#720 – The Expat Files: Retiring in Panama, Electricity Costs, and Economic Realities

Automatically transcribed from the original recording; names and wording may contain errors.

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came out to play and now 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 Hey talk about gringos and playing bees. Let's dissect this one that just came in from a listener says Hey Johnny, love your show Although I enjoy it more when you give practical or cultural Latin American advice instead of tinfoil sombrero prepper stuff

[00:46] Anyway, my plan is to retire in Panama in five years. Hey, this is me Johnny again Remember that number five years then he says five years is when my social security and pension alone can comfortably pay for my pensionista lifestyle I know you don't like it for investments talking about Panama now and some areas have become very gringo fired But if I just find a nice cozy retiree life at 60% of the cost of retiring in the US What downside could there be? Thanks signed orange hoof aka Bob Hmm orange hoof wonder how he got that nickname Then I shot him a little email bag because you know what he's talking about five years man as if nothing much is gonna change Whoa, the world's gonna be such a different place and and much worse too, especially up in the first world

[01:36] I mean come on it Can any of you out there in your wildest dreams think the world's gonna be better in five years? Or even relatively similar to what it's like now not to mention when orange hoof Bob talks about pensions and social security What your payout will be able to afford for a person who gets social security today? Well, you're guaranteed a one thing in five years. It'll buy a lot less than it does now Unless of course you're hoping and praying for deflation and that's never gonna come Does anybody really think for the next five years and relations are gonna just plug along at one or two percent annually? That means of course Bob is predicting in five years You'll have the same purchasing power nearly the same with his social security and pension that he has today

[02:21] And that's not a logical assumption at all And the reason why I bring this up is because a lot of people still are thinking about going to Panama Hey, I've been there many times even live there for a while nice place to have laid-back vacation But I'd never want to live there not permanently. Anyway, it's alright If you don't have a lot of dough and you like hot all the time However, if you don't mind paying double or triple us electricity rates, then you could afford to air-condition all your living spaces Now for the locals who have a refrigerator TV and a couple light bulbs burning They've got subsidized electricity if you use under 300 kilowatts a month your rate is highly subsidized You might only pay five or ten bucks a month But I assure you no gringos or expats are in that bracket unless they've gone native and then if you use 300 to

[03:10] 750 kilowatt hours per month you're kicked into a higher bracket and a lot of gringos use more than that the highest bracket starts at 750 kilowatt hours per month In fact, I personally know some gringos paying $300 or more a month for their electric bill and that's all year round Now that tends to blow your mind when you find out that your gardener who lives just maybe a half a mile away is paying Four bucks a month for his electric bill Of course, we all need electrical hookups and when the poop hits the ventilator up in the first world It's gonna hit down here somewhat too and there's gonna be spotty electric all over the place You've heard those stories before when it's gonna happen. I don't know but it will happen. So in the very near future I'm gonna do a couple of shows on how to go off the grid with your electrical water system everything and I'll be talking about how

[03:57] To almost go off the grid, which is much much less expensive than going completely off the grid because if you're Completely off the grid you'll have to build a big reserve into it And that's a lot of extra dough because down here in Latin America You've got that rainy season and sometimes you could have five six or seven days with no Sun at all Meaning you'll have to over build your system more in a couple of days. You'll run out of electricity No Sun So there's no electricity coming from the solar panels to power you up or charge your batteries and therefore the Batteries are gonna discharge quickly. No good, right? But how about this for a plan? Now I don't believe in subsidies governments Mismanaged them terribly besides when you get something for free or almost for free The recipient doesn't put much value on the service so they overuse it

[04:45] That's why here in Latin America Even the poorest of the poor will continue using incandescent light bulbs instead of the energy-saving ones They're just too expensive not to mention when you drive through poor neighborhoods late at night I know you're not supposed to be driving at night But when you do you'll see a lot of lights burning all night Why because electricity for them is virtually free even if you don't agree you can't change it So why not take advantage of this subsidized electricity system in Latin America? I just mentioned in Panama. There's three tiers You know, that's how it is in most Latin countries. The poor are heavily subsidized That's how politicians get elected by throwing freebies at the sweaty masses Hey Who wouldn't vote for the party that proposes that huh? And if you're in the lowest tier your electricity is practically free. I mean four five or ten bucks a month Can you handle that?

