#111 – The Expat Files: Honest Living 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. Here's a fun little story for you. You know I like to go and visit towns that are under 50,000 population down here in Latin America? Because those are the little towns that are self-policing, so there's very little crime. And that's in spite of the fact that the country as a whole might have some of the highest crime statistics in the world, like Guatemala, Honduras, El Salvador and Venezuela.

[00:52] The fact is when you hear general crime statistics about those countries, practically all the crimes that are tabulated occur in the very big cities, in neighborhoods that you and I would never go to. Perpetrated on people we're never going to come in contact with. And that's because we're the smart expats, and we've learned by hook and crook, which places to live, work, play and or retire, and those places you really should avoid. And it's not that expats like me were born smart. When I first landed here, I was as dumb as a box of rocks, just like you would be if you landed in a foreign country and didn't know the language. And when you do land in a place like that, that you really like, but you don't know the language, the unfortunate secondary effect is that you're drawn to your own kind. And by that I mean, other gringos and first-worlders like yourself, stuck in the same boat, and guess where that usually happens? In those high-volume tourist areas like Costa Rica and Panama.

[01:40] And of course, you'll pay first-world prices there, with the privilege of hanging around in a tropical paradise with people exactly like yourself. And when your vacation or long summer tropical soldiering ends, and you get back to Cincinnati, it's no surprise that nearly all the photos you took and all the things you uploaded on Facebook shows hordes of other gringos that you just met partying at the same places just like you. And in fact, I wouldn't doubt that your new gringo and first-world friends outnumber the locals in those photos 10 to 1. And though there's nothing wrong with that, I mean, millions of first-world tourists do it all the time. And I did exactly that myself the first six months to a year that I was down here. But you know, I can hang with clones of the exact same people if I go to Miami, or Key West, or Daytona Beach, and pay the same prices that I'd paid down in Costa Rica or Cancun. Yeah, and then I hear people up north always say, well, if I'm going to go down to Latin

[02:28] America, I want to go someplace that's really safe. And from what I hear, Costa Rica's pretty safe. I mean, everybody I know who's been down there came back safe and sound. Yeah, and there is some truth to that. In fact, everybody I know who's ever been down to Costa Rica came back safe and sound, too. But then again, so do all the people I know that have been to Managua Nicaragua, or Guatemala City, El Salvador, or San Pedro Sula Honduras, all of which around the U.S. State Department's PC's list. But naturally, no one in the first world who's a Latin American travel virgin, that is, whatever think of going to places like that, they want the high-volume tourist areas, the ones that their friends and relatives have been to. Yeah, and those high-volume tourist areas down here in Latin America are pretty damn safe. That's because Latin American countries that depend on quite a few first-world tourists

[03:15] coming down to keep the economy going, well, they always try to make sure that these places remain quite safe by not only having the usual civil police on hand, but they double up by having a completely separate police force called the tourist police, naturally. So when you're walking through a tourist area in Cancun or Costa Rica or Rio de Janeiro, you'll see those two separate police forces, the regular police, usually in their black or dark blue uniforms, just like first-world police. And though they might look like the cops you see up north, they're not, and it's not just because they can't speak English. The difference being, the regular cops down here are about half as educated as first-world cops, they're infinitely more lazy, and on their $400 a month salaries, they can only afford Dunkin' Donuts on very special occasions. But there is a psychological component to it too. In tourist areas especially, you have to have a certain amount of regular police in their

[04:03] regular police uniforms to make first-world tourists feel at ease. There has to be some kind of official presence here and there. However, if you've got too many uniform cops around, the first-world tourists start feeling a little nervous. They might just be thinking there's another revolution around the corner, Fidel's style. And that's why Latin American countries that get a lot of first-world visitors created the tourist police. And the tourist police are quite different from the regular police. They're always very low-key, never in your face, and are always kinder and gentler than the regular police. And they dress quite loose and casual so as to not look too military-like. And they're dressed down on purpose because tourists don't like the idea of a bunch of uniformed guys in flak jackets standing on street corners mulling around with Uzis. If they wanted that, they could visit the Holy Land or hang out at any U.S. airport

