#829 – The Expat Files: Entrepreneurship, Taxes, and Life in Latin America

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

[00:00] South of the border down Mexico way That's where I fell in love when the stars above came out to play and now I wonder Hello there all you ex-pat wannabes. I'm Johnny Mueller and you're listening to the expat files living in Latin America The show that tells you just what it's like to live work play and or retire down here in Latin America It's a mix of the good the bad the ugly and the great and it's all right here. So let's get started Yeah back in the saddle again with the expat file a show, you know, it's worth the price of admission They say especially since it's free you get what you pay for, huh? Speaking about getting paid Lots and lots of would-be gringos and expats there'd be expat gonna bees and wannabes are thinking of coming down

[00:51] But they're also thinking hey, I got to make some money once I get down here So they often get together with me in a phone or a Skype consult and then we talk about their particular skills What they're good at more importantly what's needed here The demand for certain services and skills here in Latin America and how you can fill that gap and also of course Do you want to be your own boss, which is infinitely preferable to working for somebody else? Hey, if you're a wage grunt up in the States, you know that already however There's always been a kind of a stigma attached to being your own boss because most people are wage grunts Not only that there's a persistent Ruben going around that if you are your own boss She'll be working 60 hours a week, which is usually true So you better love what you're doing generally when you start your own business that seems to be the case after all when you start

[01:39] A business. It's your little baby. Anyway, if you've never been your own boss There's a little bit of fear and trepidation attached to that I mean look the reality is if you come from a family of union wage slugs And there's no one that you can look to who's got his or her own business. They started from scratch, you know successful uncle Or an someone in the family or a friend who's a mentor then you really got no one to lean on because you'll be Reinventing the wheel and that's no fun at all However, you might have a family that just loaded with entrepreneurial types, which more than likely meant even as a kid He had no fear about trying to start something yourself But as far as gringles working here in Latin America The main thing now is the internet and that turns out to be a very good thing for a lot of reasons

[02:26] But one thing that means less and less people are opening up traditional mom and pop restaurant spires hotels, etc Which are almost never sure things because you got nothing but competition from everywhere Especially since most gringles and expats end up on the gringo tourist trail and your competition will then be other gringles Which is the worst kind of competition to have talk about gringo expat mistake number one In fact, I've been down here long enough and I've seen enough for myself to think man Anyone who opens a bar or a restaurant here in Latin America on or near the gringo tourist trails an idiot However, when you're off the gringo tourist trail is a different story when you're off the trail and your competition is nothing But Latinos anything goes if you're a gringo and know how to organize things In fact, I've seen some enterprises take off that if I was a betting man

[03:15] I'd have said when they first started out man, you might as well go to Vegas or play the horses But I was wrong their gringo advantage kicked in and they kicked ass So anyway as you might think just like up in the states here in Latin America You want to have an internet business if you can because then since you can start out from your own home or apartment You won't have any startup costs and that most likely means no government permits No taxes, no lawyer fees are very minimal and no other employees accept yourself Of course, that'll change if your business expands, but at first it'll just be you. Oh and another huge advantage They're extremely mobile too So if you plan on moving around just grab your computer or smartphone find a good internet connection and you're in business again

[04:00] So I repeat when you come down here to Latin America and get that plan be going if you do absolutely Need to get a job and some people get a job Even if they don't need one because they have to have something to do That is besides golfing sleeping drinking and eating in fact I'd say most people who say I'm coming down to retire don't retire at all Which is a great thing because retirement can be and usually is a certain kind of stress itself It's mentally fatiguing at least for above average people and sometimes the quickest way to become a stand-up drunk If you want to know what that's like, you'll have no trouble finding a few of those every time you walk into a gringo bar Oh and about those gringo bars I don't care how far off or on the gringo tourist trail you are They'll always be a gringo bar or two or ten because you see gringo bars fill a niche and believe me

[04:51] There ain't no niche for gringo bars anymore You see all over Latin America if not the world that niche was filled way before you were born So if you think you've got some great idea for a gringo bar and you want to put it into practice Be my guest gringo. Go ahead. Roll your savings reinvent the wheel and join the thousands of other gringles Who did the very same thing and who are now working as bartenders for someone else It's the same for restaurants and mom-and-pop hotels, too Hey, I'm not saying it can't be done But if you're on the tourist trail, you've got no gringo advantage and the odds are stacked against you So then what about some viable gringo job opportunities far away from the booze and hospitality business? Well, I'll tell you I see gringo job opportunities all the time and there's one for sure

