0:19

Welcome to Travels with Jim and Rita . Travels

0:25

with Jim and Rita . I'm your host , Jim Santos , and in this podcast series , you can follow

0:27

along as my wife , Rita and I work out our crazy plan to outfox the real estate

0:29

market in the US and actually increase

0:31

our retirement nest egg by spending

0:33

the next three years or so living abroad and

0:36

exploring the world . Are we bold

0:38

, forward-thinking pioneers or just

0:40

plain nuts ? Let's find out together

0:42

, shall we ? Hello

0:58

once again to everyone out there in podcast land . I'm Jim Santos , and this is Travels with Jim

1:00

and Rita , Now in real time . As I record this intro

1:02

, it's the end of March and we're very busy

1:04

preparing to empty out our home and get ready

1:06

for closing in just a few short weeks . In

1:09

fact , we're meeting shortly with the movers , as our

1:11

days of hauling furniture and boxes are

1:13

blissfully behind us . In

1:16

this episode , we'll be looking at some financial

1:18

matters . This is a subject that

1:20

Emily and a few others have emailed me about

1:22

recently , so we'll go into some details is a

1:24

subject that Emily and a few others have emailed me about recently , so we'll go into some

1:26

details . As you'll recall , if you're a regular listener and

1:28

if you aren't , don't you think you should be . Since

1:31

this is a great time to sell but a lousy time

1:33

to buy , we're going to skip the buying part

1:35

for now and travel instead . Since

1:38

Rita and I are both over 65 , we're

1:40

not too interested in long-range planning or

1:43

speculative investment options . We're

1:45

looking more for HYSAs High

1:47

Yield Savings Account . We've

1:50

already opened one two-year account with our

1:52

credit union that locked in a 5.38%

1:54

rate with an option to bump it up once

1:57

if rates happen to increase during its term . We

2:00

also have two HYSAs with American

2:02

Express . Now these are variable

2:04

rates , meaning they can go up or down with the

2:06

market , but it's been pretty steady for

2:08

the last few months at 4.35%

2:11

, which is not too shabby . A

2:13

big advantage of those accounts is that it's easy

2:15

to transfer money in and out without fees

2:17

or penalties . Now

2:19

another option we've been considering , especially

2:21

in these troubled times , is

2:31

banking some of the proceeds in a foreign currency in another country . Uruguay , is particularly

2:33

interesting , since their secure banking system has earned them the nickname the Switzerland

2:35

of South America . When we visited Uruguay a few years

2:37

ago , we spoke with some attorneys and

2:39

I'd looked into it online a bit more recently . What

2:42

caught my eye were some accounts paying as much

2:44

as 8 or 9% interest where

2:47

funds could be deposited as either euros

2:49

or yorgue and pesos . So

2:51

to look into this more closely , last

2:53

month , while we were still in Panama , we

2:56

arranged an interview with Dr Mark Teuten

2:58

of Teuten Abogados . Although

3:00

Mark deals primarily with helping expats

3:02

with immigration , paperwork , property

3:05

purchases and opening bank accounts , he

3:07

agreed to share his knowledge with us . Let's

3:10

go to that interview now and afterwards

3:12

we'll take a look at another fairly safe investment

3:14

option that we also considered . Mark

3:18

, I guess you understand the basic situation

3:21

that we're looking at here . My wife and I are

3:23

selling our home in the US right now and

3:25

we're going to be basically traveling the next two or three

3:27

years . So we're interested

3:29

in banking some of that cash

3:32

in a foreign bank , preferably in a foreign

3:34

currency , and we've been to

3:36

Uruguay before . We know the banks have a very solid

3:38

reputation there . That's the kind

3:41

of thing that we're looking at now . We're wondering what kind

3:43

of assistance your firm provides for

3:46

setting up these accounts , and can it be done remotely

3:48

, or do we need to wait till we can get out

3:50

there ?

3:50

Our main services are helping people that are coming to Uruguay to apply for residence includes assistance

3:53

in opening a bank account , because

4:06

you've got to show that you've got an

4:08

income in Uruguay in order to be

4:10

able to get residence . We have experience

4:13

in opening accounts

4:15

. It's normally part of that . Your

4:18

situation is , I

4:20

understand , is different . You just want to open

4:22

an account without applying for residence . I understand

4:24

it's different . You just want to open an account without applying for residence ? Right

4:26

, you can , that is possible . You can open a bank account in Uruguay

4:29

as non-resident . What

4:31

, sorry , what nationality are you ? United

4:34

States , because of FACTA , which I assume you're familiar

4:36

with ? Yes , they'll ask you . There's

4:40

a whole load of forms that you have to fill in

4:42

to open the account , and you know there's

4:44

the usual compliance , know

4:46

your client sort of information , and

4:49

then you have to fill in a couple of US

4:52

tax forms I'm not sure Ben

4:54

8 or whatever it is

4:56

, you know , but you can open

4:58

an account here as non-residents

5:01

. It cannot

5:03

be done remotely To open an account , you need to do that , be

5:06

physically in Uruguay and go to

5:08

the bank yourselves .

