Work Abroad but earn in USD

Thursday, July 27, 2006

How Much Money Do You Need To Live in Argentina?

I often get the question, "How much money do I need to live in Argentina?" The answer is, and always will be, "it depends." There's no correct answer because different people need different amounts to live on.

Reader's Question

I have lived and loved Indiana, Ohio, Kentucky and Illinois, but I’m ready for the smells and foods and the extended family I left in BA fifty years ago. My social security and pension stink. I spent a couple of my smaller pensions on medical issues about six years ago, so I doubt that I’ll have more than $800 – 900 monthly to live on if I retire now. I frankly don’t want to wait much longer. I’d have to wait to age 66 to receive any more from Social Security. Can a person live on that amount renting an apartment in a safe and secure area? It’s not a question I can ask my extended family. I have tried several different ways but I can never get a straight answer. Their lifestyle and mine are fairly different, and I would expect to find some kind of work at least part-time.

A Look At The Stats

The fact is, according to the per capita GDP figures, the average person in this country is living on $3800 USD per year. This is obviously a huge improvement over the $2500 USD figure in 2002, but way behind the $9000 USD figure during the times of 1:1 convertibility.

This figure, per capita GDP, doesn't tell the whole story. It only tells you how much money, in dollars, the average citizen is generating. What that means is that if a country's exchange rate changes against the dollar, the per capita GDP is likly to change as well. This doesn't take into account the fact that things might be cheaper in the country. You might have Argentines who are making $3800 USD per year, but the things they are buying are much cheaper than in other more developed nations. Therefore, their purchasing power is actually higher than $3800 USD. There's a stat we can use to find out how much purchasing power an Argentine might have if he or she was able to transfer his or her purchasing power to the United States, for example.

Purchasing Power Parity

The per capita PPP of a nation takes into account the average income of someone living in that nation and the average expenses that person will have for the basic goods and services that all people buy. Let's have a look:

  • #3. United States: $39,319.40
  • #46. Argentina: $12,301.23

The United States ranks #3, and Argentina #46. Measured in per capita PPP, Argentina ranks above all other countries in Latin America -- offering its citizens the best standard of living of any other South or Central American economy. In fact, it ranks ahead of several European countries, including Croatia, Latvia, Turkey, and Romania. That's pretty good.

So, what does this all mean? It means that the average person in the U.S. doing an average job is making and living on about $40,000. If you took that same person and put them in Argentina to do the same job, they'd be making and living on $12,000. If you're making $40,000 in the U.S., think about what your standard of living would be like if you were making just $12,000 per year. That's how you'd live if you were working here in Argentina. That's why most people here can't afford a car or other luxuries that the American middle class can easily afford. However, this isn't the case of our reader. In her case, she's going to be transfering a U.S. dollar income here. So, let's continue with the analysis.

Correlation With The Exchange Rate

You'll notice something else pretty interesting about these stats. The per capita PPP is about three times greater than the per capita GDP. That's indicating that your expenses here are going to be pretty much 1/3 the cost of what they would be in the U.S. Add to that the fact that 3:1 also happens to be the current exchange rate and a pretty clear picture is emerging.

Estimating Your Costs

Some other expats could chime in on this, but I think a pretty good way of estimating your standard of living here would be to take your U.S. Dollar income, multiply it by three, and then imagine living in New York, Chicago, or some other major American city with that income. I think that's a mental exercise that most of us could do. Of course, if you plan on living somewhere else than Buenos Aires, you'll certainly have cheaper housing.

Just for kicks, I took the rent I was paying in pesos and looked for an apartment online in New York (except I multiplied my rent by 3) to see what kind of quality I could get. The place I have here is much better in quality than what I could get in New York even at 3 times the price.

So, our reader above ought to take her $900 pension, multiply by 3 to get $2700 and then think whether or not she could live in a big U.S. city on that amount and be comfortable. For me, the answer would be no. With $2700 a month, I'd much prefer to live in a small town. But there are people who do it.

One thing that would help a lot is if you could buy a property here. It would certainly be a lot easier if you didn't have to pay rent -- if you could put together $50,000 to buy an apartment of your own you'd be set. Of course, that's not possible for everyone, but it would certainly make living here on $2700 pesos easier.

Last I checked, the government required that retirees moving here on a pensioner visa have an income of $2500 pesos or so (for a couple), so they seem to believe that it is certainly possible to live here on that amount and would approve your entrance to the country. Whether you'd be comfortable or not would depend on you and your lifestyle.

