2021-10-21_Is_It_Cheaper_to_Live_in_Mexico_or_the_USA
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00:00:30.500 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight,
00:00:34.100 | and encouragement you need to live a rich and meaningful life now,
00:00:37.500 | while building a plan for financial freedom in 10 years or less.
00:00:40.800 | My name is Joshua Sheets. I am your host and on today's show,
00:00:45.200 | I want to talk about the differences in the cost of living based upon living in a place like Mexico,
00:00:53.000 | which of course is a massive place, versus a place like the United States, which is correspondingly massive.
00:00:59.600 | In the most recent episode, I was talking about the importance of filtering advice through your own situation
00:01:06.400 | to figure out what is applicable to you.
00:01:09.600 | And I actually can't think of a better proof of that than this particular question.
00:01:14.600 | But several listeners did ask me the question. They said, Joshua, what did you mean?
00:01:18.300 | You said the cost of living for this Venezuelan guy living in the United States would be higher in Mexico
00:01:24.300 | than it would be in the United States.
00:01:26.900 | And I want to clarify my thoughts on that so that you can think about where your cost of living would actually be higher or lower.
00:01:34.900 | I do actually believe that the cost of living in the United States for many people can and often does wind up being lower
00:01:45.200 | than in many places that are perceived to be cheaper, such as Mexico.
00:01:52.000 | But that your specific numbers will vary greatly depending on the budget categories that are important to you.
00:02:00.100 | For context, as I shared in the podcast episode, I was talking with my client.
00:02:04.200 | Venezuelan immigrants had worked and lived both in Mexico and the United States.
00:02:09.300 | And I said, where are you likely to earn more money, in Mexico or the United States?
00:02:13.400 | Well, he was working as a salaried engineer and the salary plus bonus and commission structure as well,
00:02:20.500 | because he's working in engineering sales.
00:02:22.100 | But I said, where are you likely to make more money?
00:02:23.900 | And the answer was obviously the United States. Far higher income potential in the United States versus Mexico for a guy in his particular field.
00:02:32.900 | Second question I asked him, I said, where are you going to pay a higher tax on your wages, Mexico or the United States?
00:02:38.800 | And the answer is obviously there. Mexico is much more expensive from a tax rate perspective.
00:02:43.200 | Mexico is not generally a tax haven.
00:02:45.000 | There are a few little loopholes that you can find, but Mexico has pretty high taxes on wages compared to the United States.
00:02:51.100 | Then the third question, I said, where are you going to have a lower cost of living?
00:02:54.400 | And the answer there, both he and I said the United States.
00:02:58.300 | Now, that one is certainly the questionable one, right?
00:03:00.900 | It's not, it's a harder one that you have to unpack a little bit.
00:03:04.100 | But, but it is important to identify it.
00:03:07.000 | And I've asked myself these questions. I have experience living in the United States.
00:03:11.700 | I have experience in several Latin American countries.
00:03:14.300 | I've run the budget in Mexico. I understand kind of what some of the costs are.
00:03:19.300 | And while I will say it's not as, as, as plain and as obvious, I, I don't back off the statement as long as you calculate your own numbers.
00:03:28.000 | So let's talk about the differences between these two jurisdictions.
00:03:31.500 | To begin with, we could begin with the largest budget category, which is for most of us, the amount of tax that we pay.
00:03:40.300 | Tax collectively, meaning income taxes, social taxes, real estate taxes, sales taxes, etc.
00:03:50.500 | Duties, VAT, etc. And we could go all down the list and discover that taxes do matter a lot.
00:03:58.100 | That conversation is more complex and it's intensely personal based upon how your income is generated,
00:04:07.000 | where your assets are invested, where you're even willing to consider living.
00:04:12.800 | In general, the United States is, in many regards, a relatively low tax jurisdiction.
00:04:19.900 | It's not the lowest available. There are many zero tax jurisdictions and better tax planning that can be done.
00:04:26.700 | But for most, quote unquote, ordinary people, the United States can be a fairly low tax jurisdiction.
00:04:33.500 | And what you face with U.S. tax planning is as your wages are modest, taxation on those wages is also in the United States fairly modest.
00:04:43.100 | As your wages and income increase, taxation rates are quite high depending on what state you live in.
00:04:50.600 | But then as your wealth grows even more, you can live quite tax efficiently in the United States based upon just doing good planning of living off of your wealth rather than generating income.
00:05:03.400 | We've talked about that recently with discussing all of the tax leaks.
00:05:07.600 | And one of the things that you see from that is many of the wealth, assuming the data is true,
00:05:12.700 | assuming the stories being published about the giant leak of all the tax data are true,
00:05:19.200 | you can be a wealthy person and live in the United States with a relatively modest tax rate as long as you are careful about what you're doing.
00:05:30.600 | So you can get it lower with international planning, but there's that middle zone where it's the worst, right?
00:05:38.000 | Where if you're a high wage earner, you're an athlete earning millions of dollars in wages per year, that's the worst.
00:05:43.600 | Or you're a highly paid executive earning a million bucks a year, that's the worst in terms of from a tax perspective.
00:05:49.400 | But once you get through that kind of sound barrier, that tax barrier to where you've got 20 million bucks or so and you're living on your portfolio,
00:05:58.800 | then taxes can become quite moderate.
00:06:01.600 | But taxes are difficult and complex for us to deal with, so let's go with things that are more normal.
00:06:05.500 | Let's talk about housing.
00:06:07.100 | One of the things that people really appreciate about some places in Latin America is you can get cheaper housing.
00:06:16.400 | And this is true on a global basis.
00:06:18.300 | You can get cheaper housing in Mexico, you can get cheaper housing all throughout the world than the United States.
00:06:26.500 | Here is my experience on that topic though.
00:06:29.800 | You have to ask, what am I comparing the housing that I get in Latin America to from a quality perspective?
00:06:39.700 | You can purchase very high quality homes in Mexico, in Latin America and other parts of Latin America, very high quality.
00:06:48.000 | But when you start actually looking at an equivalent house of the cost of the house in the United States versus an equivalent house in Mexico or another place,
00:07:01.900 | the cost savings are more modest than many people assume.
00:07:08.200 | Because what most people look at is they say, what's the median cost of a house in the United States?
00:07:14.200 | And then they go and they say, what's a median house that I can buy or rent in Mexico?
00:07:19.000 | And they go and do that.
00:07:20.600 | And the house that is the median house in many parts of Latin America is simply a lower quality house that is not as comfortable as the house in the United States of America.
00:07:34.600 | I do think that for most people there is a modest savings with regard to the cost of house, but you have to compare apples to apples.
00:07:43.400 | In the United States, most houses that you can buy are of actually pretty decent quality.
00:07:50.800 | Because of the building regulations, et cetera, there is a significant amount of uniformity.
00:07:56.800 | Houses are generally well built.
00:07:59.500 | They're often somewhat energy efficient.
00:08:04.000 | I'd be careful not to speak too broadly.
00:08:06.200 | But you can get a quality house at a reasonable price in most places.
00:08:10.000 | Maybe in your area a good kind of normal three bedroom, two bath house is $250,000.
00:08:16.600 | For a house of that same quality in Mexico or in some other parts of Latin America where I have more experience than in Asia, maybe you might get it for $180,000.
00:08:29.600 | To be clear, I'm summoning these numbers off the top of my head.
00:08:32.400 | Feel free to do your own research with actual sales data later.
00:08:37.100 | So there is some savings available to you in housing.
00:08:40.900 | But where the big savings come, right, when someone says, look, I can buy a house for $70,000 in Costa Rica versus $250,000 in the United States of America,
00:08:54.300 | those savings are mostly being generated by a different, more basic, less comfortable construction standard.