[04:53] these days. Anyway, so you'll never see them in stark police clothing, you'll never see them carrying Uzis, because that would be just too scary. And to make them even more tourist-friendly, they're usually on horses or bikes. So my point is, tourist areas are very safe because they have basically twice the police force as compared to non-tourist and outlying areas. Oh, and by the way, here's a fun fact for you. Just lately, a lot of those tourist police departments have been instantly hyper-modernized by, get this, donations of Segways. You know what I'm talking about, those Segways. Those little high-tech battery-operated two-wheeled vehicles that automatically balance themselves as you drive them. And I know you've seen these around in the first world. Some lucky police departments up north have them too. And I don't doubt that you want one yourself, except they're $6,000 or $7,000.

[05:39] So you're probably thinking that's a great idea. High-volume tourist area down here in Latin America, lots of pedestrians, and those things can whip around just about anywhere, right? Well, you'd be wrong. In fact, down here in Latin America, with nearly every road being so damn patched and potholed, not to mention all the thousands of missing and stolen utility and manhole covers and those gigantic speed bumps I always talk about called Tumolos. Well, anyone in their right mind knows that's definitely not any kind of terrain for a high-tech two-wheeled $6,000 go-kart. But who said first world countries that donate stuff like that are in their right minds? Now here's the facts when you drive one of those things down here. You hit just one medium-sized pothole with a $6,000 two-wheeler like that, and I guarantee it'll be out of commission or at least it will never run right again.

[06:28] But try telling that to the idiot first world do-gooders that donate that kind of high-tech stuff. In fact, get this, just last week I was watching the annual Christmas parade down in Guatemala City and at the beginning of the parade, 90 brand new Segways were on display whipping down the street in perfect formation driven by smiling happy policemen looking like they'd just won the lottery. Because in fact they did. Because get this, not a single one of those cops makes enough money to own his own car. And suddenly one day he shows up at work and is presented with a brand new $6,000 toy called the Segway. Now to me, that's about like giving a high school kid a Ferrari for a graduation present. Now with a donation like that of 90 Segways, you're looking at a donation of over a half

[07:14] a million bucks. How'd you like to have a bunch of free toys like that? Well anyway, believe it or not, by the end of the parade, which lasted about 45 minutes, there were only about 80 Segways left in the parade. Those hundreds of potholes had taken their toll already. There was 10 of those little gadgets out of commission. And later on I found out that those Segways themselves had been donated about a month earlier with a ceremony and all that of course. I think it was by Norway or Sweden or one of those Scandinavian countries. They're always donating high tech stuff like that to be used by third world people with 6th grade educations. Go figure. Anyway, what I did find out was there weren't 90 Segways donated, there were actually 100 units donated. And that means over 20% of them were broken down and out of commission within the first month. And you know when one of these things breaks down, you don't take it to the corner lawnmower

[08:02] mechanic. You're talking about 5 computers in the control module and 5 separate high revolution gyroscopes going at all times. Think about it, gyroscopes. Now I'm asking you, seriously, do you own anything that has a gyroscope in it? I don't think so. Unless you have your own submarine or plane or helicopter or Saturn 5 rocket, I don't think you have a gyroscope around the house. Now if you're down in Latin America and have a Segway, who in the hell can you get the fix one of these things? And what about routine maintenance? Considering down here in Latin America the word maintenance doesn't exist even for the most standard of products. Not to mention basic theft. I mean the things as light as a feather and the lithium ion batteries alone are worth over 2,000 bucks. Well you get the idea, a very stupid first world donation I'd say, wouldn't you?

