WHATS SO CHEAP ABOUT COLOMBIA?
Every time I go to the grocery store I admit to being a annoyed at the cost of some items.
I am saying to myself,its not cheap here,its expensive.Looking at my latest grocery bill in more detail REALLY confirms this,at least in terms of that particular cost,the grocery store expense.The 190,840 peso bill,$84.82 would have been about $45 in the states,buying at Costco in admittedly greater quantities.But you don't save here buying greater quantities,its about the same price.Part of the cost,and I never noticed this before,is it appears everything but fruits and vegetables has a tax on it.Normal groceries,not even taxable in California,10% tax.Things like klennex,other toiletries,sweets,bacon and even butter,16%.It was 21221 pesos,$9.39 j just for tax.In California I would pay 8.25 % on about half the bill.Most of you would pay less where you live.So its 88% more than it would be in the US,and I only compared the actual price on 5 items,those most overpriced.It would have been an even greater savings if I tried to figure out all 30 or so items on the bill.A few,fruits and vegetables would have been slightly less.The others more than enough to offset that..
More on groceries later.
Comparing major costs between Colombia and the US there are some things cheaper in Colombia.Most thing are more,a lot more,but the cheaper items are significant.
1. First,rent or housing expense.This IS THE BIG ITEM.If you go cheap the savings here are huge.If you go high end it might be 50%.
I know a guy who rents an apartment,utilities included for 250,000 pesos,about $110.In California the cheapest apartment would be about $700,with basic utilities.energy would be all you would pay, maybe $750.Phonenot included,water,garbage paid by landlord.This is a studio type apartment but you can rent larger places in worse areas for similar prices.My ex mother in law,4 bedroom 3 bath,1500 sq ft apt.,$173 a month.Many of the less than that cost places you are getting in to real bad areas,but these 2 examples,OK areas.Not great but ok.
On the other end of the housing scale you have someone like myself.2500 sq ft luxury apartment,best barrio,2,200,000 with administration,$978 a month.Depending on where you lived in the US it could be $1500 to $4000.My utilities are high,about $525 a month,more on that later.So for the $1500 a month cost with utilities I could maybe pay $1300 a month in the US for a apartment or house.I would not get as much as I have here but very acceptable,even very good in many parts of the US.What I have here,over and above how great the place is,is relative affluence.Its very high end for here.$1300 a month in the US,middle of the road.You would not get that jaw drop response when Colombians walk in,especially compared to where they probably live.
In buying the price savings seem even larger,but they are pretty much proportional to rent.You might buy a house for 25,000,000 million pesos,$11,000 that would rent for 300,000 pesos,$133 a month.Don't get excited,you would not want to live there.Or you could pay 400,000,000 pesos,$178,000 for a place like mine and save the $755 basic rent cost ,you would still have to pay the administration I pay of $223 a month plus property taxes and repairs and possible special assessments for repairs to the building.If I bought the place I would be paying about 20 times my yearly rent,not a smart thing at all to do in my opinion,especially since its all cash to gringo.It would take huge appreciation for that to be attractive.
2. Eating out at CERTAIN restaurants.The high end restaurants and some of the low end restaurants are significantly cheaper than in the US.Fast food is a lot more.
I can have an 8 oz steak with small salad and potato at Lenos and Carbons for 8500 pesos,about $3.78.The larger 16 oz cuts are about 15,000 pesos,about $6.67.You might get the smaller steak at a inexpensive type steak house in the US for $8.
I can have a 16 oz prime cut of lomo,loin for 25,000 pesos,$11.11 at my favorite restaurant,La Antorcha .That would be over $20 in the states.If you have prawns it can be $45,000 or so,$20,about what it would be in the US.Wine cost about the same at a restaurant,If you have a beer it might be $2 instead of maybe $4 in the US.So it's a better deal but not cheap,if you east out 5 nights a week like I used to it can still get expensive.
Some cheapy local restaurants,executivo lunch,2500 pesos,about $1.10
3.Taxis. This is big.Makes not owning a car affordable in most cases.2800 peso,$1.24 minimum.Probably $7-$10 minimum in the US.A 20 mile airport trip can be 35,000 pesos,$15.In the states that might be $50.I did by a car,its convenient,I thought I would need it for an anticipated move.But I didn't need it and am probably not saving money except when I drive something like the 25 miles to Jamundi.
4.Medical care.This can be an important savings if you have no insurance in the sttes of have tp pay your own insurance.A mojor factor in retiring here.Basic health insurance,
58,000 pesos,$26 a month.Top quality care,go to the best hospitals,about $90 a month.