00:09:03.000 | And that can be totally fine.
00:09:04.700 | That's not a wrong thing, but it is different.
00:09:07.600 | The houses are less comfortable.
00:09:09.100 | They don't have the amenities.
00:09:10.400 | They don't have all of the equipment that you're used to.
00:09:13.900 | You know, yes, you might have hot water, but the hot water heater is not as good as you might normally have or it's not as powerful.
00:09:21.800 | You might have hot water in, you know, it's very rare, for example, in most places, many places in Latin America to have a hot water heater system for the whole house.
00:09:31.100 | Usually you'll have one that might be for the shower and then heat the water in the shower, but not the whole house.
00:09:37.500 | Or you might have one that heats the sink water and the shower, but not the whole house.
00:09:41.500 | Other appliances, things that are just standard, dishwasher, right, in the United States, virtually any house, especially any recent house, will come with a built-in dishwasher right under the sink.
00:09:51.900 | It's all built in.
00:09:53.100 | That's a lot less common in Latin America.
00:09:55.400 | If there is a dishwasher, it's more likely to be some kind of portable unit, not built in.
00:10:01.000 | Everything kind of being built in and comfortable.
00:10:03.400 | And these things sound so persnickety, right?
00:10:06.400 | It's like, big deal.
00:10:07.400 | What's the big deal if your dishwasher is built in or not?
00:10:10.100 | It's not that big of a deal, but that's just emblematic of kind of what you see in all parts of the construction.
00:10:16.700 | So you can get a much cheaper house in Latin America than you can in the United States because it's available in Latin America.
00:10:27.700 | But in terms of an equivalent quality of house, it's just simply not that much of a savings.
00:10:35.800 | Why is it not available in the United States?
00:10:37.900 | Well, first of all, most people in the United States don't want that kind of house.
00:10:43.200 | The houses that most people live in throughout Latin America and much of the world, people won't buy them.
00:10:48.800 | They won't live in them in the United States.
00:10:50.500 | They're too small, too cramped, and they're too poorly built.
00:10:55.200 | Thin walls, poor insulation, everything is open for ventilation instead of air conditioning, etc.
00:11:01.800 | Or what's most common in if you do have air conditioning, as most middle class and up people do in a warmer climate,
00:11:09.400 | if you do have air conditioning, you'll never have a whole house air conditioning.
00:11:12.400 | It's always going to be at this point a mini split system where the bedrooms will be air conditioned and sometimes there'll be one in the common area.
00:11:19.900 | And so even a very expensive house is just built to a different standard than what is more common in the suburbs.
00:11:28.500 | In addition to the house, you have to think about the neighborhood.
00:11:32.900 | And here's where I think your biggest changes are.
00:11:36.700 | In the United States, you can find lots and lots of neighborhoods that are safe, that are beautiful, that are comfortable, that have good neighbors.
00:11:47.400 | And while we make fun of it, right, the dream of suburbia, we make fun of it,
00:11:52.600 | the reality is the only place in most places in Latin America that you can find that is in a very expensive gated neighborhood.
00:12:00.700 | Usually they're called condominios. The word condominio, which is like condominium in the United States,
00:12:07.300 | has a meaning that usually involves a built up tower, an apartment building with units inside that built up,
00:12:15.100 | not skyscraper, but built up tower, those units owned by individuals.
00:12:20.100 | That's what we call a condominium in the United States. In Latin America, they use the word condominium to refer to some kind of community where there's a planned community.
00:12:28.600 | And so to get an equivalent quality of neighborhood, you often have to go into a condominium.
00:12:34.000 | And these condominiums cost significantly more than the neighborhoods that are not in the condominium.
00:12:40.000 | And so once you actually go, and let's say that you're an expat from the United States and you go to Latin America,
00:12:45.500 | to get an equivalent quality of neighborhood, you will generally be in a gated, guarded neighborhood.
00:12:52.600 | Well, once you do that, you have a whole other set of expenses. Some of those expenses are in the cost of the house.
00:12:57.300 | The house will cost more. And some of those other expenses will be in the just simply the maintenance fees to pay for the guards.
00:13:06.800 | Even when you do that, you still have a higher crime rate to deal with. You still have less physical security.
00:13:14.900 | You still have more concerns with security, more of those concerns than you do.
00:13:19.600 | And so to get an equivalent quality on, say, crime statistics, you need to go into a usually a very high end neighborhood in Mexico with very high quality armed guards,
00:13:33.900 | very high quality to get kind of the safest living experience that you get in the United States.
00:13:40.200 | To be clear, I'm not one who is overly paranoid about safety. I've released shows. Is it safe to travel in Mexico?
00:13:46.200 | I believe, yes, it can be safe just like anywhere can be. But the reality is it is different.
00:13:51.700 | And so generally to get an equivalent, you're going to pay more for it.
00:13:55.600 | The other and that that offsets some of the savings on your actual house.
00:14:01.400 | If you will compare the quality of a middle of the road, suburban American house,
00:14:09.900 | and you'll go and you'll find an equivalent quality house, equivalent finishings, equivalent quality neighborhood with equivalent safety statistics, etc.
00:14:19.600 | There might be a small savings, but the savings will be fairly modest.
00:14:25.700 | The next thing that you have to consider is what else do I get with the house?
00:14:30.400 | What kind of amenities do I get in the nearby area? Do I get wonderful malls? Do I get restaurants? Do I get gyms, etc.?
00:14:39.800 | And what you often see is that the people who choose to go, when you choose a neighborhood or a town that has the kind of amenities that you're accustomed to in the United States,
00:14:53.100 | you will often again lose most of your price savings.
00:14:56.500 | Mexico City is an enormous global quality city where everything is available.
00:15:04.500 | The very best malls, the very best shops, the very best gyms, the very best of everything is available in Mexico City.
00:15:12.500 | And the cost of housing in Mexico City is not cheap.
00:15:16.200 | Now you can go out, right? One of the listeners was saying, well, I have a house and I've lived in San Miguel de Allende.
00:15:21.600 | OK, you can go out to San Miguel de Allende. I like San Miguel de Allende.
00:15:25.200 | I think it's wonderful. It is a very different lifestyle experience to live in San Miguel de Allende.
00:15:31.300 | Now you can live downtown, an old town, and of course that's so pretty, right?
00:15:35.000 | It's this old colonial city, the little streets, etc.
00:15:39.300 | It's a really neat experience in and of its own.
00:15:43.600 | But if you go outside of San Miguel de Allende and you buy in one of the golf courses, etc., as I have had friends who've done,
00:15:49.900 | you are not getting the same accessibility to the stuff that you're accustomed to in the United States.
00:15:55.700 | In the United States, you can go right outside of your suburban restaurant and you see all of the brands right there lined up for you.
00:16:00.900 | You see your Olive Garden, other Darden restaurants, you see your Chili's, you see your Friday's,
00:16:06.700 | you've got all your stores that you like to shop at, you got your Home Depot,
00:16:11.200 | you've got your Best Buy, all this stuff just right there available for you.
00:16:16.200 | Well, in San Miguel de Allende, you have none of that. You have none of that.
00:16:21.500 | And so you have other options. You do have restaurants you can go to, but they're more of the local place.
00:16:27.600 | You have stores that you can go to, but they're just different. It's not the same quality.
00:16:39.500 | Now, people like that. I like that. I don't often enjoy it when I'm in the United States.
00:16:44.700 | And one of the things I don't like about traveling across the United States is if you go from Florida to California to Washington to Maine,
00:16:51.600 | you kind of got the same big box stores in all those places.