[08:49] But there are all the rage with the tourist police down here now, so don't be surprised if you go to a high volume tourist area and you see a few of these on the road. Or a few of them broken down alongside the road, which is more likely. Which brings me full circle back to my original point, when I said I like to visit small towns of under 50,000 people. Those are my kind of towns, the ones I always recommend. Now just last week I was visiting this very small town of about 16,000 people, way out in the boonies, called San Pedro. And I arrived at this place by boat about 2 in the afternoon, and it looked to me like it was one of the nicest little places that I'd ever seen. Organized, clean, people smiling and happy, walking down the street, telling jokes and having fun with their neighbors. And I noticed there wasn't a lot of noise at all, not even in the central business or

[09:34] market area. They didn't even have the usual DJs set up outside the big appliance stores blasting reggaethone music with the DJ honking into his microphone, pestering you to come on in. There was none of that loud crap going down in this town. This town was absolutely peaceful. Almost too peaceful actually. And I walked around for an hour or two marveling at the place, and eventually I got to walking past a tiny little police station. With one very dented and scratched Toyota Hilux police car out front, two broken down police motorcycles alongside the building, and guess what? Two segues on the front porch, one of which was partially disassembled. Now the other one looked like it might be working since it was plugged into a battery charger. But who knows. Now I couldn't resist walking up on the front porch and asking the lone cop standing there

[10:21] how he liked the segues. And to tell you the truth, that's the first time I actually saw one up close myself. And he did tell me the whole police force, all of 9 guys by the way, in a town of 15,000. That means there were only 3 cops on duty at a time. 3 shifts, 3 guys, 9 policemen total. And by the way, I forgot to tell you, this town has virtually no crime. But the country as a whole is considered, by UN statistics, one of the top 5 most dangerous countries in the world that's not actually in a state of declared war. So go figure. Which proves what I've always said. These Latin American towns under 50,000 population are safer than your town up north and probably safer than being in Canada. Despite what the US State Department website says about how dangerous Latin American countries are as a whole.

[11:07] Anyway, like I said, I'm talking to this policeman about his segue. The one that's plugged into the battery charger, the one that I think actually works, or might have a chance of being functional anyway. And I asked him if he'd demonstrate it for me, and he was more than happy to do it. He jumped on it, rode it down a wooden ramp, and he whipped back and forth up and down the concrete driveway, just like a teenage kid on a gold cart with a big old grin on his face. And he drove back and forth along that concrete slab, that ran right alongside that tiny police department. But he stopped just short of the main road in front of the police department, and that road was made out of thousands of irregular cobblestones. And since the road was obviously very old, a lot of the cobblestones were missing. So it turns out he loved that segue alright. He just loved it, and so did I. Except he admitted he couldn't even drive it down more than 50 or 60% of the roads in

[11:57] that little town, because that's how the other segue broke down. And he was the first to admit that you needed pretty flat pavement to drive the things on. And in that town, and practically all of Latin America, flat, unblemished pavement is in very short supply. So here you have it. A beautiful little town with 15,000 people, a town with very little crime, a police department with a total of one squad car which was broken, two police motorcycles that were damaged and missing some vital parts apparently, and two segues, only one of which worked, donated of course by some first world do-gooder organization or country. That obviously didn't give a single thought to what would happen when the things needed maintenance. But the story doesn't end there. At about three in the afternoon, I walked into a tiny little grocery store and I asked the guy behind a counter for a cold bottle of mineral water.

[12:45] So he went into the cooler, pulled one out and gave it to me, and it wasn't very cold at all. In fact, it was more or less room temperature. So I figured he must have just put it in the cooler. You know, he'd probably just loaded up that cooler with fresh bottles from the cases stacked up along the floor. And then he looked at me and said, they're all about the same temperature because the power's out today. And he said it so calmly and matter-of-factly that I was actually taken back for a second. I hadn't realized the power was off at all. There was plenty of light in the place because there's always plenty of light in the tropics. But the thing is, I had been walking around for a couple of hours through the business and market district and hadn't even noticed the problem myself. And the funny thing is, there was no way to tell it all from the attitude of the people around me that the power had ever been off at all. They were just doing things as usual, going about their business, buying and selling and

[13:33] carrying on just like they always do. Only they were doing it without using any kind of electric power at all. Anyway, I still did buy that bottle of lukewarm mineral water from that guy. And when I asked him how long the power had been out, he said, oh, it went out about 8 o'clock this morning. And he said it like he wasn't even concerned, like it was an afterthought. He wasn't bothered by it at all. So now it's like 4 in the afternoon and the power's been off for 7 hours and it's not even phasing this guy. And he's got a little grocery store going and it does use power. He's got coolers and freezers, a little radio and a small TV. And then I asked him how unusual it was that the power would be off for 7 hours at a stretch like that. He said, well, it happens two or three times a month anyway. And I said, well, what do you do then? And he said, kind of smiling.

