52-year-old early retiree left the U.S. for Portugal with his family(cnbc.com)
cnbc.com
52-year-old early retiree left the U.S. for Portugal with his family
https://www.cnbc.com/2022/06/06/this-52-year-old-retired-early-and-left-the-us-for-portugal-with-family-and-spends-2450-a-month.html
49 comments
It's fine if you guys come to visit, but staying here with your income is making Portugal unlivable for the natives. Unaffordable rents are a huge issue, for example.
Just beware that Portuguese folk might not be friendly to foreign folks someday, given that we're being crushed because of you.
I’m not saying this is a good situation. But your attitude is the attitude nearly everywhere. “Don’t move to Seattle; it’s pricing the locals out!” I even see it outside of classic HCOL areas. People in Missoula, MT, a small city in a mostly rural setting, even share the sentiment of not wanting people from, say, Seattle moving there.
As a young person, if everyone approaches the topic with this attitude, where am I meant to live?
The reality is that there is a huge shortage of places to live that are truly great. This isn’t my fault, as I’ve not been alive for long. It’s not my fault for hoping to live somewhere with a good quality of life. Is an isolationist attitude really going to solve the problem?
As a young person, if everyone approaches the topic with this attitude, where am I meant to live?
The reality is that there is a huge shortage of places to live that are truly great. This isn’t my fault, as I’ve not been alive for long. It’s not my fault for hoping to live somewhere with a good quality of life. Is an isolationist attitude really going to solve the problem?
> I’m not saying this is a good situation. But your attitude is the attitude nearly everywhere.
You appear to be calling on him to lobby his government to do something.
Couldn't someone say the same of you? Why are you not calling on your government to do something about your local problems? Running away from them won't help your own area.
You appear to be calling on him to lobby his government to do something.
Couldn't someone say the same of you? Why are you not calling on your government to do something about your local problems? Running away from them won't help your own area.
I fail to see the hypocrisy.
The xenophobic attitude exists everywhere, but the solution is never to blame outside people who are following the incentives.
The solution is to have a government that is properly structuring the incentives of society to get the best outcomes for everyone.
If I were (hypothetically) the authoritarian dictator of of Portugal I probably wouldn’t turn away willing immigrants with money to spend, I would just build more housing and ensure that immigrants were assimilating, living there, and paying taxes.
The xenophobic attitude exists everywhere, but the solution is never to blame outside people who are following the incentives.
The solution is to have a government that is properly structuring the incentives of society to get the best outcomes for everyone.
If I were (hypothetically) the authoritarian dictator of of Portugal I probably wouldn’t turn away willing immigrants with money to spend, I would just build more housing and ensure that immigrants were assimilating, living there, and paying taxes.
I think nearly everyone is lobbying their local gov to help, except those that already own a disproportionate amount of real estate
I imagine to myself how absurd it would be to make this same statement about places like New York City or Dublin at this point.
Immigrants with money and/or skills want to live in your country and you want to say no?
It’s almost unfathomable to me. 1/3 of NYC wasn’t even born in this country.
If the system isn’t being run well with the right incentives, sure, that’s a good criticism. The incentive and taxation system could be fixed to ensure ex-pats assimilate and live as locals.
But I think that blanket statement of “don’t come here, we might not be so friendly” is more of a xenophobic response.
Immigrants with money and/or skills want to live in your country and you want to say no?
It’s almost unfathomable to me. 1/3 of NYC wasn’t even born in this country.
If the system isn’t being run well with the right incentives, sure, that’s a good criticism. The incentive and taxation system could be fixed to ensure ex-pats assimilate and live as locals.
But I think that blanket statement of “don’t come here, we might not be so friendly” is more of a xenophobic response.
$130k per year in just dividends from investments is ridiculous. Normal people are doomed
130k might correspond to just 3.25 million a year with a 4% withdrawal rate. While this is a nice nest egg, it's hardly ridiculous levels of wealth.
4% is often considered a 'safe' rate of withdrawal in retirement.
