Episode Summary
In this episode of The Expat Files, Johnny Mueller addresses a common question from disabled expats and veterans about living in Latin America. He discusses the challenges of accessing medical care in the United States, particularly for veterans, and highlights the advantages of moving to Latin America. He emphasizes that while private hospitals in Latin America are often staffed by specialists trained in the first world and equipped with modern technology, they charge significantly less than their U.S. counterparts. Johnny also explains that the lower costs are due to the lack of malpractice insurance requirements for doctors in Latin America, which keeps medical expenses affordable for expats.
Johnny then discusses the relatively high standard of living that skilled professionals, such as doctors, can achieve in Latin America despite earning significantly less than their counterparts in the first world. He highlights that the cost of living is much lower, with expenses for food and locally produced goods being only a third or less of what they are in the first world. Additionally, he notes that income taxes are minimal in most Latin American countries, allowing individuals to retain a larger portion of their earnings. Johnny also compares the earnings of a Latin American doctor making $20,000 to $25,000 a year to the income of a middle-class retiree in the United States, suggesting that the former has a comparable standard of living to the latter, albeit with significantly less stress and expense.
He argues that retiring in Latin America is a financially and lifestyle-wise superior option compared to the first world. He highlights the significant increase in purchasing power, the affordability of services like live-in maids and nurses, and the relative safety and stability of the region despite negative media portrayals. He criticizes the first world's government for economic mismanagement and the misleading information provided by the U.S. State Department, suggesting that the media and government are not trustworthy sources of information about Latin America. He also points out that despite the perceived dangers, many international corporations are investing in the region, indicating its economic viability.
Johnny discusses the advantages of retiring or living in Latin America for disabled individuals, emphasizing the lower costs of medical care, the availability of house calls by doctors, and the potential for personalized care. He contrasts this with the often poor conditions of nursing homes in the United States, which are frequently highlighted in media exposés. Johnny also addresses the fears of disabled people considering relocation, suggesting ways to overcome these fears, such as learning Spanish and connecting with local communities. He concludes by discussing the financial aspects of retirement, noting how the required nest egg has changed over time due to lower interest rates.
He discusses the inadequacy of retirement planning from the 1980s and 1990s, highlighting how financial advice failed to account for inflation and poor investment returns. He explains that even with a substantial income, the real value of money has eroded significantly over time, making it difficult to maintain a standard of living. He critiques the traditional approach of relying on interest income and leaving a large inheritance to children, arguing that it is impractical and often leads to financial hardship. Johnny also shares a story from an investment seminar where he learned that many high earners did not have their college expenses paid by their parents, suggesting that financial independence is more common than assumed. He concludes by expressing pessimism about the future of retirement planning in the first world and recommends considering Latin America as a more viable option for retirement.
Finally, Johnny discusses the financial advantages of retiring in Latin America for U.S. citizens, particularly those on social security or disability benefits. He highlights the cost of living differences, the purchasing power of the U.S. dollar, and the lifestyle improvements that can be achieved with a modest income. He also addresses the fears of expats and encourages them to take the first step, such as learning Spanish, to overcome hesitation.
