The interest rate is 8%, middle-aged people go to Ecuador to save money, and some people do not work and become the local middle class by eating interest
As the saying goes, money grows feet. For people who are afraid of shrinking assets, there are many ways to hedge against assets, but going to Ecuador to save money should be an unusual one. In China, some people have traveled thousands of miles across the Pacific Ocean to save their money in Ecuador, more than 15,000 kilometers away, as far away as South America, trying to beat inflation with the 8% interest rate of local banks, and there are even people who have become the local middle class in Ecuador by eating interest alone.
In a sense, Ecuador's banks provide a remote habitat for people who lack a sense of security. Like a classic scene in the movie, the flood is raging, and restless people flee to the heights that some see as Ecuador – but people don't know what the ultimate price will be.
Just a week ago, on January 8, riots broke out in six local prisons in Ecuador due to the escape of drug lords, and Ecuador entered a 60-day state of emergency "due to serious civil unrest". Immediately afterward, masked gunmen broke into the television station, shootings were rampant, schools were closed, and the subway was suspended.
Today, the heights seem to be crumbling. Some regret and fear, some retreat and wait, and some still do not hesitate.
Text: Wang Xiao
Edited by Yi Fangxing
Killer whales
Living on interest to become a middle class
Over the past year, Zheng Yucheng has only three missing lorazepam (an anti-anxiety drug) in his drawer.
The insomnia that once plagued the 38-year-old seems to be gone. He hasn't been working since he moved to Ecuador last year, but he has a steady monthly income from the bank, which gives him peace of mind.
On January 10, 2024, as soon as he opened his eyes, Zheng Yu opened his mobile phone and clicked into the bank app, and sure enough, "the demand deposit increased by $306.7". Mr. Zheng, who lives in Quito, Ecuador's capital, rents a 70-square-meter two-bedroom apartment near Carolina Park in the heart of the city, next to a large supermarket, for more than $400 a month. Zheng Yucheng looked at the prompt and quickly converted it in his head, "This month's rent is available", and in a few days, Zheng Yucheng will also receive interest payments from another local bank, "just used as living expenses."
In China, there are already people who choose to live on interest. For example, a deposit of 1 million, at the current three-year fixed interest rate of about 2.6%, with a monthly interest of more than 2,000 yuan, and then frugal life, such stories are not uncommon nowadays.
But when the narrative crosses the vast Pacific Ocean, travels through 13 time zones, and reaches Ecuador, more than 15,000 kilometers away, it becomes a different version, and even the local middle class can be turned on the basis of interest.
▲ A city street near the Cathedral of Ecuador. Photo / Courtesy of the interviewee
Time seems to fly by. Zheng Yucheng wakes up every day unhurriedly, goes to the Pontificia Universidad Católica de Ecuador for two hours of Spanish class, goes to the park in the afternoon, occasionally plays wild ball with the locals, and goes home in the evening to cook his own meal, and then watches a few hours of short videos, like "less than 40 years old, retired early", and unconsciously, "a year has passed".
All that goes into it, it costs about $1,000 a month, which is about the cost of a middle-class local family. And Zheng Yucheng's current monthly interest can cover almost all expenses.
Chinese in Ecuador often call Ecuador "Ecuador". In Ecuador, time seems to pass very slowly. It is an incomparably simple country, the backbone of the economy is the oil industry, and beyond that is agriculture (growing bananas), there are almost no factories in the country. The locals who "rely on the sky to eat" have a sense of leisure and relaxation after spending a long time with the nature of heaven and earth, and their happiness seems to be very simple.
Zheng Yucheng walks on the street, often sees a group of people dressed in shabby, like coolies, a few people buy a bottle of Coke in the store, sit on the street, drink and chat and laugh; there are many homeless people on the street, almost all of them are followed by a puppy, the homeless people hold the food they don't know where to get it, squatting against the wall, sharing food with the dog, occasionally touching the dog's head and looking at the sky; he knows a person who works as a nanny in the local area, and the whole family only has a savings of 1,000 US dollars, but he laughs every day without any anxiety, in any situation in Zheng Yucheng's opinion," It's hard", but "they just can be happy".
