Reader Story: Working Overseas
Published on - December 4th, 2011 (Modified on - December 10th, 2011) (by J.D. Roth) This guest post from Joe Z. is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes.
I love the premise and the concepts of GRS. The principles that J.D. and the rest of the community espouse here really do work. However, one topic that I never really thought would apply to me personally was geographic arbitrage, the notion that you can save big bucks by living abroad while keeping the same income.
I want to give you a personal story about how this concept has helped us to:
- Pay down nearly 70% of our mortgage
- Provide a huge boost to my career
- Allow us to travel extensively
- Given us an adventure to remember for the rest of our lives
My wife and I always figured we probably wouldn’t find a good opportunity to go overseas for another decade or so (if ever). We’re both 27 and were pretty set in our current jobs as I was an IT project manager and she was a self-employed artist. But then we had one of those ordinary moments that proved to be a tremendous turning point in our lives because we took action.
Taking a Chance
About 18 months ago, my job at a large automotive company was going very well as I was just wrapping up a couple very successful projects. One of the high-level managers had come out from headquarters and was discussing the status of our company globally and spent quite a lot of time on what was happening in some emerging markets and China specifically. At the end of his presentation he mentioned (possibly a bit tongue-in-cheek) that they were having a very hard time recruiting people to work in China and if anyone was interested to let him know. After a polite round of laughter in the room I barely gave it a second thought.
My wife and I really love living in the U.S. and are both very close to our family members and friends. I had been with my company for about three years and was really feeling comfortable with my work and co-workers. But when I started thinking in detail about the initial objections I had, they started to seem more like excuses and less like valid reasons. When I broached the subject to my wife and her initial reaction was more surprise than outright rejection, I knew we might be able to make it work. Roughly four months later, after tons of meetings, a dozen vaccinations, and countless details being sorted out, we started a two-year assignment in China.
Anyone that has lived overseas for a while will tell you that it’s not always easy. Anyone that has lived in the non-Westernized parts of Asia where we are can tell you that some of the time it’s unbelievably hard. Almost no one outside of the westernized cities in China speaks English. The local food is exotic much of the time, and the culture is so different than the U.S. Every day is an adventure here! We are choosing to live like nobody else for a while so we can really live like nobody else after we get back. That being said, I would highly recommend an international assignment to anyone working at a company where this is possible.
Coping with Questions
Now that you know our basic story, I want to speak to a couple main topics that I think are relevant to GRS readers. Some of these questions are the types of things that cause someone to instantly dismiss an assignment. However, when you find out how the process normally works, it’s likely not as big a deal-breaker as you thought. If you want more information you can read some others articles (both informative and entertaining) at our blog.
What does an international assignment require?
There were hundreds of details to arrange. However, the most important thing is having support from your managers (both home and host countries) and your HR department. You’ll need to depend on these people a lot for all sorts of things so make sure they are on board. Once they are, you would sort out everything from moving to your new job to housing to language training.
What about your jobs back home?
My wife owning her own art business turned out to be a helpful piece of the puzzle in our case. She has been able to go back to the U.S. for a few big jobs. She also has spent a while developing her online sales of portraits while she is here. It’s substantially easier if one spouse can continue with no interruption, but many companies will also help with training or job placement for the spouse during or after the assignment.
I took a bit of a risk not knowing what my role will be when I get back. In fact, as I have been drafting this article we had some major turnover in our department, including my manager and mentor. However, I’ve received very positive feedback from a number of managers about possible options when I get back. It is definitely critical to work at planning and coordinating your reintegration. After all, you’re effectively interviewing for a new job once you get back.
What did you do about housing?
We found some family members to temporarily rent our house for the first part of our assignment but at the moment it is vacant and we have it on the market. This didn’t work out as smoothly as it could have as the housing market is still in a rough patch in our area (as it is in most places in the U.S.). We also timed it about as horribly as we could since we put our house on the market the month after the homebuyer’s tax credit ended and demand was at some all-time lows. Regardless of these challenges it has still been a plus as our housing over here is 100% paid for by my company.
How did you pay off so much of your mortgage?
The benefits for accepting an international assignment are really good at most international companies. When you add up the housing allowance, travel allowance, moving expenses, and “hardship pay” you get it would likely come out to between a 25-75% increase.
