Bolthole On A Budget

Amongst the responses International Man received from a recent article regarding internationalizing oneself, we received the following question from Joe MI:

“Should someone who can’t afford to take multiple trips just forego the thought of expatriating?”

This brings us to a question that is seldom addressed regarding internationalizing – that many of those who are seeking a more promising life elsewhere are hampered by minimal finances.

However, my advice would be the same as it would be for an established investor who is seeking to preserve his wealth, while assuring greater personal freedom for the future. If you perceive your present country to be a dead-end for yourself and your family, leave. Do not sacrifice your future because a move seems daunting. Figure out a way.

That said, if you are limited financially, here is a basic plan to get you going:

Decide how far you can (or are willing to) go

We will look primarily at North Americans here, since people in Europe who wish to move have numerous options. It’s a bigger leap for North Americans.

If funds are limited, you will not want to de-camp to, say, Chile or Thailand as it’s expensive to get there from North America or the UK (where most of our readers are based) and if you travel back and forth regularly, the costs can add up quite quickly. That doesn’t mean they are bad, but it’s important to keep this factor in mind.

Many people choose the Caribbean and, if you have marketable skills, you could pursue a job on a Caribbean island. There is a long tradition of this in the Caribbean and most islands routinely deal with thousands of new people each year. Those islands that have flirted with socialism (Jamaica, Trinidad) tend to be limited for opportunity and those that are tied to the US (Puerto Rico, American Virgins) are likely to be caught up in the next stages of the depression almost as badly as the states themselves.

Most of the smaller islands are quite poor. Perhaps the best opportunities can be found in the British Virgins, the Bahamas, the Turks & Caicos Islands and, possibly best of all – the Cayman Islands.

Many people who are on a budget tend to say, “That’s out of our league economically.” Not necessarily so. If you are retirement age and have limited funds, this would not be a good choice. But, if you are still in your working years, while it is true that your day-to-day costs might be higher than your current location, don’t forget that your income would be appropriately higher as well. This, added to the lack of taxation, means that you can save much more than in other places like Canada, the US or the UK.

Central America is also a good possibility for people on a low income. It is more difficult to set up a job in advance here, but Central American companies are always seeking capable people. The best choices are Costa Rica and Panama; however, if you are prepared to venture a bit further south, Ecuador is ideal for low-budget expats.

Of course, sometimes it might make sense to stay put.

Just recently, I corresponded with a woman in her late 50′s who was considering Ecuador. Her business just went belly-up in Albany, New York. Her husband is older and can’t work. She is essentially starting over with zero money. I had to advise her that Ecuador or any of the other Central American and Caribbean countries would be too much of an adventure for them, especially with limited funds. Still, she was fearful of remaining in Albany, as she sees a future of riots in the city, plus food and fuel shortages and possibly a loss of heat in the winter. She has family in South Carolina in a rural area with many farms. I advised her to make a car trip to see her family and to seek employment while she is there.

This situation is far from ideal. She would still be subject to an increasingly oppressive government, a rapidly developing police state and a risk of job loss over the next few years, but this is a person who has virtually nothing. South Carolina farm country is a definite improvement over Albany.

The key here is for you to figure out what you can do. If it’s an improvement, seriously consider it.

Research your choices

No matter how strapped you are, you probably have a computer. You can spend your non-working hours on the internet researching destinations. The internet is an incredible source of information. It costs you nothing and it is far more informative than spending your evening watching “Dancing with the Stars.”

In your research, pursue types of jobs available in a given destination. Also, investigate climate, crime, cost of living, wage levels, etc. and develop a chart. Be sure you include important needs of all members of your family. (If your daughter is twelve and is absolutely wild over horses, you might not be able to keep her spirits up if there are no horses where you are going, whereas, if it’s merely a casual hobby, she can get another hobby.) Find out if it’s possible to take the family dog there. In the Caribbean, English is spoken everywhere. In Central America, you can get by on minimal Spanish in some places, not in others. Find out before making a decision.

If you can afford it, visit the country before going. If you do, do not make it a vacation. While there, act as if you live there. Go to the grocery store and go through the motions of shopping. Make notes as to how much a week’s groceries cost. Visit a hardware store and see what’s available. Look at used cars. Seek out cheap places to eat. And, very importantly, talk to the locals. Make up your mind as to whether you’ll be comfortable living next door to them. (It may not be as difficult as you think. I know hundreds of people from British Columbia who found the Caribbean easier to adapt to than, say, Texas.)

Liquidate

Sell everything you can and travel light. Assume you will not be returning. I am very conservative and would never make a move without six months spending money in my pocket, but, over the years, in my businesses, I have hired hundreds of expats who had less than a month’s expenses to their names. They all survived the transition and the biggest hardship was invariably the inability to afford a used car right away.

Resolve when to go

If you will need to work immediately upon arrival, you probably cannot control when you go. You go when your work permit has been processed by the local government. If you are a retiree, you have more freedom. You can plan your destination and then, when it is most convenient to you, you simply leave. Still, you will want to complete all the above steps in advance. Do not wait until the government has destroyed your 401 K or you may lose the ability to go.

Above all, remember, if you believe the things you value most in life are going to be taken away and your quality of life will soon be seriously diminished, do not simply accept it. A serious move can seem daunting, but your freedom and future are worth the effort many times over.

Tags: foreign real estate,