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33 Comments:

Blogger johnny said...

The "wild card" in this BA cost of living for expats discussion, continues to be the cost of housing. It continues to be my impression that there are often two prices for the same apartment-the expat price quoted in dollars and the "local" price quoted in pesos. If one is able to rent here in the "peso market", one can live here VERY cheaply. But there are alot of impediments in the way. If I was the person referenced above I would try to make contact with people here(it seems maybe she knows people here) and see if she could arrange "peso rent" before relocating. Otherwise she will be stuck paying the "gringo surcharge", and the very large part of her income will be eaten up by rent. As an aside, many of the local middle, and lower middle class, continue to be squeezed rent wise by owners raising rent and offering their apartments to turistas in dollars. Not to mention general inflation.

7/27/2006 02:41:00 PM  
Blogger Ted said...

One thing to bear in mind I think is that, whatever your view is of the lifestyle that amount of money would afford you in BA right now, thinks could change pretty drastically if the exchange rate moved against you. 2500 pesos a month would be one thing; 800 or 900 pesos a month (if the exchange rate ever reach 1/1 again, which admittedly seems pretty unlikely) would be entirely different. If you're planning to live on a fixed income over the medium to long term that's a big risk I think.

7/27/2006 04:26:00 PM  
Blogger Omar Basawad said...

Thank you very much for the information!

7/29/2006 01:55:00 AM  
Blogger Chris said...

Good to see a new posting...I guess it's been vacation time for many. I don't see the exchange rate changing soon; if it does it will be followed by another collapse. Argentina is benefiting from the rate difference. It's a little worrying because Kirchner is getting credit for a stronger economy that isn't performing as it appears in truth, but is being propped up by the profits from the rate differential. It's a little similar to the artifical 1:1 under Menem. When the rug is pulled out from under Kirchner, by some slip- up, the true underlying strength of many of his protectionist and populist policies will come home to roost. It bothers me because I really do care deeply for the country and it's future. I'm tired of seeing the same cycles once every 10 years...I've seen around 3 and we're in the middle of the 4th (for me, at my age-40's). All these wars are horrible because they put serious discussions about structural reform on the back back burner..as if these problems are not going to rear their ugly heads when we get some cease-fires in place. Wow, what a time we're living in!

7/30/2006 01:33:00 PM  
Anonymous Anonymous said...

You can comfortably live here on 900 dollars if you own property. Witrhout property it will be difficult. To rent on local terms you need a guarantor - hard to do for a foreigner. Even if you can get a guarantor, you'll never have much security as rents have gone up considerably. I'd strongly advise you to buy a small apartment.

7/30/2006 08:06:00 PM  
Anonymous Expatriado II said...

Expatriado: How about the cost of medical insurance ? What is the monthly dollar cost of a top-notch health insurer for a non-smoker, moderate drinkers, healthy if slightly overweight 50s couple ?

Thanks,

7/31/2006 05:56:00 PM  
Blogger johnny said...

Expatriado II,

I am 53, smoke, drink and abuse coffee. I pay about $240p($80US)a month for full coverage with Swiss Medical. No copay unless the MD comes to your house(yes, they will do that here). The plan I have will also cover you if you return to the states, though I don't know for how long. I know an american living here who returned briefly to the states and utilized his Swiss Medical coverage there with good results and no hassles. I have used the coverage here and I have no complaints. They have offices everywhere and have been very helpul. And no, I am not on their payroll.:)

7/31/2006 10:35:00 PM  
Anonymous Expatriado II said...

Johnny:

Many thanks, very helpful

E II

8/01/2006 11:54:00 AM  
Anonymous Jason said...

Housing is at a premium in BA and the agencies are wise to foreign pricing expectations. I live in Salta and have had very few experiences of price gouging, although not none. BA is a busy city and may not suit every relocator, especially a retiree - personally the sub-Andean cities of Mendoza (not that cheap), San Juan and Salta are great places to live, especially if you want to see a landscape every day and not just streets and cars. I personally wake up to the sunrise on the Andean slopes every morning and have little intention of swapping that out for busy BA. Lets remember that Argentina is a BIG place and not just one city.

8/01/2006 05:35:00 PM  
Blogger Juan said...

Good point Jason, also the province of Buenos Aires has several destinations like Tandil or Mar del Plata. Merlo in San Luis is like an italian villa at the foot of the sierras; Villa Carlos Paz in Córdoba and many others.

8/04/2006 12:02:00 AM  
Anonymous Anonymous said...

