Move to Brazil: check logic

[cowboy73]

Hi y'all,

Family situation:
Married couple (47,45), 11 year old kid.
Considering moving to Brazil.

Financial situation:
Home paid off, worth $650k
Savings around $1m
Makes $1.6m

Against today's USD/BRL exchange rate of 5.16 this is roughly BRL 8.5m.

In Brazil would purchase apartment of BRL1m and a small farm (to live the quiet life) of BRL 1.5m
That leaves BRL6m to be reinvested and live off.

Living expenses BRL20k per month = BRL 240k per year. Some context: the minimum wage is a little over BRL1,000 per month so this seems absurdly high.. it does include international travel (which we love to do).
MMM expected return on savings = BRL6m * 4% = BRL 240k per year.
Perfect equilibrium.

Question for this wonderful community: What am I missing? Inflation?
Ah, forgot to say that my wife is Brazilian and we all speak fluent Portuguese and know Brazil extremely well.

Please shoot holes in this ...

[Paul der Krake]

I don't see any mention of the kind of assets you hold, tax treatment of retirement accounts, which accounts you plan on withdrawing from and why. Have you researched this at all?

Spoiler: it's very complicated.

[travel2020]

Another area to factor in is the USD/BRL exchange rate. Looking at last 10 years, it seems BRL has gone for 1.5 to 5.5 per USD. No idea what the future prospects are for USD or BRL but probably worth exploring options for keeping some investments in USD etc.

[Adventine]

Plenty of questions, which I hope you have already discussed with your wife:

- There is absolutely no guarantee that exchange rates will stay stable or continue to favor you in the long-term. What are your plans to mitigate this risk?

- Have you researched the immigration process (costs and timelines) to obtain legal permanent residency in Brazil?

- If your wife is a Brazilian citizen holding a US green card, a permanent relocation to Brazil may cause her to lose her US permanent residency. Is this applicable to your case? If yes, is this something you are prepared to accept?

- Have you researched the Brazilian legal restrictions on foreign nationals' bank accounts and real estate ownership? Due to FATCA, in my home country, banks are hesitant to allow US citizens to open bank accounts. You have to personally know the bank manager to MAYBE get an exception. On the other hand, due to my country's laws, foreign nationals cannot actually own real estate except condominiums. They usually put the titles in their spouses' names. Does Brazil have similar restrictions?

- What are your plans for your son's education? Have you identified Brazilian school(s) that meet your expectations and budget?

- How easy is it to move money from the US to Brazil and vice versa? Some countries like China have extremely strict capital controls.

[Metalcat]

Sorry, you expect to spend exactly 4% each year?

Where are unexpected expenses in there? ESPECIALLY running a small farm.

[draco44]

Seconding the need to think through the educational pluses/minuses for your son.

Also, have you or your wife worked on/run a farm before? Even a little bit, like by doing a workstay? Beyond financial considerations, that is a very distinct lifestyle choice that is not for everyone.  Even if you aren't actively farming the land (I'm not sure from your post if you just want the space, or if you will be managing gardens/livestock), general tasks like mowing a big area and possibly needing to travel longer distances to buy supplies can get old really fast.

I'm also a bit confused by the plan to buy both an apartment and a farm. Will you live primarily in one spot? Where will your son be enrolled in school? Why do you need both properties? Can you buy one, then see how things go and scale up later? Who will look after the other property when you aren't there?

[norajean]

Financially it can work. Brazil can be cheap to live and the exchange rate is currently way in your favor. How will you transfer the money? Brazilian banking is a nightmare. Inflation has been extreme in the past.

The main problem is that you will be living in Brazil! Every Brazilian I know would give their firstborn child to get out and move to a Western country. As you know there is terrible corruption, rampant crime, poverty, and economic woe.

You have enough money to live somewhere nicer than Brazil, even the US. How about Portugal?

[MrFire22]

I lived in Brazil for 1 year and 7 months. You can make it work, but you don't mention the visa situation. You may qualify for an investment visa based on your home purchase. But you need to confirm that, the law change so rapidly. PM me if you'd like to talk and I can tell you about my experience.

[Paul der Krake]

OP is married to a Brazilian. Spousal visas are a formality.

[mattp]

Obviously from a financial perspective, you'll be much better off in Brazil. Your dollars go a lot further in any developing country.

The question is, do you want to live in Brazil? No wrong answer, but you're probably better off visiting a few times or asking in an expat forum than asking us in the MMM forum. I've never been to Brazil and neither have most people here.

[mistymoney]

How does the 11 year old feel about the plan?

[PDXTabs]

Ah, forgot to say that my wife is Brazilian and we all speak fluent Portuguese and know Brazil extremely well.

Please shoot holes in this ...

Financially speaking, I'm sure that you can retire to Brazil with $1.6M USD if that is your priority.

Practically speaking, are you sure that you want to leave Trump's USA for Bolsonaro's Brazil? I'd personally be more interested in Portugal, especially since you are already fluent speakers. You could even take advantage of 10 years of preferential tax treatment under the NHR tax scheme.

[ericrugiero]

You don't say what your current expenses are in the USA.  Most people on this forum could live comfortably on $1.6M in most parts of the US.  I would expect Brazil to be significantly cheaper but I don't know details. 

Have you considered selling your home in the US and renting in Brazil for at least 6 months to see if you like it?  You could also try other countries or other areas of the US.  You have enough money that you should be able to live just about anywhere you want.  Obviously in some places your budget will have more luxuries than in other places. 

You mentioned a farm.  Is that something you have experience in?  Do you really enjoy that work?  Most small farms in the US don't make much money other than being a tax write off.  The farmers I know wouldn't recommend buying a farm unless you really enjoy that work and don't really need it to be profitable. 

[beekayworld]

I like the idea of you renting a place in Brazil for 6 months to see how you like it.  Your wife may be idealizing it in her memories. I have done this about my hometown. We tend to remember the good and forget the bad. 

There was a thread about moving to India where someone posted that he'd grown up in India, but after living in (Canada I think?) he realized he couldn't go back to that lifestyle. One aspect was people dropping in all day without calling. He'd gotten comfortable with privacy and scheduled social calls.