Repat Chronicles

Alternate Title: Your Boy Sold Out

You read right. I have left Lima, Peru and South America as a whole. I moved my family to St. Louis in February. Hence the title. I am no longer an expat. Nor am I an immigrant or anything in between. I am repatriated, a repat.

I’ll go through the reasons in this article, but all of them fall under the MONEY category. In short, I sold out. Or as I sometimes say, I’d love to stay in Lima … but I can’t afford it!

For the last few years I had been renting nice apartments for my family in the Lince district of Lima. We had money to visit the States for a month every year and Arequipa (wife’s hometown) once or twice a year. We took a second honeymoon to Mexico City in 2016, and we could take an international trip like that every couple years. We ate in fancy restaurants once or twice a month, and cheap neighborhood spots whenever we didn’t feel like cooking. In Peru it was standard upper-middle-class, also known as “nivel socioeconomico B” (NSE B).

So what was the problem?

I wasn’t making any progress toward buying a house. Peru Reports didn’t pan out. I make good money from Peruvian Naturals, but it’s volatile. And with a goods business in which you run an inventory, you can’t pay yourself 100% of earnings. If you don’t reinvest some profits, you’ll never grow. Given the volatility and importance of retained earnings, I pay myself a modest salary.

With three children, I need at least a three-bedroom house. But I also work from home, so I really need four bedrooms or I’d have to rent an office to work out of. Four-bedroom houses in Lince start at $250,000, and those would be undesirable locations. On the nice streets (west of Av. Arequipa, south of Av. Canevaro), they start at $350,000 and go up to seven figures.

In Peru you generally need 50% down, and I’m not too shy to say that I don’t have that in cash right now. What’s worse, being a foreigner with a foreign-based business, I probably couldn’t get a loan at all.

Peru has enacted some new mechanisms to get financing, and of course with determination I could make it happen. But the house was just one part of my calculus.

I also have to think about school for three children, and in Peru that means private. Roosevelt, the top American school, charges $17,908 per year in tuition plus a one-time entrance fee of $18,500. That translates to $90,000 per child to go just during the high school years (grades 9-12). With three children, that’s basically another house to pay for.

I have worked with Peruvians and Colombians who went to the Roosevelt equivalents in their cities and countries. And from my experience, they have about the same level of education as your average public-school-educated American. But their parents paid a house worth of dollars for it.

Obviously there are more economic options than Roosevelt. The NSE B option in my neighborhood is Sophiano, and I have connections there. I don’t necessarily have a problem sending the children to a school less rigorous than the average American public school, but it would bother me a little to have to pay $5,000 per year for it.  

Then you consider you don’t just pay for the high school years, but all 13 years of K-12. For masochism’s sake, I calculated how much it would cost to send all three children to Sophiano for K-8 and then Roosevelt for 9-12: $350,000.

Obviously I’m getting whacked by two entrance fees under that scheme. So if I gave up my dream of the top American school and kept my children in their station (NSE B), the grand total all said and done would be $175,000. That’s still a house worth of money, and that would be a grind.

Not Trying to Grind

A “grind” was not my dream in coming down to Latin America. I knew it would be a grind in the initial years, but I had dreamed of the red-carpet life, being treated like royalty and waltzing into the upper class by virtue of my blue eyes. Working like a stressed-out American and suffering the uncertainty of housing prices and school tuition was NOT the plan.

I believe red-carpet treatment and being idle rich was the standard lifestyle for gringos in Latin America for a long time, but those days are OVER. In 2019, Peru is rich as fuck, as are many other countries. It’s not easy to be a big fish in a small pond because the pond isn’t so small anymore.

Peruvians have told me that, 20 years ago, meeting a foreigner was a very special occasion that would only happen a couple times a year. But now it’s every day. We’re a dime a dozen, and that’s not counting the chamos.

Tim Ferriss’s four-hour workweek and all the dickhead expat bloggers except me have popularized the fact that it’s not too dangerous down here, and it’s a lot of fun. More gringos come every year. Many will stay. More gringos mean more competition.

Not only more gringos mean competition, but more and more Latins are studying in Gringolandia and coming back with gringo education and business culture. Then there are children of South Americans raised in Gringolandia who come back with a bicultural advantage.

It just doesn’t pay much to be a gringo anymore. Sure, you can always teach English. But that’s a lower-middle-class lifestyle these days, unless you get on as a full-time teacher at a fancy high school or university. Then it’s a middle-class lifestyle. Either way, you’re not waltzing into the good life on easy street in 2019 unless you go to a shithole nobody wants to go to (Venezuela, El Salvador, Paraguay, etc.).