Topics
Expats in Latin America, Medical care for disabled expats, Cost of healthcare in the U.S. vs. Latin America, Malpractice insurance in the U.S., Quality of healthcare in Latin America, Standard of living in Latin America, Cost of living comparison, Income and taxation, Retirement income and lifestyle, Retirement in Latin America, Purchasing power and cost of living, Media and government portrayal of Latin America
Chapters
00:00:00 Opening 00:00:24 Introduction to the Topic of Medical Care for Disabled Expats 00:00:47 Discussion of Medical Care and Financial Considerations for Disabled Expats 00:02:42 Comparison of Medical Costs in the U.S. and Latin America 00:04:39 Introduction to the topic of income and standard of living in Latin America 00:07:23 Comparison of income and standard of living between Latin America and the first world 00:07:48 Discussion of retirement income and its implications for living in Latin America 00:09:35 The Financial Benefits of Retiring in Latin America 00:09:58 Why Retired People Aren't Moving to Latin America 00:11:01 The Contradiction Between Government Advice and Corporate Investment 00:14:42 The Cost of Medical Care in Latin America vs. the First World 00:15:33 Personalized Care in Latin America vs. Nursing Homes in the United States 00:15:59 The Fear of Relocating and How to Overcome It 00:18:16 The Changing Financial Landscape of Retirement Savings 00:18:36 The Illusion of Financial Security in the 1980s and 1990s 00:18:55 The Impact of Inflation and Poor Investment Returns on Retirement Planning 00:19:31 The Reality of Reduced Retirement Income and Adjusted Standards of Living 00:19:47 Alternative Retirement Planning Strategies and the Role of Mortality Tables 00:21:06 The Investment Seminar and the Reality of Financial Independence 00:23:15 The Appeal of Latin America for Retirement Amidst Financial Uncertainty 00:23:20 The Financial Benefits of Retiring in Latin America for U.S. Citizens 00:23:32 Comparing the Cost of Living in the U.S. and Latin America 00:24:53 The Economic Advantages of Retiring in Latin America
Transcript
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. Now let's get to a few emails that I've been lax in addressing, okay? I get a lot of emails from disabled people and disabled veterans, both married and single, asking me the obvious questions of where they should be retiring or living down here in Latin America. And it seems to me all of them are receiving some kind of monthly income like social security
[00:51] or a disability payment or some kind of pension. In any event, it seems like a lot of disabled people want to ditch the first world in a big way because there seems to be so much interest in wanting to move down here to Latin America. And here's a typical kind of email I've been getting. Dear Johnny, how is it for retired disabled vets married or otherwise in Latin America? I would need medical care every now and then, which I have up here and is paid for because it's a service-connected disability. I would have a steady, stable monthly income from being a disabled veteran, but you see, I'm normally treated at a VA hospital up here in the States, and that's where I get all my medications, too. Considering all this, what would happen to me if I moved down to Latin America? Would I be improving my situation or making it worse? Well, as far as my answer to that, I've been at some VA hospitals up north, and I have
[01:39] to say that although they're free to veterans, it certainly doesn't take much to improve on the conditions in those places, that's for sure. Which reminds me of what one Vietnam veteran once told me when I was driving around Chicago looking for a particular VA hospital, and I was a bit lost. He says, you go about six blocks north and you'll hit a Texaco station, just roll down your window and follow your nose because you can smell it from there. And that seems to be the state of almost all VA hospitals up in the first world. Ask anyone who's forced to go there. Sure, they'd rather go to a private hospital any day, but those cost real money up in the first world. And that's the beauty of moving down here to Latin America if you do have a disability. Not only are the private hospitals down here, first world in almost every way, including being staffed by a high percentage of specialists trained up in the first world themselves, the equipment is also first rate.
[02:25] And yet even in the best private hospitals down here, you pay a quarter or less of the prices that you pay up in the first world for the equivalent thing. And they can get away with that down here, because doctors almost never get sued, and thus don't have to pay a heavy malpractice insurance premium that all private practice doctors up in the United States have to pay. For example, did you know that the average internal medicine doctor in Florida pays 60 grand a year for malpractice insurance? And general surgeons pay between $90,000 and $175,000 a year. Imagine that. The highest malpractice premium payments of all are paid by OBGYNs, who have to pay from $100,000 to $200,000 per year in Florida. I guess everybody wants a perfect baby, and if it doesn't come out perfect, what you do? You sue the doctor.
