#119 – The Expat Files Episode 119: Real Expat 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, it's time to take off those rose colored glasses and find out. So let's get started. Today we're going to start by catching up on a few emails again. And in regards to emails, I mentioned my email address during every show. It's The Expat Files at gmail.com. Anyway, a lot of you, for whatever reason, don't end up sending your emails to my address

[00:50] there. Instead, you send them through the Contact Us site at Progressive Radio Network or to the program manager or somehow you get the email of someone over there. Anyway, when you do that, I end up getting these things really late or sometimes not at all. So if you do want to send me an email, the best way to do it is to send it to the one I mentioned on the show, The Expat Files at gmail.com. So right now, let's catch up on some of these. And this one's from Francis. It says, two months ago I came down to Mexico to see some expat friends. They kept telling me I could open a restaurant slash bar slash motel somewhere in Mexico, specifically the beach town of Muzante. And it sounds exciting, but I don't know if I have enough experience or enough cash. I'm going to be 19 in February and I'm getting kicked out of my mom's. My dad is going to be giving me $800 a month for a little while to get started.

[01:37] I could struggle or go to college on that money up here in California or I could come down to Latin America, but I will need to have some kind of income after a few months. Where would you recommend going to start a restaurant slash bar slash motel on the beach or any other business? What about a garden store or a nursery? And then he says, would you recommend any colleges in Latin America? I have a Dutch and a US passport. Is it easier to live as a US expat or a European expat? Would you recommend that I stay and get a degree here in the US before making the move down there? Thanks for your time, Francis. That sounds like an awful lot of questions, Francis. And to tell you the truth, that's just the kind of emails I usually get. A long string of questions. And I will try to answer all those questions, but please, people, when you email me, don't

[02:23] ask me about specific places to start a business. That's the one thing I really can't do. There are so many hundreds and hundreds of nice little towns to start businesses in down in Latin America. It's not like I can just pick one or even 10 or 15 or 25. And please don't ask me in your emails just what kind of businesses that I suggest that you start. Because honestly, there are hundreds and hundreds of businesses you could start and make a great success up. You just have to go to a particular place, keep your eyes open, look around, and in time, maybe one month, maybe three months, maybe even six months into your adventure, the ideas will just start flooding in. You'll see. And after a while, you'll have so many ideas in your head that you'll have to start whittling them down and making a shortlist. And speaking of emails, ever since I've been doing this show, I've been getting emails

[03:12] from people asking me if I'm ever going to put on a seminar down here in Latin America. Well guess what? I've decided to do it. So in just a few months from now, I'm going to be putting together a few Latin American specialists from down here. A lawyer, a real estate specialist, a tax specialist, and me, and I'll be offering my exclusive little seminar in an undisclosed Latin American city off the tourist trail, where me and my little band of Latin American specialists will give you the insider's view on what it's really like to live, work, play, and or retire in Latin America. And not only will I be able to show you things that I point out in these programs, every week in my PRN shows and downloads, but I'll also be talking about certain things I can't really go into on the radio, certain advantages that I can't really talk about.

[03:58] And that's because some things have to remain, well, secret, if you know what I mean. But when I give a seminar, anything goes. Now the way it's shaping up is that it's going to be three or four days long, and I'll be in charge taking you on a guided tour of a few of my very special places in Latin America, where I can guarantee you that first world expats really have an insider's edge, even beyond the gringo advantage. And I guarantee you this will be a trip you'll never forget. So stay tuned for more announcements, updates, and details. But right now, let's get back to that listener's email. Well, first of all, Francis, if you've been listening to my show, you know that there are a few places I just don't recommend in Latin America, a few countries like Mexico, for instance. Oh, it's a nice place to go on vacation for a few weeks, but I don't recommend going down there and living. Oh, sure, if you live in a high volume tourist area, it's no problem at all.