5:09

And once you have the account , though , it can be accessed

5:12

over the internet .

5:13

Yes , yes , all the banks here offer

5:15

online banking . Specifically

5:18

mentioned the Banco de la República

5:20

. I'm not familiar

5:22

with their online system

5:24

, but I assume it works reasonably well

5:26

and you know my experience of the internet

5:28

banking in Uruguay is that it's very

5:31

good and you know you can

5:33

. You can do pretty much

5:35

every online . For example

5:37

, I mean I've got , I've got one of these

5:40

I can't even remember Dongle or whatever it's called

5:42

. I mean I can transfer up to $50,000

5:45

a day to anywhere in the world .

5:47

And I assume these accounts can be in

5:50

dollars or Uruguay currency

5:52

or euros .

5:54

Yeah , yes , the norm in Uruguay is

5:56

that everybody has a dollar account and a

5:58

peso account and we just

6:01

use the peso account

6:03

for our daily monthly

6:05

expenditure and you keep your

6:07

money in dollars , basically , and then go

6:09

along changing it into pesos as

6:12

you need it . That's the historical

6:14

norm , because Uruguayans

6:17

have never trusted very much in their own

6:19

currency .

6:21

Yeah , now we're not trusting much in US currency , so

6:23

it's interesting . Yes , you indicated

6:25

that at the beginning .

6:27

So from what you're saying , you're actually you're

6:30

positively interested in having

6:32

a peso denominated

6:35

account . I mean , obviously the Eurogram peso

6:37

in the last couple of years has gone

6:39

up against the dollar and inflation

6:42

in dollars is coming down

6:44

. So if you'd kept your money

6:46

in pesos , you'd have done okay I'm

6:48

sorry I should I mean , I should clarify

6:51

as well for the record I'm a lawyer

6:54

, not a financial advisor . So I know most

6:56

of this stuff from having lived here for a

6:59

long time . But I don't claim to be a

7:01

financial advisor .

7:02

Sure , I'm a lawyer sure you understand that right

7:04

that you mentioned the fact of

7:06

procedure we'd have to go through as foreign nationals

7:08

and American citizens . I saw

7:11

an article that said that some banks were charging extra

7:13

fees for foreign nationals because of that

7:15

.

7:15

That's certainly not my knowledge

7:17

. My experience with the

7:20

Itaú and Santander is that

7:22

they don't charge , so I don't know if others

7:24

do . I

7:26

mean there are banks who don't

7:28

charge . Is the answer to that .

7:30

Okay . Do these accounts have in

7:32

the US ? We have the FDIC protection

7:34

. Is there any kind of insurance or protection

7:37

on accounts with you know

7:39

, say $200,000 in them ?

7:41

Yeah , well , a , there

7:44

is protection up to fifty thousand

7:46

dollars . Fifty thousand , okay what ?

7:48

what kind of interest can you earn on savings

7:51

accounts in uruguay ?

7:53

I certainly don't get anything on

7:55

mine . So

7:58

you said that you've seen something online

8:00

with the banco de la republica

8:02

. I think you're offering 7 or 8%

8:05

. You said , or was it 9 ?

8:07

Up to 9% .

8:09

Yeah , but you are clear already that that's in Uruguayan

8:12

pesos , not in dollars .

8:13

Correct , but that's what we're interested in anyway

8:15

.

8:16

The banks do have specific products

8:19

which they call certificates

8:22

of deposit , right , and I imagine

8:24

that the brew that's what

8:26

it's offering . So

8:29

it's a bank guaranteed thing

8:31

. They don't give you interest on money just

8:33

sitting around in your account

8:35

. I think if you had 2,000

8:37

in a normal what they would

8:39

call a savings account , which here is called a cacao

8:42

, you'll probably get 0.1%

8:45

or something , and

8:48

in pesos , I

8:50

don't know , 2% or something . You

8:52

know very , very low . And

8:54

another thing as well for you to be aware of bank

8:56

charges in general are very high in

8:59

Uruguay . But yeah , they do offer

9:01

these certificates of deposit

9:03

and that you can get quite

9:05

a reasonable rate of return either

9:07

in dollars or pesos

9:10

. I think in dollars they'll give

9:12

you like four or five

9:14

, four percent , maybe something like that

9:16

, and from what I hadn't , I've never looked

9:18

in pesos myself , but if you've seen nine

9:20

, that sounds about right .

