Propane Fuel in the DR 4 Your Car!

Living on the north coast in the Dominican Republic is a dream come true.  Soon I will post a valid argument for why the DR is the best and only place any gringo/expat should consider living in the Caribbean. However, the DR is not perfect.  Paradise, yes. Perfect, not.  One of the things I am getting used to is the sticker shock I get on items that are priced well above what I would pay in the US.  Gasoline, alcohol, cars and electronics - just to name most of the important products.
Fortunately, many of these price premiums can be mitigated or even eliminated if you are like me and value your money.  One way to reduce the cost of gasoline/fuel for your car is to install a propane gas conversion system.  The installation cost in total is about US $1,500.

Another solution is to buy an economy car like a Kia Picanto.  I rented one of these for two weeks and although the price of gasoline is a whopping 232 pesos regular (US about $5.50) and 245 premium ($5.79), the Picanto gets more than 35 miles per gallon. So to get good gas mileage, you have to either have a small 4-cylinder vehicle like a Picanto, or, convert your 6/8 cylinder to propane, which costs 107 pesos (apx $2.50/gallon).
I purchased a Nissan Murano 6-cylinder SUV that normally gets up to 20 mpg on regular gasoline.  But the advantage was it already had the propane conversion.  If you are a good negotiator, you can get a good deal on almost anything in the DR, real estate, cars, electronics, etc.  Propane yields a little less range, but not much, as I proved to myself this morning with a test drive.
First, I emptied the propane tank completely.  I drove it on gasoline (when you convert you still have both gasoline and propane) to the propane gas station.  I put exactly one gallon of propane.  The tank went empty at 29.1 kilometers (about 18 miles).  About 23 of that was highway, the rest city.
Follow the math.
29 kilometers = 18 miles = 1 galon propane = 107 pesos = apx $2.50
Propane costs about 45% of gasoline or less (see prices above).
So getting 18 miles per gallon on propane is the equivalent of getting 40 miles per gallon on gasoline.
Hence, you can drive a more powerful, perhaps luxury vehicle with the fuel cost of a Picanto.

This is one way to eliminate some of the price premiums in the Dominican Republic.  As for alcohol, the only solution I have to reduce this cost premium is to reduce or eliminate alcohol consumption.  I will post soon on the solutions to some of the other cost premiums.  In general, the things that you NEED in the DR, such as housing and food, are much cheaper than most countries.  The things that you WANT (imports, luxuries, etc) are more expensive, if you don't do any research or care about the price of the things you buy.  I do, so I will report on ways to solve that problem.

Until then, Happy Holidays from drgringo!

Open A Bank Account in the DR in Less Than 1 Hour

Opening a bank account as a US citizen in a foreign country has become progressively more difficult over the years.  Today it is more difficult than 2 years ago, 5 years ago it was easier, 10 years ago, not a problem at all.  Most of this has to do with the fact that the United States of Hypocrisy, the self-procaimed "land of the free" has bullied all foreign banks to comply with its demand to provide the IRS with information on every single US citizen's account information, with the threat that if they don't comply, the US will essentially cripple that bank's ability to do international wire transfers.
I opened an account in Panama with HSBC in 2006.  The process took about 5 weeks from the time of application to the time of approval.  Panama is a fantastic country to bank in, for all the reasons that you have already read about if you are reading this article.  Even today, some banks in Panama will open your account with little fuss, even if you do not have a residency visa.  Most banks require more than just a tourist visa.  Some may still require a mountain of documents and a month or more waiting period.
I just moved to the Dominican Republic.
Before I arrived, I made sure my Panama banks gave me a "carta de referencia" (reference letter).  I was nowhere close to getting my residency visa yet, so I asked a few Dominican lawyers what I could do to open a bank account without one.

