Life in Nicaragua: Not Just for Sandinistas Anymore

Greetings from Leon, Nicaragua, which is about an hour drive northwest of Managua. Leon is the second largest city in the country and was the old capital for more than 200 years, before Managua became the capital, in 1851. I’m staying with a friend of mine from college and his family, who moved down here five years ago.

He lives very well here for not much money. This house in which I am staying is a comfortable 4,000 square feet with everything you could want in a house – a big kitchen with granite countertops, beautiful ceramic tiles throughout, an open courtyard, balconies overflowing with pink flowers and vines, a red tile roof – all done in the Spanish-influenced style you find throughout South and Central America. It’s bright and airy and not at all humid. So even though it is 90 degrees here, we have the windows open and feel fine.

It would cost you about $200,000 or so for this house. If you got the lot and built it yourself, it might cost you $150,000. This is a nice location, too, in a quiet neighborhood. I’m within walking distance of central Leon with its central park and the largest cathedral in Central America.

You could live extravagantly here for $2,000 a month – enough to have hired help like a maid, which would cost you about $100 a month. Last night, we went to dinner. We waked down the little narrow streets of Leon (the city was founded by Spanish conquistador Francisco Hernandez de Cordoba in the 1500s). We had nacatamales – meat, peppers, rice and more mixed in with corn meal and cooked in banana leaves – for $1.50 each. They were delicious. These were big tamales, a solid meal all by themselves. And my friend adds that these were the high-end version. There are cheaper versions in the city.

Labor is very cheap here. Food is cheap. Some things are not so cheap. I was shocked to find that gasoline is $4 a gallon. For the wages people earn here, that is a lot of money. Brand-name US products are expensive here, too. If you want to buy a pair of jeans, it will cost at least 30% more than in the US.

Still, the overall cost of living here is very low. And there is a lot to like about Nicaragua besides that. There is plenty of fresh fruit and great beaches and wonderful cultural experiences – all the things you’d want to enjoy as a tourist or expat.

Later today, I’ll head down to Rancho Santana, which is in the southern part of the country, near the city of Rivas. Rancho Santana is a development project owned by an affiliate of my publisher Agora Financial. There are about 20 readers coming down for what we’ve called ‘Chill Weekend,’ to enjoy the beaches and views and explore the area. I have not visited Rancho Santana before, but I am told that it, too, is very beautiful, and is attracting a growing population of year-round expat residents.

Nevertheless, when most people think of Nicaragua, they don’t think of any of these things. They probably think of the Sandinistas and President Daniel Ortega and the problems of the 1980s. Ortega is on his second stint as president, which began in 2007, after being out of power since 1990. Politics, as usual, is a risk in this otherwise idyllic setting. It is a situation to keep an eye on because Ortega seems to want to follow the model laid out by Hugo Chavez in Venezuela. But Ortega is not that popular here anymore (he has the support of about a third of the vote) and holds onto power only because the opposition party is split.

Beyond the politics, the region’s geology has also had its effects. A massive earthquake in 1972 destroyed most of Managua, from which it has yet to recover. Even in Leon, repeated earthquakes and eruptions from the Momotombo Volcano forced the city inland from the shores of Lake Managua in 1610. Nicaragua is full of volcanoes. In fact, there is one that is smoldering now in Lake Nicaragua.

“We have it all here,’ my friend told me. ‘Earthquakes, tsunamis, hurricanes, volcanoes…”

Chris Mayer
for The Daily Reckoning