|Mexicomatters, specializing in foreign investor representation|
The economics of living and or working in Mexico
I caution folks about impulsively starting a small business in México. If you are considering a small, retail or service related business, my advice is don't. Unless you have a product to manufacture or purchase for export your chances for success in Mexico are probably not very good. The business climate for maquiladoras (foreign owned manufacturing) is excellent due to cheaper production costs in Mexico. The average factory worker, on the U.S. side of the border, makes $1,600 dlls a month. The Mexicano Maquiladora worker makes $400.00 dlls a month. Profit margins in manufacturing or brokering products for export justify the extra hassles of doing business in Mexico.
For most retail or service oriented businesses the red tape and anti gringo bureaucrats are not worth the small profit margins. Consider how tough it is to succeed in a small, U.S. based business. It is tough enough when you understand the laws, language and culture. Now, imagine how rough it is to deal in a foreign
Now lets talk about something that makes sense: living in Mexico as a retiree or residing close enough to the border to commute to work in the states. A third possibility, occurring with greater frequency, is running a global market business from your beach home in Mexico via fax, phone and modem. What kind of lifestyle can you enjoy and at what cost?
Cost of medical care in Mexico
I have researched, for a series of articles on medical care, the cost and quality of that medical care in comparison to the United States. What I learned is that medical insurance in mexico, prescription drugs, surgeries and dental procedures are one third the cost of comparable services in the U.S. . The reasons are: the lower income of medical service consumers, government cost controls on medicine, the scarcity of malpractice litigation in Mexico and the average earnings of health care professionals: medical doctors earn an average of $1,000.00 a month and nurses $500.00 monthly.
The quality of care I have received from my physician, other specialists and dentists in Mexico have been outstanding. I would not trade my "house calling" physician and state of the art dentist for any professional north of the border. Medical training and practices in Mexico are of the highest standards if your physician or hospital is offering services in the private medical sector. The socialized medical care, at the clinic level, leaves much to be desired. However, for major surgeries, this system also offers world class specialists and care.
Cost of food in Mexico
I can buy a kilo (2+lbs.) of fresh shrimp for $16.00 dlls. We regularly eat lunch in a family restaurant, serving comida corrida (meal of the day), for thirty five pesos or $3.50 dlls. Tortillerias sell freshly made tortillas for 90 cents a kilo. Fresh rolls (birotes), that rival those made in Paris or San Francisco, cost 25 cents each and can be found in bakeries all over Mexico. Mexican desert pastries, that will satisfy any gourmet family's sweet tooth-about $2.00 a bag. Along with savings on our food bill we have the added advantage of buying affordable abalone, lobster, mussels and clams fresh from local fishermen. In addition, door to door vendors offer wonderful selections of home made cheeses, deserts and olives. The olives are not the tasteless variety sold in U.S. supermarkets that are flavor extracted by a lye based, quick curing method. These olives are slowly cured in water filled clay crocks and taste the way olives should taste.
Transport and travel
Gasoline prices are higher in México but the real savings are in automotive repairs, particularly body shops with labor costs about 80-90% less than garages north of the border. General mechanics typically charge about 1/3 of what mechanics demand in the states. Taxi cabs "de ruta", which means they pick up multiple passengers over a constant route, will cost you about 55 cents to go from one end of town to the other. There is virtually no waiting for these cabs, given the enormous number that maintain a constant flow throughout all Mexican cities. Buses in Mexico, which have improved dramatically, in quality and comfort over the past five years, cost about 20% of what bus fares cost in the U.S.; the number of routes and bus departures are significantly greater than in the states.
Hotels are a real bargain in Mexico. My wife and I choose modest rooms that rarely cost more than $40.00 and most frequently are in the $30.00 range. These are not elegant rooms but always offer a clean environment with good mattresses and bed springs. Some freinds recently traveled Mexico in a motor home and found that the combined costs for the gas guzzler and hookup fees were costlier than staying in hotel rooms. As mentioned earlier, restaurants and entertainment are also significantly less expensive in México. A first run U.S. film with Spanish subtitles, for example, costs two dollars.
When asked about my religion I sometimes jokingly respond that I am an Orthodox Hedonist. Decadence is expensive in the states. Some comparisons: Premium dark roasted coffee (Starbuck quality) that I buy direct from the local roaster is $4.50 a pound. I also enjoy premium dark beers, good cabernet sauvignon, Spanish brandy and hand rolled 100% tobacco leaf cigars from the gulf port of Veracruz. My cigars that I pay 65 cents a piece for cost three to five dollars in the states. My Spanish brandy I buy for $6.00 a fifth in the duty free store and my Bohemia or Negra Modelo beer (selling for $7.00 a six pack in the U.S.) is priced at $4.50 here in Ensenada.