Long story short, I visited the Law Offices of Guido Perdomo on the 2nd floor of this picture in Sosua.  He gave me a reference letter to Banco Popular, the largest bank in the DR, that says he is helping me obtain a residency visa. As I was leaving, Guido advised me, "Listen, Banco Popular will open your account, but it will take a week or two for the application process.  If you want a bank account today, just go downstairs to Banco Leon, show them my letter, and they will open your account right now."
As you can see from the picture, Banco Leon is just below Guido's office.
I went in to the bank, sat with a banker.  He took my passport, HSBC reference letter, Guido's letter and a "source of funds" document to prove how I earn the money I wish to deposit (standard anti-money laundering that all banks do).  He did not require a residency visa.  My tourist visa was good enough.  But you do have to live in the DR.  No proof necessary.  He asked me what my address and phone number was.  I pulled out the business card to the hotel I was staying at and gave him that phone number and address.  No verification necessary.
"US Dollar account or Dominican Peso?"
"Dollar only for now."
"How much would you like to start with?  Minimum is $100."
"Here's $300."  I handed him three $100 bills.
A few minutes later he came back to me with one of those old fashioned savings account booklets that our grandmothers have us when we were kids.  It had my account number on it and the $300 deposit was already logged in.
In less than an hour, I had opened up a bank account in the Dominican Republic.
Now, understand, I am not saying that the DR is the mecca of international banking. It will never be the next Switzerland or Panama.  But, who cares?  I value simplicity and safety when it comes to banking.  This is a strong bank, solid financials. The expats that hold account here all swear by Leon.  I can sleep at night.  But just to make sure, I am also opening an account with Banco Popular.

I will give them one week to approve me.  If they don't, then I will just walk across the street to Banco Santa Cruz, who offered me 7.2% interest for a one-year CD in DOP. They said they willl also open my account in one day, with the same criteria that Leon asked me for.  Leon will give me 8.5% if I am willing to do two years.

There are places that you can open bank accounts remotely, such as Hong Kong and Australia, but you will always need a bank account in the country that you live.  This is the way it is in the Dominican Republic, and one of the main reasons why I love it here.  Need a bank account?  Don't worry, we'll get it done.  Need a residency, citizenship?  Don't worry, if there appears to be a problem, we will work around it and get it done. Lots of things that are tangled in rules and procedures in other countries are no problem in the DR.
Everything here is tranquilo... no problema.

International Living's Flawed Ranking System

International Living is one of the best news/media/information resources for living, traveling and investing overseas.  I get a lot of good information from them.  My other favorite is Live & Invest Overseas.  I had the opportunity to meet Kathleen Peddicord and Lief Simon in Panama City not long ago. L&I Overseas has an impressive staff of really good people researching the world, literally, to provide us with the information we need to help us make decisions about where to visit, invest or retire abroad.  I am sure LI's staff is just as good.
I debated whether or not to write this post because in all fairness to International Living, it is very difficult to create a ranking system on where to retire overseas.  The reason why I decided to write this is because many thousands of people this year will use IL's information to base their decisions on where to live, invest or retire overseas.  If you are one of them, then this article is very relevant to your situation.

I am not going to go over every single detail about what I consider a flaw, just the material, important factors.

MOST IMPORTANT FLAW:  EVERY CATEGORY GETS EQUAL WEIGHTING
This ranking list is broken down to decimal points, as you can see #1 Ecuador gets a final score of 91.9.  That gives the impression that this system is quite scientific.  But here is problem #1.  The cost of real estate and the cost of living, two very important factors, get just as much weighting as subjective, arbitrary categories like "integration", "special benefits" and "retirement infrastructure". I had to google what these things meant.  Long story short, something like "integration" is so subjective and arbitrary that it comes down to your own ability to fit in to your new country, if you know the language, understand the culture, etc.  There is no way that "integration"should be as important as "cost of living". Yet if you calculate the way IL comes up with the final score, they simply add all 8 numbers, divide by 8 and.... voila!!!.... 91.9 or 73.2.  I don't know one person who is going to live abroad who would consider integration as important as cost of living.
This is important because this flaw alone twists the real value of the entire ranking system.  Right now I live in the Dominican Republic, at the bottom of the list. I have lived in or been to 16 of the other countries (some many many times) and I can tell you from my experience that my ranking would be very different based on what I know about these places.