9:22

Are there any tax liabilities

9:25

in Uruguay if you're earning interest

9:27

on accounts there ? Yes , basically

9:29

12% 12% of the

9:31

interest earned .

9:33

Interest Of the interest , yeah .

9:35

Are there any fees for taking funds out

9:37

of Uruguay ?

9:38

No . No fees for that , no we have no exchange

9:40

controls at all in Uruguay . We have no

9:42

exchange controls at all in Uruguay and I mean

9:45

also just for the record and

9:47

as you're recording it , I mean it's just information

9:49

. Uruguay has never had well

9:51

certainly in the last 35

9:53

years no exchange controls

9:56

, and

10:02

there was a problem in 2001 with some banks defaulting . Big private banks

10:04

didn't have any problems and carried on .

10:05

If we were to come to Uruguay and

10:08

want to set up something with one of these banks

10:10

, what kind of information would we need to bring

10:12

with us to be able to do this ?

10:14

Basically , what they will look for is

10:16

bank reference letter from

10:19

if you're from the States

10:21

, from a US bank . A

10:23

bank reference letter means a letter on

10:25

a headed notepaper , preferably

10:27

signed by a physical person , saying

10:30

this is to confirm that Jim

10:32

and Rita Santos have an account

10:34

with our bank which

10:36

is in good standing , and they've had the account

10:39

for X number of years . Right , that's

10:42

a bank reference letter . Number

10:47

of years that's a bank reference letter . Then you need to show proof of address

10:49

abroad , which they like to see a recent utility bill . So if you want a

10:51

joint account , it will be a

10:54

bill in each of your names . That's what they

10:56

like to see . And then the third thing is

10:58

they want to see proof of income

11:01

in general . What they like to see is your

11:03

last year's tax return , proof of

11:05

income in general . What they like to see is your last year's tax return in . So

11:07

, in terms of documents , it that's what the documents are . Um

11:09

, they'll ask you why you want to open the account

11:11

and you should probably

11:14

say something along the lines of you

11:16

know , we're going to come here to live and so

11:18

it's . We're going to be applying for residence

11:20

, so we need a bank account . Come in sort

11:22

of need to understand that in general . You

11:25

know that the whole anti-money

11:27

laundering thing and and american clients

11:29

in general , because of factors and stuff

11:32

, so the bank with americans

11:34

citizens , they

11:36

don't want to have problems , I mean you know , right I've

11:38

got a number of russian clients , and obviously with russian clients

11:40

as well . They , you know , they're really , really wary

11:43

, so they don't , don't

11:45

want to , don't want to have problems , and so you

11:47

know , just to make things easier , that would

11:49

be my suggestion yeah , well , we

11:51

would definitely have a paper

11:53

trail of where the money came

11:55

from yeah yeah , yeah

11:58

, so that should not be an issue

12:00

yes , from the sale of a home , not from anything

12:02

shady . So I mean , I think

12:04

, I think , to be honest , I mean again , this is , this

12:07

is just a sort of feeling , sensation

12:09

, um thing . I mean , I think if you two

12:11

americans turn up at the bank of the

12:13

republica , which is a publicly owned bank , and

12:16

you say , oh look , we've got 200 000 and

12:18

um , and we just and

12:20

we'd like to put it in in an account here , that

12:23

that would just look very strange

12:25

so and

12:27

obviously the bank's got discretion which clients

12:29

they're going to accept . I don't think they're going to go

12:31

out . This is the thing , whereas if it's 200

12:33

million they'll probably say , oh great yeah

12:36

, thanks , no , right , right but 200

12:38

. They'll probably it's not worth a hassle

12:40

of of , you know , looking into all of

12:42

this . So you know , but if you , no , we

12:44

need the account because we're , you know , we're looking at Uruguay

12:47

to come to live and blah

12:49

, blah , blah . That will probably keep

12:51

them happy .

12:52

Okay .

12:52

Yeah .

12:53

How long would this take normally to open up

12:55

the bank account ? Is this a couple of days , or is there a waiting

12:57

period when you first set it up ?

