When Kris was young, her family moved all of the time. Her father was in the Air Force, so they were rarely in one place for long. I, on the other hand, have always lived within the same 25-mile radius. For 41 years. More and more, I feel the itch to live somewhere new, if only for a little while. In fact, I wish I’d lived elsewhere when I was younger.
But moving (and living in adventurous locations) comes with a cost. In fact, A.M. wrote last month asking for advice on just this sort of situation. She has a chance to live in another country, but she’s worried about the financial implications. Here’s her story:
I’m planning what will be a big move — both literally, and financially — but the money side of things is giving me some concern. I’m 25, self-employed, debt-free aside from my student loans, and have built up around $15,000 in savings. Now a great career opportunity has presented itself, involving a move to a new country: I’d be moving from London to Los Angeles.
Because I’m freelance and would continue all my current contracts, it wouldn’t involve any drop in my income (only increase my potential for future earnings), but it would involve a lot of new costs; not just one-off immigration and relocation, but new monthly expenses. I would have to rent a room or apartment, and then run a car for the first time (I’d need it for work), and also pay for health insurance. My savings could cover all of these expenses, but I’m a little wary of draining that fund.
On the other hand, I’m young, this is an incredible opportunity, and my job means that just one new contract could easily restore those coffers… I’m excited by the new prospects — for my career, and also the adventure. Do you have any advice that could help me manage this big change, and keep the financial side from spiraling out of control?
I think the most important thing A.M. can do is pay attention to cash flow. Cash flow is what you earn minus what you spend. If you make more than you spend, you have positive cash flow. if you spend more than you earn, you have negative cash flow. Positive cash flow lets you build wealth (even if it’s slow progress), but negative cash flow depletes your savings, and eventually leads to debt.
A.M. know she’s going to have a lot of new expenses in the future. What I want to know is how these expenses compare to her future income. It may be that even with housing, transportation, and insurance, she’s still able to maintain a positive cash flow. If that’s the case, my advice is absolutely to seize this opportunity.
But if these expenses will be more than A.M.’s current income, that changes things. If she’s going to have a negative cash flow, she’ll need to consider her priorities. I think that a small negative cash flow shouldn’t be a big concern, but if she’s losing $1,000 or $2,000 a month (or more), she’ll need to decide how long she’s willing to stick this out. How much is this opportunity worth to her?
I also think that A.M. should do what she can to keep a close watch on her finances. She should track her spending regularly in order to make sure her cash flow stays where she wants it. By keeping a close watch, she’ll be able react quickly if she does spot trouble.
What advice can you offer to A.M.? Given what she’s told us, what can she do to keep costs low? Is the opportunity to travel worth depleting savings? Taking on debt? Should she look at this as an investment in her future? And what would you do to keep costs low so she can hold on to her money as long as possible?
This article is about Ask the Readers, Choices
Do it. In life you have to be bold. Too short to be conservative. Be responsible with money and you will make it work. Get motivated and just do it!
http://www.youtube.com/watch?v=QgEU9roiUy0
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Just one thing to add: When considering the decision, remember to think about how your taxes would change.
If you move to the US, you’re subject to US income taxes. (Here’s the IRS introduction to taxation of “resident aliens.”)
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In the past, when I’ve been considering big moves, I’ve built a couple of spreadsheet budgets. In the first column I had income and expense types (e.g. salary, consulting, rent, commuting, eating out, groceries). I estimated yearly amounts (or equivalent monthly amounts based on yearly figures). Then I had a few columns of figures. The first represented my current situation, as honestly and accurately as I could. I used bills and double-checked that the resulting cash flow matched what my bank statements were showing.
Then I ran “scenarios” in the other columns. In my case, I was looking at leaving a secure, well-paid job to go back to university and do a doctorate. So my salary dropped to the value of my stipend, but my tax and student loan repayments dropped to nil, because my stipend would be tax-free. For the scenarios, I looked at things like different housing options, and reducing outgoings on things like eating out.
For me, running the numbers was incredibly useful. The combination of not paying tax, reduced rent, and a free commute (bike rather than train) actually nullified the loss in income. In fact, however I ran the numbers, I actually ended up ahead by quitting my job! Which was great, and I don’t regret it for a moment.
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Even by US standards, Los Angeles is an incredibly expensive place to live in. I would say its even worse than New York, because in New York the rents are high, but you can at least use public transportation.
Based on my experience, expect to lower your living standards a lot. Don’t expect that you will have a glamorous Hollywood lifestyle. Don’t try to live in a fancy apartment by yourself. Look for roommate(s) and look for the cheapest living situation that you can find.
I stayed in a medium-bad part of town with no trouble, I drove a beater car that never got broken into, and just made sure I got home before 9pm and never had any trouble.
