Can you afford to live in Chile????

Chile Investment, how to invest in Chile, what to watch out for when investing, economic issues, currency exchange in Chile, and more.
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Dosedmonkey
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Re: Can you afford to live in Chile????

Postby Dosedmonkey » Mon Jul 18, 2016 11:12 pm

admin wrote:this subject was lightly touched on in another thread, and I have had many people argue with me about it over the the years, that ask things like, "how can chile be so expensive if Chilean minimum wage is only like 200-250,000 a month (about $400-500 a month)"?

Simple. THEY ARE CHILEAN.

If you are making minimum wage in Chile, are a Chilean born and raised here, you additionally receive major benefits from the government to subsidize your income.

--- free health care

--- free housing or subsidized housing (or otherwise own their own home)

--- various miscellaneous and sometimes random yearly government payments

--- free legal services

--- free education

All on top of just generally being use to living in a relatively humble lifestyle, while knowing how to max your resources (e.g. riding the cheapest local buses, knowing where to shop).

I might also point out that often families have several members living in the same household, with multiple sources of income. The overall household income, for a lot of households in Chile, is well above 500,000 pesos a month even on the low end of the economic scale.

So, you could likely say that just about anyone making 250,000 pesos a month, they are receiving, in many cases, with subsidies, something more like double that per month.


Some extra financial skills Chileans posses include living month to month with zero savings, relying on cash from their large network of family in emergencies.

Using credit to purchase things, where I would never dare on the income they're on, making themselves often look wealthier then they are.

I often got funny looks from my neighbours, not sure if they twigged I owned my car unlike them though. A lot of then had their posh cars on credit, that were worth close half their house value. Why is the gringo driving that old car.

A lot earn money on the side in legal and not legal home business opportunities. Your neighbour makes out there doing you a huge favour by giving you a lift, but still wants to get paid for it.

Second hand bargins are hard to find on Chile. Normally well or over priced.
Whilst in UK you can get a lot of very good stugg practically free just as they're happy your collecting it, saving them hassal.

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admin
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Re: Can you afford to live in Chile????

Postby admin » Mon Jul 18, 2016 11:55 pm

Last month there was a house up for auction. Bank forclosure.

So we did a drive by to have a look to see if it was worth the trouble (auctions are always trouble).

It was obvious the people were still living there, and the 25+ million peso suv in the driveway pretty much explained what happened. They bought the smallest house they could, in an area that was way too expensive, and were trying to play rich by extending their credit. The min bid on the house was 20 million pesos. The suv payments were likly more than the house payments, and that was likly next to go to auction. That was just my guess from the outside.

We later confirmed pretty much that when we pulled the court records on the auction. Long line of consumer debt collectors circling the corps.

That is the bad news. The good news, depending your point of view, is that bad credit and debts pretty much get's reset after 7 years in chile. People dont get wiped out forever. Yea some will just start over digging themselves a whole, but overall it keeps the general economy and society from being permanently damaged.
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From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

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Re: Can you afford to live in Chile????

Postby admin » Tue Jul 19, 2016 12:19 am

I just recalled my favorite debt story.

Friends of ours got themselves in to the hole. They had a Buisness go bust, spent more than they could afford, and so on. A lot of the debt was consumer loan debt.

Well in chile the credit card companies and such will get a court order, show up, and seize anything they can find in your house of value. You either have to pay the debt or they will auction off the stuff.

So often people will just move if they are renting, at the first signs of the debt collectors.

So our friends moved to a new apartment to out run the guys trying to sieze their stuff.

Next day the debt collectors show up at the door of the new apartment to sieze their stuff; but, the kicker is they were there to sieze the former renter of the apartments stuff and not theirs. The former renter had done the exact same thing. There is fairly simple court procedure to stop them from grabbing the wrong persons things for a debt
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

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hlf2888
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Re: Can you afford to live in Chile????

Postby hlf2888 » Tue Jul 19, 2016 12:35 am

canucklehead wrote:I use this website to compare costs between countries: http://www.numbeo.com/cost-of-living/co ... ntries.jsp

From my travels generally I find that, in the aggregate, the numbers provide a reasonable approximation, although sometimes the individual components may be off substantially.

I haven't yet been to Chile. Can anyone confirm that the prices generally are an accurate representation of reality?


That price comparison tool seems accurate when I compare Canada and Chile. One thing is off.. the price of cheese. Not the prepackaged cheese sold in supermarkets... I am talking about real quality gouda and blue cheese, goat cheese, etc. In Canada the least expensive real cheese in blocks is around 50$ a kilo. In Chile the best premium cheeses are around 18$ a kilo. In Canada dog bones at the supermarket are around 6$ a pound. In Chile raw bones at the butcher are around 50 cents a pound.

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Re: Can you afford to live in Chile????

Postby canucklehead » Tue Jul 19, 2016 12:41 am

Thanks to everyone who provided me feedback on prices.

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Re: Can you afford to live in Chile????

Postby MJSaywell » Tue Jul 19, 2016 12:42 am

papageno wrote:
MJSaywell wrote:Yes I woulds say resonably accurate, when I put in New Zealand and Chile, there wasnt enough data for my local city but if anything I would say the rent figures would be wider as in its more that 40 percent cheaper now here in Chile for somethings now, I was shocked at how expensive New Zealand has become. Rents and house prices have got out of control in New Zealand, here housing and rent which are always going to be your biggest expense are a lot cheaper. The rest of the numbers for other figures when you compare to how much cheaper it is now here were probably about right.


