#996 – The Expat Files: Navigating Life, Solar Energy, and Music in Latin America

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came out to play and now I wonder Hello there all you ex-pat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started. All right We'll start with a few emails then hit on a few more solar questions now, I don't know if you're all getting bored with that solar stuff, but Surprisingly enough. I'm getting a flood of emails saying Johnny. Thanks for explaining all of that

[00:45] The thing is you see there are a million and one Youtubes and blogs and all kinds of information out there on various types of solar systems And if you're not a do-it-yourself or mechanical or scientific type, well, let's put it this way if I didn't have an engineering background Let's say I had a drama sociology or gender studies degree Well, I'd surely be a drunk or evolved myself by now Anyway, if I had a useless degree and was thinking about going solar man, I tell you I just wouldn't know where to start I'd probably hire a solar company online and pay twice what I had to pay if I had just known a little bit more myself so what I'm doing here or hope to be doing is cutting out 90 to 95 percent of the BS and Marketing stuff padded into the solar space

[01:30] Oh, and the other thing is that the solar stuff changes so fast every year make it every six months The technology is just surpassing last year's technology by leaps and bounds. So how do you keep up with that? Well, I do so I'll pass that stuff on to you when I can However, if I'm losing a lot of you guys and you say oh, no He's talking about solar again. I think I'll grab some Cheetos and watch the retired ASEAN's Well, I don't want you to lose brain cells So just let me know if I'm hitting you with too much solar stuff and I'll back off for a while because you know No matter how good the information is in a podcast if no one's listening then it's time to cut your losses Alright, then let's begin with this non solar related email from Eric. He says hello, Johnny Just wanted to thank you for your show

[02:16] You're a natural presenter and I would not surprise me if you had a background in radio Not everyone can speak coherently on topics for extended periods of time as for me I'm close to 50 semi-retired and have been living internationally for four years I know people's likes and dislikes may differ but after all your time in Latin America Johnny Do you have your top three likes and dislikes for places to live in Latin America? Because based on my travels so far, I like Columbia, Peru and Nicaragua and I dislike Argentina Burgway, Chile and Costa Rica. I'm personally looking for somewhere in the Altiplano areas as you say any thoughts would be appreciated Thanks signed Eric. Well Eric, you know, I've been doing this show now for around ten years and early on

[03:03] I mentioned what I used to do before By the way, I've got emails here from Harvey Jim Lois Pete and Kenny. They're not the only ones either I get similar emails like this all the time. All of them wanting to know the following basically They say why don't you tell us a little bit about what you used to do before you had this expat podcast Well, you asked for it. I'm one of those guys who's had a number of careers Why well mostly because I bore easily and have a short attention span I've tried a lot of things pretty good at most of them too, but never outstanding I've yet to find the thing. I'm really good at I guess that's why I keep trying along the way I've been a plumber electrician and carpenter tile setter electronics repair guy woodworker house builder I've done leaded and stained glass window work all the while doing that stuff on the side

[03:50] I picked up an electrical and biomedical engineering degree minoring in electronics communications satellite work Then I picked up a useless MBA and a doctorate Oh and I wrote four books to my engineer brother and a couple other engineering buddies of mine have some joint electronics patents And all the while I've been a B grade musician by the way for you musicians or would be musicians out there There are a number of rungs on the ladder and hooves to jump through on the way to becoming a successful musician And I'd say about 98% of all people who play an instrument never get past the first few rungs on the ladder I'm talking about playing popular music now not being in an orchestra, which is cool in itself a lot of culture there I played cello for somewhat 12 years, but playing classical music. It's like professional sports something almost no one can make a living at

[04:41] So anyway, here's what most people don't know about being a musician Starting out as a kid you or your parents buy your equipment You take some lessons maybe and if you're good enough or think you are and have a lot of confidence you get into a band By the way only about 20% of people who start playing guitar drums organ keyboards Whatever actually end up in a band at some time the rest of the 80% who bought that stuff Well, it ends up in the basement or the closet with the treadmill and the ab cruncher Then when you find out you're not a natural and to get good you have to practice When you leave home or go to college your mom cleans out the attic and sells your guitar and old comic books on Craigslist Now for that 20% of kids that actually keep practicing They start a little band and start playing gigs though