We have taken most of this excess salary (after charitable contributions, taxes, and a somewhat increased travel budget) and paid it directly against the mortgage. When we arrived in China we owned about 12% of our house. Now we own just over 50% and should be close to 80% when our assignment finishes next year!
How much do you travel?
We definitely travel a lot more than we did in the U.S.! In addition to business trips to Europe and South Africa, we’ve been to Hong Kong, South Korea, and at least a half dozen cities in China. We’re also planning a big trip to Australia next year. We don’t have a huge vacation allotment and have to use some of it to get home for holidays. However, thanks to some great planning by my wife we’ve been able to have some fantastic long weekend trips. We could definitely have saved even more money than we have but we wanted to experience as much of Asia as we could. In addition, most places in Asia are cheap to visit — especially compared to Europe or the US.
I don’t think I could live there — isn’t everything too different?
I definitely wouldn’t suggest Asia if you have a particularly weak stomach or are OCD about cleanliness. But what about South America or Europe? There are hundreds of reasons you could come up with not to go. However, if you really drill down, it may just be fear of the unknown or fear of change that’s holding you back. Educate yourself a bit and see if many of your reasons (excuses?) aren’t really as big a deal as they seemed. And no, they don’t generally eat dog in China — at least not in Northern China. And even if they did, you wouldn’t be able to tell the difference between that and the silkworm you had as your appetizer…
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Great article! My husband and would love to do something like this, but as we have two small children (3 and 5 yrs old) it seems like a daunting challenge. Do you know any expats who have done this with children?
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Many (I would say 50%) of my expat friends have kids, I think if the move works for a family or not depends on the types of benefits an overseas employer can provide.
With school-aged kids, you want to be sure that international school tuition can be covered (either by salary or a stipend).
With small kids, find out about childcare options. Typically most expat families have one stay-at-home or partially-employed spouse, because salaries or housing stipends make that more affordable. Often, in Asia at least, “helpers” – or domestic workers – serve as housekeepers and part-time child care providers, since daycare as we know it in the states is hard to come by and very pricey. Having live-in domestic help is very affordable and very common in Asia, although it can be uncomfortable for Westerners who are not used to the idea of having help.
International schools can also be extremely expensive – however the quality is typically very high depending on what part of the world you are in.
Overall I believe living overseas is an awesome experience for kids!
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Ill jump in here and say that my husband and I moved to Germany for work and lived there seven years. Western europe is certainly not Asia, but our kids did just fine. We did not already live immediately next to family (wash dc to dallas, and we got home leave paid by our employer on a regular basis. That said, we did NOT save much money. We believed that we had an obligation to take our children traveling as often as possible and did exactly that-anytime there were no sports or school obligatios we were gone for the weekend.
As for how kids adjust-my parents went to europe when I was ten and I loved it for six years. We went to europe when my son was entering middle school and he adjusted well. All I had to do was promise him that our first vacation would be a week on the beaches of normandy-this for the child that watched the Longest Day in black and white at seven years old without getting up to pee
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Sara,
This is a good follow-up point. I would second what Bon said in that most families I know have a stay at home spouse taking care of children.
One additional benefit with kids this young is that they can easily learn a second language that will likely stay with them the rest of their lives with only minimal work.
I would say that as long as you ask good questions you’ll find that the key topics are usually all right – health care access, schooling, general living conditions, etc.
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Sara,
I work overseas and have two small children (8 and 3). We lived in Japan when our eldest was 2 to 6 years old (our second was born during our last year there). Since then, we’ve moved back to the States and then on again to Germany.
Our kids have adapted well, better than us in most situations. With email, Skype, and internet in general; we can easily connect back with people at home. And in the meantime, our children have the opportunity to learn firsthand about other cultures, lifestyles, and dietary options.
The key, as others have mentioned, is having an open mind. For us, thus far, the rewards have been well worth the opportunities we may have given up back home.
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I think one of the most important ways to find overseas work is to A) Talk about it and B) Leave yourself open to opportunities – just as the author did.
I flat-out told my boss (who I had a very good relationship with), that the next thing my spouse and I wanted to do was live in Asia. Fast forward just a few months later, and we were in Singapore. (Albeit with a different company, but one thing led to another and it was a win-win-win).