[05:38] That's absolutely always in demand and you never seem to be able to find one when you need them That'd be your local gringo slash expat tax preparer because you know The vast majority of gringles and expats need to get their taxes done or at least filed whether they owe money or not And as it turns out quite a few gringles and expats have a rental or two back home Something back there bringing in a little money or even a private pension That's being shipped back to your plan B destination And in that case if you make over a certain limit a year usually for a single person It's around 12 grand you have to file taxes And if you have income producing assets or money coming in from back in the States You probably have a tax preparer and you know, it's not an easy thing to do it yourself

[06:24] Unless of course your sole source of income is social security that case and here's something most people don't know if you're simply on Social security you don't even have to file taxes at all Nope, that's a fact. You don't have to mail in a form or file online at all That's because only half of your social security income is taxable So take for example a guy that makes 15 grand a year on social security That's probably about average if he's taxed on only half of that amount or 7,500 bucks He does not have to file taxes at all. That's a law says you only have to start filing after you make 12,000 bucks a year That's for a single person under 65 if you're over 65, it's 13,500 a year now for the exact amount you have to look at the IRS taxable income table on that

[07:13] It's always increasing a little bit every year So I know for sure when some gringo says you have to file taxes every year or you'll get in trouble Well, that just means he doesn't know his ass from Hillary's face Which is probably a bad example because most people would lose in that guessing game. I know I would Anyway, just know if you're living on social security alone, they have no other sources of income You do not have to file taxes Although statistically most people do because they think they have to look it up. It's not true That means there are hundreds of thousands of people on social security throwing a couple hundred bucks away Every time they have H&R block or someone else file their taxes Or you could be wasting a few hours of your own time if you file those forms yourself In fact a couple of times a year the social security division will send you some snail mail

[08:02] That is if you get social security Now if you actually read those things and you understand government doublespeak It'll point out right there in black and white that you may not have to file taxes at all If social security is your only source of income, but we were talking about gringles expats jobs and niches, right? One of those great niches again being an expat tax preparer But that it certainly mean you have to have been accountant bookkeeper or tax preparer in a past life And that's definitely not the case for most people. Anyway, it is a niche that definitely needs to be filled All right, then another expat gringo slash plan B opportunity that always seems to pop up It's a niche that needs to be filled and I'm reminded of it practically every time I get an email from an expat usually

[08:48] fairly new expat Asking me if I could refer them to anyone That would be an English speaking expat like themselves and would have to be an English speaking expat They're looking for a gringo expat a qualified gringo expat who could do a house apartment land or Vehicle inspection the thing is I'm always running into gringos and getting emails from expats Saying they've run into what they think is a great deal in a house car motorcycle, whatever But they don't know how to evaluate it In other words are tons of gringos and expats out there who would like for example to buy a motorcycle car house land Whatever and being in a foreign country where they don't speak the language. They have no idea. Is it a good deal bad deal? No deal worth the asking price. What about the asking price? What's it really worth? Is the paperwork in order?

[09:36] Is it registered properly especially when it comes to buying a property or a car? Now I know after building 12 or 13 houses down here and being an engineer myself I could be that guy, but I don't want to be that guy However, I know there are lots of gringos and expats out there who were contractors back in the States or great do-it-yourselfers Kinkerers mechanics, etc. Who could easily set themselves up to be that guy Believe me every expat gringo who's been down here any length of time has had a need for one of those guys Especially female expats gringos sure it's true If you're out looking for a car a motorcycle a house Whatever you can always find a gringo or two to go with you and check the place or the vehicle out

[10:21] Just for moral support, but are they qualified usually not? I mean look Don't you wish there was someone you could phone up if you found what you thought is a really great deal Or a desperate sell or whatever, especially if you're gonna spend 50 100 150 thousand bucks on a property It'd be worth one or two hundred bucks to find out if the place was really in good shape or needed some big-time work Or let's say you found two or three cars on olex.com Don't you wish you could phone up an English speaking gringo X mechanic and pay him 50 or a hundred bucks to check it out Before you make the deal besides the fact the average gringo doesn't know much about plumbing electricity Concrete or car mechanics. It's even worse if you can't speak Spanish So if you've got those kind of skills, man

