Can you afford to live in Chile????

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

Post by tiagoabner » Thu Jul 27, 2017 1:12 pm

I have moved to Chile with my wife last December and I have shared some thoughts at another thread, so I will drop my 2 cents here.

$50000 in savings looks like a very fair and reasonable value for anyone who comes to Chile without a job. It will let you get a decent living for $2000 per month with enough money to get back home if needed.

In my specific case, I didn't come with anything close to that sum, but I already had a contract for a remote position in an American company. As such, we already had a stable source of income. We set a monthly budget of $2000 per month to allow for us to save money and to enjoy the country while we are here and our monthly expenses came up to be around $1350 to $1500 per month. So we spent less than what we expected and that allowed for us to do some small trips here and there. We could certainly live with $1500 per month, or even less if we lived in the middle of nowhere, but we didn't want to lower our standards.

Budgeting for a move abroad is a matter of how you want to live, how much you want to pay and how much money you have available.

There are multiple living standards in every city. Haitians living in warehouses that have been split into improvised bedrooms will have a very low living standard, but it is also very cheap. Then there is the remote apartment that, while still being nice, is a bit too far to be really practical unless you don't need to work. There's then the middle-class buildings, then Las Condes flats and finally large Lo Barnechea houses.

Every option has a different price, so it is up to you to budget for the living standards you want to have and then sticking to the budget. Financial planning isn't something most schools teach, so most people don't know what to do with their money and that is what causes confusion about how to budget.

I think it has been mentioned here previously, but the real way to measure your financial health is based on your spare money. What is your desired living standard? How much it costs in cities A, B and C in countries X, Y and Z where you want to live? How much are you going to earn in each one of these places? The amount you have left every month is the way to measure how healthy you are financially, assuming you compare the same living standards.

This seems to be really basic, but most people simply overlook this while budgeting and that seems to be what causes frustration all around. Yes, you can get the same living standards in Santiago for way less than in, let's say, New York or Perth. However, your spare money will probably be much less if you don't get a job that requires skilled work or if you don't have a source of income disconnected from the Chilean work market.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

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

Post by admin » Thu Jul 27, 2017 10:45 pm

Nice coverage.
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hlf2888
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Re: Can you afford to live in Chile????

Post by hlf2888 » Fri Jul 28, 2017 10:19 pm

admin wrote:When i have time, i might come back and tell the long story of how i was a complete failure in my first pass at chile (mas o menos), under the above criteria, and then some, considering i had all exta resouces and support most foreigners will never have.
I check everyday for this story, hope you have time soon...

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

Post by eeuunikkeiexpat » Fri Jul 28, 2017 11:33 pm

hlf2888 wrote:
admin wrote:When i have time, i might come back and tell the long story of how i was a complete failure in my first pass at chile (mas o menos), under the above criteria, and then some, considering i had all exta resouces and support most foreigners will never have.
I check everyday for this story, hope you have time soon...
This would indeed be a story worth telling as in my experience of 16 years, those who failed in Chile and vowed to return, never came through with the vow.
There are two ways to be fooled.

One is to believe what isn't true;

the other is to refuse to believe what is true.

- Søren Kierkegaard

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

Post by tiagoabner » Sun Jul 30, 2017 11:51 pm

I'm also curious about Admin's story.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

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

Post by admin » Mon Jul 31, 2017 10:51 am

Well, fail is not exactly the right term. More like I never came to Chile with the intention of succeeding. I was leaving ASAP. I came to visit my brother. Did not really see anything here for me; I was quickly bored with Chile. My problem was, after spending several years in Central America and Mexico, I just did not see any opportunities or a whole lot of adventure.

In real developing countries, everything is broken or just never existed. So they are flush with opportunities. As an old partner in central america use to say, "in latin america you don't need a new idea, you just need a good idea". Yea, there are opportunities in Chile, but you have to put in a relatively large investment in time and money to make them work vs the neighboring countries. I simply was not interested in working that hard at it, when I knew that somewhere in south america there was a pile of opportunities.

Then I met my wife. We decided we were going to leave Chile, go to school in Europe. She insisted however before I judge Chile, I needed to see the south. In the south of Chile I seen opportunity. Santiago had nice shiny everything, but the south was just getting going. Still, we went to Europe for year. China for year. At about that point, I realized I was tired of traveling. I had been bouncing around for nearly 12+ years, none-stop.

It was after China I sort of come to appreciate Chile. I realized the opportunity that Chile presents, is stability. Once you build something, you generally get to keep it. In the rest of latin America, and much of the World, there is about a 10-20% chance you get to keep what you build, before someone comes along and takes it away (e.g. mafia, corruption, copycats, governments, etc).

At that point, we were ready to invest the time to make Chile work. So we came back to Chile, and went south. It was not easy by any stretch, but it worked out. I think we came back from China with like $1000, and burned through that very quickly. Everything else we had to figure out along the way. Yea, we had family, but they were of pretty limited help, and honestly we did not want them involved in our projects. Probably one of the better moves was keeping the family at arms reach. Chilean families will to want to be very helpful, but in a too many cooks in the kitchen sort of way. Most friends and family thought we were crazy, and should just go get a nice stable job in Santiago. We would probably still be dying a little bit every day, "at that nice stable job in Santiago" and have never gotten anywhere with it.
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Re: Can you afford to live in Chile????

