Monthly Archives: January 2012

Cuenca – The People

Standard

Looking over the posts from the last two weeks, I feel as if I have neglected to discuss the most important part of our journey to Cuenca; that is, how we found the people.  I tend to be a rather goal oriented individual and too easily get lost in the “nuts and bolts” of providing functional and practical information. However, the essence of why I travel, why I like some places more that others, why I, at core, do the things I do, has more to do with intangible and wholly subjective, feelings; rather than, practicality.  In fact, those that know me well would say I will usually do the opposite of what is practical.

The challenge with every journey I venture, is communicating to others the great joys and highs to be had by going forth into the unknown and finding laughter, warmth and kindred spirits.

This slideshow requires JavaScript.

The people of Cuenca were fun, welcoming and  full of laughter, cups of coffee and cocoa.  People were helpful, mellow, and relaxed.  And the small stature of the majority of the people made me feel like a runway model in 2 inch heels.  Sweet!

Ecuadorians were not as curious as Indians, or as gregarious as the Senegalese.  Instead they are even keeled, soft-spoken and really not that different from home, except:

  • language, of course;
  • Cuencanos are very family oriented and prioritize spouses and children;
  • they take their Catholicism very seriously; and
  • they do not mind being stuck in a perpetual autumn.
Advertisements

A Word on Banking in Ecuador

Standard

The benefit of Ecuador being a US dollar based economy is that, for the US investor, it eliminates the inherent risks associated with foreign currency exchange fluctuations and it allows us to take full advantage of significantly higher short-term interest rates.

I am still learning about the Ecuadorian banking system and I am not an investment professional; however, if you are considering a long-term stay in Ecuador, there are some clear advantages to short-term (1 year or less) investing there.  Just compare the interest rate on your current savings account or any CD’s you may own.  The rate is probably somewhere close to zero versus 6.0% (on average) for a one year CD in Ecuador.

I have a particular focus on CDs (certificates of deposit) because I like the fact that it is a relatively liquid asset and I know exactly when my money will be available to me, without any withdrawal penalties (however, early withdrawal penalties can be about 2%).  CDs are like temporary savings blocks.  You can invest for a minimum of 30 days to 1 year and you earn interest as a reward for locking up your money with the bank for that amount of time.   The reward, or interest rate, increases with the amount of time you are willing to let the bank(s) in essence “borrow” your funds.

With Ecuadorian bank investments, CDs are a great choice because you can stagger your investment across different periods of time and in varying amounts, based on your comfort level/risk tolerance.  In addition, the minimum investment is low, $1,000 or less.  This flexibility can be a safeguard so that you know, for example, your money will not be tied up at the end of 60 or 180 days.

To understand how to calculate the amount of interest you can earn in a given period, take the following steps:

  1. Determine how much your initial investment will be, for this example let’s say it is $5,000
  2. Determine how long you want the CD in place for, let’s say 30 days at a rate of 3.50% (Banco del Austro as of Jan. 2012).
  3. Multiply your investment amount by the interest and divide by the number of periods in 1 calendar year (30 days = 12, 60 days = 6, 180 days = 2, and 360 days = 1) So,  $5,000*3.50%/12 = $14.58
  4. This means your interest earned at the end of the 30 day period will be $14.58
  5. You can then decide if you want to do another CD or just take your money and do something else.

Two final thoughts

  • The difference between banks and cooperatives is similar to the difference between banks and credit unions in the US.  Both are financial institutions offering similar products, however cooperatives (like credit unions) are governed by a different set of laws and regulatory bodies.  As a result, cooperatives may be perceived as inherently more risky and they therefore offer the highest interest rates on CD investments.
  • The requirements to open a bank account will vary between institutions. Some require only a passport, others require an Ecuadorian resident card and a utility bill.  All require you to open the initial account in person, so get to know your bank and the investment professional you will be working with, because when you are away, they will typically be able to help via phone or email.

For a list of some of the banks and cooperatives available in Cuenca, Ecuador and their respective interest rates, click on the Ecuador Investments page.

What You Get for $250 – Cuenca, Ecuador

Standard

In one of my earliest posts, I said that it was possible to live in Cuenca and only pay $250 in rent per month.  A kind commenter, who currently lives in Cuenca, then replied that really the monthly rates are more in the range of $300-$500. So, delaying further discussion, I decided to see for myself.

After a week in Cuenca, talking to everyone from taxi drivers, to friends, to shop keepers and bank officers, I can say that the commenter was WRONG!!  You can absolutely live in a nice place in Cuenca for $250 or under and $250-$300 is considered the higher-end by the average Cuencano.  Yes ladies and gentlemen, that is a fact.

Sure if you want to live the high life/expat life, with the other expats, paying higher rental fees to live in condo buildings that are essentially occupied by other retired expats from North America (ex Mexico)….then go ahead and pay more. [There’s also that really fabulous, fully furnished house for $600 that I really want.]  However, if you are moving to Ecuador to make friends AND save money, well then you are in luck, because there are lots of options, you just need to have patience, a little flexibility and some time.

