The Investment U E-Letter
Monday, January 26, 2004
* * * * * * * Nicaragua: Free at Last … And Profitable, Too!
By Dr. Steve Sjuggerud
President, Investment U Managua, Nicaragua - As long as Americans think of Nicaragua as "Russia with palm trees," it will be a great place to invest… I've been saying that since my first trip here a dozen years ago, and the returns on investment have really been extraordinary. But since Americans still think of Nicaragua as Russia with Palm Trees, I still believe there's much more to come. Let me explain… A Lot Has Changed… And that's Good for Investors The changes I've seen in 12 years have been amazing… I'm writing to you from the excellent Intercontinental Hotel (which didn't exist a couple of years ago), working on a high-speed Internet connection in my room (which didn't exist last time), looking out over the modern mall (here three years), where Porter Stansberry and I saw the Tom Cruise movie "The Last Samurai" last night. (The movie theater with the full stadium-style seating was nicer than the one in my hometown.) You've got Pizza Hut, McDonald's, Subway, Burger King and more here… and literally, that's just in the mall's food court. Compare that with a dozen years ago, when there was really no American business here whatsoever. Two Extraordinary Events Suggest Rapid Growth Is Around the Corner Two extraordinary events in the last few weeks set the foundation for rapid growth in Nicaragua… and the potential for large investment gains… First, former President Arnoldo Aleman, whose term ended in 2002, was thrown in prison for 20 years on corruption charges. It is the first time in history a former president has been convicted in Nicaragua, and to me it shows that, unequivocally, no one is above the law. The rule of law is sound here. Second, three days ago, the IMF announced $4.5 billion in debt relief for Nicaragua, reducing Nicaragua's external debt by 73%. The chains of debt for such a poor country just got a lot looser. The opportunities for economic expansion got even greater. And for one friend and colleague of mine, those opportunities are already paying dividends. Dinner with the Indiana Jones of Investing Talk about being in the right spot at the right time… Mike Cobb, who Porter and I consider to be an "Indiana Jones of Investing," lives here now. The presidents and finance ministers of a few countries will take Mike's call. Mike moved here a year ago with his wife and now three-year-old child, to work on a large investment project. With the ex-president thrown in prison and the debt relief, it looks like Mike's time has arrived. He told us what it's like living here… and he says it's great… Quite honestly, knowing his wife, I didn't expect her to want to stay. But Mike told us last night that she said she doesn't feel a need to move back to the States. She might be getting spoiled with the six-day-a-week maid, who costs roughly $100 a month (and Mike says that's overpaying), or the driver, or… well, you get the picture. Surprisingly, Mike says his cost of living is actually about the same as it was in the U.S…. but his standard of living (with the maid, for example), is much higher. A Modern Lifestyle, a Great Climate, Cheap, Too… What's Not to Like? A dozen years ago, you couldn't have possibly lived a "modern" lifestyle here. But now, I can see it. Out my hotel room window, I see the mountains, Lake Nicaragua, the mall and theater, and stores like Radio Shack. The big stores like Price Club are here, and quite frankly it's already awfully "American" here. It is a perfect day outside, as it often is in Nicaragua… it'll probably hit 85 degrees, with a nice breeze and not a cloud in the sky. I don't see myself moving here like Mike. But for adventurous investors and those looking for a unique place to retire inexpensively outside of the U.S. with a high standard of living, Nicaragua is now finally worth a look. Today's IU Cribsheet - The Oxford Club has a 4- bedroom "Bed & Breakfast" Clubhouse at Rancho Santana in Nicaragua, with stunning views of the Pacific, a lovely mile-long beach, and lots of other amenities. For more information or reservations, go to http://www.oxfordclub.com/nicaclubhouse/, or call Gail Geerling at 011-505-887-4343.
- My friend Mike Cobb puts out an email a few times a year (originally to friends and family) about the trials and tribulations of living in Nicaragua. It's good fun. If you're interested, let him know at mmmcobb@aol.com and he'll send you the most recent one and put you on the list.
- Finally, the folks at International Living have an office in Nicaragua and know the country extremely well. They also do real estate tours that are an excellent introduction to the opportunities in the country. For more information, call Gordon Nelson at 954-727-5194.
Good investing, Steve | 
