#146 – The Expat Files: Realities of Living and Working 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. Well the time has come for my seminar, it's here. It's called Latin American Insiders Seminar and all you have to do if you're interested is go to www.expatwisdom.com. That's www.expatwisdom.com.

[00:48] Put in your email and you'll get complete details and updates on the seminar, so go over there and check it out. Everybody has been asking about it, so now is your chance to sign up. You know I get a lot of emails from people asking me about expat Eddie, just how did he make his millions, coming down here some 7 or 8 years ago with only 5 grand in his pocket and a lot of failure up in the United States. And knowing about as much Spanish as I knew when I came down, just enough to order at Taco Bell. Well you know people email me about Eddie not only wanting to know how he made his fortune, but they want to know how he deals with his employees and what obstacles he had to overcome in business and stuff like that too. Anything and anything about expat Eddie and his road to success. Well the other day I was talking with Eddie, I asked him some questions on how he handles

[01:34] his employees because he's got 40 or 50 at least. I asked him for some specific pointers and tips on how to deal with these guys on a day to day basis. And here's what he said, he said what you're going to find out from day one is that your employees are going to think that you're rich, even if you were really short on business start up funds like Eddie was. After all Eddie only came down with 5 grand and that was his mother's money. Anyway even if you have to eat cat food and beans for a couple of months, till your business gets on its feet, they still think you're rich. Latins think in general that gringos don't really care too much about money. They think you're kind of a bottomless pit and you've always got plenty. When you run out of cash or checks, there's always more where that came from. Because down here in Latin America you just don't see any destitute gringos.

[02:20] Even the most down and out of us, the hippy types, live a cut above the average guy making 300 bucks a month. You don't see gringo vagabonds even in the worst districts. And even the odd gringo that's gone native, you know, greasy hair, clothes a little ragged around the edges, Jesus sandals or scuffed up shoes. Even gringos who go native have cars. And even if it's a beater, it's still more than the average $300 a month Latin American could afford. Because you see, in a way, we confuse the locals by our conflicting looks and our conflicting actions sometimes. Some of us, you know, have brooks by their suits, chauffeurs, bodyguards and spit shine shoes. That's not your normal expat though, but you'll see guys like that in every city. Those are people that work for big corporations, executives that came down from the first world on contract, working for a foreign branch of Intel or Microsoft or one of the big drug

[03:10] companies. You know, they've got a lot of sweatshops down here too. So Nike and Guess Jeans and Tommy Hilfiger will have offices down here in some big cities and executives running those offices from the first world, living the first world life all the way and getting paid first world salaries of course too. They're not your typical expats at all, but they are down here. You see them once in a while. Usually in the business districts of the big cities, around the big hotel areas where they have conferences and a lot of the big corporate offices. And we mustn't forget the big transnationals like McDonald's and Walmart. They've all got their offices down here too and they don't have locals working the top spots. Those are imported gringos. And they act and look just like the guys you see on corporate row in New York or Chicago. You know, those guys are here but you rarely see them, unless you get invited to one of

[03:55] those embassy parties or some kind of big social event. Now most of these guys, and I know a few, don't live down here with their families. They live the secluded life in a luxury penthouse apartment somewhere. They might be single, but sometimes their family could be living somewhere in Dallas or something. Only a very few of them bring their families down here from the first world. And these guys are forever jetting back and forth, so it's almost as if they never really put roots down anywhere, especially not the Latin American country they're supposed to be stationed in. Then there's the opposite end of that gringo spectrum, that local Latins get a glimpse of too. And that's the gringo backpacker, and Latins think that they too have an unlimited stash of money somewhere up in the states. I mean how else could they take off for months at a time, come down to Latin America and just hang out? And the locals are always amused when they see these guys hauling those big backpacks

[04:42] that from a distance look like they're hauling King Tut's sarcophagus around on their back. Yeah, to Latins, gringos are a strange species. You certainly don't see average Latin Americans with get ups like that. Then of course, slightly below the status of backpacker is the hippie gringo who's gone native. So you've got the two extremes, the backpacker and the hippie versus the extremely well-dressed executive type up in his penthouse apartment. But no matter what end of the spectrum you're in, if you're a gringo, Latins think you're rich. And if you don't count the tourists, all the rest of us expats, about 90% of us, after a while we end up actually slacking off a little bit in our dress and our attitude, at least according to first world standards. Whereas back in the United States, when you were a working stiff on that dreaded corporate treadmill, you might have spent a half an hour in the morning getting yourself together,