I just compared Concepcion to Auckland and about fell out of my chair. New Zealand now makes southern California suburbs look affordable. :shock:


I know, it shocked me going back for a holiday recently, another thing that is happening in New Zealand too is the public health system is not keeping up with demand and more and more people are having private medical health insurance as the waiting lists are becoming too long in the public system (health insurnce seemed more expensive in New Zealand than Chile) There are many aspects and costs in New Zealand that are starting to make life a lot more expensive for New Zealanders, and tourists and expats alike who are surprised at just how much New Zealand costs even compared to the UK and the States.

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Dosedmonkey
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Re: Can you afford to live in Chile????

Postby Dosedmonkey » Tue Jul 19, 2016 7:30 am

Just had a go at the calculator and it was wrong for the UK.

They quote the cheapest Chilean prices compared to more top end UK ones. Lider vs. Tescos, I ca. Save about 40% price in UK. Lider vs. Aldi I can save 60% on some items. And UK has larger variety and quality.

UK also has reliable internet shppping, this hugely saves money on consumer products. Also huge competition here pushes prices down. Chile just has a few major department stores for a lot of things.

The only thing I am spending more on here then Chile is property. It looks like its twice as expensive, but actually when you factor in the much much lower crime rate, meani by you don't need to live behind condumium fences. The better insulation, construction and electrics. The better local parks and facilities. You get exactly what you pay for.

Even McDonalds they quote is not the same, the quality is much better here. Different recipes and procedures. Not that I go there very often.

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JHyre
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Re: Can you afford to live in Chile????

Postby JHyre » Tue Jul 19, 2016 8:34 am

Came to visit circa June 10th, leaving in two more weeks. The US Midwest is much cheaper, with greater variety and quality, as well as much higher wages. I knew this in the abstract before arriving, but it's always a bucket of cold water to experience it first-hand. There are a few exceptions, such as haircuts, public transportation, wine, fresh veggies in season and nana/maid - though the latter needs to be adjusted for the hassle of dealing with Chilean labor and Chilean labor law.

On an unrelated subject, I am ever in awe of the Latin sweet tooth. This visiting Ohioan needs to hit the gym after lots of alfajores, milhoja and kuchen. There's a bakery on every corner, nice to see Chileans still hitting those little businesses instead of the supermarkets.

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canucklehead
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Re: Can you afford to live in Chile????

Postby canucklehead » Tue Jul 19, 2016 11:34 am

Dosedmonkey wrote:Just had a go at the calculator and it was wrong for the UK.

They quote the cheapest Chilean prices compared to more top end UK ones. Lider vs. Tescos, I ca. Save about 40% price in UK. Lider vs. Aldi I can save 60% on some items. And UK has larger variety and quality.

UK also has reliable internet shppping, this hugely saves money on consumer products. Also huge competition here pushes prices down. Chile just has a few major department stores for a lot of things.

The only thing I am spending more on here then Chile is property. It looks like its twice as expensive, but actually when you factor in the much much lower crime rate, meani by you don't need to live behind condumium fences. The better insulation, construction and electrics. The better local parks and facilities. You get exactly what you pay for.

Even McDonalds they quote is not the same, the quality is much better here. Different recipes and procedures. Not that I go there very often.


Yes I expect that many consumer products are not cheap. I don't know what Lider, Aldi and Tescos sell so I'm not sure what you are comparing. One thing you didn't mention was food, except for McDonalds, both in groceries and restaurants. How would you compare the price and quality of food?

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eeuunikkeiexpat
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Re: Can you afford to live in Chile????

Postby eeuunikkeiexpat » Tue Jul 19, 2016 11:39 am

Exactly the reason I stock up on my mandatory family visits to the States. Even "cheap" things like quality bandaids and aspirin. Also the reason I nearly always upgrade the return portion for the greater luggage allowance. You can bring in quite a bit of consumables and other stuff over 15 years. Just part of the logistics an intelligent habitual planner does to keep expenses in check.
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john
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Re: Can you afford to live in Chile????

Postby john » Tue Jul 19, 2016 3:06 pm

Affordability is really a function of disposable income. For example, if your US (Southern California) monthly salary is $8000USD and your monthly cost of living is $4000USD you would have a disposable income of $4000USD. Whereas, if your Chile (Santiago) monthly salary is $4000USD and your monthly cost of living is $2000USD you would have a disposable income of $2000USD. So, based on that admittedly very simple example, it would be less affordable for you to live in Chile than in Southern California.

My average monthly cost of living in Viña del Mar is less than half of what it would be in Southern California; however, my disposable income is greater as my retirement income has remained constant. So, for my wife and I, living in Chile is significantly more affordable than it would have been had we stayed in Southern California.
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Re: Can you afford to live in Chile????

Postby papageno » Tue Jul 19, 2016 3:24 pm

john wrote:Affordability is really a function of disposable income. For example, if your US (Southern California) monthly salary is $8000USD and your monthly cost of living is $4000USD you would have a disposable income of $4000USD. Whereas, if your Chile (Santiago) monthly salary is $4000USD and your monthly cost of living is $2000USD you would have a disposable income of $2000USD. So, based on that admittedly very simple example, it would be less affordable for you to live in Chile than in Southern California.

My average monthly cost of living in Viña del Mar is less than half of what it would be in Southern California; however, my disposable income is greater as my retirement income has remained constant. So, for my wife and I, living in Chile is significantly more affordable than it would have been had we stayed in Southern California.


That overlooks taxes, unless you'd included them as part of your cost of living estimates. Separately, but related in an overall sense , does anyone know whether the U.S./Chile double taxation treaty was ever completed?


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