[03:10] And yes, there are other states that have cheaper malpractice insurance premiums, like Pennsylvania or Nevada, where a general surgeon might only pay $50,000 a year for his malpractice insurance. But when you consider that the salary for a general surgeon in the states could be anywhere from $150,000 to $300,000 or more, even with those fantastically high malpractice insurance premiums that keep creeping up every year, that twisted first world U.S. medical system keeps chugging along and no one seems to want to do anything about it. But you know, it's another crisis in the making, and it will grind to a halt sooner or later. So we come back to the fact that, down here in the third world, there are first world style hospitals all over the place, with specialists trained up in the first world and beautiful buildings with all the modern equipment, yet the hospitals and doctors charge only a quarter
[03:58] or less of what you pay for for the same thing up in the first world. It still seems hard to believe when you tell that to someone that's lived all their life up in the states. Even when you explain to first world people that down here in Latin America practically no doctor has malpractice insurance, thus no hefty premiums. But the second thing is the doctor's salaries themselves. Now I don't think that there's any medical doctor up in the first world making less than $100,000 a year, unless he's a resident right out of medical school and working towards that specialty degree. But every other doctor working out there in the private sector, according to recent statistics, makes well over $100,000. In fact, the average family physician, the one you call when your kid's got a sore throat, makes $140,000 a year in the states. But guess what? Down here in Latin America, the average medical doctor makes about $20,000 to $25,000 a year,
[04:45] which pretty much falls in line with all the labor statistics down here in Latin America. It seems like all skilled workers and professionals make between one quarter to one sixth of their counterpart up in the first world. So if you talk to the average doctor down here, he's not at all unhappy with making $20,000 to $25,000 a year. He's got a nice house and a car or two, and is basically living large compared to everyone else down here. But you're asking how can a guy making $20,000 or $25,000 a year live large anywhere? Considering that the poverty level for a family of four in the United States is at about $22,000 a year. Well, there's a good reason for this, besides the fact that when that doctor calls a plumber or an electrician or a car repairman, he's paying them about a quarter to a sixth of what you'd pay for the same equivalent of plumber or mechanic or electrician up in the
[05:34] United States. I'll tell you right now, plumbers and electricians down here do not get 50 to 75 bucks an hour. If down here, a plumber, a certified electrician or a body man made 30 to 50 bucks a day, most everyone down here would think the guy was overpaid. So like I've said so many times before, labor is dirt cheap down here, even professional labor. And I mean, especially the professionals and skilled labor. So how about some more reasons why a person making $20,000 to $25,000 a year down here is living the life of Riley? You might not believe this, but he and his family are basically living like upper middle class first world people with half the stress or less. Well, for one thing, his expenses for food and locally produced products are also less than half of what you'd pay up in the first world, probably closer to a third or even
[06:20] less. And why is that? Well, for one thing, farm products are produced by people who make only about $200 to $300 a month. Add that to the fact that there's three or four growing seasons down here as compared to one or two growing seasons up in the first world. So they easily produce twice or more the volume of produce on any given piece of land than farmers can do up in the first world. But the main reason to living really quite well on $20,000 to $25,000 down here is the fact that in most countries in Latin America, people pay little or no income tax. Oh sure, they have income taxes on the books all right. But with all the little tricks and deductions you can play legally, the vast majority of people end up being in the 5% or less tax bracket when all is said and done. Now imagine yourself up in the first world in the 5% tax bracket.
[07:06] And imagine yourself paying property taxes on a substantial home of well under $500 a year. So in effect, if you add up all the advantages monetarily of living down here in Latin America, a person making $20,000 to $25,000 a year has the equivalent earning power of a person up in the first world making over $100,000. And the reason why I picked that $20,000 to $25,000 a year range when making these estimates, it's not because I consider that a minimum that you would need to live in the style that you're accustomed to living up in the first world. It's not that at all. Because there still are a lot of places down here in Latin America, off the tourist track of course, where you can live quite nicely like a first world person on $1,000 to $1,500 a month. And I mention those numbers because that's exactly within the range of the actual average
[07:53] Social Security monthly payout these days, about $1,200 a month. But let's talk about people that might have an income of $20,000 to $25,000 a year, which is right in the lower end range of the average pension and Social Security payout for most disabled veterans and middle class retirees. I'm talking about the average Joe now. People who've worked long enough to qualify for a company pension in addition to Social Security. And in fact, most middle class retirees in the United States don't have much savings at all, but they do have a pension and a supplemental Social Security income. And according to statistics, in the year 2010, the average yearly income for a retired person over 65 years of age was $30,000 a year. And for a retired married couple, it was $43,000 a year.
