#1033 – The Expat Files: Starting Early, Navigating Challenges, and Financial Realities

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

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came out to play and now as I wonder Hello there all you ex-pat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started All right Now here's an email you guys and gals with a plan B Go and we'll like and those of you who haven't started yet who are on the fence and just thinking about it Well, this might make you squirm a little this is from for toad Jones. Who's really another Dave in disguise

[00:48] He says Johnny Thanks for all the info over the last 10 years as you've helped me design and execute my plan B And I couldn't be happier that I started this four years ago Please tell your listeners and seminar attendees to stop waiting around Until this or that happens like selling a house or waiting for retirement age or pension, whatever Just go down hook up with your lawyer and get the ball rolling Then you can go back to the states and live out your life until the house sells or till you reach retirement age But the ball will already be rolling for your plan B. That's imperative I'm so glad I started the process when I first came down in 2017 and did plan on staying in Guatemala permanently But family issues brought me back to the states But my permanent residency has already accomplished and now I'm almost four years into the five-year plan of getting citizenship

[01:38] And most importantly that second passport Then he says for the past ten years you've been saying that particularly with Guatemala You only have to be in the country for one day a year. That's to maintain your residency I can attest this is true I Started my residency thing and wound up having to go back to the states and booked my flight without my residency being completed yet But Anna one of the assistants at your recommended lawyers office got me my passport back with the residency sticker in it by 4 p.m And 7 p.m. The next morning. I was on my way back to the US I didn't return back to Guatemala for 11 and a half months and my residency was still valid Then he says Johnny I still yell out loud when I hear you read an email about some expat wannabes

[02:26] Saying they'll get started with residency later on or next year and I say no You have to start now and if you have to go back to the states get your ducks in a row That's okay This way the process will already be going on while people are tying up loose ends up in the states to me It's a no-brainer I don't know why people are so hesitant you often say that people should start now as it's gonna get harder and harder In the future I can also attest to that too because I started my residency when all you needed was a good conduct Report from your local sheriff or a local law enforcement office. Now you need that and an FBI report Anyway, thanks again for all you do Johnny signed for toad Jones AKA Dave squared. Well, mr. Jones. Thanks for that

[03:11] We always appreciate a good boots on the ground story But your message is crystal clear if you're up in the state You know, the walls are tumbling down and if you don't find the exits pretty soon You're never gonna get out like mr. Jones said you don't have to do it all at once You could come down and get the residency started Check out some of the sites see a few of the neighborhoods meet some people get a network started, you know, get your sea legs All right. Now we have a telling email from someone who's been living in Antigua, Guatemala for quite some time He's a long time listener his name. I love it Gringo star now, why didn't I think of that? I wonder if he plays the drums He says Johnny just listening to your January 29th 2021 show About the cleaning lady who had the clothes catch fire in a dryer because she never ever cleaned the lint filter

[04:00] Didn't even know that one existed and as far as my clothes dryer where I rent The tenants using it at least clean the filter on a regular basis I suppose that's because they're gringos and expats though as you mentioned your show There's another problem They let the dryer exhaust right into the laundry room as opposed to having a hole in the wall So it can be exhausted outside through a tube. All right, just a comment. Mr. Star I can bet they're never gonna vent that dryer outdoors unless you get someone to do it and you pay for it Because I'll tell you Latino landlords are on triple manana time Oh and here's another important point about Latino landlords when you're first renting a place, of course You'll put down a deposit. It could be one or two months depending on how you negotiate Oh and remember if you offer to pay six months or a year in advance and show them the cash in hand

[04:48] That's a good time to mention that there's really no need for a deposit after all he's getting a lot of dough up front Believe me here in Latin America You want to put down the least amount of deposit possible because you almost never get the whole thing back For example, I was just talking to a gringo who rented for two years and he just bought a place because you know The real estate bubble is popping and there's tons of desperate sellers out there and he found himself a fantastic deal in Lake Atitlan Guatemala the most beautiful lake in the world He's got his own pier a nice house and a guest house with all first world amenities He was built by a Spanish guy whose restaurant business has practically been wiped out by the covid it thing anyway He got it for a hundred and twenty five thousand bucks I'd say up in the States in the lake country to be worth a million and down here it'd be worth maybe