Post by hlf2888 » Mon Jul 31, 2017 11:10 pm

thanks admin... love changes everything

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

Post by Jaggg » Sat Jul 21, 2018 1:17 pm

Britkid wrote:
Wed Jul 26, 2017 5:20 pm
Jamers41 wrote:I got away with having saved less (around $12000 USD), but I also had some advantages........A. it was not my first time living in Chile, B I did not have a car, in fact I did not get one until last year, so essentially I got used to living at a lower quality of life.......not terrible, but not as good as when I was single living in the US. The part about the first year or two being more expensive is certainly correct, I ate through most of my savings in about 18 months before I was fortunate enough to land a job that, while not enough to live the high life over in Las Condes, allowed me to stop burning through cash and "make it" just with my local income (sure beats trying to live off of only English classes). Even recently I, sometimes after having to convince my wife, have made decisions that don't jive with a typical Chilean's way of thinking, in order to keep personal debt levels to a minimum...........if it were up to her, we would be living in a smaller apartment in a much pricier part of Santiago, with a newer car, and we'd probably be struggling to make the minimum payments. Instead we bought a house in a cheaper part of town, and waited until last year to buy an old vehicle, because I decided that I was willing to put up with a crazy commute to work (well over an hour)........I'm willing to bet many from Anglophone countries wouldn't tolerate that.
In my experience, Chileans don't seem to like just having money sitting in the bank. It seems like a waste to them. People in the lower classes will spend all their money month to month, no saving whatsoever, and then ask to borrow 10,000 from someone in their family so that they can go and see their friend. Personally, if I did not even have 10,000 to my name, I wouldn't be borrowing 10,000 for something unless it was critical, but they don't seem to think like that. And people in the middle/upper classes seem more willing to stick money in property or a business that have it sit in the bank.
Maybe it's because of lots of things, lots of poor people do not trust the banks except for Banco Estado, so you have lots of people with savings earning 0.4 or 0.5 over inflation because they're saving in Banco Estado. Also, low salaries, half of the country earns less than 400.000CLP, and half of households earn less than 800.000, which is a very good improvement, but still not good.

Then you have a weird paradox which i do not think happens in the US, it's people who think that they're gonna live much less than they would. When you tell people that Chile has a longer life expectancy than even nordic countries, people at first do not believe you (source: http://hdr.undp.org/en/69206) basically because this have been a really poor country decades ago and even thinking to be better than the US in some category is unbeliavable.

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

Post by admin » Sat Jul 21, 2018 6:44 pm

Can't recall the exact figure, but the latest was like 540,000 per person medium wage per person, and something like 1,100,000 medium household income. That figure was just publish a couple of weeks ago.

Now that was a survey of 36000 urban households.

I still dont buy those numbers however.
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Re: Can you afford to live in Chile????

Post by frozen-north » Sat Jul 21, 2018 7:29 pm


el Instituto Nacional de Estadísticas (INE) entregó los resultados de su Encuesta Suplementaria de Ingresos (ESI) 2017, los cuales arrojaron el promedio del ingreso mensual y mediano de los trabajadores chilenos.

el ingreso promedio mensual, .... llegó a $554.493 y que el mediano, “el que recibe un individuo representativo de la mitad de la población”, ascendió a $379.673.

https://www.biobiochile.cl/noticias/eco ... 2017.shtml

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

Post by frozen-north » Mon Jul 23, 2018 7:40 pm

Jaggg wrote:
Then you have a weird paradox which i do not think happens in the US, it's people who think that they're gonna live much less than they would. When you tell people that Chile has a longer life expectancy than even nordic countries, people at first do not believe you (source: http://hdr.undp.org/en/69206) basically because this have been a really poor country decades ago and even thinking to be better than the US in some category is unbeliavable.
Do you have any reference to how the income differential affects life expectancy in Chile? It could well be that people are referencing their own knowledge of how it has been reflected in their family history.

Life expectancy gap between rich and poor US regions is 'more than 20 years'

https://www.theguardian.com/inequality/ ... n-20-years

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

Post by admin » Mon Jul 23, 2018 7:59 pm

I have published my informal smell test of those numbers before. Basically, stand on any street corner in santiago, and count the number of cars going by that cost 10 million, 20 million, and up.

So this last weekend went to the public hospital in puerto montt to visit a relative. Was standing in the vistor paking lot killing time, and started thinking about that number.

Easly the average vehical was 10 million. Talking everything from a campo piece of crap being held together with bailing wire to some nice new pickups that are easily $15-20 million pesos or more. But easy 10 millon was the running average. No ferraries or mercedes squewing the results.

There is no way anyone was giving car loans to anyone on a 300,000 a month income. You got to have way more assets and income in the household.

Go to a bank in chile and tell them you want a loan for 10 million and you only make 300,000 a month. Even banco estado will laugh you out of the bank. Hell most banks wont let you open a checking account with less than a million a month.

Annnnd....those decisions are based on official irs declarations. Chileans are really good at under reporting their income, no matter what income bracket they come from; it just gets harder as they get richer to hide it without a lot of legal tricks.

So the hospital serving some of the poorest people in southern chile, i am still doubting the accuracy of those numbers.

At the least a monthly income number is not capturing net wealth, household wealth, etc.

An american, say a watress or 7/ 11 worker in the midwest, is on a tax return bases makes more; but, i am certain on a net wealth basis the average chilean is as wealthy or wealthier than a lot of americans. Factor in health care, house subsidies, inheritance, retirement savings, etc.

Obviously for a variety of reasons those are apples and zebra comparisons, but they are at least in the same group.
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