The entertainment here has an unpretentious and unpretentious feel, which is mainly reflected in the price. For many people who live in the area, they go to the cinema almost every week and show up at the cinema for just $6 per ticket when their favorite movie premieres. Every once in a while, visit the $5 Comic-Con or catch a band. Walking down the street, there are old Indian buildings everywhere, and when you wander to any of the ancient architectural attractions, the admission fee is almost in the single digits.
And the sense of roughness is reflected in their lack of entertainment. Located in the heart of the city, the park is a large green space, fountain and artificial lake, and on weekends, Ecuadorians always bring food to eat, and the whole family lies flat on the grass for a day, which is one of the most accessible and common forms of entertainment.
▲ Locals play football in Carolina Park. Photo / Courtesy of the interviewee
In the past two years, there have been many more oriental faces among the people who are "lying", and there are many Chinese like Zheng Yucheng, who have deposited money to Ecuador to eat interest. Beijinger Li Meini and her husband moved to Ecuador in 2021, and in the past two years, they have moved almost all their domestic savings to Ecuador, "which is equivalent to changing their deposits", and can receive more than 900 US dollars in interest every month, covering almost 80% of their living expenses.
Li Jinglin deposited some of the money in a bank in Ecuador at the end of 2021, and the interest has been kept in the bank's current account and has never been withdrawn. In January last year, he traveled to Ecuador, and when he looked at his account, he found that he had accumulated several thousand dollars, and he had lived in Ecuador for more than two months.
Zhang Hui, who has been running a migration agency in Ecuador for more than five years, also found that in the past two years, more and more people in China want to deposit money in Ecuador. In 2019, there may only be more than a dozen people to consult a month, but since 2020, the number of people in each year has doubled compared with the previous year, and in the past two years, there have been hundreds of consultations per month, and the conversion rate is very high, and there are many people who "almost decide after consulting".
Zhang Hui's wife is Ecuadorian, and when he first started his business, he was the only husband and wife in the migration agency, but as he had more and more clients, he called his wife's younger brother, younger sister, cousin and other relatives to work, and the company expanded to a team of six. Even though the team has expanded, everyone still has to work "at full capacity" every day, from 9 a.m. to 5 p.m., "there is basically no rest time at noon", and often there is no time to eat lunch. The wife wondered, "Although I like my country very much, Ecuador is not so good, why so many Chinese come."
There are also people who spend Ecuadorian interest directly at home. Zhang Xiao, a Shanghainese, transfers nearly $300 in interest to his current account every month, which can be accessed wherever he can swipe his VISA card or Master card, and Zhang Xiao calls this part of his income "stable happiness". She posted her experience on social media, and the comments were filled with people who asked her to "save money".
On social media, more people share their lives with monthly interest. Some people receive thousands of dollars a month and live directly in the wealthy area of Quito; some people directly post the amount of bank interest received and "receive 2000+ pensions in advance"; and some people check in Ecuador's tourist attractions every day, from cathedral to islands, from volcanic hot springs to tropical rainforests, although "pie does not fall from the sky, but Ecuador (will fall)".
Since 2023, in order to pursue a deposit interest rate of 4%, many deposit special forces have traveled to countless cities in China to save money across provinces. Obviously, now the "transnational deposit special forces" have appeared, and some have extended the boundaries of deposits to the other side of the ocean.
▲ Ancient buildings in Quito, flank of the National Vow Temple. Photo / Courtesy of the interviewee
Flee to high ground
Behind the continuous flashing and moving of assets is people's anxiety about the shrinkage of assets. While traveling thousands of miles to find a place to settle for money, he is also looking for a habitat for himself.
Zheng Yucheng has drifted north for many years, and five years ago, he came out to work alone and became a freelance designer, nesting in a partition outside the Fourth Ring Road. At first, there were still a few projects at hand, and he could earn more than 10,000 yuan per month on average, but later major companies reduced costs and increased efficiency, reduced advertising and other businesses, and Zheng Yucheng's work began to be intermittent, sparse, and there was no income for a few months.
