#173 – The Expat Files: Adapting to Life in Latin America

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

[00:03] Hi everybody, I'm Johnny Mueller and you're listening to the expat files living in Latin America. The show that tells you what it's really like to live, work, play and or retire in Latin America. I tell it just like it is, not the version they give you in those glossy travel magazines or the picture they paint for you in those international traveler websites where they're only trying to sell you something. What's it really like for expats living in Latin America? Well, if you stick around a while, you'll find out, so let's get started. Now I always like to mention the fact that if you're going to live the expat life, if you're leaving the country and coming down here to Latin America, it's really in your best interest in a lot of ways to keep a low profile, fly under the radar whenever you can. And you know when I talk to long term expats down here, they tell me that that sometimes

[00:52] is the hardest part of all, the hardest part of becoming a full time expat. Aside of course from that very first few weeks when you make the plunge and you feel like a fish out of water. Or worse, because not only are you in a strange land, but you can't speak the language. But becoming low profile for most people is a very difficult thing. And how do I know that? That's because often new expats tell me that they lived a low profile kind of life up in the first world. And when they say that in all seriousness, it's obvious to me that their idea of a low profile life would never fit the description down here. I mean if you have a few Rolexes and a rack full of designer suits in your closet, and you got a few high end SUVs in the garage up in Philadelphia, I can imagine that your idea of dressing down and even roughing it is a little different than mine.

[01:40] And not surprisingly it seems like first world women expats have the hardest time switching from their first world habits, especially dressing habits, and shifting gears into a low profile lifestyle. Now that doesn't mean throwing your nice shoes and jewelry away, but you do have to real line your thinking about what you consider expensive and not expensive. Because you have to remember that about 95% of all Latin Americans don't own any real gold jewelry. And forget about platinum, that just doesn't exist down here. Oh but that doesn't mean you won't see a lot of gold everywhere, all the girls are wearing it. But it's only plated, and they call that Oro Chapiada or Oro Brasileña. And Ordo of course means gold, O-R-O. And every middle to upper middle class shopping center here in Latin America has one or more

[02:26] stores that sell nothing but gold plated jewelry. In fact down here, even 10 carat gold is way too expensive for the middle classes, except for of course those engagement and wedding rings. And you could tell they're real gold because they're always the slenderest tiniest of things, meaning cheap. And don't even think about diamonds at all, sure they sell them in the high end jewelry shops to the 2 or 3% of the population that can actually afford them or the payment plan. So what about the tradition of having a diamond engagement ring? And you do see real diamond engagement rings down here. And how do I know that? Because the diamond is such a small microscopic sliver of a thing, there's just no other explanation. It's gotta be real I guess. And if you think that Latin Americans are completely ignorant about the gold that they

[03:13] buy and sell, well they're beyond clueless about diamonds. So we won't even go there. And actually the whole gold jewelry business down here is turned into a kind of a funny dichotomy. Because you see all those young ladies that are riding those chicken buses and making $200 to $350 a month, well they look as if they're breaking all my rules. They wear tons of gold necklaces, chains and bangles. But of course it's not real gold, only plated. And so you might think that if you rode the chicken bus one day and had some real gold jewelry on you, well you'd think it'd be completely safe because everybody knows the people on the bus don't wear real gold. And of course the thieves know that too, so they leave the women's jewelry alone. Instead they concentrate on stealing wallets and cell phones. And of course the occasional leather jacket.

[04:00] Or I should say it used to be a pretty good sideline stealing leather jackets. But these days manufacturers can make fake leather jackets look so nice that most people including me sometimes can't tell the difference anymore. And it seems that the only proof of a real leather jacket or real leather shoes these days is either the smell test, because we all know what genuine leather smells like, you can't fool your nose. Though I wouldn't doubt that some smart chemists have that figured out too. Anyway you've got that leather smell test, and if you look at the inside lining of the shoes or leather jacket, if it's way too processed and perfect then you know it's not leather. But then again when observing people in a chicken bus you can tell they don't have enough money to buy real leather shoes or leather jackets. So again you might think that if you ride the chicken bus and have real gold and real

[04:48] leather on, that you'll be unmolested too. But you'd be wrong, because obviously if you ride the chicken bus you're going to stick out like a sore thumb. And the locals have their obvious stereotypes about gringos and gringas. That means that the petty thieves and the crooks do too. Namely that we have money and buy high end things, the real stuff, gold and leather. And since we're foreigners in a foreign country, we're definitely not carrying a knife or a gun. Meaning that if we're ever assaulted, we're unlikely to fight back. Just a few more reasons for gringos to stay off those chicken buses. So anyway here's how part of that low profile thing works out down here. It's like this, the locals can wear pretty much whatever they want, anytime they want and anywhere they want, because it's common knowledge that no matter how elegant and costly

