The Mexican Wealth Accumulation Movement: A Primer
Many immigrants from Mexico who work in the United States for several years or even decades often save up a significant sum of money and then move back to Mexico to live. This practice, although not commonly referred to by a specific term, is a form of the broader lifestyle and financial movement often associated with the FIRE (Financial Independence, Retire Early) philosophy. However, the path to achieving this goal for many Mexican migrants is slightly different and involves unique cultural and economic factors.
There is a striking similarity between the FIRE movement and the motivations of these Mexican immigrants. Both groups seek to accumulate significant assets through hard work and smart financial decisions before retiring and relying on those savings. For Mexican immigrants, the primary destination is their home country, Mexico, where they can maintain a high quality of life independent of continued employment.
Path to Financial Independence
The journey to financial independence among Mexican immigrants typically begins with working in the United States. These workers often earn modest salaries but contribute to a savings plan over time. Many accumulate not just savings but also property assets, including land and housing, which they either build or improve. For some, this accumulation happens more slowly, while for others, it can be more accelerated.
For example, someone like my father, who worked in the U.S. for most of his adult life, owned his home here and also owns significant land and assets in Mexico. His investments include inherited agricultural and grazing land, cattle, horses, and property foundations for a home, all planned for a future life in Mexico. His long-term goal is to retire there, where he can freely travel and celebrate town holidays.
Similarly, my mother envisions building a vacation home in Mexico as many of her siblings and cousins frequently visit or temporarily live there. This accumulation and planning for a return to Mexico is a more common path than the typical FIRE movement seen in the United States, where individuals aim to retire early.
Dependency on Remittances
Another common scenario involves maintaining a family in Mexico and relying on remittances sent back from the United States. These remittances supplement the financial support required for sustaining a comfortable lifestyle in Mexico. While some like my father aim for complete independence in Mexico, others, like my mother, look to build a secondary home.
It's important to note that this is not always an immediate process occurring at the age of 40 or 50. Instead, it is a combination of factors, such as inherited property, middle-class earnings, and careful financial management that enables this transition.
Recent Trends and Business Setup
More recently, a new trend has emerged among Mexican migrant workers. Rather than just saving for retirement, many find themselves setting up small businesses in Mexico after a few years of work in the U.S. These individuals are typically in their 30s, 40s, or 50s. Unlike the typical FIRE proponents, who aim to accumulate assets for early retirement, these Mexican migrant entrepreneurs aim to gain financial stability through business ownership.
For instance, a cleaner I once knew worked in the U.S. for several years and saved enough to move to the Mexican island of Cozumel, where the warm climate and low cost of living attract many American retirees. The trend of Mexican migrants setting up small businesses in their home country reflects a different economic reality and cultural preference for entrepreneurship and business ownership.
A Parallel in American Expat Communities
Interestingly, this phenomenon is not unique to Mexicans seeking to return to Mexico. Many Americans are also working in the U.S. and saving for an affordable retirement in other countries. The lady who used to clean my office now lives in Cozumel, and my cousin retired to Thailand and loves it. If one is adventurous and not tied down to family, there are many other countries that are also welcoming to American retirees, such as Panama, Ecuador, and Costa Rica.
These countries offer affordable living costs and a higher quality of life, making them attractive destinations for Americans seeking retirement abroad. The choice of such locations is driven by factors such as climate, cost of living, and accessibility, including high-quality medical care and green spaces.
The Mexican Wealth Accumulation Movement, although different in its specifics, shares many similarities with the FIRE movement. Both involve hard work, strategic financial planning, and a desire to achieve financial independence. These financial dreams are shaped by cultural, economic, and personal aspirations, leading to unique paths to achieving a comfortable, independent lifestyle.