questions...

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superdave

Guest
Looking to retire in PP or Sosua area.
Questions:
Does it sound reasonable that a couple can live off the interest from $400,000 (living very simple not drinking/smoking/partying) ??? If no, what if cost of housing was covered?

Are the interest rates in DR stable enough to depend on that income for living?

Thanks.

Dave
 

wishingiwasthere

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Nov 19, 2005
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On my last visit I met an English lady who had ?200k. She has this in an american $ account and lives off of the interest. I believe she lives VERY well.

I would suggest if your houseing is covered and the interest is to live on - the answer would be yes - however I dont live there.

Im sure others will chime in.......
 
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apostropheman

Guest
i understand that you can receive at least 15% per year on $400k if you do not touch the principle. this would amount to $60k USD per year or $5k USD per month. in pesos @ 33/$ is 1,980,000 pesos per year or 165,000 pesos per month.

that is a LOT of money for most people, expats definitely included, to live in the DR especially if housing is paid for (or even if housing is NOT paid for :D).

for example I'm confident that i could live on substantially less and be thrilled :)...i'd guestimate that the interest you would receive for only 1 month would allow me to have a very enjoyable lifestyle for 3 or 4 months (and perhaps longer)...so if you need a pool boy, i'm your guy :cheeky::bunny::bunny:
 
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apostropheman

Guest
thank you Lambada, (too much wine for me i guess :D)
you are correct, it should have been:

on USD 12% per annum and 13% for a 2 year term.

i'd still be good for 3 or 4 months for every month of interest earned :D:bunny::bunny:
If you're prepared to exchange it to pesos, yes. If you want to leave it in dollars, interest rates are noticeably less.
i wouldn't recommend exchanging to pesos for this type of investment but then i'm also not a financial professional :)
 
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BushBaby

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I think the true response to your question is 'YES' but it depends on what risks you are prepared to take to ensure a short term of long term income.

It depends to a great degree on your age, whether you intend truly retiring or having some form of employment (albeit what you LIKE doing as opposed to what you HAVE to do to earn a crust). If you got yourself involved in consultancy, building works, car mechanic, computer repairs etc, you could earn an additional income to supplement investment income & thereby reduce the risk factors!!

MY initial idea would be to use US $200,000 for income investment (i.e. convert that into RD pesos at 33.70 approx) & leave the other invested (to compound if possible) in a hard currency (U$D, ? Sterling or Euros). If you do not earn an income from part-time work & need to draw off the investment in hard currency, you could then do so as & when needed! This would give you the best of both worlds whilst teaching you to live off smaller incomes until you found your feet & got the knowledge of how things work here!

I am presuming in these figures that you are NOT using any of the capital for house purchase to start off with! RENT for at least six months, get the feel of the DR, learn how things are done & THEN (when you find the right land or house for YOU) negotiate hard from strength & buy at the price YOU want to pay.

Due to recent inflation .......... That is my RD $50 worth! ~ Grahame.
 
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superdave

Guest
thanks...

thanks everyone for your input. couple more q's...

1. what do you know about the history of the interest rates, have they been stable?

2. in your experience, do most people (expats) transfer everything into RD or keep their money in $ ? Is one safer than the other?

3. are real estate prices actually going thru the roof as the realtor websites would have you believe? (in the PP area)

4. what are property taxes on a house/villa like in comparison to condo fees? and are condo's safer - in your opinion?

5. someone mentioned doing some work for supplemental income, i am a computer engineer, does anyone know if it is easy to pickup odd jobs doing computer repair/installation or networking?

some info about us: we are 30ish, canadians, won't be moving for another 2 years or so, intend on spending our time doing missionary work (which is very inexpensive :) )

we will certainly take everyone's advice and RENT for a while first, and will learn as much spanish as possible. we speak french also, are there many french speaking dominicans?
thanks!
 
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BushBaby

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Answers (IMHO only)

1. Basically YES since 2005. They could well take a jump (either way) after this next election's results are in!

2. Some do exchange (for the income) some prefer to remain in U$D! It really depends upon YOUR income versus comfort of mind needs! It would be best to come down & meet the players before making any decisions - ask YOUR questions & then make YOUR decision once you feel comfortable with the financial institution/s you talk to.

3. NO!

4. Taxes vary according to value of 'assessed' of house. Security depends on area chosen. Choose the right area & NO, condos are not safer than houses - choose the WRONG area & both are susceptible to crime!

5. Computer engineer????? Are you SURE you can't get down here in less than two years?? Pretty PLEASE?????

Not many Dominicans that I have met speak French but there are a whole lot of Haitians that speak a form of it!! If you have your own house built in due course, you'll be a wow with the bricklayers/labourers etc!!

