4 Annoying Things to Consider Before You Move Abroad

living abroad

Your future office?

Are you trying to work abroad and not just travel abroad? Many of the blog posts and books about developing a business you can run from anywhere in the world are all about the big picture. In the early stages, that’s essential. If you can’t get your butt off the couch, if you can’t save up some dough, if you can’t look your boss in the eye and say, “I quit,” then it’s all just a dream.

But just as succeeding in business is as much about execution as it is about the big ideas, it’s those nitty-gritty details that will make or break you when you really make the leap to being location independent. I’m halfway through living in Mexico for a year and running a whole series of websites and blogs from there. I can tell you that you’re sure to run into some obstacles that make you say, “Hey wait a minute, nobody told me about THAT!” Here are a few key questions to answer before you take off.

1) Where and how will you withdraw money?

Wherever you live, you will probably be withdrawing money from an ATM regularly. That means potentially getting hit with lots of fees each month, especially if you use use one of the struggling U.S. banks. Many banks will charge your account $5 every time you take out money abroad. Then you will likely be hit with another fee from the local bank as well. In Mexico the latter is typically $2 or more. Avoiding the local bank charge is tough: I’ve only found one ATM machine (out of about 25) within walking distance in the city where I live that doesn’t levy a fee, so when I have the time I walk the extra 15 minutes to get there.

There are a few ways to get out of that charge on your home account as well though. I use a Fidelity cash account that doesn’t levy a fee on international withdrawals and I know others who use Bank of America in Mexico because it has an agreement with Santender that allows free withdrawals at those branches. In other countries you may be able to use machines from Citicorp, ScotiaBank, or HSBC without fees if you have an account at one of these banks.

Remember that transferring money from one account to another can take extra time: it requires a ridiculous seven days to move cash from my regular bank account to my Fidelity one, for example. So you need to plan ahead. Also assume that your regular bank will ream you in myriad other ways every chance it gets, including after departure. My wife closed her Regions Bank account after they refused to waive a new $5 per month fee because she didn’t have direct deposit now, even though we had four accounts between us with that bank and she has been a customer for more than a decade.

Bankers as a whole have proven they are not bright business people. Always have a back-up plan when dealing with them. Naturally it helps to have a Paypal account to get around them as often as possible, which you’ll probably need for business purposes anyway. You can get a Paypal debit card as well so you can withdraw directly from there in a hurry—again, with no extra ATM fees.

2) Which credit card will you use?

There are very few right answers to this question. For most people, the one right answer is Capital One. They’re the only big company that won’t hit you for two or three percent on every single charge you make in a foreign country, regardless of the currency. (Panama and Ecuador use the U.S. dollar as their currency, but you’ll often still pay a “foreign exchange fee” even in those countries.) If you charge only $500 a month, you’ve handed over $180 extra dollars in fees by the end of a year with most credit cards. No matter where you live, that’s a lot of money you could have spent on yourself instead. If you belong to a credit union, you may be in luck: those accounts usually don’t levy this gotcha fee.

3) Who is your helper at home?

If your answer to this is ambiguous, you are in trouble. You need someone who can get mail, send checks, and sort out any problems that require using the postal service. Sure, it would be great if we were all in a digital world, but we’re not. I asked my local water company how I could pay outstanding charges online for my house after I moved out of the country. Their answer? “You can’t.”

Can I pay with a credit card?

“No.”

How do I know how much I owe?

“We mail you a bill.”

Sigh…

The other issue is, you need a U.S. address for all kinds of transactions with U.S. companies, so whether you live there or not, you need to have an address back home. This applies to banks, the government, advertising networks, affiliate networks, and on and on. (I imagine it’s a similar problem if you’re from the UK or Canada.)

4) Do you have a web-based e-mail address?

If not, get one now because if you’ve got an address through Comcast, Roadrunner, AT&T, or some other connection provider, your account will be kaput once you move abroad. If you’re a webmaster or blogger who uses lots of Google services, you should probably not use gmail as your main e-mail account. I personally know three people who have had their gmail account hacked in just the past few months and it was a nightmare restoring thier associated accounts for Adsense, Google Analytics, Google Docs, and the rest. All that linkage Google demands means 10X the trouble when something goes wrong.

Get another one from Yahoo, GMX, MSN, Apple, etc. or just route the e-mail from your website/blog server through Thunderbird. As with banking, it pays to have a backup too. Legit e-mails that get blocked by one service may fly through fine on another.

Sure, there are plenty of other things to worry about in terms of language, culture, cashflow, keeping files backed up, and your Skype subscription, but if you get these four nagging aspects of your world back home working smoothly, it’ll be much easier to focus on the reasons you moved abroad in the first place.

Are you living abroad? What did you learn the hard way?