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Well, whatever help your new career company can give in terms of the move itself, some kind of transport allowance, group rates on anything, tax assistance, etc…will be helpful….take it at the beginning, as later on it will be harder to negotiate. We never worked on a contract basis (only with major corporate moves)so please consider your finances and costs carefully. And when looking for a place to live, ask if your company can provide a real estate agent to steer you to safer locations to rent…big American cities are a bit different than London. You may want to take part of that $15,000 and stuff it in a lockbox of some kind…CD or some other place so it doesn’t all get spent, incase things don’t work out, you’ll have some cash to work with.
Living abroad is incredibly eye-opening, and you’ll meet people that you’d never meet stying in one spot your whole life…..GO FOR IT!!!25 and unemcumbered…perfect time to do such things.
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I think one thing you have to consider is the lifestyle change. I have never been to London, but I’m going to assume it’s a lot like most big cities. Good food, nightlife, and no need for a car to get to all of those places.
Los Angeles is going to be totally different, depending on where you live. There is great food and attractions, but you’re most likely going to need to drive to most of them.
Make sure you’re close to your work. Sitting in a car for over an hour (or two!) every day can be maddening (there’s a reason why I live in a very walkable location).
My advice: if you want to do it and think it’s a good opportunity, jump for it. But make sure to research where you live. Is paying an extra $100-200/month for an apartment reasonable to pay if it means an hour less in the car each day?
I think these are really important questions to ask yourself. If you are not happy with your daily routine, it’s going to be hard to be happy with your new city and life.
It sounds like an exciting opportunity. Let us know what you decide to do!
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Congratulations on the opportunity!
I recently moved with my partner from Australia to Switzerland. We’re so glad of the opportunity, but also have been surprised at many unanticipated expenses we have. For example, I forgot to close my mobile phone account in Australia for two months – that wasted $100! And we got hit with fees for leaving our electricity supplier before the contract ended. Similarly, we got hit with penalties for leaving our rented apartment before the contract ended. As you say, you have to distinguish between once-off costs, and ongoing costs/benefits. Just make sure to add a big buffer, because it’s quite tricky to anticipate all the things that crop up. But as Sally says, wow, you’re young, single, with good savings. It’s much harder to make the leap later, when you’ve got spouse / kids who have commitments in the home country. Best wishes with your decision!
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It’s a wonderful opportunity. Cost of living is key. Since you will be hit with three major expeditures – housing, car and health insurance — that you’ve never paid before, so be ready. What kind of self-employed insurance policies have you looked at? They’re not cheap. $15,000 is starting not to sound like a whole lot. Maybe save a bit more before you go? And what if you lost one or two of your current freelance jobs? Just go through all scenarios on paper so you can plan ahead. All in all, best of luck with this new adventure. California is gorgeous.
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Moving is expensive, but I agree: do it! I moved a lot as a kid too, overseas. A few things to consider–England is expensive and London is one of the most expensive cities in the world. While some expenses will be more, many will be lower. Food is a lot cheaper here than it is in Europe, by a long shot. Even in LA.
I’ve never lived in LA, but @Chase is correct–it’s a huge sprawling city and you’ll be spending a LOT of time in a car. The traffic is epic from what I’ve been told by friends who have traveled there.
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What an exciting opportunity. I’d say go for it, but note:
- have a plan. Know how you’re going to manage your expenses and set a goal of meeting/exceeding expenses by a certain date. Cut expenses to bare minimum at first. As a frequent visitor to the area, I think LA is an easy place to get caught up in ‘keeping up with the Joneses.’
- ask for help. check with your company, anyone you might have connections with – even secondary or tertiary – in the area (maybe you can couch surf until you get a sense of the area to know where you want to live).
- find support. there’s probably a decent expat group in LA, there may be an industry association or simply clubs for your areas of interest. Join them. The sooner you make connections, the sooner you will feel part of the community and the sooner the opportunities will start to appear.
- consider an exit strategy. I only say this b/c I don’t have a sense of how much support your company will provide. If you’re mostly on your own, know when (under what conditions) you would say “LA is not right for me.” That doesn’t mean end the great American experiment – but there are so many places in the US, I’m guessing you could ply your trade in many places outside LA – perhaps places that are less pricey or easier to live in.
Good luck! Sounds like an awesome opportunity.
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Do it.
Fortunately, LA overall is NOT more expensive than London!
See if you can have a California accountant or CFP go over your likely expenses with you, regarding health insurance, taxes, car (go used), car insurance, rent, etc. You might find that things balance out financially. You’re fortunate that as a freelancer, you won’t necessarily be tied to any particular area of the LA region for a job.
(We moved to Wisconsin from California, and found that most of our living expenses actually went up!)
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Do it- you’re 25. . .
It’s sounds like it’s just the expense/money holding you back- if that’s all it is, then just do it. It’s important to plan and make smart decisions, but money is a tool, it will come and go your entire life.
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Do it!
Like JD, I regret not moving elsewhere when I was young.
My husband did this. He moved from the Carribean to Minnesota when he was 23 with hothing but a suitcase and $200. He knew no one, just had a job. It worked for him because there are a ton of things one can do with out. He was a bit on the extreme side… he slept on the floor until he’d earned enough to buy a futon mattress in cash.. but it worked.
