Chapter 1: It's time

Who knew it would come so soon. I sure didn't. I could never even see myself as retired. The concept was unacceptable. I had sunk all I had into my businesses, and the one that had actually made it big, was lost to me due to some poor choices on my part and some bad faith on the part of others. Still, I wasn't crying over that, I had plugged ahead, with another company. In the end, when the market took a zig, my latest company was the zag. It was time to gracefully and quickly as possible, shut things down, and sell the assets I had. There was enough in assets to pocket about $200K as we turned off the lights.

As I reviewed my situation, I was still a few years from getting the most out of my social security. The cost of living, to live in the home I had, and in the way I did, would consume all my sayings soon enough. At some point not too many years down the road, all that would be left would be a Social Security check, and whatever small paycheck my sweet wife might bring in, as she was not highly skilled in anything other than being a good wife.

I did have other equity. I had a home. We had refinanced recently to get some needed cash but I figured that if we sold it and paid off the mortgage, we would realize about another $200K. But that gave me only $400K for years to come (and the possibility of a modest inheritance at some point in a few years further on). I clearly had a problem.

I was aware of reverse mortgages, but my Filipina born wife, Maricar, is thirty years my junior and I had to leave her standing when I check out. So that was not a viable option.

Since birth and for sixty-two years, I had been a proud citizen of the United States. I had never considered leaving it. I saw no reason to leave it. Now, as I contemplated my retirement, I did.

The math was compelling. If we moved to the Philippines, I could build a house for my wife and me, and build an apartment building, with the money we had available.

For what amounted to $2K US, or P80,000 in Philippine Pesos, a month, we could live very, very well. We could live off the rents for as long as we pleased, once it started coming in. The SSA checks would kick in, in a few years, adding a bit to our monthly income. The inheritance would also kick in, in a few years. Until all that happened, we would be depleting some of our remaining capital. But the rents would kick-in within the first year we were there. Our cash burn would stop well short of $24K during the first year for our monthly needs. If we didn't decrease the $2K were using a month, adding the SSA income, bumping the total to $3K, a month, we would live without any concerns at all.

That might have been a problem because of the USA tax laws, but the Philippines was a cash economy, it was not a credit/plastic economy. It wouldn't even help if we used my wife's account, as she was a dual citizen, with both USA and Philippine passports.

In the future, any money we deposited in our Philippines bank account was going to be reported to the USA IRS and we still had to file US Tax returns. So the SSA checks could go into the Bank and build up, but the cash we realized from rents, would be collected in Pesos, be used as Pesos and never see the inside of a bank. With the rentals, we would actually be making good money. When the inheritance hit, we could build more apartment buildings. And that money would also remain in Pesos.

It was simple, stay in the USA and go from middle class to poor. Move to the Philippines and be OK for the rest of my years, while at the same time bequeathing a valuable estate to my wife and heirs.

To accomplish this I drew up a list of the things that needed to be done. One by one, they were completed. Customer contracts sold off in conjunction with company liabilities. My goal was to end up neither making nor losing money. I was hoping for a wash and that is what I got.

With money, we already had in the bank, we (via my wife, as a citizen of the Philippines because foreigners cannot purchase land) we acquired a 1000SqM lot in the Dadiangas Heights area of General Santos City.

I sold the other assets in my company, at the perfect point and received more than I had hoped we would get. I realized $235K. The USA housing mess was over, mortgages were still low interest and there was demand in my region. The house also sold for a bit more than I had anticipated. We realized $260K profit at the sale. Being $5K shy of a half a million dollars was way beyond that which I had hoped. The cost to ship all our worldly good to the Philippines via container freight was under $7.5K. I applied for and received an immigrant Visa from the Philippine government. When the 40 foot-container arrived at the port of Davao in the Philippines, I showed my Immigrant Visa and the cargo was released duty and tax free! Welcome to the Philippines.

We leased a home for $250, (or P10,000), a month while we built our new house and the apartment building. So I started my life, as an Expat retiree, in the Philippines. What I didn't expect was how my life would change in many other ways.

Maricar: Hon, Inday tells me she is having a problem collecting the rent from 3F. Will you please take care of it? I need to go to the market, stop off and pay the water and electric bills.

Me: How much is due?

Maricar: They are late a week on the rent. It's P4500.

Inday is my wife's sister. She and her husband live in one of the apartments – she acts as manager for us. We pay her a straight salary and provide them the apartment free of charge. Inday's husband, Edgar, works as one of our security guards at the gatehouse of the building. They do OK. For all that, they fix anything broken or in need of repair. She normally is to collect the rent. Her salary is minimal, but so is the work. Most of the hard stuff falls on Edgar. We also have another of my wife's sisters, Liezel, who works for us as a maid, at least for now. Whether she will be with us for long is up for discussion. Once again, we pay a minimal income, but she pays for nothing. She is essentially a dependant of mine, she lives with us in the house and everything including her clothing is paid for. What she gets in money is more like an allowance.

Anyway, my wife had asked me to see about collecting the rent from the family in 3F. All my working life, I had been a professional, dealing with other professionals. I had never been a landlord. Now I was. I had thought of my role as the hands off landlord, reaping in the profits but not actively involved in the day to day. This was different.

The apartment building is on our property, but outside our compound. It is still early morning, about 7:50AM, as I walk out our gate, pass by Edgar at the hut by the apartment building gate and walk up to the third floor of the apartment building.

3F is a two-bedroom apartment. In Manila, if there was an elevator, this apartment might go for 12,500P, but here in Gensan, and with only stairs, it was a lot less expensive. Still the average salaries were low too and even P4,500 was a struggle for many a Filipino here.

I knock on the door of the apartment. A boy of maybe four years opens it. I ask in Tagalog for his mother or father. The child runs off leaving me at the door for a good minute before a woman appears.

She is probably attractive, but at the moment, all I see is a young woman, somewhat disheveled and fearful. I wish her a good morning and she returns the greeting. The rest of the conversation in Tagalog, will be written in English.

Me: I am your landlord.

Renter: Yes, I know Sir Lawrence.

Me: What is your name ma'am?

Renter: Imee, Sir.

Me: Imee, you know that your rent is over due by two weeks?

Imee: Oh Sir, it is one week! I do not have the money. I will have it soon! I promise.

Me: No the rent is due on the first of the month. We allow you to pay up to a week late, and you are a week later than that!

Imee: Truly, I will have it soon! I promise.

Me: Imee, what makes you think you will have the money soon?

Imee: As soon as my employer pays me, I will pay you.

Me: You do not know when you will be paid?

Imee: No, Sir. She says it has been a bad month for business, but that I will be paid.

Me: Imee, I am afraid that we can't allow you to stay without payment.

Imee begins crying, sobbing and begging. This is just what I don't need! She is on her knees, sobbing and grabbing my legs, saying something about how her family will end up as beggars on the streets if I can't help her out. Unfortunately, I suspect that she is speaking the truth. Still, if I just let this slide, I will end up as a non-profit homeless shelter! That can't be. I say as much to her.

Chapter 2 »