[05:29] picking out the right clothes, making sure everything matched, not walking out the door and going to the office with too many wrinkles, or scuffed shoes, and you wouldn't show up with a spot or a grease mark on your shirt or pants, while the guys in the office would think you were a bit uncouth. You know clothes make the man and all that, and you'll be way down on the promotion list if you look a little rumbled and frumpy. Because if you've got gravy stains on your shirt up in the first world, people kind of start thinking you're disorganized and maybe it reflects on your competence in some way. I mean the only ones I know that can get away with that up in the first world corporate world are nerds and engineers. Well, they're just considered a bit eccentric, and that's considered kind of the norm in those professions. But no matter how smart you are, you're still probably not going to get promoted to the boardroom if you drive to work in a 1992 Honda with a cracked windshield and missing a bumper.

[06:17] And believe it or not, I know a lot of expats with real money that drive cars like that. And you know there are limits to how much you want to blend in, but you do want to have a low profile, you really do. But here's the thing, after expats have been down here a while, and you start loosening up a bit, and you realize that no matter how perfect in first world you want your car to be, it's going to get dinged and banged every time you go into a parking lot. So after a while it's like Chinese water torture. And if you don't loosen up, you're just going to find frustration after frustration every single day down here. So in the end, most expats, after about six months of being down here, they start undergoing a physical change. They start looking more relaxed, even younger. In fact, Expat Eddie's a good observer too, and he says a lot of the expats he knows in Salvador look like they've had some cosmetic work done.

[07:03] Their faces actually look younger with less lines and creases on them. And after he said that I noticed too, that expats don't have that stony look on their face. You see, with a lot of people who work in corporate America. And long term expats don't seem to frown much either. They're not bothered much at all by the little things that got to them when they first got down here. Like long lines in the bank, the crazy traffic, the manana attitude and all that. And that's why when you run into an expat that owns a business down here, a self made expat that is that doesn't work for a big corporate giant like Office Depot or Sears let's say, anyway, you know these guys just don't look the part. They may be like Eddie running a million dollar business, but more often than not they'll seem like some casual guy that just came off the street after cutting his lawn on Sunday.

[07:49] You don't see these guys wearing shirts and ties, forget it. In fact, one very successful expat that I know says that in his old life, and by the way, that's what we call it down here. We refer to our past life as our old life. As if we've been born again or resurrected somehow and a lot of us have, believe me. Anyway, I know a long term expat down here told me he had 15 custom made suits in his closet and about 100 expensive silk ties on a rack up there too. But that was in his former life up in Pennsylvania and he gave them all to the Salvation Army when he came down and now down here he's only got one store made sport coat, which he practically never wears, and he swears he'll never wear a tie again. Yet this guy runs a million dollar business down here too. But like I said, if you see him in his store, he looks like a guy who's just come in to

[08:35] buy some Scott's turf builder for his lawn. And that's what happens to 90% of the long term expats down here. And that's just one of the reasons why we look better and live longer than our counterparts up in the first world. And that's one of the great things that Latin America does for us. We just don't care that much anymore what other people think. We don't dress to impress, not as much as we used to. But you know who does? Those Latin American guys that have successful businesses. And even the ones that are just scraping by, it's all about the show and they can really put on a show, believe me. So you got a guy like Eddie for example. He drives a nice late model car, that's okay, with a ton of parking lot dings in it of course, which would be an embarrassment to a guy in his position if he was up in the first world. People would certainly talk. But down here again, all long term expats eventually fall into that groove.