[14:19] Instead of closing at 9 or 10 at night, I just close early. Around 6 or so when the sun goes down. And all the while I'm thinking, isn't Latin America a land of extreme contrast? Think of it. Three blocks away at the police station, there are a couple of segues. Each with 5 ultra-high-tech gyroscopes and a half dozen computers tucked away inside of them. And of course, they're completely dependent on electric power. And yet they're assigned to a police department in a town that has so many routine power outages of 7 or 8 hours or more that the people have become absolutely numb to it. And it doesn't really seem to matter to them at all. They survive quite nicely either way. And come to think of it, that's why that town was so quiet. There were no TVs or radios going, no DJs in front of the appliance store blasting ragathon

[15:05] music. And you know what? I can't help thinking that that's what little towns must have sounded like back in the first world some hundred years or so ago before electricity really took off in a big way. Now I know what some of you might be thinking. You're thinking, why would I ever go down to Latin America? God, if the power went off for 7 or 8 hours, it would be the end of my world, that's for sure. Well, you should think again. You're a first world person. If you're down here in Latin America, you have your battery backup or your generator. And there's no place like Latin America if you want solar power. Man, they got sun down here, that's for sure. If you plan things right, you'll never be without power down here. And though all you expat wannabes up there are concerned about that, you shouldn't be. And more to the point is the fact that the locals down here, in a lot of the little towns anyway, are so used to power outages now and again, that they don't go into panic mode

[15:52] at all when it happens. They just go to plan B, which is to close up shop before the sun goes down. Now I'm asking all you folks up in Minneapolis, what are you going to do when things get tough up north, when your power goes off for 6 or 7 hours at a time? Are you ready for that? I don't think so. Will everybody around you start to panic? Yep, I'll bet on that. So the question is, where would you rather be when the feces hits the fan? And it will, of course. Down here in Latin America, where people are used to plan B, or up there in Minneapolis. Where there either is no plan B, or you dial 911, and you hope one of those bloated government agencies like FEMA is there to help you. Fat chance when it hits the fan. Okay, let's move on to something else. Now I always get emails from expat wannabes asking me about job opportunities down here

[16:38] in Latin America. I mean, who doesn't want to know about that topic? And like I've said in so many past shows, because you've got those first world instincts inbred into you, automatically, whether you believe it or not, well you do have those hidden talents, and they generally pop out unexpectedly when you do start a small business down here. And not only that, you've got that automatic gringo advantage going for you. The fact that Latin Americans love anything and everything first world, and you're there to provide it for them. If you want to. Well, starting a successful small business down here is almost as certain as getting a hangover with tequila. Anyway, I talked a little bit in the past about opening up a franchise down here. That is, buying into a first world franchise operation, paying that franchise fee, getting a territory assigned down here in Latin America, and opening up the first world franchise of

[17:25] your choice down here. Well, today I've got a little bit more solid news on that subject, the subject of franchises down in Latin America. Now, there are franchises down here already, of course. All you have to do is visit any big Latin American city, whether it's on the tourist trail or not, and you're going to see McDonald's, and Wendy's, and Taco Bell. But basically, that's just in the big cities. The city's from a few hundred thousand to a half million or so. And the people down here who do have franchises have an organization, doesn't everybody? And their organization is called La Federation Ibero America de Frankisias, which is their version of the American Federation of Franchises up in the first world. Which I suppose anyone who has a franchise of any kind can join and just pay their dues and get your monthly news rag. Anyway, down here, this organization just released some figures about franchises all

