Episode Summary
In this episode, Johnny Mueller dives into the cost of living in Latin America, comparing it to the first world. He discusses how expats can live comfortably on a fraction of their US income, especially if they're living off the tourist trail. He contrasts the cost of living in the first world with that in Latin America, emphasizing that while certain expenses like food are significantly cheaper, other costs such as imported goods can be more expensive. Johnny highlights that expats can live a first-world lifestyle on a quarter or less of what they would spend in the US, especially if they're living alone on a social security check. He also provides a comparison of the cost of living for a couple in Chicago versus that in Latin America, suggesting that the latter is much more affordable, even when considering basic expenses.
Johnny then discusses the cost of first-world products in Latin America, highlighting the role of large corporations like Walmart and the impact of free trade agreements. He explains that expats often end up buying first-world goods out of habit or impulse, leading to situations like the anecdote about an expat buying excessive amounts of cottage cheese. Johnny also addresses the issue of expiration dates on food products, noting that while they are now common, they may not always be accurate or strictly enforced, especially in regions with limited food safety inspections.
In another segment, Johnny explores the issue of food product expiration dates and quality control in Latin America. He explains that while manufacturers may not strictly regulate products within the region, international shipping and distribution standards become much stricter once products cross borders. This leads to a situation where many first-world products, especially those past their expiration date, end up in Latin American markets. Johnny shares personal anecdotes about his experiences with expired products in local stores and highlights the prevalence of these items in small variety stores and big-box stores like Walmart and Costco. He concludes by noting that while Latin America has its own versions of many first-world products, some high-tech items are still imported from China.
Johnny then discusses the differences in consumer protection and cost of living between the first world and Latin America. He highlights that in the first world, products past their expiration date are not sold due to legal risks, while in Latin America, such regulations are less strict. He emphasizes the importance of 'buyer beware' and the lack of a 'big brother' or 'nanny state' in Latin America. Johnny also talks about the high cost of electricity in Latin America, which can be up to four times higher than in the United States, and suggests that expats can reduce their electricity bills by living in regions like the Altiplano, where heating and air conditioning are unnecessary. He also mentions the limited number of suitable Altiplano locations and the challenges of finding such places, as well as the climate effects of the Altiplano region.
In the final segment, Johnny discusses the cost of living in Latin America compared to the United States, using data from a report by the United States Economic Policy Institute. He highlights the significant cost differences, especially in cities like New York City versus places like Marshall County, Mississippi. He also touches on the financial situation of Americans, noting that 2% are extremely well-off, 10% are well-off enough for retirement, 10% are concerned about retirement, and 60% live paycheck to paycheck. Johnny shares a story about an expat senior living comfortably on a social security check in Latin America, illustrating how the cost of living is much lower there.
Topics
Cost of living in Latin America, Comparison of cost of living between Latin America and the first world, Expats and gringos living off the tourist trail, Social security checks and expat lifestyle, Cost of first-world products in Latin America, Impact of free trade agreements on product pricing, Expats' habits and impulse buying, Expiration dates and food safety in Latin America, Food product expiration dates, Quality control in Latin America, International shipping standards, First-world product distribution in Latin America
Chapters
00:00:00 Opening 00:00:32 Cost of Living in Latin America 00:01:24 Local Products Are Cheap 00:01:31 Living a First-World Lifestyle on a Quarter 00:02:08 Living on a Social Security Check 00:03:14 Cost of Living in Chicago 00:04:19 Word-of-Mouth Poll on Cost of Living 00:05:30 Cost of First-World Products in Latin America 00:11:04 Accuracy and Enforcement of Expiration Dates 00:11:10 The Problem with Expired Products in Latin America 00:11:42 The Case of Pharmaceuticals and Generics 00:12:23 Latin America as a Dumping Ground for Expired Products 00:17:03 Expiration Dates and Consumer Protection 00:17:44 Electricity Costs and Living in the Altiplano 00:20:58 The Altiplano Region and Its Climate Effects 00:23:05 Introduction to Cost of Living Comparison 00:23:30 Data from the United States Economic Policy Institute 00:25:52 Comparison of Financial Status in the US and Latin America