[05:31] So if you can't beat them join them Why not do a back door walk around and get that subsidy for yourself? In other words you rig up a solar electric system not a big one But enough to drop you into the lowest bracket you get it So let's say no matter where you are in Latin America, you're using seven or eight hundred kilowatt hours a month You rig up an electric system that'll drop you below 300 kilowatt hours a month and voila You're paying about five to ten bucks a month for electric What's not to like about that and your solar electric system the panels inverters and stuff will cost you less than half Maybe even just a quarter of what you'd have to pay if you went completely off the grid and built in a big reserve Just so you could power yourself through those few little stretches where there's five or six days with no Sun

[06:18] You get it pretty cool, huh? But where were you? Oh, yeah talking about Panama and of course you longtime listeners to this show will have heard me mention many reasons I don't like Panama in fact at my expat insider seminars I almost always seem to have a couple people who've settled in Panama realize too late. They kind of made a mistake I mean really why would they be coming to my seminar after they've already settled in Panama? Hmm that speaks volumes, huh? But you know to each his own and it's always your call So anyway, the gist of what I wrote back was as I said, Bob, you're thinking about five years out, man I'll bet you Bitcoin in a year. You'll be wishing you got that residency started somewhere even in Panama But maybe you have in five years, man. It will be a different world

[07:05] It's not gonna be pretty especially up by you at least you should be getting some of your assets out of the country because I'm sure It'll be frozen or manipulated or outright taken from you or Forced into T-bills or some kind of government instrument and then what are you gonna do? Well, the good news is at least you've got a plan B in mind. Alright, that's the message I popped back to him and he shot back another one to me saying and I'll paraphrase again He says this is my situation Johnny. I took a big hit in the Obama years So the plan is to live with in my means on a social security Projected at 1,800 bucks a month and pensions projected to be around 970 a month, but the earlier I start the less I get monthly. All right, it's me again. Just a little comment here, man

[07:53] I hear that same song and dance from so many expat gonna bees and wannabes who actually can retire now But they don't in other words, they keep waiting and waiting to get the maximum agent for the maximum payout I see so security recipients talking about that all the time. Oh, man. I don't want to take it at 62 I'm gonna wait till 65 to get another one hundred and sixty seven dollars and twenty two cents a month You know in my opinion that's flawed logic and a big mistake talk about penny wise and pound foolish And as far as Medicare, which you don't qualify for unless you retire at 65 You can't get it down here in Latin America or anywhere outside the US. Anyway, I mean really when you were young I mean really young how many times did you have that conversation with others and yourself? Saying that you're never gonna get so security the US will be bust by then. Hey

[08:44] I heard adults talk about that kind of stuff when I was in my teens and yet it's Survived up till now just barely anyway, my advice again. Look at it as a gift Take it at 62. You're nuts. If you don't don't wait and be thankful you're getting anything at all Remember back when you were 25 or 30. You never thought you were gonna get a cent by the way Don't even wait till you're exactly 62 About three or four months beforehand get all the paperwork ready send in the forms do it online Whatever if you're eligible, you don't want to lose a single month of those benefits Which is why if you're moving to a Latin country You got to get a lawyer to help you open a bank account that accepts direct deposit social security You might remember I explained how to do all that just a few shows ago in great detail. So check the archives So again in my opinion Bob who does at least have a plan B in mind is committing a typical gringo air thinking things are

[09:35] Gonna kind of bump along within his time frame thinking things won't really get bad until he gets his maximum payout on his social security Apparently his crystal ball is working a lot better than mine Nevertheless again, I repeat take your social security as soon as you can consider it a gift Can't you see how fast things are changing uncle sam's beyond dead broken They're eyeing all the possible extraneous money resources and that means social security and private pensions What else they're figuring out the kindest and gentlest ways and means to get a piece of it Just look what the canadian government did if you don't spend six months a year or more in canada That cuts you off the national health. The question is what's next? All right, so orange hoof bob says he took a big hit in the obama years who didn't

[10:23] And he says in 2022 or 23 when he's 65 or 66 he'll have 2800 bucks a month which he says should guarantee keeping my neck above water even if accounting for some mild inflation There you go mild inflation man again how we can fool ourselves how we can talk ourselves into anything, huh? Yep, now that the u.s. Government is over 20 trillion dollars in debt Beyond bankrupt impossible to repay bob says he'll be okay even accounting for some mild inflation over the next five years Man, you know, it's like that old story a guy jumps off the empire state building and every floor he passes He's thinking hmm. No problem. So far so good Then he says however, if the reset button gets pressed before I leave the states i'm screwed