[11:07] There's a market down here and you won't really have to speak Spanish though It's a plus and it would be nice because that car is a car in a house is a house no matter where you go You just do your inspection. It doesn't matter if you can communicate with the seller or not because you're working for the prospective buyer By the way speaking of cars here in Latin America You see lots of old death traps and pieces of crap and you wonder how in the hell Those things stay on the road worse yet since it's all about the show here in Latin America Aren't those things a terrible embarrassment to the owner? I know it doesn't make sense, but this is Latin America You know even on your first trip down you'll get into taxis that are pieces of junk broken gauges windows that don't work even Giant cracks in the windshield not to mention practically every car that's over five years old has a zillion little dents in it

[11:58] Oh and talk about a hygiene problem when you get in don't look too close because you'll find dozens of stains and skid marks on The upholstery. Yeah, what's that all about better not to speculate? You'll find that with all used Latin cars and trucks and you'll find that with Latin living room furniture, too you know what that means folks skip the white duds or pay the consequences and You know Latin governments as lax as they are actually starting to do something about it Nope, not about the multiple stains You don't want to know the origin of but about the fact that so many cars and trucks are death traps Just pieces of junk you see some Latin countries are starting to put an age limit on the cars You can import which might have an effect on you if you're planning on driving a vehicle down

[12:46] There's a ten-year-old limit on imports. That's been showing up a lot in Latin countries these days Of course, that means if you bring a car in that's nine years and eleven months old once you get it in you can drive it Forever. Oh and here's another thing Latin governments do that's completely ass backwards That's the way they charge you for your yearly renewal on your license for your vehicle and they all do it this way For example, if your car is new you pay more for your yearly renewal So as your car gets older and older you pay less and less and after about 15 years, it's almost nothing Which if you ask me is just the epitome of another governmental brain fart when they could have used that Licensing technique to clean up the cars and the pollution because you see if they'd have done just the opposite

[13:32] Made it more expensive to own an older car in a matter of a few years All the junks and death traps would be off the road For example in countries like Peru Honduras and Dominican Republic if your car is newer than the year 2010 you pay around a hundred bucks a year for your license renewal However, if your piece of junk was manufactured between 2000 and 2010 you pay 50 bucks And if your sut belching death trap was manufactured before the year 2000 most countries will charge 25 bucks a year. So Latin countries give a break and in fact encourage people to own junks Alright, speaking of cars and traffic all Latin cities have big traffic problems because there's no such thing as infrastructure or civic planning

[14:18] And of course every city's got civil engineers on their payroll, but their immediate bosses are almost never qualified They're just the dickhead sons and daughters of crooked politicians Turns out throughout Latin America just like in Chicago Once a politician gets elected it becomes the large-ass friends and family full employment act But I digress as usual. Where were we? Oh, yeah so traffic in all Latin American medium and large-sized cities is bad and Getting worse due to the fact that our in motorcycle dealerships are now offering quick and easy credit with no money down That's all new It's never happened like that before and of course in certain Latin cities The populations are growing like crazy and that means more cars and motorcycles, too

[15:04] All right, that said here's a question for you Which Latin City is rated number one for the influx of gringos and axe pads? Well, if you can't guess it's easy to find out just go to the International Living website and see what they're promoting They're flavor of the month or the year now You might have guessed Cuenca Ecuador and you'd be right and as you might expect Cuenca Ecuador's city fathers are kind of terrified that the population will soon outgrow its infrastructure and resources So accordingly experts from Ecuador's Institute of statistics are sounding the alarm They're saying the growing population will be needing many more resources such as clean water and advanced city planning to provide adequate space And proper living conditions for the influx that's coming now and in the future

[15:51] They head of the agency saying quote I don't see any sign that our growth will subside any time soon Cuenca has become what is known as an international magnet city attracting people from other cities in the country and First world foreigners from the north and from overseas in Europe, too We are now he says an international destination growing much faster than anyone could have anticipated Hmm me Johnny here. Good luck with that. You know, he did mention advanced planning Well too bad that phrase along with the word maintenance don't happen to be part of the Spanish vocabulary In fact, the gringos and expats living in Cuenca now are seeing it firsthand They say it's a dichotomy on the one hand They're saying the government is incapable of balancing its budget For example, the national health care system once the pride of Ecuador is now bankrupt and they just keep raising taxes and fees