[08:42] And they came up with those numbers by including pensions, Social Security, and income from retirement investments. So those are the average yearly incomes for retired Americans. Now you hear talk all the time about how retired people are having trouble making it, even when they have a pension in addition to a Social Security check. And then there's all those tens of millions of people whose only retirement income is a Social Security check and that's it. Well, I'm here to tell you if you're having any concerns at all about how you're going to make it up in the first world, whether you're on a disability income, retired, or just getting ready to retire, try this little experiment that'll give you an idea of how well you can do down here in Latin America on the same retirement income. Just conservatively, double your monthly retirement income figure in your head, the retirement figure you are getting right now, or what you expect to get when you do retire.
[09:31] And that'll be about the minimum value you get for your money if you decide instead to live your golden years down here in Latin America, instead of fading into the sunset up there in Cleveland. And if you tripled your monthly income figure and came down here as long as you stayed well off the tourist trail, you'd be living about three times as well off your retirement income as you would have if you stayed up in the first world. And I'm still being very conservative here because I believe it's possible to do even better than that down here due to a lot of factors. So then why isn't there a huge stampede of retired people racing down here from the first world in their wheelchairs and walkers? Well, that's because of the media and the bad press and the way people are scared to death to come down here. And that's why I get so many emails from people who fear retiring up in the first world, but are equally afraid to make the move and come down here.
[10:17] Seems like people are torn about what they read in the papers about kidnappings and narco wars and what they read on the U.S. State Department website. And then you got guys like me living down here with a gringo advantage, living like kings, telling you exactly the opposite of what the media and the government is telling you. Well, all I have to say about that is, how much do you trust the government? They've steadily destroyed the dollar, they've ruined the economy, public school systems are holding tanks for delinquents, you're living pretty much in a police state where they've thrown away the Bill of Rights, half your income is stolen in taxes, they've created the biggest, most expensive and abusive military that the world has ever seen, and they've made it so impossible to do business that most big industrial and manufacturing jobs have gone overseas. And now your same wonderful government is telling you on the State Department website
[11:05] that it's not recommended at all to go down to Latin America. They're saying that Americans are targets and that you're down there at your own risk. Yeah, right. If it's so dangerous and unstable down here, why are hundreds if not thousands of huge international corporations coming down here, opening up offices, franchising businesses, buying land and mining rights, and building factories? Yeah, because the best place to put investment money is a place that's dangerous and unstable, right? And guess where all that investment money is coming from? The US, Europe and China. But the first world talking heads advised the common man not to come down here, right? Smell fishy to you? Does to me. But I do recommend Latin America as a very good place to retire, especially if you're on a limited income. Not only can you double or triple your purchasing power when you're down here, even if you're
[11:53] on the lowest possible Social Security payout of $1,200 a month, and by the way, they will direct deposit that $1,200 a month to a bank in whatever city you are down here in Latin America. So you never have to screw around with mail or the physical checks themselves. Anyway, like I said, even if you're on the minimum Social Security payout of about $1,200 a month, think of this. You can afford a live-in maid, and she'll only cost you between $150 to $200 a month plus room and board. Now, you could never do that up in the first world, even if you made $300,000 a year. A living maid up there would cost you $50,000 or more when you considered room and board and FICA and insurance and other expenses, and she probably won't lift over 10 pounds or do windows or toilets either. Because you see up in the first world, even if you make $300,000 a year, after all the
[12:39] taxes and expenses are taken into account, you most certainly would have only about half of that left in actual usable income, $150,000 or so. And 10 to 1 says, you're not going to spend a third of your income on a live-in maid, not up in the first world. Only the very rich seem to be able to pull that off up in the first world. And the fact is, when I did live up in the States, I never even knew anyone who had a live-in maid. Do you know anyone who does? I only saw that kind of stuff in the movies. But down here in Latin America, everybody making $15,000 or $20,000 a year has their own live-in maid. It's the standard down here in just the way things are. In fact, people making $700 or $800 a month down here have live-in maids, especially if they have kids. So think of it, on your measly $1,200 a month Social Security check, which is direct deposited,
[13:26] you can live out your golden years like an entitled rich guy. You won't have to do any of those boring, time-consuming things, like wash, cook, or clean, which is the ultimate luxury for you disabled folks out there. Like that disabled veteran that wrote me that email. Imagine how much easier your world would be if you were disabled and you had a 24-hour live-in maid. And if you had some special medical problems, let's say you needed kidney dialysis, IV drips, physical therapy, or frequent injections, then you could hire a full-time nurse, a trained LPN, licensed practical nurse, for anywhere from $300 to $400 a month. And it's not unusual to have a full-time live-in licensed practical nurse for around $400 to $500 a month, and if you hire her as a live-in, she'll do the maid and cleaning lady thing too. So you can kill two birds with one stone.