I plan to make up for my lack of travel when I retire… I am going to move from city to city every 6-12 months, working odd jobs or volunteering while I sightsee. Can’t wait!
Good luck, AM!
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I’ve moved city a few times, including internationally. Once you’ve paid visa fees and got yourself there the biggest expenses are the same as home – housing, transport, groceries, etc. I have a few suggestions, and good luck!
Don’t commit yourself to an expensive place or a long lease to start with. Find a reasonably cheap, safe, central, furnished apartment and use the next couple of months to explore neighbourhoods and the better value furniture stores.
Be prepared to spend on ways to meet people in your first few months – eating out, sports clubs, lessons and so on. Once you have that social circle set up that cost will decrease or go away entirely.
Make your family aware you won’t be flying home for every christmas, wedding, christening, and other event – that cost will use up your savings very quickly. And use up your vacation time – in my experience british/irish families just don’t understand the pathetic vacation allowances you get in the US and expect you can return at the drop of a hat.
Do some research on banking options and types of accounts as early as you can – they differ widely across oceans.
And lastly, there are ways to save money in the US that don’t exist in other countries and the yanks don’t even realize it! I’m talking the types of coupons referenced in the recent food post, the amount of products and competition available buying online, the sheer size of local ebays and craigslists and etsys and so on, true low cost brokerages, free chequing, the number of outlet and warehouse stores, and just huge competition in everything – take advantage of ‘em!
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- Taxes change, especially for expat freelancers! Make sure you know all about it.
- be prepared (virtually impossible LOL) for the financial and emotional complications of a partner (either one you bring with you, or one you find in your new location) — especially if your move is short-term. Their jobs and financial situations will impact you.
- This applies to family too — family is expensive to fly back and visit as often as they/you want — you may not be able to travel AND see your family, it’s an evil prioritizing choice!
- Also, no matter how prepared you think you are you will never ever be able to guess at how many hidden expenses there will be when you make the move. Just save save save before you go so you don’t have to put them on credit. Ready cash was the most useful thing I could have had on hand.
- financial products you have in one country may not be available in another, which makes saving difficult (at least I’d found it to be so). I have immense trouble, for example, using specific advice from this blog and others because great internet savings opportunities or tax free savings opportunities aren’t available in the country I’m living in.
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I grew up in Austin, and moved to NYC at 23 or so and then Chicago at 26. I wouldn’t trade those experiences for the ~$8000 I spent on all the moves (I actually moved cross country 5 times, long story). Not everything is about money but I agree that you need to be able to afford living where you live (positive cash flow).
I’d love to live internationally but my career makes a lot more sense right here, so I stay.
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Excellent advice above. Work with the new company for the help (when I moved to LA my company hired an agent to help me find an apartment and it saved me). See if they’ll get you a driving instructor too.
But if there is any way to swing it, go for it. Just living in a different country is such an incredible experience that it is worth some sacrifice. You are at the perfect age to try someplace totally new.
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Do it!
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Do it! Moving around is stressful, but fun. I moved from Ohio to Los Angeles. I loved it there. Los Angeles isn’t so very expensive when you get used to it. Getting a one bedroom apt may be out, but you can rent a room in someone’s house for ~$800/mo.
Food can be very cheap if you go ethnic. A bowl of delicious pho is something like $8.
That said, immigration is more than a one-off expense. My friends liked to joke with me that I had student loans, they had lawyer fees.
I’m living in New York right now. I miss LA.
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Go for it… even if it doesn’t make financial “sense” for a while – just make sure you can leave if it ends up not being sustainable long-term. It’s easier for you to do this now than it probably will be in the future.
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Do it! I took a job in the UK after college and it was a great experience. I met my husband, and now we both live in the States. I’d recommend:
Talking to a tax consultant in the UK, to make sure that you file the appropriate forms re: your pension while you’re living abroad.
If you’re planning on retaining a memberships or expenses from the UK during your time in the US, inquire about reduced rates. It could equal big savings.
Price shop flights so you have a realistic idea of how much it will cost you to visit your family.
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We’ve moved numerous times around the world following work opportunities. Some were no-brainers and some involved a little risk. But, having lived all over California and in London as well, personally, I see a lot more upside than downside on your move.
Taxes, food, just about everything is going to be cheaper than in London. Depending on how much you make, over time you should be able to offset the additional cost of health insurance, private transport, etc.
For instance, we can live a lot cheaper in Southern California than it currently costs us in London. The main difference for us is we get paid a lot more in the UK which more than offsets the additional expenses and taxes here.
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No way should you go. Stay huddled in London where you are comfortable and hug your 15k and cackle to it, “I’ll never risk you oh beautiful e fund!”. Then at age 50 wake up knowing you never took a chance to see more of the world, expand your business/income/life experience.
Ok, I’m being silly but I think the only option is, at 25 yo, to take what overall may be a risk (but at this stage of life doesn’t seem too big) for what should be an enlightening experience. (both financially and otherwise).