00:16:54.800 | And that makes me sad because I like that sense of national diversity.
00:16:58.800 | I wish for different brands and such.
00:17:01.600 | But from a quality of life perspective, having access to those stores makes for a much higher quality of life.
00:17:09.100 | I am amazed being back in the United States at how easy it is to go and get the stuff that I need and want just right there.
00:17:16.300 | You need to go get a modem, trot down to Best Buy, pop in.
00:17:19.000 | There's about eight, ten, twelve different modems that would all work great for me.
00:17:22.700 | Grab one that's great. It's cheap. It's high quality.
00:17:25.900 | I don't even have to worry about it. Everything that's there is high quality.
00:17:28.400 | It's available. It's in stock. Pick up a router. Boom, boom, boom.
00:17:31.600 | Everything is there. It is not that way in other places.
00:17:35.400 | The modem, if I were shopping for a modem in Mexico City, of course, I can find it.
00:17:39.700 | All the stores are there. I can get it. I'm going to pay more money for it.
00:17:43.100 | The selection is going to be less. And the whole system is just not as robust as it is in there.
00:17:48.500 | Now you're in San Miguel de Allende and you want to go do that.
00:17:51.000 | That's going to be a multi-hour thing for you to get everything set up.
00:17:54.500 | Now it works just like here, right? You can call the cable company.
00:17:57.600 | They'll bring you out your modem. It all is the same.
00:18:00.200 | It's just not quite the same quality, not quite the same ease.
00:18:03.600 | Many people love that, right? That's why they go.
00:18:07.600 | They want to get away from the big box culture.
00:18:11.100 | But what I'm sharing is that those things make for a higher quality of life.
00:18:17.700 | It's very chic right now to be a foodie and to talk about,
00:18:23.000 | "I would never eat at Olive Garden." I understand that.
00:18:27.200 | I have those tendencies. I think of myself as a bit of a foodie.
00:18:31.100 | I don't want all the preservatives and everything.
00:18:33.000 | But man, you travel the world and you come back
00:18:35.900 | and you realize the fact that you can go to Olive Garden
00:18:38.600 | and you can get all their stuff and you can get it for $10, $12, $13, $8.
00:18:45.900 | I don't know exactly what you're getting. $20, whatever you're getting.
00:18:50.300 | These are high quality things with massive portions and good food.
00:18:56.000 | I have eaten in a cafe in Italy.
00:18:58.300 | I am not saying that Olive Garden is Italy. It's not.
00:19:03.000 | But on a global basis, having access to that stuff with reliable service,
00:19:07.500 | with reliable pricing, with reliable ingredients,
00:19:10.700 | that's where the United States really, really shines.
00:19:13.900 | And so if you're looking for a different cultural experience,
00:19:16.600 | that can be had all around the world.
00:19:19.000 | And you can enjoy that cultural experience potentially at a lower price.
00:19:23.700 | But those price savings are not so significant.
00:19:26.600 | And if you compare the quality of having the access right at the gate
00:19:29.400 | of your suburban neighborhood to all the stuff that exists
00:19:33.000 | around every suburban neighborhood in the United States,
00:19:35.600 | that convenience is something that I have come to learn to appreciate.
00:19:41.000 | What else? What are the other costs and the cost savings?
00:19:45.700 | Let's talk about where you do save a lot of money.
00:19:48.000 | The place where you can save the most money in Mexico is on anything
00:19:53.800 | that involves service, the cost of wages, the cost of labor.
00:19:59.600 | If you were going to hire a housekeeper to come and clean your house in Mexico,
00:20:06.000 | that cost will be 25% or less of what you would have to pay
00:20:14.100 | for an equivalent service in the United States.
00:20:17.700 | And that can be a major, major upgrade in your quality of life.
00:20:23.100 | Now, why does that wage disparity exist?
00:20:27.000 | It exists because the kind of person that you would hire to clean your house
00:20:32.900 | or be your gardener in Mexico is not living a Western class of lifestyle.
00:20:41.400 | That gardener or that housekeeper is living a more basic,
00:20:45.300 | normal Mexican class of lifestyle.
00:20:48.300 | What do I mean? Well, when I live abroad, I don't eat beans and rice.
00:20:53.600 | I don't enjoy eating beans and rice very much.
00:20:56.200 | I don't like it. I'm not used to eating beans and rice and tortillas every day.
00:21:00.100 | It's fun to eat on occasion, but that's not how I eat.
00:21:02.700 | So when I go, I eat abroad the same way that I eat when I'm in the United States,
00:21:07.400 | which means that I go to Price Smart in Latin America,
00:21:10.800 | is the equivalent of Costco, where it's actually owned by,
00:21:15.100 | they have all the Kirkland brands. And so I go to Price Smart.
00:21:18.100 | I pay 20 to 30 to 50 to 100% more for the same product,
00:21:22.600 | the same Kirkland product that you can get in Costco in the United States
00:21:26.400 | at Price Smart in Latin America. I buy all of the expensive foods.
00:21:31.200 | I buy some of the prepared foods, all the expensive foods.
00:21:34.500 | And so my food bill is five times more than a local person because I eat differently.
00:21:40.300 | I'm accustomed to eating in a different way and we eat differently.
00:21:43.700 | Again, could you save money going to Mexico? Without question, you could.
00:21:49.600 | Many people have. You could go to Mexico
00:21:52.200 | and you could start eating tortillas and beans and rice and tacos normally.
00:21:58.800 | And I love to do that on occasion. But when it comes to eating that way every day,
00:22:03.000 | since I wasn't brought up that way, it doesn't feel normal.
00:22:05.500 | It doesn't, I don't enjoy it. And I'm not broke.
00:22:09.300 | So I don't have to eat that way.
00:22:11.000 | And so you pay more for kind of that,
00:22:12.600 | for that Western class of lifestyle in Latin America than you do in the United States.
00:22:18.800 | The other thing about services is that there are services that are cheaper,
00:22:23.300 | that involve basic labor. Again, housekeeper, gardener, security guard.
00:22:29.900 | But a lot of those things could be had for cheaper in the United States with a different system.
00:22:37.100 | So let's say that you go to Mexico and you have a house,
00:22:42.400 | and with a house with a half acre of land in a nice gated neighborhood, etc.
00:22:48.400 | I guess it's a little bit too little for you to hire a full-time gardener,
00:22:51.400 | but it wouldn't be uncommon for you to have a full-time gardener with something like that,
00:22:55.200 | if you are a wealthy person. So you have a full-time gardener taking care of the property.
00:22:59.600 | But what is much less common in Mexico is the lawn
00:23:04.200 | and landscaping service that comes by once a week and takes care of your garden.
00:23:10.100 | Usually it's done on the community level where there's community gardeners
00:23:13.900 | or it's your own private gardener. Whereas in the United States,
00:23:17.700 | if I want my lawn and my grass cut, my bushes trimmed, etc.
00:23:23.200 | There are plenty of people competing for my business,
00:23:26.000 | and I can just simply hire them and transfer the whole business over to them.
00:23:31.500 | They're the ones who buy the lawnmowers and maintain them.
00:23:34.500 | They're the ones who decide when to show up. They're the ones who hire the employees, etc.
00:23:39.000 | I just pay them their monthly fee. And the monthly fee for you to have a landscaping service
00:23:43.600 | come to your house is cheaper than or at least equivalent to the monthly fee
00:23:48.700 | for you to have a full-time gardener. And do you get more benefit from one over the other?
00:23:54.100 | If I'm in Mexico, I love the fact that I can have a full-time gardener that I can support.
