You worked hard your entire life and are now ready to fulfill a lifelong dream of retiring abroad. So, what will it be? Costa Rica? Belize? How about somewhere a bit closer, like the pristine beaches of Thailand? Perhaps the Philippines?
Like buying your first house back home, your retirement dream home comes with a set of financial challenges and responsibilities. But this time around the challenges is more important and could catch you by surprise.
Did you even think of how to pay for your dream home? The seller in a foreign country will only accept the local currency and bringing a suitcase full of cash through international borders is reckless, and perhaps illegal.
The safest and cheapest way to pay for a dream home is through an online money transfer platform — but which one should you use? Online review sites like Send Money Australia can help Australians moving abroad better understand the many options available.
Tip 1: How To Pay For Your House
The most important step in moving abroad is, as expected, the process of buying your new home. Sure, the local bank that you have used for decades can assist in the payment process, but at a higher exchange rate with hidden fees.
Instead, online money transfer services are known for offering a much better rate. And we aren’t talking about saving a couple of dollars. The savings on a $250,000 house can be more than $10,000.
The best part is each platform will be happy to provide a free quote and estimate. This guarantees you will receive the best possible rate possible.
The process of signing up for an online foreign exchange provider requires filling in standard forms, submitting a valid ID along with address documents.
Tip 2: Get A Local Bank Account
Each and every time you use your old Australian debit or credit card, the bank will add a foreign exchange fee and maybe even a fixed fee. This can add up to a lot of money over time, especially if bank machines limit the amount of cash that can be withdrawn per transaction.
The solution around this is simple. Open a local bank account and never pay exorbitant fees again. The process of transferring money from your old Australian bank to your new one can be done through an online transfer service.
Tip 3: Managing Your Investments
Moving from a first-world economy like Australia to an emerging market economy doesn’t mean you need to move all of your assets.
As the 12th largest economy in the world, Australia offers superior investment opportunities, including a world-renowned stock market that averaged an annual 11.2% yearly return for the 10-year period ending 2019.
By comparison, emerging stocks returned an inferior 8.2% yearly return over the same time period.
Also, moving assets from Australian stocks to a foreign market could result in a large one-time tax bill. Instead, you can sell your Australian stocks and investments as needed and transfer the proceeds to a local bank account through an online money transfer service.
It is important to keep note that tax laws are often complex and confusing. As is always the case, a chat with an accountant and/or financial advisor is highly recommended to maximize your savings.
Tip 4: Don’t Forget You Aren’t On Holiday
Perhaps the most important money-saving tip for expats is to understand you aren’t on holiday. It might be difficult at first to avoid the temptation of splurging and acting frivolously as people normally do on holiday.
While the cost of living might be cheaper in a new country, this isn’t a reason to live like royalty for an extended period of time. This attitude can lead to untold strains on one’s personal finances.
The best course of action is to start living like a local. Most notably, understand where the local population goes shopping for food and household goods. Tourist traps where it is more likely to find a merchant that speaks your first language might be a tempting option — and an expensive one also.
Speaking of which, always be mindful of local customs, traditions, and etiquette. What is considered to be normal behavior in your home country might be frowned upon.
Bottom Line: Don’t Forget What’s More Important Than Money
It is important to be mindful of your finances and how to save money, but it is perhaps more important not to forget your friends and family back home.
Moving to a new country is not only a financial decision, but it is also an emotional one. Your family and friends will miss seeing you and will certainly want to hear about your new adventures. Make sure everyone understands how best to use technology to keep in contact, including video-sharing platforms like Skype and Zoom.
It might be easy to forget someone’s birthday back home so keep your calendar full of all the important dates and set up reminders in advance.
You worked hard your whole life for this moment. Don’t forget to keep in contact with all the important people who helped you along the way.
