Post Number: 585
|Posted on Wednesday, June 28, 2006 - 6:38 pm: |
Post Number: 1
|Posted on Wednesday, June 28, 2006 - 2:56 pm: |
Hi. I have a question if you could help. My husband and I are looking to acquire a business in Argentina. Mendoza area. I know about doing due diligence and such, as I am an attorney & CPA. Personally, I am surprised at how expensive things are. So if $3500 let's you live like a king, what if you just want to be comfortable?
Would you say that the purchase of a business that is profitable (net) for less than 200% is a fair deal? In the US, this is a great deal -- and a lot less risk. I would love your thoughts on this. I would hate to leave our current jobs and learn it was a huge mistake. We would like to stay for 5 years and then either sell or have someone we trust run the business.
Post Number: 584
|Posted on Wednesday, June 28, 2006 - 6:27 pm: |
Kimberly, there has been some inflation since we wrote about the $3500 budget. I am not sure that is true anymore. I'd say at present you can live *very* comfortable on that budget but not like a king. Prices are nothing what they used to be 2 years ago... Please note it has been 4+ years since Argentina devalued its currency and the rate of exchange against the dollar has remained steady at 3 to 1. Still, you can get excellent health care for you and your husband for usd $150/month and no deductibles and private schooling for children for a fraction of the price you will pay in the US. Please tell us which prices you thought were expensive...
If you understand the business you are getting into, you might be able to weather any downside caused by the disappearance of the present favorable conditions. When doing DD it will pay off to see the solidity of such business during other periods of our history since the last 3 or 4 are probably tainted with optimal external variables.
Do you mean 2 times net profits and NOT 2 times yearly sales? In such case, net profits may be hard to come by and you must look in-depth at the accounting, ALWAYS very complex in Argentina as you will find out and a fertile playground for a savvy accountant. I will soon write more privately since I also got your email. I will also move this discussion to a new thread.
Post Number: 80
|Posted on Thursday, August 24, 2006 - 5:42 pm: |
Roberto is spot on (as usual). IMHO, $3,500 isn't too much per month and certainly not enough "to live like a king". Prices of rentals have gone up each of the past 3 years and continues to go up. Also, it's impossible for a foreigner to live as cheap as a local.
While the cost of living is still cheap compared to the USA, it's VERY difficult to make money here in Argentina. Most businesses you are earning pesos so it's not so easy to live comfortably and also save up for retirement as well.
As Roberto mentioned, accounting issues here are VERY VERY complex. I would take anything you hear (and see - i.e. books) with a grain of salt here. As I've said before, the only sure thing about Argentina is there is no sure thing.
I still find living here to be wonderful with a much higher quality of life than the USA. I'm positive it would never move back 1:1 with the dollar but even if it did, I'd still live here as I love the city.
Post Number: 122
|Posted on Friday, August 25, 2006 - 5:54 pm: |
Is the budget $3500 pesos or US a month.
Either way it can be comfortable.
If it is US $3500 you can live like a duke or maybe a viceroy if not a king.
Now if you want to live like a king and have 6.5 million US there is a beautiful estancia in the southern part of Buenos Aires province where you could live like a king on $3500 pesos a month.
Post Number: 85
|Posted on Friday, August 25, 2006 - 6:09 pm: |
I would humbly disagree with Tom. 3,500 pesos is nothing here in Buenos Aires. That is only u$s 1,148 per month. Things add up. To really have a good life here which involves living in a great place, dining out once in a while, going to events (movies, concerts, etc), cellphone bills, normal expenses then that isn't enough to live on and have a good life. Count in things life medical insurance and things that many ex-pats I talk to aren't buying.
Money and budgets is all relative in life but many people are deluded into thinking it's dirt cheap here. Also, consider that some are moving here and not accounting for the fact they will not be able to save money for the future or their retirement. This will be a good problem for many.
If you are taking off a little time off from work to escape for a brief time it might be ok. Or if you are retired and currently getting a pension or income in u$s dollars/euros/etc. Or if you can somehow make u$s/euros here it's a dream. If not, really think things through. I've seen a lot of ex-pats pack up and go back to the USA because they realize they can't make enough to survive and live a good life.
Coming to Buenos Aires for vacation for a few weeks and living here long-term are two different things...have a good game plan.
Free advice. Good luck all.
Post Number: 126
|Posted on Friday, August 25, 2006 - 6:59 pm: |
I agree Apts.
If you owned the apartment or house you live in 3500 pesos would be adequate for me, one person.
But I would still need more income because I travel back and forth from the US a lot.
A lot of Argentines who earn the minimum wage of $650 pesos a month would love making this kind of money no doubt.
Post Number: 87
|Posted on Friday, August 25, 2006 - 7:20 pm: |
As mentioned Tom. It just depends on the kind of lifestyle you would live. I can tell you that probably NO American could live the lifestyle of the average local only making the minimum wage here. It's not realistic to compare the two. As you mentioned, many are accostomed to traveling around or back and forth to the USA and that is expensive.
I agree that if you own here it makes things much easier to live. Actually ironically I own many properties in the city and I don't live in any of the ones I live in because you can rent out a luxury property and make far more income renting out out than living in it and you can rent something even bigger and more luxurious.
It's not for everyone. Many foreigners don't realize that purchases here are 100% cash and mortgages are non-existant for foreigners.