[14:13] Now I know that every disabled person has his own individual sets of needs. Sometimes they're in a wheelchair or in a walker or have impaired vision or any number of things. And normally, disabled people make frequent trips to the doctor or to the hospital. And if you happen to be a retired or disabled person on Medicare, if you're living down here in Latin America, good luck trying to get Medicare or Medicaid to cover anything while you're here. But the good news, besides the fact that hospitals and doctors charge about one-quarter to one-fifth of what they do in the first world, well, you'll be amazed to know that doctors do house calls here, and they charge between $15 and $25 for the service. Up in the first world, sometimes you pay more than that to have a pizza delivered. So the point is, if you're not severely disabled or bedridden, Latin America just could be your best choice for retirement or long-term living.
[14:58] And even if you're moderately disabled and don't get around much at all, and you need a certain amount of around-the-clock continuous care, Latin America still could be a great choice for you if you don't have much savings or you're on a limited budget and really need a nurse or a person around almost all the time. Because you see, when it comes down to a choice of living up north in one of those horrific public nursing homes, you know what I'm talking about, the ones they do exposés on all the time, on shows like 2020 and 60 Minutes, well, I mean, given a choice between that and coming down to Latin America, having great weather all year round, terrifically low expenses, and having a 24-hour live-in nurse slash maid on the premises, I tell you, it's a no-brainer, especially when a nurse is responsible for you alone and not 20 other sick or disabled people in a smelly nursing home ward in the States where the staff doesn't give a damn
[15:48] about anything except what's playing on their iPod. And when you can have such personalized care like that on a stinking social security check, what an easy choice, right? But guess what? It isn't. As it turns out, 99.9% of all disabled people, including disabled veterans, are really too afraid to make the move down here. But the way to get over that hump is to learn some Spanish, take a home course, then get online and start reading some of the Spanish-language newspapers down here. That'll get you over some of those fears right away. Get yourself familiar with the Latin culture? Hook up with some disabled people or disabled veterans online? People already living in the country that you think you might want to settle in? And start a friendship and a dialogue with some of these guys? They already know the ropes, and they'll be glad to share that information with you. And you know, if you're a disabled person thinking about coming down, there is only
[16:36] that little extra pointer I can give you besides my general information. I'm talking about learning a little bit of conversational Spanish before you come down. And that advice is a bit different from what I usually tell people. I say, come on down, even if you don't know any Spanish at all. That's the way I did it. And you're going to pick up bits and pieces of Spanish along the way sooner or later, unless you throw my advice to the wind and locate in a contaminated gringo tourist area like Costa Rica. Or if you end up hanging out a lot at those gringo and expat bars, then you'll never learn your Spanish. And why not expat bars? Well, although they always seem like a comfortable place to be once you first get down here, especially when you have those occasional bouts of homesickness, which believe me, fade away to nothing after about six months or so. But when you do get homesick, those gringo expat bars start looking pretty good to you.