The body responds more honestly and directly to anxiety. When his income was unstable, Zheng Yucheng found that it was becoming more and more difficult to sleep, and his body began to be uncontrollable frequently, first in his big arms, the muscles on the inside of his arms would contract and tighten sharply, stiff like two dead branches, and then his knees, which began to tense as well, and his legs sank as if they were filled with lead. The muscles were tense for longer and longer, and for many nights, Zheng Yucheng could only sleep for two or three hours. He went to the doctor and was diagnosed with depression.
During the epidemic, his parents also had some minor health problems, and Zheng Yucheng decided to simply return to his hometown of Anhui. So, he packed a simple bag and a lot of medicine for depression and ended up drifting north.
In March 2022, Zheng Yucheng saw an ecuadorian immigration sharing post. In his opinion, this is almost a country of immortal immigrants: a democracy, using the dollar, and most importantly, interest rates on bank deposits are as high as 8%, credit unions are even higher, some even more than 10%, and the success rate of immigrants is almost 100%.
One of the most universal strategies is investment immigration. As long as you deposit 46,000 US dollars (100 times the local minimum wage, equivalent to 320,000 yuan) in an Ecuadorian bank at one time, and make a fixed deposit for two years, you can get a two-year investment visa, and after two years, you can freely access the principal, and then live in the local area for 21 months, you can obtain local permanent residency. During the fixed deposit period, no matter where the person is, he can get interest every month, which is equivalent to "a high-interest deposit and a free green card".
On the day he saw the post, Zheng Yucheng contacted the agent of Ecuadorian investment immigration and prepared to operate. Not long after returning to his hometown, Zheng Yucheng sold his wedding house, and the money from the sale of the house happened to be saved in Ecuador.
Those who choose to deposit to Ecuador have been hurt by the shrinkage of their assets to a greater or lesser extent. Li Meini was originally a math teacher in a tutoring institution, but in 2021, the double reduction policy was implemented, and the number of students in the tutoring institution was greatly reduced, and Li Meini's salary also shrank. She switched careers to a private company in the oil industry, but then ushered in home office, the company must punch in offline, otherwise there will be no salary, in January, the time to work is only ten days, and she can only receive a basic salary of more than 2,000 yuan per month, and the disposable income is equivalent to directly "cutting most of the waist", this situation has continued intermittently for more than a year, "you can't see the end at a glance".
There is no hope for financial management, Li Meini invested in A-shares two years ago, but just after buying it, it began to fall, and when it just fell, she was a little distressed and didn't want to cut the flesh out, but now, "I can't get out at all", and the investment of more than 100,000 yuan has lost 30,000 or 40,000 yuan. So, she and her husband wanted to find a visa-free country to relax.
In 2016, China and Ecuador established a comprehensive strategic partnership, and Chinese citizens can travel to Ecuador without visas. Li Meini was moved, and after learning more, she found that Ecuador's deposit interest rate was so high that she could still get a green card, so she simply applied for investment immigration.
At the same time as assets have shrunk, people's sense of security has also become thinner, and the stories of bank crashes in individual villages and towns have further exacerbated people's anxiety.
However, for people in China today, the interest rate of 8% is still a distant dream. According to Beijing Daily, near the end of the year, the third round of "interest rate cuts" in 2023 was ushered in, and the five-year listed interest rates of many banks were further reduced from 2.25% in September to 2.00%.
The era of high returns is gone, and even the "Living with Interest" group on Douban has changed the lazy style of eating interest, and now the posts have become wailing for the falling A-shares and funds, and "Living with Interest" can no longer be reached.
And the emergence of Ecuador has made this dream possible again. In 2000, when Ecuador suffered from the national financial crisis and hyperinflation, it abandoned its national currency and switched to the US dollar, and after losing the right to issue currency, banks and credit unions raised deposit rates in order to attract more investment.