Transcript
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 up to play and now as I wonder Hello there all you expat 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 I'd like to start today by talking a little bit more about the cost of living down here in Latin America Now if you've been listening to me for a while You know that I'll often throw cost of living numbers out like for example when you're living on the gringo tourist trail like in Panama
[00:46] Costa Rica Cancun Rio Etc and any place where cruise ships stop as far as the cost of living for gringos and expats For most things except for maybe food You'll be paying just as much as the average cost of things up in the first world But what are the average costs for things up in the first world? The thing is certain costs and expenditures up there are wide-ranging too, right? So it's legitimate to ask how can a guy like me generalize and say for example that the cost of food is a fifth Of what it is up in the states Well, I'll get to some hard facts on that in a second And the other thing you hear me talk about a lot in regards to the cost of living down here in Latin America Is that when you live off the tourist trail like me almost everything produced locally is amazingly cheap That's why I keep saying that you could easily live a first world lifestyle down here on a quarter or less
[01:37] So what you're spending right now up in the states But the question is just what are you buying on a day-to-day or week-to-week basis? And just how much are you paying for basic living expenses? Well, just hold on a minute We'll get to that and also you've heard me say a lot that if you're a single person living on a social security check of about 1500 a month which is the average payout in fact I think it's a little more than that anyway if you're living solely on a social security check I always say that when you're down here in Latin America off the tourist trail You can continue to live your completely first world middle-class life on that measly government check in fact I know a few gringo expats living alone getting a social security check down here who are living a Noticable not sure too better then first world middle-class people who are still in the workforce and on that treadmill up in the states and
[02:29] First world people always wonder how can that be? Well, that's because if you're down here alone getting a social security check You've only got one person to support you And if you're a couple with two social security checks coming in well, then you've really got it made down here You're surely living much better than you did when you lived up in the first world still work in that full-time job Now my friends and family up in Chicago have told me just for a couple two people to live a basic middle-class Lifestyle that is no frills. No going out no vacations No partying drinking gift-giving or even splurging on pizzas or Girl Scout cookies Not to mention no routine purchases of expensive gadgets like the latest iPhone big-screen TVs and high-speed internet either now Even that mundane lifestyle would cost the average couple about three to four grand a month and that according to some of the people
[03:21] I've talked to is the way it is up in Chicago You get the picture just kind of surviving and living a pretty bland and mediocre life and for a guy like me That's pretty shocking since I'm really living the good life and I spend maybe a thousand to fifteen hundred a month Though I don't drink or party unless someone else is putting the bill in fact I don't have any booze in my house at all And if you open up my refrigerator, I do have two cans of beer that have been sitting there for over a year So as you might imagine I don't have much company and that's what happens when you travel a lot So anyway, my friends and family mentioned the numbers three to four thousand bucks a month for two people to live an absolutely no frills Middle-class life in Chicago. Oh, yeah, and I forgot to tell you that three or four grand a month does not include car payments
[04:07] Credit card payments or monthly payment plans either But it does include your house or rent payment and quick pick lotto tickets Just kidding about the lotto tickets that is anyway that three to four K a month number It's just kind of a word-of-mouth poll amongst my friends and family And when you think about it, it sounds like a real sad and tragic life to look forward to doesn't it? I mean, none of us wants to live like that, right? So what's it all mean? It means if you live up in the States, you're gonna need a lot more than two social security checks to live a nice life As a couple you're gonna need that in some kind of a pension or other income and it still just might be a pretty sad life To look forward to now if you pay attention to the alternative media You may have heard analysts say that the average family of four in the US makes about fifty thousand dollars a year