[11:08] But i'm not as panicked as you think I should be johnny I don't believe trump or pence is going to push the reset button The thing you must know is that trump has no allies in washington or the media So all you hear are wildly exaggerated bad press from the newspapers from tv from the alternatives like the young turks You would think trump is satan incarnate if you only got the news from them They won't tell you how the dao has risen from 1900 to 24 000 in one year Without qe how jobs are growing steadily and unemployment is inching down towards 4 nationally Figures all those braying jackasses predicted would never happen They predicted and rooted for financial collapse All right, bob got to straighten you out on something here

[11:54] It looks like you're addicted to the lame street news too because the real Unemployment rate is above 22 percent. Look it up with a hundred million able-bodied adults out of work Or just working piddly part-time jobs. Oh, I agree You can't believe the mainstream news, but the stock market, please That's where all the funny money and the old qe money has gone because people cannot get more than one percent on a cd Or a t-bill or bond these days Where else is the big institutional money going to go except where they can get a high return? That would be the market big pension and insurance funds have to make and I read this just the other day four to five percent A year just to cover their existing payouts and there's no other

[12:40] Financial instrument they can utilize that pays over 1 percent only the stock market at least in this big bull market Anyway, so if they don't get at least four or five percent return a year They're losing money and companies are not in business to lose money only governments have that privilege So trump's an idiot too claiming the health of the stock market signifies the health of the country And like a total economic doofus He thinks also that the government numbers of four percent unemployment are real Their absolute lies that the public buys and you know, bob as I was reading along in your email It made a lot of sense until I got to the unemployment part And when it came to the part about trump repents pressing or not pressing the reset button, man Don't you know there are at least 20 tipping points that are teetering right now each one of them capable of pressing the reset button

[13:28] About those four percent government unemployment figures What a joke a five minute search on the internet will reveal that the u.s Government a few years back decided to completely change the way they calculated unemployment statistics Of course to make the maggot-brained politicians look like they actually are accomplishing something Yeah Well, they are good at two things stealing and lying now they count part-timers and they never did before and they don't count people Who just threw in the towel and gave up looking for work? And they twisted around a lot of the other traditional unemployment figure measurements, too So bottom line if you go back to the way the u.s government analyzed unemployment numbers for the past 100 years Before they recently changed the rules you got 22 plus percent unemployment bob

[14:16] Those are third world numbers or first world depression numbers The only thing missing are the soup kitchens We don't have those anymore because the u.s has prepaid welfare cards to use at the grocery store Called snap cards, then he says johnny on the way home from work. I can listen to guys like george norrie and clide louis So I get the nutburger view of how the secret one world government is plotting world domination, etc It will happen. I think but not for another 15 or 20 years a lot of pieces have to line up first Anyway, johnny a quiet little spot in the panama mountains is attainable for me only in five years And I just wanted you to know that I think you're wrong that in the short term things are going to go down The tubes fast because I think with the pensionado visa in panama and the u.s

[15:01] Dollar as currency there sounds like the most hassle-free way to live in a third world economy While getting paid a first world retirement By the way, he says keep on mentioning guatemala, columbia, ecuador, etc I'd rather not have a mad dash of clueless gringo stampeding panama beyond what's already there Now you can keep your bitcoins, too Signed orange wolf bob. All right. Thanks for that bob and we'll agree to disagree on some of that stuff The only question I have is bob. Have you ever been to panama or any other latin country off the gringo tourist rail? Bottom line. I like panama. It's a nice place to visit but wouldn't want to live there Oh and about bitcoin, it seems like everyone I run into who poo-poo is a crypto currencies or have something bad to say about them

[15:49] Inevitably, they've got a friend or two that they've watched get rich off this stuff. Yep. It's crypto shot and froid In fact, i've even met a few people who had the opportunity to invest early on but they didn't And now they're actually hoping for the cryptocurrency and bitcoin bubble a bust That way they can get the double whammy Satisfaction of watching their bitcoin pals get poorer and have the repeated pleasure of being able whenever the subject comes up To say I told you so meanwhile I know some gringles and expats here in latin america who are not techies in any sense of the word Some just a slice or two above computer illiterate who are actually mining crypto currencies and making money In fact captain mangle who always claims he's a computer dunce He's being extremely modest there. He says he's mining litecoin and he's making 30 to 40 a day

