#554 – Expat Life in Latin America and Financial Preparedness

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 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 Hey, how about this? Are you folks thinking about moving to Bolivia or perhaps Ecuador and by the way? There'll be a lot of construction jobs for the next year or so because you see that giant 7.8 earthquake let a little air out of that real estate bubble

[00:45] However, big earthquakes like that always tend to drive prices up because there's a shortage of laborers not to mention people with dough Want things fixed right now and they'll pay more every time So really if I was you I'd cross Ecuador off my list except for a vacation that said this news comes today from La Paz Bolivia's Biggest newspaper it says here that President Evo Morales agrees Hardly with President Rafael Correa of Ecuador that the best candidate for the presidency of the United States is guess who? Time's up. How about Bernie Sanders? You see according to Evo Morales and Rafael Correa who are big Bernie Sanders fans They say his posturings are decidedly socialist and in fact anti capitalista

[01:34] That's anti capitalist and they both agree with such great credentials. He's by far the best candidate for the job Hey with a fan base like that all Bernie needs now is an endorsement from the Castro brothers Now, of course in light of that monster 7.8 earthquake in Ecuador last week where presently the death count is nearing 500 isn't it funny that socialist president Rafael Correa will gladly accept any and all help and donations from whatever Capitalist business capitalist country or capitalist organization that cares to donate. Yep in good times He pisses on capitalism and democracy and in bad times. He has his hand out begging. Hmm. You get that? You know, I wonder how Bernie feels about getting those big-time international endorsements must be pleased as punch, huh?

[02:21] So yes do vote but vote with your feet get the hell out of dodge as soon as you can And if you think things can't get any worse, you ain't seeing nothing yet. Oh and here's some cool news according to the pan-american international school of business in a recent poll of 2300 Latin business students who had their own credit cards They were asked what the monthly fee was that their credit card company was charging them 60% of them said they didn't know exactly 35% who did pick a number were wrong In other words, they guessed and only five percent of them knew what their monthly interest rate was on their credit card Within plus or minus five percentage points and get this the vast majority of them said they didn't care What interest rate their credit card company charged as long as they qualified for one or two or ten?

[03:12] The question is do you know what your credit card or credit cards monthly interest rates are? Does anybody really care? Hey now here's something that's bound to please all you guys and gals living in California And it's just now filtering through the daily general conversations of Latin Americans everywhere You see it turns out there is a brand new law called a B 1461 in California and get this according to this new law and a report by the Washington Times all California residents getting new licenses or renewals are automatically registered at the DMV to vote So as it turns out new California residents will no longer be required to fill out a voter registration or voter ID form the goal is to ease barriers to voting said a spokesperson for governor Jerry Brown, but election

[03:58] Integrity advocates warn the measure will inadvertently add millions of illegals to the voting rolls Automatically given that California now allows Undocumented that is illegal aliens to obtain legal driver's licenses by going down to the DMV meanwhile California bureaucratic lunk heads and politicians are praising the law for example Alex Padilla California's Secretary of State says quote citizens should not be required to opt in for their fundamental right to vote We don't have to opt in to other rights such as free speech or due process the right to vote should be no different and state Assemblywoman Lorraine Gonzalez from San Diego says

[04:45] This bill will lead to millions more registered voters in California, which means better communication with the people we serve So there you have it now if anyone thinks this is BS or hyperbole just look up California law a B 1461 so get this that law was voted on in October and November 2015 that's what it went into effect and it took about four to five months for the news to trickle down here to Latin America And now it seems that every baptism can say annuals party and birthday party if you were to sit down to eavesdrop Or you were a fly on the wall, and you knew you're Spanish When the conversation got around to the folks up in Cleveland or Detroit sending back those remisses You just might notice along with the latest news from the barrios up in the land of the American dream

[05:31] You'll hear some chatter about that Prince of a governor in California Jerry Brown and that wide-open driver's license law that just went through by the way He's endorsing a wide-open border, too Now I've been at a few get-togethers where people have been talking about this and they're ecstatic and it seems everyone wants to go to California Now instead of Texas New York or Cleveland, however I asked around and none of the Latins I talked to knew you'd automatically be signed up as a voter Because you see for lands down here with the American dream on their mind They just want to get there get a job get some decent papers And of course step one get a legal driver's license and the only place to get that right now is California And the final step is to eventually get their share of that fantastic US social safety net

