Cheaper Wages,

U.S. vs Mexico

Every once in a while I receive email from people who just don’t believe it’s that much cheaper to live in Mexico than it is to live in America.

Of course, it all depends on how you spend your peso or dollar… just how well you’ve learned to make that dollar stretch…but, beyond that, the simple facts are these: 

The 2010 minimum DAILY wage in Mexico is set according to three different zones in Mexico. They are:

Zone A: 

The states of Baja California, Baja California Sur, Mexico City and some municipalities of the states of Mexico, Sonora, Tamaulipas Veracruz and Chihuahua  at 57.46 pesos a day. 

Zone B: 

Includes Monterrey and Guadalajara, plus the states of Jalisco, Nuevo León and some municipalities (not covered by A above) of the States of Sonora, Tamaulipas y Veracruz. at 55.84 pesos a day. 

Zone C: 

Is scheduled for the smaller cities, plus the states of Aguascalientes, Guerrero, Quintana Roo, Nayarit, Oaxaca, Puebla, Querétaro, San Luis Potosí, Sinaloa, Tabasco, Tlaxcala, Yucatán, Zacatecas, Morelos, Michoacán, Hidalgo, Guanajuato, Durango, Chiapas, Coahuila, Campeche, and some municipalities of Veracruz, Nuevo León, Sonora, Tamaulipas, Jalisco, and Chihuahua (not covered by A and B above), rose to 54.47 pesos a day. 

Remember, an approximation for converting pesos to dollars is ten to one – but it does vary daily.  Actually, I just checked for today, 8-29-10, it’s at 12.99 to one.  But, for quick changing, using 10 to 1, the highest daily rate of 57.46 pesos equals 4.50558U.S.D. 

Yes, that’s right, $4.50 a day.

 

Now, I defy any of you to live in America on that…doubled, or even tripled. 

And yet, Mexicans do live on that amount, and they are not starving.  They are buying their veggies at native stands – their meat at native stands, etc., and they are raising food themselves.    

They may not have high speed internet, but that’s okay too – they may be too busy carefully watching their children to bother with such stuff.  

Oh, by the way, the minimum wage, HOURLY in America is $7.45  (States may individually set a minimum, in which case the higher of the two is the controlling minimum wage for that state.) 

Mexico’s minimum daily wage is based on an 8-hour work day.  8 hours of work = about $4.50 U.S. 

Mexico’s work week is 6 days. 

America’s daily minimum wage, based on an 8-hour day.  8 hours of work = about $60.00 U.S.  That is approximately 13 times Mexico’s minimum wage. 

So, you don’t think it’s cheaper to live in Mexico?  Amazing!!

Cost of Living Info

Mexico Jerry kindly supplied me with the info that prompted my article for today and even supplied us with cost of living info in his area.

Hey Cathy, I told you that my readers are usually very happy to share their experiences!  

Jerry has sure proved my point and has not let me down!  Jerry also confirms my writtings! Sometimes people find the cost of living in Mexico a bit unbeliveable, but, well, read for yourself below.

Not too much more to add, other than, you will surely notice he’s not concerned a bit with his safety.  Things are truly getting worse in Mexico…it’s spread all over our TV and newspapers…impossible to ignore!  

But, I just discovered a most interesting fact, and I know it’s important to all of you:  that 98% of the crime in Mexico is criminal against criminal.  But that left over 2% is a big figure if it happens to involve you or your family. Now, the crime is spreading to include the good people who are fighting the drug lord situation – it is a war.  Just be careful, and be aware…everyplace.  Another reason to not flash cash – don’t wear showey/expensive jewelry – don’t leave big tips – don’t wonder into unfamiliar areas by yourself – etc., etc., etc. – use your common sense! 

Now, read some major reasons you should move to Mexico – especially in retirement with Mexico’s good cost of living – if you follow our cheap / frugal folks’ rules: 

E-mail from Cathy, to (Mexico) Jerry’s first blog response, cc’d to me:  

Hello Jerry, 

I’ve been doing some research on different areas of Mexico.  I’ve also been in contact with a couple that moved to Merida and have been there for a couple of years and love it! I find the culture exciting and hope to experience it as they have.  

I would have some cash to live on for a while, but would have to find a way to make some money after a few months.  We all start somewhere, and it is great that people like you are willing to share what you have learned along the way.  Maybe I’ll be able to do the same for someone else someday.  

Any information you can share is much appreciated. Thanks, Cathy 

Jerry Draughon’s reponse to Cathy, cc’d to me, including info on his cost of living::

Cathy, you don’t need much to live on here. 

I walk to the plaza and get two tacos for just 6 pesos each.  That is often my supper  I might  just have a hamburger or a hot dog. Yes, I go out to nice restaurants too, it’s just not that expensive 

Food is cheap, especially if you shop where the Mexicans shop. (Barbie’s note – which I stress constantly in my articles)  I guarantee that your veggies will probably be more flavorful and tastier than the ones that you buy where you live.  Most farmers here don’t have the extra money to pay for chemicals to throw on their gardens.  

Dr’s are cheap and highly trained.  My Dr charges me 100 peso’s for a visit.  He speaks English too.  You can go to the central salude (clinic)  for nothing or next to nothing.  

Prescriptions are much cheaper here.  I leave all my stuff like TV, lights and fans on all day long well into the night and my electric bill is VERY high, it never (so far ) has gone over $40 USD per month.  You pay the electric every two months and as you use more, you will be charged the highest rate per kWh.  I am in the high usage and you see what I pay. 