I think that article that was written that said you can rent here for $250 a month is still in people's minds. Please, if you read that article and think it's reality...it's not.

Just an aside about living outside the city. You can also buy land outside the city at very reasonable prices. We saw chacras yesterday of 2-5 hectares for approx 2.00 - 5.00 U.S. per sq. meter. For someone who doesn't have to live IN the city and is willing to be a hour to an hour and half away it offers a very realistic way to buy a piece of land and build, or buy a house already existing. if you've never gotten out of the city and drive out towards Canuelas or Montes, try it sometime.

Laura
http://movingtoargentina.typepad.com

8/07/2006 02:12:00 PM  
Blogger apartmentsba.com said...

I've been on holidays and also traveling around on business so haven't read the board in a while. This topic comes up from time to time. I've commented on it a few times.

I really think that everyone is in a different situation. You can spend as much or as little as you want here. I do NOT think it's wise to assume that everything is dirt cheap here and that life is all roses.

Argentina has to be one of the most difficult places in the world to make money. I work at least double the hours I worked in the USA and it's not easy to make a lot of money here.

I get emails daily from people that assume it's easy to get a job here and make a lot of money. That is far from true. Quite the reverse. It's almost impossible to make a lot of money here unless you are making u$s dollars/Euros/Sterling as I mentioned many times before.

Inflation is a factor, rents keep going up and that trend isn't expected to slow down anytime soon. The average property in a good area has gone up about 45%+ in the past 2 years as I predicted. I believe it will continue to go up as there is no other safe investments here in ARgentina. All the people I know here with money invest in real estate.

Now you have foreigners coming here discovering how great it is and they too are buying MASSIVE amounts of real estate. I'm not just talking about a few dozen apartments. I'm talking hundreds and tens of millions of dollars worth of real estate. All this is pushing prices up which will keep pushing rents up.

If you have a great quality of life in the USA, don't automatically assume you can have a super high quality of life here unless you are making good money. Case in point, I have an employee that is American (born here). She speaks perfect English and Spanish. Both sides can't tell the difference as her accent is good both ways. She is here doing her MBA school. She is living like she has never lived before struggling to get a nice apartment on her own.

It's not easy to rent here. I've posted about this before. On a long-term lease for a nice apartment you MUST have a guarantor that will basically co-sign for you. That's not easy to find. The other option is short-term renting which is expensive and getting more expensive.

Basically the cost of living can really add up. I am spending more here than I did in the USA which I never thought I'd do but it's easy to get into "splurges" like a full-time maid. I have a full time chef that makes lunch and dinner every single day. I'm not talking sandwiches either. I'm talking gourmet meals.

In the USA you'd NEVER be able to do that but here why not? It's just $350 US per month + the cost of the food. A full time maid you can get for $300 or less per month.

Taxis can add up.
Medical Insurance
Going out to dinners/drinks
Movies and entertainment

My biggest expense is traveling around Argentina and South America. I try to go somewhere at least once per month.

If you are making foreign currency Argentina is a paradise. If you aren't then don't expect things to be so cheap. Prices are definitely going up.

8/11/2006 01:45:00 AM  
Anonymous Anonymous said...

I love reading apartmentsba comments......they are always amusing but that is a classic !!!
It doesn`t matter what the topic of conversation is, he always mentions how he predicted the property price boom.....who the hell didn`t, it was just a matter of who had the funds to invest at the time!

8/17/2006 05:01:00 PM  
Anonymous Anonymous said...

I'm the individual that posted the question and I thank you so much, Expatriado, for your answer, and all others for expanding on it. It certainly has clarified many things for me, and now I can start making some real plans.

8/26/2006 03:08:00 AM  
Blogger Fields said...

Hey I love the Blog ... I have been a lurker for sometime. Prices do seem to be going up a bit in BA but then the US dollar is crap these days. Prices in the touristy recoleta seems to be gaining momentum.

Anyways, I want to mention Cordoba as a place to think about in Argentina. I have a good friend who lives there and he has figure out his very upper middle class existence to about 1800 a month. That includes a house with a garage, nice car, mortgage payment at 12% on 42000 house, every form of cable and internet access, pretty much every modern technological luxury.

Anyways, I have lived out in Alumine, Argentina a lot and that place is super beautiful as well as dirt cheap .. 2 hours now of the super expensive San Martin ..

You could live very well for 1000 a month there ..

Just my 2 cents

Anyways, have some faith .. you'll make it work .. do more with less ;-)

9/01/2006 01:40:00 AM  
Blogger apartmentsba.com said...