Also I must note that Singapore contradicts the author’s notes about Asia – it is actually easier, cleaner, and more developed than anywhere I’ve lived including the states – KL is very nice as well.
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Bon,
I just visited Singapore this summer and loved every second of it. It is by far the cleanest city I’ve ever visited and it is very easy to get around. Westernized a bit and since everyone speaks some English it is easy to get by. Also a very diverse city-state. My dad has two years remaining of a three year assignment there, and I hope to make it back before he leaves. If the opportunity to work overseas presented itself, I would have a hard time saying no.
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Thanks for this post. I am trying to convince my first year college student daughter that she needs to study abroad her junior year. I am going to show her your quote (paraphrasing here) about how one can find hundreds of reasons NOT to go, but deep down it is probably fear that is holding her back. I want her to expand her horizons. And it IS fear in her case. She loves where she is now, but when I dropped her off, I had to pry her sobbing little self off of me so I could get in the car and leave. Yep, it’s definitely fear of the unkown.
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Cheryl, definitely encourage your daughter! I studied abroad in college, and it was fabulous. I was a science major, and I took a semester off to go study art in Europe. I loved my time there, and I also came back refreshed and energized to study science yet again. I found that I consistently visited the science museums in my area even more than the art museums!
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Fear can be useful when it alerts us to danger; I don’t play chicken with trains because I have a healthy fear of them, and dropping someone who can’t swim into the deep end of a pool is hardly the way to convince them that the water is fine. Traveling isn’t for everybody, and the timing has to be right too. My parents pressured me to study abroad in college (my dad because he’d traveled and loved it, my mom because she hadn’t gone and regretted it) but I chose not to. It wasn’t MY dream. I might have had a wonderful time but there was also a decent chance that things could have gone very badly. I have food allergies so I NEED to know exactly what is in the exotic meals I’m eating; I am highly dependent on my social network and handle stress poorly if I don’t have friends around I can rely on; I was already in a fair amount of student loan debt and didn’t want to borrow extra for travel expenses. Naturally, since I didn’t travel abroad I am now ignorant and intolerant and narrow-minded and… oh wait, I actually used that time to get the most out of my classes that I could, strengthen my relationship with the wonderful man I’m now married to, and learn about different cultures from the international students already in my classes! I do hope to eventually travel for short trips with my husband and maybe other friends, but a semester-long commitment in college just wasn’t right for me.
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This above all: to thineself be true! Smart decision!
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Have you thought of encouraging your daughter to take a summer course abroad rather than during the school year? If I’d had the money, that’s what I would have done. I had no desire to do a regular semester or year abroad because it would have put me behind in my program and I wouldn’t have had the time or money to see a whole lot outside of school.
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This is what I did and it was an excellent option for me. My program was too intense to take an entire semester abroad, so I did 7 weeks during the summer between my junior and senior years of college. I know several people who enrolled in that program then tacked on an extra week or two afterwards to do their own traveling.
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Something to consider: If you want to encourage your daughter, have her talk to the study abroad coordinator at her school. Most colleges and universities have a coordinator if not their own study abroad programs. Some even have both! The coordinator will be able to talk to her about place to go, and possible scholarships that she can apply for. If the college is the one hosting the program then a lot of times a student will be able to use his or her financial aid from the school on the program. There is no harm is asking.
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One thing I learned living overseas (7 years in Korea and Japan) was that in order to leverage the “economic arbitrage” you gain by living in a country with a lower cost of living it helps to live more like the people in your new country.
If you eat more like a local, choose housing that is of the size and quality typical for a local, participate in activities that are common for locals then you’ll have a lifestyle that can be supported mostly on a local’s salary and the excess built into an expat’s salary can be banked or used to pay off bills/mortgages at home.
If you expect to live like an American when overseas, it could take all of that extra salary to source the food you are used to, buy the “extras” you are used to, and you won’t achieve the economic advantages expected from the move.
I wish the author had explained a bit what lifestyle changes they make to live more like locals and how much that helped them with their savings as well….
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I definitely agree Jennifer. Sometimes we’ll splurge and spend what might seem an obscene amount of money for some particular Western thing we’re really craving. However, we keep those few and far between and have found many local things that are as good or better than the imported goods for substantially cheaper (10 or 20x in some cases).