You obviously have a level head and aren’t going to go and blow your cash in bars etc as you could easily have done that in London. Your income sound secure and may go up. Really, I think you regret not going.
Good luck.
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Some (non-monetary) LA specific things: If you’re moving for a job, get a small apartment as close to your job as you can. Commuting out here is HORRIBLE. The experience when you live 3 miles from your regular 8 min commute is very different from when you’re stuck on the 10, 405, or 101 with everybody else for two hours each way.
Some areas of LA are walkable–you can get to groceries, parks, drugstores, restaurants etc. within a mile or two. You just can’t out of the neighborhood without a car.
The weather is great on the coast, as you move into the inland or the valley it can get hotter by 20+ degrees.
The Indian food is not as good as you will have been used to. Yelp may give it a 4.5/5 but they don’t know any better.
Keeping up with the Joneses is a big part of some neighborhoods here. We know lawyers who want to move to DC, even though it has a higher cost of living, because when they were living there there wasn’t as much of a push to spend on everything. There is a lot of stuff to buy out here and it can be overwhelming when you first get here. Not all neighborhoods are like that though. There’s plenty of low income folks, and we live in a neighborhood comprised of house-rich aging hippies with 20+year old volvos or first generation priuses and electic cars.
Pinkberry is awesome. Get the original. Yes, if you live around here you may say that pinkberry isn’t all that and you must try one of the different places that came after… they’re good too.
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Yes moving comes with a price. But so does living. Some people are content where they are and then become afraid to try something-be it a move or a different brand of soap! For every person that makes a major move there is another person who doesn’t know what’s in a town or area less than 20 miles from where they live. Go for it!!!
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I think I’d need all the numbers to know if it’s worth it for you. Moving across continents can be a great experience, and you’d have a job right away and opportunities for more, but one thing to be very careful about is how different everything is going to be. Since I have some experience with that (moving from France to Canada) that’s what I’ll talk about.
From my own experience, the main difference is distance. If people tell you something is “close by”, from a European point of view you might think, like I did, that it’s five or ten minute away. Think 1 or 2 hours, instead. Possibly more.
Distance-wise, what I would have considered super-far in France (so far that I only visited friend living there once a year because, you know, they lived so far!) might be your commute to work. Everything is incredibly huge.
As far as money goes, expect to lose money even if things are cheaper (which, in LA, probably won’t be the case often), as you need to get used to the value of money and the cost of things in a different currency and different location. Expect hidden costs that don’t exist in your country. Except a lot of weird things (from your point of view) to be the norm, and things that were part of your daily routine not to exist anymore.
It’s all very exciting, but it’s also very frustrating at first, and stressful in a lot of ways. So I would say, make sure you’re very prepared financially, because you don’t need more stress than you’ll already get.
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Check the tax situation: You may have to pay taxes to the U.K. as well as to the U.S.
Los Angeles probably doesn’t cost as much to live in as London — when I was in London, rents simply defied belief. You should be able to find a reasonably safe, livable place for what you’re paying now, maybe even less.
But be aware that L.A. is a different KIND of city from London. London, Paris, New York, San Francisco are of a type. Los Angeles, Phoenix, San Diego, Atlanta are a different type. You may find yourself feeling culturally famished in a vast sprawl of bedroom communities. Try to get yourself centrally located, where you’ll have access to the big-city cultural amenities — they do exist in L.A., but you have to seek them out.
One thing about finances: You won’t have to buy a lot of warm winter clothes. And heating costs are very low in winter. Those savings, however, are more than offset by the costs of transportation and health care. You will have to buy health insurance; assuming your health is good and you have no pre-existing conditions, because you’re young you should be able to get a major medical policy at an almost affordable rate, but be aware that this will not cover minor and routine costs.
Enjoy! Life goes around once. Take advantage of opportunities for new adventures. Don’t wait.
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I did it at 23 and never looked back. Those were some of the memories I cherish the most in my 53 years.
Moving to another country is an adventure and will test your limits.
Never move back until you have been there a year- six months is often the breaking point. You just push through it. Then you can see if it really is the place you want to be.
I am a bit confused. Will you be freelance in your new position or staff? That makes a bit of a difference with health care. Independent? Look for health insurance in weird places – like Walmart!
LA is a different type of city (and I have lived in ten different major cities). Be prepared for the pace- which is ultra fast.
You might consider an apartment swap….slowtraveler might be a source to start with. If you have a good “tenant”background, you might find someplace to house sit for a year. I did that for a couple who traveled all the time when I was young.
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While I don’t often post on here, I am a regular reader.
And after just doing very similar, I think I can offer some good insight into this situation.
I just moved out of Philadelphia in January. My dreams have always been to travel around the world and take photos. I felt that my income was stable enough to do this because I am single, freelance, no family, and no mortgage. While the costs of living expenses in Philadelphia are no where near what they are to London nor Los Angeles, I decided that I would travel around the world and spend a few months living at various locations that I would call a “home base”. My first adventure was a big long road trip across the US. I arrived in LA and haven’t left…for several reasons. Of course, with every move comes its disadvantages as well, which I learned pretty quickly.