4% is often considered a 'safe' rate of withdrawal in retirement.
I am 100% positive that to anyone making $13,920/yr (before taxes!), 3.5 million sitting and paying out 130k (10x the minimum wage per year!) is the definition of obscene.
It never ceases to amaze that someone always has to deflect saying 'it's not so much, look others make even more!'
This comment shows the wealth gap has truly become a gulf where the upper echelons truly cannot wven fathom how those below live.
It never ceases to amaze that someone always has to deflect saying 'it's not so much, look others make even more!'
This comment shows the wealth gap has truly become a gulf where the upper echelons truly cannot wven fathom how those below live.
$3.25m being 'a nice nest egg' and how nonchalantly you describe that might even just emphasize how much normal ppl might be screwed. Maybe more people are better off then I expect though.
I think I have like $10k. If I get very lucky with stable income at my current salary for a long time, I'll be able to save up a bit, but that's relatively high potential.
I think I have like $10k. If I get very lucky with stable income at my current salary for a long time, I'll be able to save up a bit, but that's relatively high potential.
Have a look at Canada for your future.
TLDR: Canada is about TWICE as expensive as PT.
Mean house prices 2022may (CAD) . Vancouver 1.374 MM . Toronto 1.354 MM
Median HOUSEHOLD income 2022apr: . Vancouver 71.5k CAD . Toronto 70.6k CAD
price/income (HOUSEHOLD!!!) . Van 19.22 . Tor 19.17
For reference PT (couldn't find per city): . Average salary: 12 * 1,517 EUR = 18.2k (2020) . Average home price in PT: 368,441 EUR (2021)
PT price/income (HOUSEHOLD!!!): 368,441/(2.018.2k) = 10.12 * assume 2.0 persons in a household, in the US it's 2.53 but not all of those ppl work: https://www.statista.com/statistics/183648/average-size-of-h...
Sources: https://www.ctvnews.ca/business/what-s-the-average-price-of-... https://www.canadafornewbies.com/cost-of-living-in-canada-co... https://en.wikipedia.org/wiki/List_of_European_countries_by_... https://www.theportugalnews.com/news/2021-10-23/76-increase-...
TLDR: Canada is about TWICE as expensive as PT.
Mean house prices 2022may (CAD) . Vancouver 1.374 MM . Toronto 1.354 MM
Median HOUSEHOLD income 2022apr: . Vancouver 71.5k CAD . Toronto 70.6k CAD
price/income (HOUSEHOLD!!!) . Van 19.22 . Tor 19.17
For reference PT (couldn't find per city): . Average salary: 12 * 1,517 EUR = 18.2k (2020) . Average home price in PT: 368,441 EUR (2021)
PT price/income (HOUSEHOLD!!!): 368,441/(2.018.2k) = 10.12 * assume 2.0 persons in a household, in the US it's 2.53 but not all of those ppl work: https://www.statista.com/statistics/183648/average-size-of-h...
Sources: https://www.ctvnews.ca/business/what-s-the-average-price-of-... https://www.canadafornewbies.com/cost-of-living-in-canada-co... https://en.wikipedia.org/wiki/List_of_European_countries_by_... https://www.theportugalnews.com/news/2021-10-23/76-increase-...
the history of humanity is defined by migrations due to resource constraints.
Also wouldn't more rich people coming to the country lead to more spending on goods, services, and real estate, which would benefit indepedent businesses and land owners?
Also wouldn't more rich people coming to the country lead to more spending on goods, services, and real estate, which would benefit indepedent businesses and land owners?
> Also wouldn't more rich people coming to the country lead to more spending on goods, services, and real estate, which would benefit indepedent businesses and land owners?
It can also be looked at from a different perspective: more rich people moving in == more customers for products and services == more jobs and money for locals too.
I think that the birth rate in Portugal is about 1.3 per woman so long term rents and property prices will crash unless you find people to fill all those houses.
True or not, 10,000-foot talk about long-term trends does not do sh*t to help lower-income natives who are being priced out of the market now, and getting desperate for workable places to live.