[05:28] Unfortunately only about 10% of garage bands ever make enough money playing gigs To cover the expense of their own equipment and only about 25% of those guys ever make a real living at it That is they make enough money playing in a band or whatever to support themselves in a family middle-class American style That means only about one in a hundred people who take up an instrument can ever make a living at it The fact is and I heard this from my friend Tommy M who owns a couple of music stores in Chicago He says playing an instrument is like having a gambling addiction in that 95% of the people who buy equipment and get into a band Never even make enough to move out of their parents house much less make a record Yet when they walk into a music store their eyes glaze over and they keep buying more stuff as if buying another mic more

[06:17] Symbols drums guitars, etc will make you a better player Just like in Vegas. It's money down a rat hole though with music At least you've still got your instruments and you get a deep satisfaction out of jamming with them even if deep down You know, you know good now as for me and music I got to the third level I was in a good enough band that made enough money so that we could afford to have people carry our equipment and set it Up, you know roadies and only about 5% of bands ever get to that point believe me That's a monumental hurdle So as for me, I was in a lot of bands and I made consistent money enough to keep me going while I was going to university But I knew I could never make a great living at it, but it's a hell of a lot of fun So just a word of advice parents Don't let your kids grow up to be cowboys lawyers politicians or musicians though music is a great hobby

[07:04] So by all means if your kids have the desire, let them pick up an instrument and try it Not that they'll ever make a living at it You should tell them that but who knows they might have some real talent for it But if they don't and you let that guitar or bass sit in the attic for a couple of decades In other words, you resist the urge to have a rummage sale could be that instrument becomes part of your retirement plan Truth is I've had a few instruments I bought for two or three hundred bucks thirty or forty years ago They're now considered vintage classics who'd have thunk Yep Luckily, I've got two original guitars in a bass from the 60s that I never sold and now if I put them on eBay I could buy a Tesla, but I won't because I still tinker around with them a bit now I've said about that now Eric and his email referred to the fact that he thought I might be a radio guy in a past life

[07:52] Well, Eric you'd be right Around the year 2000 turn of the century. I started as the morning and evening drive time homegrown gringo English-speaking radio host so I was the live morning and evening guy in certain big markets here in Latin America I worked for a guy a very wealthy Korean who spoke no English, but he owned 22 Latin American radio stations I worked for a few more stations to owned by extremely wealthy stuck-up gringo wanna be families So then how do you get a job like that? You know way back when before the internet really took hold every big radio station in every big market in Latin America at their token gringo radio show in English specifically aimed at the upscale market of gringo wannabes, you know Latinos who spoke a little English or

[08:40] Rich Latinos who sent their kids to bilingual schools and all that not to mention Embassy folks would tune in too back then before the internet really hit all the gringos and expats working at Transnational companies here in Latin America and working at embassies had a huge craving for American style Shock jock radio. I was that guy. I filled that niche. All right aside from that and Eric's email He says he's been living in Latin America for four years now, and he dislikes Argentina Uruguay chili in Costa Rica Hey, I'm right there with you Eric But as for the top three countries that I like that's not really a fair question or fair analysis because Everyone's got their particular likes needs and bucket list when they're looking for a plan B

[09:26] Some people like the beach and the hot some people like the Altiplano Some people want to be self-sufficient live out in the boonies and get off the grid and others Want to live smack-dab and the busiest parts of a big city where all the action is some people want to be where there's a lot Of English spoken others don't want to be with gringos expats and tourists at all Some people have kids and they want to be really close to the high-end helicopter schools Others just want to smoke their habanos drink beer and fade into the sunset others are looking for love Or looking to write the great un-american novel In other words my top three countries for a plan B are not going to be the same picks as yours However as for countries I dislike and don't even want to visit well the same ones seem to show up on a lot of people's Lists and the other thing is this a lot of your opinions will be based on that very first

[10:13] Experience you have in a particular country or city So for example if you land at the airport in Chile and get gouged or ripped off by the taxi driver You're probably forever gonna have a bad taste in your mouth for Chile That's how we gauge things by first impressions that are not necessarily in line with reality and sometimes I've noticed when you land at a particular Latin American airport Just the way things look on the drive from the airport to your hotel or destination We'll give you a kind of a stereotypical image of the whole country, especially if you haven't traveled much It's like Latinos I meet who've only been to New York or Miami They think the whole USA is just a bigger version of that in other words if the cab driver takes you through some real crappy areas Your gut feeling for the place will be different than if he took you through some high-end neighborhoods and very nicely manicured and landscaped subdivisions

