#1114 – The Expat Files: Living Off-Grid, Solar Power, and Crypto in Latin America

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 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 Yep, the things you just got to love about Latin America or not, especially if you're anal Here's an example. I just got my electric bill now you long-time listeners No, I'm off the grid or I have been for over a year now in the place

[00:45] I've been hanging out recently. This isn't the first time I've actually gone solar three different times three different places But this time completely off the grid and I've also got that really nice portable solar system with two suitcase panels 400 watts with a 1500 watt all-in-one unit then I can just toss in the back seat or trunk of my car and I could run a computer or small TV and a Refrigerator with that thing for eight or ten hours and that's at night during the day You just plug it in and it runs and charges the units lithium battery at the same time if you want to know which one I'm using and you can get it on Amazon now cost around. I think between 1,200 and 1,500 bucks Send me an email the expat files at gmail.com and I'll send you a link now when talking about actually getting completely off the grid You've also heard me say many times before if you've been paying attention

[01:33] That I never recommend you completely disconnect from the grid now to some people that doesn't make sense I just said get off the grid yet. I'm saying don't completely get off the grid What I'm saying is you get off the grid completely, but you remain Connected if you need to get back on in other words you keep your meter and all that and you just have to flip a switch To get back on let's say you've got two days of rain and clouds and we got company over You've got all the lights and TVs on and everyone's watching Netflix Well, all that just might poop out your battery in a day or two So you just flip the switch and get back on the grid for the remainder till the Sun charges up your system again And down here in Latin America, it's easy because you don't even have to tell the electric company You went solar by the way, your electrician will install that switch. You don't have to contact the electric company Let me repeat that because this is important If you're going solar down here completely off the grid or partially you don't ever have to contact the electric company ever

[02:22] Whereas up in the states and i've got friends in california turns out you got to go through three Permitting procedures over there they come out and inspect your house four times, too It's such a big brother bs the u.s. Government just can't mind their own business They got to get there to corrupt and disgusting tentacles in everything you do But that's another story and also reason 4,856 through 86 why you really have to get the hell out of that as soon as you can possibly do it because you know What's next don't you as far as the solar energy thing? I'm talking about up in the states nationwide They're going to do just like australia is doing you know down under it's a virtual police state, right? They're formulating legislation to tax the number of solar panels you have on your house And some us western states aren't talking about legislation like that, too

[03:11] What a disgusting bunch of parasites. They won't even let you be your own independent energy producer They just won't let you have the freedom to do what you want on your own property Even if it improves everyone's situation But when it doesn't improve the tax base or actually takes away from the tax base because if you're not buying electricity from the grid You're not paying taxes on it, right? The state has to crack the whip and that's what's next for the us You know starting with california it always starts with our comrades in california But here in latin america not in your wildest dreams. Anyway, i'm off the grid got two tesla power walls and about 29 440 watt solar panels putting out almost 15,000 watts an hour. How about that? In fact, I can't even use all that power half of it goes to waste. It just doesn't go anywhere

[03:57] Of course, I could sell it back to the power company, but I don't want to do that I know people talk about that all the time up in the states You know your meter running backwards and all that getting a kickback from the electric company Well doesn't that feel good watching that meter run backwards who'd have thunk they'd even allow that. Well, not so fast. Guess what? Personally, I don't want anything to do with anyone's electric company Because if you do have excess power and you sell it back to the grid You got to sign all kinds of contracts and agreements with the electric company You have to do that in any country here in latin america, too And they're gonna come out routinely and inspect your stuff because they're gonna make sure that it's compatible with the power company's infrastructure And though you might think that's okay. It's not okay for me because I don't want them to know about anything i'm doing It's none of their business

[04:43] I want to maintain a low profile and you're not going to do that by selling power back to the grid because they're gonna Make you feel out of giant form form a contract and you'll have to reveal all kinds of stuff about yourself Your bank accounts credit cards the whole works. It's government, you know, they're not here to help you They're in another kind of business that sheep monitoring and data collection business But none of that will happen if you decide to go off the grid or partially off the grid As long as you don't sign up for selling energy back to the electric company you get it So again, let me repeat when you do solar here in latin america You don't need permission from anyone as long as you own your place, you know But if you're going to sell power back to the grid You got to make a deal with electric company They're going to come out and do an inspection and guess what the government and the electric company have got all your debts

