For years, many of us have wondered why Mexico, with so many natural resources and hard working people, remains largely in poverty. Since volumes of analysis by people smarter than I have attempted to answer this, I’ll just add a couple of opinions based on my observations over a lifetime of Mexico study and travels.Many expats are drawn to purchase and live in Mexico because of the low cost of living, day-to- day. Whereas property taxes in the U.S. are used to fund multiple social services (schools, etc), in Mexico the taxes are so low that they fund very little. Property taxes on a $200,000 house are only about $200 per year. In fact, tax collection (corporate, income, etc) on a whole is very low in Mexico, totally about 14% of the country’s GDP, compared to about 28% in the U.S. So, you end up with a situation where people love moving to Mexico for the low taxes, but then bitch about not having paved roads, a well-paid police force, and crooked politicians…well, I guess those are everywhere you go.

Mexico has some very wealthy families, with Carlos Slim now the richest person in the world. At least ten others in Mexico are billionaires. They have the highest GDP in Latin America, including Brazil. This in a country that has an average daily wage of about $11.00. Mexico has a majority of its wealth concentrated in a very small upper-class, with a small and shrinking middle-class. The majority are poor and sinking lower every year . Why, you ask? Well, it’s the same old story. The rich don’t want to invest, to pay taxes, to fund the programs that help to build a middle-class….good schools, health care, transportation corridors, a living minimum wage…the list is long. The wealthy control the politicians who write the laws and they don’t want to tax themselves. That’s the simple story.

There is much to like about Mexico. It’s my favorite place in the world. But they, as a country, need to enact reforms that will benefit the majority. In the long run, everyone would gain.

When I first started traveling to Mexico, carrying money was an issue. Dollars were accepted in the border areas, but deeper in Mexico you had to have pesos. These days you can spend gringo dollars in the tourist towns throughout the country, but it is best to convert your money to Mexican money. You won’t be perceived as a rookie Mexico traveler (which increases the chance that you might get fleeced) and you don’t have to do mental math calculations when they give you change in pesos (not recommended while slamming margaritas in a cantina). When a six-pack of beer at a market is marked at 39 pesos you pay that amount in the local currency just like a local. If you pay with a $20 US bill, the clerk, if he accepts your $20, will give you change in pesos using a conversion scale to his liking. Most likely you will pay more for the brew that way.

I always save a wad of pesos from a trip so that I have will them available for the next time…usually around $50 - $100. That way, if I am flying in, I have pesos as soon as I land. The airport may have a bank window or a casa de cambio (money exchange), but they aren’t always open when you need them. The large airports (i.e.,Mexico City) now have ATM’s, but many do not. I also carry a couple of $100 US bills in a safe place (not my wallet) for emergencies at odd hours. Years ago everyone used travelers checks, requiring waiting in bank lines in order to cash them, which was a huge hassle. In the last seven years or so ATM’s have become very common all over Mexico, at least in any town large enough to have a bank. An ATM will offer you the best conversion rate and will leave you a legitimate paper trail. A case de cambio is the second best option, but that is for converting your US dollars into pesos, which requires that you carry cash. Why carry cash that you might lose when you can use plastic, getting enough cash every day for that day’s needs? The ATM’s also handle cash advances for Visa and Mastercard.