Meaningful Financial Life Plans

Many expats don’t realise until it’s too late that they are insufficiently prepared for their financial future. They often put off making any meaningful plans or just cannot be bothered and when they do set about formulating a plan the vast majority don’t know how to do this comprehensively.

Why is this case? For the most part it is because expats are not in their domicile or country of origin and as a consequence they often choose to change this. Please do not misunderstand, as a long term expat of 32 years I totally advocate this life but the fact is that the countries in which we choose to live are still foreign lands. We are still guests and cannot expect to be treated as we would back in our country of origin. There is no welfare state for us; no hand outs or charity; we have to survive through total independence and cannot get support elsewhere.

A major part of this dilemma is making our own financial plans and being able to support ourselves come what may. We live in a tough world and can expect less help because we are visitors in our chosen countries. Having said that expats are a special breed, they enjoy a frontier type existence which is often filled with excitement and vibrancy.

So, why do expats fail to plan properly and let themselves down as far as the commercial aspects of living life are concerned? It is largely because they are complacent about their finances, brought on by a lack of understanding. Because they do not comprehend the complexities and myriad of pitfalls along the way they “fail to plan” which is tantamount to “planning to fail”.

I have said the above on a number of occasions before and no doubt will say it again. This failure to plan is not only in the estimation of the wealth you need to create to ensure you are financially independent for your lifetime but all the other peripherals which are essential but never envisaged.

Did you take account of the fact that inflation could ruin your financial plans? I have met many people who do not comprehend how damaging inflation really is. They shrug it off as something which can be ignored without realising the true vicious effects it has.

Did you take account of the fact that if you delay creating wealth for your future you will pay dearly for this one day? Many also scoff at this idea until they reach an age where they cannot attain the wealth they really require.

Have you considered the aspects of the business of living life which so many ignore until it is too late? Medical insurance is an important part of your ongoing life plan. (See – The Error Of Self Negligence of 11 December 2011)

Creation of a succession plan is also paramount to all expats. They do not realise this until later in life and then there is a panic to achieve a good secure plan for what will happen if they become seriously disabled or when they eventually die.

With forward planning these issues can be dealt with leaving you comfortable that you have provided properly for your heirs. Some expats never actually get round to this and then leave a huge mess for the family to resolve which costs heavily in terms of professional fees but even more heavily in terms of emotional turmoil.

Some of the initial errors expats tend to make were highlighted in Net Worth: Expat Errors of 25 September 2011. However, these are more concentrated on those expats in their earlier years abroad. There is a tendency for more serious errors to occur as time progresses and the expat becomes more self-righteous. Here he will simply put his head in the sand and announce that it will never happen to him and he is set for life.

However, how many expats are going back home from Thailand because they cannot afford to live here on the income they are receiving? How many never anticipated the change in the value of the Thai Baht? How many never really believed that inflation affected them until their cost of living exceeded their income? There are plenty and they are the victims of circumstance who never thought it would happen to them. When they came to live here it was very affordable and they were intent on staying for life. The stark reality is that their dreams and ideas have now been crushed.

If you are still reading this; congratulations. You are serious enough to understand that this affects you. What should you do next? The best things would be to seek consultation with a professional financial adviser. I am not talking about the cowboys who set up in Thailand intent on making a quick buck and disappearing. I am referring to the true professional firms who have been here for the long term and will not be going anywhere. Such a professional is someone who will be able to offer holistic advice about the long term goals in all areas of the business of living your life. If you have found the sort of person who wishes to do no more than push products your way then you need to change and find a serious professional alternative.

Once you find him you will know. He will stick with you over the long term and be there for all occasions and through all seasons, offering advice and solutions to all aspects of your life issues no matter how insignificant they may seem.

Your adviser will start with a proper profile of you and your current situation covering all aspects. He will then discuss your goals and inspirations with you and start to make a plan which will fit your hopes for the future. He will involve you in the formulation of your plan which will then form the basis of your financial future and will need adjusting on an ongoing basis.

Your adviser will encompass every aspect of the requirements you will need to move forward in fulfilling your plan, including retirement planning; pension management; taxation; risk management including life, medical and loss of earnings insurance; succession planning; writing wills; property acquisition, management and maintenance; overall wealth creation, protection and management; the use of trusts and other protection vehicles and any other aspect which may affect you personally during your lifetime.

Many expats are sceptical about IFAs. They believe that costs are excessive and advice unnecessary. However, consider this: would you treat yourself for a serious medical condition without consulting a doctor? Would you fight a case in court against you without consulting a lawyer? You would engage the right experts and expect to pay reasonable fees for such professional advice. So, why would you make decisions about your financial future without proper qualified professional advice when you could put your entire future in jeopardy? Don’t allow any bad experiences that you may have had in the past stand in the way of getting a service that you truly deserve for yourself.

Questions for Andrew can be directed to PFS International on +662-653-1971 or email via enquiriesthailand@fsplatinum.com

You can also connect with Andrew on Linkedin here

Andrew Wood has been an expat in Asia for 32 years and is Executive Director with PFS International. He has been writing Net Worth articles for four years and has made a significant contribution to the PFS library of financial service articles dating back over seven years. These articles which cover the complete A-Z of financial planning are available to readers upon request.