Maybe the new folks could live rough until that eventual demographic collapse frees up housing for 'em?
Didn't think so.
Maybe the new folks could live rough until that eventual demographic collapse frees up housing for 'em?
Didn't think so.
I've just looked it up: Portugal's population has been decreasing since 2009 and is at about the same level as it was during the mid-80s [1] (facts, same as my previous comment, not emotional perception). Furthermore, current UN projections to the end of the century are rather dire (30% population decline).
So, whatever housing issues people might face they do not seem to be caused by population pressure on housing. Now, in some areas there might be a level of pressure due to second homes (i.e. empty houses with no permanent residents) but that's a bit of a different issue.
[1] https://www.macrotrends.net/countries/PRT/portugal/populatio...
So, whatever housing issues people might face they do not seem to be caused by population pressure on housing. Now, in some areas there might be a level of pressure due to second homes (i.e. empty houses with no permanent residents) but that's a bit of a different issue.
[1] https://www.macrotrends.net/countries/PRT/portugal/populatio...
Okay - how about the new folks avoid the trendier and more-urban areas (where local population is increasing, and housing costs skyrocketing), and flock to the smaller & remoter villages in the countryside, where the local population trends are far more negative?
https://en.wikipedia.org/wiki/Demographics_of_Portugal#Maps
https://en.wikipedia.org/wiki/Demographics_of_Portugal#Maps
If you expect trendy, hot locations to be affordable for everyone I am afraid you will be disappointed anywhere you go on this planet...
I have an idea. Tie housing construction goals to incoming migration numbers. If 10,000 people move to a city in a year, the city must permit 10,000 new housing starts. No room to meet your city’s goal? Rezone that empty lot that’s zoned for hotel. (I know you have one, every city does).
Permit is a funny word because it means both the piece of paper that allows a developer to build and also “to grant permission” the city has the power to grant or withhold permission to build. And to be perfectly frank the default position is withhold. But we have the power to change that. We can simply demand it of our elected officials.
We should welcome people who want to move in (because economic success depends on it but also because it’s friendly and healthy) but we can also make a plan so they don’t squeeze out the locals. I know Silicon Valley utterly failed to do that. Maybe other places could learn from their abject failure.
Permit is a funny word because it means both the piece of paper that allows a developer to build and also “to grant permission” the city has the power to grant or withhold permission to build. And to be perfectly frank the default position is withhold. But we have the power to change that. We can simply demand it of our elected officials.
We should welcome people who want to move in (because economic success depends on it but also because it’s friendly and healthy) but we can also make a plan so they don’t squeeze out the locals. I know Silicon Valley utterly failed to do that. Maybe other places could learn from their abject failure.
It's quite simple. The Portuguese should have more children. The way these demographic trends are discussed as inevitable or intractable is quite funny to me.
Sure, one couple can't do it alone. But a general cultural shift towards pro-natalism, with the support of generous government benefits for parents, just might do the trick.
Sure, one couple can't do it alone. But a general cultural shift towards pro-natalism, with the support of generous government benefits for parents, just might do the trick.
This is pretty much the story when it comes to foreign home buyers in Toronto and Vancouver, Canada. The argument is that it is pricing everyone out. The average 1 bedroom apartment here in Toronto is now more than $1900, and more than $2000 downtown, so it certainly appears that way.
This plays out with talk of taxing people who own houses they do not live in, if they also do not live in Canada, and therefore not adding to the economy in any way. Nobody but the foreign investors have a problem with that.
This plays out with talk of taxing people who own houses they do not live in, if they also do not live in Canada, and therefore not adding to the economy in any way. Nobody but the foreign investors have a problem with that.
In one of our house of commons committee meetings about a bill tabled by a conservative, a Bloc member opposed it on the basis that the U.S might retaliate and piss off boomer snowbirds in their riding. Meanwhile, every Liberal MP voted it down, before a month later implementing their own very similar initiative. So it's not just foreign investors, it's also local profiteering locals who fear change and anticipate having their easy lifestyles cut off. Arguably much more of the latter in some form if you dig into the numbers and urban planning factors.
