If you peruse mainstream media articles on personal finances and average wages, chances are you’re going to come across some income numbers that don’t make any sense. For example, according to the 2014 US Census Bureau Annual Social and Economic Supplement, the mean household income of the US was $72,000. For people living in Southern California, that probably seems like a poverty wage, and for people living in Northern Wisconsin, it’s a hefty sum. In fact, the various regions of the US are so diverse in terms of cost of living, that a mean income number for the nation becomes close to a worthless statistic. One surefire way to maximize your saving potential, is to live in Lima and work in the USA.
The trick to measuring your prosperity isn’t the amount of money you make, but the amount of money you’re able to save or invest after having paid off your living expenses. For example, if your yearly cost of living is $10,000, and you’re making $50,000, you’re doing much better than a person making $100,000 in a place that costs $95,000 yearly. We currently live in an era where work from home employment is becoming more and more common, but as of yet there hasn’t seemed to be much evidence of a mass migration to inexpensive rural areas where people can maximize their income by drastically cutting back their expenses, much less a migration to less expensive countries.
When I lived full time in Lima starting back in 2001, I had extremely low expenses. I rented a room for around $100 a month, and I didn’t have a car payment, car insurance, health insurance, or any other of the associated costs that might go along with any of those things. Not having health insurance was a bit of a risk, but I was 26 years old and in generally good health, so I thought I was better off not incurring the expense at the time. During those years I worked a bevy of freelance jobs including article writing, translating, teaching, and anything else I could think of. All of this was supplemented with a long term, low risk, investment strategy that worked fine until 2008.
Around 2006, I met a group of guys who were living in Peru and working either as contractors or freelancers as programmers with US companies. One guy I knew never even bothered to inform his employer that he lived in Peru. I believe he maintained an address in the US with friends or family, and during the few times of the year when he had to meet his employer in person, he simply jumped on a plane. A flight from Lima to Houston, for example, takes just under 7 hours, so it’s comparable to a flight between New York and LA.
At the time, this friend was concerned his employer might have a problem with his residing in Peru, but he worked there several years and his choice to reside in Lima never affected his work in any way. Peru has improved its internet service over the years, and the live abroad, work in the States model is becoming more prevalent.
One example of how you are at an advantage living in Lima while working in the US is through health care. Peru’s health care system is far superior to the US, and the costs are dramatically lower. In fact, it’s getting to the point where a forced migration away from the US health care system should start being recognized as a statistical probability since all it takes is one major illness, or injury to wipe out all the wealth you’ve accumulated in your entire life (even with decent insurance). There is also an expat tax exemption, although this exemption was written from a pre-internet perspective that assumed if you were living abroad, you were paying taxes abroad. Legislation tends to lag behind technological advancement, but I’d still highly recommend consulting with a certified accountant before attempting to take the expat exemption, although I have used it in the past.
I recently attended a conference where the keynote speaker suggested that our society is going to be moving more and more to a freelancer type job system. The speaker asserted that within as little as 10 to 15 years, the majority of people could be employed in work from home type occupations. With an increasing technological society, it’s easy to see how this transformation could occur. Look no further than a mobile app developer starting salary, and you can see how attractive the idea of a mobile, work from home, low expense lifestyle could be.
With its mild weather, good health care, and increasing overall prosperity, Lima, Peru is a great choice for a person who wishes to reside abroad for a few years while enjoying a work from home employment opportunity. There’s no better way to eliminate student debt, or to get started on your retirement nest egg, than by working at a competitive wage in your field while taking advantage of a very low expense living situation. This is a scenario that’s worth exploring even for people who are considering retirement, as the retiree might find that he or she is able to save more by freelancing while living abroad than was possible than by working a career job.
For decades, people always had the philosophy that they needed to work hard in their youth so that they would have money to travel in their later years. However, now it is possible to both work and travel throughout your life, and if you’re clever you’ll be able to do it in a way that makes you more prosperous than anyone who follows the conventional model. It’s an ever changing world, don’t get left behind, consider living and working abroad. Perhaps in 10 years, you won’t have any other option.
