I am a digital nomad in Puerto Rico. I have heard some comments hurled in my direction about the "plague" of digital workers, etc. It is odd. Puerto Ricans ARE American. True, Puerto Rico still views itself as a Spanish Colony. But, it is not. Puerto Ricans have American passports. One can travel to and from the island to the United States as easily as one can fly from Portland, Oregon to Disneyland. Puerto Ricans receive Social Security Retirement Income, Medicare, and Medicaid, etc. When a hurricane hits, the Governor of Puerto Rico uses the English word "FEMA" perfectly.
To lure "Main Landers" here, PR has passed tax incentives. As a result, 15,000 have moved here from the States, generating 23,000 jobs for Puerto Ricans. That is one thing I say to lighten the mood when the origins of my birth come up. If that does not instill more respect into the conversation, I point out the obvious. Puerto Ricans are descended chiefly (about 80%) from horribly aggressive people who sailed here from Spain. These conquerors then began to kill, loot, and colonize their way across the world. So, really, complaining about digital workers and the way they impact rent prices is silly. No one belongs anywhere really. We are all here temporarily. Like fleas arguing over who owns the dog.
I've heard the situation in Puerto Rico is especially interesting because of the tax incentives. Some transplants are saving hundreds of thousands in taxes by moving there. I can imagine that might lead to some resentment from people who were born there and struggle under difficult economic conditions.
Thanks for sharing Darol, it's nice to hear the perspective from someone who lives there as a digital nomad.
The tax incentives are weird. There is a 4% corporate tax. But, a US S Corp is pass thru. So, right there, PR is behind. The income tax is not impacted. In fact, PR has a higher marginal rate. One difference is capital gains tax savings and property tax. BUT!!! Act 60 requires a $10k contribution to a PR charity. You are also required to buy a residence here AND PR has an estate tax whereas only 12 states have an estate tax. Also, as near as I can tell, PR has ZERO credits like the US has. I actually learned about the R and D Credit from you on Fizzle. And look at the Employee Retention credit. INSANE! I think it is actually easier to save on tax in the US in some situations.
I am not here for tax incentives. I am not that rich. That gives Puerto Ricans some comfort. Lol. But, I often ask, do you really resent other people because they pay less in tax than they used to? I sometimes have to remind them that these Americans still pay WAY more in tax than they do. (If PR was admitted to the US as a state, it would be the poorest state in the Union by a huge margin. The median income is $34,000.) PR has a graduated income tax system like the US. The more you make, the more you pay in income tax. So, even with breaks in dividends and capital gains, these Americans are contributing far more to the PR tax system.
If that makes no dent, I ask "how much did you donate to a PR charity last year?"
The point is not PR tax system. It is about resentment. It is easy to resent anyone who is perceived as doing better. But forget that they support the tax-based benefit programs that the poorer in society depend on, e.g., Medicaid. As such, there should be a little more respect if not appreciation.
…. Displacing people ? Because you don’t believe PR has a culture of its own worth recognizing because we come from “horribly aggressive people who sailed from Spain”? So then this is a drive through island? I’m appalled at your lack of self awareness. Keep telling yourself that narrative to feel better about yourself.
You said so yourself if the median income is 34,000 how do you believe people won’t be completely outraged at the displacement caused by people with US mainland incomes living in PR rising prices in everything? Don’t you believe that causes displacement? Isn’t that gentrification? Do you understand how rent, home prices have skyrocketed since such a law came into effect? Do you believe its fair and that you deserve it? It’s like a bigger kid fighting for a chair, he will win, and no, there aren’t enough chairs for all of us. The island is very small.
I have lived in and around Barcelona for nearly 30 years so I've seen it first-hand. The biggest problem for the local population is always going to be access to affordable housing as city residents are displaced by remote workers with higher incomes with the effect now radiating outwards to surrounding towns. The effect on local commerce is notable (if you've ever had a stroll through the Gothic Quarter there - not much that you'd actually want to or could afford to use if you lived there). But as you say, the problem is wider than the digital nomad, starting with mass tourism, AirBnB as an income, foreign real estate investment etc. It's going to come down to governments at different levels to regulate it if the pressure and desire is there.
