Sigrid Paul was living in East Berlin in 1961 when she gave birth to a beautiful baby boy.
Unfortunately, her son was born with serious health problems… and Sigrid had to seek the best possible medical care to treat him.
It was more than fifteen years after World War II, and Germany had already been divided between East and West for over a decade.
Not surprisingly, the capitalist West had much better health care than the socialist East (which was really just a Soviet puppet state). In fact, the West had better everything…and that’s why more than three million East Germans defected to the West between 1945 and 1961.
In the early 1960s, the Soviet Union was desperate to stop the flight of talent and workers from East Germany. It was an embarrassment for them. So they slowly escalated “people control” to keep the population of East Germany in their socialist utopia.
They started with tighter border controls, exit visas, “papers please” and so on.
Many East Germans began to worry about what would happen next and whether they would continue to travel to the West…including Sigrid Paul. She regularly went to West Berlin to treat her son and feared getting stuck.
But in June 1961, the leader of East Germany reassured everyone when he publicly declared: “No one intends to build a wall.”
The East Germans were reassured. Their government promised them everything would be okay, so they stopped worrying. And Sigrid was reassured that she could continue to have access to West German medical care.
But everything changed when the residents of East Berlin woke up on the morning of August 13, 1961 to find a barbed wire fence and concrete barrier erected between East and West Berlin… not to mention armed soldiers backed by the Soviet Union.
Sigrid panicked. She and her son were instantly deprived of medical care.
Fortunately, a group of East German doctors were able to falsify some medical records and transport the boy to the West, saving his life.
But Sigrid was not allowed to accompany him. Soviet bureaucrats forced her to stay. And when she was caught planning an escape to join her son, she was arrested and served four years in prison.
If Sigrid had taken the risk seriously, she could have simply crossed the border to the West and started a new life there… when the option was still available. But like so many others, she ignored the obvious warning signs and believed the experts who told her everything would be fine.
As a result, she was separated from her son and lived under a totalitarian regime until it collapsed in 1989.
Sigrid’s story is obviously an extreme case. But at its core is a very common theme among human beings.
Most people are optimists who suffer from severe normalcy bias. We really want to believe that tomorrow will be a lot like today. And even when very bad warning signs flash, our optimism and normalcy bias lead us to ignore the risks.
This is especially true when our leaders make expert statements. And we’ve certainly seen our share of it:
Ten days to stop the spread. Silicon Valley Bank is safe. The Taliban will not take back Afghanistan. No one will touch your social security. Debt doesn’t matter. Deficits don’t matter. America can afford two wars.
The list goes on and on.
For example, like I mentioned earlier this weekby 2031, U.S. tax revenues will no longer even cover mandatory social spending (like Social Security) or annual interest payments on the national debt.
This is what the Congressional Budget Office, a US government agency, says.
You can practically circle a date on your calendar for a major financial crisis: 6 years from now, 11 months from now, 26 days from now.
To think that this does not pose a huge risk to the prosperity and stability of the United States is more than illusory.
Meanwhile, civil unrest already appears to be igniting in America’s streets at the slightest provocation. Crime is reaching ridiculous levels. Imagine what it will look like when real economic hardship hits.
When faced with such obvious risks, it makes perfect sense to have a backup plan.
And a crucial aspect of a Plan B is having somewhere else to go, where you have the right to live, work and raise a family.
This is what getting a second home can do for you.
It is obvious that no place is perfect. But having a second residence abroad means you’ll always have somewhere else to go…another option. And more options mean more freedom, more security, more diversification and less risk.
In general, there is no downside to receiving this benefit. And there are many different ways to do this:
For example, Golden Visas are popular residency programs in European countries like Portugal and Greece. In exchange for an investment, you get easy residency without having to spend a lot of time on the ground in the country.
In Greece, the possibility of investing in real estate worth at least €250,000 (which you can use personally or rent) is still available. Portugal recently dropped its real estate investment option, but you can still get its Golden Visa for just €200,000 investment in a cultural heritage project.
It’s actually another reminder to act while the deal is good: the best options don’t last forever.
But if you don’t want to spend that kind of money, there are plenty of residences available for those who can simply prove they receive a certain amount of retirement, investment, or employment income.
Mexico and Costa Rica are examples of options popular with Americans, due to their proximity to the United States and relatively low eligibility requirements.
In Mexico, retirees can obtain permanent residency with an income of around $6,000 per month, or by demonstrating around $240,000 in investments and bank balances. It is easier to obtain temporary residency and only requires an income of about $3,600 per month or a balance of $60,000. (That’s about double the price of a few years ago due to the strengthening peso – yet another reminder to act sooner rather than later.)
Costa Rica only requires a monthly income of $1,000 for retirees and $2,500 for remote workers, making an investment totaling $150,000 in various categories including real estate, business or even vehicles.
Then there is Panama, which offers residency pathways for retirees and through a Golden Visa.
Retirees only need an income of $1,000 per month, from a pension or social security, to qualify for the Panama pensionado visa.
Or, a $200,000 investment in real estate could allow nationals of “Treaty of Friendly Nations” countries, including the United States, Canada and many European countries, to obtain residency in Panama. (For others, the Golden Visa requires an investment of $300,000).
I had the opportunity to view real estate in Panama during my stay there a few months ago, and let me tell you, $200,000 goes a lot further there than in the United States .
Of course, these are far from your only options. The fact is that there are many accessible ways to obtain a second residence in the country of your choice.
And that’s a pretty reasonable thing to do given all the risks looming on the horizon.