[18:12] throughout Latin America. Now, listen to this. According to this Latin Franchise Federation, Mexico has 954 foreign franchise brands registered, and 80% of those are first world franchises that have come down from the United States. But get this, that sounds like a lot, right? 954 brands. Franchise brands, that is. And to clear that up, they're not saying 954 individual franchises, they're saying 954 brands. Like for example, McDonald's is one brand, Wendy's is another brand, Taco Bell is another brand, okay? Now 954 brands in Mexico sounds like a lot, right? Well listen to this. In the United States, according to Forbes magazine, there are over 3,500 registered brands in the United States. Which means in Mexico, there are tremendous opportunities for anyone who wants to bring

[19:00] a franchise down, because only about 25% of US franchises have made it down there yet. Which means there are over 2,600 franchise brands from the US that haven't landed or set up shop yet. So take your pick. But you know, I really don't recommend Mexico as a place to live, work, play and or retire. And if you want to know all the reasons why, just check out some of my old shows in the archives and you'll find out. But let me give you some more stats on Latin American franchises. Listen to this. Now the two countries that are immediately south of Mexico are Guatemala and Belize. And here's the franchise stats on those two countries. Now like I said, Mexico has 954 registered franchises from the first world. Now Guatemala has less than a third of Mexico's stats.

[19:47] Now think of it. They only have 300 registered first world franchises down there in Guatemala. Which means less than 9% of all the first world franchises have hit Guatemala yet. Which means if you want to bring a franchise down, you've got over 3,100 franchises to choose from. First world franchises that is, that haven't made it yet to Guatemala. So the opportunities seem endless, don't they? And of course that doesn't mean that every franchise in the first world would make it down in Guatemala. I mean, you might not want to have a pet cloning a franchise. That might not work. You might not find too many clients for that. And yes, that's no joke. They do have a pet cloning franchise you can buy into whose headquarters are in California. And if you do choose that one, over all the thousands of other franchises available up

[20:32] in the first world, you probably deserve to go down with the ship. But anyway, are you starting to see what I mean? Why business opportunities are so lucrative down here? Now like I said, directly south of Mexico are Guatemala and Belize. Now Belize, believe it or not, has only 34 first world franchises registered. Now admittedly, Belize has a very small population. But 34, that means only 1% of the available franchises from the first world have landed down in Belize. So let's move on to a more realistic example, Honduras, which along with Salvador is directly south of Belize in Guatemala. Now Guatemala has 14 million people, and Honduras has a little more than 8 million. But the fact is, Honduras has less than 100 franchises that have landed from the first

[21:18] world, which works out to only about 3% of the available first world franchises. And as we go farther south down the Isthmus, down to Panama, down to Colombia and Venezuela and Brazil, you'll find, even with the two most developed countries in South America, Chile and Argentina, which by the way are the two most expensive countries in South America to do business in because they're hell bent on adopting a first world tech structure, anyway for all their first world pretensions and hyperbole, Chile and Argentina only have about 150 registered first world franchises each, which is only one sixth the number that Mexico has, and only half the number of first world franchises that Guatemala has, even though Chile and Guatemala have about the same population. And when you consider that Argentina has a population of about 42 million people, which

[22:07] is three times the population of Chile and Guatemala, and they only have about 150 registered first world franchises, out of the more than 3,500 available, it's almost like going 30 or 40 years back in time, isn't it? So if you think the key to your success down in Latin America is franchising, or you really can't make up your mind what kind of small business you might want to toy with once you get down here, you'll expect wannabes that is, well there's just no easier way to spell it out to you. The farther south you get from Mexico, and the deeper into the heart of Latin America, it's pretty obvious that first world franchises are far and few in between. And believe me, I've been down here 20 years, and it's absolutely laughable when you see what the local franchise competition is like. Oh yes, third world Latin countries do have their own successful franchises, and these