[09:23] You dress extremely casually, even to the point of looking a little tattered and natty. And you become in time just a lot more tolerant of everything. So you're stressing your blood pressure go way down. Because down here, blowing your stack just doesn't have much of an effect at all. And like Eddie says, he's not the kind to blow his stack, he never was. But he's watched other Latin bosses do it with their employees, to practically no effect. Now Eddie's one guy who instills great loyalty with his employees. Now you may have heard that up in the first world. You should always keep a little distance between yourself and your employees. You don't want to get too close to them, you don't want to be too friendly with them. You've probably heard that. Because you find if you get too close to an employee and that person does something wrong or takes advantage of his friendship with you, it's a very difficult thing to take

[10:08] actions against a person like that. You've crossed that line between being a boss and being a friend. But down here in Latin America, Eddie says it like this. He says it doesn't matter if you're really good friends with one of your employees or you're strictly business, 100% by the book. In time, almost every one of your employees will try to hit you up for a loan. Because as Eddie says, no matter what salary he pays these guys, by the time the Monday after payday comes around, none of them has two nickels to rub together. And I suppose you can understand that when most people down here only make about 300 bucks a month. But you see, the thing is the average working man down here likes to go out and get plastered on weekends. I mean, what else have you got to do if you only make 300 bucks a month, right? And naturally they can't buy the good booze, so most guys who like to drink buy this stuff

[10:56] called guaro. And depending what Latin country you're in, it'll go by other names too. But it's actually a mass-produced item by a regular distillery and it looks like vodka. And it only costs about 3 or 4 bucks a quart. But just one swig and it'll take the enamel off your teeth. And that's why Monday mornings are a little tough. The guys will always show up for work. You don't have that problem here. And most of them will even come on time. But sometimes you can just see in their eyes that they had one of those tough weekends again. And of course, being a macho society, guys handle the money in the family. They always do. Though the wife or the lady of the house usually manages to squirrel away something for emergencies but it's behind his back, of course. Now I'm saying this not to give the impression that guys are all drunks and that they're bad workers. Because they're not. They're really very good hard workers.

[11:42] But a lot of the middle and lower middle classes do have drinking problems. And they all have money problems. And like Eddie says, he's been touched by every employee that's ever worked for him. And Eddie himself is a pretty soft touch with a long memory. And he remembers every time he hit up one of his friends for 50 or 100 bucks and they came through for him back in the battle days when Eddie was broke. But you see, Eddie was the kind of guy that would only touch it for 50 or 100 bucks. Never more. Never enough to wreck a friendship or piss his friends off too much. And like Eddie says, and he's kind of a street philosopher, if you're going to touch your friends for some money, never go over 100 bucks he says. Because when you start pushing it like 500, 1000 or 2000, that's the kind of money that can test a friendship. And your friendship always suffers later.

[12:27] Now Eddie says when his employees try to touch him for some dough, he more often than not will lend small amounts of money to his women workers but not the men. Because he explains in his world of workers, the women almost never seem to ask him for anything more than 10 or 20 bucks just to get him over a hump during the week. And within the next couple of weeks they'll always pay him back. Almost never in one lump sum, usually in little payments of 3 or 4 or 5 dollars spread out over a few days at a time. But nevertheless they still pay him back and they keep a very good accounting of that too. But with his men workers it's different. Sometimes they'll ask him for a whole month's advance on their salary. Now that might only be about 300 bucks, which isn't going to kill you right? But you just can't do it once. When word gets around that you've lent that kind of money to someone, sooner or later

[13:14] all the guys end up coming around. And your gardener and your cleaning lady will pull it all the time too. And the big excuse almost always is, someone's sick in the family. And it's almost always a kid they tell you about, a little kid that needs some medicine that's expensive. And you know Eddie says in his experience, based on what he hears from employees who try to nick him for money, Eddie says old people are indestructible, they never get sick. It's always kids, sick kids in the family. It's like every family's got these deathly ill kids and everybody else is just fine. At least Eddie says they could be a little creative. You know, they could spread the sicknesses around. One week it's the kid, the next week it's the old grandma, then it's the married daughter and then back to the kid again. You know, shuffle the fibs around for some variety. But here's the thing about that month's pay that a lot of the guys try to nick Eddie for.