FLAW #2:  VARIANCES WITHIN EACH CATEGORY ARE GIGANTIC!
I just moved from Panama.  The real estate market there is all over the place.  In the city, there are no bargains.  The high-end market is scary (lots of inventory, but still at prices higher than many good cities in the US), but the middle and low-end markets are on fire, with very little inventory.  However, if you are like me and want the tropical beach life, you can find deals so cheap outside of PTY- in the Azuero Peninsula that you wouldn't believe me if I told you I saw a house for sale, beachfront, for $500/sq. meter (apx.$50/sq.ft).  Long story short, I would say Panama City should get a poor ranking in real estate, but plenty of spots outside the city should get very good ratings.
Same holds true for climate.  IL crushed Chile (would be in my top 5 or 10 in the world) on climate with a score of only 57.  Are you kidding me?  First of all, the climate in Chile is all over the place, from desert in the north to freezing snow/rain in the Patagonia. But many of the places you would want to live in Chile are central, which has a Mediterranean-like climate... almost perfect.
Panama is #2 mostly because it gets high marks in almost every category, but the climate in the city sucks, yet IL gives it an 88 score.  It rains almost every day in PTY 8 months a year.  You can't plan outside activities like golf or pool in the city because there is a good chance you will get rained out.  88?  Maybe in Coronado or Punta Chame.

FLAW #3:  SOME CATEGORIES ONLY LOOK GOOD ON PAPER
Panama has, by far, the best special benefits program I have seen.  I totally agree with IL's score of 100 here.  Panama has really rolled out the red carpet for retirees and investors looking to do business  there.  As a "pensionado" you get all sorts of benefits, including discounts 10% or more on everything from groceries to healthcare to movie tickets.  I now live in the Dominican Republic.  Long story short, there are few, if any, of the "special benefits" being marketed here like in Panama.  But I don't need them.  My cost to get a citizenship is CHEAPER and FASTER in the DR than Panama, despite Panama's marketing machine to attract foreigners.  I don't need discounts in the DR because, even with the discounts that pensionados get in Panama, my costs to live in the DR are still much cheaper, everything from the price of a house or rent to groceries.  For example, filet mignon is roughly $6.50/lb in Panama (was only $5.30 a year ago at Rey Supermarket... lots of inflation there). So with a pensionado discount, minus 10%, its $5.85.  With no "special benefits" in the DR, I buy filet mignon for 180 pesos/lb, which is about $4.25.  Yes, some things in the DR are dysfunctionally higher in price, like electricity and gasoline, but when it is all added up, my cost of living dropped nicely from Panama to DR, yet IL says that Panama gets an 86 score on cost of living while DR gets only 70.  My real life factual experience is that the opposite is true.

Having identified these flaws, how is it possible to organize a ranking of the world's best places to live or retire?  If I was on the IL staff, I would make next year's list weight-adjusted and sub-categorized.  Everybody I know cares a lot more about cost of living than "integration".
If you are looking to live or invest in a foreign country, the best advice I can give you is this:  Use IL and L&I Overseas as an information resource.  But when it comes to making a decision on where to visit first to see if you like it, ask yourself what is important to you most.  You can't find this on their ranking lists.  For me, I chose the DR because I wanted to live in the tropics in a beach community.  Panama does not yet have this product, where people actually socialize at the beach, on the beach, with shops and restaurants.  I live in Cabarete, a true beach community.  The price of beach-front real estate is as good as anywhere.  I also chose it for some of the unique business opportunities available.  What are your motivations?  Pursue them first, and leave these rankings for the herds who need someone else to think for them.

But then again, what do I know?  I am only drgringo!