I've witnessed Costa Rica become beyond unreasonable in terms of cost of living. We were there between 2019 and 2021. By the time we left, an average 2 bedroom on the Central Pacific Coast would go for around $2k/mo. Now, I'm seeing very similar listings around $3k/mo. There are many there who would be considered digital nomads, but I would say more are those looking to settle who were trying to escape the policies of the US and Canada that they did not agree with - many of who are willing to pay higher prices because maybe that's what they were already used to paying back home and/or made out financially by selling a home at the housing values of the past couple of years. I would say the gentrification and rising cost of living issues are a testament of the further disintegration of quality of life of one's home country, coupled with the ability to make a living while abroad.
Hey Amanda – thanks for sharing the video. We were just in Nosara a few weeks ago for the first time. There was definitely quite a visible juxtaposition between the local neighborhood and the multi-million dollar palaces in Guiones. It made me think about the impact of tourists and digital nomads on small towns vs big cities.
I traveled around the world from 2007 until the pandemic started.
I never considered myself a "digital nomad" per se. I started traveling before the term was used, and I moved around too much ever get an apartment somewhere.
I long said that more countries would be welcoming of digital nomads because it is free money. They bring money into an economy and they don't take any jobs. It is a simple economic boost that requires no investment and little risk.
The places which are complaining are, for the most part, places which have never experienced immigration before. They are not used to foreigners in their midst. You won't see similar complaints in cities like London, New York, Bangkok, or Berlin.
Increasing real estate prices and rents are a global phenomenon right now. Quite frankly, the number of digital nomads in a city as large as Mexico City could barely budge the price of housing.
If there is a problem it is that a few places become popular and everyone gravitates to those few places. This is the problem with overtourism. The problem isn't too many tourists, it is too many tourists all visiting the same place at the same time.
I have worked in 6-7 different major cities (Paris, Taipei, etc) as a Digital Nomad and considered places like Lisbon and other Asian countries. Friends have considered or are living now and working abroad from South American or Mexican cities.
I have to say that there is a certain "be careful what you wish for" syndrome occuring with these localities that first invite workers in and then get pissed off when they come. Lisbon is going through this now, but due to Covid cannot or will not amend the lax taxes.
This is a fascinating piece. I’m glad you piped up to contribute having been a true pioneer in the digits nomad space. I think maybe Tim Ferris was your only contemporary digital nomad back in ‘09, and you both certainly hadn’t owned the title yet. “Snowbird” I think was still the phrase in vogue 🤣.
Anyhoo, having become a digital nomad myself around 2013 I can attest your pitfalls are astute. The first five years taught me personally that I would prefer to work from him and travel...for vacation. Novel concept, I know, but there is a special kind of hell one finds one self in when sitting on a fjord deck watching lobster fishermen chug by while your 4:00am deadline looms and your internet has thrust rusty rebar up yer rear...
Truly greener grass usually hides nuance or complication of some sort. Sometimes it’s worth wrestling the new system down and dialing it in, but sometimes it’s worth looking at the one the world uses and becoming curious once more as to why it seems to work so well for so many.
Thanks for the reply Aiden! This site was also big in the space way back when: https://locationindependent.com. Lea was leading the conversation about location independence (as she called it) back then.
As someone who will be starting the digital nomad life next year, I've read so many of these articles as well. I'm glad that, in-person, you have had a different experience, but I can see the many concerns listed as valid. The nomad Visas are interesting as well, but given the restrictions that many of them have, I don't think they'll be as successful at luring people as they think. That being said, I may not be the "typical" nomad as I like to spend 2-3 months in one place while traveling locally to explore the area. Even at that, I wouldn't qualify for most Visas. Maybe my mindset and desires will change as I travel and the idea of being tied to one country for a year would excite me (as long as its not the US, haha).