[14:03] And he doesn't fall for that one. Eddie explained it to me this way, he said, look Johnny, imagine you're up in the States and an average worker comes up to you and he asks you, hey boss, things are tough, can you give me a month's salary in advance? Now up in the States, the average guy makes 35-40 thousand bucks a year, which is about three thousand dollars or so a month. Now imagine you lend the guy that money or give him an advance on his salary. When payday comes around the next month, if you hold back on the guy's wages for the money that you lent him the month before, he's going to be completely destitute and his family is not going to be able to eat and they'll shut his water and his gas and his phone off because most average people in the world, wherever they live, live from day to day and week to week. Even the average family in the United States, if the average salary is forty thousand dollars

[14:49] a year, with four people, they're never going to be able to save a dime. So if you lend them three thousand bucks or so, how are they ever going to be able to pay you back? They just won't be able to do it unless you put them on a payment plan for a year or two and that's no way to run a business, believe me. And that's why Eddie says if you lend a guy a month salary, even if he gives you the biggest sob story in the world, even if it is only three hundred dollars, he's just never going to be able to pay that back. So if you give him that kind of money, you might as well just write it off. It's the end. Because that's like giving a middle class American three grand or so when you're ever going to see that money, even with the best of intentions. But anyway, the women do have the best of intentions and they do pay off their debts. It's your male workers you got to look out for. And here's the other thing, Eddie said sometimes it's not good that your workers know where

[15:36] you live, even if you live miles and miles away from your factory or your business or your store or whatever. Because Eddie says a couple of times a year, he'll be at his house on a Saturday or a Sunday afternoon. He'll get a knock on the door and there'll be one of his male workers standing there, always with two or three little kids and a babe in arms. And of course it'll be to hit you up for money. And no, you can't tell he brought the kids along for a sympathy play, right? Not too obvious, huh? But Eddie says the best attempt that any one of his employees ever used to get some money out of him for a loan was when one of his workers asked him for a $500 loan and said that he had collateral for it. And he did because right outside of Eddie's house was a kind of a decent looking pickup truck. 15 years old maybe, and not in terrible shape for a Latin American vehicle.

[16:25] But then again Eddie wasn't in the market for a 15 year old pickup truck. But the guy insisted that Eddie take a look at it. So he walked over there to please the guy. The guy opened the hood and the motor looked okay. The guy started it up, man, it just purred like a kitten. And Eddie actually thought about it a while. He figured the thing was worth maybe two grand minimum. The guy said Eddie could hold onto the truck until he paid that $500 loan back. And Eddie knew if he took the truck it would be his because nobody ever pays a debt like that off. It was a sure thing. And then the guy pulled out the title papers and everything looked in order. And Eddie in a moment of weakness actually thought maybe I'll do this thing. Until he looked around and realized he lives in a really nice neighborhood with some really nice vehicles and he didn't have any room in his garage for this thing so he would have to sit in his driveway.

[17:11] And Eddie really didn't want any of that. And even though he came from a trailer court white trash kind of background, he was past that stage in his life so in the end he turned the guy down. So they said their goodbyes and all that and Eddie said I'll see you Monday at work. And when Monday morning came around Eddie got up, walked out of his house and he saw the pickup truck sitting out on the street where they'd left it. And Eddie thought what the heck is going on? Why did he leave his truck here? And when he got to work and the guy came in on his shift Eddie said why is your truck still at my house? And the guy said oh don't worry I'll come tonight and get it don't worry. So the next morning when Eddie got up guess what the truck was still there. So when Eddie saw the guy at work that day on a Tuesday he said why didn't you come and get the car last night? Is there something wrong with it? Did it break down or what? And the guy said no no it's running fine I'll come and get it tonight. And Eddie said yeah I know you're coming to get it tonight.

[17:58] You're driving home with me, you're going to get in that truck and you're going to start it up and you're going to get it out of there. So Eddie drove the guy to his house at the end of the shift. The guy got in, started the truck up, boom just like that, turned over like nothing, sounded great and then Eddie went into his house. Only about an hour later Eddie happened to look out the front window and guess what the truck was still there. So Eddie ran out in the front yard. The guy was still sitting in the driver's seat. Eddie leaned into the driver's side window and said what the hell is going on? And the guy said Los Hiento no tengo le sensia which means I'm sorry I don't have a driver's license. And Eddie didn't quite understand that reasoning because in Latin America not having a driver's license never stopped anyone from driving believe me. And just as an aside did you know that if you get pulled over and don't have a driver's