[05:36] their stuff looks, it's not real. So when there is an assault on a bus or in an iffy neighborhood, it's almost always a cell phone that gets ripped. By far, cell phones are the number one item that gets stolen throughout Latin America. And even though a huge majority of the population have cheap throwaway cell phones that are worth only 15 to 25 bucks, there is a growing percentage of middle class latins, that is middle class latin style, people making only 250 to maybe 450 dollars a month. These are people who have to ride the bus all the time because they just can't afford a car. And even though they can't afford many extras at all, they do try to upgrade to a nicer telephone. That's a priority with them. And it seems to be almost always these young latin guys and gals from age 15 to about 35

[06:24] who really crave having a more advanced cell phone. You know, not exactly an iPhone, that's way too expensive. But I'm talking about a smartphone with some limited internet access. Maybe with a 3G connection, a touch pad and a fancy sliding screen and stuff. And something like that could cost anywhere from 50 to 125 bucks, a week's salary or even more for the average person down here. And the thing is, all young latin people crave these things. Having a little bit higher grade phone is a real sign of distinction. In fact, I can't tell you how many young latin folks I know that have phones like that yet they don't even have a microwave oven or even hot running water in the house. They've moved up to a middle of the road cell phone, just to be cool among their friends,

[07:09] but they take a cold shower. Priorities priorities, huh? Anyway, like I've said before in some of my broadcasts, when you're talking about upper middle class and wealthy latins, you are what you drive. At least that's what they think. But with lower and middle class latins that ride the bus, it's really true that you're only as cool as your cell phone. But back to my main topic of keeping a low profile down here, really, there's no better way to fly under the radar than keeping all your assets and investments in a corporation down here. And I'm talking about a latin corporation, not a first world one. In that way, you don't have to have your name on or attached to anything. You just go to your lawyer and open an essay corporation, that's a society.anonyma corporation.

[07:55] It's what you'd call a completely anonymous corporation in English. Now if you open one or more of these corporations, you could place all your assets in that corporation, whether you have a house or a boat or some land, or even a brokerage account. And your name won't show up anywhere. And in most of the 20 latin american countries, your name won't even show up in the municipal business registry. So if someone's checking on that business, they'll never find your name. Only the names of the board of directors that were appointed, probably by you and your lawyer, when you and he first created that corporation in his office. And often times down here in latin america, the lawyer and his trusted staff will be named on your company's corporate board of directors. But you will have the corporate shares that are issued, and you'll be the sole signatory

[08:44] over the corporation and the checking account that usually goes along with it. And the credit and debit cards that the bank will issue in the corporate name too. And that's what most smart long term expats do. In that way, they remain almost completely off the radar. Now just imagine for a minute that you have a corporate credit and a debit card. That means you could go to an ATM machine and pull out money anytime you want. And you can order things online and buy things in retail stores all day long if you like. And remember, it's in a corporate name, so you're off the radar. But if you like, you can have your name on the credit card, but why do that, unless you have to. Oh and by the way, whether you're Mr. or Mrs. Moneybags or not, since the object is having a low profile, you don't want to get one of those black visa cards.

[09:31] You know, those very high limit ones, the ones that you can pay off your mortgage with with one swipe, or even swipe for a Ferrari? Definitely not low profile. And the problem is, sophisticated crooks know that when they see a black card like that, the owner is definitely a high roller, and you don't want to be singled out like that. So bottom line, even if you are Moneybags, don't come down here with your Rolexes and your gold, and your leather jackets, and your new high end SUVs unless you want to be a Target. And stick with the common everyday Visa and MasterCard. Nothing special. Now that doesn't mean you can't live in a terrific, fantastic house or condo. On the inside, just don't make it look too fantastic on the outside, or you'll be a target. And since we're talking about maintaining a low profile here, here's a little tip that

[10:21] expat Eddie taught me. You know, one day when I was in a big Salvadoran shopping center with Eddie, and I wanted to pull out a couple hundred dollars from the ATM machine, oh and by the way, down here, ATM machines don't give you much on a daily basis. Only about $200 a day, and about $300 to $400 a day in the local currency. Though I know that some of the ATMs at the big international hotels like the Intercontinental and the Princess and the Hilton, they have a few of those high limit ATM machines where you can pull out a thousand or more a day. And I know that in places like Panama, where some of the international hotels have casinos operating within the same building, they always have a few of those high limit ATM machines so that you'll take out a big chunk of money and lose it.