You said so yourself if the median income is 32,000 how do you believe people won’t be completely outraged at the displacement caused by people with US mainland incomes living in PR rising prices in everything? Don’t you believe that causes displacement? Isn’t that gentrification? Do you understand how rent, home prices have skyrocketed since such a law came into effect? Do you believe its fair and that you deserve it? It’s like a bigger kid fighting for a chair, he will win, and no, there aren’t enough chairs for all of us. The island is very small.
I will take full credit for starting this trend of moving to CDMX when you cannot afford America anymore. When I lived down there on and off again from 2013-2017 I didn't have the money to eat at Lardo because I was living on $650 - $800 USD a month.
Now I am pioneering the trend of getting stuck in your hometown because you cannot save up enough for plane tickets to leave! Hopefully all those tech bros from San Francisco will follow my lead, and then I will rush back to San Francisco and scoop up a cheap apartment in a bad neighborhood.
CDMX is the biggest city in North America. I think if you brought the entire population of San Francisco down there no one would notice.
My advice is if you feel you are in an area that is too gentrified then walk four blocks in any direction and perhaps cross a major intersection. For example: the tortas on the other side of Reforma are much cheaper than the ones on the Jaurez/Centro side of the road.
Just do not go to Doctores! I can't explain why but everyone will tell you DO NOT GO to Doctores. Something is horribly wrong in that neighborhood. I'm a weird fan of Tepito though, just be careful if you go!
I am a digital nomad in Puerto Rico. I have heard some comments hurled in my direction about the "plague" of digital workers, etc. It is odd. Puerto Ricans ARE American. True, Puerto Rico still views itself as a Spanish Colony. But, it is not. Puerto Ricans have American passports. One can travel to and from the island to the United States as easily as one can fly from Portland, Oregon to Disneyland. Puerto Ricans receive Social Security Retirement Income, Medicare, and Medicaid, etc. When a hurricane hits, the Governor of Puerto Rico uses the English word "FEMA" perfectly.
To lure "Main Landers" here, PR has passed tax incentives. As a result, 15,000 have moved here from the States, generating 23,000 jobs for Puerto Ricans. That is one thing I say to lighten the mood when the origins of my birth come up. If that does not instill more respect into the conversation, I point out the obvious. Puerto Ricans are descended chiefly (about 80%) from horribly aggressive people who sailed here from Spain. These conquerors then began to kill, loot, and colonize their way across the world. So, really, complaining about digital workers and the way they impact rent prices is silly. No one belongs anywhere really. We are all here temporarily. Like fleas arguing over who owns the dog.
I've heard the situation in Puerto Rico is especially interesting because of the tax incentives. Some transplants are saving hundreds of thousands in taxes by moving there. I can imagine that might lead to some resentment from people who were born there and struggle under difficult economic conditions.
Thanks for sharing Darol, it's nice to hear the perspective from someone who lives there as a digital nomad.
The tax incentives are weird. There is a 4% corporate tax. But, a US S Corp is pass thru. So, right there, PR is behind. The income tax is not impacted. In fact, PR has a higher marginal rate. One difference is capital gains tax savings and property tax. BUT!!! Act 60 requires a $10k contribution to a PR charity. You are also required to buy a residence here AND PR has an estate tax whereas only 12 states have an estate tax. Also, as near as I can tell, PR has ZERO credits like the US has. I actually learned about the R and D Credit from you on Fizzle. And look at the Employee Retention credit. INSANE! I think it is actually easier to save on tax in the US in some situations.
I am not here for tax incentives. I am not that rich. That gives Puerto Ricans some comfort. Lol. But, I often ask, do you really resent other people because they pay less in tax than they used to? I sometimes have to remind them that these Americans still pay WAY more in tax than they do. (If PR was admitted to the US as a state, it would be the poorest state in the Union by a huge margin. The median income is $34,000.) PR has a graduated income tax system like the US. The more you make, the more you pay in income tax. So, even with breaks in dividends and capital gains, these Americans are contributing far more to the PR tax system.