[18:43] license the cops will give you a $25 or a $30 fine. And sometimes they'll pocket it and sometimes they'll actually write you a ticket and you'll have to go down to the municipality and pay it within the next couple of weeks. But this is Latin America so the cops would much rather take the bribe. And usually bribes are the name of the game down here if it's only one or two cops that stop you. But if you get stopped at one of those paradas where they have those traffic cones and a guy waves you over and there's six or seven cops there and four or five squad cars checking papers and looking in your trunk and under your hood and stuff for contraband. Well, in that case there will be no more data because there's just too many cop witnesses and too many cars being pulled over at once. Sometimes there's three or four in line waiting to get checked. So the cops that go for the bribes it's usually a lone gun or two working as a tag team because

[19:29] once you get three or more cops together they can't agree on anything much less how to divide the spoils. Because remember this is the third world now. So anyway Eddie got in the seat of that pickup truck, rev the motor, put it into gear and guess what? The stick shift came right off in his hand. It turns out the motor was fine but the pickup truck had a bad transmission and worse yet it didn't even have a transmission. And to this day Eddie doesn't know how the guy got the pickup truck from his place which was miles and miles away to Eddie's subdivision which has all kinds of hills and valleys and hairpin treacherous slopes. And Eddie speaking of his employees again warns expats of this too. He says when he goes into work he always finds there's a little commerce going on on the side. Seems that every one of his lady workers has some kind of business going.

[20:15] Her market of course being the other workers. For example one lady sells tortillas at lunch, another sells little bags of peanuts and cashews, still another is an Avon representative and one's a Mary Kay girl. And don't forget Tupperware that's really big down here. And there's even a lady or two with lingerie and shoe catalogs that you can order from. And one lady sews draperies and one makes wedding dresses. You name it and there's a lady that's working for Eddie who's selling it. And that's all part of that gray market or underground economy everybody talks about that in some of these Latin American countries makes up 50% of the total GNP and workforce and pays zero taxes. But this stuff is absolutely necessary when you look at it because how else is someone supposed to get along on 300 bucks a month? Now they have a thing down here called the Canasta Basica. I might have described it once before on another show and what that is is the government's

[21:04] quarterly report on what it costs for a family of four to buy all the necessities they need to live including rent and food and transportation and it's broken down by the month. Now it's a kind of a fallacy to think that the average family in Latin America brings down only $300 a month. That's for a family of four. Because even if the average guy's only making 300 a month the wife's always working at something whether it's a sewing job in a factory or at a restaurant or whatever or she's selling things on the side like Avon. Because you know it really doesn't make sense when the government announces that quarterly Canasta Basica which is the cost per month for a family of four to live and survive. Because the last I saw in Central America except for Costa Rica and those high buck tourist destinations the Canasta Basica for four people in a family was running around $400 to $500 a month.

[21:51] And when the government says that the average man head of the house makes 300 bucks a month where's that extra 100 or 200 bucks coming from? Because if the average family didn't have that extra income they wouldn't have enough food or electricity to make it through the month. That average $300 a month salary would only bless the family about three weeks out of that month. So out of necessity the average woman down here has a little business on the side and believe me there's nothing complicated about it. It's very basic like selling tortillas at lunch. And selling food at lunch to the average worker down here is a big business because on the money these guys make they can't afford to go to McDonald's, Burger King or Taco Bell. And because of that whether they know it or not they'll live longer too. Now get this, the average worker who doesn't bring his own box lunch down here and about three quarters of the people still do bring a box lunch.

[22:37] I'm talking about the average $300 a month grunt worker now. Not somebody who's making five or six hundred bucks as an accountant. People in the profession splurge a couple times a week and do go to McDonald's. But the average guy you almost never see him there except on a weekend when he's out with his family or it's date night. And it's a definite sign that a Latin country's 30 or even 40 years behind the times is when you realize that such a huge percentage of the population still takes a box lunch. I mean come on when's the last time your kid took a box lunch? Do they even know what a box lunch is? And because your kid buys lunch at school if it's not subsidized now how much dough do you give your kid to eat that junk food that they serve at school these days? I'm guessing you give your kid four or five bucks a day. But down here when the average guy doesn't bring his own lunch he spends between a dollar and a dollar and a half.