[11:07] Anyway, I was in the shopping center with Eddie, and about to withdraw some money from the ATM machine, and Eddie said, wait a minute, let me go first, okay? And here's what happened, as we got about 30 feet in front of the machine, Eddie quickly veered off to the side, and made a wide circle around the machine, and then he snuck up alongside of it, waiting for the guy who was taking out some money to leave. And all that while he never stood directly in front of the machine at all. Instead, when the guy left, Eddie quickly placed the palm of his hand over the plastic square above the CRT screen. And as you might know, that's where the camera is, because you see, they film everyone who makes a transaction these days. Ostensibly, of course, to deter robberies, and so they have a record of someone's tampering with the machine too, so every time you make a transaction, they get a nice mug shot at

[11:56] your face. And you know, Eddie's an expert at a lot of strange things. Here's what he told me about ATM machines, and don't ask me how he found that stuff out. Anyway, he told me that in all ATM machines, the camera is hidden right smack above the CRT screen, right behind that smoke covered plastic glass. Now Eddie says if you don't want your picture taken with every transaction, block or cover that window before you stick your card in. You see, with every ATM machine, except the very new high tech ones, the camera starts working right when you put your card in. So you can either do what he does and put the palm of your hand over that plastic smoked glass, or you can stand way off to the right, or way off to the left when you're doing your transaction, because the camera is set to look right at your face, front and center.

[12:43] And remember, as soon as you put your card into that machine, from that point on, all transactions are being filmed. And unless the machine you're using is one of the very latest generations, there's no one sitting in a room somewhere down at the bank or the ATM company looking at the cameras in real time. That's not what happens. Not yet. Maybe up in Cleveland, but not down here in the third world. The transactions are actually captured on a film, and the ATM company in the bank only processed that film if something went wrong with a transaction, if the ATM accounts don't balance with the bank, or if there's been a complaint by a card user that the machine screwed up their transaction. Now the ATM companies don't like to process that film because it's an extra step that takes man hours and money.

[13:29] That's why all the latest generation ATM machines are set up for internet real time surveillance. And although in the first world they're gearing up for that in a big way, thankfully down here in Latin America, we've got that lag time thing going for us, so it's not going to happen for a long time. And here's the other thing Eddie told me. He said that some ATMs, about 30% of them, actually have fake cameras. Now this might sound crazy, but he says it costs a couple of thousand dollars a year to keep a camera and the film processing inside functioning properly. And actually that's a really good thing for us expats who want to stay anonymous, because obviously down here in the third world where the word maintenance doesn't appear in the dictionary. Rather, it should be substituted by the phrase crisis management.

[14:17] Anyway, what that more than likely means is that about 90% or more of the ATM machines down here in Latin America have non-functioning cameras. And that's reason number 2374 why we love Latin America so much. So you can figure that only ATM machines that are less than a year old actually have the capability of filming anyone, probably because they've got a one year warranty. After that it's back to maintenance Latin American style. But even so, I like what Eddie does to foil the cameras in the ATMs. So I'm in the habit of doing it too. Thanks for the tip Eddie, good job. Now to shift gears a little bit, let's talk about corruption in Latin America. I often get emails saying, Johnny, how could every politician, every policeman and every

[15:05] government worker in Latin America be corrupt like you say? Come on, there's gotta be some honest people in government. Well if you've heard me talk about corruption down here, it's not that I say that everybody's 100% corrupt, it's that I pointed out that when you want to buy off a government official, he has a very low price compared to the first world. You know, what it might cost to buy off a judge in the states could be 100 grand, but down here you could buy off a similar judge for 500 to 1000 bucks. Now that doesn't mean that every judge is corrupt, that just means that the ones that apparently aren't corrupt, the ones that haven't taken any bribes, just haven't been offered a big enough one yet. And I'll admit, once in a while you run into a politician or two that seem incorruptible.

[15:51] Well if you investigate that scenario, it seems that's what happens when times are good and things are easy, and the guy's making a pretty good salary. But when times get tough, these guys all have their prices too. Years ago I saw that down in Columbia, you'd have a few incorruptible journalists or politicians, and they'd expose all kinds of graft and narco stuff, and their incorruptible faces would show up in the paper every now and again. And then all of a sudden you'd see they disappeared from the scene altogether. They'd be off living in Europe somewhere or even in the states. How did that happen? How did a fighting crusader like that just disappear and show up in another country? Well that's because if you're portrayed as incorruptible, especially as a politician or journalist exposing stuff, eventually someone's going to come at you with a really big bribe.