00:23:58.600 | But now also that creates an entanglement.
00:24:01.500 | You know that you're responsible for supporting, you know, your gardener's family.
00:24:06.000 | You know that if you fire your gardener, that's potentially devastating.
00:24:10.200 | You're opening up a whole set of relationships, which can be a tremendous blessing,
00:24:14.600 | but it's also a tremendous responsibility.
00:24:16.900 | If I decide that I want to take over my lawn care service in the United States,
00:24:20.200 | and I fire my company, I don't have any moral problems with that.
00:24:26.700 | But in Latin America, I do, because I know that there's a whole family that I'm feeding.
00:24:31.500 | And now it creates a whole different set of expectations.
00:24:35.700 | One is not right. The other is not wrong. It's just different.
00:24:39.400 | And it's a different system. Similar things with housekeeping.
00:24:44.300 | If you hire a housekeeper in Mexico, that housekeeper is going to clean your house with a broom and a mop.
00:24:53.600 | No equipment. She's going to use a broom, sweep the floor,
00:24:57.600 | then she's going to get a towel, wrap it around the mop handle and mop, and do a great job.
00:25:03.000 | Well, you can't get that work as cheaply in the United States.
00:25:06.600 | Of course not. But what you can get in the United States that is just not commonly used is equipment.
00:25:12.300 | You can even buy a robot. You can go down and for $300 or $400,
00:25:16.500 | you can buy a robot that will sweep your floor every single day for you while you're away from the house.
00:25:22.300 | And over time, that robot is vastly cheaper than the cost of the housekeeper in Mexico.
00:25:29.700 | Obviously, a very different scenario. Again, back to this pros and cons.
00:25:34.000 | In Mexico, you get to support a housekeeper and her family and as a relationship, and it's wonderful.
00:25:40.300 | But then on the other hand, it's a whole set of obligations and things that are concerning.
00:25:46.300 | So the point is that to get the equivalent thing, it's different.
00:25:51.900 | It's a different thing. And the cost savings are not as dramatic as you might otherwise assume.
00:25:56.900 | What services cost more? Well, now, let's talk about things for your children.
00:26:02.500 | Simple things, libraries, education. One of the things that happens is in many societies like the United States,
00:26:11.200 | the things that are available for free are things that you have to pay a lot of money for when you're abroad.
00:26:20.200 | Anyone who's ever listened to Radical Personal Finance knows that I am one who questions government schools nonstop.
00:26:27.600 | You can get a phenomenal education in a government school.
00:26:34.300 | For an equivalent education quality, and by that I mean access to services, access to sports,
00:26:41.300 | access to quality teachers who are knowledgeable, you have to pay a significant amount of money
00:26:48.100 | to go to a private school in most places in Latin America.
00:26:53.100 | So many Latin Americans are paying lots and lots of money for what they can get as part of their tax system
00:27:02.100 | in the United States of a similar quality. Why does that exist?
00:27:06.400 | Why is it so much? Because when what you use, one more example, right?
00:27:11.700 | Let's say that you want your child to go to a taekwondo class or gymnastics class, etc.
00:27:17.100 | All of that exists in many parts of Latin America.
00:27:19.600 | It's going to be abundant in Mexico City where all the other costs are much higher too,
00:27:24.300 | but it's going to be harder to find in San Miguel de Allende or Cancun or something like that.
00:27:31.400 | It's harder to find. When you go and find it, because there's less demand for it, the prices are higher,
00:27:38.300 | and because those who demand it are the upper class, the wealthy local elite, you pay Western prices for it.
00:27:47.200 | You go and enroll your children in a gymnastics gym, it's going to cost you the same to enroll your children
00:27:51.700 | in a gymnastics gym in Mexico as it will in the United States.
00:27:55.300 | There's no cost savings because the upper crust, the wealthy elite in Mexico,
00:28:02.200 | are just as rich and richer than what they are in the United States.
00:28:06.500 | So the difference is that in Mexico, you have to be upper class elite to be able to access those services,
00:28:12.800 | where in the United States, an ordinary common middle class family can access those things.
00:28:19.700 | That's the difference. And so there's not a big cost savings there.
00:28:23.200 | So yes, you can have a housekeeper that's a lot cheaper,
00:28:29.000 | but when you go and enroll your children in gymnastics, all of a sudden you're like,
00:28:34.000 | "Wait a second. The cost that I'm paying here is exactly the same." Access to things like libraries.
00:28:39.000 | My wife's favorite thing about being in the United States is access to the library
00:28:43.200 | because we can go and get 100, 200, 300 books a week and it's abundant.
00:28:48.900 | The selection is never-ending. You don't get that quality of library.
00:28:54.100 | You don't get that quality of selection in Latin America.
00:28:57.500 | And you can just go on down it. What about cultural events?
00:29:00.800 | Now here, cultural events are different, right?
00:29:02.600 | Every culture has lots of festivals and things that are available,
00:29:06.400 | but you can get different cultural events that are available cheaper in the United States than in Latin America.
00:29:14.000 | If you take the equivalent quality of your county fair and you go and in Latin America,
00:29:21.800 | usually that's going to cost you about the same as far as your county fair versus others.
00:29:26.700 | You know, we've taken our children to the circus when traveling through Latin America.
00:29:30.700 | Awesome, right? Very cool, but still Western prices.
00:29:34.800 | There was no—and of course, Latin America is part of the West.
00:29:37.300 | What I mean is U.S.-American prices.
00:29:40.000 | What things are certainly more expensive in a place like Mexico or the place in Latin America?
00:29:46.500 | Vehicles. Vehicles.
00:29:49.000 | Now, the difference in cost, though, is dependent on what you buy.
00:29:54.400 | Let's say that you go and you buy a brand new vehicle in the United States,
00:29:58.000 | you know, a brand new minivan, $40,000, right?
00:30:01.400 | That's what you pay in the United States.
00:30:02.500 | Mexico, and again, I'm directionally right on this, but I haven't priced the exact numbers.
00:30:07.500 | You pay $53,000, right? A little bit more.
00:30:10.900 | But here's where things change.
00:30:13.200 | Let's say that you want to get a very, very high-quality, high-safe, reliable minivan in the United States.
00:30:21.700 | How much money do you have to spend to get that?
00:30:25.500 | My answer is $5,000. $5,000, right?
00:30:28.200 | You can go buy a 2005 Toyota Sienna, five-star crash ratings, four-star crash ratings, modern, reliable, comfortable, etc.
00:30:38.000 | And you can find one in pretty good condition for $5,000.
00:30:42.100 | You can't find it in Mexico. Cannot find it.
00:30:46.200 | And why is that?
00:30:47.200 | Well, there's so much money in the United States, and there's so much debt,
00:30:52.200 | that there are lots and lots of people who buy new cars.
00:30:56.600 | And so because there's lots and lots of people who buy new cars,
00:31:01.100 | there is a robust used car market for high-quality, not beat-up used cars.
00:31:08.600 | That market is much, much thinner in many places in Latin America.
00:31:13.400 | In the United States, it's not thin at all.
00:31:15.700 | Any day of the week, you can go out and you can buy a $5,000 used car that will last you for five, ten years,
00:31:20.800 | give you minimum trouble, be totally safe,
00:31:23.800 | run down the highway at 80 miles an hour without any trouble whatsoever.
00:31:29.200 | You won't find it in Latin America because the used market is very, very thin.
00:31:34.400 | The vehicles are available for the upper class to buy, and they buy them.
00:31:39.700 | There are lots of new vehicles on the road, but the used market is very, very thin,
00:31:44.600 | and the savings are not nearly as significant as they are in the United States.