My last Colonoscopy here,$90,no insurance coverage.In the states $4500,insurance paid.
One surgery,no insurance coverage here,my US insurance might pay.$11,000.Thats high for here,they were assuming my insurance in the states would pay,still no answer on that.
5.Drugs.Lots of generics.Generic Cipro,$.20 a pill,real Cipro $10 in the US.Viagra, $1.10 for 100 mg.I paid $11 in the US,internet options just starting when I left.
6.Hotels,some travel packages.A 5 star hotel can be $80 up.Maybe $100 in San Andres.A deal.Lots of cheaper hotels.The rooms can be OK but when you get under about $25 a nigh you are usually getting an unsafe area,at least in Cali.
7 Labor.So how does that help you?Its built in to the Colombian costs I quote here.But if you have to pay directly,as in car repairs,it can be huge.To replace a front steerr4ing tie rod type part on my 94 Honda Accord,40,000 pesos labor.$18.I presume about 2 hours.that would be about $150 in the US,and that factor keeps lots of old cars going that would have long since been junked in the states due to high repair costs.Parts,about the same,maybe a little more.It was $135 for the part,would have been about $45 if it was a Mazda,they make them here.
If you get in to remodeling or building a house labor savings can be huge,Tile bricklayer plumber types,$9 a day.You can do lots of floors , kitchens ,baths,painting cheap.A guy a Colombian friende knows built a 3000 sq ft house for 70,000,000 pesos,that's $31,100,$10.37 a sq ft.I need to talk to that guy.Contractors will quote you $27 to $32 a sq ft and you can pay up a lot more if you let a contractor do a remodel.They can be more difficult or harder to figure out that new construction and the contractor mark up can be more.Mail me at
peiguren@aol.com if you want to be on my real estate letter.Its way overdue to come out,sorry to those who have been waiting.I haven't figured it all out yet but will but will send out what I know to this point soon.Put real estate in the subject so I will recognize it.I am a former real estate broker in the US and worked many years in land development for a major California city.
Also,low labor rates make things like maids services cheap.Lots of people have full time maid they could never affords at US prices.More expensive homes and apartments have maids quarters,a small bedroom and bathroom for a live in maid.This makes things like child care a lot cheaper.
Did I forget anything? Some clothes seems cheap but on the whole its actually less in the US.
Well there is the cost of sexual services,10% what it would be in the US.A guy from Florida can pay for a whole trip in one purchase.
Groceries,no way,MOST a lot more,more on that in the what costs MORE column.
OK,WHAT COSTS MORE
?
1.Cars.1.5 to 4 times more for a new one.2 to 10 times more for a used one.A new Honda Accord 4 cylinder,110,000,000 pesos,$49,000.New Mazda 3,2 liter hatchback,popular here,63,500,about $28,200.Both of these twice what they would be in the US.Cheapest Hyundai you could buy in the US,Accent,$12,445 in the states.Here with smaller engine 35,800,000 pesos,$16,000.
BMW 545.last years model, 324,000,000 pesos,$144,000. $56,000 in the states for the 550.Jeep Grand Cherokee,US model,155,000,000,$68,900,about $30,000 in the US.
There are some real small cheap casrs you can't even buy in the states.Hyundai Santro,1100 cc,24,900,000 about $11,000.Some new Chinese mini cars,about $10,000.
Used cars.My 1994 Honda Accord,$8400,here,cheap for here.about $3500 in the states. The 2001 BMW 325 I drove last summer in the US.I bought and sold it for $16,000.Here about 100,000,000 pesos,$44000.
Real cheap transportation cars you could buy in the staters for $500,like an old Maxda 323,maybe 8,000,000 pesos here,$3500.I spoke above about low labor costs for car repairs here.So if a guy can't fix it himself he can get it done for less than 20,000 pesos an hour,$8.80,what I paid and maybe a whole lot less than that.Parts can be expensive.
When my ex wifes mother wrecked the pickup I gave her for her plant nursery business I told my ex labor is cheap,just get them to pound it out the best they can and avoid new parts.I guess they did and its drivable.
2.Anything electronic.There are big taxes,30% or more on this stuff.So even if you go to El Centro for TV's and appliances or Pasarella for computers you will still pay 30% more.Price it at a department store like Carefore it can be 2 or 3 times more than the US price.Funny thing,as poor as they are hear they like3 NAME BRANDS,trust nothing less.I bought a Chineese clone new lap top in the US for $500.I am about to sell it for what I paif for it.They might pay $1000 or 2,250,000 pesos for a name brand with the same guts and with a warrenty.I decided there was no money,or not much in electronic although I am looking in to certain cell phones now that might make some money bringing them in.