[06:16] They've all heard about and you know if you're stuck in a conversation like that up in a party in the States Don't let them tell you otherwise I'm getting my info down here from the horse's mouth from the common Latin people and anyone who disagrees with what I just said Needs to learn some Spanish and get some boots on the ground down here off the gringo tourist trail You really need to have a conversation with some of the average Latin people down here But back to the point Which political party do you think will benefit the most when millions and millions of illegal Latins suddenly get the vote? Yeah, I know most will vote libertarian and the others will vote for Trump, right? Hmm. Well, it really doesn't matter You just let them vote any way they want while you get your plan B together and vote with your feet You know what? I'm gonna say next right come on down to my July 2016 expat insider seminar now, I'm not gonna beat you over the head with this anymore

[07:06] I'm just gonna say go to www.thenewexpat.com and click on the seminar link on the top of the page Check it out and sign up and don't forget as of this broadcast You got about a week and a half to sign up and get that $500 per person early bird discount Remember that offer expires on May 1st, and then we're back to the regular price So the question is do you have a plan B? Do you want a two to five year head start on becoming an expat? You know one of the big points of the seminar is to help you avoid the mistakes I made in the first five years I was down here in Latin America and remember I came down with zero Spanish, too And the other big point of the seminar is to hook you up with a network of people that is expats and trusted Professionals so that when you get down here, you won't be on your own. You won't be an orphan

[07:51] You'll have people to call and connect with immediately from the get-go. Okay enough said about that Which brings us to an email it starts dear Johnny Enjoy your podcast hoping to retire to the alti Plano somewhere in the spring of 2018 my social security kicks in then but somehow I don't expect it to be available then and I'm trying to concentrate on saving hard assets furiously now So there isn't much talk up here in the states of the upcoming Financial collapse and you've spoken of it too. Some say that many will lose their job Stock markets will fall considerably and the Fed will just print up more money and life will go on and on as usual others However, say that can't be and are predicting a big collapse of the petrodollar and a complete failure of the global fiat currency

[08:40] They're saying banks will be closed for months millions out of work civil unrest, etc Etc along with social security pensions evaporating food riots chaos all the worst parts of that Bible stuff now I've converted many of my assets to gold and silver as so many people recommend and I'm wondering what the policy is about Bringing gold and silver into one of the Latin countries, for example, Guatemala Honduras Belize, whatever What about getting it into a Latin country? Surreptitiously and Johnny did you know that at many Mexican Texas border crossings? They now have US checkpoints for inspection on the way out. They actually shake you down to find out what you're taking through They don't want us leaving and they sure don't want us to take any of our I mean their assets with us

[09:27] I actually plan on driving down having followed all of yours and others notes about making the trip by car But I'm wondering if I do make it down unscathed with whom and where would I be able to exchange my gold and silver? If needed jewelry stores, maybe I don't think Central and South American countries have pawn shops Do they I have some silver and mercury dimes they're 90% silver, you know called junk silver By the way for easy barter still how and with whom would one change gold with also if things get really bad up here Couldn't things be much worse down there? Have you thought of whether there might be a call to have all foreigners deported regardless of legal status? I lived in a Dominican Republic in the 90s and I know the government would just make it up as they went along and as needed

[10:14] The good news is that once the dust settles most Latin countries It looks like appear to have a self-sustaining food production So when the world markets crash there may not be any gasoline or razor blades But food production doesn't have to travel 3,000 miles in a semi to go to market not in Latin America Okay, let's take these points one at a time First of all when that big crash comes and it will because just too many tipping points that are on the brink right now By the way, don't ask me to pick an exact time my crystal balls got a crack in it now I can speculate and I've heard people peg it within the next six months Who knows I do know that the QE card has been played and it only served to prop up the real estate the derivative and the stock Market bubbles, so QE was the final card the Joker in the feds deck

[11:01] So there is really no more kick in the can down the road guess you all know that by now Hope you've got your plan B in motion Anyway for all you guys and gals out there worried about losing your social security check sometime in the future Well, I'd say that's the last thing that's gonna happen since the US government continues to print money at well They'll just keep printing money for those social security checks and other entitlements The question is what's the dollar gonna be worth when the dust settles and what's it gonna buy? Now Richard in his email mentions that there are Tex-Mex border inspection stations upon exiting the US I know that's true because I know of cases where cars and mobile homes have been searched and that's on the way to Mexico And parts out and of course while they're rifling through your stuff