Well, it was nice while it lasted... Portugal's D7 visa process was already a ~6 month waiting time, this recent influx of people since late '21 is pricing out so many as the Visa process is usually a large hurdle.
It's still possible, of course, but honestly now I'm on the fence given who is coming over. At least most are sticking to Lisbon, and Porto, there are still lots of small cities not ready to turn itself into the typical tourist trap(s) quite yet.
It's still possible, of course, but honestly now I'm on the fence given who is coming over. At least most are sticking to Lisbon, and Porto, there are still lots of small cities not ready to turn itself into the typical tourist trap(s) quite yet.
I wonder what is the end game here.
The Portuguese government needs the extra tax revenue to mitigate their own foreign debt and stop state pensions from collapsing mostly because there is no population growth and a large emmigration flow.
But these retirees are largely not going to generate jobs or raise more kids and they will increase the pressure on real estate and healthcare.
I wonder if anyone has done the maths on this in terms of the long term consequences and costs?
The Portuguese government needs the extra tax revenue to mitigate their own foreign debt and stop state pensions from collapsing mostly because there is no population growth and a large emmigration flow.
But these retirees are largely not going to generate jobs or raise more kids and they will increase the pressure on real estate and healthcare.
I wonder if anyone has done the maths on this in terms of the long term consequences and costs?
They are the spenders and lifts up local economy. As long as immigrant population has more than above average income than local population, it's good for economy. Downside is ofcourse that real estate will go up but upside is that average income local population also goes up because there are more people buying goods and services.
At the local level, in many western countries, municipalities will specifically zone for "55+ communities" for this reason: They bring tax dollars but don't need schools.
A friend of mine relocated his tech company there. It’s going great. He employs locals, farms them out to US clients at a more favorable rate, guarantees outcomes, lives well. I should look him up and go visit.
With the birth rate they have the natural trend is that their population is shrinking.
Therefore, a level of immigration is certainly not putting pressure on real estate. If anything it's preventing the market from crashing.
Therefore, a level of immigration is certainly not putting pressure on real estate. If anything it's preventing the market from crashing.
OTOH, there are vast regions of Iberia that are unpopulated. Where migrantes may be more welcome!
EG 70% of Spain is Empty: https://www.youtube.com/watch?v=pL8XPZp4-5c
EG 70% of Spain is Empty: https://www.youtube.com/watch?v=pL8XPZp4-5c
Good for him! Him and his family will have a safer, secure, and more relaxed life there.
"Wealthy millionaire retires to foreign country"
You can move to Portugal on a D7 visa with no more than €10k/year in passive, pension, or remote income for a single person. For a family of four, it’s closer to €20k/year. More income = improved housing quality and location, of course. Private health insurance (a visa requirement) for a year for a family of four was quoted to me at ~$1200. For the entire year. For comparison, I spend ~$18k/year for premiums and deductibles with an employer provided health plan. After five years, you can apply for citizenship and have free movement to all of Europe.
Social Security income recipients, in many cases, meet that bar. Portugal also has a treaty with the US where earned income in Portugal can count towards your US social security earning record.
Social Security income recipients, in many cases, meet that bar. Portugal also has a treaty with the US where earned income in Portugal can count towards your US social security earning record.
The couple in the article bought a home for €500,000 cash (no mortgage) and are making $130,000 a year just on dividends. You're probably right, but so is the parent. They're wealthy millionaires.
According to this video[1], $1.9 million yielding 5.2% will give you $100k per year in dividend income, so they have to have even more than that invested.
[1]: https://youtu.be/DWu3oU6dcBs?t=772
According to this video[1], $1.9 million yielding 5.2% will give you $100k per year in dividend income, so they have to have even more than that invested.
[1]: https://youtu.be/DWu3oU6dcBs?t=772
Point taken. There’s always nuance.