[16:40] Remember that's a no-brainer. You do nothing the hardware and software cranks along 24 7 doesn't need anything except electricity now think about it 30 to 40 bucks a day That's like a social security pension Anyway, you'll hear all about that. If you come down to my expat insider seminar starts in a couple weeks now You can still get in just go to www.thenewexpat.com and click on johnny's seminar link, man I'll tell you there's lots of different ways to make money down here and just in the last two years I'd say all these little it money making niches are popping up and your capital investment extremely minimal except for of course your computer So if you wonder how you're gonna make some money after you come down here and start your plan b Don't reinvent the wheel come down and find out how others are doing it Come to the seminar and see and talk to these people yourself

[17:27] Just go to www.thenewexpat.com and check out the seminar link. All right. Meanwhile kind of on the same subject I got this cool email a report that's entitled why I love living in poor countries Man, what a loaded title, huh? All right again. I'll paraphrase this and kick out the boring parts. It says Opulence is nice. Most people like staying in five-star hotels The great european cities are a feast for a traveler who enjoys architecture art and photography For example western europe is serviced by fast efficient train and subway systems that make it an easy relatively Stress-free way to travel in and around countries. However for that privilege it ain't cheap And there's another major hitch wealthy countries in europe are regulated to the extreme

[18:15] And they're bureaucracies massive and overfunded so they can enforce those laws to extremes, too All right. First he's talking about europe before we get on with this I have to make a comment about europe myself not so long ago. I was in barcelona spain You know that was where recently that idiot muslim terrorist ran down. What was it 22 pedestrians? And right on la rumba one of the most famous boulevards in the world It's a funny feeling, you know If you've ever been to a place and later on it gets hit by a big terrorist attack It kind of gives you a pause and you think about it. Sometimes By the way, I remember a long time ago. I had dinner at the top floor of the world trade center And I know anyone else who ever visited that place, of course before 9 11 Just has to pause and think about it sometimes

[19:03] And that's true. Even if you're watching an old television show or movie pre 9 11 and you see the towers in the background Anyway, I have to tell you on my last trip to europe, which was just a year or so ago The main boulevards and tourist attractions are pretty much as they were 20 30 even 40 years ago Now before all that muslim terrorist crap You could walk down a couple of blocks on either side of a heavily traveled tourist area to see how the locals lived And by and large, it was a happy nice experience But man on my last trip was eye shock whether it was barcelona Naples, Rome, nice prance Wherever as soon as you walked a couple of blocks from a known tourist spot It was like walking into a middle eastern caspa. I'm not kidding

[19:48] That's not to say when you walk off on your own just to explore things. It's not safe Well, it is in the daytime, but a lot of times at night, man I saw a lot of shady looking middle eastern characters not to mention a lot of tattooed russian and eastern black types Man, they're the smokiness people in the world as in cigarette smoke Well, let's just say that it's not wise for a female to walk alone at night in any big european city I wouldn't even recommend it for ladies walking in pairs. Whereas just six or seven years ago last time I was in europe There was a completely different much lighter vibe about it However in my latest trip for the first time in nice france, no less I heard every morning and evening the wailing of the muslim prayers that should paint a good picture for you

[20:35] By the way, this little article slash report. I was reading also talks about france this time the stifling bureaucracy goes on to say Case in point my cousin recently spent a few weeks in france She rented a car and drove through several regions of the country when she returned home to canada She was alarmed to find nine separate speeding tickets waiting to be paid It seems the photo radar system in france along the highways recorded her speed and license plate number Traced her identity to the rental car company and discovered the mailing address on her canadian's drivers license and promptly Mailed her the citations which had heavy fines Just to let you know My cousin is a very law-abiding citizen and paid all those fines

[21:20] Even if she wasn't inclined to pay she would have run the risk of having unpaid traffic fines Escalate to higher and more serious offenses in her absence And in europe all the eeu countries are connected via law enforcement computers, etc Meaning her next visit to a eeu country could have landed her in jail So instead like a good law-abiding canadian, she paid several hundred dollars instead No victims no accidents no property damage Just hundreds of dollars in fines for just going a few kilometers over the limit without even knowing it Case number two. I rented a flat near london for six months. I signed the paperwork on a friday moved in saturday on tuesday A tax bill arrived at my new address in my wife's and my name informing us. We owed

