A Wealthy Lifestyle on a Middle-Class Budget
I walked into Susana’s home on a Saturday night… a magnificent contemporary that overlooks the city of Cuenca, Ecuador, from a hillside high above. About half of her guests had already arrived and were seated around a conversation pit that faced a stunning glass wall through which we could see an ocean of sparkling city lights below. Her giant German Shepard and two Labradors bounded over for a friendly greeting. From an old Ecuadorian family, Susana is editor for Hoy, the country’s version of USA Today.
Miguel, the director of the symphony orchestra, rises and greets me with a friendly hug as he heads to the bar to pour me a glass of cabernet. Mario, the former Minister of Education, strikes up a conversation and asks if I can come to speak at one of the local universities… to a civics class wanting to discuss the Iraq war.
Two well-known artists are here tonight: Eduardo Vega and Diego Jaramillo. Diego’s latest exhibit starts with a cocktail reception on Wednesday night… and he’d like it if I could attend.
This is the social network I found myself in as a new retiree in Ecuador. For some reason, people felt I was a special person… an important person. And it wasn’t just my new friends….
I went to the civil registry to get my national ID card. When the director saw me, he pulled me from the long line and escorted me to his office where I could relax with a coffee while they immediately processed my request.
And when they failed to take care of what I needed at the state police, I was free to stroll into the commandant’s office and ask him for immediate attention… as if I were a VIP.
Without expecting it, my move abroad had landed me in the upper class.
And it wasn’t just the level of society that I found myself in… there were plenty of other ways in which my lifestyle improved. I found that I could routinely eat in the city’s best restaurants, shop in the best stores, and hang out in the most exclusive clubs… all for what I considered to be pennies on the dollar.
And to compound my advantage even further, I paid virtually no taxes and spent almost nothing on utilities. Gasoline in Ecuador, even today, is only $1.48 per gallon.
I was enjoying a wealthy lifestyle, while spending a fraction of what I did for my middle-class lifestyle in the U.S.
And that’s a far cry from what’s happening to my former middle-class environment back home. There’s no question today that the middle class is shrinking.
Middle-income jobs are rapidly disappearing from the economy, with the share of middle-income jobs dropping by a staggering 20% between 1980 and 2010. These jobs were replaced by low-income jobs, which now make up 41% of total employment. The U.S. now has almost 50 million people living in poverty… an increase of 6% in just the past two months.
From an international perspective, America’s income inequity is now the third-worst of the world’s developed countries.
Analysts are calling it the “middle-class squeeze;” a phenomenon that creates a barbell-shaped society, with lots of wealth at the high end, the poor at the low end, and nothing much in the middle…a pattern that used to be common only in Third-World countries.
But moving abroad can make all that irrelevant. Instead of being part of the group that’s being squeezed out of the economic picture, you have the chance to advance to the high end of the economic barbell.
This is because even America’s poorest segment of people (the bottom 5%) is still richer than 68% of the world’s population. In some cases, our poorest 5% earns the same as other countries’ wealthiest 5%.
So in fact, I was at the top end of the local economy after retiring abroad. My small pension—amounting to only 30% of our rent in New York—placed me as one of the top earners in Ecuador.
As an overseas retiree, for the first time in my life I became really well off…a feat that can be accomplished in a number of countries around the world.
And frankly, at first I was somewhat taken aback with this status—incredulous—because I was never an upper-class person in the U.S. My income wasn’t that high; and believe me, the artists of New York and Vermont were not exactly breaking down my door to invite me to their openings.
I had been quite comfortable with being “one of the guys”…an average middle-class person with an average income. But without much trouble, being well off grew on me. I began to like it. Today, I don’t think I could accept being pushed to the low end of the economic spectrum.
Living abroad will present you with a lot of great opportunities, including the chance to improve your economic station in life. It will feel strange, but you’ll get to like it…and it beats being a victim of the “middle-class squeeze.”
Editor’s Note: This article was taken from a past issue of International Living’s monthly magazine. To get full access to all past and future articles and to receive the magazine in the mail or online each month, simply click on the below button to subscribe to International Living magazine at the special introductory price of $49. You will get instant access to the current issue of the magazine as well 10 years of back issues. As an added bonus, we will also send you a FREE report – How to Retire in Paradise on $30 a Day. (You can cancel your subscription at any time.)