[04:46] But you're going to be spending first world money. Is that what you want to do? Sounds like you don't, because if your dad is going to give you $800 a month, well, that's not a first world income now, is it? And you say he's only going to give you that for a few months, and then what you're going to do? Remember, there's no such thing as welfare, unemployment insurance, or a safety net in Mexico. So when that money runs out, what you're going to do? Now the style of living I recommend for expats is to live in a little bit smaller town off the tourist track, where there's Nerea Gringo to be found, though you can do pretty well in a town on the tourist trail if you're selecting a town that's not touristy for first world people. In other words, it hasn't really been discovered yet by first world people, but the local Latins and Latins in neighboring countries have found it, and it's a tourist destination for them.

[05:34] And they spend their free time vacationing there. And how do you find places like that? Well, it's not easy, because your New Jersey travel agent's not going to have pamphlets. On a place that Gringos don't go to, even if it's very popular with middle and upper class Latin folks. Those are places that you only seem to find out about once you've been living in a country down here for a while. Then when Christmas time and the other holidays come around, that's where the locals go. And that's where the wealthier Latins have their beach houses and vacation homes. But your first world travel agents are not going to know about that stuff, I guarantee it. However, when you're down here in Latin America just exploring, sometimes you might just stumble on a place that's only big with the Latin population. I'm talking about quaint little colonial towns and beachfront resorts where you can walk

[06:19] around for hours and almost never see a Gringo. Now, those are the places that I recommend. And guess what? You're not going to find too many places at all like that in Mexico. And another thing, if you want to live in a tourist town in Mexico, and you want to live like a first world person, or pretty close to it, and you don't want to live like the natives, which is considered roughing it if you ask me. Anyway, like I said, you're going to need first world income to live like a first world person in those places. And believe me, if you want to open up a business in a town like that, a town that Gringos and first world Europeans have already found, which means over the years, a lot of those guys have set up businesses, well, they're going to be your competition. And do you want to be in competition against other first world people who have the same idea that you have? Only they had it a few years ago before you ever got down there. And now they're well established, and you're going to open your doors selling your brand

[07:07] of pizza against their brand of pizza? The brand that everybody knows down there already? The first world style pizza that they're accustomed to eating? No, I don't think so. You're going to be butting heads from day one. Instead, you're going to want to go to another kind of Latin American town completely, one that isn't flooded with first world people that came down and opened businesses already. Because if that's what you want to do, you might as well stay up in the first world and butt heads against the first world competition in your own town. Open a business there, because that's the same thing that's going to happen to you if you come down to a tourist town in Latin America and try to do the same thing. That is, unless you have a terrifically new product or idea that's very novel in the area. Then you can be the first guy in, and then naturally you have a big chance of making a great success of it, providing of course the public is ready for it.

[07:54] And that your product isn't so very expensive that the average guy just can't afford it. Because let's say you're going to bring in a brand new super efficient solar panel that's not only going to heat your shower in bath water for free once it's installed, it'll heat up your swimming pool water too. Great idea, right? In a place with a lot of sun, especially. Like south of the border. The only problem is something like that is probably going to start around a few thousand bucks per unit. That means for the average Latin American guy down here, even the ones that are considered upper middle class by their definitions, well, you're going to have to give these guys a one hundred year payment plan to even get them to think about the possibility of buying a money saving device like that. Even though a set up like that would work absolutely terrific in any place in the southern United States. Well, down here in Latin America, if you got a product that costs over five hundred bucks,

[08:42] you've already just about cut out ninety percent of the population who might even want that product in a big way, but don't have the money or just can't qualify for a loan. And the fact is, eighty percent of the population just does not have the kind of disposable income to buy something like that. Even if they understood that it would pay for itself in a couple of years, and that they'd basically have unlimited free hot water for the rest of their lives after they paid for the damn thing. And while I'm speaking of solar panels that heat hot water, down here in every big city in Latin America, if you look in the yellow pages or get on Google, you'll find there's a half a dozen companies selling these things, and they're all imported from different places like Israel, Germany, the United Kingdom, and the United States. And they all cost at least a thousand bucks or more to buy and install. And even at those prices, they promised a three to five year payback time, which is

[09:30] actually reasonable down here in Latin America, because you do have that constant, intense sun. Even in the rainy season, you usually get four to six hours a day. And some of these hot water solar panel reps and suppliers have been down here in Latin America five, even ten years. Yet when you drive around here in Latin America, you almost never see those panels on the roofs of the houses. You only spot one once in a great while, and only in guarded subdivisions in wealthy and upper middle class neighborhoods. So there's an obvious market for those things, because everyone uses hot water, and the price of fossil fuels and electricity is increasing every year. Solar water heaters should be a slam dunk, but they seem just too expensive to have any real market penetration. But you know what I think any astute expat could come down here and start his own solar panel hot water heating business if he was a relatively handy do it yourself guy.