[05:34] 300,000 if we weren't in the age of Covid it. It's amazing. Yeah, see it to believe it Anyway, this expat was renting for two years and then he gave his notice because he was moving to his new place He kept the place in perfect condition yet his landlord wouldn't give him his deposit back and the reason given well The landlord said he had to have all the walls repainted and the furniture cleaned. It was a mublado, which means it was furnished now I could be wrong, but I don't think up in the States your landlord has the right to charge you for repainting a place whose walls Have no marks or stains on them only because he feels it's got to be repainted same thing with having the furniture clean That's what you call normal wear and tear when you're renting something, right? Like for example when you lease a car when you bring it back after two or three years

[06:21] The dealer doesn't arbitrarily say it needs a new paint job and you're paying for it So be advised here in Latin America Latino landlords will play tricks on you all the time They'll do repairs are right but on triple manana time That means if you're like me and not too patient you end up doing them yourself And when it comes to getting your deposit back, they'll tell you you were the greatest tenant they ever had They'll gush about it, but still you'll rarely get it all back. So then what's the answer? Well, I've got a partial solution for you when you give your landlord notice Which is generally a month before you're actually gonna move out Tell them that you'd like to have half a year deposit back right now We're as fast as he can get it to you because you'll need it for your move to the next place and in that moment Most landlords will bite after all they want to stay on pretty good terms with you because you're still gonna be in the place

[07:08] For a month besides that you're a gringo and landlords absolutely prefer gringos as tenants Because we're generally pretty orderly We maintain the place and we pay on time and then of course the day you move out your landlord will do an Inspection and that's when he'll come up with a million reasons why you shouldn't get it all back But at least you'll have the half that you got back the day you gave your notice now The reason why a landlord will fall for that is it because you've completely caught him off guard You're blindsided them because no one's ever done that to him before No one's ever asked for half of their deposit back And if he bucks in that moment tell him to take a walkthrough right now so we can see everything's in pretty good shape Anyway, I know that works. I've got some expat friends who've tried it All right, there's more to gringo stars email he says Johnny

[07:54] Regarding the training of maids and cleaning ladies when mine comes in she mops up the floors cleans the kitchen counters, etc But invariably she puts everything she moves in order to clean the countertops and surfaces and such Wherever she chooses and in whatever order she chooses Nothing ever ends up in its original place. The question is Johnny Can I train her out of that or would it be rude and unacceptable to approach that subject? I really didn't want to bother you with this, but I need a little help from my friends Hmm best regards signed Gringo star. All right. Thanks for that gringo You know, I think the guy that won the biggest lottery in the history of the world was Ringo star He was a fair drummer nothing special couldn't much hold the tune while singing seemed to have average intelligence and all that

[08:43] But man, did he win the world's biggest lottery all because he was friends with George John and Paul then again There are lots of famous groups with one particular superstar in the group Who had a brother to that they were obliged to put in the band and they also won the lottery big-time like for example John Fogerty's brother from credence Tom Fogerty who's ever heard of him a mediocre guitarist who won the rock-and-roll lottery on the coattails of his Super famous brother John and then there's Ray Davies brother from the kinks Dave Davies Again with the Dave's another rock-and-roll lottery winner by accident of birth Yep, just another couple examples that prove life ain't fair, but you knew that already, right? You know that happens in business a lot, too

[09:29] There's one super successful guy in the family who starts a mega business and he's kind of forced to hire his Mediocre family members or his mother will never speak to him again I mean look at Joe Biden for his entire life in the swamp He's kept his crackhead son's nose in the government trough. Anyway regarding mr. Stars complaints about his maid I think you know the answer if you're paying her you got all the right in the world to tell her what to do And if she's not replacing things where they were stand over her shoulder and make sure she does it right believe me You're not being offensive or rude. You're just being the boss and now an email from a yet another Dave Yeah, I think there really are that many days maybe these emails are just With me or could it be International Dave week and it just slipped my mind

[10:16] Anyway, this emailer he calls himself Dave number one Well, I guess he's the prototype patient number one. Anyway, he says hello John As always I patiently await Friday and Saturday to listen to your always interesting podcast I recently started going back in time and have been listening to your older episodes, too And in one of the December 2019 episodes you mentioned using an HP 10-inch laptop that you paid around 200 bucks for Would you please give me some insight into this device? Secondly, he says regarding your medical health care booklet Do you provide a list of doctors and dentists along with their specialties and fees and then he asked if I'm still gonna have a July 2021 Expat insider seminar and of course the answer to that is we postponed the January one