We also have friends that admit that they spend a good bit but are over here so that they can “live like kings”. I think that if you’re generally frugal at home you would stay that way abroad and vice versa.
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My husband and I are counting down the days until we can travel to a new place for work. It will be at least 5 more years. There is something that really shakes me out of my little hole when I spend a significant time immersed in another culture. Your points are right on that its not all glitter and unicorns but I think it’s worth it.
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I absolutely LOVE stories like these. Where I work there’s the possibility of extended international travel in the next 2-3 years to help build out the part of the business I’m heavily involved in with our overseas divisions. I’m keeping my eyes and ears open for such opportunities should they arise.
Beyond the economic benefits one could see, for my wife and I it’s more about the experience than it is about the cash (though we do have to fund this somehow, so extra pay is always good!). We love travel and we love experiencing other cultures, so the idea of living abroad for 1-2 years is very enticing for the both of us.
Big props to Joe Z for seeing the opportunity, having the guts to take it, and sharing his experience with us here. I really hope I can manage something very similar in the future.
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Great thoughts/perspective on a different career path!
One question though: why the emphasis on the mortgage paydown? Why not a focus on personal savings/retirement savings/etc?
And I know some people are very against this, but if you only had “12%” of equity in your home at the time you went overseas, you likely were in reality underwater in the house given the market collapse the past few years. At any point did you seriously consider walking completely away from the mortgage, especially since it was a zero factor in your life for the next few years?
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MT,
Good questions. From the retirement savings topic, we already save roughly 15% of our income in long term accounts. We generally have another 15% in short to medium term savings.
When we looked at the overall savings we would have, it turned out to be surprising close to our remaining mortgage balance. After some long discussions, we decided that having no house payment would really give us tremendous flexbility in the future. If you took out our savings and housing payments, we could survive on roughly 40% of only my income. This means that essentially, I could get almost any job where we live in the US (fairly low cost of living area).
I’m sure that there might be some more optimal choices available, but the very real possibility that by the age of 30 we could have a paid-off house seemed too good to pass up.
From an overall valuation standpoint of our house, we had roughly 30% equity from the original cost and appraisal. The 12% came based on an offer we had gotten to sell it about 6 months before we decided to move (aka 6 months too early!). So, we never seriously considered walking away as it’s not really underwater.
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Joe Z – great post!
It sounds like your house has now been on the market for over a year and a half? If so, you might consider a few things.
Big picture, is it more important to conserve your capital (get as high a price as possible) or to eliminate the mortgage payment? No “right” answer, but thinking about it may help clarify any action you wish to take. Great work on paying down the mortgage, that gives you more flexibility than most sellers.
A few ‘action’ ideas (there are many more variations & possibilities, these may give you a general idea)
1-do the math, are the carrying costs high enough to justify cutting the asking price a bunch to sell sooner rather than later?
2-consider taking the house off the market, make a few cosmetic or functional upgrades (anything to help the buyer think “I could move in tomorrow), and put it back on the market (same or slightly lower price)
3-consider turning your home into a rental for the time being, and sell it later. Or, if you have friends/family nearby that you trust, make it a house sit until you return. Or close up the house (if you have someone who can check from time to time that it is secure) and make a decision when you return
4-if you like real estate as an asset class but want to be financially independent of a mortgage payment, you could offer the house as rent-to-own or ‘regular’ sale with seller financing (possibly wrapped around your existing mortgage). This could create a cash-flow positive situation where you have a set time line to no mortgage at all (and could increase the number of potential buyers). This might be a wait-until-return idea, since regulations for real estate vary by state & there are recent federal regulations for seller financing to abide by as well.
Good luck!
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Thanks for posting this Joe! I also think that if you do have to move on to a new company, the international experience is a great boon to your resume.
I also couldn’t let this post go by without putting a plug for the Foreign Service. While hiring is going to drop for a while due to budget constraints, there’s still a lot of great opportunity to work overseas while serving your country (well, if you’re a U.S. citizen…).
careers.state.gov
USAID, DOJ, USDA and Commerce also have overseas assignments.