The high interest rate on deposits is compensated for by higher interest rates on loans. Banks use their deposits for lending, and local interest rates are as high as 20%.
In order to ensure safety as much as possible, the bank insures large deposits of more than $32,000, and if the bank fails to come up with the money, the insurance company will pay the depositor $32,000, and "the probability of both the bank and the insurance company going bankrupt at the same time is very low."
It's like a classic scene in the movie, when the flood is raging, restless people flee to the high places, and in the eyes of some, Ecuador is that high place.
▲ The statue of Our Lady in Quito, the capital of Ecuador. Photo / Visual China
Trek to the deposit
The problem of cross-border deposits lies more in the flow of money and cultural differences.
If you are in Ecuador, you can directly prepare a letter of recommendation, identity and other materials to open an account with the bank, even if you are in China, you only need to open a power of attorney and entrust an intermediary in Ecuador to help operate.
The whole process seems simple, but in the actual flow of such a large amount of money, problems may arise at every link.
The hardest thing is to transfer the money out, "the money out is a victory". Zheng Yucheng entrusted an intermediary to help him open an account, and he went to the counter of the Agricultural Bank of China in July 2022 to start transferring money. The mainland has a limit of 50,000 US dollars per year for personal overseas remittances, and Zheng Yucheng thought that the money he wanted to transfer was just within the limit, and it should be easy. But when I went to the counter, I found that it was more difficult to remit the money than I imagined, and the bank "stuck the foreign exchange money very hard", Zheng Yucheng showed the salesman almost "all the materials that should not be given", and even handed over the contract signed with the intermediary, which took half a day, and finally reached an agreement: you can't transfer all at once, you can only transfer 9,000 US dollars at a time.
It took four or five months to transfer 9,000 dollars a month, and it took 46,000 US dollars to be transferred. Despite the twists and turns, Zheng Yucheng's transfer process is not the most difficult compared to other friends.
Zheng Yucheng has a friend who chose to open an account in Ecuador in person, and his parents stayed in China to transfer money. As a result, in front of the bank counter in Ecuador, I just couldn't wait for the money to arrive, and I called to find out that the domestic bank would not allow the transfer, and the domestic bank pulled out a long list of risks, and Ecuador was on the list, and the list meant that it was risky to transfer money to this country, and "it could not be transferred".
But as long as the money is still in the country, there is always a way. Usually a bank can not be transferred, you can transfer the money to another bank in China, and then transfer it to a foreign country, if it is not possible, change a few more banks, Zheng Yucheng later summed up the experience with people who have successfully operated: commercial banks are the easiest to transfer out.
Intermediaries have more ways to transfer money, but they can also be the riskiest part.
If you want to entrust an intermediary to open an account and transfer money to an account in Ecuador, theoretically, the intermediary can freely move the money in the account, "if you meet a scammer, the money will be gone". Li Jinglin has dealt with more than a dozen intermediaries on the Internet, added them to the intermediary WeChat group, and squatted for more than half a year before selecting an intermediary, "You must choose a very trustworthy one."
And even if you make it to Ecuador, it's not easy to deal with Ecuadorian banks, where people seem to have a "very good attitude, but they just don't do anything."
When Li Jinglin was traveling in Ecuador, he found that the online banking could not be logged in, he went to the local bank to handle it, the service staff was very good, and greeted him with a smile every time, and the business manager has been patiently explaining and comforting. Every local waiting in line also has a friendly expression on their faces, "don't rush and take your time". Li Jinglin's experience was very good, but he went back and waited for a few days and found that he still couldn't log in, he went several times, and each time he was friendly, but the problem was not solved.
Until now, he still can't log in to his online banking.
Mr. Zheng, who had lived in Ecuador for a little longer, found that the problem might be because the process was too cumbersome. He also encountered the problem of not being able to log in to the online bank, and ran to the bank and waited for two days before the manager found the problem: there was a problem with the user name, the account was registered with a passport, and the English of the passport was capitalized, "It is estimated that the bank teller was negligent when entering it at that time."