[11:02] So we're just waiting on more covid it testing details and that should launch in April or May So we'll have that seminar coming up the one that was postponed and the next seminar will probably be in January 2022 And hopefully the mandatory vaccine and vaccine card bs won't be mandated until well into next year 2022 Now personally i'm 100 against mandatory anything's but it looks like sooner or later We're going to be stuck with that if we want to fly I wonder how many Americans will be good little comrades So anyway dave number one regarding that little computer that I recommend. It's what I call my traveling computer It's got a nice little carrying bag. I sling it over my shoulder when i'm at airports and getting on planes It's great for reading books watching youtubes and movies

[11:49] And i've got most all the files from my big computer copied on that thing And when i'm not traveling I stuff it in a little emp bag and put it in the closet knowing if my main laptop takes a crap I've got a spare that can immediately take over cool thing Is it's got one of those micro sd slots and my main computer does too? So i'm always backing up my day's work on that little micro sd card I'm talking about in my main computer and if that ever goes down And it has I mean more than once I turned it on and the screen remained black Always a scary. Oh Moment there Anyway, since i'm always backing up my data on that little micro sd card If and when my main computer dies, I just pop it out and stick it in the slide of the little 10 inch HP laptop and i'm good to go

[12:34] Nope, I don't use any of those clunky external hard drives anymore like I used to since now you can buy those mini sd cards That'll hold something like a tetra byte of data and you know how small those things are as big as a sim chip So dave number one i'll send you the link on that little hp computer And finally dave about my health care report It would really be impossible for me to make a list of dentists and physicians in latin america. There are just thousands of But the report does tell you step by step exactly how to find a good one And you'll see in that report an average list of prices too All right now on the latin american covid front now, I don't know if you heard this you probably haven't but the dictator of venezuela nicholas maduro Has just gone on national venezuelan television and twitter announcing that venezuelan scientists have discovered the cure for

[13:23] Covid it's a simple liquid. You put 10 drops under your tongue every four hours and you're cured With that he says it promises to eradicate all the coronavirus in venezuela a miracle is done and a miracle has come He said but hey, there's more to the story Turns out it's an extract from a plant and three months ago maduro had announced that the venezuelan institute of scientific research Had found a molecule called dr-10 Obtained from a medicinal herb, however without mentioning which one But he said venezuelan researchers have found a way to completely eliminate the virus Using that extract the question is is it true or is it bs? Well considering the fact that in venezuela everyone is struggling with severe shortages

[14:08] Almost no access to foreign currency for the purchase of supplies and repair of equipment They've got terrible black and brownouts their internet sucks And worse yet a huge brain drain of scientists and researchers from venezuela. In fact since 2003 Venezuela has lost 1954 biological scientists and researchers according to the academy of physical mathematical and natural sciences In fact, they're reporting that in 2017 alone There were 275 doctorate scientific defections from the faculty of sciences in Venezuela in fact the official spokesperson for the academy says quote the talent drain in venezuela is dramatic because young people are leaving in droves Cases of young people presenting master's thesis and leaving the country thereafter are all too frequent

[14:58] It's getting so bad that even undergraduate students who are close to graduating but don't have degrees yet Are leaving in depressing numbers. Meanwhile, it says the funding for scientific research in venezuela has dropped 44% since 2015 and whereas in the year 2006 The number of scientific papers published that year was around 2000 turns out as of last year 2020 The number of published scientific papers in venezuela dropped by 92 percent They only published 160 of them last year So adding all that up the brain drain lack of funding and just those ongoing lies coming out of maduro's cake hole It's really hard to believe they've discovered a cure even harder to believe is that yeah

[15:44] Just administer a couple of drops under your tongue and that's all there is to it Hey, I could be wrong, but I wouldn't bet on it All right Now for some discouraging words for gringles and expats coming out of costa rica as if that's anything new You know one of the great advantages of getting the hell out of dodge is that you don't have to pay income taxes at all On foreign sourced income For example, if you have a mom and pop shoe store in honduras You'll be paying taxes on income generated when people come in and buy But if you sell those shoes online to people in other countries all that income is tax-free You only pay taxes on money generated within the country Now that's totally different from the us No matter where you are in the world if you're a u.s Citizen and you make income no matter where it's from you got to pay taxes on it