[17:22] But don't fall into that trap, please. If you do, you'll not only come up short on your Spanish. You'll never get the full effect of the gringo advantage either. And I talk about the pitfalls involved in that in a lot of my past shows. So check the archives. Now, I want to say one more thing about retirement in general. If you Google retirement nest egg, you're bound to come up with a ton of articles about a certain recommended nest egg or amount of money that you should have stockpiled away in investment somewhere, that motherload IRA or annuity you were supposed to build up when you were young, that's supposed to provide you with the lifestyle that you're accustomed to once you retire. Now, 20 some years ago, when I lived back in the States, when I saw these figures and calculations about what I needed to have a nice nest egg when I retire, well, that stuff used to really scare me. Those figures always seemed ridiculously high, always so far in the stratosphere that I didn't
[18:10] have that kind of money, nor did any of my friends either. In fact, if you remember in the early 90s, they used to say that you needed a million dollars for a single person now to be able to live off the interest indefinitely when you retire at 62 or 65. And those were those long gone days when you could get 6, 7, 8, 9, even 10% interest on your investments with ease. So if you did have a million bucks tucked away and you were making, let's say 9%, you'd have 90 grand a year to live on. Now 90 grand a year to live on back then sounded great, but really it wasn't at all. Even if it was tax free, which it isn't because it's interest income, the guys who calculated that stuff didn't figure much on inflation. Not to mention they never figured on these crappy investment returns we have these days, like 1 or 2% if you're lucky. So since the big financial blowout in 2007, 2008, if you have your money in conservative
[18:59] investments you're actually losing against inflation. I mean inflation is more than the return on the investment. Now like I said 20 years ago when retirement planners were saying I needed a million dollars in a nest egg somewhere, to maintain my lifestyle when I hit 65, what they forgot to tell me was that in those 20 years that $90,000 that was supposed to start rolling in every year to cover my retirement living was now only worth half that, about $45,000 in real 1990 spending power. Well that's just great. I wish someone would have told me that back then. According to that reasoning, I can live half as well as the standard of living that I'm accustomed to. And isn't that a nice surprise? And you know back then in the late 80s and 90s, when guys my age were supposed to be putting together this big nest egg, there were actually two ways to figure out what
[19:45] would happen to the principal on that nest egg. One was that you just live off the interest on your investments when you retire, and when you die you still have that big million dollar principal for that nest egg sitting out there as a nice inheritance which your no good greedy parasitic kids are going to fight over when they read the will. I personally think that leaving anything to a kid over 18 is an idiot move, but you can't tell that to a parent who thinks they've got to set that snot-nosed kid up and get this. Some of the people in my own family are planning on making their own bratty kids rich when they die, so who am I to judge? So anyway, that kind of retirement idea was quite popular in the 80s and 90s. You know, live off the interest and when you die your kids get the motherload and all that? Man was that stupid advice. Anyway, the other way of handling your retirement nest egg was to work it out mathematically
[20:31] so that you got a nice fixed income when you retired and were able to live within the style that you were accustomed to, only you'd be living on interest and part of the principal of that nest egg every year and eventually when you'd reach a statistically very old age, based on insurance company mortality tables, when you were ready to croak your nest egg would be just about gone and when you died your kids wouldn't get jacked. Which some people might say is selfish because you don't give your kids anything, but you're really doing them a favor. You earn it, you spend it, that's my philosophy. Which reminds me of an investment seminar I once went to in Chicago back in the early 90s when the economy was rolling along and everybody was getting 7, 8, 9, 10, even 15% on their investments and that seminar room was chalk filled with professionals, engineers,
[21:16] doctors, accountants, lawyers and the speaker asked this one pertinent question. He said, I want all of you to raise your hands, all of you who have a fund in place for your kids college expenses or who are still saving money right now in order to have enough money to put your kids through college and out of 200 people in that room, at least 190 raised their hands and then the speaker asked this, how many of you guys make over $100,000 a year and again 95% of the people raised their hands and then he hit him with this. He said, how many people in this room had parents who paid your college bills and you know what, only about 10 people, about 5% raised their hands and at that moment the room got silent and everybody looked around at each other. They knew what he was getting at and the last thing he said was this, he said, don't raise
[22:03] your hands but just think of this for a second, how many of you would be sitting in this room right now, all you high earners, if your parents had handed you a check and paid for your college education because you see it turned out that 90% of the people in that room actually had to work while they were in college and surprisingly only a tiniest percentage of people in that room had not done it on their own, almost none of them had rich mommies and daddies. It was an interesting and kind of uncomfortable little demonstration, that was before the internet when every parent still wanted his kid to go to professional school to become a doctor, a lawyer, an engineer, an architect or an accountant. So anyway all those retirement plans and schemes and ideas and dreams that people clung to in the 80s and 90s, well after creeping inflation and the death of the dollar, the dot com bubble