[11:46] They ask a lot of questions about what you're bringing down South. So what are they looking for? Certainly not drugs I mean, that's against the flow of nature whoever heard of bringing drugs to Mexico from the states All they could be looking for is assets that you're taking out of the country like gold silver cash, etc Now as far as bringing gold and silver to a Latin American country like for example, Guatemala or Honduras police Whatever you have to believe philosophically that they'd want you to bring in as much as you possibly can because then you're gonna spend it And use it in their country, right create jobs and prove the citizenry and all that in fact It's always when you leave a country whether it's a first world country or Latin country that you fill out a customs form And of course all us frequent travelers lie on those forms. Don't deny it. You know the drill They're asking questions like what do you want to declare? Are you bringing more than 10 grand out of the country, etc?

[12:37] Now, of course on the way in to any country Latin countries, too You'll have to fill out a form that asks if you bring any goods into the country because you know If you're bringing a TV or a microwave stuff, you bought in another country They're gonna want to charge their import duty or tax when you bring it in that said Here's my advice If you're just flying in with a few suitcases or maybe a couple extra boxes from home You'll find that could be very easy however You really could end up beating your head against a wall for months if you try to ship a container down You know a lot of people think they have to pack up all their household items put them in a container and ship them down To wherever they're gonna be in Latin America, and that'll be cool Then you have a whole house full of all their stuff stuff They're used to however these days that only seems to work out if you have a pension auto residency in a Latin country

[13:25] Then your container comes in duty-free The thing is years ago. It was pretty easy even for people who didn't have pension auto residency, but these days import export and aduana rules are changing all the time and at a drop of a hat and a lot of it depends on the Mood and the attitude of your lazy fat ass yellow tooth government customs agent The guy that checks out your container and assesses the taxes on it Which is why I told that story on a previous expat file show of how my lawyer said if you bring down a couple of good-looking Ladies when they open up your container on the day of the inspection You'll almost always pass through in record time and get a much cheaper tax rate provided that your customs agent isn't female Those jobs by the way are almost always held by males, so that's how customs works down here if you can call that work

[14:15] Hey, I didn't make up the rules. It's a macho society, and that's the way it is now I mentioned before about the only way it's worth it to bring a container down is if you're a pension auto resident sometimes called a rentista Residency they have those in quite a few Latin American countries and they allow you to bring a container of household goods in Duty-free and each country is a little bit different. That's something you'll check out ahead of time with your Latin lawyer However, I'd say in the vast majority of cases people who bring containers full of furniture and are not pension autos in that case It might go very smoothly or there could be no end of problems, too In fact, I've heard of cases recently where containers have been stuck in the Adwana for months and months at a time Just due to some stupid paperwork error that might actually be the fault of the idiot

[15:03] Adwana guys themselves because remember most of these guys have barely enough brain power and motivation to pee in a real bathroom Which is why I always recommend just fly in with a couple bags and maybe a couple boxes and generally airport customs will leave You alone unless you have something obvious. They want a tax like for example that big-screen TV You're hauling around on your back sealed tight in the original box big mistake Then they just might pull you aside and make you pay tax on it That's why I always say if you're bringing anything new down repackage it in an old box and make it look Well, just a little bit used in fact one gringo I know who goes back and forth to the states quite a bit just recently he brought through a very expensive Bose stereo system He repackaged it kind of crudely and get this he stuck a big piece of masking tape on the main unit

[15:51] Enrode in big thick magic marker done. Yeah that which means Damaged, you know scratch and dense sale and all that and even went so far as to Photoshop some receipts that showed that he only paid Something like $89 for the thing. Yeah, he took a Best Buy receipt for a toaster or a blender He bought and he just photoshopped it In fact, he said that Best Buy receipt has gotten more Photoshop action than any other receipt in history But this time he said he never had to show the receipt because when they saw that damage sticker on the unit They waved him on through but where were we? Oh, yeah We were talking about bringing gold and silver into Latin countries specifically in Central America The fact is I know quite a few people who brought gold into Mexico and points out But they've always brought in sort of small amounts usually under 10 ounces