[05:29] So there goes that low profile unless you put it in your cleaning lady's name I know a gringo who did that it worked too x-pad eddie's going solar now too and that's what he's gonna do Now I know what some of you are thinking It's a huge advantage to sell power back to the grid when it's not being used by you or you're over producing, right? Well, guess what i'm over producing and i'm not selling it back to the grid But my electric bill is zero So even if I sold the excess back to the grid No one's gonna pay me for that because the way it works at least here in latin america And I believe it does in the states too It's only an offset against what you take from the grid if you produce more than your generate You'll just get a credit against future use of kilowatts from the grid clear as mud, huh? Oh, and one more thing if you make that deal to sell energy back to the grid The electric company's not going to pay you the kilowatt hour rate you pay when you buy electricity from them

[06:19] They'll buy it back at wholesale prices without all the taxes and extra fees they add on You know all those multiple extra charges on your bill that you really don't know what the hell they are But you got to pay them anyway So for example up in the states if you're buying electricity for let's say 10 cents a kilowatt hour That's with all the taxes and excess charges included If you've got solar panels and you're generating excessive solar and selling it back to them They're not going to give you 10 cents a kilowatt They're going to give you about four cents a kilowatt less than half They'll subtract the taxes and additional charges and they'll give you the wholesale rate minus all that That's something a lot of people don't understand but back to one of the many things I really love about latin america Besides the fact that you can do practically anything to your house that you want and the government's not going to step in And they're not going to ask for permits Well, as long as you're not adding an addition or garage that's larger than the actual original house

[07:07] Then the inspectors might pop over but it's not a given it might not happen at all Oh, but there is another way inspectors might come down on you if for example, you have hateful neighbors Hey, this happened to me. I had a neighbor. That was a jerk. Just didn't get along with her She was a frustrated wealthy latina middle-aged lady whose husband had left her for a much younger girl Actually girls He had a string of them And was she sour about it and she lived alone with her cleaning lady and gardener and yapping lap dog And a very nice house right next door to me Well as it turned out I told her in no uncertain terms one day that I couldn't stand her dog Yapping into the wee hours of the morning and she really should do something about it Well, she was insulted that i'd pick on her little baby So after that we weren't on speaking terms She'd give me the cold shoulder and a dirty look when she'd drive by and about six months later

[07:57] I was rebuilding a terrace putting in new sliding glass doors remodeling the porch and such And a local municipal government vehicle pulled up a guy came out handed me a pink slip that said I had to go to a hearing because I didn't apply for a permit to remodel my front porch I couldn't believe it, but I did call my lawyer right after that. That's what you do My lawyer agreed of course it was revenge a completely ludicrous charge because No one ever pulls a permit for a remodeling job Or for practically any construction job that requires an addition to an existing structure But I knew in a second why that happened. She was connected So somehow no one in the municipality laughed at her and told her she was ridiculous for filing the complaint And it turns out I found out later her son was a lawyer That meant we could go back and forth with this thing and would cost her nothing

[08:44] So I sent my lawyer to this zoning meeting which happened about three months later and I end up paying a 300 dollar fine Plus my lawyer's charge is like 150 bucks. So it cost me 450 bucks So I had 450 bucks worth of resentment built up for that lady. Don't worry. I got even remember I'm from chicago can't tell you about it here But if you come down to my expat insider seminar starts february 18 2022 Just about two months from now. I'll fill you in on the rest of the story By the way, i've never had any trouble with regular middle-class latino neighbors only with a few upscale Entitled types who think they're royalty and treat their help like crap, but I digress. Where were we? Oh, yeah talking about my electric bill Remember I said I pay no electric bill because i'm off the grid But I never did terminate my electric service from the electric company. So they weren't in the loop

[09:34] I just went off the grid without telling them and suddenly there was no electric bill at all But i'd still get a monthly statement for the meter charge, you know, you're renting the meter whether you know it or not You're renting the meter. That's another little charge on your monthly bill. You probably never noticed But remember here in latin america, it's details details or lack thereof So anyway this month my meter charge was 50 cents. Yep. I got electric bill for 50 cents You ever get one of those? I don't know maybe in your dreams And last month believe it or not I use no power once again, but I got an electric bill for a buck 75 Now you gotta wonder how could that be? How could they charge me a meter rental fee of 50 cents this month and a buck 75 the month before? Well, you know what? I'm not going to go down there and argue but the point is getting back to details

[10:24] You just have to marvel at the disorganization of public private companies down here Oh and the month before it was two bucks and the month before that it was 35 cents You have to marvel at the incompetence or or just how they're calculating those things That is if anyone's actually calculating those things at all I just had this image of a fat government slug Looking at tick tock with one hand and arbitrarily just picking figures out of the air and plugging them into a spreadsheet with the other hand Hey, i'm really not complaining I don't know about you, but i'd rather have a government that's totally lax and has mindless idiots working for it Then the crack the whip type that makes you get four different kind of permits before you can put up your own solar panels Hey, but that's just me. Oh, but there's more. I have a friend who went off the grid about a year and a half ago now