3.Groceries.I talked about that above.Some things like fruits and vegetables can be less.Most things are a lot more.But if you just buy the basics like poor Colombiand dom it can be cheap.But I will bet I can beat the besns and rice price too at Costco in the US.
The items from my recent visit most overpriced.
Splenda sweetner.31,250 pesos,$13.89 with tax for 200.US $12.94 for 700.That would be
$3.70 for 200.$10.19 more here.I usually buy enough of this for a year and bring it back.I just ran out.
Bacon 16,298 peos,$7.24 for 500 grams.US $2.99 for a lb.,440 grams.That would be $3.40,$3.84 overpriced.
Klennex. 4733 pesos,$2. 10 for 80.US,$9.73 for 1680. That's $.46 for 80,$ 1.64 x 3 = $ 4.92 overpriced.457% more than in the US.Lots of cosmetic toiletry items way overpriced.I saw 4 gillete triple type razor blades.22.040,$9.80.I think maybe $4 in the states.
Ice cream.19256 pesos,$8.56 for a half gallon.US,$2.99 or $5.57 less.
OK,I am talking luxury stuff?How about chicken breasts.boneless skinless.Colombia 13200 pesos,$5.28 a lb.,presuming 10% tax.It might be 16%,I didn't buy any this time.Costco,frozen but better quality,$2.40 a lb.
Meat,about the same as chicken for lomo,about the same as Costco.
Chesse.23000 pesos $10.22 for a lb of cheddar if you can find it.US,$2.50 at Costco.Other cheese cheaper but nowhere near $2.50,more like $7.
Beer is cheaper here for similsr quality.I like Costena as well as Corona or Pacifico I would buy in the US.$.63 a can vs $1.62 for Corona or Pacifico.Corona in Colombia about the same as the US.Cheap us beer cheaper than cheap Colombian beer.Even though they want $.86 for a budwiser here,$.36 in the US.But I don't like it.
Rum. 20880 pesos,$9.28 with tax for a 5th of Bicardi.Us $9.73 for 1.,5 liters.Thats $4.87 for a 5th.
4.Fast food.I don't know how Colombians afford it.Maybe it's a treat they have seldom unless thery have money.The other night at Chipi Chapi we felt like Hamburgers.2 Hamburgers with cheese,2 fries,2 beers 28,000 pesos,$12.50 at El Carbon.Without the beers I could have bought it for $4 in the states.The other night,extra large Pizza,44,000 pesos,about $20.In the states I can get 2 medium pizzas for $9 at Dominos.Yeah I know there is a Dominos here.They don't know about pizza sauce like all Colombian pizza makers.And the pepperoni is real poor quality.And no 2 for ones.The WORST pizza in the US is better than the BEST pizza in ColombiaIts funny.Here you can get a steak,salad and potato at Lenos and Carbons for less than a hamburger.They should do Hamburgers there,they are missing it.
5. Gasoline.I don't know where its at in the US right now.Here regular is 5800 pesos,$2.58 a gallon.Probably close to what it is in the US.But premium is 7800 pesos,
$3.47 a gallon.And it seems the quality of regular is poor here,Lots of cars that would run on regular in the US need premium here.And there is no mid grade or extra.
Those are the basic things that are less and more.I probably forgot some things.I don't mean to complain,it comes with the territory living here.They could do a lot of things better and probably will eventually.They just got in to selling clothes dryers here.We have had them for 50 years in the US.
Off course there are other reasons to be here other than the cost of living.Number one for me is the women situation.No way I would have found my 38 year old novia in the US.I turn 63 this week.Now that we are together it raises the question of why not move back to the states.She really doesn't want to but recently said she might.She is very concerned about her 78 year old mother who is in poor health.One of these days that will no longer be an issue.I am not pushing it.I am not ready to move back but that might come about.The other advantage for me here is the weather.I like warm weather year around which we basically have in Cali,except for some rain.
For now I chose to be here,even though the cost of living is really not less considering everything than in the US.But I like it here and feel relatively wealthy here.And that's better than felling poor which I probably would in the US with my pensions.They gross $51,000 a year.Considered real good for here but not wealthy at all.In the US,at least in California that would be on the poor side.
Pete