[22:08] 2200 dollars in counsel tax for the duration of our residency in the neighborhood A week after I purchased a tv the invoice arrived for the famous united kingdom Telly license who says the government can't be efficient. They certainly wasted no time in taxing us By the way, you do know that in the united kingdom. There's always been a television tax Yes, first world wealthy countries have the ability to do such things They track your finances track your purchases your movements The uk has one surveillance camera for every 11 people now Did you know that these first world governments and I use that term loosely given their true balance sheets Have millions of rules and regulations and at any given minute you're in violation of several of them

[22:56] Of course, you remember the book three felonies a day that's in the us, but i'm sure it's quite similar for europe Which brings me to why I much prefer living in poorer countries They call them developing countries Where you don't live under relentless scrutiny by the government Of course, you've got north korea and a couple of retarded backwards arab states But we know instinctively we'd never want to have a plan be there But let's take latin america place like mexico two men can do minor business deals according to the terms they agree upon No one steps in the way Their first thought isn't about whether or not their arrangement is acceptable to the government or If they will run afoul of some petty laws In fact when I speak to the owner of a home in mexico

[23:43] I can rent it under any terms and conditions that are mutually agreeable to us. We just seal the deal with a handshake No one else needs to be privy to that arrangement. Of course, you can bring in lawyers and stuff But it harks back to a much simpler casual laid-back time In poorer especially latin countries the owner of a property is not an unpaid agent of the state Who must collect taxes and submit paperwork and report whereabouts to authority and in these parts of the world We're still just two people coming to an agreement shaking hands and doing mutually beneficial business Then the author says maybe i'm getting old But there's a long lost familiar charm in visiting a place of business and not seeing a dozen posters And announcements on the wall with rules and legal disclaimers intended to reduce lawsuits

[24:32] Not to mention the safety codes that are just too innumerable to post Meanwhile in poorer countries service can actually be personalized without setting out a stack of rules That would have to be slavishly followed by all the employees and everyone else in the place from that moment onward If I treat a person with the dignity and respect he's due I think he'll go the extra mile to see that i'm happy Maybe that's the reason why all polls seem to show that latin americans and people in poorer countries are just basically much happier Their world makes sense to them and they don't drag in the government or the legal system unless they absolutely have to Then he says look no one wants to die a premature death because of unsafe situations

[25:18] That's a given but when i'm in a major western country I feel like i'm at disneyland safety railings everywhere warning signs audio announcements electronic sensors Telling me to watch my step hold the rail look both ways Caution this caution that it's like being a four year old out for a city walk with mom. It just grates on me By contrast in poorer countries There's some satisfaction actually in climbing over rocks to reach a deserted beach That's never seen a signpost or a lifeguard before or perhaps walking through a field of trip hazards To reach the perfect vantage point for a photo Those are the times the traveler says you really feel free that you're not a tourist and not a watched child These are the places where a rational adult can exercise his own risk assessment

[26:05] And desire to connect with his world at his pace Meanwhile in the first world the safety police are everywhere. They care about regulation and compliance as a way of life No exceptions There's real fear out there always reason to sue someone to sue and threats of a suit Now for younger people people under 30 that might take some getting used to they're used to the welfare state being coddled all their lives For them though It's an opportunity to be reawakened to what it was really like to be a person who controls his or her own life Then again, they might not be interested in that Often, you know when a bird's been living in a gilded cage when he opened the door to freedom He just won't go out Then he says it's a shame so many of us have to leave the country

[26:50] We were born in and go so far away to do such natural things We have to travel 500 a thousand even 2000 miles to a third world country to experience What it's like to escape the nanny state and be in control of your own life again But again to some people especially the under 30 crowd that might be too much of a personal trauma I mean imagine walking up a whole flight of stairs without a railing and no one to sue That's why I say it's nice living in poor countries where governments lack resources where they lack the control to keep you under surveillance And they lack the manpower and the desire to act as your nanny This is the expat files living in latin america

[27:38] If you want me to help you out with your own plan b just schedule a one-on-one console Send me an email at the expat files at gmail.com And if you want to learn how to move forward with your own plan b from right up there in the states Go to www.expatplanb.com and check out my three videos. See ya nos vemos