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I have decided that I am almost certainly going to move away from South East England when my degree is over- it’s just too expensive to live here. Rent that barely covers a studio flat around here could get me a 3 bedroom house in other parts of the country, and there are so many train links into the capital that I could still easily come back. I have thought about moving further away though, maybe to Canada or Berlin. The cost of living in the UK provides poor value of money in my opinion. You can buy a much better quality of life even in nearby European countries.
My family recently found out that my father had gotten a job offer when I was a kid to move out and work for 2 years in Australia. He didn’t even bother to tell my mother because he wrongly thought she would say no and he didn’t want to disrupt my and my brother’s childhood. We were pretty angry as a family when we found out. I would have loved to grow up in Australia.
So if you get the chance to work abroad but you don’t want to rock your loved one’s lives- at least respect them enough to talk about it (like Joe in this article did). Their responses might surprise you.
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Excellent article. My son has been working overseas – first in India and now in Singapore – for almost four years. I encouraged him to seize the opportunity when he graduated college because jobs were so hard to find in the U.S. He has had tremendous experiences and traveled extensively throughout Asia. Not only has he been gainfully employed and gained valuable experience, but he matured in a way that would not have been possible if he had stayed home in his comfort zone.
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The biggest caveat I have for those who elect to take on an international assignment is what happens to you when you return. As mentioned in the article, sponsors and bosses change and it can be difficult to come back to your old organization. One, because they have moved on in your absence and there might not be a suitable role for you and, two, it’s hard for most organizations to figure out how to use your new experiences.
I’ve found organizations that don’t make very strategic decisions on how to handle expats on their return are very likely to lose them. You come back with a host of new experiences and aren’t satisfied with the narrower scope of the position you return to. The company might make you find your own job on return and it’s possible your network has faded in your absence and you have to start all over again.
It’s probably more true with management-type roles than specialists, but I’ve read that most expat assignments ultimately fail, especially if the individual is gone longer than a couple of years. This probably works better in organizations that have a long term history of sending folks overseas, but much like a college student going overseas for a semester means missing out on some things at school, so an international assignment may mean you don’t have the best opportunity for a promotion or a plum assignment upon your return.
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I agree with Joe G – it’s the return from overseas that can be a problem. I was an HR manager for the Navy. Navy’s policy was to encourage employees to take overseas assignments; however, that often didn’t reflect how individual managers felt. Good employees who were overseas for 2 years or so were generally welcomed back. But the longer the employee was overseas the less warm his/her welcome back was.
Managers turned over and knew/liked the current incumbent rather than the overseas returnee. Reorganizations might have made the original job obsolete. Also the longer a person was overseas the more likely it was that he would go overseas again as soon as possible.
Fair? Maybe, maybe not. But it is reality.
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Joe G,
Very much agreed that this is one of the biggest risks (if not the biggest). I’m probably less worried than most based on my age. And if I really get a bad deal when I come back, I think I’m substantially more employable with my accomplishments now than an additional 2 years in my previous role would have made me. So I do have the option to walk. If I had been with the company for decades already though and was fairly attached I might be a good bit more worried.
Definitely a key point for people to consider when thinking about a choice like this.
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This post recommends this sort of thing highly, but never actually says why. It’s dirty, you don’t like the food, you miss your family and friends, you might not have a job here when you come back, but you recommend it! Aside from the extra salary, what’s so great about this? Your short list of bullet points just sounds like it basically says, “get to feel like I’m doing something cool and exotic”, which is fine, but is it worth it? Even the mortgage payment thing is a bit of a misnomer if the house I’d for sale. If you have 80% equity in a house and you sell it then you just have a big savings account. That’s good to have, but it would be easier to save here in the US if you lived in Chinese-style housing, too. I guess my question is, now that you’ve described how to do this — why would I want to?
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Why would you want to? New experiences? See the world from a different viewpoint (i.e. not as a tourist)?
This strikes me much more as a story about being open to and taking new opportunities in life vs building a pile of wealth. But if you’re just looking for the financial side of it, I felt he covered it very well by describing all he’s managed to do with the extra pay. What he specifically did with the money is less important overall than the fact that he had it to put it towards financial goals he felt were important.