[11:06] Alright, this next email is from Nate He says hi Johnny love the show writing to you to request your info on Bitcoin and crypto So I'll send that to you. I always recommend captain mangoes Bitcoin and crypto for beginners. He'll hold your hand through it If you're just starting out captain mango is just the guy for you can't do much better Anyway, Nate says I've heard you mentioned living in the Yucatan in Mexico. So what about Colombia? How about your best overall view? Thanks for everything you do Johnny Nate by the way Johnny for your information I'm 67 on a pension and Social Security I don't own a house and hesitate to buy one while maneuvering through my plan B. All right, Nate Thanks for that. But again, it all depends on what your bucket list is what your

[11:52] Expectations are your budget your Spanish speaking ability and all that stuff previously mentioned now as for me I like the big cities in Colombia median in particular I like but it's now getting very expensive So you're not gonna be able to live a nice first-world life on a Social Security check Not in Colombia anymore and also you might not get this information up in the states But there's lots of unrest still with the FARC You know that militant socialist group who've been controlling the cocaine trade out the boonies for what 50 years now Yep They're still around even though the Colombian government a few years ago Pardoned all of them gave them a free pass and now some of them are even in government It's an uneasy truce and there's still lots of violence, but not much in the big cities

[12:39] In other words except for that the prices are going way up in the big cities. I like them However, I would not want to live out in the boonies in other words I don't feel all that safe when I'm on the road driving from major city to major city because Colombia is a big country and there's a long stretch between cities and the FARC Well, they remain out in the boonies the cities are well controlled and safe safe enough Anyway, if you live in a nice area, it's always about the area and location, you know Oh and here's something to think about, you know Yeah, right all that money goes to the governments and their cronies and the people get jackf**k

[13:26] Figures, right? Just like in the States, but here's what they didn't tell you or me or anyone else The IMF and the World Bank know these countries won't be able to pay that back still they gave them out because it's a crisis Well, of course, the IMF has strings attached. For example, here's what they're making Ecuador do They have it in Russia They're writing in their agreement that Ecuador increase its VAT tax It's 12% now, 12% on everything you buy Turns out the IMF has told Ecuador they have to raise their VAT to something closer to Colombia's and Peru's Colombia's is 19% and Peru's is 18% By the way, Guatemala's is 12% All right, besides that the IMF has told Ecuador it must now make certain fiscal adjustments

[14:11] To face the reality of their debt situation meaning raise taxes across the board They have to eliminate a number of tax breaks and exemptions Like for example for seniors and eliminate gas and LP gas subsidies. Hey, I'm all for that Now I just mentioned the VAT in Colombia is 19% and 18% in Peru But of course the IMF has attached strings to their loans to saying they have to increase their taxes across the board as well So you can see where this is headed since governments never get smaller They're like a cancer metastasizing till they kill the host. They never downsize So in the near future we can expect a procession of sovereign defaults like Argentina does every couple years Then again, isn't that what governments always do?

[14:57] They put more burden on the productive sector of the country where the emphasis should really be on Efficiency and reducing government spending but they never do that. Luckily in Latin America They're very weak and inefficient at collecting income taxes Most people pay from none to maximum 10% and the ones who pay almost always cheat There are so many loopholes. The tax laws are like a sieve So really the only way for governments to collect any tax money is through that VAT which it can't avoid It's tagged on everything you buy and through gas taxes at the pump So in a way, that's one of the real advantages to living in Latin America You may pay a fairly high VAT tax, which is like a state tax in the US But then again, if you're working and making dough You might only pay from zero to 10% income tax and property taxes. Well, they're a joke a good joke

[15:48] In fact every Latino and gringo expat I know that has a house worth 100 to 300 thousand bucks None of them pays more than 500 bucks a year in property taxes. What are you paying? My mother's got a small house out in the burbs in Chicago. I'd say it's around 1,400 square feet worth around 200,000 bucks and her property taxes between four and five grand a year fact is in the states You never really own your house even when you pay off your mortgage That's no reason to celebrate because if you quit paying your property taxes for just two years The sheriff will put your house up for auction. Speaking of taxes. Here's reason 4226 through 4295 why I'd never want to live work play and or do business in Costa Rica

[16:35] This comes from a publication called Central American Data It says in order to access the 1.5 billion credit requested from the IMF The Costa Rican government will now tax financial transactions between individuals and businesses they'll increase the tax on the profits of companies and individuals and increase real estate taxes, too According to this new information a fee will be charged for all banking and securities transactions Temporarily for the next four years. Yeah, right. Nothing's temporary in government, especially taxes Then it says the first two years it will be point three percent on every single transaction Then it says in the case of Costa Rican salaries There will be an extraordinary tax levied an additional two point five percent surcharge on incomes