[16:39] Big enough so that you can change your lifestyle completely. You know, live a first world life in Europe or the United States. If a big bribe comes your way to shut up, or look the other way or throw a court case, let's say there was a huge bribe offered and you still don't accept it because you have your scruples, then oftentimes the party offering the bribe gets tough and they threaten violence, or they kidnap your kid, or your mother, or your brother. And that's when that bribe starts looking awful good to you. But after saying all this, I think there just might be one incorruptible powerful person in Latin America. Of course, nobody's talking about him because it's corruption that sells newspapers, right? But I'll talk about him because I think you have to know this. Now out of the 20 Latin American countries,

[17:25] there's one president that seems to be above reproach. The guy seems incorruptible. In fact, for all his scruples, you've probably never heard of him, I'm sure. Yet, ostensibly, he's the model president for Latin America, if not the whole world. And I really do think they broke the mold when they made this guy. I'm surprised he hasn't been shot. His name is Jose Muzica, and he's the president of Uruguay. Now first of all, this guy came from a very poor family, and he lives on a very austere little farm outside of Montevideo, the capital of Uruguay, where he and his wife cultivate flowers for export. It's a very small operation, and by no means is he wealthy. Now he and his wife are long-term vegetarians, too. Another check mark in the plus column.

[18:11] And here's the really cool thing. He doesn't have any outside income, except for that farm, and he's considered the poorest president in the world. He actually makes $140,000 a year, but he donates 90% of that to charity. So he only lives off the proceeds of his small farm and $14,000 a year. And that other 90% of his salary that he donates goes to Uruguay's social housing fund and some other charities. He decided when he got elected not to move into the luxurious three-floor presidential palace, which is actually a huge mansion. But instead had that building listed on the state shelters list for homeless people. So if you're a homeless person in Montevideo, you might find yourself in the presidential palace someday

[18:58] if you don't have any place to sleep. And you know, here's one guy who did what he promised when he ran for election. He said he was not going to move into the presidential palace, but instead live on his small farm outside of Montevideo. And listen to this. Before he was president, he actually went to Congress as a congressman and a member of parliament on a Vespa scooter. And that was the only vehicle he actually had besides a 1987 Volkswagen, which he still has and the first lady drives. And believe it or not, they don't have any other vehicles. And according to a lot of South American news reports, his political opponents have been trying to dig up dirt on him forever and they just can't find anything. Except for the fact that he lived in sin with his wife before they got married. Big deal.

[19:43] And the fact that he doesn't believe in God. He's an atheist. Which in itself would have been the kiss of death for any politician in a Catholic country like Uruguay. But since he set such a good example for a politician and was such a sterling legislator and led such a humble down-to-earth life, he had no trouble being elected president. And now that he's in office, there's some big shakeups happening in Uruguay that are having worldwide repercussions. And I'm sure you're going to hear a lot about this. Now here's a little fact about Uruguay. That's a very well kept secret. You wonder why Uruguay draws a lot of backpackers and free-spirited new age neo-hippie style tourists. Mostly by the way from next door neighbor Argentina. And that's because, get this, there's no law against marijuana use in Uruguay.

[20:31] The possession of it for personal use has never been criminalized. So basically it's pretty much the only country in the world that it's legal to have smoke and grow marijuana. Even Amsterdam where you can go to marijuana shops and smoke pot legally, in Amsterdam it's illegal to buy, sell and smoke it outside of those little marijuana bars that are licensed by the state. So for all these years, marijuana has been completely legal in Uruguay. But Uruguay being in South America and having only 3 million people is way off the radar. Until just now. And that's because Uruguay is going beyond simple legalization. They're going to be the first government in the world to actually grow it and sell it. And here's what president Mujica said in an interview

[21:19] with Columbia's RCN radio network. He says the plan is for the government to sell marijuana at a cheap and reasonable price and then monitor what each consumer uses. The idea is to take the drug profits out of the hands of criminals he says. Saying that while drug addiction is a medical problem, drug trafficking is an unwinnable police problem. And Uruguay will be the world's first nation to sell marijuana directly. Now personally I don't care about marijuana either way, but I am a libertarian. So I think it's a very good step in the right direction and that other governments should follow right along. And actually when you think about it, it's pretty good marketing. I imagine it's going to bring a certain kind of a tourist boom to little Uruguay.