[16:42] Meanwhile international lenders like the IMF just keep lending and lending Yep, same old same old just like in that famous little book Confessions of an economic hitman by John Perkins. Have you read that? What an eye-opener If not put it on your reading list now as for me, you know, I've been down here a long time There's a kind of a black irony and perversity To gringos having a plan B in a beautiful expat destination Usually certain places international living and other rags are touting because they've got real estate to sell to me The real irony of it is that gringos and expats go to these places to escape what they immediately begin recreating Like for example this little announcement that comes out of a Cuenca Ecuador English language rag

[17:30] It begins come one come all the campaign to vaccinate against the flu and other viruses will last until February 28 the free vaccine can be received at the Centro de Salud health center and is directed at children six months to five years old Seniors and people with chronic illnesses just the kind of people that'll get even more sick and have bigger reactions Being injected with that kind of crap. Hey, why not take two one in each arm? They're free Man, you know, I just don't get it Why do people come to Latin America to escape what they immediately try to recreate who's fool and who here more to the point? Who's the bigger fool the fool or the fool who follows the fool or maybe it's the fool who's following the fool

[18:20] Who's following the original fool? Which is why I always prefer to be in places that are off the gringo tourist trailer Far enough from the gringo tourist trail that I don't see expats or gringos on a regular basis In fact where I'm at I'd have to actually be on a mission to run into a gringo and most of those cringles and expats Are people that came down to one or more max pad insider seminars and ended up here in Latin America? Permanently and the thing is most of them have taken my advice and are not directly on the gringo tourist trail though Some are a half an hour to an hour outside of a gringo area, which is just fine, too That way you can have your gringo fix whatever you wanted Yet you could still enjoy a heavy dose of the gringo advantage when you're back home in your own neighborhood Oh and speaking of gringos on a mission. Yep, no matter how far you are off the gringo tourist trail

[19:10] Once in a while you're bound to run into a few gringo do-gooders on a mission. That means Mormons, too Yep, they're everywhere and Mormons. Yeah, they got the uniform. You can use these spot them at a great distance and do-gooders, too They always seem to have matching t-shirts that you could spot at a distance Oh, and if you're stuck in an elevator with a couple of Mormons or do-gooders if you want to get a lap You can do what expat head you often does. They'll say hey and you guys want to buy some weed Well, it's a kind of a test because Eddie says he's never yet met a Mormon actually they travel in Paris You know, that's a rule who's ever said? Yeah, what do you got how much or no? That's all right I'm okay through the weekend They'll always say something like no. Thanks. I'm not into that though. They're so polite

[19:56] You never know if they do or they don't but expat Eddie will also say there are plenty of Kumbaya Churchgoing do-gooders and matching t-shirts whose eyes will perk up and suddenly they'll want to be best friends with Eddie But only when you get him alone or in pairs. Oh, and let me point out Eddie's not a weed dealer He's just with them. That's the way he is. Oh, by the way Is anyone out there keeping track of what's happening in Venezuela these days? You know had an election Maduro won again because he changed the Constitution which in itself was unconstitutional Then Venezuelans in the rest of the world saw that was an illegal move and most other countries have recognized that the election wasn't legit So instead of recognizing the guy from the other party the guy Maduro tried to put in jail and make his party illegal

[20:45] His name is Juan Guido something like that Anyway throughout the world almost all first-world countries are Recognizing this guy as the new interim president and even three-quarters of the rest of the 20 Latin countries are Recognizing this guy as the interim leader with most of them saying Maduro can't change his country's constitution So his reelection isn't valid. So then you might ask which Latin countries are playing ball with Maduro Well, you got Cuba because they've been getting free oil from Venezuela for a long long time And Venezuela's got thousands of wage slave Cuban doctors stationed there So you can expect Cuba is gonna play ball But oddly enough one of the only other countries that's kissing up to Maduro is little Uruguay and you wonder why?