Hired help in Mexico
My secretary is paid two hundred dollars a week and my house servant who: cooks, cleans, washes and irons clothes is paid eighty five dollars a week. It is affordable help and greatly enhances our enjoyment of additional free time.
I don't live in Mexico to save money. I live in this country because my quality of life is better. However, a major contribution to that quality of life is that I can afford a little decadence and am able to avoid household chores that I neither like nor am good at performing. Viva Mexico and Viva the good life!.
On a Fixed Income in México You Need Not Eat PET FOOD.
As mentioned above housing and medical costs in Mexico, are a third of those in the United States. Recently, I was reminded, by an expatriate friend, how this economic advantage translates into quality of life benefits.
At age 57 I am quickly approaching the receipt of Social Security benefits. Damn. How time flies. My friend at age 62 has preceeded me in qualifying for Social Security payments and his comments, regarding same, struck a responsive chord in me: "If I were living in the U. S., on Social Security benefits alone", I would be eating dog food like so many older American. Here in México, I have a damned decent life style on $ 1000.00 a month.
My friend owns a home in Ensenada. A 2,000 square foot abode with a great view of the city and bay, He pays approximately $150.00 a year for property taxes. The same home in the States would cost him thousands of dollars a year. Property taxes force many seniors in the U. S. to be uprooted from a home they have enjoyed for decades before retirement.
A market survey I recently conducted for a client, Travelers Investment Corporation, further underscores the economic advantages of México for U S. citizens. Travelers Investment Corporation (T. I. C.) provides loans for elective medical procedures: cosmetic surgery, Radial Keratomy, dental implants and other services not covered by medical insurance.
T. I. C. makes these loans very accesible to patients via physicians, hospitals, clinics and dentists. The medical provider informs the patient about T. I. C. loans and offers assistance in completing a simple one page application that is faxed to T. I. C.. Within 24 hours of receiving the loan application the patient is accepted or told that a qualified cosigner is required.
Assuming T. I. C. approves the loan, the service provider is paid directly to perform the procedure. Everyone wins: the patient is treated, the provider gets paid and T. I. C. receives a fair interest rate.
T. I. C. asked us to verify what they believed was a burgeoning market of U. S. citizens, traveling to México for quality medical care at a savings of 50 to 70 percent of what they would pay in the U. S. I was amazed at our survey results. Medical and dental specialists in Ensenada, on average, estimate that U. S. patients represent 30% of their total practice and 50% of those U.S. residents are Hispanics.
As already stated, I am very impressed with the quality of medical and dental care I receive in Ensenada. I believe that care to be superior to the services I received when living in Northern California. Also, I enjoy substancial medical insurance savings. My medical premiums are $ 55.00 dollars a month for full coverage with a small deductible and I have my choice of of providers. An HMO, without the choice advantage, would cost me three times more in California.
My decision to live in Baja Mexico, again repeating myself, has more to do with cultural considerations than economic reasoning. However, my quality of life owes a lot to economics.
A large tourism sector for Baja California are the thousands of U.S. citizens who travel here every month to take advantage of elective surgeries and or medical treatments at savings of up to 75%. U.S. and Canadian citizens, who live in Baja California, quickly learn that they can receive better medical and dental care from private practicioers here compared to what they received when living in the States. House calls, twenty four hour emergency care and a doctor who spends time explaining treatment options often shocks foreign patients accustomed to indifferent and "too busy to talk" practitioners at home.
Medical and dental specialists in Ensenada report that an average of 30% of their patients are U.S. citizens; retirees, living in Ensenada, or folks that travel to Mexico from north of the border. At least one half of those U.S. patients are Hispanic.
Another benefit of being treated in Mexico is that some very effective medical modalities exist here but are not approved for use in the United States. RK surgery in Mexico for many folks who have extremely bad eyesight is not available in the United States because of a special laser not yet approved by the FDA but available in Mexico and Canada. Last year, an RK surgeon in Tijuana performed four million dollars worth of RK on U.S. patients referred to him by Scripps, UCSD hospitals and leading eye surgeons in San Diego unable to provide the surgery necessary.
The problem for patients who want to take advantage of the benefits of being treated in Mexico is that they do not know where to go for a decent referral.
Ensenada, Mexico: (646) 176 6759 US: 1(619) 819 9369