[22:04] I mean when people are willing to fly to Amsterdam at first world rates like that, imagine what will happen when people find out that Uruguay, a third world country at third world prices, is now officially on the party trail. Now I know in some of my past shows, I mentioned that Uruguay might not be a good place for expats to settle down. Based on the fact that I think the banking system is going to crack and break, when the next financial crisis hits Argentina, which is probably going to be pretty soon. Most rich Argentinos have their money in Uruguay banks. So when the crisis hits, the domino effect will rock Uruguay's banking system. And I also mentioned that Uruguay's got the four seasons and I don't like snow and cold, even for half the year. And another thing I don't like about Uruguay is it's kind of flat and ugly.

[22:50] And the water at the beaches is actually a bit too cold to swim in. But you know, with a president like that, maybe it is a pretty good place to settle down in. However, he's 77 years old and who knows who's going to take his place. Anything can happen. So the bottom line is this, expats have 20 Latin American countries to choose from. And selecting the one you think is best for you could be a difficult decision. So the best thing you can do is get your feet on the ground and visit a few. And I don't mean a week on the beach in Costa Rica or Panama. The only thing you'll get out of that is a walletectomy and a hangover. Anyway, I got an email from Chris here, I'd like to reach you. He says, Hi, Johnny, been listening to your show for a year or so and read through your PDF on the 17 undiscovered places

[23:36] on your expat wisdom.com website. My question is, is Cartagena really off the tourist trail? I like the size for social and business reasons and the climate, but it seems like a decent number of people know about it. Sure, a 50% cost of living decrease would be nice. But what should I expect in a resort city like that? I'd like to start a gym and then live a reasonable distance from that. Thanks, Chris from New Haven, Connecticut. Well, Chris, you know, Cartagena is a pretty big city. It's about a million people and it's a tourist town, but it's not a gringo tourist town. It's way off the tourist trail for more reasons than one. First of all, because it's a long expensive ride to get there.

[24:23] I mean, you could get a week long package deal in Costa Rica or Cancun or Panama for five to 800 bucks all included airfare and all. But going to Cartagena is going to cost you twice or more because you just don't have that many flights coming and going from the States. And secondly, US citizens are still god awful afraid to go to Colombia. And it beats me why they'll still go to Mexico, which is about 20 times more dangerous. But it's all about the media, the marketing and those cheap package deals, I guess. Anyway, I'm telling you, you could walk through Cartagena for a whole day and not see a single gringo. However, you think you're seeing a lot of gringos, but that's only because a lot of the people visiting Cartagena are from Europe. And Cartagena is a very popular tourist town with Latins, wealthy Latins,

[25:12] mostly from all over South America. And because you have to fly in if you're coming from Argentina or Chile, let's say, you're most likely upper middle class to wealthy if you're a tourist there. And I don't know how this is going to sound when I say it, but it's true. Upper middle class and wealthy Latins are always whiter, taller, and in general, more fair skinned and gringo looking than the average population in Latin America. That's why when you're in a wealthier section of any town in Latin America, it always looks at first notice that there are at least some gringos around. But they're really not North Americans or gringos at all. Because if you listen close enough, you'll hear that they're speaking perfect regional Spanish. Now you're probably wondering, how could that be? How could the wealthier classes look more European or gringo?

[25:58] Well, that's because the wealthy people in Latin America are a self-selecting sample. What Latin men really love, and they'll always admit it when they're not around their own Latina women, is that their absolute romantic goal in life is to hook up with a woman that looks pure gringo. The taller the lady, the lighter the hair, the lighter the skin, the clearer the eyes that is blue or green. The more desirable the woman is to a Latin man. For marriage and babies, that is. And since we're talking about upper middle class and wealthy class Latins, they have the money so no matter what they look like, they can attract women like that. So after playing that game for generations and generations, that's why the Latin American upper classes and the wealthy look so gringoized or Europeanized, whichever way you want to look at it.

[26:45] You know, it's a lot like the British royal family. It seems like for generations and generations, they've had a persistent, recessive, ugly gene that's been floating through the whole bloodline, specifically the male bloodline. I mean, just look at Prince Charles. If he had muscles in his ears, he wouldn't have to drive. He could fly. And in that family, it took Princess Diana and her family's strong, good-looking genetics to displace some of Prince Charles' ugly genes when they had their two boys. Anyway, that's kind of an abbreviated version of what's been happening with the Latin upper middle classes and the wealthy for many generations. So bottom line, Chris, by all means, go to Cartagena. It's cosmopolitan. People are educated. Things are inexpensive. It's got a lot of class and elegance. And there's very few gringos.

[27:38] You've been listening to The Exped Files, living in Latin America, coming to you each week from somewhere south of the border. And don't forget, you can email me on anything at all about Latin America, The Exped Files at gmail.com. Once again, The Exped Files at gmail.com. See you next time. Nos vemos.