Okay, so why the serious difference in rental rates (perceived or real) between the commenter and I?  Language skills, living standards, other stuff ….take your pick.  All the conversations I had with people regarding living expenses were in Spanish.  While I did contact one of the expat real estate agents, it was on the last day I was in town and we really did not have a chance to speak.  For $250 and below (and it should be below), you can get a two bedroom newly renovated, apartment and the further you are from El Centro, the cheaper it gets.  I took a tour of a small, 2nd floor, 2-bedroom apartment that had just been renovated and the asking price was $250, which to me means that for a year lease you can get it for $200.  It is a 10 minute walk from downtown and in a decent/typical area.  I also spoke to the owner of a 2 bedroom, new construction apartment that had just rented it for $180.  It is walking distance to a Coral Supermarket (one of the supermarkets that we all would be happy with), a $2 taxi ride or a $0.25 bus ride to downtown and it is a block off a major road and right on the bus lines.

If you are looking for a place, there are tons of rentals, signs are posted on the homes (“se arrienda”) and foreigners are very welcome.  Just bring along some Spanish or a Spanish speaking friend, and negotiate heavily.

The big prize, however, is the home that originally got me excited about living in Ecuador.  I actually got to see the house in person, had dinner on the beautiful handmade/homemade furniture, and it is now the type of house I aspire to have…at the exact same price or less! [Side Note – Frank, Angie and their boys have created some really incredible furniture pieces, my personal favorite is the dining table and its seating.]

To supplement the pictures of the house, below are pictures of the neighborhood. The house is about a 10 minute, $2, taxi-drive from downtown area, or a $0.25 bus ride.

This slideshow requires JavaScript.

Pictures of the home I visited, before it was furnished, are at following link – Frank and Angie’s Blog.

So when someone says it is not possible and you can’t, just repeat these words, “Yes you can!”

Ecuador, I’m in love… too bad you’re not a man!

Local Living – Cuenca, Ecuador

Standard

How is it that some people can not live in Cuenca for under $1,000, while others live comfortably for $500-$600?   The answer is, it is the difference between living locally or living in “expat mode”.

Now before you read further, let me state for the record that I offer no judgement as to whether one has more value than the other.  Some people find sleeping under the stars, in a tent, blissful, while others can not do without hot running water and air-conditioning.  My point is simply that to live like you are living at home will cost you more than to live how the local people live.

What is “Expat Mode”

Expat mode means living a life in a foreign country that is exactly like the one you lived or would have wanted to live, in your country of origin…but probably could not afford to.  It also means replicating, as close as possible, all the comforts of home (US, Canada, Europe, etc.). Expat mode extends to social living, in that the events you attend and the places you frequent will most probably be places where the people and language are familiar; that is with other expats.

When you read other Cuenca blogs you will get a listing of the places that hold “gringo” nights, ladies nights (for the gringas) and other North American (owned and patronized) businesses.  So, if you are the type of traveller that finds cruises to be wonderful and engaging travel experiences…then Cuenca has a lot to offer you and in many ways, you will quickly feel at home.

What is Local Living

Local living is just that, living like a local.  It means putting aside some (or many, depending where you are) of the comforts of home and determining to live like a local.  Now in Cuenca,this does not mean cold showers and unsanitary conditions.  It does mean, shopping predominantly at local markets for most of your needs.  It means living in a typical neighborhood, with typical neighbors and almost never paying more that $300 in rent (for a house). [Side note: average rents are between $200-$250 for a sizable place- and this was confirmed many times]

Living locally also means walking a lot or taking buses (for a quarter). This path also means taking the supreme step of learning to speak the language (in this case Spanish), because without some communication ability, living locally can become not only frustrating, but just as expensive as the “expat mode”, without the flashy benefits.

Just in case you are wondering what local grocery shopping means, compare shopping at your North American supermarket with the pictures below.  Not everything is cheaper here, but the things that are…really are.  Warning…on your first go round, take a local friend, who speaks Spanish and knows the prices, with you.  This way, you’ll know what the “real” prices are and you won’t get caught up in foreigner inflation; otherwise known as the “gringo tax”.

This slideshow requires JavaScript.

What you get for $600 – Cuenca, Ecuador

Standard

Want to see how the 1% live in Cuenca?  Then rent a house for $600.   For this “great” (this is all relative to the  US because it is an outrageously ridiculous price for most Cuencanos) price you can get:

  • Gated and private entry onto your own private street of only 9 homes
  • House in a compound of houses that are all owned by the same family (none of the others are rented out and there are children in all the homes)
  • 3 story fully furnished home with 4 bedrooms, 4.5 baths
  • Formal dining room
  • Sunken living room
  • Large  kitchen with all the requisite plates, pots, spoons, forks and other items included
  • Servant’s Quarters
  • Laundry room with washer and dryer
  • Private garden with fruit trees
  • Private enclosed and tiled courtyard
  • Beautiful views of Cuenca
  • Only 10-15 minute walk to center of town
  • Secure home with intercom buzzer
  • Deposit is $1,000 and renter pays for all utilities (which depending on usage maybe about $100 including light, gas, water, internet, cable and telephone).

Can you live on your social security check in Cuenca, Ecuador?   Yes you can!  Come and live like the 1% – if that is what you choose.

So tell me, if you could choose between spending $600 just on rent or $600 on everything for the whole month?  Which would you choose?

This slideshow requires JavaScript.