[17:25] Over fifteen hundred dollars a month and an extra five percent tax charged on incomes of over two thousand dollars a month and a ten percent additional charge on incomes over three thousand dollars a month as For tax on profits and capital gains. There will be an additional tax a sliding scale from two point five percent to ten Percentage points and it says legal entities like SA corporations in Costa Rica Their gross income will be charged an additional six percentage points They're talking about gross not net income and this is a killer. It says in addition 5% will be charged for every remittance or wire transfer coming to Costa Rica from abroad And finally it says they plan to increase the property taxes on real estate by a half a percentage point across the board

[18:14] Man talk about killing the goose that laid the golden egg, huh? Who do you think's gonna take the brunt of that people doing legit business in Costa Rica as well as gringos and expats? All right now an email from text He says Johnny something you mentioned in your most recent podcast sounded really interesting to me You mentioned that for about 120 bucks a month. You can get a top-notch health insurance plan that provides worldwide coverage Do you know how this would work? My family and I are Guatemalan permanent residents though We still live in the u.s. The thing is that my current employer. I'm paying almost 1600 bucks a month for health insurance for my family of five in addition. I have an annual deductible of 12,000 bucks Needless to say I'd love to find a better option. Thanks in advance for any info

[19:00] You can give me on the subject Wow Tex. Did I hear you right? 1600 a month that's almost $20,000 a year for medical insurance and you still have a $12,000 deductible You know when I hear things like that, I'm thinking why isn't there a gigantic stampede of gringos south of the border? Hmm, I shouldn't say that it just might happen and I wouldn't like it that would ruin everything. Look at Costa Rica Well, Tex, here's the facts about worldwide health plans that you get here in Latin America Now I explain all this in great detail at my expat insider seminar By the way, which will be kicking off in early January of next year for more info Just go to expat plan B comm anyway at the seminar We go into health plans in great detail the thing about health care plans here in Latin America is that they have a very small lifetime payout cap as

[19:48] Compared to the policies up in the states. For example, the policy I have has a lifetime cap of around 250,000 bucks that means every time insurance pays for something They're subtracting that from that lifetime cap The thing is with medical insurance in the states You generally have a lifetime cap of between a million and three million bucks depending on the policy Now the reason why the lifetime limits here in Latin America are so low is because medical costs are so low You've heard me say before that costs and procedures range from around 10% to 25% of first-world costs That means my particular $250,000 lifetime limit for my policy if you were to extrapolate it to a typical policy up in the states It's equal to a policy up by you with a cap of a million to two million bucks

[20:35] That's why you've heard me mentioned in past shows It's not really all that worth it to buy worldwide coverage because if something happens to you up in the states Let's say you're stuck in intensive care for ten days. Well in that case, you could easily rack up $15,000 a day or so in costs that's over a hundred and fifty grand and that will wipe out more than half of your lifetime Limit if you're using a policy like mine that you got here in Latin America. You get the point That's why I always say if you have a Latin American health care plan if you get sick or end up in the emergency room Up in the states or in a first-world country give them strict orders to stabilize you Just enough so that you can get back to your Latin country and receive the rest of your treatment there Of course in an emergency you got to get done what you got to get done

[21:21] But don't by any means schedule an operation up in the states or hospital stay You can postpone and have done here in Latin America. Get your ass back down to Panama, Guatemala, Mexico Or wherever your health insurance plan originated or you'll rapidly wipe out your lifetime maximum Oh and one more thing text that hundred twenty bucks a month for a worldwide plan is for a single person I'm guessing a worldwide family plan would cost from 200 to 250 a month So is it worth it? Of course it is if you're living here in Latin America But if you're living elsewhere up in the first world of that is should you also get a worldwide Plan like that. Well, it's your call The thing is since you say you and your family are living up in the states pretty much permanently right now And you do have residency in Guatemala. I'm not so sure let's say one of your kids ends up in intensive care

[22:07] You're gonna want to ship them down to Guatemala for the rest of his treatment if you're not actually living in Guatemala yet However, if you've already got a place there and your plan B is really active. It could work out nicely Point is again, you don't want to have extended stays or operations done in the states if you can have them done here in Latin America That's the only way having an insurance plan here in Latin America will work out good for you Only if you're living down here and just go back to the states once in a while again I can't emphasize this enough If you have a first world style medical health insurance plan here in Latin America like most gringos and expats do including me if you Have health troubles when you're up visiting in the first world Have them do just enough work to get you stabilized and head on back to your home country and get your work done there