00:31:50.400 | What else? Cost of financing, major factor.
00:31:53.200 | One of the biggest reasons why the houses in the United States are a higher quality and cheaper
00:31:58.600 | is because people can finance them.
00:32:00.800 | So because you can go and get a mortgage, people can afford to build a nicer house that's cheaper,
00:32:06.000 | whereas in Mexico, financing on a house is much more difficult to get.
00:32:11.300 | When it can be gotten, the rules are much tighter.
00:32:14.100 | You don't borrow 96% of your house or 97% of your house.
00:32:19.300 | You might borrow 40% of the house.
00:32:21.400 | And so that's why most houses are more basic.
00:32:23.900 | And so the prices are higher for the rich houses.
00:32:30.600 | Same thing with cars, right? The financing on cars.
00:32:33.400 | Is there financing? Yes. Much harder to get, much more severe limits on credit, etc.
00:32:39.600 | And so this leads to a tighter, thinner market.
00:32:42.900 | And this is probably, for me, the most important factor.
00:32:46.600 | In the United States, virtually nothing that you want is unavailable in the secondary market cheap.
00:32:53.800 | Need a new phone? Boom. Facebook Marketplace.
00:32:56.000 | Grab yourself a two-year-old phone and spend a hundred bucks and you're out the door, right?
00:33:01.100 | Want a new vacuum cleaner? Boom. Go to Craigslist, Facebook Marketplace.
00:33:05.400 | You can find a great quality one cheap.
00:33:07.800 | The used market in the United States is so thick with the stuff that you need
00:33:15.600 | that you can get it for far, far cheaper than you can in Mexico.
00:33:22.200 | In Mexico, is there a used market? There is.
00:33:24.500 | But the prices are higher and the selection is less.
00:33:28.100 | We can talk about other things.
00:33:29.000 | Food. Food is cheaper in the United States than it is in Mexico.
00:33:33.400 | Cheaper on virtually everything.
00:33:37.700 | There may be some things that are cheaper in Mexico.
00:33:42.400 | When you can shop directly from the farmer and get fresh vegetables directly from the farmer,
00:33:48.000 | maybe it's cheaper.
00:33:50.200 | But generally, everything is more expensive in Mexico.
00:33:55.200 | Especially the basics.
00:33:57.500 | Maybe corn. I haven't shopped the corn market.
00:34:00.200 | But maybe you can go and you can buy corn flour cheaper in Mexico
00:34:03.500 | because that's what everyone lives on.
00:34:05.400 | But you probably don't live on that.
00:34:08.000 | And corn flour in the United States is not expensive.
00:34:10.000 | It's easy to get.
00:34:11.600 | But everything else is cheaper in the United States for food.
00:34:14.900 | And what's also interesting about the United States is that you can get a lot of prepared food much, much cheaper.
00:34:20.800 | And that prepared food can often minimize your costs.
00:34:25.300 | Once now that you're back in the United States, what do we want to do?
00:34:28.000 | We wanted to have friends over the other day.
00:34:29.400 | We're too busy to cook a normal meal.
00:34:31.600 | And so what I do, I went to Costco and I bought a beef lasagna from Costco.
00:34:34.700 | Fifteen bucks I fed.
00:34:37.000 | Actually I fed off of that $15 prepared lasagna, grabbed $15 prepared lasagna, $6 salad kit on the side, and a little bit of dessert.
00:34:45.800 | And I fed eight people for one meal plus two more meals for my children out of it for a total of $25.
00:34:54.700 | I can't do that in Latin America because the prepared food options don't exist.
00:34:58.800 | The convenience foods.
00:35:00.200 | Either I have to cook from scratch or I have to go out to eat.
00:35:03.200 | And depending on where we go out to eat, the cost in Latin America is equivalent or more often than the cost in the United States.
00:35:12.600 | So I hope you get my point is that you have to look at the actual lifestyle that you are living.
00:35:16.800 | And so how do you figure out what's right for you?
00:35:19.200 | Well, your costs may be totally different.
00:35:21.900 | You might be a surfer working on a laptop saying, I want to build some kind of Amazon FBA business.
00:35:30.900 | And so I need the cheapest place that I can go.
00:35:34.000 | All you need if you're a single guy living that lifestyle is Internet and a place to sleep at night.
00:35:39.800 | Well, your best bet in terms of a place to live cheaply is probably going to be Latin America.
00:35:44.400 | You can find yourself a hostel that'll do a night leave at $10, $15 a night and have Internet.
00:35:52.600 | So maybe you work out a weekly or monthly rental deal.
00:35:56.100 | You might have some beers with your friends.
00:35:58.200 | You don't mind eating rice and beans from the street food.
00:36:01.500 | You don't eat that much anyway, and sometimes you cook in the hostel.
00:36:04.600 | You can live easily in that situation.
00:36:06.400 | Ride the bus. You can live far cheaper in Latin America.
00:36:10.400 | You might be a retired couple.
00:36:12.400 | And I recently worked with a retired couple who was moving down to San Miguel de Allende.
00:36:17.100 | You might be a retired couple.
00:36:18.200 | What do you do? You buy a very nice house and a wonderful, comfortable neighborhood, gated neighborhood, golf community, something like that.
00:36:28.100 | The house is going to be a little bit less than what you might pay for an equivalent house in the United States,
00:36:31.700 | but you're not going to skimp on the comfort.
00:36:34.100 | And then you just live a different lifestyle.
00:36:36.400 | You're not worried about the same things that I'm worried about or someone with young children is worried about.
00:36:41.400 | You get one nice car. You go out with your friends.
00:36:44.200 | You enjoy the cultural experiences, and your life is very simple, and you might be able to live cheaper down there.
00:36:49.900 | By the way, I forgot health care.
00:36:52.200 | I should have mentioned health care is one of the biggest categories.
00:36:54.300 | One of the biggest reasons people will move to Latin America is for health care savings,
00:37:00.100 | because either they can get cheaper health insurance coverage of some kind,
00:37:05.800 | or they can simply get cheaper health care, pay doctors less so they can actually afford it.
00:37:12.400 | And the insurance market in the United States is so screwed up right now.
00:37:15.200 | There have been many people who simply cannot afford it.
00:37:17.000 | It's one of their biggest reasons.
00:37:18.100 | They need ongoing care, and they cannot afford it in the United States.
00:37:20.900 | If that's you, you will definitely save quite a lot of money being in Latin America.
00:37:26.500 | And so there's a very compelling reason for people to do it.
00:37:30.800 | But I don't think that the costs are—the cost savings are as significant as you might expect.
00:37:38.600 | I have come to this conclusion for myself.
00:37:42.000 | If I had to live on a very thick, very minimal budget—the number I always say is $1,000 a month.
00:37:50.700 | If I had to live on $1,000 a month, which is not easy any—it's not easy.
00:37:55.300 | If I had to live on $1,000 a month, where would I want to live on $1,000 a month?
00:38:00.400 | After years of thinking about that question, traveling the world, looking into local budgets, etc.,
00:38:06.500 | me personally, if I had to live on $1,000 a month, I would choose to live in the United States.
00:38:14.300 | And I would do it because of that robust secondary market,
00:38:18.000 | and the fact that so many things are simply free.
00:38:22.800 | So what would I do?
00:38:24.700 | Well, the first thing you have to have to deal with is—well, you don't have to deal with taxes $1,000 a month.
00:38:29.200 | First thing you have to deal with is the cost of housing.
00:38:31.600 | How would I deal with the cost of housing?
