics are given in seven, easy to use learning techniques that help gain any skill, from computers to athletics to conversational languages…  in much less time than traditional learning techniques… often two-to-five times faster, in exciting and innovative ways…but most of all it is a system that is stress free and full of fun.

The third tactic builds on the first two and uses 17 unique lessons to provide Spanish fluency in a short time.

Let me prove to you how this third tactic works by teaching you hundreds of Spanish words in less than 30 seconds.

Here is the proof.

“Most words in English that end in ION are almost identical, just pronounced differently (which we teach in the class). For example action is accion, education-educacion, manipulation- manipulacion, etc.”

There you have it.  How long did it take you to read the sentence? You now know hundreds of Spanish words that you will never forget.  We practice this and help to enliven the brain so that more and more correlations come forth from within to use in communication.

See examples of the words you know below.

How long would have taken you to memorize all those words?   How soon would you have forgotten them?

Thanks for your inquiry…and please see more about words like this at “Why you can Speak Spanish in Four Days here.”

Ecuador Relocation Question: Hi Gary,  We are Canadian citizens,  I see that the yields on bonds of the so-called “developing nations” (like  Brazil and the Dominican Republic) are at the 10% (give or take) range.

Which makes me think, “Can I not take my money there so it earns higher yields?”

Our situation (my wife, my dog and me) is as follows: mortgage-free owners of a house worth about CAD$300,000, total RRSP (tax-free retirement savings plans) worth about CAD$250,000 CAD, and no consumer debt (we pay off our credit card balance every month).  Our age bracket is the 35-40 group.

Is it realistic to expect that we could sell our house, take the CAD$300,000 and place it into higher-yielding bonds like those of Brazil and Dominican Republic (or any other suitable investments) and expect that the income from those investments could provide at least some of the money that we would need to cover our living expenses in whichever country we could choose to relocate to?  Or are we simply too young to even consider such a move and all we can do is “wait and see what happens and hope for the best”?  I feel like I’m the pig who sees the big bad wolf on the horizon racing towards us, but instead of building a brick house, I’d rather just “get out of Dodge” altogether.  Because in this case, I don’t even think the brick house is going to hold up intact against this big bad financial wolf headed our way.

Thank you for your time and consideration.

My Reply: I hold an overweighting of Brazilian bonds in my portfolio and they were paying over 12% when I invested.

As of July 2010  the Brazil’s Moody’s Rating Outlook was Positive and the Country Currency Debt rating Baa2.

For Baa1, Baa2, Baa3 ratings,  Moody judges obligations rated Baa to be “moderate credit risk”.  They are considered medium-grade and as such “protective elements may be lacking or may be characteristically unreliable”.

I do not hold DR bonds which are of a much lower grade. Last April 2010 Moody’s raised the Dominican Republic’s government bond rating to B1.

There is a stable outlook, but this is still four levels below investment grade.

For B1, B2, B3  Moody judges obligations rated B as speculative and “subject to high credit risk”, and have “generally poor credit quality”.

My newest report “Running Risk – How to Invest in Risky Times” shows that when risk is greater… as it is now, investing in riskier assets makes sense. Learn more about this report here. One key part of risk management is diversification.  So I have invested in Brazil, but certainly would not trust all my savings to Brazil and especially not the Dominican Republic. Right now my feeling that the masses are crazy. A n October 25 2010 New York Times article entitled “In Bond Frenzy, Investors Bet on Inflation” by Christine Hauser says: At a time when savers complain that they are earning almost no interest from their bank accounts, some investors on Monday bought United States government bonds that effectively had a negative rate of return.

My Reply: If  you want to avoid real estate scams I regret you’ll have to find a place where there are not people… or at least a place where people have overcome greed.  I have been living, traveling and working globally for 43 years now and have not found that yet… so try to do the best thing possible and shed light on the entire market so scammers cannot use ignorance of the market as their tool. Until then always beware! You can gain the assistance of full time full support research and assistance team by subscribing to our paid premium Ecuador Living service.

Bizarre as it sounds, that is correct. In an auction of a special kind of five-year Treasury bond, investors paid $105.50 for every $100 of bonds the government sold — agreeing to pay the government for the privilege of lending it money.

The reason is that these types of bonds offer a guaranteed protection against inflation. So, if inflation soars — as some economists worry might happen, with the government seeking to give the economy a boost by flooding it with money — the value of the bonds would go up accordingly.