Try to make a holiday down here each year until you move & check even more questions when you come!! Also check the archives under the search function using keywords like 'Buying a home', 'Condos', 'Moving to the DR' & all variations thereof - the amount of posts that will come up will astound you!

Good luck. ~ Grahame.
 

The Virginian

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Mar 16, 2007
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Banco Centrel is curently offering 15% for a 30 month CD. must be ein peso's. You can not withdraw it before the 30 months are up. Not that there is a penalty for early withdrawal, you simply CAN NOT withdraw it before the 30 months. If your house and car are paid for, you CAN live like a KING on 15% of 400,000 USD.
 

margaret

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Aug 9, 2006
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thanks everyone for your input. couple more q's...

1. what do you know about the history of the interest rates, have they been stable?

2. in your experience, do most people (expats) transfer everything into RD or keep their money in $ ? Is one safer than the other?

3. are real estate prices actually going thru the roof as the realtor websites would have you believe? (in the PP area)

4. what are property taxes on a house/villa like in comparison to condo fees? and are condo's safer - in your opinion?

5. someone mentioned doing some work for supplemental income, i am a computer engineer, does anyone know if it is easy to pickup odd jobs doing computer repair/installation or networking?

some info about us: we are 30ish, canadians, won't be moving for another 2 years or so, intend on spending our time doing missionary work (which is very inexpensive :) )

we will certainly take everyone's advice and RENT for a while first, and will learn as much spanish as possible. we speak french also, are there many french speaking dominicans?
thanks!
Since you're Canadian and you intend to keep working for awhile and perhaps contributing to an Registered Retirement Savings Plan (RRSP), here's an article on taxation, the timing for changing residency, and making withdrawals from your RRSPs.

reportonbusiness.com: Thinking of leaving Canada? Deal with your RRSP properly
 
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Tamborista

hasta la tambora
Apr 4, 2005
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Banco Centrel is curently offering 15% for a 30 month CD. must be ein peso's. You can not withdraw it before the 30 months are up. Not that there is a penalty for early withdrawal, you simply CAN NOT withdraw it before the 30 months. If your house and car are paid for, you CAN live like a KING on 15% of 400,000 USD.
You forgot about Currency Exchange rate risk!
What happens if whoever gets elected decides he likes RD45/USD better than 33.50? Ummmmm.....you just lost 26%, so I guess you break even after interest payments. I am not predicting it is going to happen, but ya' never know. Remember Hipo's admin paying 50%?

I do not reccommend putting your entire nest egg in ANY particuliar currency, unless you are hedged. They do not exactly have Peso Puts,on the CME to trade, like the major currencies.

tambo'
 
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J D Sauser

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Nov 20, 2004
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Banco Centrel is curently offering 15% for a 30 month CD. must be ein peso's. You can not withdraw it before the 30 months are up. Not that there is a penalty for early withdrawal, you simply CAN NOT withdraw it before the 30 months. If your house and car are paid for, you CAN live like a KING on 15% of 400,000 USD.
Hmm... in pesos... but then just a 10% dip in the DOP/USD pair and you have some value losses to compensate for.
I'd split 4 ways: USD, DOP, EUR (to counter act any further USD/EUR catastophies) and (over time) some real estate.
I would also not invest it all here on the island exclusively. Some banks in the EU offered almost 6% interest on new accounts, to give you an example.
Being here (living full time) rental real estate CAN be a valid way of safe placement AND income generator (if you can oversee and manage yourself).

I would NEVER convert high portions of my net worth into a currency like the DOP. The DOP is being held "stable" by politicians... not because of trade or real financial data and economics.

... J-D.
 

Malibook

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Jan 23, 2002
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DR1 Daily News - Friday, 18 January 2008

Inflation eats up interest rates
Interest rates on Dominican deposits are at around 7-8%, but with the Central Bank announcing a year-end inflation rate of 8.8%, Dominicans are barely keeping the value of their deposits, as reported in Diario Libre. Central Bank reports indicate that the average rate paid for 30-day certificates was 6.26%, for 60-day certificates 6.62%, and 6.98% for 90-day certificates. 180-day certificates were paying 7.49% and 7.71% for certificates that have been deposited for a year.

Those must be the figures for the DR.
I'd rather have a good sound sleep.... :tired:
 

Criss Colon

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Jan 2, 2002
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"Well Done" Malibook!

Everyone wants the DR's High Interest rates! But likes to foreget about the high inflation that goes with them!
Prices of food have jumped since our two "Tropical Storms"! "Gas" is about $5 US a gallon
I would NEVER "retire" to the DR without first "living" here for at least a year!!!!!!!!!
Leave your $$$$$$$$$$$$ where they belong,in the USA!
Come rent for a year!
You can get a nice airconditioned 1 or 2 bedroom condo,with a pool, in Sosua for 400 US a month!
You better try that first!
Cris Colon