[04:55] Which is about forty two hundred bucks a month Oh, and by the way before I get on with that Let me remind you if you live down here in Latin America off the tourist trail like I do Anything that's imported from the first world is gonna be more expensive than what you pay for it Since it had to get shipped here from the first world and then of course they've got their taxes and duties added However, the strange thing is is that if you shop at any of the big box stores down here like Walmart or Costco Or even the big franchise chains like Sears or office depot The prices will be the same as they are in the US and sometimes a little less Don't ask me how they do that, but it's probably due to two factors big volume purchases and sweetheart import export deals That they've made with the government because you know a company like Walmart. There was a hell of a lot of weight around
[05:43] I mean after all it is the largest single employer in all of Latin America And you know, it's still hard for people to believe that still shocks me when I hear it Especially since I didn't see a single Walmart in Latin America till about six or seven years ago So anyway as a general rule, you're gonna pay more than first world prices for first world imports Unless you're buying at a big box store However, if you buy goods down here that are imported from another Latin American country They're always gonna be much cheaper than in the first world since most Latin countries are now in Mercosaur and in other Latin free trade organizations Ensure it's a form of protectionism But it generally keeps Latin products cheap and first world products more expensive and you know long-term Expats really don't care much about that since eventually we learned to wean ourselves off that expensive first world stuff
[06:34] Eventually you figure out that there's plenty of locally made alternatives Now once you've been down here for quite a while turns out there are very few first world things you really need to buy In fact, I remember what it was like 10 years or so ago when there were no first world Franchises or box stores and when you did happen to run into a first world product somewhere Sometimes you just snap it up because you figured the next gringo that walked by would that's why a lot of long-term Expats have closets full of dusty first world junk. They bought on impulse just like that. In fact some years ago I remember one gringo friend calling me and saying hey Johnny you like cottage cheese I mean a real American cottage cheese and I said not that much. I'm not really into it But what's up? Anyway, he happened to be in a big grocery store chain in Cartagena, Colombia
[07:22] And he stumbled on a worker stocking the shelves with real American imported cottage cheese And my friend bought every one of them There were like 30 or 40 two pound plastic containers and get this this expat guy loved cottage cheese So much that he actually bought an extra small refrigerator because his regular refree That's what they call him down here Refrees because it takes some effort to say the whole word Refrejadora anyways regular referee could only hold ten of them So he bought another little one just for the excess now his latina wife thought he was a little nuts for going overboard like that But they're used to expats and gringos pulling eyeball stunts like that Yep, I have to admit every one of us that comes down here is a bit eccentric than his or her way
[08:08] Anyway, the next time I visited his house. What do you think he did? He brought out the Borden cottage cheese, you know with good old Elsie the cow on the label What else and after that practically every time I came over cottage cheese was well represented on the menu In fact too well represented and one day when I grabbed the plastic carton and started reading the label I noticed that the product was about three or four months past its expiration date Now I know a lot of you guys up in the first will pay close attention to those expiration dates But when you're down here one of the first things you're gonna notice is that they often sell things in grocery stores that are Well past their date and you know when I first got down here I used to freak out about that But I'm a lot more realistic now and you will be too in fact it might amuse you to know that putting
[08:54] Expiration dates on products in the grocery store is pretty much a recent concept down here in Latin America Oh, yes, pretty much everything now does have an expiration date, but 10 years ago almost nothing did So are you freaking out yet? Well think about this when I was a kid back in the 60s and 70s I think the only thing that did have an expiration date on it was milk In fact, I don't remember anything else having it till the 70s and 80s So guess how many of the hundreds of kids I went to school with back then got sick or died because of that None yet these days so many people are absolutely Petrified when something in their food hamper or refrigerator goes one day over the expiration. Come on Are we pampered or what now if you have half a brain?