The investors who took part in the $10 billion auction are betting that inflation, now at about 1 percent annually, will rise to a level that more than compensates for the premium they paid.

The unusual auction on Monday “reflects a condition in the Treasury market that has been in place for months, chiefly that yields on shorter maturities have moved below the inflation rate,” Anthony Crescenzi, a senior vice president at the bond giant Pimco, wrote in a research note.

Along with diversification is risk premium acquisition.  In other words…”GET PAID TO TAKE RISK”.

To buy US dollar bonds and pay a premium (we look for discounts… not premiums) in my humble opinion is not wise.

Finally,  at age 35 to 40, I would invest more in myself and my own micro business!

Increase your ability to serve. See why at “Investors Get Screwed”. Reader Comment: Concerning comments about banking in Ecuador. At this point I would not transfer my life savings to an Ecuadorian bank. However, for convenience I have established an account in a small bank in San Jacinto a town of 3,000 next to San Clemente where we own a home on the beach. I met the bank officers and two of the members of the board of directors. When does that happen when you open an account in the US?This was done for the purpose of transferring funds to be used in Ecuador and not having to carry large sums of money on the flight. My account is at Cooperativa de Ahorra Y Credito (COACMES). This is the Ecuadorian equivalent of a local depositor owned savings and loan in the USA.

It is proving very handy. I can go to the bank (20 minute walk) (5 minute taximoto ride 50 cents) and withdraw funds as needed. They also offered me free checking services with the account. The interest rate is great, between 6 and 10 percent depending on amount and term.

I know others who have had in this bank large sums of money for long periods of time with no problems.

My Reply: This reader is correct. I agree and have written numerous times that “small amounts” for convenience makes sense.

But keep in mind that had “large amounts in Ecuador banks for long periods of time with no problems” until without notice all banks in Ecuador were shut down. I had $30,000 frozen for over a year and eventually received back only $19,000.

Banks can never be of higher quality than the investment rating of their country and Ecuador is not investment grade risk. You have been warned.  Be careful. Why take this risk when there are other much safer centers to hold the bulk of your savings?  Plus most Ecuador banks will only provide US dollar accounts and this is another risk.  I do not recommend holding very much of your savings in dollars or Ecuador banks.

Reader Comments: What about real estate scams in Ecuador?

This complete service includes our staff being able to provide personal responses to your questions.

Plus we help subscribers gain hotel discounts in the most visited parts of Ecuador.

See details of Ecuador Living’s full services here. 

 Ecuador real estate still offers great value like this Cuenca house offered at $72,000. 
See a Cuenca Ecuador house for sale here. Reader #2: Comment: Interesting how most of the Ecuadorian properties being marketed to the USA public using the internet as the venue are at least double the asking price from a couple of years ago. I wonder if most of the sellers are the “usual” real estate speculators.  Grab low – Sell High.

My reply to reader #2: Thanks for writing this as I have been wanting to get on my soap box and preach about flipping.  Your note provides my opening. Many of the properties are owned by people who have held them for a long time.

I started recommending buying in 2000 and many readers who did are selling for ten times what they paid.  As I have written often I am selling many of the properties I bought back then and selling now and buying back in Florida.

Ecuador prices have really been rising in recent times.

Construction costs have risen.  Cement, wood etc. are international commodities and labor is rising as the expats flood in.

There are some expats who try to come down and flip. This is not as easy as it seems and we find that most properties sell for much less than the offer price.  I am hoping that people will learn the risks of flipping.   I predict that those who try this in Ecuador will get their fingers burned.

Ecuador real estate still offers some great value but you have to get to Ecuador… learn how to market and wait with cash for bargains. The way to make a profit without getting ruined by popping bubbles is to spot distortions that create unusual value. Buy troubled properties and fix them. Throw in a dash of imagination and garnish with good taste. Plus be willing to wait five to ten years.

There is no easy way to always get rich.

I like real estate with lots of water as a good investment when it can be purchased at a good value.

Reader’s Question: Gary, here is the deal.  I need your input.  Iraq dinars .  You can purchase about a million dinar for about $1000.  Next, when something? happens with the govt. of Iraq they WILL revalue!!!!  On an unbelievable mutiple.  This is going to happen very soon.  Better get on board now!  Do not miss the boat!.  I have never dealt in a currency play.   The hard currency is actually mailed to you.