1) Rent in LA is outrageous. The person who said above that LA is more expensive than NYC is definitely right. For the simple fact that living in this state is more expensive in general and as mentioned, the fact that you need to have a car and drive everywhere. I have been jumping around from place to place, living in temporary furnished places that people are renting out when they leave the city for short periods of time. It happens a lot since most of LA is in the industry. It is unlikely that you will find an apt in this city for under $1000/month and if it is under that, it’s likely a dump or in a bad neighborhood or you’ll be living with 3 other people. Roommates are not uncommon in LA so if you don’t mind living with someone, you’ll probably be ok. In addition to rent, nothing is cheap here. Though, compared to London, I would think it is about the same or maybe a bit cheaper.
2) You can’t live without a car in this city. You could, but it’s not easy (a friend tried to do it). And of course, if the day of the week ends in “day”, there is traffic in this city.
3) The aforementioned friend also just moved here from Canada and is a Canadian citizen. His biggest stumbling block has been not having credit in the United States. Without credit, you are going to have a difficult time renting an apartment, getting a United States credit card to do things that are only available in the US (Netflix, having an iTunes US account, etc), buying a car…basically doing all of the “big” things that you will need to do here. So without credit, you better have a huge wad of cash saved up to move here. If moving to LA from London, I would say that this is the biggest stumbling block of all.
But for me, the pros outweigh the cons. I think that my Canadian friend would also agree (but I will try to get him to throw in his two cents here!). Los Angeles is a great city despite the things that I mentioned. Every city is going to have drawbacks. There are so many things going on, so much culture and life, and you can be at the beach, the mountains, or the desert all within an hour. I’ve found that people are generally friendlier here than other places where I’ve lived. But the weather….oh, the weather….there isn’t much that beats it.
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LA is certainly different from London. But **IF** you have a choice about where you can live — this depends on your job and responsibilities — then it IS possible to make good use of public transportation. I know someone who does not drive and lived in LA for a year. He lived in a pretty safe neighborhood at the intersection of two major bus routes, each with frequent express buses, and it was a lot more convenient than people will lead you to believe.
There are many parts of LA and the suburbs that do not work this way, so you have to do your research carefully, but it is NOT true that living in LA HAS to condemn you to a car-based lifestyle.
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I am assuming that you will have a permanent resident visa; otherwise, you might be setting yourself up for a visit from the ICEmen who are not known for their sympathetic natures or senses of humour. The preceding comments covered most everything you need to know, except one. If your existing clients are in the U.K., you will need to consider the methods of payment will be needed. When you look at banks in the U.S., be aware that banks are like weeds here. There are tiny banks, small banks, medium banks, large banks, and megabanks. If you use one of the online payment services such as paypal.com, it won’t be a big deal where you bank.
Banks in the U.S. are chartered one of two ways. Federal charters and state charters. I would avoid banks that are chartered by the state, in this case California, and stay with federally chartered banks. Many state chartered banks have limited experience with international currencies. For the same reason, I would avoid credit unions which are bank-like institutions.
Most U.S. banks will probably not accept cheques drawn on foreign banks. The alternatives are international money orders, which are incredibly expensive for the buyer; wire transfers, again, quite expensive for the sender; online pay services that can handle transfers between currencies; cash, which is cheap for the sender up front but carries lots of risks during mailing and will cost the recipient quite a lot in bank fees to convert to U.S. dollars.
As you might surmise, I would look into the online services. I know of several that take payments in one currency, convert to another, and notify the recipient. The payment can be accepted and electronically deposited in your business account. The sender will have to pay a fee but it will be much less than the fee charged for other international instruments.
This reminds me of another aspect. Someone touched on taxes, but as a self-employed person, you need to consider the consequences for you as a person and for you as a buisness. You will have to do this for both federal, state, and local government. California is a state with an income tax entirely separate from the federal government. I don’t know if California allows local governments (city or county) to tax income but a few states do. The safest way to handle your taxes is to incorporate your business and find a good tax accountant for your first couple of years. In fact, see a tax accountant first. It does not have to be a large accounting firm. Look for accountants with CPA (certified public accountant). He or she can advise you on the best route to take and the details you will need to complete.
Taxation for legal resident aliens is the same as for U.S. citizens.
I was born in England to an English mother and American father but grew up as a dual national in America. I am in the process of obtaining my British passport, and if not for the fact my children and grandchildren live here, I would like to live in England for a while. My skills are easily transportable and like yours can be performed remotely.
Best of luck to you.
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One thing I regret is not ever studying abroad while in college. I’ve lived in California all my life. I say go for it. I currently live in LA and I remember visiting London and seeing how expensive it is!
LA traffic sucks so you should know that people who live in West LA usually stay in the Westside, and same goes for the East side of LA. To make things bearable for yourself, do research to where you will have to travel to most for work and live closer to there with a housemate/or roommate if you want to save money. If you’ve saved that much up so far, you seem to be good with your money, so I don’t think you’ll have any problem thriving in LA with a set budget.