[09:39] You'll know there's a lot of products that can go a long time past their expiration date and some that can't now to prove A point and you should know this under the right conditions honey virtually never spoils. Neither does coconut oil However, when you buy that stuff in any store, they're stamped with an expiration date. So what's that all about? I mean, come on. They found perfectly good honey in King Tut's tomb. Remember anyway as for the cottage cheese Well, my ex-pet buddy insisted he'd keep eating that cottage cheese Which was his absolute favorite until either his taste buds or his eyes told him that the stuff had truly gone bad I mean like he said after all what's cottage cheese anyway, but milk that's gone way past its expiration date
[10:25] And one last thing about expiration dates now You know if you've been listening to this program for any length of time all Latin governments and cities do have sanitary food and inspection Departments, but they almost never inspect anything unless there's a massive food poisoning episode and people end up in hospital or dead You know those government types that work in departments like that They sit on their dead asses like slugs and watch TV or pick lint out of their navels while reading yesterday's newspaper That's if they can read the rest look at the pictures So anyway that said you really have to wonder if those expiration dates that are so prominent on labels these days even down here Are they really correct? Can you count down what they indicate? Do they mean anything or are they just a show? I mean if no one cares and no one does the inspections
[11:14] Manufacturers can put anything they want on there, right? Well, not really because many of these food products are distributed internationally That is to other adjacent Latin countries and in order to get the permission and the licensing To sell at other grocery stores in other countries even other Latin countries with the same loose standards Even down here products shipped internationally are tested and monitored once they get shipped over a border The standards suddenly become much more strict It's just like the case of pharmaceuticals and generics and in that case I never recommend that you buy a generic drug That's only produced and used within one particular Latin country because then Inspections and testing could be pretty shoddy However, if the product is shipped internationally or even to adjacent Latin countries
[12:01] Then the quality control monitoring becomes very strict. You see what I mean? So does that mean when you're in a grocery store down here? You should just ignore what the expiration date on the label says Well, my advice is just use it as a very general guideline Oh and one more thing and I know I'm jumping all over the place on this show So bear with me like that's something new for me, right? Anyway, it does appear that a lot of first world manufacturers are using Latin America as a Dumping ground for a lot of their own products that have reached their expiration date or beyond I mean really you gotta wonder where do cases and pallet loads truckloads even train car loads of product go When they're past their date, you don't think that Nestle's or Procter & Gamble or Kellogg's berries or torches that stuff now
[12:50] Do you know a lot of that stuff ends up down here? And how do I know that? Well get this every Latin American city has Dozens and dozens of little food and product outlets kind of like a Ben Franklin or Woolworth's Variety store we all had back in the States in our town if you remember those chains went out of business in the 80s and the 90s anyway down here every medium and large-sized city has dozens and dozens of little Independent variety stores like that and they'll always have a little section with canned and boxed food items from the first world Common products you were used to seeing back home like planters peanuts skippy peanut butter Oreos chips Ahoy Nestle's quick Hershey bars M&Ms things like that and when those first world products started showing up some six or seven years ago
[13:37] I too was suddenly taken in by the sudden availability of all that stuff and occasionally I'd buy some M&Ms or grape nuts flakes Jiffy peanut butter or whatever and although the packaging looked perfectly fine I began to notice that some of the contents were pretty stale and old especially the Hershey's kisses Sometimes part of the chocolate had dried up and turned into a powder somehow They'd gotten desiccated and I know from chemistry in nature that takes a hell of a long time That was when I started paying a lot more attention to the expiration dates and guess what? I found out that there were some products that were expired by many months and others Didn't even have a date stamped on them at all and some of them had a convenient little sticker over the top of the place Where the expiration date should have been listing all the ingredients in Spanish and if you ask me, that's way too convenient
[14:29] Oh, and by the way, every Latin country does have a law that says any Imported first world food product must have an additional label pasted on like that listing all the ingredients in Spanish So if you're up in the States thinking of exporting anything to Latin America, keep that in mind Anyway, like I said before a few years back Gringos and expats used to really get excited when they saw the sudden appearance of some sorely missed first world food product When it suddenly landed on the shelves of a local Latin supermarket But those days are long gone not only can you get most of that stuff these days at the big box stores like Walmart and Costco But better yet to avoid those despicable places and avoid Contributing to Sam Walton's trust fund you can skip those stores all together and buy the latin version of your favorite products