[16:38] By the way 10 ounces today would be valued at around twelve thousand bucks You could live a nice life down here for a year on that kind of money and so far No one I know has had any problems bringing that amount in however I wouldn't be so optimistic since these Latin customs and it wanna guys are kind of unpredictable see the thing is when you're standing in front of them getting interrogated or you get led into a room at the airport or whatever or at a land border You're at the mercy of these guys, especially if you don't speak Spanish and unfortunately even though the lawyers recommend it You can't always have a pretty girl at your side when a government slugs trying to shake you down That said I know for a fact It's pretty easy to get a roll of one ounce gold coins in and out of Latin American countries

[17:23] I've done it many times but being a gringo. I always have a plan B in mind if things go south I always carry a news mismatic coin book with me. They're a blue or red book That's what they're called by the way They come out yearly and tell the value of various coins throughout the world and always make sure I have a hard copy of a coin Show blurb that's taking place in either that country or a nearby one In fact, there are hundreds of coin shows every weekend usually at airport hotels like holiday ins and such Just check it out on the internet for example Once I took a mix of 21 ounce gold maple leaves and cool grands across a couple of Latin borders that time by air I had them all stacked in a little plastic coin collectors, too I'd walk up to the metal detector take it out of my pocket and stick it in the little tray

[18:09] Waiting for the fat ass government slug standing there checking that stuff to give me the third degree, you know where it came from What's it worth? Why am I traveling with it? But the questions never came though I was always ready with my coin book and a hard copy of where the coin shows were in that area Never needed them though. So that was my plan B However, these days with the bony malignant finger of Uncle Sam staring everyone down who's leaving the country My suggestion is to just sell your gold and silver up north or bury it somewhere by the way do that in a tube Vertically not horizontally because vertically it becomes a tiny little circular target. That's difficult for a metal detector to find However, as you know, it's a very good idea to have gold and silver down here in Latin America or anywhere for that matter to me

[18:57] It's kind of your last resort survival dough. Now. I suggest you buy your gold and silver when you get down here And by the way, there are a number of very highly respected honest and often recommended gold and silver dealers You can easily find them on the net you buy it from them and they'll ship it anywhere in the world and some of them Even have free shipping and of course, it's fully insured. By the way, always have your gold in hand Don't leave it at any kind of brokerage firm or warehouse By the way This is where your Latin lawyer will really come in handy because you'll probably want to have it shipped to his business office That would be the safest and best way to do it Now remember this all Latin American countries have a fairly active news mismatic society In fact, if you look at the big local newspapers There are always people and businesses in the classifieds and internet sites like OLX comm offering to buy and sell coins

[19:49] And there are coin shops and antique shops down here in Latin America Especially in the big cities that do buy and sell various coins mostly gold and silver But Richard's right when he says they don't have pawn shops Well, they don't have pawn shops as we know them up in the States. Anyway, they generally are just used furniture appliance and household good stores And that's it now every medium in large Latin City has a number of jewelry repair shops and jewelry Fabrication businesses, so they're buying their gold and silver somewhere, right? Now once just once I walked into one of those shops and I pulled out a one ounce gold maple leaf And the guy behind the counter instantly asked me if I wanted to sell it and he said if I had more he'd buy those Too so that does answer the question of who will buy your gold from you

[20:36] So that said I wouldn't worry much about bringing gold down But silver is way too heavy if you want silver buy it over the internet and have it shipped down And believe me if everything else goes to crap and you've got gold and silver You'll be the richest gringo or gringo in Babylon. Oh, and I almost forgot about that business of your lawyer Accepting a shipment of gold or silver for you even better yet You have him order the gold and silver and his name and his credit card, whatever and guess what you just broken the link between you and the malignant bony finger of Uncle Sam as Gomer pile would say shizayyum Because you know, there are reporting requirements for gold and silver Did you know that the US government requires two? Reporting obligations that bullion dealers and coin dealers have to submit to the IRS when customers buy gold or silver

[21:27] Well, here's how it shakes out. The IRS has a form called 1099-b that applies to specific bullion sales So dealers who sell you certain kinds of bullion have to report it and you to the IRS So right now if you buy certain gold coins or bars that weigh over 1 kilo That's thirty two point one five Troy ounces The dealer will fill out that 1099-b on you And if you buy any silver bars or certain silver coins that weigh over 1,000 Troy ounces They'll fill out that 1099 on you. Remember, it's not you filling this out It's the dealer that's gonna fill it out and send it to the IRS So think about it if it's your Latin lawyer who's making the purchase. He's a foreign citizen and that's where it ends again