My reply: This is a very risky bet. I have seen this story floating around for several years now… and it flies in the face of history so I have not taken it up.

Fundamentally the idea is not strong.  What makes a currency strong is… a country united in political.. work… religious… legal, etc. work ethic and its competitiveness and productivity versus other nations with a balanced budget and reasonable government debt.

I am no expert on Iraq but do not see these qualities there.  Maybe they’ll get their act together… but how can a nation that stills makes its women wear burkas compete with modern society that lets women like our wives excel in the work force?

This is a huge dilemma that all Muslim nations face. How can you get the women into the work force?  Even if there was a huge change in religious and social philosophy this could take at least one or two generations.

Iraq has oil but also needs to import billions maybe trillions to rebuild… and I have yet to see a new currency issued that is upvalued. They are always devalued.  Will the people who rebuild the infrastructure accept an inflated currency as payment for their work?  I doubt it. I suspect the big construction firms will want a currency that is realistic.

Plus with all the new oil being discovered (and or now capable of being recovered) in the US… oil prices may go down.

If having a lot of oil alone made a currency go up, the Russian Rouble would rise verses the dollar.  This chart shows that instead since 1999 it has fallen from about 50 cents to 32 cents and is headed down.

Here is a currency play I am doing that has done very well recently.  I am not recommending that you follow the below outline and must add caution because these plays are always changing and in these times of risk need to be carefully monitored.  If you want to know what I am doing or changing or rearranging, just keep reading this free daily email letter.

I borrowed $300,000 and invested
$100K each in Mexican peso gvt. bonds (BBB) 10% Due 2024 selling at 117 yielding about 8%

$100,000 European Investment Bank Australian dollar bonds (AAA) 6.0% 2013 101.49  yielding 5.56%

$100,000 European Investment Bank  New Zealand dollar bonds (AAA) 6.5% 2014 104.77  yielding 5.38%

•Average yield 6.31% or $18,930 a year income.

•Loan cost      $   9,000

•Return           $   9,930

•Plus Forex Potential and all three currencies has risen versus the dollar.

Maybe you’ll make a lot on the Irqui dinar but maybe you’ll make a lot on the lottery. Odds are… you’ll lose.

One of our North Carolina cabins. I have a heavy weighting in real assets compared to currencies.

Reader Comments: The banking industry is sitting on $2 trillion of bad mortgages.Just last week Pimco and the Fed asked B of A to buy back some faulty mortgage investments formed by Countrywide.This is just the beginning.

Real estate has more downside and could be much more.

Second, baby boomers are downsizing. This puts pressure on the larger property market where there are many more sellers than buyers. As these prices continue to fall they will take smaller properties(which have somewhat stabilized in some markets) with them.

The only thing that will prevent a further significant drop in prices is a massive federal program that will allow homeowners to refinance at low or no cost at current mortgage rates and also allow them to walk away from some of their debt.

It is extremely difficult and expensive (especially in states like Florida) for homeowners to refinance today. The Feds need to make this process much easier (especially for those homeowners that are currently underwater but continuing to make their mortgage payments.

That’s my 2 cents.

My Comments: All these reasons for the real estate market continuing to fall make sense except  for three factors.  First, history disagrees.  Since the industrial revolution began… the world’s standard of living has improved.  Second, the population is growing and each person expects more.

Third, real estate is paying a great risk premium!  When the economy is in the doldrums it is hard to see how the economy can improve.  Yet is always has.

In this situation, the current tide is almost always wrong. When times are bleakest is the best time to invest because everyone else is selling.

Consider the alternative… land purchased at .5o cents n the US dollar or government bonds sold at $1.05 for a dollar bond!  Plus you can put your energy into a real estate deal… buy… fix… landscape… rent… use, etc.

Recently a reader passed a note entitled “How a stimulus package works” I rarely pass such emails on but this one is interesting. It said:

It is a slow day in the small Saskatchewan town of Pumphandle, and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.

A tourist visiting the area drives through town, stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.

As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Co-op.

The guy at the Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her services on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the traveler will not suspect anything.

At that moment the traveler comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves.

No one produced anything. No one earned anything… However, the whole town is now out of debt and now looks to the future with a lot more optimism.

And that, ladies and gentlemen, is how a Stimulus package works.