[16:29] And recently brazil and columbia have passed similar laws and believe me now that practically every government in the world is technically bankrupt And only a few can print money out of thin air and can get away with it without some huge negative consequences Though there will be a day of reckoning Anyway, we can add costa rica to that small but growing list of countries that taxes you on worldwide income So just this week article 1 6 and 27 of the income tax law 7.092 in costa rica Was amended to include taxation regardless of where profits are generated So you better believe one by one all the countries of the world They're going to start jumping on that bandwagon Which is why so many astute expats and gringos. I know who are living in latin america

[17:14] They like to do business and cash and or carry two sets of books You know one for the government tax authorities and one that's basically the real one Which you'll need if you ever want to sell the business and prove To the prospective buyer that the business is really putting out a lot more than the earnings reported to government i.e. The cooked books Again, i'm not advising you to break the law I'm just telling you how many many long-term gringos and expats run their businesses and in the past maybe five years Gringos and expats down here have set up all kinds of internet businesses and most of those are completely Insulated from any government oversight at all. So that means when people pay with cryptocurrency Paypal or credit cards that money just accumulates in a bank account somewhere with no paper receipts generated

[18:04] And as far as taxes while you're on the honor system The thing is in latin america latin countries don't have anything at all like the irs They've got no storm trooper swat teams to bash your door down and confiscate all your property They've got no equivalent irs agents to comb through your files and audits forget about it In fact in the 30 plus years i've been down here in latin america I don't know of a single person who's ever been audited latino or gringo The only time you ever hear about people getting in trouble with the tax collector is when some big company Is caught bribing some of the tax guys to get products in and out of the country tax-free You just never see that happen with individuals and even with companies It's so infrequent you only read about it in the local press maybe twice a year and surprise surprise It almost always involves a crooked politician. Are there any other kind?

[18:52] But still more and more countries are passing laws copying the united states exactly again Because they're all virtually bankrupt and broke and latin and third world countries have discovered if they turn on the printing press Well, you just have to look to venezuela to see how that turned out So in the end a bankrupt country has four ways to get solvent number one austerity That would be stop spending and lay off the fat asses in government But that's never going to happen number two roll the fiat printing presses. Well, they've pushed that to the limit too That's why so many currencies are virtual toilet paper Number three float bonds and take out loans from places like the world bank in china Well, they've done all that and pushed it to the limit, too That's why most all latin countries default on their debts They haven't the money to pay back the interest and number four a country could try to get solvent by increasing taxes

[19:40] Which is exactly what we're talking about regarding taxing income, not just locally but worldwide So in the end, how's it going to play out? Well, most certainly with runaway inflation and it won't be pretty in fact We've got inflation raging right now in argentina brazil and venezuela, of course And as for the us, well the clock's ticking there, too But you knew that already. All right now an email from cameron who sounds pretty irritated He says johnny long-time listener first time complainer He says i've been in cryptocurrency for a number of years now And I hate it when people give me that old bs about bitcoin being used principally by criminals money launderers and terrorists When people say that it shows their ignorance and total lack of investigative skills and blind belief and fake news

[20:27] That coupled with the fact that they lost out and didn't pull the trigger when cryptos were cheap They had their chance, but they didn't take it. So they harbor resentment for their own failures and Just love to repeat over and over again that only criminals money launderers and terrorists use crypto and bitcoin Well, I hate to pop their bubble, but bitcoin transactions are squeaky clean compared to banks They're the biggest funders of terrorism and money launderers of all. Well, johnny you've heard of HSBC bank it's britain's biggest bank It's also the custodian and manager of huge stores of gold But unbeknownst to 99 percent of hsbc clients It has a history rife with scandals including predatory lending tax evasion and money laundering

[21:15] To the tune of hundreds of billions of dollars and with their look the other way policy when dealing with clients The bank allowed billions to be funded through terrorist groups and drug traffickers And they keep getting caught red-handed at it over and over again. Their rap sheet is extremely long Check out this dirty little list on january 2013 hsbc paid 249 million dollars It was a fine for illegally for closing on thousands of their mortgage holders Then in march of that same year 2013 the government of argentina filed criminal charges against hsbc For helping argentine businesses evade taxes and launder money Then in july 2014 the u.s attorney for new york fined HSBC 10 million bucks after being convicted of misconduct and civil fraud again in connection with illegal foreclosures