[15:17] Now you see it took some time But Latins have pretty much their own version of everything first world down here now Except some of the high-tech smartphones and appliances and such all that's made in China these days So down here we get that stuff just as cheap as you get it up in the States Oh, and by the way regarding my expat friend and his cottage cheese Well now you can get actual first world cottage cheese at places like Walmart and Costco Any day of the week and as for my friend He never wants to see another dab of cottage cheese as long as he lives and neither does his dog Who by the way ended up eating the last four or five containers of the stuff once the fluffy white color started turning a bit green Yuck. Oh, but there's more turns out last year right after Christmas the day before New Year's
[16:05] I was in a Costco myself looking at that great after Christmas closeout sale They were having on Christmas decorations when I saw six or seven pallets of edible merchandise Laid out in the middle of the main aisle and there was a little sign in Spanish and English on each one that said close out Sale fifty percent off. Well being the kind of guy that's instantly drawn to fifty percent off sales I was all over that stuff in like seven seconds Turns out I bought about ten little six packs of those single serving Dan and natural yogurts And of course, I looked at the expiration date and guess what everything on those pallets had just expired in only the last couple of So I guess that's what you can do if you run a big box store like that in a third world country
[16:53] And you've got some product that just slipped past its expiration date You could stick it out in the main aisle and have a 50% sale nothing wrong with that right not to mention again It was yogurt which like cottage cheese is just milk. That's way past its expiration date, right? Anyway, I know in the first world you could never sell anything past its expiration date Why because if someone bought it and got sick you could sue the pants off the owners of the store while down here Of course people just don't sue for things like that. In fact, almost no one ever gets sued So what's it all about Alfie? Well, it's all about buyer beware when you come down here You've got little or no big brother and no nanny state here there and everywhere Protecting you from every little thing. It's buyer beware and guess what us expats
[17:42] We happen to like it like that So bottom line you could stay up in Cleveland with the surgeon general Hillary John McCain and Obama looking after you or you can Come on down to Latin America and look after yourself Scary, huh? so anyway, let's get back to my cost of living rant if you remember and that was a long time ago, I mentioned there are two things that are always first world expensive down here and sometimes even more expensive one of them being imported first world products and the second thing is the Unbelievably high cost of electricity In fact the price of electricity down here in some places could be up to four times as much as you're spending per kilowatt hour up in the States, so go ahead check your electric bill right now and
[18:28] Multiply it by about three or four and you'll see what you'd pay if you came down here with all your electrical toys and appliances And didn't change your habits a bit And that's why so many of us smart expats live in the Altiplano region that way we have no heating or air conditioning bills at all and for example if you live in the Midwestern United States You'll see that you're heating and air conditioning bill accounts for well over half of your kilowatt usage So if you can eliminate that by for example living in the Altiplano region or living in a beach house with no AC at all Your monthly electric bill even with a family of four probably will never go over 50 or 60 bucks in fact my electric bill at my Main residence at 3500 square foot house runs me about 40 to 50 bucks a month when I'm actually living there
[19:17] And the only reason why it's that expensive since I'm really not there that much It's because when I'm not home I always leave a couple outside lights on and inside lamps on timers to make it look like I'm at home Now in the last full month that I stayed there. I used about 250 kilowatt hours and the bill was about 50 bucks, but I know up in Chicago It would be half of that even less maybe 20 to 23 bucks now if you look at your electric bill I'm sure you're using over 500 kilowatt hours a month And I bet most of you are pushing a thousand kilowatt hours a month in other words You got about a hundred dollar a month electric bill Which would be two or three hundred bucks a month down here that is if you were living on the coast or on a beach Or in the lowlands because your air conditioning would be running all the time
[20:02] And if you lived in Argentina or Chile or Uruguay or in southern Brazil It'd be like living up north you'd be using air conditioning and heating because you got the four seasons Then on average for your electric bill you'd be paying two or three hundred bucks a month, too anyway Don't think this is a plug for the altiplano region because I don't really want to be responsible for a stampede of gringos coming Down here and ruining it for me But you know there's only about 50 really choice altiplano small towns and cities to choose from sure you could live on the side Of a mountain at the perfect elevation practically anywhere in Latin America and get the perfect altiplano climate effect But you're gonna be far far away from a town of 5,000 or more with all the necessary Shopping and professional services and things you might need to live a nice first world lifestyle
[20:49] anyway, it's not so smart to live all isolated and alone anywhere in the world and Speaking of the altiplano region which people ask me about all the time in fact I'd say the altiplano region only makes up about five percent or less of all residential areas in Latin America Well, I'm not saying you don't have a hell of a lot of room in the altiplano you do there's wide open spaces That's for sure, but hell it took me five or six years to even find the place in fact I didn't even know it existed. I didn't know what the word altiplano meant until on one little journey I finally landed in a place that never seemed to get miserably hot in fact at night many times I found I needed a sweater or a jacket Now 95% of all people who go on vacation to a tropical climate would never think of bringing that stuff now, would they?