This is an interesting story and has a point but I’d like to point out that the hotel proprietor got screwed! He accepted the $100 from the prostitute… forgave the debt and then lost the $100.

So when the government gets too involved in the economy… always ask the question… who is going to get screwed?  The US dollar bond holder? The share investor. The commodity owner? The land owner?

My guess (and where I am betting more of my money) is that inflation is ahead and during inflation commodities and real estate win.

Keep in mind diversification… but once again look for risk premium.  The risk premium on real estate may be at an all time high!


See our catalog of service here.

Belong to the International Club 2011

See how to attend Gary & Merri Scott’s schedule of seminars – invest globally, have an international micro business – learn Spanish in four days –  FREE with International Club 2011.

Economies, investing and business change like the seasons. The change creates opportunity, which is why we want to share our exciting schedule for 2011.

Join us and our International Club 2011 and enjoy special prices.

Attend our eight investment, business, and Spanish courses in 2011 FREE plus attend the last course of 2010 free.

We just completed our October international investing and business course. Delegates gathered at our farm afterwards to share what they had learned and view…


the leaf change from…


our front yard.

International Club 2011 Membership Enroll here

Start learning today with our emailed International Investing & Business Course. Then stay up to date through the rest of 2010 and 2011.

Economic turmoil today will create more future prosperity then ever before…for those….who accept change and adapt.

This is why we bring together experienced like minded souls, who take a positive view and think outside the box..in a constructive…thoughtful way.

Merri and I are in our 42nd year of organizing courses, seminars and newsletters about international and quantum lifestyles. The importance of this sharing…by like minded souls…was reinforced when a delegate from a course sent an email that said:

My Dearest Merri and Gary, Thank you for your most gracious hospitality last weekend. I am just thrilled at being a part of your group. You and Gary were exactly as I imagined you to be, warm friendly, kind, considerate, genuine, helpful, fun, sincere, what else can I say……I felt so comfortable in your presence and learned so much in your course. I was sad to leave the farm that Sunday afternoon. You made us all feel so welcome and cared about. You were so kind to make arrangements for a ride with the other delegates from the Charlotte airport. They were so nice to me and so helpful, by the time the weekend was over I felt like they were my long lost brothers. Monday morning we all had breakfast at the airport together and I was so sad to see them go, I was sad the weekend was over, perhaps sad is not the right word for how I was feeling perhaps Gratitude is a better way to describe it. Grateful for having the opportunity to share the weekend with such wonderful, like minded Human Beings, in the beautiful mountains of North Carolina. Thank you Merri and Gary.

Thanks to you I now have new hope and a new direction to move forward in my life. Thanks to you I am so ready to move to Ecuador and begin a new life. I just have to figure out what I am going to do and how to do it.

I know by attending your classes and conferences that through education and due diligence I will make the right choices.

This delegate’s comments about “belonging and feeling like a brother” to the other delegates is a wonderful refrain we have heard from our readers, year after year.

This why I want to share how you can attend eight of our investment, business, and courses in 2011 (worth $7,491) FREE.

21 years ago Merri and I created a way that readers can join us to be immersed in a year-long learning program through our International Club.

The ideas behind this program began all those years ago in Vienna, Austria while we were conducting a course there. One of our older delegates, had some sort of attack. The first fear was heart trouble. Several delegates took him to the hospital. Others stayed with him there. I don’t think that delegate was alone for a minute!

What impressed Merri and me was that no one asked the delegates to help this man.

The friendships of delegates sharing many courses had just grown so strong that it was a natural reaction, just as if a family member was ill. Fortunately, it was only travel fatigue and the delegate didn’t miss a session of the course!

When you join our International Club 2011 you become part of a special family. The very first member to join the club all those years ago wrote, Thank you for the enjoyable and informative courses. I am pleased to be part of your international family and look forward to continuing my education at the next course.

His feeling struck a familiar chord. It has always been one of my greatest satisfactions to see how much fun delegates have getting together, sharing information and making friendships.

These courses somehow draw together like-minded souls. For this reason some delegates come back again and again. They come to learn, but also to be with their many friends made at the courses. When like-minded souls get together again and again to discuss a common purpose, magic happens! I can’t explain it in any other way-but it is true.

In a way our meetings are almost like family reunions. Perhaps it is getting together and reflecting on what has been said and what has been happening.