[11:11] gringo expect guy who also didn't want to sell power back to the grid He just went off the grid didn't tell anybody and spent a year and a half now He had no electric bill except for the meter rental charge Oh and his meter charges all over the map too, but it's never gone over two bucks a month. He said so he's not complaining Anyway, he told me just last month after he'd been off the grid for an entire year and a half paying nothing To the electric company except that tiny meter charge that was basically pennies Guess what electric company car pulled up a guy came out knocked down his door Looked at the solar panels on the guy's roof. They were obvious from the street He finally said in spanish, of course. I don't want to bother you, sir You mind if I take some pictures of your solar panels? I just came out because we noticed on your electric bill that you pay nothing

[11:58] So we usually assume there was some hanky-panky going on and you were stealing power. That happens a lot. It's a big problem That's usually what we find when power drops way off from month to month. But I see that's not the case You have solar he said excellent. I wish I could do that And this was the power company worker talking even he would like to go solar Even though if everyone went solar he'd be out of a job But just think about it for a year and a half this gringo expat guy had no electric bill at all And he told me he uses at least 600 to 800 kilowatts a month He told me he was paying about a hundred bucks a month the electric utility before he went off the grid Now think about it That means that it took the electric company billing department a year and a half to figure out this guy might have been stealing electricity

[12:46] That's why they call it the third world details details you get it Now I ask you how long would it take do you think for an inspector from the electric company to come out to your house In minnesota or wherever you live if your monthly electric bill suddenly went to zero You think it would take 18 months. How about six months three months two months? Yeah, i'm thinking maybe two months since there is the outside chance A person might go on vacation for a whole month and turn off the main breaker though Most people don't even know where that is But even so people just don't do that Up in the states the more likely scenario is that the inspectors would come over to your house and slap a huge fine on you For going solar without getting all those permits. Yep latin america. You gotta love it I like chaotic disorganized governments just full of slugs

[13:33] It's like the difference between getting pulled over by barney fife versus an illinois state trooper All right moving on You know, I get lots and lots of emails from people about porterico since they've heard it's become a bitcoin paradise Or at least a lot of bitcoiners and crypto people are moving there because they've created a lot of tax incentives Well, you want to know the scoop on that we're going to go into it today First let's start by reading some excerpts from an article that just came out on december 16th Entitled crypto rich flock to porterico the world's newest luxury tax haven paradise Starts up by saying joe biden has promised to roll back tax cuts for the rich. He wants to hit him harder So the impending clampdown has spooked a lot of affluent investors including crypto investors who are descending To porterico in large numbers to dodge tax hikes turns out

[14:20] It says porterico passed two important tax bills in 2012 that have transformed the island into a cryptocurrency tax haven paradise Under act 22 of its local tax code the caribbean island and unincorporated u.s Territory, you know, it's a u.s Protectorate offers full exemption from all local taxes on passive income to new residents act 20 provides a four percent corporate rate And exemptions on dividends This is a much better deal than in the u.s Where investors pay 20 percent in long-term capital gains and 37 percent in short-term gains All of this has caused an explosion in remote work on the island It's become a tax haven for crypto corporations and crypto investors An example is the case of anthony etman who left los angeles behind and bought a condo at a porterican resort in march

[15:07] Antman is the chief executive officer of ikagi asset management a crypto asset management firm He relocated to porterico's wealthy north shore. He says he expects to reap huge tax savings However, the rise in crypto markets lately has made it an easy target for the biden administration and democrats To tax the living hell out of the industry So crypto investors are getting out of the u.s smart money now understands what's coming and wants no part of it Other good examples of the crypto exodus from the u.s include pantera capital and redwood city ventures They've moved there to escaped u.s Taxes too along with facebook product manager turned whistleblower frances hygan who recently disclosed that she moved to porterico To be with her crypto buddies, too

[15:52] Says mr. Giovanni menda is a corporate tax attorney now specializing in crypto taxation issues He says crypto people are moving to porterico because they've heard other crypto people are moving there All are independent creative like-minded people sort of a crypto domino effect So how'd these special tax laws get set up in porterico? Well, you see porterico's tax laws weren't specifically set up to help crypto people It's just that in 2012 they were slated to go bankrupt Puerto Rico was going down the tubes and they had to change their tax laws to help its struggling economy And for crypto investors, it was a huge gift. In fact so far this year porterico has received more than 1,200 new crypto business applications through its individual investors act Which exempts new residents from paying on capital gains and another?