00:38:33.700 | Well, first option would be to move from a place where housing is expensive
00:38:38.400 | to a place where housing is not expensive.
00:38:41.200 | The housing is very expensive in New York City, just like housing is very expensive in Mexico City.
00:38:46.300 | Housing is not expensive outside of the cities in Mississippi, Alabama, Florida even, outside of South Florida.
00:38:56.600 | Once you get out, housing is not expensive.
00:38:58.900 | And if you can get out, sometimes you can get more basic housing.
00:39:02.500 | In addition, if you can find alternative housing,
00:39:06.900 | then alternative housing can sometimes be better than cheap housing in Latin America.
00:39:13.200 | I would rather live in a low-priced RV in the United States than a cheap house in Latin America.
00:39:21.000 | Some people would make the exact opposite choice,
00:39:23.200 | but I personally would rather live in a low-priced RV than in a cheap house in the United States.
00:39:27.700 | Why? Physical safety.
00:39:31.200 | Right? Low-priced RV. I can travel the country.
00:39:34.100 | I can camp out and for free with my friends on free land.
00:39:37.400 | I can live in campgrounds. I can even live in cities sometimes.
00:39:40.600 | And I will experience vastly greater physical safety.
00:39:44.300 | I won't be worried about theft. I won't be worried about attack, etc.
00:39:47.800 | as compared to physical safety in Latin America.
00:39:52.300 | I can, what about other costs?
00:39:54.300 | So I got to solve housing in some kind of creative scenario.
00:39:58.300 | I could solve it by living with somebody.
00:40:00.600 | In most cities in the United States, even today, $500 a month,
00:40:03.900 | you can rent a room in a house from somebody.
00:40:06.600 | Sometimes less, sometimes more, but you can rent a room.
00:40:10.300 | Renting a room in a normal American house
00:40:14.700 | will give you a much higher living experience
00:40:18.100 | than many places in Latin America,
00:40:21.900 | for all the reasons stated.
00:40:23.800 | Quality of house, comfort of house, amenities of the house,
00:40:27.700 | safety of the neighborhood, amenities of what's available outside, etc.
00:40:33.000 | All of the stuff that you want to do on a daily basis
00:40:36.900 | is probably free in the United States.
00:40:39.500 | Books are free from the library. Movies are free from the library.
00:40:42.600 | Internet is free from the library.
00:40:44.500 | You can go and get your free phone from the government.
00:40:47.200 | You can go and get free food from the government.
00:40:51.500 | There's so much stuff that's available for free in the United States
00:40:55.500 | that you really don't need much more than that.
00:40:58.100 | Just the access to a library, an internet connection,
00:41:02.100 | movies, etc., at the library, cultural events, etc.,
00:41:05.800 | is really powerful in terms of entertainment.
00:41:09.000 | More than that, tons of activities
00:41:11.800 | that you would find doing in the United States are so much cheaper.
00:41:14.900 | You want to go kayaking in the United States?
00:41:17.400 | Go on Facebook Marketplace, grab yourself a cheap used kayak,
00:41:20.400 | go out and do it.
00:41:21.900 | Mexico? Going to be three times as much to buy the kayak.
00:41:26.100 | Many more concerns about finding it, right?
00:41:28.700 | The whole market of outdoor recreation
00:41:30.700 | is not nearly as strong in Mexico as it is in the United States.
00:41:35.300 | There are clubs everywhere in the world.
00:41:36.400 | I see motorcycle clubs everywhere.
00:41:38.200 | There's hiking clubs. They exist.
00:41:40.200 | But they're much more in abundance in some places than they are in others.
00:41:44.200 | And so, when going down the list,
00:41:47.400 | in the United States for entertainment, all you need is a phone.
00:41:50.000 | And you can get unlimited internet on most phone plans
00:41:53.200 | for the high end, $60 a month.
00:41:56.700 | Easily $30 a month less.
00:41:59.400 | Mix that with widely available Wi-Fi,
00:42:01.600 | which is changing, it's available all around the world now.
00:42:04.100 | You got your Netflix account, you got your YouTube,
00:42:06.400 | you got books, everything, it's just all available for you.
00:42:09.400 | And then when you need stuff, you need a bicycle,
00:42:11.900 | you need a watch, you need a phone,
00:42:14.600 | all the stuff is available in the used market
00:42:17.000 | and quite frequently, literally on the side of the road.
00:42:21.900 | The amount of stuff that Americans throw away on the side of the road
00:42:25.500 | that is good, high quality and useful is astounding.
00:42:30.400 | You can furnish your entire house from the side of the road.
00:42:33.300 | You can find building materials.
00:42:35.200 | All the stuff is available on the side of the road.
00:42:37.400 | And then you get to the cultural questions, the cultural issues.
00:42:41.100 | One of the challenges for many Americans,
00:42:43.300 | this would not have applied to my Venezuelan friends so much,
00:42:46.000 | but one of the challenges that many Americans face is that
00:42:48.000 | they never can access the local market.
00:42:50.400 | Even if they speak Spanish, they still can't access the local market
00:42:54.000 | because they don't know how everything works.
00:42:55.500 | They don't know where everything is, the costs of everything.
00:42:58.200 | So, that's why I said what I said,
00:43:01.800 | is that for me, my costs of living in Mexico,
00:43:09.500 | the category expenses will change.
00:43:13.600 | But for me to get a really high quality of life,
00:43:18.800 | lifestyle, physical safety, not worrying about my children,
00:43:22.600 | good education, etc., it would cost me more
00:43:26.600 | doing that in Mexico than it will in the United States.
00:43:30.100 | Some categories will be cheaper.
00:43:32.100 | And I can make decisions that will mean it would cost less.
00:43:34.800 | I can move to a rural area and I can say,
00:43:37.300 | I'm choosing to live a different lifestyle.
00:43:39.900 | I'm choosing to have this experience of being out in the country
00:43:43.800 | instead of being in the city.
00:43:45.500 | I don't want to be in Mexico City.
00:43:46.500 | I'm going to be in San Miguel de Allende.
00:43:48.000 | Okay, that's fine.
00:43:49.700 | But I could also do that in the United States.
00:43:51.700 | I could move from South Florida to rural North Florida.
00:43:55.200 | I could give up the conveniences of being in the middle of a city
00:43:58.000 | and move out to the country. You could do that anywhere.
00:44:00.300 | And so just make sure that you're comparing,
00:44:02.900 | when you're doing this comparison,
00:44:04.200 | you're comparing comparable lifestyle to comparable lifestyle.
00:44:08.400 | And I think that if you do that,
00:44:09.900 | sometimes the cost savings are not as significant as people,
00:44:14.900 | as they first appear.
00:44:17.500 | In closing, two things.
00:44:18.900 | First, we've not talked about taxes.
00:44:22.400 | Taxes are one of those things that can be dramatically improved.
00:44:25.700 | Mexico is not a tax haven.
00:44:27.700 | Mexico could be part of a tax strategy that would be massively cheaper.
00:44:32.100 | And so when you are dealing with taxes,
00:44:34.700 | why am I such a fan of internationalization?
00:44:37.300 | Because internationalization allows you to legally transform your tax code,
00:44:41.600 | your tax payments.
00:44:43.100 | And so if you're a high-end, if you're an entrepreneur,
00:44:45.400 | you can earn money from anywhere.
00:44:47.100 | If you are a businessman, an investor,
00:44:51.200 | somebody making a lot of money,
00:44:53.000 | then now transforming that is a big deal.
00:44:55.300 | And you can often afford to buy the best of the best.
