Can you afford to live in Chile????

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frozen-north
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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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Re: Can you afford to live in Chile????

Post by Space Cat » Mon Jul 23, 2018 9:36 pm

admin wrote:
Mon Jul 23, 2018 7:59 pm
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.
Also 84% own a house or an apartment:
A small share of households live in rented housing in Chile (16%) compared to other OECD countries (20%) and in Chile the private rental sector caters more to high income households than to low-income ones, contrary to what happens in most OECD countries. This is probably in part the result of Chile's housing policy in the past decades, which has supported access to homeownership among low and middle-income households but provided no support to the rental sector.
http://www.oecdbetterlifeindex.org/topics/housing/

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

Post by passport » Mon Jul 23, 2018 10:09 pm

Based on my (limited) observations, the cost of living seems plenty higher in Chile than in US:
Wages seem to be about 1/3 of what is paid to comparable workers/professionals in the US.
Case in point: Chain saw - double the price (converted to dollars) in Chile. Wages - 1/3 of US. So on that particular item, it appears that the real Chile price, is 6x the US price.
Converted to dollars, groceries are the same as or more than in the US. Factoring in the earnings differential, that means 2x as expensive.
Gasoline, propane, electricty, all more expensive in Chile just in dollar terms.
Am I missing something?

Now - if you want to talk about QUALITY of life, the tables could be turned.

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

Post by fraggle092 » Mon Jul 23, 2018 10:31 pm

passport wrote:
Mon Jul 23, 2018 10:09 pm
Now - if you want to talk about QUALITY of life, the tables could be turned.
Or maybe not. Depends....
Après moi, le déluge

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

Post by eeuunikkeiexpat » Mon Jul 23, 2018 11:01 pm

How many of the "working 'poor' to low-to-mid-middle class" own their own homes in the USA these days? How many in the USA in the below groups have free-to-cheap health care, legal assistance, etc. How about three moths PAID maternity leave and the right not to be fired for two years after birth and many companies that pay for daycare for that time period? How about all those bonos throughout the year especially for those "struggling" with a familia?

The myth of Chile being some kind of harsh neo-liberal hell is FAR from the truth especially given DECADES of unbroken stability that actually allow people to save an plan for the future.

Asshole modern "Bolivar" revolutionaries of Ibero-America have been proven wrong, wrong, wrong in the past three decades. They should have used their hatred of the current paradigm to play the system like Chile till the emergence of a multi-polar alternative finally emerges.
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Space Cat
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Re: Can you afford to live in Chile????

Post by Space Cat » Mon Jul 23, 2018 11:11 pm

passport wrote:
Mon Jul 23, 2018 10:09 pm
Based on my (limited) observations, the cost of living seems plenty higher in Chile than in US:
Wages seem to be about 1/3 of what is paid to comparable workers/professionals in the US.
Case in point: Chain saw - double the price (converted to dollars) in Chile. Wages - 1/3 of US. So on that particular item, it appears that the real Chile price, is 6x the US price.
Converted to dollars, groceries are the same as or more than in the US. Factoring in the earnings differential, that means 2x as expensive.
Gasoline, propane, electricty, all more expensive in Chile just in dollar terms.
Am I missing something?

Now - if you want to talk about QUALITY of life, the tables could be turned.
The US are cheap when it comes to consumer goods, cars, and some subsidized food. But the costs of many services and housing are prohibitively high.

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

Post by frozen-north » Mon Jul 23, 2018 11:48 pm

Space Cat wrote:
Also 84% own a house or an apartment:
A small share of households live in rented housing in Chile (16%) compared to other OECD countries (20%) and in Chile the private rental sector caters more to high income households than to low-income ones, contrary to what happens in most OECD countries. This is probably in part the result of Chile's housing policy in the past decades, which has supported access to homeownership among low and middle-income households but provided no support to the rental sector.
http://www.oecdbetterlifeindex.org/topics/housing/
From what I know of Chile and Canada, the information on that page is mainly nonsense. An example: 'the average home contains 1.8 rooms per person'. Let's see, for a family of four in a 3 bedroom house they must be counting the bathroom and the closets.

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

Post by frozen-north » Mon Jul 23, 2018 11:59 pm

admin wrote:
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.
Actually it is not this way. If you have more money, you might have more ways to avoid taxes, and those with more money can pay accountants and financial advisors. Most people that are employees on a fixed salary don't have any easy way to hide their income. Those that own their business and have a higher income might be able to find ways to claim deductible expenses, but those that work independently and don't get regular work, don't have much of an income to worry about.

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

Post by eeuunikkeiexpat » Tue Jul 24, 2018 12:37 am

As compared to the US, I see the informal economy (selling stuff on the side artesanal, used, etc. to providing all sorts of services) quite the boon for many Chileans from the low to mid class. Undeclared, untaxed and mainly unknown (intentionally or not) by the authorities. Those who do not know this, do not live here or among the people of Chile, not academic speculation when in reality it makes a big difference in the lives of individuals and families who would really be living on the edge without that extra income.
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Re: Can you afford to live in Chile????

Post by Space Cat » Tue Jul 24, 2018 12:52 am

There is no income or global complementary tax on less than CL$644,000 monthly, so evading taxes is not an issue at all for most people. Chile still has the lowest income taxation in the OECD.

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

Post by admin » Tue Jul 24, 2018 3:25 am

Yea you can make a lot of money very legally in chile before you need to pay taxes. Especially small biz / self-employed owners.

Which is the right way to do it.

What is more common is people under reporting income to maintain social benifits. Everything from goosing house subsidies to keeping grandma's disability check coming.

Which, as bad as it sounds on the surface, study after study shows it is also the right way to do development. It allows people to build momentum and reach escape velocity from povertity. Unlike the u.s. system the penalizeses the working poor as soon as they start getting their head above water.

The one that made me chuckle was the study of home ownership in chile that conclueded that only something like 30,000 people had a second home in chile (can not recall the exact number, but silly low). There is an entire segment of the real estate industry devoted to it. Families just spread their real estate holdings around the members of the family for tax reasons. By the same stripe, they also almost never report rental income to dodge paying the IVA tax and other reasons.

There was the other recent study if the informal economy. The people selling bread, sandwiches, etc at the metro station were found to be clearing a million pesos a month, tax free.

That informal, cash economy is common and wide spread, and they dont make those hard numbers used by the oecd or whatever group that calculates international income rankings.

Again, the people working in the informal cash economy get to keep the social benfits.

Probably the single most important policy is the inheritance laws in chile. Rich or poor, most wealth is forced to stay in the family. In particular real estate. Each generation, gets to build family wealth on top of the previous generation. For the most part, especially for the smaller estates, it is fairly cheap and efficient to handle the probate.

It is also why i believe there is a massive amount of real estate wealth in chile that is simply not reported in any of those international numbers. Fully iwned properties, passed down through families, sometimes for generations, have almost no reason to have their property values apraised or even recorded.
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