[10:18] In fact, just Google do it yourself solar hot water heating systems, and there are dozens of plans for excellent homemade systems that could heat all the water in your house and your pool for anywhere from two to five hundred dollars complete. So if you're a handy kind of expat guy, just copy the plans of the system you like best. And if you check it out, you'll see all that kind of stuff is available at a hardware store, nothing special. Anyway, you could be the first one in your little town, in Latin America that is, to offer a first world gringo designed and installed solar hot water system for a half to a third of what the big boys are charging. You get the idea, and that's how you're going to have to think if you come down here and plan to compete in a market that's already saturated with the product that you want to offer. When you're competing against a first world service or product, your product or service

[11:06] has to have a completely different twist or have some terrific brand new features that the other competition just doesn't have, or you're just going to have to be a lot cheaper. So again, if you want to go into a touristy area like Mazante, Mexico, which is a very small town, but it gets anywhere from fifty to a hundred thousand tourists a year because of its beaches and its turtle preserves, it's a mite small alright. With only about one or two thousand people, but they get a horde of tourists, and they're mostly first world tourists, and it's in Mexico which gives it two black marks in my book. And while we're talking about Mazante, Mexico, I'd like to tell you a little story about that town. Now, even before it was a town, even before the Spanish came down and wiped out half of the indigenous population, well even hundreds of thousands and millions of years before that, the beach where Mazante is today was known by millions of turtles who'd come in

[11:54] every year to lay their eggs. The eggs would hatch a few months later, and then the babies would take off into the ocean. So naturally, when humans got there, they discovered there were tons of eggs and tons of turtles to eat. In fact, there were so many hundreds of thousands of big turtles coming in every year to lay their eggs. The turtle meat and eggs eventually became a huge industry, because you see, catching a turtle in the ocean is difficult, but when they come up on the sand to lay their eggs, once they find a spot and start digging, it takes them about twenty minutes to finish the job. And once they start digging that hole, you can walk right up to them and touch them, and that doesn't stop them, they just keep digging. They're on automatic pilot and it's as if you're not even there. So naturally, humans figured this out in a hurry, so that's how that turtle meat industry started. In fact, the turtle meat business got so big in that town, that in the 1970s, the town

[12:42] built a huge meat rendering plant. Turtle meat rendering, that is. A kind of a turtle slaughterhouse, if you know what I mean. But as things usually happen with humans, when they find a good thing like that, they ruin it. So after about ten years, the number of turtle nests decreased by ninety percent. The locals had just about killed the turtle that laid the golden egg, and it took about ten years for the Mexican government to shut down the plant and ban killing turtles, eating turtle meat, and selling turtle eggs. But since laws in Latin America are enforced spotty at best, you can still stroll up and down the beach and walk through the Pueblo and see little kids carrying handfuls of turtle eggs, bringing them home to mommy to cook up. And you can't make a reptile omelet without breaking a few turtle eggs. And though the turtle egg and turtle meat business still goes on in a big way, under

[13:28] the radar, of course. But first world tourists are clueless about the whole thing, unless they keep their eyes open and take a walk through the local Pueblo and look into the kitchens of the locals, they have no idea that the locals are still feasting on one of their traditional foods. And even though it's all under the table, I don't think the locals have to worry about the tourists getting involved in the turtle meat and egg business. Because to first world tourists, the thought of eating turtle meat and turtle eggs is pretty disgusting actually. And I've had plenty of chances to eat turtle eggs, because when you go to a middle-class family home, if you're in a beach town and you're at a local's house, it's on the menu. If there's a turtle nesting ground nearby. For them, it's traditional food when it's in season, just like iguana eggs, believe it or not. And I've had my chance to eat those too. Yuck. I've sat at more than a few middle-class Latin American breakfast tables in coastal areas