Apples and Oranges

In Lince, three-bedroom houses start at $250,000 (probably $350,000). In St. Louis, they can be had for the mid-five figures, and that’s not even getting into smack-and-crack neighborhoods. In Lima, the school I would probably select would set me back $175,000 for all three children when it’s all said and done. In St. Louis, FREE!

Those minimums are $425,000 in Lima vs. $50,000 in St. Louis.

To be fair, those prices do not reflect an apples-to-apples comparison. Lima is the economic, political and entertainment capital of Peru, while St. Louis isn’t even all of that for the state of Missouri. Comparing Lima to New York or Washington DC would give you a most accurate look at pricing in Peru vs. the United States.

You can get three-bedroom homes in Peru for the mid-five-figures, but I’m not willing to live anywhere other than Lima. Hell, I’m not willing to live in the conos of Lima. It’s Lince, San Isidro or Jesus Maria, or I’m going home.

I’m willing to live in various working-class parts of St. Louis. That doesn’t bother me. But I’m not doing that in Latin America. That’s not what I came for. I know many gringos who are happy doing the middle-class thing in Latin America. Some doing less. But even if I were willing, changes in my business are also pulling me back to the States.

My U.S.-based Biz

Five years ago I had only three products: Maca, Chanca Piedra and Cat’s Claw. These days I have 20. Growing the product line was necessary in order to grow the business, but that has also increased complexity.

More inventory requires more manual labor than I can pay family members to do. Somebody has to manage the warehouse. Some products require time-consuming packaging work. And while there is value in being close to your suppliers, I’ve come to see that there is more value in being close to your market. From a business standpoint, it was getting increasingly difficult to justify staying in Peru.

Shameless plug: If you want to help me and support Expat Chronicles, these are the products I need to move right now: Cacao Nibs (super-nutritious, unroasted cocoa beans) and Huanarpo capsules (boner pills, priced 2 for 1!).

So that sums up the reasons for repatting: housing prices, cost of education and business. Or in one word: MONEY.

Children > Determination

I’m fond of saying “There are two types of expats: [A]s and [B]s.” Here’s another one. One type thinks their home country or culture is rotten, ruined or somehow going to hell in a handbasket. They come from all over the political and moral spectrums and see their countries in various negative lights, so they choose a foreign country. The anti-patriots.

The second type, probably more common, has nothing against their home country. I was always in that camp. While I chose not to live in the United States for many years, I never thought it was a bad place. I was just bored. I needed adventure and the high-octane lifestyle that being an expat offers. But I was always proud to be an American and sometimes craved going home for visits.

I also have always wanted my children and especially my son to be at least a little American in their personality, which would require living in the States for some of their childhood.

But that isn’t why we made the leap now. That could have been delayed. We made the leap for MONEY.

When I first moved to South America in 2008, I may have been a little strange in determining it to be a permanent move. The thinking wasn’t a trial visit, it was immigration. In those early years, I saw many gringos throw in the towel and head back home. I developed a determination not to fail. That’s how I saw it back then, a challenge.

I remember identifying three years as a kind of milestone. Most gringos throwing in the towel did so after one year, and almost all of them did it before three years. If I could get beyond three years, I thought, I was home free.

By the time I made it to three years, I noticed another feature of gringos throwing in the towel on Latin America: children. And that’s what got me, the need for education and a big house in a nice part of town. The adults told you all your life that having children changes everything. And I’ll tell you now, they were right. They were right all along.

Repat Chronicles

Lima has beaches and the some of the best food in the world. St. Louis is an unremarkable, provincial city in the Midwest. I don’t hesitate or exaggerate in saying the quality of life in Lima is higher. Not for everybody, but for me it is.

The plan isn’t to stay in the United States forever. But there isn’t a plan. There is only a minimum, and the bare minimum is three years. Three years is the time required for Wife to get American citizenship so we don’t have to dick around with visas anymore. Five years is a more realistic minimum.

In the back of my mind, I’d like to return to Lima for the oldest to attend high school. But I wouldn’t go back without a big pile of cash — like $200,000. If that doesn’t happen, I won’t go back to live. I won’t go back to grind.

Something else I’m fond of saying: it’s a brave new world when you have to work and save in the States in order to buy a house in Peru!

In the meantime, I’ll still be blogging. I published a taste of new content in “This is America,” a series about repat culture shock. I have a few on deck, so stick around. I’m still dropping good reads here and in the newsletter.

Say it Ain’t So

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