For many, getting an awesome experience AND making significant financial progress is a pretty darn good reason to do something like this
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I think you nailed it Tyler – he got to do something ‘cool and exotic’ but he felt liek he came out financially ahead. I think for a whole lot of people who have grown up in the US, they have a hard time wrapping their minds around truly budget travel. And so for them to consider *visiting* someplace like Asia it would be prohibitively expensive. You dont’ have those mental barriers, either that or you have no interest in visiting Asia. Also, there are about a gazillion studies that show that your happiness in what you have is relative to what others around you have. Meaning it is much more difficult to ‘live like a Chinese person’ in the US than in China.
I wish we could have a story that talks about geographic arbitrage in terms of local living. Deciding to live in the ‘blue collar’ neighborhood instead of the ritzy neighborhood. It’s possible without having to stomach exotic foods. You have a lower cost of living, do your neighbors.
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Tyler,
I would say that the experience has definitely been amazing as well (you can see some of the great times on our blog too if interested). If the conditions were really bad all the time, the money wouldn’t be enough.
It’s more that I can have a truly unique experience and get to travel in a part of the world that I would never have enough vacation time to visit at length, while getting paid a substantial amount. As Mike mentioned, I think the combination of things is what a lot of people might not think is possible.
As a quick note, I didn’t mention it in the original post but our apartment here is actually bigger and a small bit nicer than our house in the US. We don’t have the yard but the day to day living is actually quite nice. For some colleagues in more western cities (Beijing or Seoul) it’s even better.
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Congratulations, you saw an opportunity and took it. Successful people recognize opportunities and take advantage of them.. I think you career will benefit from the experience.
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I’ve been waiting for an article like this on GRS. Living outside of your home country can be a great opportunity.
I’m an American in my third year in the Middle East and the benefits are incredible. First of all, it’s not dirty and while you do have to get a little creative with cooking, the food is as exotic as you make it. The money is great, the vacation time is incredible compared to the US so we’ve gotten to travel a lot, housing is provided, and, if we had kids, the international schools would be provided as well. In addition, you meet an adventurous, international crowd of people. The downside is that we’re far away from our families.
Thank you for sharing this story. I add my experience just to point out that living outside your home country can mean a thousand different things. We, for example, found jobs directly here rather than transferring and have no concrete re-entry plans other than to start a job search when we’re ready to come home.
It’s not for everyone, but it’s been wonderful for us.
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17 years ago we went to Taiwan for my husband’s career. There were MANY Americans living and working on the island at the time. One man was an executive for GM at the time out of Detroit. Many of us brought our children along with us. My son was 2 at the time and the children ranged in age from newborn to 12 – 13years. The school aged children attended the American school and we often got together for potlucks and conversation. It is a memory I will always treasure. After Taiwan we did a stint in Brazil. Living overseas can be challenging but you learn to appreciate the things we often take for granted here in America. Because of my travels I have a tolerance and broader world view. I wouldn’t change it for the world!
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Great Report Joe. Good Luck!!!
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Sounds cool but I’d hate to be overseas when the SHTF..
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I worked abroad in Spain in my 20′s and would love to return to Barcelona for an extended period of time. International travel and living is a priceless experience.
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Not sure why this hardly ever comes up, but I have been an expat. And the only thing that would keep me from doing it again is taxes. I am back in the US 3 years after my assignment and this will be the first year I am able to do my own taxes.
Thankfully my company provided tax benefits while on assignment. This just adds stress to an already stressful situation.
I can 2nd everything in this article it was a wonderful time and if you go in with eye’s wide open you will enjoy every min of it.
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“I definitely wouldn’t suggest Asia if you have a particularly weak stomach or are OCD about cleanliness.”
Hey! Japan resents that remark! (and Singapore, and Hong Kong, and South Korea, and other places, I’m sure)
Seriously, though, Japan and Singapore are like the cleanest places in the world, and Japan has some of the mildest food.
I currently work in Japan and, mainly because my housing is subsidized, I am saving a large amount of money each month. So this can even work in high COL countries!
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Hi imelda,
No offense meant to Japan or some of the other cities you mentioned! I’ve been to Hong Kong and Seoul and they really are very Westernized and quite nice cities to visit. (We particularly loved Seoul!)
