Moving to another country is a hassle and takes planning. Actually living in another country takes commitment and even more planning.
Once the initial excitement of planning a move abroad and starting a new life has passed then the hard work begins. Preparation is vital. When you arrive in another country and start to settle down euphoria is gradually replaced by a realisation that you are now very much on your own.
The ‘Spirit of fair play‘ is out the window, you have a new found respect for decent, affordable healthcare and why, oh why did you not fully appreciate teachers back home?
You should give serious thought to how corrupt a country is prior to any move abroad. There are several instances where a little ‘grease‘ will get things done quickly and conveniently. However, many countries suffer from systemic corruption not only at street level but right up the food chain and as such the entire system can be against all but the most wealthy and influential. As a foreigner you cannot fight this, you can only vote with your feet and move to another country.
Fail to Plan, Plan to Fail.Common sense
Key areas to focus on and get right are:
The vast majority of individuals who move abroad are older folks retiring from work and seeking a well-earned relaxing lifestyle in their latter years. The advancement of modern medicine means people are living longer and recovering faster. Similarly, most people are less ignorant now about the importance of diet, exercise and moderation of evils such as alcohol and tobacco.
Quality of life is important. Many people retire abroad for this exact reason. To live in an area with likeminded people, enjoy a warmer climate, stay active and reduce stress. Some even use it as a great excuse to get away from the extended family! 🙂
Living costs money. Living longer costs more money. More on this to follow…
The second bunch of individuals working abroad are those working for international corporations, embassies and institutions. The majority don’t have much say in where they are posted or for how long. Most will benefit from in-house relocation experts or at the very least have some assistance when moving. Private healthcare, Accommodation, Schooling and Life Assurance is also usually provided for such individuals & their immediate family.
These are the dreamers and it’s OK to dream. People who are fed up with corporate BS, those looking to de-stress, seeking a higher purpose or meaning to their lives, a desire for their children to grow up in a less narcissistic world where greater emphasis is placed on life values and not gadget values. A wish to do some good, improve the environment, blog/vlog about their life as a Digital Nomad, start an online business and work remotely from anywhere there’s a beach, embrace Buddhism and hug trees?
Free-thinkers are most likely to move abroad and fail, or at the very least become disillusioned. Of course there are many shared stories of Digital Nomads enjoying a great new life unchained from a desk, reliant on their initiative and exploring the world – but these are the few, not the many.
Free-thinkers are most at risk from over indulgence, substance abuse, be tempted by fast, quick money (nearly always illegal) and running out of money. Don’t be one of them!
Drum roll… It costs money to live abroad – and more than you imagine!
A will share with you what a very wise friend and mentor once told me:
Think about how much money you need to retire, all the costs, life expectancy, social expenditure, travel, healthcare, luxuries, food, bills and everything else. Be conservative and round-up not down. Really think about just how much capital and income you need –
Then double it!
If you think this is an exaggeration then you’re definitely on the wrong website.
Why do you think in the UK Pensions have changed from traditional ‘Final Salary’ schemes (guaranteed) to ‘Money Purchase’ schemes (non guaranteed)? It’s because guarantees cost money. Very few Pension Schemes are now of the traditional guaranteed type – save Government, Civil Service and such like – surprise surprise!
We’ve all heard the stories of corporations raiding pensions to sure-up the balance sheet, missing millions, pension scandals and scams where people have lost their entire pensions.
If you have a pension ‘pot’ then no matter what its size, treat it with care, don’t take undue risks, limit your expectations and use ‘pension targeting’ to gradually lower risk exposure as you near retirement. Any pensions can be your new best friend!
Have you been offered a ‘job’ abroad? It might be unfair of me to differentiate between ‘job’ and ‘career’ but in my experience there is a big difference. There are many ‘jobs’ available abroad and I am sure many are great opportunities. Some on the other hand are short-term contractual and/or offer very little security, no salary (commission only) and little ongoing support save a flight ticket back ‘home’ if you’re lucky.
This type of job offer might be acceptable if you take the view that it is merely a stepping stone into a new life abroad. You have to start somewhere right?
It is crucial that you consider worse-case scenarios with these types of jobs. Dependent upon your level of expertise, success, entrepreneurship and mindset it is totally possible to change jobs and continue your life abroad in a different role. This is why it is always wise to network – just in case!