Go for it!
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I would say yes, absolutely. Living and working in another country is a unique experience. Just don’t accumulate too much and stay away from financial commitments that are hard to cancel on short notice.
While I have not experienced the cost of living in LA (we live in Denver), I moved myself, my wife, a toddler and an infant to the U.S. from Sweden in 2008. I too, was offered what seemed like a great career opportunity (L1 visa). Our cash flow has been very positive here, but there is more to moving to the U.S. than that.
In general, life has been great here. We’ve gotten past the no-credit hassle (by paying 11%+ on our car loan for 6 months or so and depositing $500 per line to get post-paid mobile plans for example), we love the house we’re renting and the area we live in. Our kids have learned to get along in English and my wife has made some good friends. Health care has been great with our insurance.
A week ago, we found out that a decision was made by our parent company to shut down our operations. While this did not come as a total surprise, it was still the news that really changed everything. I’ll be working through June, but that will be the end of it.
This leaves us in the biggest state of flux in our 8 years of marriage. We’d like to stay here, but there’s a slew of complications. We will be out of immigration status on July 2nd. Having talked to an immigration attorney, the safest (from immigration perspective) option would be to go home, find a sponsor for an H1B visa, and then come back. Spending the summer in Scandinavia doesn’t sound all too bad, it’s just that my wife is 6 months pregnant and we’d really like to NOT have to deal with everything it takes to move back and forth across the Atlantic right now. Well, if we KNEW we could return (and preferably where to), it wouldn’t be so bad – we could just put all of our belongings into long-term storage somewhere. However, due to the regulations, the earliest I could start an employment as an H1B is October. There seems to be a lot of work for software engineers such as myself in the country, but finding an employer who’s filling to agree to hire someone who can’t work for 3+ months from now has proven to be a challenge.
The reason I wanted to write all this was to say that despite what’s happening now, we are so happy we didn’t bail out on the opportunity to move here in the first place, despite all the uncertainty that was involved. It’s been a great experience for us all as a family, but as individuals as well. I have yet to confirm this, but I’m also confident that having worked a few years abroad will give me an edge in my future career, wherever that may be.
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I disagree that it costs more to live in LA than in NYC. It costs less to live in LA than it does in Boston, and it costs less to live in Boston than NYC… therefore, by transitivity…
I also disagree that the pace of life is faster here than in other major cities. People TALK faster, but the pace of life is much slower than in Chicago or Boston. The pace of life is faster than in say, New Orleans or maybe even Houston, but in general I find it much more relaxing, so long as I don’t have a long commute.
Like I said before, the PUSH to spend more is definitely higher in LA than elsewhere. Some people get caught up in what the Jones are doing and it drives me nuts with their complaining… it’s just like JD’s friend Michael. Somehow making 200K+ out here makes some people out here feel poorer than those making <100K because of the people they associate with (and the pricy house they bought and the fancy cars they lease)– it’s like a microcosm of The Millionaire Next Door. You don’t have to let that happen to you.
You don’t have to have a huge commute. The Westside does have a fabulous bus system, and there are very walkable neighborhoods.
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I live in L.A. too and made it (easily) for four years without a car … was able to walk to work. What I’m really curious about re: A.M.’s situation is, if she’s been servicing clients from London without a car, why will she need one in L.A.? Were the London clients actually based in L.A.? Will they expect her to be on-site just because she’s in L.A.? I guess what needs to be answered first is, what is changing about the work – she’s still going to be self-employed, right?
Anyway, a lot depends on that.
I’ll agree that it’s expensive here. A decent apartment *anywhere* in the metro area is going to run, on average, $1000 per bedroom. Sometimes you end up with excellent quality of life, sometimes you don’t. A roommate can be a blessing or a curse.
When it comes to looking for a place to live, my advice would be to get here first, find temporary lodging through a “corporate” rental or through connections at the embassy/university/business, whatever, and then explore the neighborhoods closest to the clients. You can’t tell from a rental listing what the neighborhood is like. When I moved here, I gave up on ads very quickly, and just drove through town till I found where I wanted to live.
Would be interested in a follow-up!
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13yrs ago I moved from the UK to Scandinavia with my husband and 3 kids. 5yrs ago we moved to the US. Moving to America is like nowhere else! It’s a lot more difficult practically and financially than moving within Europe. There are a lot of costs tied up with the immigration process itself and as Andy@29 says, the most crushing aspect is having no credit rating in the US. The financial system here really sucks if you’re an immigrant. We were in our mid-40′s and are only just beginning to come out of the consequences of this after 5yrs. Just this week we received notification from our home owners insurance to say they still cannot give us the best rates because we’re classed as having ‘no history!’ We’re debt free aside from our mortgage but still get stung, especially on insurance because we haven’t lived here long enough. This was something we really didn’t understand before we moved, despite doing projected cost comparisons between our Scandinavian life and our US one.