13:00

My experience with the private banks

13:02

with whom I work is that

13:04

it can be less , but

13:06

you've got to work on the basis that it'll probably

13:09

be between two weeks and a month for them

13:11

to do all the compliance . It's certainly

13:13

not overnight and it's certainly not two

13:15

days , because you fill in

13:17

the forms in the bank and then it goes to their

13:19

compliance department and they look

13:21

at it all .

13:22

Okay , right .

13:27

Well , we're thinking of spending a month or two in Montevideo anyway . Yeah , I mean you don't need to be

13:30

. I mean , again , you don't need to be here . That all might , you know . You can just be here

13:32

a couple of days and go in and

13:34

fill in the forms and then and wait

13:36

for them to

13:39

, and then you can access it over

13:42

the internet you know okay

13:44

.

13:44

Well , no , we enjoyed our time in Uruguay . So

13:48

that's not a downside having to stay a month of a

13:50

day over .

13:53

Yeah , great , I'm just trying to

13:55

clarify , but you

13:57

wouldn't 100% need to stay around

13:59

just for that .

14:01

Yeah , okay , and I know

14:03

it's not really your field or anything

14:05

, but are there any other like

14:07

two to three year investment opportunities in uruguay

14:09

that you have heard of or you think we should consider

14:11

?

14:12

there's uruguayan government bonds which

14:14

, again , historically , uruguay hasn't

14:17

defaulted on . On

14:19

its bonds , even in 2001 , we

14:21

didn't default . The advantage

14:24

of them is that interest

14:26

on that is tax-free well , that's , that's

14:28

it . You might that

14:31

might be of interest . They're

14:33

, they're what is it ? Their investment

14:35

they're . They're not triple a , they're

14:37

, I think they're bb plus or

14:39

something . You know they're in this . So their investment

14:42

grade ? I think they give around five

14:44

percent , but tax-free , but

14:46

tax-free and what else ? Well , the other

14:48

thing was to , for your information

14:50

, I mean , there are other

14:52

banks who , in addition

14:54

to the bank of the la republica , who

14:56

also offer similar

14:58

products and services . All

15:01

the banks will require you to go in

15:03

person , though to open an account . There

15:06

are other brokers

15:08

who will open an account

15:10

for you where you can do

15:12

digi sign . I think it

15:14

is . You know you can , um , you

15:16

can sign virtually , and they you can

15:18

open . So you could open an account

15:20

with , with one of those . There's

15:23

several respectable firms

15:25

around , you know , who've been in operation

15:27

for many , many years . They

15:29

offer , as I understand it

15:32

, financial products from around the world , so

15:34

they can offer you Uruguayan products

15:36

or , you know , from anywhere else

15:39

. From what you're saying , you're not interested in US

15:42

treasuries or anything like that . You want

15:44

to get away from that , but there are

15:46

. So , but there are , you know , there's .

15:48

There's several broker , brokerage firms

15:50

yeah , basically we're looking at diversifying

15:52

. You know we want to split our money

15:55

up a couple of different currencies in a couple of

15:57

different ways .

15:58

Yeah , from what you said . I mean you are

16:00

thinking of coming here , so you know it wouldn't

16:02

be a it's not a problem for you to have to come

16:04

in physically to go and open an account

16:06

.

16:09

It might be nice to talk

16:12

to the other brokerages as well

16:14

, jim , to see what other you

16:16

know , because it doesn't have to be just 200

16:19

. We need to know what type of products

16:21

they have and that we could further

16:24

diversify .

16:26

I can send you one or two names afterwards

16:29

if you want .

16:29

Yeah , if you wouldn't mind , if you knew anyone who specializes

16:31

in investments , interest-bearing accounts

16:34

, the government bond certainly is something

16:36

we should look into a little further as well .

16:38

Yeah , yeah , that's interesting

16:40

. But of course , when you sell them , they don't

16:42

sell unless there's somebody there who

16:44

is willing to buy them . So

16:47

that's you know . We'd have to keep

16:49

track of multiple

16:51

economies , but certainly

16:54

Uruguayan government bonds are pretty liquid

16:56

here . Ok , ok

16:58

yeah .

16:59

Yeah , that's good . I don't think that's a

17:01

problem at all . There's a bit

17:03

of that's been the situation

17:06

for the last 20 odd years , but

17:09

nobody knows exactly what the future holds

17:11

.

17:12

For any country really .

17:15

Yeah , exactly , but in principle yeah

17:18

. Government bonds , Eurogoing government bonds , are

17:20

pretty safe and

17:22

pretty liquid .