My general experience in Asia though is that this is the exception and not the rule. That said, there are definitely international opportunities in these more Westernized cities as well and if this is more to someone’s liking then I’m all for it!
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No prob, I didn’t think you did!
But Japan isn’t clean because it’s Westernized. It’s clean because that’s the culture.
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Excellent article, and I can’t agree more. My husband and I have been on assignment for two and half years now. The first two years were in Prague, and now we are a quarter into the second assignment in Shanghai. It’s been an amazing and definitely priceless experience. Not only did we get to travel to awesome locales and see how others live, the economic benefit has been phenomenal. We were blessed and fortunate in that I was able to keep my job and just worked virtually, so that we did not have to lose my income. Financially, we just banked our U.S. salaries and lived off our assignment allowance. We paid off our mortgage last year, 6 years after we purchased it. We estimated that being on assignment accelerated our pay-off schedule by 12-18 months.
Contrary to some posts are indicating here, we’re not sacrificing any U.S. comfort for lower standard of living. One may think that it’s a step down to move to developing countries, and it’s not true. Both housing accommodation in Prague and Shanghai was/is a high-end, luxury apartment, and we live very comfortably and are very happy and grateful for the assignment opportunities. We’ve met many amazing people (both local as well as expats) and made long lasting friends.
True, it’s not for everybody, and there’s always a question of job security in repatriation back to the U.S. But there is a risk of that regardless you embark on an international career opportunity. I personally definitely think the pluses outweigh the negatives. Especially with the latest trends in globalization and shifting focus and investment in emerging countries, the experience helped to round out our perspectives. If you enjoy traveling and are not afraid of new things, and a nice international assignment package comes your way, seize the opportunity!
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Zoe,
How lucky are you? Prague! May I ask what you do for work to be this fortunate? I want to live abroad as well
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What an interesting post!
I grew up overseas — Saudi Arabia. My parents moved there when I was three years old. We didn’t live on the local economy (Americans didn’t then) but in an American camp. The school was far superior to the schools I went to when we returned to San Francisco (I was 13 then). When we got back to the states, I tested three years ahead of my classmates even though I’d been out of school for six months.
My father was not an educated man and so could not have earned the kind of money a young college graduate would. But because of the housing allowance, the paucity of places to spend money, the low cost of living, and much higher pay than he would have earned stateside, he did pretty well. Despite not even having a high-school diploma, he managed to retire at the age of 50. I grew up knowing a heckuva lot more about the world than most American kids do, and my mother…??? She didn’t complain.
Today, now that I’m old, I would recommend that any American college graduate look overseas for work. It could be the most reliable way to stay in the middle class.
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We’ve been living in Taiwan for 2 years now because my partner got a job with a Taiwanese company. Living abroad is full of ups and downs but overall, it’s been a good experience. One benefit that I haven’t seen mentioned is the great cultural and language immersion for kids. My oldest daughter goes to local school, not to an international school, and we count her fluent Chinese language abilities as one of the best things about being here.
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A good thought provoking post for those that may find themselves in a similar position. A big caveat regarding these types of assignments is to thoroughly review and understand the benefits and support offered by the company. While many have commented here about their good experiences with company support (allowances, language assistance, spouse job placement) not all companies offer these types of benefits. If you are considering an international assignment, I highly suggest sitting down and thoroughly going over all the details in depth so you can assess the true reality of the move. Try not to get caught up in the romance of living abroad.
In addition, one shouldn’t down play the risk surrounding reintegrating upon return, especially given the situation Joe describes with major changes happening in the department. Two years will seem like an eternity has passed when returning to the ‘old position’, you may find it hard to fall back into line.
Ultimately for me the biggest decision point revolves around family. My wife and I returned to the western US to be within ‘easy’ travel distance of our families so we can share more time and experiences with them. That is hard to do from the other side of the world.
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This is a good point and important to remember. Many friends have left their overseas assignments because they “thought” they would be saving a ton – but they just didn’t know the details up front, and ended up being socked by tax implications and other things. Definitely take a LOT of time when negotiating with your company and do not just trust what they tell you!
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I would like some guidance on what to look for/negotiate for in an international package.
My company is looking to expand from US to Europe and wants someone to go there and open an office, but they don’t have much experience with international assignments. It is not like they already have a basic package to tweak.