"our portfolio of high-yielding stocks and mutual funds paid roughly $130,000 a year in dividends"
I mean can you imagine? That would barely keep the wine cellar stocked let alone anything left over to afford original works of art.
I mean can you imagine? That would barely keep the wine cellar stocked let alone anything left over to afford original works of art.
I hope Portugal makes it onerously difficult for expats. The last thing that place needs is to be the new Malaga.
Yes, I am biased as I'm ethnically Portuguese, travel there often enough, and love "my ancestral homeland" and already see signs of boorish US/UK expats being full-on entitled jackwagons.
Yes, I am biased as I'm ethnically Portuguese, travel there often enough, and love "my ancestral homeland" and already see signs of boorish US/UK expats being full-on entitled jackwagons.
>Yes, I am biased as I'm ethnically Portuguese, travel there often enough
Ah so you love the old "enjoy visiting the old country on the new country salary" bit. But what's good for you the occasional visiting ex-Portuguese may not be good for people who actually live there.
Portugal is furiously marketing itself to expats (retirees, entrepreneurs, professionals) because their government understands the demographic situation it's in. Stagnant population for ~30 years, but now the natural change is becoming so bad that without immigrants and expats, the depopulation will make any kind of economic growth impossible. A country needs a tax base, and your occasional visits won't do much for that.
Ah so you love the old "enjoy visiting the old country on the new country salary" bit. But what's good for you the occasional visiting ex-Portuguese may not be good for people who actually live there.
Portugal is furiously marketing itself to expats (retirees, entrepreneurs, professionals) because their government understands the demographic situation it's in. Stagnant population for ~30 years, but now the natural change is becoming so bad that without immigrants and expats, the depopulation will make any kind of economic growth impossible. A country needs a tax base, and your occasional visits won't do much for that.
"Ah so you love the old "enjoy visiting the old country on the new country salary" bit"
No, I enjoy visiting my family and a culture I have always been attached and a part of. But thanks for the patronizing bellendry, it was expected.
I'm fine with as much immigration as .pt sees fit. I am not however, fine with what happened to southern Spain, where whole portions of coast turned into "Little Britain" including lambasting the locals for speaking their own language and preferring their own food. A local population (stagnant or otherwise) isn't there to just be a servile convenience for people just because they have means to self-exile there.
As to the rest of your moribund commentary...'porra'.
No, I enjoy visiting my family and a culture I have always been attached and a part of. But thanks for the patronizing bellendry, it was expected.
I'm fine with as much immigration as .pt sees fit. I am not however, fine with what happened to southern Spain, where whole portions of coast turned into "Little Britain" including lambasting the locals for speaking their own language and preferring their own food. A local population (stagnant or otherwise) isn't there to just be a servile convenience for people just because they have means to self-exile there.
As to the rest of your moribund commentary...'porra'.
they could reduce level of corruption to find the money and reduce tax burden to keep people from leaving.
If tax burden was the driving reason for people leaving, wouldn’t NYC, LA, and San Francisco be empty by now?
Yes, corruption is likely a cause of brain drain, I agree with you there, but I have to think that brain drain is a multifaceted issue. Some of these facets are out of the control of the locality entirely.
Some examples:
West Virginia can’t change the fact that there’s little demand for coal mining.
The Midwest can’t change the fact that the manufacturing industry spread out beyond its borders.
Vacation towns in Michigan can’t change the fact that cheap air travel now exists to take people to more desirable beach climates.
New Orleans can’t change its physical location to be less prone to flooding.
I don’t have enough familiarity with Portugal to say what’s going on, but any time I hear high taxes being blamed for widespread issues I get a faint whiff of oversimplified libertarian ideology.
Yes, corruption is likely a cause of brain drain, I agree with you there, but I have to think that brain drain is a multifaceted issue. Some of these facets are out of the control of the locality entirely.
Some examples:
West Virginia can’t change the fact that there’s little demand for coal mining.
The Midwest can’t change the fact that the manufacturing industry spread out beyond its borders.
Vacation towns in Michigan can’t change the fact that cheap air travel now exists to take people to more desirable beach climates.