17:23

Well , mark , I appreciate you taking the time to talk

17:25

to us about this . I know , again

17:28

, it's not exactly your field you kind

17:30

of work with people more applying for

17:32

a residency but I do appreciate

17:35

the information . A lot of good things for us to look at here

17:37

.

17:37

Okay , cool . Well , I hope it's been

17:39

helpful .

17:43

So , as you probably picked up from that conversation

17:46

, we found that , while there are some excellent

17:48

banking opportunities in Uruguay , we

17:50

would have trouble making it work for our particular

17:52

needs . The main stumbling

17:54

block seems to be that we would have to show proof

17:56

of residency in some country , providing

17:59

things like utility bills or a lease , and

18:01

we will not be able to do that as we'll be doing

18:04

the slow travel routine . Do that as we'll be doing

18:06

the slow travel routine . But if you're looking to move to Uruguay

18:08

or

18:13

you're a foreign resident with a fixed address , there are some

18:15

intriguing possibilities for you in that laid-back and lovely country . Now , lastly , a

18:17

few words about that other investment option we

18:19

had on the table . If

18:21

, like us , you own your home outright and have no

18:24

mortgage or liens , you can consider

18:26

offering your home for sale with owner financing

18:28

. This is a situation

18:30

where , basically , you are the bank and

18:33

you set the interest rate that the buyer will pay

18:35

and the terms of the mortgage Check

18:37

with an attorney , of course , because I'm definitely

18:39

no financial expert , but most states

18:41

will allow you to do this if it is your home

18:44

and the only mortgage you will hold . In other

18:46

words , it can't be a side business . Now

18:49

the upside of this is that you're getting a monthly check

18:51

and , depending on the market , earning a decent

18:54

amount of interest . For example

18:56

, when I did this selling my home in

18:58

West Virginia about 14 years ago I

19:01

was able to get 6.25%

19:03

on a $210,000 loan . This

19:06

was at a time when bank interest rates were running

19:08

around 4% . This

19:10

got me a monthly check of $1,293.01

19:13

. The buyer made a cash

19:15

payment on it at one point , but still

19:18

, when he eventually sold the house after 80 months

19:20

, the payoff on the loan was still

19:22

just over $68,500

19:24

. If you do the math , counting

19:27

the down payment of $15,000

19:29

, the payment of $90,000 he

19:31

made at year five after receiving an inheritance

19:33

and the 80 months worth of mortgage

19:36

checks , I collected almost $277,000

19:39

on the deal . Now

19:41

there are some downsides . I was

19:43

able to get a higher interest rate than the banks were offering

19:46

at the time because I was willing to take a risk on

19:48

someone who may not qualify with the bank . I

19:51

had arranged a quit claim deed to protect

19:53

myself . That's where a title automatically

19:55

reverted to me if the buyer fell three payments

19:57

behind . Now , naturally

19:59

, such a buyer may not be able to put much money

20:01

down , so you don't get as much money up front

20:03

. Also , you need to take care of

20:06

the paperwork , which includes figuring an escrow

20:08

amount to add to the mortgage payment each month . It's

20:11

prudent to pay the home insurance , hoa

20:13

fees and property taxes out of that account

20:15

so you know the property is protected

20:17

, and managing that is some extra work

20:19

. We did visit a local

20:22

attorney here in Knoxville back in December when

20:24

we first started on this mad path of ours , just

20:26

to make sure there were no legal issues and that they

20:29

could handle the closing paperwork , title transfers

20:31

and et cetera for us . So

20:33

, while we were prepared to go that way if needed

20:35

, it was still a bit of a relief to

20:37

find a more conventional buyer so

20:39

we do not have the extra paperwork and details

20:41

to deal with . Still , if you're

20:43

in a position to do so , it's definitely an

20:45

option worth considering . Still

20:48

, if you're in a position to do so , it's definitely an option

20:50

worth considering . Well

20:54

, that's it for this week's show . Keep listening , keep spreading the

20:56

word on social media , as we are now in 26 countries and counting . If you

20:58

can , please take a moment to leave a rating and a review

21:00

and , of course , subscriptions are always

21:02

welcome If you have

21:04

any questions or would like to tell us your own story

21:06

, welcome . If you have any

21:08

questions or would like to tell us your own story , email me at jim at jimsantosbookscom

21:11

. And remember you can find my books , short stories

21:14

and audiobooks on my Amazon author

21:16

page simply by going to jimsantosnet

21:19

. Until next

21:21

time , safe journeys to you all and don't forget

21:23

we travel not to escape escape life , but

21:25

so that life does not escape us .