Taxes & Residency
There are numerous tax implications when moving abroad. Some are cast in stone, some fluid and some are dependent upon your deemed tax status in the eyes of the authorities both at home and abroad (HMRC in the U.K.). And yes! things often change and not usually in your favour. Worthy of note are:
- U.K. Basic State Pension can be fixed in some countries and indexed-linked in others.
- In some countries you need to pay tax on income, pension and capital gains.
- Your estate can end up paying inheritance tax twice – the country where you reside and also in the U.K.
- If you retain your home (main residence) in the UK yet live abroad and subsequently sell it Capital Gains Tax (CGT) is applicable.
- Returning to the U.K. does not give you access to free NHS treatment automatically.
- Be aware of the differences between Country of Domicile and Country of Residency. And of the implications and meaning of Residency vs Ordinarily Resident.
Investments & Property
This always proves to be a very emotive subject. Many successful property investors abroad will shout from the rooftops how well they have done for themselves. Similarly, you only hear about the successes made by stock market investors. Both can prove lucrative and both can prove catastrophic.
When moving abroad and living in another country you will encounter many investment opportunities which at face value seem too good to be true. They are! The vast majority of investments (including property) are subject to very loose regulation (if any) and outside of highly regulated jurisdictions you are in the Wild West!
Of course there is a valid argument that if you buy property in your favoured destination then you will be free from greedy landlords and have a place that you can call your own. If you are absolutely 100% committed to that location, you are familiar with local building and planning laws and have some protection from mass overdevelopment nearby then great – go for it! You should also be confident that there is an active resale market should you ever decide to sell.
It is important to consider personal growth and that of your family. This includes education for your children, learning new skills, taking up hobbies and having interests that get you and your family outside of the home. New challenges can help inject life into an otherwise mundane existence and help forge new friendships and connections with likeminded people abroad.
All too often once the initial excitement of moving abroad has wained and the realities of day-to-day life sink in it is all too easy to become bored and feel like every day is the same as the last. A perfect scenario for the elderly who are happy to watch the world go by, but not so good for anyone who envisioned an active, vibrant and interesting life abroad.
If you are moving abroad with children then what’s in their best interests is crucial. It is also extremely important that they too are happy. Younger children can be content living anywhere new, where they can explore the beach, swim in warm water, play outdoors most of the day and not be fixated on smartphones, iPads or T.V.
Isn’t it great that your children are more Huckleberry Finn than Super Mario?
It really cannot be stressed enough how important it is to seriously consider what’s best for your children at any age. Younger children can easily settle in a new country, learn the language lightening-quick and before you know it, they are just as local as the ‘locals’!
Problems can occur when moving abroad with older children. They will have already become accustomed to a certain way of life, a certain level and standard of schooling and access to technology. If you are moving to a country where there is an excellent standard of education (there are excellent schools abroad that in many aspects are far superior to anything state-run back home) then great. Older children are likely to excel and achieve results that will open the doors of many other great colleges and universities around the world. Perfect! (Just be prepared to pay a lot of money for it.)
If you are more holistic and have decided that you wish to live on a beach (or similar remote location) and bring up your children in a less materialistic and narcissistic world, this is great too. Just don’t expect your children to achieve stellar results good enough to get them into a respected college or university.
The world is a very competitive place. Why do you think the children of wealthy Asians are pushed from a very young age to excel in everything? It is to get into top universities, be successful and strive for wealth. Anything less than A++ is deemed failure!
Is this a healthy approach? Hell no! (I don’t think so anyway) – but Wake Up! and accept the fact that this is what your children will be up against.
You have probably had the opportunity to go to a school where the teachers actually turn up? You have probably had access to steady job opportunities? a good career? A library? Theatre? Museums?
Just because you want to live on a beach or other remote location don’t think for one minute that it’s the best thing for your children. Older children especially need access to a wide variety of educational resources in order to grow and decide for themselves what kind of life they want. We can’t all be hippies.
Physical and financial security for yourself and that of your family is vital. Living abroad is fraught with danger. Of course every single country has its fair share of dangers, pitfalls and scams, but oftentimes foreigners living in another country are more at risk.
A few of the most common issues arise from:
- Investment & Property scams, poor financial advice & weak investor protection.
- Hacking, Credit Card Skimming, Phishing emails, Malware.
- Drugs, Weapons, Corruption, Bribery.
- Home invasions
- Petty theft
- Kidnap for ransom – yes! seriously.
- Harassment (Physical, Sexual, Financial)
- Religious, Political, Cultural & Racial tensions
- Ignorance (Local laws & Regulations)
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