[21:34] Why pack your bag with something you'll never use, right? Wrong and though in the day, it's almost always in the upper or mid 70s Well at night it does occasionally drop into the 50s Anyway, I didn't know what the altiplano was till I was down here a few years at the beach resorts and at sea level and you know That's the case with so many gringos and usually their first taste of an altiplano region is San Jose Costa Rica because technically that is altiplano since it and the surrounding area is about 4,000 feet above sea level and that's about the lower limit where the altiplano effect on climate first kicks in But you see most gringos who end up landing in San Jose Costa Rica by hooker by crook are Generally tourists who only end up there for a couple of days at most and don't even realize what kind of beautiful climate
[22:25] They've landed it because San Jose is generally just a quick stopover when you make a trip to Costa Rica It's a transit zone for everyone heading to the beach That is except for casino bound tourists or for lovelorn gringos who are coming in to San Jose for the sex tourism bit or for dating and mating hookup services that arranged dates and meetings and marriages for clueless naive Stateside lovelorn gringos and by the way for any of you lovelorn gringos up there Don't send me any emails asking me about that stuff because I don't recommend it And if you want the full scoop of why not you'll have to go back to a previous show a year or two ago Where I'd give you the full rundown Anyway on this show I always talk about the cost of living down here and how it compares to the cost of living up in
[23:13] The States, but really it depends where you live in the States, right? I mean if you live in Boise, Idaho and you make fifty thousand a year for a family of four you might be doing All right But try that in New York City and you'll be lucky to afford anything in the deepest darkest part of the ghetto Anyway, just to put all this in perspective Listen to this according to figures just published by the United States economic policy Institute It costs exactly twice as much to live in New York City for a family of four as it does in Marshall County Mississippi and the report goes on to say the average cost for a modest living family of four in the United States is $63,000 a year and one of the places that can be found is Newaygo County, Michigan
[24:00] Now that's an average over the entire United States and they're in Newaygo County, Michigan for $63,000 that covers food Transportation housing childcare healthcare and taxes, but get this for that 63 K Even there it won't cover any extras including eating out credit card bills or loans Vacations or putting one extra cent aside for savings now in New York that very same lifestyle costs 93,500 bucks for a family of four and if you live in Mississippi that lifestyle for four costs 48,000 bucks a year now the article also mentions how well-off Americans really are and they mention that
[24:47] 2% of Americans are so well off. They never have to worry about money These are people that go to sleep at night and never even think about it. Wait a minute. Wait a minute That doesn't sound right. I bet they're thinking about it In fact, I bet they're thinking about making more of it Anyway, it goes on to say here about 10% of Americans are well off enough that they can continue their present upper-middle-class Style of living on through retirement. In other words 10% of Americans don't have any retirement worries at all Then the report goes on to say another 10% of Americans are living quite well now But believe they'll be taking a big hit in their style of living once they retire In other words the people in this group believe if they continue living like they are now
[25:34] they'll run out of money during their retirement years and then the report concludes by saying the other 60% of Americans are living from paycheck to paycheck or Government handout to government handout and it's that 60% that have zero savings So how might that compared to living in Latin America? Well, look at it this way your average social security check, which is about 1,500 a month or about 18,000 bucks a year. Well, I happen to know quite a few expat seniors living down here We'll get their check direct deposited down here in the Altiplano and they live a nice comfortable First world middle class style life In fact one of these guys from New York who's in his 70s is married to a young Latina And he has a six-year-old daughter with her and then there's two kids from her first marriage living in the household, too
[26:25] Well, he supports that family of four actually five including him And when you walk in his house and look around it would appear to anyone in the first world that he lives the life of a guy that's making maybe $60,000 a year up in the States and probably according to that report. I just mentioned It would be like he and his family are living on 90 grand in New York And as a matter of fact, he owns a little beach house, too How's that for a 70 ish guy supporting a family of five on only a social security check now when I ask him how he? Compares his lifestyle to his brother and his sister who still live up in New York. He tells me Johnny You know what? I'm the luckiest guy in the world He said I just can't compare my lifestyle on my social security check with my sister and brother up north
[27:14] who barely live a first-world life on a private pension and a social security check and Just one more little story concerning that that you're really gonna like. Oops I'm up against the clock and I have to quit in a few seconds. I promise I'll start with the story next time do tune in You won't regret it You've been listening to the expat files living in Latin America coming to you twice a week from somewhere south of the border Email me the expat files at gmail.com and don't forget to check out expat wisdom.com to sign up for your free Reports on Latin America. See you next time nos vemos