[14:18] and beach towns, where they've had odd-looking eggs sitting on a plate. Turtle and iguana eggs are not really hard like a chicken egg. If you push on them with your finger, you can put a little dent in them. They don't break. They're kind of leathery and flexible. And by the way, in these hot coastal towns, iguana meat is often on the menu too. And why not? You should see the size of some of these iguanas down here in the coastal towns. In one of the houses I had on the beach, I had a 10-pounder and his little brother living on my roof. And one time in the morning, I left my front door open and was cooking breakfast. And that big boy walked right into my living room. Scared the hell out of me. But iguana meat, no thanks. But the locals seem to love it. And when I say iguana meat is on the menu, I don't mean on the restaurant menu. You almost never see it at a restaurant. Anyway, I never have. But it's on the menu in the kitchens of the locals.

[15:05] And why not? If like turtles, they're hanging around the area, it's high quality protein you don't even have to pay for. You just go out and catch them. Or send the kids out with their slingshots. And by the way, Mazunte, Mexico isn't the only place in Latin America that the turtles swarm the beaches and lay their eggs. It happens in hundreds of other beach towns, mostly up and down the Pacific coast. And yes, almost all of those Latin American countries have passed laws banning the killing of turtles and taking and eating their eggs. And as you might expect, in every one of those areas, the locals still kill and eat the turtles and take their eggs. In fact, the last time I was on a Pacific coast beach in Costa Rica, I knew right away that it was turtle season because I saw kids walking up and down the streets with their hands full of turtle eggs. An act which of course was illegal. But as usual, where are the turtle police when you need them?

[15:52] But let's get back to Francis' email. In it he's asking, what about opening up a nursery or garden shop? Sounds good, especially down here in the tropics, where everything grows like a weed. And not only that, you've got three, sometimes even four growing seasons. Well, to that question Francis, I'd say, no, don't even try it. Because I'll tell you right now, Latin Americans might be third world in every other way. What I mean is, everything they seem to do is a little second rate and scruffy around the edges. Take for example, when they do an electrical, plumbing, or painting job, it's never up to first world standards and never exactly to spec. That said, there's one thing that the average Latin American really excels in. That's gardening, yard work, and horticulture. When it comes to those three things, these guys are absolute experts. It seems they're all born with a green thumb.

[16:38] It's in their blood or something. In fact, here's an example. Let's say you've got an avocado plant in your backyard and it's stunted or it's just not producing. Or you just don't like the way it looks. Well, all you have to do is ask practically any middle class Latin American. And a good percentage of them know exactly what to do. Because the fact is, over 50% of Latin Americans grew up very close to the soil themselves. Even a lot of the common low class and middle class big city dwellers moved to the big city after growing up in the sticks or on a farm. And here's what expat Eddie always says. If he's having trouble with some plants or his garden or some insect pests that are attacking his bushes or whatever, he just asks the first guy he sees with a machete or a cowboy hat and the guy almost always knows what's wrong and how to fix it. But these days, Eddie doesn't even have to do that.

[17:24] He's got a full time gardener, so he never has to worry about his land or his garden not looking good. So all you expat wannabes up there, if you've got a green thumb and you absolutely love plants, gardens, and horticulture, come down here to Latin America and by all means do your thing. But you might just be better off making it a hobby and not a business. Because if you do open up a store or a nursery, you're going to be competing with some of the world's best. Which means if you were king or queen of the compost pile up in Cleveland, down here you just might find yourself ranked with the amateurs. Okay, and the next thing Francis asks in his email is, do I recommend any Latin American colleges for him to go to? Well first of all, there are a lot of first world exchange students going to universities down here, but they only stay on for a semester or two and almost never pull the full four