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C.Rivers, if your company has never facilitated an international assignment I would strongly encourage them to seek external professional assistance from a relocation consulting firm. Otherwise, there is high potential for whomever takes the position to end up a lab rat, testing the sustainability of the package on the fly.
A good place for you to start gaining information would be looking at other companies in your field that offer these types of packages. Find out what they offer and you have something to compare, a starting point for what to expect.
When it comes to specifics, the most important advice I can give you is to pay special attention to TAXES. Complicated is an understatement.
Don’t get me wrong, overseas assignments can be very beneficial in many ways (career, financial, worldly experience), but go into them as prepared as possible so you can make the best decision for you own situation. Best of luck.
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>I definitely wouldn’t suggest Asia if you have a particularly weak stomach or are OCD about cleanliness.
Neither of those two are true for Japan (lived there for 3 years). Cleanliness and food safety are impeccable, probably better than in many places in the West.
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I would suggest the food comment was more about what is eaten rather than safety. I understand the Japanese palate goes to a lot of options that would be quite foreign to American tastes.
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Very good post. I have worked and lived in Africa (where I am from), the US and Europe. I loved learning the culture of the other African country I lived in; was ‘shocked’ by life in the U.S. (ie large houses and love for shopping) and pleased by the two European countries I have lived in (ie small houses, even for someone like me, and frugality). I have also made quite a bit of money because of this, but nothing beats first hand experience of learning other cultures and languages. My tolerance for food and people with different backgrounds from mine has certainly grown. I would strongly recommend spending at least a couple of years living in a different country, hopefully where the culture is also very different from yours.
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I chose Bermuda for 2 years after I graduated highschool. The salary was tax free and it was very close to home in Toronto (direct flights took less than 3 hours). I paid off $24k in student loan debts and saved a big cushion. I know couples that saved one spouse’s salary while working there and came back after 3 years or so to buy a house outright, no mortgage.
Highly recommended even though island living gets tedious (no seriously) after a while. Still more patatable than mainland China I’d imagine for most Americans. And it’s first world living, too!
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What about taxes?
I was an expat to England, and I am still dealing with taxes. This is even with the help of my company.
I am always curious to see if tax burden is always an issue from other expats.
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Hi John,
Good question and I can discuss taxes a bit but it really varies by your location. Some countries have very generous agreements with the US on how to treat taxes and some not so much so this will all be general.
Most companies will assist you with tax preparation as this can be quite daunting during and after your assignment (as some commenters mentioned already). That said, your total taxes owed can be a huge problem and it’s usually helpful to reduce your taxable income as much as possible as many benefits you might receive are taxable.
My company has a tax equalization policy so they calculate what I would have owed if I received my standard salary in the US and make up any difference. Very helpful for us but not every company will do that. It’s a nice thing to negotiate for if you are considering an international assignment but your company doesn’t offer it. If you have a deal like this, don’t forget to check the tax paperwork to make sure the calculations are correct!
In general, filing your taxes is quite complicated and while we always filed our own taxes in the US, I would never dream of handling this on my own. Make sure to get a clear picture of how this aspect of an assignment would be handled! And don’t just take off-hand comments as gospel either. I can’t tell you how many people told me I would owe no taxes as I was working outside the US or that I only paid Chinese taxes on money made in China or other random things. None of these are true but you need to do a bit of research to make sure you understand the true tax impact on you.
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It’s very important to have a company that is supportive of your move, and not just looking for a warm body. I had a great experience working for a year in London – but my company didn’t offer the most supportive package and I ended up out of pocket. I decided to take the hit as an investment in my career, and am now much more marketable than I was – but not everyone will come out ahead financially, and sometimes that’s okay.
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I definitely want to live in Argentina… probably Buenos Aires… for at least a few months.
If I had the money to get there and back right now, I’d be jumping on it. Unfortunately, I don’t have the money to spend on the actual travel–otherwise most of my expenses would be the same or cheaper than they are right now. Living somewhere cheaper than I’m currently living is always a tempting prospect.
I would more be in your wife’s boat, though, since I’m seeking self-employment as one of those crazy artistic types. As soon as it becomes profitable *crosses fingers* I’m out of here.
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