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May 4, 2013 at 7:46 PM #20649May 5, 2013 at 2:25 PM #761797
Forget everything you thought you knew about Mexican politics and their economy. Their economic growth rate is about twice ours. Their unemployment rate is falling fast while ours remains stubbornly high (which is why the illegal immigration rate to and from the U.S. now is a net zero). Their birth rate per mom has fallen in a generation from about five to two. Most promising, their new young president has taken on corruption, the all-powerful unions, and giant monopolies like Pemex and Carlos Slims’ empire. So while the US moves toward crony capitalism, Mexico is going in the other direction. Accordingly, if you make your plans based on trends instead of what exists now or existed in the past, then Mexico looks promising.
Spend a week or weekend in Ensenada or nearby locales (skip Tijuana!) talking to the a few of the thousands of other Americans living there to get the pros and cons of such a choice.May 5, 2013 at 3:45 PM #761798desmondParticipant
You would think it is April Fools day not Cinco De Mayo reading the Prof’s post. Read this blog for a couple of weeks, try and watch some of the videos that are real and worse than any “Saw” movie you have ever seen, and make your own mind up. The press has just given up reporting drug cartel crime, to many reporters have been killed.
I am very serious about this, some of the videos are gruesome and will stay in your head, be very careful.May 5, 2013 at 8:50 PM #761803Allan from FallbrookParticipant
Desmond: Good post and thanks for the weblink. The Department of State Bureau of Consular Affairs and OSAC (Overseas Advisory Council) both report extensively on countries around the world. I would definitely do my research on Mexico and parts south.
The Mexican drug war has claimed some 70,000 lives and it shows no signs of abating. The cartels have expanded into kidnapping and murder for hire and have targeted expats as well as tourists. There is no trustworthy law enforcement presence down there and there are reports that the Mexican Army is now involved in the drug business.
I’d seriously think twice about relocation. I think EconProf makes some valid points about the Mexican economy and the great strides forward it’s making in terms of progress, but money don’t mean shit if you’re lying dead in a pool of your own blood.May 6, 2013 at 6:35 AM #761805SD RealtorParticipant
I agree with you Allan. It is really unfortunate. Back when I was a young lad… several decades ago, we went to Mexico all the time. Pops and I would go fish regularly. Through college we would go down there alot as well. In the 80’s and early 90’s I would regularly take my family camping as well. We would hit Bahia De Los Angeles and Guerrero Negro.
On the way back from one of those trips in the mid 90s things got sketchy with 3 stops at checkpoints by federales and another stop by people who were not federales but we had no clue who they were. That was our last trip and I have not gone down since. I have a good friend who still went regularly for surf and sailboard runs with his crew. In 2006 they were robbed at gunpoint of everything, boards, trailers, bikes, the entire 9 yards.
It is so beautiful down there and I have so many great memories of the place. I think Econ made good points from a macro-economic point of view. Personally I would never set foot down there again until things change dramatically.May 6, 2013 at 8:34 AM #761806desmondParticipant
[img_assist|nid=17292|title=Rancho Buena Vista-1972|desc=Did the same things as you SD, just a decade or two before.|link=node|align=left|width=71|height=100]May 6, 2013 at 8:58 AM #761807SD RealtorParticipant
Yup to bad man. We would go down a few hundred miles and just have a blast. Coast side, gulf side, it was a blast. It is really a shame man…I feel bad that I cannot bring my kids down there now. My wife has some other clients of hers that had some bad news stories as well.
All it takes is that one bad thing that can change your life forever.
It just is not worth the risk.May 6, 2013 at 9:02 AM #761808
We are kind of talking about different things here guys. I touted the economic and political improvements of Mexico as a whole, and suggest their future is a lot brighter than their past. Investors agree, and capital is flowing into the country, esp. from China. Their wages are growing fast and the expanding middle class with small families are demanding cleaner government and higher living standards.
Their bloody drug wars continue, albeit lessening of late, and only in specific parts of the country. And they are largely, though not exclusively, bad guys killing other bad guys.
Enclaves of American retirees continue to grow, and I’d go there to get their side of the story. Every country has its dangerous areas. Mexico’s are especially graphic and telegenic, which may be giving us an outsized vision of the danger that exists in the retirement communities. I also would not chose to retire in America’s murder capitals like Detroit, Chicago, or New Orleans.May 6, 2013 at 1:53 PM #761818Allan from FallbrookParticipant
EconProf: I agree, and took pains in my post to make that distinction. I also advised doing the necessary research and reaching an informed decision.
However, personal safety always trumps economic opportunity. I don’t believe that the drug war shows any signs of abating and previously “safe” areas of Mexico (safe being a relative term in Mexico), like Acapulco and Monterrey, have been struck by the same violence plaguing the rest of the country. This is becoming an intractable problem and the violence necessary to quell it will take years and cost thousands more lives.