[22:54] Remember if you don't you'll wipe out your lifetime maximum in a hurry again If you come down to my expat insider seminar We spent about four hours going over this stuff and we do a boots on the ground visit to a first world style Hospital for a couple of hours as well and our guide is a fully bilingual first world trained emergency room and trauma surgeon Some people by the way, especially people with medical issues say it's the best part of the seminar All right now a solar power question from candy says hey Johnny always enjoy your shows keep them coming though in your most recent show About solar photo voltaic systems that's PV systems You recommend hot water heating by a propane or a solar water heater setup My question is have you ever looked into electric heat pump water heaters?

[23:39] I installed one about a year ago and it works fantastically Fantastically they use a fraction of the power and have added benefit of cooling the room you put them in thus far this year It's only used approximately 200 kilowatts about 10 kilowatts per month By the way in the states where kilowatt rates are between 10 cents and 20 cents kilowatt hour That'd be just a couple of bucks a month as for me Johnny while I don't have a solar system setup yet Because I live in one of those overly sensitive gated neighborhoods with a heavy-handed homeowners association and they have a deep Repugnance for anything that doesn't seem to be aesthetic according to their rules though I think a typical solar system with PV panels You know solar panels would easily power one of these heat pump water heater systems anyway

[24:29] I thought I'd share that possible option with you Then he includes one of the many links on that subject for me Then he says finally Johnny glad the airports are opening back up so I continue with my plan B progress Thanks again, Johnny for all your valuable insights signed Ken. All right Ken I know about those electric heat pump water heaters But here's the thing Ken you know up in the states what a solar hot water heater costs anywhere from three to five thousand bucks Because in most of the states you get a frost or freeze in the winter Therefore a solar hot water system up there by you has to be of a more complicated type With radiators and pumps and refrigerants and heating coils however down here in Latin America They use a very simple type of solar hot water heater and the normal cost for one with an 80 gallon reserve tank

[25:18] Around a thousand to fifteen hundred bucks, which is just about the same cost for an electric heat pump water heater Oh and another thing those solar hot water heaters the simple ones they use here in Latin America have no moving parts So there's almost nothing that can go wrong and there's no electrical hookup either Whereas an electric heat pump water heater. There are plenty of moving parts and electronics sensors and refrigerants, too In fact, it's pretty much exactly like an air conditioner or refrigerator because you know If you notice with a refrigerator if you stick your hand back of the refrigerator where there's a kind of radiator grid That's hot and of course the inside of the refrigerator coke though You're right If you have one of those electric heat pump water heaters wherever you have the unit the room will be a little bit cooler So you've got a good point there

[26:04] You can heat your water with the thing and cool a small room down, too Though you won't need that effect in the altiplano at lower altitudes into benefit Then again, the air conditioning effect is not intense like a regular air conditioner though It will dehumidify your air nicely and sometimes that's all you need just getting rid of the humidity when it's hot and muggy Really helps so in the end it could be an advantage if you're at lower altitudes and want to cool a single room, too But you know, they still use electricity though Not much about half or less than your standard gas or electric hot water heater So in the end one of those heat pump water heaters could work well up in the states except remember this wherever you've got the unit It's also cooling the air in the room Which is exactly what you don't want to do in winter not up in the states because you're heating your house in the winter

[26:51] Right in that case, you'd probably want to put that thing out in the garage, but they're not easily movable So you'll never get the air conditioning effect from it in the summer when you need it Bottom line if I owned an apartment or townhouse in a residential tower in Latin America And I wasn't able to put a solar hot water heater on the roof due to condo regulations, whatever I'd think about getting one of those heat pump water heaters if I had lived in lower elevations But I wouldn't if I was in the Alti Plano I'd stick with one of those on demand hot water heaters fueled by propane gas not electric simply because propane gas is cheap Here in Latin America and electricity is about twice as much per kilowatt hour here Then you pay up in the states You've been listening to the expat files living in Latin America If you need some help with your own plan B

[27:38] We can schedule a one-on-one phone or Skype consult Just send me an email the expat files at gmail.com And if you want to get on the waiting list for my next week-long expat insider seminar in Central America Where you're guaranteed to get a two to five year head start on your plan B Send me an email the expat files at gmail.com. No spamos