When The Expat Shoestring Breaks

Asia is tantalizingly attractive and makes us elated and happy. The lifestyle soothes us and detracts from the realities of unexpected events. This can become a trap, leaving you – the expat – financially vulnerable and exposed.

Many expats who come to live in Asia actually end up doing so on a shoestring. It may not have been their original intention but often circumstances catch up with them. When asked whether they would ever consider returning to their home country, they give an emphatic “no”, although reality should dictate a subdued “maybe”. They are left in a situation where they wish to continue the lifestyle but face the prospect of more difficulties, a classic catch 22.

I know some retired British expats who rely almost entirely on their UK state pension, sometimes supplemented with some additional small income from private sources. Back in 2008/09 they were changing their GBP income at THB72. Thus with a regular income of say £700 per month they were converting to THB50,400 and having an acceptable existence. They now find themselves with the same GBP income and a much less favourable exchange rate of THB55 which now translates to THB38,500. Couple this with inflation and their real spending power has diminished significantly. I calculate this as between 35% and 40%.

Although I have chosen the example of British expats, it is happening to all nationalities in a number of Asian countries where they choose to live. Many of these people simply do not wish to go back to their country of origin. There are too many general advantages to life in Asia and these heavily outweigh life back home. So, they soldier on and make a life of sorts.

In remaining in Asia, these expats often take on additional risks, often resulting in catastrophic consequences, creating nightmares which are difficult to cope with. The major problems usually revolve around health and sometimes family issues where they have a local wife and children.

I know one such expat who has fallen on very difficult times. Fred lives upcountry on a budget and has always told me that he will survive without being able to afford medical insurance. All appeared to be well until out of the blue I received a call from his wife’s daughter saying that Fred needed to be admitted to hospital with a suspected broken hip. He needed to access part of his offshore savings to be able to pay the bill and I am not sure how he would be able to do that. It would be very difficult for a Thai person to call a foreign investment institute asking for money for Khun Fred because he needs to be cared for. They simply would not entertain such a request.

A few years back I also encountered another situation where an expat had investments but had been too lazy to make arrangements in case a terrible event occurred. Then he died unexpectedly and there was turmoil because no one really knew how to contact this expat’s family back in his country of origin.

The point here is that the unexpected happens to us when we least expect it and if we have not gotten ourselves organised in preparation for this possibility, we leave ourselves and a number of others in very difficult circumstances.

Almost without exception no one plans to die unexpectedly. Similarly none of us expect to meet with an accident or contract a dread disease which can leave us in an absolutely hopeless situation. Fred is now in a very difficult dilemma because he is so sick that he is hardly able to tell anyone what to access and how. Others in a similar situation have been known to die unnecessarily.

These situations arise because people say it will never happen to them. I have written about this subject a number of times and I still see people suffer because they continue to think it will simply never happen to them.

It does happen, so you are well advised to make a plan to cover such eventualities. Prepare for any situation. Make sure you have left instructions on what to do if you are incapacitated through illness or injury; what to do if the worst happens. Have a catastrophe plan in place. Get insurance for massive losses which may affect you.

One of the dilemmas I talked about at the beginning here was that some expats are living on a shoestring. This means they simply cannot afford even relatively basic medical insurance, let alone securing comprehensive cover for themselves. It is a quandary which none of us would ever relish facing but one which is happening every day to a growing number of expats in Asia.

What is your own personal situation?

Questions to the author can be directed to PFS International on 02 653 1971 or email to enquiriesthailand@fsplatinum.com

Andrew Wood has been an expat in Asia for 34 years and is Executive Director with PFS International. He has been writing Net Worth articles for six years and has made a significant contribution to the PFS library of financial service articles dating back over nine years. These articles which cover the complete A-Z of financial planning are available to readers on request.



2 Comments to “When The Expat Shoestring Breaks”

  1. Greg 21 May 2014 at 10:49 am #

    I am resident in Patong, Phuket 10 months of the year,but go to Australia twice a year for my medical checkups. I have a retirement visa in Thailand, but still am an Australian resident. If I die here, I do not want to be shipped back to Sydney, but cremated and ashes scattered wherever. How do I have this plan set up here?

  2. PFS International 23 May 2014 at 7:33 am #

    For one, you will need to set up a Thai will. There are other facets to this, depending on your personal circumstances.

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