[23:23] And of course they've got those little street corner kiosks that you see all over the place and for a buck or a buck and a half they'll give you a complete meal. Beans and rice and tortillas and vegetables and even some kind of tang instant Kool-Aid. And of course like I've said many times before expats should never even think of eating at those places because you're going to get Montezuma's revenge. It's just a matter of the roll of the dice. But most of the times in big factories and sweat shops and on construction sites each noon time a couple of ladies will show up, set up a card table, take out their utensils and some tin foil covered Tupperware dishes and they'll make you a complete lunch plate for a buck or a buck and a half. That's how it's always been down here in Latin America. And the ladies that bring that food don't have permits or licenses or permission from the ministerio. One day it's a bare piece of land, the next day a construction site starts and the next

[24:13] day the neighborhood ladies show up with their card tables and lunch plates and everybody's happy. And that's because they're serving hot food. And these grunt workers on construction jobs would rather have that than a cold hard box lunch. Especially since every latino is absolutely nuts about tortillas. From the highest to the lowest classes they have tortillas at every meal. Tortillas for latins, bread for people up north. That's how it goes. And the latins much prefer their tortillas warm and steaming. And that's why there's always a lady with warm tortillas on a job site. Oh and while we're talking about employees like unskilled workers that work at Eddie's sushi shops, and in his case they're mostly women, well here's another thing that Eddie warns me about. You see, often times you'll hire a girl that's kind of cute. I mean it's a boss's prerogative, right? When choosing between two workers of equal skill and one's better looking than the other,

[25:02] or even a lot better looking than the other, which one are you going to pick? The ugly one? Now so you don't get mad at me and sending me emails and calling me sexist, I'm paraphrasing Eddie here because after all you wrote me the emails asking me about Eddie and his workers and how he handles his business, so I'm obliging you. Anyway, so Eddie's always got a few nice looking girls working for him. Which in the end has caused him a few problems, because you see, good looking girls always leave a trail of broken hearts behind, don't they? And it's just like that in Latin America too. So every time you do have a good looking girl working for you, she's either got a boyfriend or in between boyfriends, and more often than not, boyfriends and exes will come around to check on her. Because this is a macho society and good looking girls are always getting hit on, the boyfriend of such a girl is always on high jealousy alert and will find any excuse to confront

[25:52] her about it, whether she's innocent of all charges or not. And Eddie tells me he's seen many a big blowout fight in the parking lot when one of his better looking lady workers walks out the door when her shift is out and there's some jealous boyfriends standing out there in the wings ready to pounce on her. And Eddie and I, having a lot of different girls working for him, has seen it all. Eddie says the boyfriend's jealous if she wears a little too much makeup, her skirts a little too short for him, she smiles too much at the customers, or at the boss and that's where Eddie says you can get into real big trouble. Because he says, when a good looking girl's relationship starts going on the rocks, when the boyfriend starts noticing that things are going sour, the first thing the jealous boyfriend does is accuse her of having an affair with the boss. And Eddie, being the boss, has found himself caught between a rock and a hard place on

[26:41] this because sometimes his female workers do play up to him a little bit. Just to get on his good side, which is an occupational hazard for any boss in any country. But when the girl's a looker, rumors spread, somebody whispers to the boyfriend or ex, and now you got the guy confronting you in the parking lot. Now because 95% of Latin American guys, we're talking about the middle and lower middle class guys in the 300 buck a month range anyway, they're usually short little guys that weigh about 145 pounds. And like Eddie says, they don't want to fight you, they just want to stand there, confront you and accuse you of stealing their girlfriend, and they'll get all steamed up but that's where it's going to end. And it really doesn't matter what you say to the guy because jealousy is so intense down here that nothing can ever change the guy's mind about it. And speaking of jealousy, and the examples of jealousy, and the intensity of it down

[27:27] here and what can happen, I think I'm going to do a whole show on that. So, stay tuned. You've been listening to The Expat 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, theexpatfiles at gmail.com. Once again, theexpatfiles at gmail.com. See you next time. Nos vemos.