Completely agreed on Detroit, Chicago and NOLA.May 6, 2013 at 3:56 PM #761819HobieParticipant
Also check property ownership by foreigners. Years ago, I am rusty, you could buy a 99yr lease but the kicker is that is was ‘revokable’ at any time. So that lead to bribes to local government officials to keep your house.May 6, 2013 at 4:38 PM #761821barnaby33Participant
My folks lived in Primotapia for a decade ending two years ago. I never even once had an issue going down there. I’ve driven to Cabo, though admittedly that was in 90 and I’ve driven to Guerrero Negro twice in the last decade. Never had an issue. Crime is higher in Mexico, no doubt, but there is just way to much fear mongering.
As to investment and looking south. I lived in Medellin Colombia last year for a few months and would highly recommend it. It’s peaceful, pleasant year round climate and only 3 hours from Miami by plane. It’s economy is growing and they don’t hate gringos even though our money fueled their civil war.
JoshMay 7, 2013 at 8:20 AM #761827ltsdddParticipant
Anyone here remember the Punta Banda land dispute?
It’s been quite a while, but it’s worthwhile to look it up – “punta banda eviction” – and decide for yourself.May 7, 2013 at 10:57 AM #761829mattParticipant
For me, its the above dynamics that are potentially keeping prices down and making investment compelling. It took Columbia many years but they eventually overcame the violence. I believe Mexico will do the same.May 7, 2013 at 1:42 PM #761832earlyretirementParticipant
There are some good posts from both sides. EconProof makes some valid points but so do the other posters about the violence and crime.
I speak from experience. I have extensive experience working and living in Latin America. I own several corporations in Latin America as well as owning real estate in 4 different countries in South America.
Are there investment opportunities in Mexico and other countries? Absolutely. But there is a LOT of crime, violence, corruption, red tape, bureaucracy, inefficiency, and tons of other problems.
I’ve done business in many countries and I can tell you that in many of these countries the judicial system really doesn’t work in the event of some dispute. Or even in countries where it does, judges can get bought/bribed, etc.
The police in many of these countries are totally corrupt and in cahoots with the bad guys.
People can say what they want about the USA but for the most part everything is totally efficient here. The banking system is excellent and works. The legal system is excellent and works. We have remedies like Small claims courts that mostly work. Judges here can’t easily get bought/bribed and it’s NOT common. Police officers for the most part are totally clean and not corrupt.
Even countries that are considered relatively safe and stable have lots of shady things going on. And FORGET about it if you come from an affluent or wealthy family.
Let me give you one example. I’m working in my office one day and my wife’s friend’s husband calls me panicked. This guy is worth millions. He keeps a VERY low profile but his family owns several businesses. Well, he calls me late afternoon and asks me if he can borrow the equivalent of $50,000 US in cash.
I immediately know something is wrong because this guy is worth tens of millions of dollars and I personally know he isn’t having any financial problems. And I can hear he is panicked and almost crying. So I tell him he can confide in me.
Well he tells me that his daughter has just been kidnapped. We’re talking about a 12 year old girl. She was walking to her friend’s house. (They live in a VERY affluent area). A black van pulled up to them. They left her poor friend and only took her. They call him and tell him if he doesn’t give $50,000 in cash and drop it off in a trash can on the street corner they designated, they would cut off all of her fingers one by one.
So, he wants to talk to her. Well, these guys are pros and they tell him that if he calls the police they will kill his daughter. And they claim the police is in on it with them so if he calls them they will kill her.
So they ask him if he wants to talk to her. So all of a sudden he hears “Daddy, I”m bleeding..they are cutting off my fingers”. Imagine this as a parent!
The banks had already closed as they close early in Latin America. And he didn’t want to get too many people involved. I owned a financial firm and we always had cash so he knew I could help. Absolutely I helped him and he paid the ransom and they let his daughter go.
The positive thing is they didn’t cut her finger off or harm her besides a small cut. The girl was so panicked she was yelling so they knew exactly what they were doing. But she just had a breakdown and he immediately moved his family to the USA. And needless to say, shortly after that I also moved back to the USA as I couldn’t imagine going through that with my family.
So when people talk to you about all the opportunities, or lower cost of living, or booming economy, yadda yadda yadda in other countries. Remember this true story.
Allen from Fallbrook said it best, “Personal safety always trumps economic opportunity”. That is SO true. Trust me on that.
Am I saying this kind of thing is a common event with retirees? Nope. Not at all. But you have to keep in mind in many of these countries, the levels of poverty are very high. And in many cities like Rio de Janeiro, you have really wealthy and expensive neighborhoods like Ipanema right next to slums.
These low lives feel it’s worth the risk for this type of crime.
Does this stop me from visiting these places or even continuing to invest in them? No. Would I want to raise a family in some of these cities again? Absolutely not.May 7, 2013 at 2:49 PM #761833
Wise words from EarlyRetirement, a guy who has the experience to pass on his wisdom to us.
I agree that for the wealthy family with kids, parts of South America, including Mexico, have big problems with kidnapping, which is why many of them chose to vamoose to the U.S. In fact, many of the wealthy of Tijuana have homes in and around Coronado because of the fear of kidnapping.
But the original thread was regarding retiring in Mexico, presumably for the very non-wealthy American. Just as we can learn from ER’s experience with rich expatriates, we could learn from one of the many American retirees who do not regret their choice. Too bad one of them has not yet chimed in.
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