Health insurance is another issue. When you’re not used to budgeting for copays for office visits and small procedures, it’s a big change. That’s on top of paying for coverage every month. Be aware that circumstances can and do change. Doctors offices can stop contracting with your insurance so you have to go elsewhere or, if you get your insurance through your job, that can change too. We’ve had 4 insurances in 5yrs!
Don’t rely on income increasing with time either, especially in this day and age. Allow a large buffer in case it drops and have an exit strategy. Keep some savings in the UK, always enough for a plane ticket home. This is the beauty of being 25 with no ties, it takes a lot less cash to exit!
That said, there’s more to life than money (although I’d recommend striving to not owe anyone anything no matter where you live. It gives you the freedom to leave on your terms.) If all you want to do in life is amass as much of it as you can then moving abroad isn’t the way to do it. But if you value experiences, go for it! You only get one life, so live it. We have and I wouldn’t trade the experiences we’ve had for all the money in the world. When I’m sitting in my rocker at 80, I’ll have a fine load of stories to tell!
Good Luck!
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If it makes financial sense, then do it!
My husband and I are moving to Denver from Houston next month so I can go to graduate school. I have a fellowship that covers all of my tuition — a nearly impossible thing to find when pursuing an International Studies degree — so I won’t be accruing any new debt for a degree that will enable me to pursue a doctorate or get a good job.
My husband is keeping his current job, and will be working from home and a cubicle he’s going to rent downtown — this should make for an interesting experience and a chance to develop some good tech contacts. Rent in Denver for the same size apartment we have in Houston is three hundred dollars cheaper. Denver also has bus and rail lines near where we live that will get us where we need to go (most Houstonians don’t believe in mass transit), so we won’t be spending money on gas and may even sell a car.
We’ve been able to sit down and figure out that moving to and living in Denver will work for us financially…but, more than that, we really, REALLY want to move somewhere new, where we can get outside without having to fight off mosquitoes the size of walnuts and where we can walk down the street without drowning in the humidity. We’ve loved living in Houston, but I’ve been here for eight years now and, frankly, my desire to GO somewhere kicked in ages ago.
Now, if only I can convince my husband that it is possible to travel Europe on a budget…
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And more having gone back to read Rob’s excellent reminder re taxes.
Every city in the L.A. metro area has its own business tax rules. The City of Los Angeles is geographically enormous and has spread out to encompass all of the territory not previously claimed by the cities of Santa Monica, Beverly Hills, West Hollywood, and Culver City – just for some Westside examples.
Beverly Hills socks it to self-employed people; you pay tax on the first dollar of income. Don’t move there. Los Angeles, on the other hand (the city of) has a $100,000 business income exception at present. That is, if your business income is under $100K you don’t owe separate city business taxes, “just” state and federal self-employment tax.
You do have to register your business with the county clerk regardless of where you set up shop. That’s inexpensive, but a pain in the arse.
I’m with Nicole, while rents are comparatively high, it’s not that expensive to live here if you know how to manage money and aren’t a “me-too” kind of person – which I’m guessing A.M. isn’t, or she wouldn’t be a successful entrepreneur at such a young age.
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I haven’t read all the comments, but one thing that has hung me up whenever I risked a move was having to sign a 12 month lease. Sometimes you can negotiate a six months lease instead.
Rita
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do it do it do it! Ideally you’ll have an escape plan if it doesn’t work. (I moved cross-country when I was 25, and my escape plan was to not have much stuff, so if it wasn’t working out, I would go home for Christmas and stay. I didn’t have to use my escape plan, and I hope you won’t either!)
London is insanely expensive, right? But perhaps you don’t have to pay rent there. In any case, totally go for it. It will be an amazing experience. Start with a short-term rental or roommate situation, do everything you can to have a SHORT commute, and get out there!
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As everyone else has said, DO IT! Yeah, do the math and make sure it won’t kill you, but it sounds like opportunity to me.
Like Kris I moved around a ton as a kid, including some time in Europe – after which I spent 9 years in LA. It’s an experience all right. COL is lower than pretty much any European city, but high for the US. My husband lived there many years without a car, so it can be done; we currently have a friend living there without health insurance, going to low-cost clinics when necessary and Planned Parenthood for her female doctoring. All things are possible and I think you can certainly make it work – it will be the experience of a lifetime!!
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my husband moved from england to LA right before i met him and just from personal experience be prepared for lots of unforseen costs. the visa process can be a nightmare, he had an attorney doing the work at first, but after no progress we took charge. it can be very stressful! i know you mentioned health insurance, but really check in to the numbers, because you probably have no idea how costly it really is (being spoiled by not having to worry about it!).
i would def recommend finding a place to live with other expats where you can rent a room with a flexible timeline until you decide what neighborhood will work for you. Don’t get locked into renting a place in a crappy area or where you end up on the road for hours and hours a day.
one more thing, the credit issue will be a pain too. you won’t be able to get your electric bill or a cell phone without paying lots up front. be prepared to pay cash for a cheap car, cause you won’t have any credit history as far as US business/ credit car companies are concerned.