Comments
  1. Solo travel

    Great advice Tim. I have a small web based travel business and have been debating moving to Sydney for 6 months out of the year and having already lived and worked there a few years ago you tips are spot on! I would also add making sure you are aware of all the laws, fees, taxes etc. that the state your company is registered requires and that you can address them while you are away…

  2. Will

    Good points, all.

    I absolutely loathe bank fees…especially the ones you mentioned for “foreign exchange fee” for withdrawing U.S. dollars in Ecuador. Wells Fargo is the absolute worst I have experienced in slamming me with fees. In contrast, Schwab has treated me fairly well. None of that crap PLUS they actually refund me any local ATM charges.

    On postal mail, my family finally got sick of handling my mail for me…so I use Earth Class Mail dot com…it’s a bit more expensive than I’d like, but, they receive mail, they scan it and I can then either have it forwarded if its something I need an original of, or I can download it in .PDF format. Also, they can receive checks and deposit them for me. I’m fairly happy with the service, but again, find it a bit on the expensive side for my needs.

  3. Grant

    Why not open a bank account in Mexico for your day to day needs? Wouldn’t that simplify things enormously? Same goes for the credit card. Admittedly, I’ve never been out-of-country long enough to go to those lengths myself.

    • tim

      If you had ever seen the lines at a Mexican bank, you would know the answer to that question. An hour is not uncommon on a Friday. They also charge you a monthly account maintenance fee, so it’s a wash financially that way and not worth it unless you’re moving here for good.

  4. Inia

    You are right. Many banks are charging account $5 – $8every time I take out my money abroad. Then be hit with another fees from the local bank as well. Paypal debit card will be helpful for directly withdrawal with no extra ATM fees. Thanks for your post.

  5. Henry

    Hi, Tim.

    I write a cheap travel blog in Portuguese, had lived in New York and I`m currently living in Argentina right now. I`ve faced most of the difficulties you`ve presented. We have both brazilian and american bank accounts and credit cards, and even when withdrawing cash from our brazilian account here in Buenos Aires we have to pay extortionary fees (which is unbelievable since both countries are from Mercosul area).
    My american HSBC account was blocked more times I could count, because they thought those south american transactions were suspicious, even after we`ve contacted our branch saying we`d be living abroad form some months.

    One thing we`ve learned the hard way is not to expect american prices for some items. While food, groceries and rent can be pretty cheap, buying electronics and clothing can be a nightmare. Expect to pay two or three times more for an item with poorer quality in South America.

    And something that is really driving us crazy is to get used (again) to the latin american way of doing things.

    Well, traveling to another country and living in it are two totally different situations. Some places are wonderful to live in, but for others a two weeks trip is far from enough. :D

    • tim

      Thanks for your input Henry. It is odd, but things like cars and electronics seem to be far more expensive in dollar/euro terms in cheap countries than they are in more developed ones. I can’t quite figure it out. Even factoring in distribution monopolies and inefficiencies in the market, it still seems nonsensical from a business standpoint. If you’re Sony, Apple, or Toyota, you’re losing a huge number of sales because you’re priced out of the market. Same for the distributor: I’ve had friends bring in cameras and electronics for friends in Mexico because the cost goes up by 50% when you cross the border. Baffling.

      As for banking, I try to use Fidelity, Capital One, and my Paypal debit card. They don’t sock me with fees, so they get my loyalty.

  6. Heather

    Wow-thanks for this. I just found your site. This info will certainly save me some nasty surprises in the future. I thought that PayPal accounts wouldn’t transfer to another county–that you had to open a new one? It’s good to know about the fees, because I have a PayPal debit account.

    • tim

      You should keep your home back account open so Paypal is still connected to that. Better to keep it for a variety of other reasons anyway, like online bill paying and automated payments.

  7. Vanessa

    I need advice on how to stop paying transaction fees when withdrawing money from my US Wells Fargo Account. I live in The Netherlands. I rent out my house in Florida and make a $650 profit from that which I use to live here with. So basically I have to withdraw that amount every month with a $5 transaction fee from Wells Fargo and since they have a $500 withdrawal limit I have to withdraw twice which is $10/month fee. It adds up after awhile – I also have a PayPal debit card so transferring from US account to PayPal is free but transfering from PayPal to my dutch ING account has a fee + currency exchange fees. It’s quite annoying. Any advice is appreciated.

    • Tim Leffel

      The best bet is to use a brokerage cash account like at Fidelity, Schwab, or E-Trade. A Capital One online account doesn’t charge fees either. If you have a Paypal debit card connected to your bank, there shouldn’t be a charge to transfer to it unless they’re under different names.

  8. Casey Alvarado

    Very interesting information. I had troubles with my e-mail address. It was not web-based. My account was kaput. :) It was my mistake. Unfortunately I found your article too late. Thank you for sharing it! Greets!

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