00:44:59.400 | You can go ahead and afford to buy the penthouse apartment
00:45:02.700 | in downtown Mexico City in the best neighborhood.
00:45:05.800 | Well, there, in that penthouse apartment in the best neighborhood,
00:45:09.500 | you will not want for anything.
00:45:11.700 | You go to a capital city in any country in the world,
00:45:14.400 | and every brand you want is there.
00:45:17.200 | Every restaurant that you want is there.
00:45:19.300 | Every convenience is there.
00:45:21.800 | Everything is available for you there.
00:45:24.900 | And so as long as you can pay for that,
00:45:26.900 | or you're willing to accept what you can afford there,
00:45:29.400 | everything is available in those zones, in the capital city.
00:45:32.800 | And that's where we see the world transforming.
00:45:35.300 | The Costa Rica that I studied in in 2005
00:45:39.900 | is not the Costa Rica that I visited this last year.
00:45:43.200 | Just not. It's totally different.
00:45:45.500 | And every brand is there.
00:45:47.000 | And so we live in a time in which it's never been easier for you to move abroad.
00:45:51.100 | And so as long as you can solve some of these things,
00:45:53.100 | the lifestyle options are there.
00:45:56.100 | They're there in abundance.
00:45:59.400 | But you got to consider what your actual costs are.
00:46:03.700 | So for that businessman, you know, to buy the apartment in downtown Mexico City,
00:46:07.400 | or rent the really nice house in whatever city you're interested in,
00:46:13.200 | you can do that, and everything is there.
00:46:15.200 | And the big savings on tax costs,
00:46:18.300 | or cost of employees, or etc.,
00:46:21.900 | more than offset the slightly higher cost to go and eat at Friday's.
00:46:28.300 | The second thing that you want to consider is oftentimes
00:46:32.000 | internationalization provides a great excuse for you to change your lifestyle.
00:46:36.600 | For example, I have frequently said,
00:46:39.500 | if I went broke, I would get on an airplane,
00:46:42.200 | and I would go to some really low-cost place,
00:46:45.400 | and I would build a new business.
00:46:47.000 | I get on an airplane, and I go to Thailand,
00:46:49.000 | and I join the startup community in Chiang Mai, or something like that.
00:46:53.600 | Or I'd fly to Nicaragua, and I'd rent a little shack on the beach,
00:46:56.300 | and I'd build my business.
00:46:58.300 | And by the way, all of this thing is going to be even,
00:47:00.700 | three years from now, when Starlink is available all around the world,
00:47:04.900 | this is going to be, these options are going to be on steroids,
00:47:08.600 | in terms of what's available to us at that point in time.
00:47:11.200 | But I would do that,
00:47:12.700 | and I would have a massively lower cost in that circumstance.
00:47:16.500 | Why would I consider doing that?
00:47:18.300 | And why would I do that, still in light of everything that I have just said?
00:47:22.400 | The reason is, sometimes it's easier for you
00:47:25.700 | to accept the lifestyle trade-offs,
00:47:29.000 | if they're dramatically new,
00:47:30.900 | and just a totally different kind of adventure.
00:47:33.300 | Living in the United States, for example,
00:47:36.000 | I have never, make sure I'm telling the truth, yeah,
00:47:39.600 | I have never taken a bus in Florida.
00:47:43.900 | I've never ridden a public bus.
00:47:45.900 | There is a bus system, I've looked at the map sometimes,
00:47:48.600 | there have been times when I've looked at it,
00:47:49.800 | and thought about commuting on a bus,
00:47:51.500 | but I have never taken a bus, I just, I don't take the bus.
00:47:55.300 | And I'm not willing to deal with the inconvenience of taking the bus here.
00:47:59.900 | But that's very different than if I move to another place,
00:48:02.800 | and just from the beginning I take the bus.
00:48:04.900 | I move to a place, and hey, this is what we do, right?
00:48:07.100 | Some people do when they move from Florida to New York,
00:48:09.100 | okay, I take the bus and the subway and all the public transportation.
00:48:12.300 | And so, and they don't worry too much about it.
00:48:14.300 | Is it inconvenient? In some cases,
00:48:16.200 | and of course in some places it's more convenient than having a car,
00:48:19.000 | but it is inconvenient.
00:48:20.800 | But why do they deal with the inconvenience?
00:48:22.600 | Well, because it's new, it's novel, that's just how things are done there.
00:48:25.900 | And so if I went from here to Thailand, I would have no car.
00:48:30.100 | I would just rent a little apartment.
00:48:31.900 | I would eat noodles, and that would be exciting to me,
00:48:34.600 | because I like noodles. And for six months to have no car,
00:48:39.300 | I would walk, I would go to the market, I'd go to the beach, I'd ride the bus.
00:48:42.100 | I'd do all that stuff, and it would be part of the fun adventure of being in Thailand,
00:48:47.000 | and it also allows us to save less money.
00:48:49.900 | Now, do I still think you could live cheaper in the United States?
00:48:53.800 | Maybe. Housing would be more expensive in the United States,
00:48:56.700 | but you could get rid of your car in the United States.
00:48:58.900 | You could walk everywhere or ride your bicycle everywhere.
00:49:01.500 | You could eat noodles every day, but that's not fun for most people,
00:49:05.500 | and most people aren't going to do that.
00:49:06.900 | They feel like they would be being deprived.
00:49:09.100 | But sometimes when you're in a new place,
00:49:11.100 | you feel like the adventure allows you to put up with the things
00:49:14.300 | that you normally wouldn't put up with, and that's why I see that.
00:49:18.900 | Living in an RV can be cheaper than some other living options, but often isn't.
00:49:24.300 | But why have I recommended to some people that they,
00:49:26.200 | yeah, go live in an RV for a time, and you'll save some money.
00:49:28.700 | Why? Well, because they're willing to adopt something totally different.
00:49:32.700 | When you live in an RV, you might be willing to go,
00:49:35.100 | and for your entertainment, go and do nature walks at night,
00:49:38.700 | instead of going out on the town and spending lots of money at restaurants.
00:49:42.000 | You might be more likely to go and do picnics.
00:49:44.900 | Why? Well, you could do that in your hometown,
00:49:47.400 | but you've probably already seen everything in your hometown,
00:49:49.900 | and so being in the RV says, "Hey, we'll change a different lifestyle,"
00:49:53.400 | and I think that is a valuable strategy for a time.
00:49:57.400 | And so that's why I said what I said in Mexico,
00:50:00.000 | specifically talking to somebody who had a couple of children,
00:50:03.800 | who had gotten accustomed to a Western lifestyle, to recreate.
00:50:08.200 | I shouldn't use Western, because Venezuela and Mexico are both part of the West.
00:50:12.500 | I was talking to someone who had gotten accustomed to an American lifestyle,
00:50:18.000 | and was earning a high salary, had all the nice stuff,
00:50:22.200 | had a nice house in the suburbs, had just all the stuff, right?
00:50:25.100 | All the normal stuff. Well, to go away from that stuff,
00:50:28.700 | and then go back into a different place,
00:50:31.400 | I think it would cost more to recreate what he has in the United States, in Mexico.
00:50:37.700 | That's my opinion. Your mileage may vary.
00:50:41.200 | I believe that cost differences exist,
00:50:43.500 | and that you can live cheaper in Mexico than the United States.
00:50:47.200 | But most of the savings doesn't come from, with the exception of service categories,
00:50:54.000 | most of the savings doesn't come from cheaper goods.
00:50:57.300 | It comes from a changed lifestyle of what's normal,
00:51:01.800 | and that's a good strategy to employ.
00:51:05.100 | If you have just a car, in many places in Latin America,
00:51:10.200 | you're considered to be wealthy.