"Anonymous",

Glad my posts are amusing for you. As far as your comment that "who the hell didn't know that property prices would boom". Well, that is just plain false. Of course many people had to sell to raise funds but there was certainly no indication that everyone knew property would boom. In fact, quite the opposite.

There were so many so called "experts" that called real estate, the exchange rate and tourism WRONG. I mean seriously wrong.

It's so easy for people to play Monday morning quarterback. Most of them are usually "Anonymous". Ha, ha. That doesn't bother me. I just get a good laugh out of it as well.

The ironic thing is that many people each year for the past several years have said real estate has peaked here and that "now is the time to sell" only to see it go higher and higher.

The great thing about public message boards (when you don't post anonymously) is that you can see who was right on the money and who was totally wrong. I still maintain that real estate will be a good investment for the next several years.

Good luck all.

9/01/2006 12:34:00 PM  
Anonymous Anonymous said...

My girlfriend and I want to move to BA for five months at the beginning of the new year. I have heard conflicting statements on the cost of living and the prices of apartments. Is it cheap there or not? IS it easy to rent a place? Should a place be lined up before you go or is it easier to negotiate once your there??

9/01/2006 02:23:00 PM  
Anonymous Anonymous said...

Thanks for a very informative blog!

I've dreamt of moving to Argentina since the early 90s, partly in response to Chatwin's book, but also in response to the nice, cultured Argentines I met growing up. I lived in the UK for several years when I was a teenager and twentysomething. I've just never become accustomed to American society. I can't wait to leave.

To be honest, I'm disgusted with the increasing coarseness of the US, the violence, the mass third world immigration, the multiculturalism, the endless wars. When you come right down to it, I just don't like Americans. The US is not a country for educated, cultured, professional people, esoecially if they are of European descent.

Thanks again for an informative blog. I'm seriously considering buying a few properties in BA (I'll have about $3MM to work with). Argentina's economic problems are worrying, and I've heard BA is having issues with Amerindian immigrant squatters from neighboring countries, so I'm also considering Uruguay and southern Chile.

9/01/2006 03:40:00 PM  
Anonymous Anonymous said...

"I'm talking gourmet meals."

Classic.

9/02/2006 12:02:00 AM  
Anonymous Anonymous said...

"I'm seriously considering buying a few properties in BA"

You might want to read up on some of the expropiation activities of the Argentine government.

9/21/2006 10:47:00 PM  
Anonymous Anonymous said...

Great blog. It really gives me a clear perspective on life in BA. I make $7,200 USD a month from my internet based company and I have about $50K saved up. I currently live in San Francisco, where my after tax income is completely used up each month, on rent($1500), healthcare costs($590 w/Kiaser), drinks with friends and eating out, and some months I even have to tap into my savings. Bottom line, I'm constantly stressed out about money, and I want to move to a city where I can live off of my $7,200 in relative comfort and maybe even save a little something each month (what a concept!). I love New York, Paris and London, but they are all even more expensive than San Francisco, so BA sounds like the next best thing.

Additionally, I know you recommend buying, but from what I have read, $50K won't get me much in BA, now that the rest of the world has discovered what a bargain BA real estate is.

So, what kind of lifestyle is on my income and do you think it's possible to actually still buy an apartment for $50K(including agent fees, taxes, etc.). Any response would be apreciated.

10/18/2006 04:38:00 AM  
Anonymous Mark said...

HI, just found your site and I am enjoying it. I am a retired US expat who visited Argentina maybe 30 times for work from 99-04. I moved to Rosario and absolutely love it. My comments would be ...
1. BA is incredibly expensive as well as dangerous. I only go maybe once a month for a weekend visit ... VAMOS RIVER!
2. If you are serious about moving here BUY an apartment.
3. The interior of Argentina is much prettier and cheaper, if less elegant, than BA. Consider Rosario, Cordoba, Mendoza, Salta, etc.
4. LEARN Castellano!!!!!!! and then try to learn Lunfardo.
5. A great company to help you move is TRANSPACK in BA. They are good but somewhat costly. Also know you will have to pay Customs fees and an insurance policy to move goods into here. Neither is expensive, just a hassle.
6. If you are thinking long term, get your residency visa BEFORE moving. The consulate in Chicago was excellent.
7. Next work to get your DNI (national identity papers). You will need a GOOD lawyer and it will cost but is worth it.
8. Keep your money in a US bank and live via your ATM card. If you have a bank account here you cannot touch your money for 1 year.
9. Health insurance. I have OSDE and pay about U$D90/mo. for top of the line coverage.
10. If you are going to live here then ASSIMILATE. I have NO American contacts here and I never speak English (I took castellano classes for 2 years here). This maybe more important here in the interior of Argentina.
11. The bureaucracy here is incredible and pervasive. I have horror stories about getting my DNI.
12. I have a million more tips but I am, I fear, overstaying my welcome.
Chau y suerte

10/30/2006 01:30:00 PM  
Anonymous El Americano said...

