Cost of Living Like a King in Mexico: An Insight

For those contemplating a luxurious lifestyle in a foreign land, the possibility of living like a king in Mexico might sound like a dream come true. However, the reality is not quite as simple. While the idea of enjoying a cheaper lifestyle undoubtedly appeals, it's crucial to understand the nuances of what it means to live like a king in Mexico.

The Misconception of Low Cost of Living

Many people assume that living in Mexico is inherently cheaper, thanks to their frequent exposure to the idea that the cost of living in Latin American countries is significantly lower. However, this is more of a superficial understanding. The cost of living in Mexico is not uniformly low, and it can actually be as expensive as living in certain parts of the United States.

Realities through the Big Mac Index

To grasp the true cost of living, we can refer to economic indices such as the Big Mac Index. This index compares the price of a Big Mac in different countries at the same time. In 2018, a Big Mac cost 5.58 USD in the United States while it cost 2.54 USD in Mexico. This figure suggests that you might need only 45% of the money to live like a king in Mexico compared to the United States. However, it's important to note that this index does not take into account all factors and may not fully reflect the cost of living.

The Relevance and Limitations of the Big Mac Index

The Big Mac Index is a gauge of the cost of living as it reflects the cost of goods required to make the product, which is affected by government subsidies and the average lowest salaries. It can be a useful reference, but it also has limitations. The price of a Big Mac reflects the cost of ingredients, labor, and overhead, but it does not cover all expenses. Importantly, it does not account for luxury items like a car, boat, or castle, and vehicles and any imported goods are not affected by this measurement.

Personal Experiences and Costs

My personal experience provides a more tangible perspective. I recently moved into a new house in Colima, a beautiful state in western Mexico, with my wife. Our new home is just under 3,000 square feet and is part of a middle-class neighborhood. The lot size is 2,700 square feet, which is relatively small by American standards but a good size for the area. A lot of this size sells for around 46,000 USD, and construction costs should be between 45 - 55 USD per square foot using a turn-key contractor.

Utilities and taxes in Colima are relatively low by U.S. standards. Property tax is over 400 USD per year, water, sewage, and trash pickup is around 25 USD per month, and electricity costs about 40 USD each month. Internet service is approximately 20 USD per month. For groceries, we typically spend around 100 USD per week, which includes a bottle of liquor. Dining out at a casual restaurant costs between 5 - 7 USD per person, while a nice dinner at a steakhouse with an adult beverage costs about 15 - 20 USD.

Variations Across Regions

However, it's important to note that the cost of living can vary significantly across different regions in Mexico. In Mexico City, while the cost of living may be lower compared to most U.S. cities, it is not drastically lower. Luxury items might even be slightly higher there. In smaller towns and rural areas, the cost of living can be much lower than in the United States. For instance, Colima is a coastal town where the cost of living is quite reasonable.

If you have 150,000 USD to purchase a home, you won't be paying rent, and an income of 1,800 USD per month will allow you to live quite well in the region. It might not be king-level luxury, but it provides a comfortable lifestyle. However, if you desire more luxury, such as a large lot of 7,000 square feet, a typical home might cost over 300,000 USD, with home owners dues of around 150 USD per month.

In conclusion, the cost of living like a king in Mexico is highly dependent on your definition of luxury and the specific area you choose to live in. Whether you choose to live in a smaller town or a larger city, the cost of living can provide a surprisingly affordable and comfortable lifestyle.