[16:41] 274 corporations llc's partnerships and other entities were approved for the exports services act which provides a 4% corporate tax rate And a 100 exemption on dividends. Anyway, there's this gringle guy named michael turpin the founder of bid angels He moved to porterico from vegas in 2016. He's known as the messiah For convincing crypto people to move to porterico Turns out me johnny here again. Here's the point Crypto investors are only going to very specific areas in porterico like for example bahia Which is 26 miles east of san juan and the rich carlton dorado beach resort Of course, you may have figured the wave of newcomers has lifted property markets in the whole country It has and not for the better francisco diaz fornier partner of luxury collection real estate

[17:26] Says some individual properties and houses are selling for over 20 million bucks In fact real estate developers are saying in the province of bahia prices per square foot double just in the last year Meanwhile inventory is running out for high-end homes So if you're thinking of moving there at least in the areas that are nice, you better be a millionaire But here's the bad news actually the first of the bad news now me johnny again I've been telling you all along for the last 11 years on this show I only like porterico to visit on vacation. I'd never want to live there No matter how good the tax break for one thing its government is handcuffed to the us. It's a us protectorate Look, especially with all those mega rich crypto guys coming down. That's a real honey pot for crooked politicians Are there any other kind? Problem is, you know, it is a us protectorate and they have a right to vote to become a state every couple of years

[18:17] They do have that vote and the vote keeps getting closer and closer So close that people are beginning to wonder if it will be the 51st state eventually and then when that happens Although special tax rules dissolve away and porterico becomes part of the us federal tax system Now after listening to that article, you're probably thinking you have a pretty good sense of what's going on in porterico politically and tax-wise, right? Oh and real estate wise too Well, that's how the regular news services can fool you Well, you knew that already, right? Because right now I want to read an email to you from someone who is right on the ground there It's as if this guy with boots on the ground there is living in a completely different bizarro world. Listen to this Starts out johnny. If you use this, please don't say my name Starts out some friends of mine convinced me to move to porterico six months ago

[19:04] Puerto rico is a giant slum. If you ask me about 10 of the homes for sale are currently in foreclosure Then there are those few little tiny pockets of very nice homes That's where the boom is problem is the overwhelming poverty just takes over The grocery stores sell only low-end items that you'll find in any slum area Fresh foods and vegetables are hard to find and everything shipped in by boat So most of what I can find I have to buy on or after the expiration date And i've already had two bouts of food poisoning And they talk about bahai beach. That's where the crypto guys are relocating too. Some of my friends are at bahai beach Seven million dollars for a townhouse on the beach and it's in the middle of nowhere surrounded by miles and miles of slums

[19:51] Literally just tin shacks everywhere. I can't stand it there myself and look out if they make porterico estate And that tax haven status for millionaires goes away. I'm betting that seven million dollar townhouse won't be worth 500 grand Sure. It's true. He says you avoid taxes, but the things you need to buy are much more pricey This is an island, you know, everything except the few food items has to be shipped in And how about this? He says i'm being charged 150 a month for my check-in account Those are my bank charges and gas is twice the price as the mainland Most stores are used to like target or staples aren't here and won't ship here Amazon primes takes about three weeks and fedex takes over a week He says I figure I receive only about half of the snail mail that's sent to me

[20:40] Then you've got those mosquitoes hurricanes and earthquakes. They're quite common They still haven't rebuilt from the big hurricane of two or three years ago And how about this? No homes in porterico have carpeting because the windows blow out and water pours in from the tropical storms So carpeting is a huge liability and the power and internet go out every day Even the water just goes out for days at a time and without ac in about two hours your home's uninhabitable And think about your refrigerator and freezer and then our writer describes what's pretty common in most every latin country Not just porterico. He says nothing happens when you want it a friend of mine had her power cables running into her home Disintegrate in the salt and air and the power company said they'd be there to reconnect everything in eight weeks And as for the locals They just look at me as a gringo to be taken advantage of whenever they can

[21:27] So all this stuff about porterico being such a great place to be in such a great tax haven Well, it hasn't been as great as I thought All right. Thanks for that. Mr. Anonymous All right now from my two sentables You longtime listeners may say over and over again that porterico is a nice place to visit But I wouldn't want to live there You just heard a lot of the reasons why And if I was going to move someplace just with the tax breaks, I definitely set down in el salvador They've removed capital gains property tax personal tax everything as long as you're doing business in crypto And I love the fact that their government's not on very good terms with the us government because neither am I But I do want to say this, you know There's always a certain percentage of gringos and expats who come down who are natural pessimists, you know downers complainers