[18:10] years and get the degree. They almost always end up going back to their home college up in the first world. And why is that? Well, that's because if you look at the rankings of universities, and by that I'm talking about the major world university international ranking systems, which you can look up on Google, there's at least three or four of them, and you'll see very quickly that in the top 500 universities in the world, there are less than 10 Latin American universities that rank in that group. And depending on which ranking system you look at, there's only one Latin American university that ranks within the top 100. Now when you hear that kind of information, you think Latin American universities are pretty pathetic, not where you want to send your kids. But when you remember that there are about 9,000 accredited universities in the world, Latin American schools don't look that bad. It turns out that the very best Latin American universities are solidly mediocre by American

[19:00] standards, which means that your run of the mill Latin American university is pretty much like a first world high school. Anyway that's according to an unofficial poll that I've been taking over the past few years. Based on information I get when I ask that question, do some average and very above average expats that have all gotten degrees from first world universities and have worked with Latins with Latin American college degrees? And in my case being a first world trained engineer myself, I'd have to say that even the best engineers that I've met that have graduated from Latin American schools are mediocre at best. And I've never yet met one that I'd actually hire if I had an engineering job to fill. But on the other side of the coin, if you do decide to go to a Latin American university or send your kids there, if you pick one of the very highest quality ones, you can be pretty certain that it's probably not going to be any better than a mediocre first world

[19:48] university. But in any case you'll pay about 25% or less than you might pay for even a mediocre first world university up in the first world. Which means ironically you could get a mediocre first world style university education down here in Latin America for about one quarter or less of the price that you'd pay for a mediocre university education up in the first world. And like I said in a past program, many of the private universities down here offer a bilingual curriculum. That is, some of the classes will be in English all the time and some will be in Spanish. Which means of course you do have to know your Spanish if you're going to go to a university down here. Which in my mind is the biggest reason why so many people from the first world don't send their kids down here to Latin American schools to take advantage of their terrific price differential. I mean, what first world parent, when given the choice to send his kid to a local private

[20:38] university near his hometown or a state university, wouldn't jump at the chance to send his kid down to a university in Panama, Brazil, Chile or Argentina for a quarter of the price. All else being equal. That is, the first world universities being mediocre and the ones in Panama, Chile and Argentina being rated very highly by Latin American standards but by first world standards being quite mediocre too. Comparable more or less to a regular community college up in the states. A pretty good college education really. But nowhere in the ballpark of a Princeton, Yale, Caltech or MIT. And in Francis' email he also mentions that his father is going to give him 800 bucks a month to live on for a while. Well in regards to that amount, I've said in so many shows before, if you go to a tourist area like Panama, Costa Rica, Rio de Janeiro, parts of Mexico and in practically every

[21:24] well-known beach town in Latin America where cruise ships often stop, well in those places a single person with 800 bucks in his pocket every month is not going to live like a first world person. It's just not going to happen. On that kind of money you could live pretty much like a backpacker tourist or maybe a little better than that. You'll get by alright but you'll live a lifestyle somewhere in between that of a middle class local and a first world college kid living in a dorm. And if you've been through college you probably know what I'm talking about. A lot of us have been through that. So if you don't much mind living like that, more power to you. But as for me and what I try to preach on this show every week is that if you stay off the first world tourist trail you can live like a first world person on a quarter to a half of what you'd spend to live the same way up in the first world. But no matter if you end up in a high volume tourist town or in one of the cities or towns

[22:12] that's not yet contaminated by the gringo dollar, you can always make some extra money as a bartender because bars and restaurants are always willing to hire first world people because of those gringo qualities they think we all have. You remember the gringo advantage I always talk about. Anyway, you can bartend even if your Spanish stinks because in the business districts in every big city down here they have first world franchised hotels, restaurants and bars like the Hilton and the Clarion and Howard Johnsons that do get their share of first world business people coming in for conventions and such. So there is a demand for first world English speaking bartenders. But don't expect to make more than two or three hundred bucks a month. And if your Spanish really sucks there's always those English teacher jobs. You see those in the classified ad sections almost every day of the week. And the ads are in English. Not to mention every big city down here has call center jobs which I talked about in a

