Millionaire Expat. Andrew Hallam

Чтение книги онлайн.

Introduction

      Our taxi crawled along the 3‐lane highway. But from what I could see, Egyptians don't care much for lanes. Five cars squeezed, side‐by‐side, along a road designed for three cars abreast. I wondered if there was an accident ahead or whether this was normal mid‐afternoon traffic. We were on the outskirts of Cairo, Egypt, driving into the old city. “Hey, check this out!” my wife laughed. Ahead of us, to our right, a bus driver yelled at a guy in a car. It was hot, and our taxi's air‐conditioner was on its last legs. But at least now we had entertainment to keep our minds off the heat and the clogged traffic jam.

      Tempers soared between the two drivers. And when the clogged traffic stopped, each guy sprang from his vehicle to wage a verbal war. Fueled by anger, they gesticulated and spat as they screamed at one another. I thought a physical fight would start. But before it could, passengers in the bus began screaming at their driver because, in his rush to jump from the bus, he had forgotten to pull his emergency brake.

Traffic was now moving, and the driverless bus gained speed on the downhill grade. The driver then sprinted for his bus, barely getting to the door and jumping in. He slammed on the brakes and averted smashing into a stopped car ahead.

      Almost every traveler has a story (or ten) to share. The world, after all, is filled with wondrous sites, people, cultures and quirks. But expats witness far more than most. When choosing to leave their home countries, they enter other worlds. Some prefer ultra‐modern cities like Hong Kong, Singapore or Dubai. Others seek African, Asian or South American cities with a bit more grit. These often contrast old ways of life with a growing modern touch. You might see a woman in Hanoi, Vietnam driving a top‐of‐the line Mercedes Benz, followed by a guy carrying a fridge on the back of his scooter. Plenty of expats move from place‐to‐place. Others settle down, sometimes moving to Europe from North America, Australia, New Zealand or South Africa.

      But expats often face financial risks when moving overseas.

      You might wonder what I'm smoking if you're on a cushy expat package. After all, there's a large league of expats in Southeast Asia and the Middle East who make bucket loads of cash.

      They left their home countries to teach at international schools or work abroad in industries such as banking, information technology, oil, cosmetics, pharmaceuticals, and shipping. Many work for firms like Coca‐Cola, Facebook, American Express, Johnson & Johnson, Google, Microsoft, and Exxon Mobil.

      Not all expats (including millions in Europe) make massive sums of money. But even those that do face financial risks.

      In 2003, when I left Canada to teach in Singapore, I kissed good‐bye to a defined benefit pension. Had I continued with my former job, I could have paid off a home, contributed modestly to investments, and received pensionable income for life.

By comparison, most expats run naked. Many don't realize they would need more than a million dollars in the stock market or multiple mortgage‐free rental properties just to equal, for example, the retirement benefits earned by most public‐sector workers in the United States, Britain, Australia, or Canada.

      Such benefits are globally waning. But they're still a reality. Governments offer additional monthly cash: Social Security (for Americans), Canadian Pension Plan for Canadians. In fact, most developed world countries offer retirement benefits for their respective home‐country workers. But it's different for expats. Few expats contribute to their home‐country social programs once they've moved abroad. Without maximizing contributions to these plans, they can't fully open their mouths to such morsels once they've retired.

      One of my former colleagues learned this the hard way. She's American. But she taught overseas for most of her career, so she contributed little to US Social Security. While working abroad, she earned a lot of money. She furnished her large apartment with fine carpets. She bought beautiful jewelry. She enjoyed flashy holidays—often flying business class to five‐star resorts. Unfortunately, she didn't save much. Today, my friend is back in the United States, renting a room in somebody else's home. She's 73 years old and struggling far below the US poverty line. As Warren Buffett says, you only know who's swimming naked when the tide goes out.

      In sharp contrast, I also taught with a couple that retired with about $5 million in their investment account. That's a lot of money—especially for teachers. They paid for their two daughters to go to college. They own a mortgage‐free home. They lived well as expats and retired fully clothed. But they were great planners.

In this book's first two editions, I described the most common investment products sold to expats in Asia, Africa and the Middle East. These rank among the world's worst financial schemes. They pay eye‐watering commissions to the folks who sell them, which is why they're so prolifically sold. Over the past few years, I've given plenty of talks in Europe. With СКАЧАТЬ