[22:53] are spread out all over Latin America. Fast food joints and their version of chicken lichen, their latinized version of Chinese and Italian food, to name just a few. Those kind of Latin American third world franchises are all over the place down here. And I'll tell you a little secret, not one in a hundred of those franchises could ever come up to the first world and make a go of it. Though there have been a small handful that have actually done it. For example, a terrible greasy chicken franchise out of Guatemala called Pollo Campero, which is guaranteed to give a first world person heartburn after two bites. In fact, the first time I ever went to one of these joints down in Guatemala, I went with expat Eddie, and when the waitress brought over his plate, the first thing he said to her was, can I have a little chicken with my grease? Anyway, this terrible third world franchise restaurant, which is all over down here in

[23:40] Latin America, not just Guatemala of course, it's everywhere, well it turns out they've become quite a little successful chain up in the first world, up in the United States. And guess why? It's not because their food's any good, it's a sure ticket to heartburn and stomach cancer if you ask me. Anyway, it turns out they have some smart marketing guys. What they've done, they've gone to the big cities in the United States where they know they have the biggest concentration of illegal Guatemalans. And they put up these restaurants right in the center of those barrios in New York, Chicago, LA, and those undocumented Guatemalans in the states are homesick for anything from their country. So where do they hang out? Pollo Compero of course, a touch of home. But you see that Pollo Compero example is the only example of a third world franchise I know that's actually made it big time up in the first world.

[24:26] But first world people never step foot in the joint because it's just terrible food. Not that McDonald's is any better, but believe me, that Pollo Compero stuff will kill you twice as fast. And you know, expat Eddie has a friend in management in the Pollo Compero Corporation, and Eddie told me that about 10 years ago, when they first were toying with the idea of opening up a franchise in the first world, well, they almost didn't franchise out at all to the first world until they noticed something strange in a little tiny Pollo Compero stand that was operating at the Guatemalan international airport. This tiny carry out window was doing land office business, and at first no one could understand why it was breaking all records. None of the 50 or so Latin American Pollo Compero franchises could touch it. Finally, they figured out that all the Guatemalan tourists that were going to the United States

[25:16] legally by air and head a visa to the United States were ordering Pollo Compero carry outs and bringing them on the airplane as requested by their Guatemalan friends and relatives they were visiting up in the United States. And because of that, the company executives figured there must be a huge pent up demand for that product with all those hundreds of thousands of Guatemalans up there. And as soon as they opened up a few of these things, in the big city latin barrios of course, the franchises just took off. But the point is, 99% of all Latin American franchises could never make it up in the first world. They're not even mediocre by first world standards. So down here in Latin America, that's your competition. And when you open a first world franchise, most people down here tell me it's not even a roll of the dice. After 6 months or so, most of those franchise owners already know they've hit a home run.

[26:06] And for those of you who don't know too much about franchises but are interested in them, just check on the internet for something called the Handbook of International Franchises to see just how huge the variety and selections are. And if you're wondering how a US based first world franchise will translate down to Latin America, well the franchise company's marketing department will do all the heavy lifting for you. That is if you buy into the franchise. And of course, if you get a territory down in Latin America, they'll translate everything and anything into Spanish for you too. And one more thing about franchises, it's just not food franchises we're talking about here. They're franchising practically everything these days. Including hotels and dry cleaning services, shoe repair shops and beauty salons and muffler shops and real estate agencies like Remax and Century 21.

[26:52] Even pet stores, you name it. They franchise it. But like I said, it's obvious that some first world franchises won't cut it down here in Latin America. Like for example, tax services like H&R Block, since most people don't even pay taxes down here, and the tax system is completely different than the tax system up in the first world. And how about those franchise lawn care services? Well something like that would never make it down here in Latin America, since you can hire a full time gardener for two or three hundred bucks a month. So obviously there are franchises that just won't translate down here. But when you got over thirty five hundred to choose from, and in some of these countries not even ten percent of those franchises have landed yet, well, do I have to say any more? You've been listening to The Expat Files, living in Latin America.

[27:40] Coming to you each week from somewhere south of the border. And don't forget you can email me on anything at all about Latin America, The Expat Files at gmail.com. Once again, The Expat Files at gmail.com. See you next time on Spamos.