But figuring out the problem is only the first step. If it is placed in China, it is enough to change the password, but the manager said that he has no right to change the password, and he has to ask the headquarters for help. In the end, I had to re-register for online banking, and the process was all over again, and it took four or five days to solve the problem.
Banks are just a facet and there is no rush in Ecuador. Po has lived in Ecuador for more than ten years, and he found that life there is like "China in the 90s", in China, one ID card can access the information of multiple systems, all systems and data are interconnected, but the various systems in Ecuador do not seem to be connected to each other, you need to personally go to various institutions and departments, and prepare the required materials one by one.
For locals, multithreaded work is almost non-existent, and work doesn't seem to be the most important thing. Ah Bao shared his weekend party with locals on his Douyin account @阿宝在South America, and he asked his friend what was the most important thing, and his friend didn't want to think about it, only answered: football and beer.
▲ Locals are exercising. Photo / Courtesy of the interviewee
Living in this country is not in a hurry, things have to be done slowly one by one. Bao's pace of life has also changed, he started a foreign trade business in Ecuador, originally he would make a busy work plan for himself every week, a single business "oral negotiation today, payment tomorrow, order the day after tomorrow", but the actual situation is usually that today's oral negotiation is good, and the money can arrive in this month.
As a result, Bao's work plan slowly changed from a daily arrangement to a monthly arrangement, and "it was useless to be in a hurry".
Crumbling heights
Today, Ecuador does not seem to be the best solution to avoid flooding, because it is unclear whether or what to pay.
Prices here are higher than expected, and if you want to live a middle-class life in the local area with interest, you have to be very economical. For most people who live with interest, "not moving the principal" is the most basic principle, and Zheng Yucheng is trying his best to abide by it.
Except for what can be produced locally in Ecuador, everything else is expensive. There are no factories in Ecuador, only agriculture, so the only cheap things are tropical fruits such as beef and bananas, and the rest of daily necessities are imported. When Zheng Yucheng visited the mall, he was taken aback by the price of daily necessities, which cost $13 for ordinary rolling paper, more than $20 for sunscreen, and $14 for 150ml shampoo.
▲ Bananas are the most common food in supermarkets. Photo / Courtesy of the interviewee
In order to save money, Zheng Yucheng rarely eats out, and usually chooses a cheaper vegetable market near his home to buy vegetables.
Due to the limit, there is still a part of the deposit in China, and the monthly interest received cannot fully cover all the living expenses, and Zheng Yucheng is sometimes a little anxious. In order to save money, he plans to move to a lower rent house in the future, and Spanish classes may also be suspended.
Although Li Meini transferred all her savings to Ecuador, the interest she received was still not enough, so she and her husband registered a business license just two months after moving to Ecuador, and worked intensively to learn Spanish in preparation for the opening of cram school.
Li Meini remembers that when she first got off the plane, there were few high-rise buildings in front of her on the way from the airport to the city, and it looked "very unprosperous", even after living for more than a year, she still felt that Ecuador was "dilapidated".
Others travel to Ecuador to save money in order to jump higher. This was originally a Spanish colony, so it is easier to immigrate to Spain from here, many people use Ecuador as a springboard, Li Jinglin is one of them, his final destination is Spain, he plans to get permanent residence in Ecuador, directly apply for Spain's non-profit immigration program.
In Maugham's novel, Tahiti (Tahiti) in the South Pacific is a free, innocent enclave where countless people bound by life, urban pressures, and moral shackles have fled from Chicago to those who are already in Ecuador, who have physically arrived on their own island of Tahiti, but who seem to be still living in Chicago.
In January last year, the number of people coming to Ecuador suddenly became extraordinarily large, and the number of tutors increased tenfold from three or four people, and many people sent their children to tutor in the hope that they could quickly learn the language and keep up with the classes in private schools.