I have a friend that moved to Meridia and she tells me that it is both very hot there, as it is sea level, and very expensive. I lived a year in Mazatlan and while it was very pretty, when summer came, all the gringos left for cooler climes.  That’s why I came to the Chapala area as it is the same height as Denver, Co.  She also told me that it is very pretty too.  

I hope you find what you are looking for but don’t be too caught up on how much money you have.  I know people who live here on  a SS check of $350 USD per month. 

Write me if you need more info. Nos vmos ( see ya!)  Jerry 

So, for cost of living info, and a whole lot of goodwill, you and I can almost always count on my Expat readers ! I thank them from the bottom of my heart!

Retirement Primer

In my book, Retire In Luxury, I begin by saying that Dick’s and my retirement starts a little unexpectedly.

Oh, sure, we knew retirement was coming.  We had known that for years, but to choose a day when an actual paycheck would no longer be coming in… that was scary to say the least.

Through Dick’s work career, we had always matched the employer’s 401K contribution fully toward our eventual retirement.  We had managed to save a little money from the building and remodeling of houses that we had done for years — although back in those days, we congratulated ourselves when we walked away from a sale with $5,000 profit in our pockets.  And we did almost all of the physical work ourselves.  But we were young and strong, and now Yikes!  Well, we still feel young.  We are still fairly strong, and we were going to need that strength now.

Talking About Retirement

The whole process started with a lot of talk about retirement – I mean a lot of talk.  What did we want to do with the rest of our lives?  Where did we want to spend the rest of our lives?  How in the heck would we pay the bills?  And just how long might this “retirement” last?… Oh my gosh, that’s right… the rest of our lives… hopefully for many, many years!

Remember… this was a little over 10 years ago – so I grabbed pencil and paper – yes, I had computer, but I was still relying on the good old tablet and pencil for the first-round.  It took a bit of work, but I finally had a list of bills – debits, and the list of income – credits.  Darn, the debit list is a whole lot longer than the credit list.

On the debit list, there were utilities, there were insurance payments, there were credit card payments (luckily years ago we had learned to pay off that debt monthly), we had a very small payment for the maintenance fee where we lived in Louisiana, and every little bill I could think of was placed on the list -I wanted no surprises in our retirement.

Retirement …or Mortgages

I want to tell you now that if you are still making mortgage payments on your home or if you are still making payments on a vehicle, you may not find retirement very rewarding.  But, maybe you’re just one of those few souls who happen to absolutely love your work – then, keep it up – and enjoy – you’re not really retired – you’re just enjoying working.  Or then again, maybe you have a whole pocket full of money – if so - that’s good too!

However, if those big payments are still coming due, you will most likely be one of the many who take up a second career – or just continue your original.  So if it is at all possible, get those two bills paid off… you will be very glad you did – if you actually want a good and enjoyable retirement.

It’s strange, but once you have all this information down on paper, a lot of those spooky clouds and worries started to disappear.  We realized if we were careful – frugal — maybe downright tight, this retirement just might work out.

Even if you’ve already taken that big step and retired – go ahead and get those lists down on paper (or on the computer).  They’re not nearly so scary in black-and-white.

The “where” choosing portion of our retirement, I’ll delve into later.

Retirement article by Barbie.

Moving to Mexico?

You will be applying for certain Mexico Visas – FM3, etc. - you must prove you have a minimum monthly income.

That is a requirement to obtain certain visas – expecially for seniors. $1,150 a month for the first person in the family is approximate, due to the fluctuation in the exchange rate, and considering yearly increases set by the government’s Mexican Immigration Department’s Official Federal Requirement, but that’s a pretty close estimation.  If you own property in Mexico, you can cut that amount in half.  For the second person in the household, about half the amount of the first person is required.  This amount also varies as to which zone you want to reside in Mexico, A, B, or C, in 2010.   Read more in one of my newsletter reports:

http://www.retireinluxury.com/free/retire_in_luxury_july20.pdf page 3.

There are rental properties available almost anywhere in Mexico.

And you may be able to take advantage of them to check the area out that you are interested in.  I always tell my readers to go, not as a tourist, but as some one who is really looking for a new place to put down roots.  Hang out at the native shops and restaurants.  Staying only in a lovely resort, in the fabulous pools, is not going to give you the real taste of Mexico you need to make your big decision as to whether you’re going to move south of the border or not.   Take a few trips to check things out.

Mazatlan, because of having every convenience, was our choice, but, there are places nearer the border.

And, sure, you can own property in Mexico.  In the interior you’ll get a deed – much like the States.  In the “excluded zone”, you can still own property, but you will do so through a Trust. Do download all my free newsletters and read all my reports and articles – you’ll find oodles of information to help you in your decisions.

Just heard a new one – at least for me – when life deals you a bunch of lemons – hey – make Margaritas :)

And, to end today, an email received from Marlene S.:   “Thanks for all the information on Mexico.  Your e-book was very helpful.  Thanks to it and a visit for the month of October, we are moving to Lake Chapala area at the end of February.  Less than one month!!!  In about two weeks I will have a different e-mail address. If you want it just let me know. And thanks again for the good tidbits, do’s and don’t's,  etc.  Our friends from British Columbia just moved as well.  He was having some chest pains before he left but the BC doctors gave him a clean bill of health. When he arrived in Mexico things got worse.  He ended up having triple bypass surgery in Gudalajara.  It went very smoothly.  They gave the BEST and quickest care they have ever seen.  In a new clean modern hospital.  He may not be alive if he was still living in BC.  So Medical care is superb in Mexico. All for now.  Marlene”

Do read all my free articles on Mexico on my sites, and enjoy.