I remember when I first went to argentina as a kid and someone handed me some funny-looking pinkish colored bills in exchange for my dollars. I was like "yeah right, now give me the REAL money!".

Cause face it, the crap looks like Monopoly money (...and is worth about as much). I laughed when I saw my first pink, blue, red and purple currency bills, although later I cried when I realized their value trying to buy things.
To add confusion to everything, every 3 months or so they would add a few zeros to the bills (new emissions) which meant that once you learned the whole thing you had to start over. Suddenly the blue one was red and the red was valued like the old purple. Not very consistant.

Their coins were something else too. At times pretty nice &/or hefty (I like the 'silver'-colored ones with the 'golden' centerpiece inserted) and other times so light you could throw them at someone and the wind would blow them back.
But in either case they also changed with frequency, making it confusing. Then they did the peso-austral thing and just when everyone was about to understand it they undid it with the austral-back-to-peso move. At which point I lost sight of the shell game and gave up and walked away. You gotta keep your eyes on the hands you know.

Then there was also the time when they decided to KEEP everyone's currency, but hey, that's a different story.

12/14/2006 12:19:00 AM  
Anonymous Anonymous said...

You have to have an independent income to live in Argentina. Otherwise u will hate it to the bone.

12/28/2006 10:24:00 AM  
Anonymous Anonymous said...

Is there inflation?

2/14/2007 02:21:00 PM  
Blogger Thomas Allen said...

At one time, inflation was so high that the Argentinian peso was virtually worthless. Right now, annual inflation stands at 10%; in the US inflation is about 2-4%. In a word, store it all in dollars, and convert to pesos only if need be.

2/21/2007 12:11:00 PM  
Anonymous Anonymous said...

Hi, I am suppose to go to Argentina in the second semester of 2007 and am currently negociating my salary with my employer. Apparently, apartment are quite expensive especially if you want ot leave in a nice and secure area. What should be + or - the net income in order to have the same quality of life than in the US?
Thanks

2/24/2007 10:05:00 AM  
Anonymous Yanky said...

I will be moving to Argentina in June for retirement. I see references to Swiss Medical and OSDE. Any comments on medical coverage? Also, on an extended visa?

Yanky

3/26/2007 02:54:00 PM  
Blogger oilhead850 said...

I like the post about hating Americans and all of our problems. Most of the American people I meet travelling hate what is happening too. That's why we are trying to move AWAY from the USA. Please don't blame us all.

I've noticed that in the last few years that Anti-Americanism isn't as bad as it was in 2003/04 at the beginning of Gulf War II. But I've only visited Mexico and Central America. How's the feel in South America? Are we totally hated down there? Thanks.

8/05/2009 02:20:00 AM  
Anonymous Pakman77 said...

Hahaha... no, Oilhead, you are not TOTALLY hated. Argentina is basically a European multicultural country - so, you'll come across different thoughts and ideas. People are great, but they are still people, you know what I mean?

9/29/2009 02:52:00 PM  
Anonymous ParisMinx said...

Hi, I was wondering if you could leave on a salary of USD2,000 in Buenos Aires, if you hope to rent a property? hanks in advance for your assistance!

11/13/2009 01:45:00 PM  
Anonymous Anonymous said...

My wife and I are thinking of moving to Argentina but I can't seem to get a good idea of rents in smaller towns around the country. We really can't stand large cities pop 100,000+. We live comfortably in the U.S. on about $900/mo rent is approx 65% of that just trying to figure out how much we would need to save to stay at least 5yrs any approx ideas would be great thanks.

4/21/2010 06:40:00 PM  
Blogger Syd said...

I live in the U.S. and receive about 600 US dollars per month. In July I will be moving to Mar del Plata. An Argentine friend of mine who lives in Mar del Plata told me I could get a small apartment or flat for about 250 US dollars per month. Does anybody know if this sounds correct?

5/07/2010 01:48:00 AM  

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