(email me if you would like more advice/ tips! valerie_z at hotmail. We have been through it all, even the self-employment taxes stuff.)
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Oh… culturally, another warning…
Coming from the midwest initially what tripped me up is that when native Los Angeleans say “Let’s do lunch” they mean, “sometime if it’s convenient and we just happen to both have lunch free and run into each other, we could share a meal with each other.” In the midwest, “Let’s do lunch” means “Let’s plan a time to eat together and actually meet and eat at that time.” That spills over to a lot of areas. In other words… assign probabilities on anything that native Angeleans tell you they will do, and don’t hold it against them if it doesn’t happen.
(And no, not all natives are like that. But enough are that it can trip you up if you’re not expecting it.)
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I’m not going to encourage you to take the plunge as quickly and non-chalantly as others have.
I’ve moved around a bit in my adult life, from Wash DC (not exactly a cheap place to live) to LA and then back to DC. I’ve visited London, but can’t speak intelligently on COL issues there.
Honestly, LA is a huge city, with a lot of sprawl. If you’re going to live in LA, live in the right spots. (Like West LA, Santa Monica, West Hollywood, Westwood, etc.) I lived in the Valley, ’cause that’s where work was, and that’s what I could afford. If that was what you were considering, I’d just tell you to stay put. You pay a lot of money for an un-enjoyable quality of life.
So, if “the right spots” are on your radar, figure out your future expenses and compare that to what you have now. If the numbers work, do it. LA is great in the right spots, not so great in the not-so-right spots.
Comparing the costs *for you* between London and LA right now is not something we can do without more information.
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To a certain extent, life is a gamble. You make the best choices you can, prepare the best you can and hope for the best outcome. What is the worst that could happen? If everyone stayed safe and snuggled up with their emergency fund, no one would ever experience anything. As a reader said earlier, money is a tool, and if you can’t use it to help you accomplish your goals, then what good is it?
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First of all, YES, do it! And as someone who moved from a small city on the east coast to LA 12 years ago, it is a big adjustment. I second the comments from Nicole on June 11.
Get a place near your work, as cheap (but safe) as possible for at least a couple of months, until you discover what area of the city you really like. People aren’t kidding about the sprawl here and the neighborhoods/areas. And use J.D.’s negotiating skills to help with rent. The rental market here isn’t quite as crazy right now, and landlords may be more willing to bargain with you (lower rent for cash up front, a free parking space, etc…)
Along those lines, get a good, reliable car (a Honda maybe?) that takes regular gas (the lowest-priced grade). You’ll do a lot more driving than you anticipate.
Explore as much as possible in your free time! I think it’s good to try to get out of LA at least one weekend a month. California is beautiful, and there are nice people everywhere. I’m sure you’ll make friends quickly. Best wishes!
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Be careful.
Chances are that your work permit will only cover your primary employer.
I doubt that you will be able to legally do all of your freelance work for your overseas clients. If you do so, you will be working illegally and could be deported if the authorities catch on.
Immigration issues are very complicated, very expensive, and very time consuming. And it is difficult to find information on how it really works. Especially if you are doing anything slightly “not normal”. Normal being working for a single American company. Being freelance / having foreign clients definitely complicates things. Immigration law has not caught up to the concept of working remotely at all. They don’t understand the concept of bringing money from outside of the country. They only understand “working outside of the bounds of your visa”. You need to talk to a good US immigration lawyer.
Find, read and understand the tax treaty between UK and USA. Your taxes will become complicated. Probably having to pay taxes in both countries, and deducting the amount paid. Every tax treaty is different, so I don’t know how things will work for you. You will likely at least need to file taxes in both countries. You should also talk to a good accountant who knows international tax considerations, especially between UK and US.
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I just moved back to the US from the Philippines (I relocated for 6 months for a short term contract)…my advice in general: DO IT. And see as much as you can and meet as many people as you can along the way. It’ll be awesome.
My advice on the financial details of such moves: housing was the main $$ drain. Food and activity costs can be controlled, business costs can be budgeted for and (to some extent, I’m sure) recouped. So find housing as inexpensively as possible…roommates are a great way to go–check craigslist and similar sites as a starting point–you get the added benefit of moving in with people who probably know the area (at least better than you will).
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At the age of 22, I had the opportunity to work in Germany. Even before I understood how much money I would need to do it, I said yes. Once I got there, I realized that Frankfurt is no cheap place. But, I loved my job, got to do some heavyduty traveling, learnt German and found a career for myself.
Such opportunities should not be measured in cashflow. They should be measured in long-term investment in yourself – hard skills, soft skills, experience, growth, future earnings and many more.
Bottom Line: If you can swing it, go for it. Even if it means serious negative cashflow for a year or two. The long-term benefit would drown out the short term problems. Of course, if you do not have funds to sustain negative cashflow, this opportunity may not be for you.
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FYI — the flaming yellow orb in the sky you have not seen living in London is known as “the sun”. It appears very commonly in L.A. You will likely find the reaction of most Angelinos to rain amusing.
In addition, the state of California catches fire yearly.
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