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Many current and future retirees are considering more economical lifestyles outside of the United States -- especially after the market jolts of the past year. The trend may have started with Butch Cassidy and the Sundance Kid when they retired to Bolivia. In the same spirit, Mexico may offer one of today's best opportunities for a convenient, pleasant and cost-effective retirement locale. I just completed a 3,000-mile round-trip motorcycle ride from San Diego to Puerto Vallarta by way of the Baja peninsula. My three friends and I went by ferry from La Paz, near the southern tip of the peninsula, to Mazatlan on the West Coast, and then on to PV through jungles, villages and banana plantations. Along the way, we chatted with numerous American retirees who have made their homes in Mexico. These conversations convinced me that there are major advantages in Mexico for those who can come to terms with "the fear of the unknown." The Economics First the economics. Anna, a former supervisor at a Borg Warner transmission factory in Muncie, Ind., showed us her attractive ranch-style home built about 10 years ago for $12,000. It took a dozen workers three months to build, and it is located 50 yards from the beach in a small fishing village about thirty miles north of Puerto Vallarta. Anna also built an eight-room hotel that caters to long-term visitors from the United States. If she needs to go home for extended periods, the guests run the hotel. Speaking of her three children and grandchildren, Anna says, "Hey, they don't want 'Gramma' back up there in Muncie. They would much rather come visit me here in Mexico ... especially around Thanksgiving, Christmas and spring vacations." At a party, we met just about the entire American community living in this village, which is called Punta de Mita. One person had just developed the town's Web site, and another was teaching English in a Mexican school. Dinner for eleven persons at a local restaurant serving great Mexican food came to a total of $16. The consensus is that an income of about $2,000 per month can provide a very adequate lifestyle anywhere in Mexico, outside the hardcore resort communities. Many retirees living on their sailboats manage comfortably on $500 per person per month. In the Lake Chapala area, as well as around Mazatlan, there are large communities of Americans and Canadians. Many of the Canadians have renounced their citizenship to avoid Canadian taxes. Taking this initiative is a major cost-reducing step. With regard to health care, Mexico offers some good resources. On a previous motorcycle trip, one of my travel friends (a surgeon himself) had a little accident and broke seven ribs and a collar bone. The attending physician in Mexico was a McGill-trained specialist working in a hospital with first-class surgical facilities. A knee or hip replacement costs half to one-third as much as the same operation in the United States For obvious reasons, Blue Cross loves it when its U.S. members receive medical care in Mexico. Apart from good medical care, the cost of around-the-clock assistance for, say, a spouse who has had a stroke or who suffers from Alzheimers can be a fraction of the prohibitive cost in the United States. This is another compelling reason for retirees to consider this adventurous alternative. 'Funky' Lifestyle Some aspects of Mexico take getting used to. Outside the resort communities, little English is spoken. You have to learn at least the basics of Spanish, but when you're there, the basics come pretty easily. Spanish is an appealing language to learn, and a reasonable amount of study and diligence can make you conversational. There's also the issue of climate -- it tends to be dry and dusty for much of the year and humid in the summer. Overall, things are just "funky" compared to life in a typical United States or European suburb. The resources are just not there to created> | |||||||||||||||||||||
These securities are used in the facilitation of customer trade execution activities and are held and may be pledged by the clearing organization.
5. Related Party
Transactions
The Company is party
to a servicing agreement with its Parent, whereby the Parent provides
all personnel, occupancy, administrative and equipment usage services
of the Company.
6. Stockholder's Equity and Net Capital Requirements
The Company is subject to the Uniform Net Capital Rule under the Securities Exchange Act of 1934. In accordance with the Rule, the Company is required to maintain minimum net capital, as defined, and requires that the ratio of aggregate indebtedness to net capital, both as defined, shall not excess 15 to 1. At December 31, 2000, the Company had net capital, as defined, of $2,262,795, which was $2,012,795 in excess of its required net capital of $250,000. The Company's ratio of aggregate indebtedness to net capital ratio was 1.39 to 1.
At December 31, 2000, 2000 shares of $0.01 par value common stock were authorized and 1,050 shares were issued and outstanding.
7. Commitments and Contingent Liabilities
The Company has not been named in any legal actions or arbitrations, and management, after consultation with outside counsel of the Company, is unaware of any threatened or pending legal actions.
8. Income Taxes
At December 31, 2000 the Company has NOL carryforwards of approximately $12,700,000, which begins to expire for Federal tax purposes by December 31, 2019. Due to the uncertainty regarding the ultimate realization of any tax benefit relating to this NOL, such benefit has been fully offset by a valuation allowance.
9. Financial Instruments with Off-Balance Sheet Risk
In the normal course of business, the Company's securities activities involve the execution and settlement of various securities transactions for customers. These activities may expose the Company to risk in the event customers, other brokers and dealers, banks, depositories or clearing organizations are unable to fulfill their contractual obligations. The Company continuously monitors the credit worthiness of customers and third party providers.
10. Subsequent Event
During May 2001, the Parent entered into an agreement with several of its investors whereby the investors committed to provide up to $10 million in additional funds to the Parent and the Company for use in its ongoing business.
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Securities and cash held in customer accounts at BUYandHOLD Securities Corporation are protected through the Securities Investor Protection Corporation (SIPC). This coverage includes $500,000 of protection (including up to $100,000 for cash). SIPC was created by an Act of Congress to protect clients of SIPC member firms. SIPC coverage does not apply to money market funds, which are custodied outside BUYandHOLD Securities Corporation accounts.