[22:14] Time vampires energy suckers, you know all their names for them The thing is they're the ones that are most likely to get on the internet and start responding to articles op-ed pieces blogs twitter You know negative pessimistic people are real active on anti-social media Because you know happy and content people they're happy and content They don't need to make it their mission to write letters of complaint and this guy who wrote this email seems He doesn't like much of anything Though it is true. He's totally right in his observations It's just that if everything drives you nuts and you see fault and everything You're just not going to be happy in latin america or probably anywhere else now as for me i've been called anal before I'm a picky guy Most engineers are like that maybe not in their closets or garages But we're taught to write everything down and stay organized

[22:59] So I too can be an equal opportunity critic You've heard me rip on people in their houses cars and the way they live before but still i'm a generally happy guy And though there are lots of things about latin america that are pretty disgusting like the pollution the littering reggaeton The ash crack pants phenomena a good percentage of the bathrooms things like that But realistically when compared to what's happening in the usa and how it's completely changed over the last 10 20 years in the usa canada europe australia It's a triple whammy society culture and the economy are going down the toilet fast Being practically anywhere in latin america except for cuba, pennsylvania and nicaragua except for those three countries the good far far outweighs the bad And the thing is if there's something you don't like about latin america or your living conditions in latin america You could change them with ease

[23:45] You could live like a backpacker live with the locals live as a middle class latino or live in a gated guarded community It's your choice As for me, I like to live in a house or apartment that has first world amenities and I want that apartment or house to be in Really good tip top shape and I want to have a nice yard a nice garden and a nice spectacular view And if those things aren't happening I won't complain and write letters to the local gringo english tourist rag And I won't whine on social media to the local gringo fake book expat groups either I'll just hire someone to fix what needs fixing or i'll tinker away at it myself I'll do the improvements. I'll move to a place that has a great view The trade-off is things are so much cheaper down here The lands the rents the apartments the houses and the people so nice that instead of complaining about where you live or your surroundings

[24:32] Just add value to your own place yourself And that by the way is why latinos love to have gringo is move into the neighborhood You know We're gonna have the nicest house on the block or at least the best maintained And you gringo is the next pets out there living in latin america If you're complaining about your water not being on 24 7 get a cistern or move to a subdivision that's got its own well Municipal or city water is always a problem in latin america. It's never on 24 7 Well, maybe once in a while But all you need to do there is buy yourself a nice big cistern and then at night when no one's using water Water pressure builds up in the lines fills your giant cistern. I mean giant don't get a little one get one That's at least 250 gallons And then the next day when the water kicks out the motor and sensor on your cistern will automatically recognize that pressure drop and kick in seamlessly

[25:20] And at night again, it'll fill up to the top and a 250 gallon cistern set up with a pump and everything would cost maybe 500 bucks Now you long-term listeners have heard me say that the average american uses about a hundred gallons of water a day And you'll find the average latin american uses around 25 gallons of water per day. Of course Wealthy lanterns use pretty much the same amount of water as regular americans because they can And many of them live in upscaled neighborhoods with their own wells or if they're on municipal water They have huge cisterns, but it's true about 90 percent of latin americans use about 25 gallons of water a day So let's say you have a 500 gallon cistern That's a medium sized one that'll last a water wasting american five days or a family of two two and a half days Family of four but a day Of course, you're thinking what if it's a prolonged water shortage late the guy was talking about in porta rico two days three days

[26:09] Well, i'll tell you this i've been down in latin america over 30 years now And i've never lived or been in an area where the water's been out more than one day And only then under special circumstances. It just doesn't happen like that in normal latin municipalities The water might go up two three or four hours a day, but never for the whole day At least in my 30 years down here I haven't seen that unless There's some big calamity a big natural disaster like a hurricane or a earthquake or big repair exactly what happened in porta rico What is it now two and a half years ago? And still if you took a drone and flew over you'd see that a good part of the island still looks like it Just got hit by the hurricane. So again for me porta rico is out on top of that There are us protectorate. So they're right under the thumb of a very Orwellian political machine one

[26:55] That's completely bankrupt economically and culturally and finally an email from kevin. He says johnny How can I get a job like yours doing podcast radio about latin america or any other foreign culture? I know I could start a podcast but there are literally tens of thousands of podcasters out there How do you get noticed when dogs cats even lizards have podcasts? Wait a minute. Wait a minute. Kevin me johnny here. You're wrong. Aoc hillary and maxine waters do not have podcasts So anyway, kevin, you're wondering how to do a successful podcast As for me, I just work for a big station because of white privilege and the entitled white guy quota 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

[27:41] 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