[22:13] I'm not advocating doing anything illegal I'm just telling you what a lot of expats do but there's more if you buy more than 25 1 ounce Canadian gold maple leafs gold cougarands or gold Mexican onces The dealer will fill out a 1099-b on you But remember 25 1 ounce coins today is worth over 30,000 bucks So that's not small change, which is why people buy slightly less then the dealer won't report them I mean those are the rules correct, but that's not all did you know that when you sell gold or silver back To a US coin dealer in many cases. He'll send that information to the IRS again There are legal loopholes and this is the breakdown for example You can sell any amount of the following coins to a coin dealer or whatever and he won't report it starting with Australian Perth mint coins

[23:03] Austrian coins like the Philharmonic Canadian maple leafs that are silver not gold Chinese pandas and Get this any and all gold and silver coins that are under one ounce denomination In other words if you have a drawer full of or even a dump truck full of Canadian maple leafs that are not one ounce But under one ounce like half ounce quarter ounce Whatever the dealer who buys them does not have to fill out a 1099-b form and this might be the best loophole of all Did you know that United States one ounce gold coins? That would be the Eagles are completely exempt from the binding selling reporting requirements of bullion dealers Don't know how that happened, but it did now. There's the IRS form 8300 that deals with reporting cash transactions over 10,000 bucks on a single transaction or a series of so-called

[23:52] Related transactions within a 24-hour period however if you're smart You can beat them at their own game legally because of their own definition of what is a cash Transaction now get this according to the IRS cash is defined as a cashier check Us and foreign coins and currency money order bank draft or traveler's check having a face amount of 10 grand or less and here's what they say is not cash and therefore not reportable a Check drawn on the payers own account. That's your own personal check Bankwires credit and debit card payments PayPal payments and ACH transfers regardless of the amount so there you have it just buy and sell gold using instruments that are not

[24:40] Designated as cash then the dealer does not have to fill out a 1099-b or that form 8300 that has to do with cash transactions over 10,000 bucks now I have a really nice report that explains all of this in great detail So if you want to copy just send me an email the expat files at gmail.com and I'll ship it off to you Now back to our email Richard says Johnny Have you thought that when things really hit the fan up north all foreigners might just be deported regardless of legal status since Latin American bureaucrats tend to make up the rules as they go along as It pus-brained American politicians don't well. Here's my general response to that You know the foreigners in any Latin American country For example are treated as kind of special first-class visitors. We invest we create businesses and jobs

[25:30] Etc. Etc. Why do you think the US government gets so upset when we take our assets and leave and know this any government including Latin governments For example can change the rules as they go along like the Dominican Republic has done Used to be when you had your permanent residency You could get your passport your nationality papers in four years and they change it to five and now they've moved it to eight But the point is you see once you've waited out the time and are a nationalized citizen with a passport You're a citizen period and your citizenship cannot be revoked So Latin governments can mess around with temporary and permanent residency your visa privileges and the time you can be in and out of the country But once you've got that passport, you're a citizen permanently In fact in most countries the only way you lose your passport is if you voluntarily renounce your citizenship or you're convicted of treason

[26:20] Oh, by the way, here's a cool story a New friend of mine gringo came down to my expat insider seminar bought one of those really nice Handmade leather zipper belts in the little town of panachella at Lake Atit land for get this around 12 bucks By the way If you come down to my seminar and go on one of John Galt's pre or post trips to Lake Atit land You'll be able to pick up a couple of those belts for yourself and don't think you'll find these belts on the internet You won't anyway when this guy got back to the states He slipped 20 one-ounce Canadian maple leaf gold coins into the zipper part all lined up and and no overlapping Then some months later he came back to my seminar as a repeat offender and when he changed planes Which was twice he did the usual took off his shoes

[27:07] But when he took his belt off He said he wound it up in a nice tight coil like a snake So that when he placed it in the plastic bucket and it went through the x-ray machine The viewer would see the belt not flat but on edge He was thinking hoping that only the edges of the coins would be picked up by the x-ray And that's what happened because no one said a thing though He was ready with plan B the coin collector alibi to just in case south of the border 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 if you want me to help you sort out your own Latin American plans schedule a one-on-one Console with me just send an email and let me know at the expat files at gmail.com. No spamos