If that makes no dent, I ask "how much did you donate to a PR charity last year?"
The point is not PR tax system. It is about resentment. It is easy to resent anyone who is perceived as doing better. But forget that they support the tax-based benefit programs that the poorer in society depend on, e.g., Medicaid. As such, there should be a little more respect if not appreciation.
…. Displacing people ? Because you don’t believe PR has a culture of its own worth recognizing because we come from “horribly aggressive people who sailed from Spain”? So then this is a drive through island? I’m appalled at your lack of self awareness. Keep telling yourself that narrative to feel better about yourself.
You said so yourself if the median income is 34,000 how do you believe people won’t be completely outraged at the displacement caused by people with US mainland incomes living in PR rising prices in everything? Don’t you believe that causes displacement? Isn’t that gentrification? Do you understand how rent, home prices have skyrocketed since such a law came into effect? Do you believe its fair and that you deserve it? It’s like a bigger kid fighting for a chair, he will win, and no, there aren’t enough chairs for all of us. The island is very small.
I have lived in and around Barcelona for nearly 30 years so I've seen it first-hand. The biggest problem for the local population is always going to be access to affordable housing as city residents are displaced by remote workers with higher incomes with the effect now radiating outwards to surrounding towns. The effect on local commerce is notable (if you've ever had a stroll through the Gothic Quarter there - not much that you'd actually want to or could afford to use if you lived there). But as you say, the problem is wider than the digital nomad, starting with mass tourism, AirBnB as an income, foreign real estate investment etc. It's going to come down to governments at different levels to regulate it if the pressure and desire is there.
Thanks Rachel – appreciate you sharing your perspective from Barcelona :)
This is an interesting look at the situation in Nosara, Costa Rica: https://www.youtube.com/watch?v=Q56JeXUoL-w
I've witnessed Costa Rica become beyond unreasonable in terms of cost of living. We were there between 2019 and 2021. By the time we left, an average 2 bedroom on the Central Pacific Coast would go for around $2k/mo. Now, I'm seeing very similar listings around $3k/mo. There are many there who would be considered digital nomads, but I would say more are those looking to settle who were trying to escape the policies of the US and Canada that they did not agree with - many of who are willing to pay higher prices because maybe that's what they were already used to paying back home and/or made out financially by selling a home at the housing values of the past couple of years. I would say the gentrification and rising cost of living issues are a testament of the further disintegration of quality of life of one's home country, coupled with the ability to make a living while abroad.
Hey Amanda – thanks for sharing the video. We were just in Nosara a few weeks ago for the first time. There was definitely quite a visible juxtaposition between the local neighborhood and the multi-million dollar palaces in Guiones. It made me think about the impact of tourists and digital nomads on small towns vs big cities.
I traveled around the world from 2007 until the pandemic started.
I never considered myself a "digital nomad" per se. I started traveling before the term was used, and I moved around too much ever get an apartment somewhere.
I long said that more countries would be welcoming of digital nomads because it is free money. They bring money into an economy and they don't take any jobs. It is a simple economic boost that requires no investment and little risk.
The places which are complaining are, for the most part, places which have never experienced immigration before. They are not used to foreigners in their midst. You won't see similar complaints in cities like London, New York, Bangkok, or Berlin.
Increasing real estate prices and rents are a global phenomenon right now. Quite frankly, the number of digital nomads in a city as large as Mexico City could barely budge the price of housing.
If there is a problem it is that a few places become popular and everyone gravitates to those few places. This is the problem with overtourism. The problem isn't too many tourists, it is too many tourists all visiting the same place at the same time.
Thanks Gary, love hearing the long-term perspective on this from someone who is so well traveled.