00:51:11.700 | Whereas in the United States, hey, you have a car, now you got to have a nice car.
00:51:15.200 | So you can get rid of some of that consumer culture by going abroad,
00:51:18.000 | and that can be helpful.
00:51:19.400 | But the savings in some places are not as substantial as many people think.
00:51:26.400 | So calculate your categories personally,
00:51:29.800 | figure out what you need, what kinds of things you spend money on,
00:51:32.900 | and then you can figure out the best place for you.
00:51:35.700 | Thank you for listening to today's show.
00:51:37.000 | I hope that helps clear it up.
00:51:38.600 | Feel free to plug in your own budgets.
00:51:40.100 | I'm just sharing my experience, pretty extensive on some of this stuff,
00:51:44.000 | but I didn't go back and try to calculate dollar-for-dollar equivalencies.
00:51:47.900 | But this explains and elaborates my comment on the subject.
00:51:51.600 | Remember that I do have consulting open right now.
00:51:53.600 | If you'd like to book a private consultation with me,
00:51:55.700 | you can do that at radicalpersonalfinance.com/consult.
00:51:58.700 | You want to work on your tax plan, want to work on your investment plan,
00:52:01.800 | want to work on your cost savings plan,
00:52:04.700 | whether it's in the United States or in Mexico.
00:52:06.600 | There's lots of ways to save money in both places.
00:52:08.800 | Go to radicalpersonalfinance.com/consult,
00:52:11.200 | and you can book a call with me there now.
00:52:12.900 | Thank you.
00:52:15.900 | Hey, friends.
00:52:16.400 | Sorry, I forgot one story I wanted to tell you
00:52:18.200 | that I think proves the point
00:52:19.700 | and also demonstrates where a place like Mexico is actually much, much better.
00:52:24.500 | I recently heard a story from a friend of mine here in Florida.
00:52:28.000 | This particular friend was planning to move,
00:52:32.000 | and they've been out full-time RVing for six months, some months.
00:52:38.100 | And this particular friend was planning to build a kind of a house,
00:52:44.300 | sort of a barndominium type of approach for themselves to live in.
00:52:50.100 | And so they bought a piece of land out in the city known as Okeechobee,
00:52:55.400 | which is west of Palm Beach County.
00:52:58.500 | And Okeechobee is known as being more of a rural place,
00:53:01.400 | the small town farming community, lots of ranches there, etc.
00:53:05.200 | It's within striking distance of West Palm Beach and South Florida,
00:53:11.500 | but it's kind of out there a little ways.
00:53:14.400 | And so they bought a little piece of land,
00:53:16.200 | and their plan was to build a shed first, build kind of a shed,
00:53:20.200 | and then put an apartment into it and start building it out little by little, right?
00:53:23.400 | The way that so many of us have seen people do throughout history,
00:53:26.900 | where you live on the property while you're developing it.
00:53:30.000 | They found out that even in the city of Okeechobee,
00:53:33.100 | which again is known for being a rural, more easygoing, less restricted place,
00:53:39.500 | they found out that in the city of Okeechobee, their plan will not work.
00:53:44.700 | Well, why?
00:53:46.100 | According to them, what they have discovered is
00:53:48.900 | it is now illegal for them to live on the property
00:53:55.100 | without having built a permitted building.
00:53:58.700 | And the minimum size of building that they have to construct on the property is 1,200 square feet.
00:54:07.900 | They can't build anything smaller than 1,200 square feet, so 30 by 40.
00:54:14.200 | And if they were to build something that's 1,200 square feet,
00:54:19.200 | they can't actually sleep on the property
00:54:22.100 | until they have received their certificate of occupancy.
00:54:25.700 | In order to get their certificate of occupancy,
00:54:27.800 | they have to build a permitted structure with all of the relevant things required by code,
00:54:32.800 | bathroom, etc., kitchen, I don't know all the details of the code,
00:54:36.500 | but they have to get their certificate of occupancy
00:54:38.800 | before they can spend a single night on the property.
00:54:42.300 | That's what they're dealing with in this semi-rural,
00:54:45.100 | I mean, it is a rural county, it's just, it's not rural in the South Dakota sense,
00:54:49.200 | but it is a rural city in Florida.
00:54:52.900 | And so the entire idea of having an RV,
00:54:56.400 | living in it while you build a house and then you move into the house,
00:54:59.400 | that just won't fly based upon the legal restrictions.
00:55:03.500 | And that's where the United States has become really, really difficult.
00:55:07.900 | It's not the same everywhere.
00:55:09.500 | There are, of course, how many counties are there? 3,500 counties,
00:55:12.800 | something like that across the United States.
00:55:14.600 | And every county will have a different set of rules.
00:55:17.200 | And so you can find pockets where you can build an earth ship,
00:55:21.200 | you can find pockets where you can convert a pre-made shed into a house,
00:55:26.200 | you can find pockets where you can just park your RV and live on it.
00:55:29.900 | There's lots of places to do that in the United States.
00:55:32.200 | But in the vast majority of places in Latin America,
00:55:35.300 | nobody blinks twice about you're doing that stuff.
00:55:38.400 | And that is one of those places where Latin America really does shine.
00:55:41.500 | So if you want to build a $500 house for yourself,
00:55:45.100 | or you grab a few pieces of wood and stack them up around yourself
00:55:50.000 | and put up a few pieces of tin on top,
00:55:52.200 | you can do that in Latin America.
00:55:54.300 | And you can't really do that in many parts of the United States at this point in time.
00:55:58.600 | And so that is where you can massively save costs.
00:56:03.500 | Mexico and many other places, just fewer laws, fewer hassle.
00:56:08.300 | First, it's fewer laws, fewer dumb laws,
00:56:11.300 | if you're trying to build a homestead, things like that.
00:56:13.900 | And the laws that are, are just not enforced very much.
00:56:18.000 | And there just, you know, the cops aren't, there aren't so many cops,
00:56:21.800 | there's not so much enforcement.
00:56:23.500 | It's just a much more relaxed culture.
00:56:25.800 | And so if you want to live in an RV while building a house, etc.,
00:56:29.800 | you should very seriously consider going to Mexico.
00:56:32.100 | You're going to pay more for most building things.
00:56:34.000 | And if you build a US-American house style, you're going to pay more.
00:56:36.900 | But you can build a basic house, and that house, basic house can be perfectly comfortable.
00:56:41.100 | And that's one thing that I have come to really appreciate,
00:56:43.200 | is that today, you could live like a king in a very basic structure.
00:56:47.900 | You don't necessarily need all the stuff that makes for the more normal house.
00:56:53.400 | You can live very, very well in that kind of context.
00:56:57.200 | The only kind of flip side to that is you don't have to go to Mexico to get that.
00:57:02.900 | Right, if my friend can't do, you know, if their family can't build the kind of house they want to build here in Florida,
00:57:09.000 | there are many other places that they could go.
00:57:11.700 | And if they went to some of these other places,
00:57:13.900 | they would experience all those other benefits of the United States versus Mexico.
00:57:19.500 | And that's what's so unique about the United States,
00:57:21.400 | with it being such a massive country,
00:57:23.700 | and with it being a country composed of 50 independent sovereign states,
00:57:28.700 | and then with those states being composed of many dozens of counties,
00:57:32.900 | each of which has their own rules, regulations, or lack thereof,
00:57:37.600 | you can usually find something in the United States that gives you the kind of lifestyle you're looking for.
00:57:42.900 | So I do believe there are big benefits to Mexico,
00:57:45.200 | but I wanted to share that story just in closing.