[22:48] and the housing and the banking bust and the rot that's in the European union, well all bets are off when it comes to retirement planning these days, that's for sure. I mean who has a crystal ball when it comes to what's going to happen in the next two or three years? All I know is it's not going to get better, only worse. And there's really no light at the end of the tunnel. And if you ask the people in the know, it's just getting darker. Which makes it all the more appealing to come down here to Latin America to live out your retirement years. Because really no matter what happens with the financial situation up in the first world, the US government is always going to issue a social security check and or a disability check if you're a disabled veteran. And if you're down here in Latin America, the numbers will always work out greatly in your favor. Because think of this, if you're up in the states living on $1200 a month, your average
[23:36] social security check, and you can barely make ends meet now, and due to inflation the cost of living just keeps going up, and of course your social security check doesn't. Why be reduced to turning your heat down to 62 and eating cat food? When you can be down here in Latin America, where you don't have a heating bill at all, and food is a half to a third of the price that you're paying up north. And if you still somehow need to prove to yourself that you can really live 100% better down here, just remember that the average guy down in Latin America makes about $300 a month. And as you might imagine, people like that live a pretty basic lifestyle. But we're also talking about an average family of four on $300 a month. Now these people don't have cars and dishwashers or even clothes dryers. But they do have cable TV and refrigerators, and maybe even a virus infested 10 year old
[24:22] computer. And then you come along. A gringo from the first world, retiring on a $1200 a month social security check. And that's a worst case scenario, when you don't even have a savings or a pension of any kind to supplement that income. And you know what else? You're probably going to pack up all your first world stuff in your apartment or house up in Cleveland, and have it all shipped down, with the intent of renting an apartment down here for maybe $300 a month, and it'll be just like back home again, except it'll be about two thirds cheaper. So what I'm saying is this, even in the worst case scenario, if you only have that social security check, you're bringing in four times what the average person makes down here, and on average he's supporting a family of four. And if let's say you're not alone and you're married, and you bring your wife down with you, then chances are you've got some kind of supplemental income coming in for her,
[25:08] whether it's social security or a pension, which becomes even more of a multiplier effect as compared to what the locals earn. And another thing, even though the US dollar is constantly being nicked away by inflation and losing its purchasing power year over year, things priced in the local currency are even worse off, so the dollar is king. And in the short run, you might see local Latin currencies rise against the dollar, like in the recent case of Brazil's Real, but in the long run, every single Latin currency is being constantly devalued against the US dollar. So in comparison with local Latin currencies, the US dollar actually looks like the gold standard, which of course is pure BS, and we know it, though you'll never be able to convince a Latin American person of that. 95% of Latin still think the US dollar is backed by gold and silver, man are they out
[25:53] of touch with reality. So once again, the worst case gringo retirement scenario is a person simply living on that $1200 a month social security check, which in the first world is basically living in poverty, since up in the states the poverty level for a family of four is somewhere around $22,000 a year, so it should be a no brainer for anyone in that worst case first world retirement scenario to come down here and not only live much better than they live up in the first world on that amount, but possibly live better than they ever have before. And for those of you not in that worst case scenario, those of you making the average retirement income of around $30,000 a year, you'd be doing yourself a huge favor if you came down here making that kind of money, because not only would you be able to afford a live-in maid, but you most likely could have a city and a beach house too.
[26:40] On that kind of money up in the states you'd be living in a trailer court. But here's the problem, people are afraid to come down, just like people who live in the inner city in big cities in the states are afraid to move out to smaller towns where their dollar would go a lot farther and they'd be a lot safer. Just like a bird who's lived in a dirty little cage all his life, if you open the cage door chances are he won't venture out at all, he's too afraid of the unknown. So anyway, all you disabled people and retirees out there, to get over some of that fear and get over that first hump, start learning some Spanish. Even though it's really not immediately necessary, it'll give you some confidence before you try that first step. And here's the carrot I'll dangle in front of you guys who can't get over that hump. Remember these words carefully, live-in maids are $150-$200 a month. And what that means for you is, an uninterrupted fun in the sun retirement, no cooking, washing
[27:30] or cleaning required. You've been listening to The Expat Files, living in Latin America, coming to you each week from somewhere south of the border. And don't forget you can email me on anything at all about Latin America, The Expat Files at gmail.com. Once again, The Expat Files at gmail.com. See you next time. Nos vemos.