I have worked in 6-7 different major cities (Paris, Taipei, etc) as a Digital Nomad and considered places like Lisbon and other Asian countries. Friends have considered or are living now and working abroad from South American or Mexican cities.
I have to say that there is a certain "be careful what you wish for" syndrome occuring with these localities that first invite workers in and then get pissed off when they come. Lisbon is going through this now, but due to Covid cannot or will not amend the lax taxes.
Great article.
This is a fascinating piece. I’m glad you piped up to contribute having been a true pioneer in the digits nomad space. I think maybe Tim Ferris was your only contemporary digital nomad back in ‘09, and you both certainly hadn’t owned the title yet. “Snowbird” I think was still the phrase in vogue 🤣.
Anyhoo, having become a digital nomad myself around 2013 I can attest your pitfalls are astute. The first five years taught me personally that I would prefer to work from him and travel...for vacation. Novel concept, I know, but there is a special kind of hell one finds one self in when sitting on a fjord deck watching lobster fishermen chug by while your 4:00am deadline looms and your internet has thrust rusty rebar up yer rear...
Truly greener grass usually hides nuance or complication of some sort. Sometimes it’s worth wrestling the new system down and dialing it in, but sometimes it’s worth looking at the one the world uses and becoming curious once more as to why it seems to work so well for so many.
Thanks for the reply Aiden! This site was also big in the space way back when: https://locationindependent.com. Lea was leading the conversation about location independence (as she called it) back then.
Appreciate your points about greener pastures :)
Ah yes, “location independence”, that’s right. Still trying to get my “firebird” label to stick (a reverse snowbird home-based in Phoenix, AZ).
*digital, from *home (not him)
As someone who will be starting the digital nomad life next year, I've read so many of these articles as well. I'm glad that, in-person, you have had a different experience, but I can see the many concerns listed as valid. The nomad Visas are interesting as well, but given the restrictions that many of them have, I don't think they'll be as successful at luring people as they think. That being said, I may not be the "typical" nomad as I like to spend 2-3 months in one place while traveling locally to explore the area. Even at that, I wouldn't qualify for most Visas. Maybe my mindset and desires will change as I travel and the idea of being tied to one country for a year would excite me (as long as its not the US, haha).
Keep us posted after you set out on the adventure Victoria. I'd love to know what you experience as a new nomad. Thanks :)
Of course! I'm excited for the journey and I'm sure I'll spot some pros and cons along the way ;)
You said so yourself if the median income is 32,000 how do you believe people won’t be completely outraged at the displacement caused by people with US mainland incomes living in PR rising prices in everything? Don’t you believe that causes displacement? Isn’t that gentrification? Do you understand how rent, home prices have skyrocketed since such a law came into effect? Do you believe its fair and that you deserve it? It’s like a bigger kid fighting for a chair, he will win, and no, there aren’t enough chairs for all of us. The island is very small.
I will take full credit for starting this trend of moving to CDMX when you cannot afford America anymore. When I lived down there on and off again from 2013-2017 I didn't have the money to eat at Lardo because I was living on $650 - $800 USD a month.
Now I am pioneering the trend of getting stuck in your hometown because you cannot save up enough for plane tickets to leave! Hopefully all those tech bros from San Francisco will follow my lead, and then I will rush back to San Francisco and scoop up a cheap apartment in a bad neighborhood.
CDMX is the biggest city in North America. I think if you brought the entire population of San Francisco down there no one would notice.
My advice is if you feel you are in an area that is too gentrified then walk four blocks in any direction and perhaps cross a major intersection. For example: the tortas on the other side of Reforma are much cheaper than the ones on the Jaurez/Centro side of the road.
Just do not go to Doctores! I can't explain why but everyone will tell you DO NOT GO to Doctores. Something is horribly wrong in that neighborhood. I'm a weird fan of Tepito though, just be careful if you go!
Wow, full credit huh? Back when it was still called DF :) Thanks for the neighborhood tips!