[23:01] previous show too and you're looking at two to four hundred dollars a month there too. Anyway, what I'm saying is you can supplement that income from daddy and really stretch it out as long as you don't decide to come down to a high volume tourist area. And when daddy's money runs out, so what if you have to live like a native for a while? Big deal. You still have your first world brain going for you and the gringo advantage. Because you see almost every single expat I know that made a big success of himself down here or a moderate but agreeable success. Anyway, nearly every single one of them I've ever talked to said they came down with a small little nest egg most with not more than five to twenty thousand bucks. In today's world, not enough to get you started in any kind of business up in the first world except maybe a hot dog or a pretzel stand on a street corner. Anyway, all of the successful and moderately successful expats I know came down with the

[23:50] small amount of money, a little nest egg like that, and after traveling around a bit and keeping their eyes open, they'd end up in a place for six months or so and it wouldn't take long before those business ideas just started flooding in. And to tell you the truth, many of them who came down with a specific idea, let's say, to start a mom and pop bed and breakfast or a jungle canopy tour operation or a bar or restaurant, well after being down here six months or so, so many of them end up starting businesses that are completely different than the ones they intended to start when they first came down. After you get the lay of the land, that's what often happens. All right, and the next thing Francis asks, he wants to know if he should use his Dutch passport or his US passport. Which one is better to use in Latin America? Specifically, he asks, is it better to live in Latin America as a US citizen or a Dutch

[24:39] citizen? Well, to answer that, like I've said so many times before, you have that first world advantage which I call the gringo advantage and a Dutch person, and in fact, almost all Europeans look like gringos to Latin Americans. And by the way, Europeans who speak Spanish as a second language do speak it with an accent that's native to their country. In other words, Dutch people, German people, French people, Italian people, when they speak Spanish, even very good Spanish, it comes with their native language accent. And Latin Americans can tell which European country you come from by your accent, even if your Spanish is perfect. Just like we pick up a German accent or a French accent or an Italian accent in someone who speaks perfect English because it's his second language. And a person's second language always carries a bit of the accent with it. So to get back to the question, you will have that first world or gringo advantage I always

[25:27] talk about, whether you come from Holland, France, Italy, Germany, or the States. However, if you're a gringo from the States or Canada, you seem to carry just a little bit more of that advantage than a European, just a little bit. And that's because they watch our cable TV, love our Hollywood movies, want nothing better than to have a trip to the States to go shopping in Miami, are nuts about Disneyland and Disney World. And the fact is, every Latin family has a friend or a relative living somewhere up in the States. And the only connection like that, that Latin people have with Europe, is that they absolutely love German cars. Who doesn't? And of course, there's that love-hate relationship that they have with the mother country Spain. But almost every Latin American person I've ever spoken to, when given a preference over which country he'd like to visit, he or she almost always picked the United States over

[26:14] Spain any day. So for my money, Francis, if you have two passports, Dutch and US, and you don't have a Dutch accent, when you come down to Latin America, tell everybody you're from the States. And there's one last question in Francis' email. He asks, should he finish his degree in the United States before he comes down to Latin America? Okay Francis, here's the thing. If you think that degree from the first world is going to help you when you come down here to Latin America, it's not. It just won't. It's the very rare expat that comes down here looking for a job with a big company where he needs some kind of a degree to get his foot in the door. Because really, that's all a degree does up in the first world, to get your foot in the door. And since down here, 95% of all expats start their own businesses and that's how they succeed, aside from the gray-haired expat crowd that comes down here simply to retire.

[27:01] Anyway, if you plan on going back up to the States and working for a big firm someday, well yeah, get your degree. Because up there, you probably can't get an interview without one. But if you're coming down here to Latin America with some business ideas, even if you have no idea of what you're going to try to do yet, well forget about the degree and just make plans to come down. Provided you're not so close to graduating that you just need a few more credits, then it would be stupid not to put in the extra semester once you've put in three years or so already. But, since you're only 19, I'd say forget it and come on down. 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

[27:49] at gmail.com. Once again, theexpatfiles at gmail.com. See you next time. Nos vemos.