There are also Chinese who came to live in Ecuador in the early years, and they also send their children to her cram school, and those children go to public schools to come to Li Meini to tutor in mathematics. Ecuador's education level is not as good as China's, "the third and fourth grade mathematics is equivalent to the level of China's first and second grades", so that children and Chinese learn mathematics, "do a better job in mathematics, physics and chemistry", and later can be sent to the United States, European countries to study in universities.
▲ The Chinese who walked the line to the north. Photo / Courtesy of the interviewee
As more and more Chinese arrive in Ecuador, the Chinese have also demonstrated a strong ability to transform the local area.
In Ecuador, for example, the variety of businesses has become more diverse. Bao remembers that for more than ten years, there may have been only two or three Chinese restaurants, but since 2023, two or three more have been opened, and the forms are more abundant, some people have launched an all-you-can-eat buffet for $6, "there is no such form in the local area", and some people have opened homestays on several floors.
Even the locals began to roll up. Zheng Yucheng found that on a street outside Carolina Park, recently suddenly a group of Chinese began to set up stalls to sell snow girls, at first there was only one, and now, a street less than a kilometer has been crowded with six or seven, and locals have also begun to put up, "roll each other", all sell snow girls. Zheng Yucheng inquired with a familiar stall owner, a Xue Mei Niang one dollar, if she sells well, she can earn more than 100 dollars a day, Zheng Yucheng sometimes wonders "do you want to sell it yourself".
▲ Local Chinese restaurant. Photo / Courtesy of the interviewee
But the "fierce" competition became somewhat quiet from the 8th. According to Xinhua news agency, the drug lord, alias "Fito", may have escaped from a prison in Ecuador on January 7. Immediately after the 8th, riots broke out in six local prisons, and several prison guards were detained by prisoners. President Noboa declared a 60-day state of emergency in Ecuador on the same day "due to serious civil unrest".
Zheng Yucheng saw that the people on the street were coming out of school and company to go home, the expression on his face was a little worried, and his Spanish class was also stopped, "I don't know when (class) will be held again". News of riots began to circulate around the country, such as riots in Cuenca, prison guards being held hostage, "considered the safest city in Ecuador", curfews were imposed throughout the country, and soldiers patrolled the streets with guns in their cars.
Law and order problems seem to be the main reason for dissuading people. Li Jinglin originally went to Ecuador with the mentality of investigation, and if it was appropriate, "the whole family would pass". He lived for two weeks in Guayaquil (the largest city in the region), where there were many refugees from Venezuela, and the law and order was very poor, as soon as he turned on the TV, there were one crime after another, and Li Jinglin did not dare to go out every day, "and it was not ordinary theft and robbery, it was all shooting and murder", one case after another, "there was no end to the broadcast."
Li Jinglin felt that there were many people robbing money and stealing mobile phones on the streets of Ecuador, and he did not dare to take out his mobile phone to look at it even if he did not recognize the way outside, and every time he took his mobile phone, he had to look around vigilantly, "I look like a thief." Once, Li Jinglin was walking near the embassy, it was still morning, and he was also walking on a big road, but a local man riding an electric car stared at him for a long time, and then passed him back and forth three times, "drive over and over, and then find a chance to start", Li Jinglin was so frightened that he was stunned in place and did not dare to move.
▲ The police arrest the robbers. Photo / Courtesy of the interviewee
Now, Zheng Yucheng is also starting to worry a little about the safety of his funds, he just started to run the self-media some time ago, and wants to help others make some money with immigrant visas, and now he has just earned more than 100 US dollars, "The political situation has become like this, and it is a disaster for this (immigration industry)."
But the body is the most honest, Zheng Yucheng originally stocked up on a batch of lorazepam tablets before going to Ecuador, but even now when the political situation is turbulent, he has never had insomnia, except for eating three pills at the beginning of jet lag, he has never moved again. In the future, Zheng Yucheng plans to transfer some of his domestic money to Ecuador, and strive to make the interest cover all living expenses.
He is the one who does not hesitate. Zheng Yucheng is glad that he sold the house in 2021, "Compared with those who sell their houses now, it has been at least a year old, and it is worth it."
▲ Night view of Ecuador city. Photo / Visual China
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