[22:06] This time on government secured mortgages then in november 2014 hsbc was fined 275 million bucks and an additional 343 million by britain's financial conduct authority for illegally manipulating foreign exchange markets in the same month of 2014 hsbc paid a 24.5 million fine to settle charges filed by the securities exchange commission They were fined again in 2015 when it was reported that hsbc helped wealthy customers of its swiss branches evade swiss taxes then in february 2016 hsbc paid 470 million dollars because of illegal abuses and mortgage fraud again then in january 2017 hsbc was fined

[22:52] 32.5 million again for fraudulent foreclosure practices then in october 2018 hsbc agreed to pay 765 million bucks to settle allegations that it had covered up risks associated with mortgage-backed securities And then in december 2018 when chinese telecom giant hawaii Technology ceo was arrested for evading us sanctions against iran. Which bank do you think they used? HSBC and then in 2019 hsbc paid 192 million to resolve allegations that it conspired with customers to help them evade taxes and that johnny is just a commercial list of the sins of hsbc the largest bank in the united kingdom

[23:37] And yet that bank is still around as thousands of branches and nobody ever goes to jail And that's only one bank a big bank But only one of maybe 25 gigantic banks in the world that are all doing pretty much the same thing yet people have the nerve to say cryptocurrencies fund terrorism money laundering etc etc That just shows how lazy people are and how so few of them know how to do research anyway Johnny just thought I'd give you some more ammo on the subject signed cameron well. Thanks for that cameron But you know facts and the truth Unfortunately won't help because people believe what they want to believe and it takes a rare person You know to admit they're wrong especially if they've been clinging to the party line for years and years That's why you'll never hear opportunists like dr. Falsy say I'm sorry

[24:25] I guess I fucked up. Oh and since cameron our last emailer is a listener from the UK I wonder if he knows this little factoid about the British pound Do you know why they call their dough the pound it turns out in? 1694 the Bank of England was founded and they started printing pound notes with each paper pound note Representing one pound of sterling silver even though it's backed by nothing now They still call it the pound sterling talk about inflation one paper note pound sterling back in 1694 was equal to a pound of silver and today in 2021 how many paper pound notes does it take to buy a pound of silver? 170 in other words since the paper British pound note was introduced the pound has lost

[25:10] 99.4% of its value That's a ninety nine point four percent loss in its purchasing power but of course you have to know that every single fiat currency in existence paper money is Continuously losing its value that is its purchasing power and of course the United States dollar the Federal Reserve notes That were issued by the US Treasury starting in 1913 little over a hundred years ago now Well to have the same purchasing power that a dollar had in 1913. It takes $26 today in other words in 1913 a dollar then would buy you what? $26 buys you today so in that time span of approximately a hundred or so years the US dollar has lost 96% of its purchasing power so then what stores of value do maintain their purchasing power?

[25:58] gold silver property and land and now at the age of the internet we have the currency of the internet that would be cryptocurrency and Specifically Bitcoin the internet gold standard now I know a lot of baby boomers especially don't believe in it because they weren't born with a cell phone in their hand But as Bitcoin Dan would say if you don't believe in crypto You're intellectually lazy, and I say when you're talking about crypto Bitcoin etc. Always follow the brains That means never put faith in government predictions Because you know government jobs are the refuge of the bottom 10% of a graduating class You've heard the saying I'm sure sees get degrees and that includes doctors and biologists, too Hey, I bet there's a ton of bottom 10 percenters working for dr. Falsy, but I digress as usual

[26:46] All right one last thing if you happen to be down here in Latin America, and you take a taxi or uber You'll find these guys love to lay on the horn doesn't do you much good doesn't get you any farther ahead But no matter oh, and if you take a lot of taxis and ubers You'll see the driver get frustrated a lot He'll throw up his hands shake his head make some guttural noises because you know the traffic really does suck And you'll often hear the guys say under his breath mu head is Frustrated taxi drivers say that all the time and that just goes to show that cars traffic and drivers are all the same throughout the world I'll tell you why you know what the driver means don't you when he blurts out mu head is it's the same word in Spanish What many stateside male drivers like to blurt out in English? women yeah women

[27:32] You've been listening to the expat files living in Latin America If you need some help with your own plan B We can schedule a one-on-one phone or Skype consult just send me an email the expat files at gmail.com And if you want to get on the waiting list for my next week-long expat Insider seminar in Central America where you're guaranteed to get a two to five year head start on your plan B Send me an email the expat files at gmail.com