New Orleans can’t change its physical location to be less prone to flooding.
I don’t have enough familiarity with Portugal to say what’s going on, but any time I hear high taxes being blamed for widespread issues I get a faint whiff of oversimplified libertarian ideology.
"I don’t have enough familiarity with Portugal to say what’s going on, but any time I hear high taxes being blamed for widespread issues I get a faint whiff of oversimplified libertarian ideology."
Bingo
Bingo
How do you feel about expats where ever it is you live now?
Given that they comparatively try to assimilate into the milieu, I find it delightful. I live in a melting pot (much like places like Lisbon) and its swell.
I live in the US, in the same place I was born in. But I am the son of immigrants who chose to naturalize, become "native" while not losing sight of their history. It's not difficult to do, and it's a comparative benefit (variety is the spice...)
I live in the US, in the same place I was born in. But I am the son of immigrants who chose to naturalize, become "native" while not losing sight of their history. It's not difficult to do, and it's a comparative benefit (variety is the spice...)
So you'd be fine with expats in Portugal if they learned Portuguese? (Doesn't say one way or the other if the person in the article learned the language.)
Conversely, are you upset by immigrants in the US that don't speak English?
Conversely, are you upset by immigrants in the US that don't speak English?
I like how you are trying to find an angle here.
My expectation for those wishing to live in Portugal are analogous to how I feel about those emigrating here to the US: don't just treat your new home like a blank slate to impose your will on. It's a relationship, treat it like a balanced one.
Yes, I think language requirements matter (I hold that basic language proficiency for standard cases should require at least elementary English sufficient to participate as a citizen); I also advocate for all US citizens to be required to achieve substantive skills in a second language...note, my first language was not English, and I'm still functionally bi-lingual. The reason I don't mention this for Portugal is that they already do this, and most Portuguese born after the revolution, and certainly in urban areas, are bi-lingual or polyglot.
And yes, I think unless you are on a work visa with a set end date, you should make at least a modicum of attempt to "fit in". That doesn't mean subsuming your own historical identity, but making a functional attempt to expand it since you were inspired enough to transfer yourself to a whole other context...adapt accordingly by pulling from and contributing to.
I'm not upset by those that don't speak English in the US, but that is itself context specific. If you decide to move here at a comparatively young adult age, and do little to acclimate, then yes, I find that obnoxious. I've harangued those in the Portuguese diaspora in the US for that very same behavior; living in suburban enclaves lost in time (manay emigrated to the US during the Salazar regime).
My expectation for those wishing to live in Portugal are analogous to how I feel about those emigrating here to the US: don't just treat your new home like a blank slate to impose your will on. It's a relationship, treat it like a balanced one.
Yes, I think language requirements matter (I hold that basic language proficiency for standard cases should require at least elementary English sufficient to participate as a citizen); I also advocate for all US citizens to be required to achieve substantive skills in a second language...note, my first language was not English, and I'm still functionally bi-lingual. The reason I don't mention this for Portugal is that they already do this, and most Portuguese born after the revolution, and certainly in urban areas, are bi-lingual or polyglot.
And yes, I think unless you are on a work visa with a set end date, you should make at least a modicum of attempt to "fit in". That doesn't mean subsuming your own historical identity, but making a functional attempt to expand it since you were inspired enough to transfer yourself to a whole other context...adapt accordingly by pulling from and contributing to.
I'm not upset by those that don't speak English in the US, but that is itself context specific. If you decide to move here at a comparatively young adult age, and do little to acclimate, then yes, I find that obnoxious. I've harangued those in the Portuguese diaspora in the US for that very same behavior; living in suburban enclaves lost in time (manay emigrated to the US during the Salazar regime).
You might be biased, but you're spot on. This can't go on much longer.
so when your family immigrated it was ok but when others immigrating it's not ok, do you see the hypocrisy that's all good?
You're either very much in need of re-reading what I wrote, or are intentionally, petulantly choosing to miss my point.
Try again.
Try again.