[21:31] What kind of special relationship do they have with Venezuela? Well, you think it might have something to do with the fact that the president of Uruguay's son His name is Javier Vasquez He has a 62 million dollar contract for the computerization of Venezuela's state communication company and last year the president of Uruguay's son pocketed four and a half million bucks For supposedly training Venezuelan personnel in the Ministry of Science and Technology in addition He's involved in a 1.2 million dollar contract for a website administration in Venezuela and a 2.8 million dollar contract For the management for the city halls in Venezuela and an architectural consulting firm has two contracts under way

[22:18] And he's partner for three and a half million bucks and another for six hundred and seventy thousand bucks And it's not just here say this was all confirmed by the son of Uruguay's president in a court case Where it was shown that his accountant who denounced those shady Venezuelan business deals But he never did get to testify due to an alleged suicide in the cases were closed Well, this is from an article coming out of Uruguay's biggest newspaper It says while the average Venezuelan citizen has now lost 24 pounds due to malnutrition Just this year. It's been found that the son of Uruguay's president Vasquez Has received seven huge wire transfers to a bank in a tax haven country assumed to be Panama The facturas those would be the receipts show that he received those payments from the Venezuelan government for his

[23:11] consulting services So again if you're wondering why little Uruguay is one of the only holdouts in Latin America One of the few countries that's supporting Maduro now. I think you know the reason why Alright now for an email this one comes from Bob He says well Johnny way back in your early expat file days You mentioned your rough plan was to eventually move to Colombia your early on PDF report about some cool spots to move in Latin America had about three Colombian spots listed and also an island in the north of Venezuela That's I guess how fluid things are down here and are about to get downright Syrupy when the global currency reset kicks in and it will I wonder he says if it's not

[23:58] Logical to just stay mobile more or less to adapt as things inevitably get more and more chaotic Even down here in Latin America. That's the rough formula that gypsies have used for centuries and centuries That would be freedom equals anonymity equals mobility Now he says I'm not about to move out to the boonies myself and live like that, but it wouldn't be a bad plan C After all he says indigenous ladies love gringos, too However, he says in the nine years. I've been in Mexico I'm seriously considering a semi-permanent place to flop down and maybe build an off-the-grid house Besides he says I've seen social climates change radically in places like Uruguay Venezuela Colombia even Chile Honduras just had a coup and saw a new US military base installed

[24:47] How about that he says I know you still recommend Guatemala and a few others for residency But how long before the soldiers start heading out to plow various Indian villages under again over there? I'd say in this overall climate of radically changing conditions maybe it's good to have another plan B a Plan B to the plan B or maybe a small base in different bordering countries and the ability to move there quickly if need be one of your original cool expat locale choices Might not be too bad a tri-border area with Argentina just a bit farther makes for lots of options Meanwhile nearly everywhere in Latin America you can spend four bucks for a Starbucks coffee Or go to a local diner and get the same thing or better for a buck in some change. All right, Bob

[25:35] Thanks for that. Well, I'll tell you I wrote that report around eight years ago now and things change as they always do look back Then the International Living was still pounding on Costa Rica and Panama which are now ruined And of course now they're all over the big cities in Colombia and Ecuador So that means you could do all the internet investigations You want all the boots on the ground investigations throughout Latin America you want But when one of those big notorious rags like International Living or AARP Suddenly it decided to put a nice calm beautiful expat paradise on the radar all bets are off When Bob you talk about being kind of a nomad Well, you can only do that if you're a single if you've got a spouse or kids or a significant other It becomes extremely difficult to remain on the moon. Hey, I've done it

[26:23] I've moved around a lot but eventually end up in a place You really like though the idea is to always keep your options open and of course, I'm a hundred percent with you Talking about the imminent crash of the first world monetary system And of course, it'll have its effects on Latin America too, which will be a topic of discussion in the next show So stay tuned. We'll talk about how things will fare down here in Latin America when all that comes down Just remember this there's no such thing as a dangerous country only Dangerous neighborhoods and there's no such thing as a safe country only safe neighborhoods. So no matter where you are It's all about the neighborhood. Oh and before we sign off today Remember to pick up my hundred page Latin American health care report It's my own personal step-by-step guide on how you can get first world health care at third world prices

[27:14] And that means whatever hospital doctor clinic or procedure you get up in the states You'll be able to get down here same quality same professionally trained people same equipment But for a quarter to a sixth of what you'll pay for the same thing up in the states Just go to the expat files comm slash health care So you've been listening to the expat files living in Latin America If you need some help with your own plan B, you can schedule a one-on-one phone call with me But first download my free plan B questionnaire at www.the new expat.com Better yet if you want to get your plan B going from right up there in the states Just sign up for my 9-hour expat essentials course get the perfect plan B blueprint by going to the expat files comm Academy most famous