Learning with those who are also interested in the world creates thoughts that multiply the value of what we gain. This is hard to describe but results are most powerful and wonderful! This is to me is as important as the great financial benefit of attending nine courses that would cost $$7,491 FREE.

See why and our 2011 schedule below.

We started and have continued this program for 21 years because there are wonderful benefits from having repeat delegates at courses. Having repeat delegates makes the whole course somehow more exciting for all. Being a repeat delegate makes it easier to make and keep wealth and to lock in the knowledge you gain. It’s an exciting lifestyle. We have fun, gain adventure, discovery and friendships and share ways to improve our health and wealth!

We have expanded our courses in 2011… four in the cool Blue Ridge of North Carolina and four in Historic Old Florida.

Few club members actually attend every course and tour…  but certainly some attend all of them!

If you attend even a few of the courses, you gain considerable savings… PLUS we record each course so you can have the course downloaded on your computer when you cannot attend in person.

For those not interested or not quite ready to go to Ecuador, we have our North Carolina courses in the summer when it is cool here in the Blue Ridge Mountains and don’t forget the autumnal beauty in October…. plus in sunny Old Florida during the winter.

Here are the courses and tours you can attend free. Plus there is even one more savings you will see below.

November 4-7, 2010 – Super Thinking + Spanish Course.  Mt. Dora, FL ($749, couple $999)

Feb. 11-12, 2011  International Investing Made EZ.  Mt. Dora FL ($499 or couple $749)

Feb.12-13, 2011   International Business Made EZ,  Mt. Dora FL ($499 or couple $749)

March 10-13, 2011  Super Thinking + Spanish, Mt. Dora Florida ($749 or couple $999)

June 24-25, 2011  International Investing Made EZ,  Jefferson NC. ($499 or couple $749)

June 25-26, 2011   International Business Made EZ,  Jefferson NC. ($499 or couple $749)

Oct. 7-8, 2011  International Investing Made EZ,  Jefferson, NC. ($499 or couple $749)

Oct. 8-9, 2011  International Business Made EZ , Jefferson NC. ($499 or couple $749)

Nov. 3-6, 2011   Super Thinking + Spanish,  Mt. Dora Florida. ($749 or couple $999)

Schedule subject to change. Always check final schedule at www.GaryAScott.com/catalog

If you join the International Club, the entrance fee for 2011 is $1,500. You can attend all courses with a guest and all attendance fees at all courses are waived.

You and your guest can attend $7,491 worth of courses FREE.  Plus there is more.

I invite you to be a member of the International Club which allows you and your guest of your choice to attend all of these courses which are valued at $7,491 FREE!

Plus if you cannot attend any seminar in person… we’ll send you the course by email so you can hear it on your computer or in your car.

International Club 2011 Membership

Enroll here

You may well wonder why I would make such an offer and ask why the cost is so low? Let me answer this question frankly and from the heart. First, it helps us do a better job for you. We feel greatly enriched when we can really help our clients improve their lives. We have learned through years of experience the best way to do this is to meet with you regularly. We can best help you learn how to improve your health and wealth through continual expansion of knowledge.

Second, we gain enormous fulfillment from the many friendships we form through the years. Our friends have enriched our lives tremendously. Let me explain this in more detail.

As a member, you will be part of our international family that meets intensively over the next year to examine ways we can make our lives better. Our goal is beyond just having money. Our goal is to have quantum wealth… good health… wealth and fulfillment through service.

Though we give all course delegates my very best, I cannot help but to do a better job for those who come again and again. As we meet often; your particular wants, needs and desires become clear, and it is easier for us to help you find the right direction.

Another phenomenon is that repeat delegates help each other! They get to know one another, help each other learn, share their insights, make contacts, become friends and gain more wealth.

Lifestyle for Two.

There is more!

I have learned at my courses that many repeat delegates were couples.

We want couples! As a member of the program, you are entitled to bring another person to every single course or tour. The cost for that extra person will be ZERO!  You can bring whomever you wish. Bring your spouse, a friend, son or daughter, partner, accountant, adviser. You can bring the same person each time or a different person, whomever you choose to accompany you. (Accommodations and air fares relating to the courses are not included for members, delegates or their guests.)

Won’t you join us in this exciting club and share Merri’s and my lifestyle for the next year?

We look forward to seeing you at as many courses as possible and sharing this wonderful world of abundance and well being with you!


International Club 2011 Membership  Enroll here