In this report, I share why some people fail at retiring cheap overseas and ways to avoid failure.
I left the USA in 2007 and have been to 67 countries so far. I share videos and written reports about where and how to retire cheap in paradise all over the world. I will give you a link to everything I discuss in writing at the end, so no need to take notes. I am showing you pictures I took all over the world.
When you have lived overseas for 14 years like me, you will meet people that tell stories about themselves and others who had to give up international living and go home. Trust me, after you have lived this way, you will not want to go home, so listen carefully.
The good news is that many people that failed and went home, learned their lesson, and were able to make a successful second attempt. So, I am going to share their mistakes, and more importantly, how to stop those mistakes from happening in the first place.
Why Some People Fail at Cheap Retirement Overseas
Kid in a Candy Store:
When you first retire cheap overseas, you will feel like a kid in a candy store. Your time will be all your own because you won’t have many, if any, of your old responsibilities, connections and routines, taking up most of your day.
You won’t have to mow the lawn, clean out the garage, go to visit family and friends, or do any of the other things that were taking away from your ‘me’ time. You will wake up in the morning and can do almost anything you want with very few limitations.
Once you get acclimated to your new area of the world, you are going to feel really free and easy. You are finally going to be living your ‘me’ time in early retirement. It will feel like you are a kid in a candy store–You may find that you just keep eating candy.
For some early retirees, especially men, you may find yourself eating too much, drinking too much, and spending too much money on nightlife and dating. If you have any history of addictions like alcohol, drugs, or sex, you may find yourself struggling with those again in many parts of the world.
If you get deep into any of these addictions, days will turn into weeks, weeks into months, and months into years, and you may run out of money and find yourself on a flight home from paradise, or worse.
Set some rules about behavior before you jump on a plane to paradise. First, you need a budget and you need to stick to it. So you have to monitor early and spot when you are sliding down a rabbit hole.
Second, for single people, I recommend not paying for sex. It is dangerous from a health perspective and it is bad for your psyche. Just date normal people where there is mutual attraction and interest. There is no shortage of people in these places.
Third, if you do have an addiction, don’t put yourself around people or environments that will tempt you to go in a dangerous direction.
Reverse Sticker Shock:
When you first arrive in one of my retire cheap in paradise destinations, you may suffer from what I call reverse sticker shock. Things are likely going to be much cheaper than in your home country. It is not unusual for a beer to be $1.50 in a bar instead of $4.00.
The places you can rent could easily be less than half of what you would pay back home. You might go on a snorkeling tour that is $10 instead of $50. You may be able to rent a Scooter for the month for $100 instead of a car for $50 per day.
Many people will be shocked at how far their money goes outside their home country. The symptoms of that shock will include a feeling of invincibility. You might be shocked into doing things that you wouldn’t do at home.
You might hear your voice yell something in a bar you have never said before, like “One round of beer for everyone on me.” You might rent an apartment or house for way over budget … saying to yourself, “It is so cheap compared to home, how can I say no?”
You see, when you first arrive in a new place, you could do stupid things just because of the reverse sticker shock. It is all so cheap, it must fit easily into my budget, right? Well, maybe not.
The sticker shock may cause you to consume too much of everything.
What is the solution to reverse sticker shock? It may not be a problem for you if you have unlimited resources. But if you have limited resources, like the rest of us, such as a social security check and a fixed emergency savings account, you have to honor that or you will be going home ahead of schedule, with empty pockets.
Before you leave your home country, or starting today, set a budget for each category: Rent, Groceries, Restaurants, Entertainment, Transportation, and Alcohol. Your rent will likely be your biggest expense. Set a maximum rent of about one-third of your entire budget.
Keep track of your spending for the first few months so you know if you have a problem right away and can adjust before you deplete your emergency funds.
The Currency Disconnect:
You are likely to suffer from the currency disconnect during your first few years in paradise. The currency disconnect is what happens when you are doing currency conversions in your head as you pay with local currency.
Today, one US dollar is worth over 14,000 Indonesian Rupiah. So when you buy something using Rupiah, you will think that it is cheaper than back home. When you do the conversion, you will realize how cheap it is compared to home.
Thereafter, whenever you buy that thing again, you will think about how cheap it is. It is so cheap, you will say without thinking about your budget in the aggregate, “I’ll take two or three please.”
With the local currency in your pocket, you won’t have a real understanding of how fast you are spending it. At home, when I have $40 dollars in my pocket and I spend $10, I know what I have left, without looking in my pocket.
But $40 dollars is almost 600,000 Rupiahs. If I leave the house with 600,000 Rupiahs, it just feels like I am loaded so I spend money faster because I have no perspective. It feels like I am rich because of the currency disconnect.
This one is really hard to adjust to. So you may need to only bring out however much money you are willing to spend that day. Then maybe a little extra to get a ride home if you run out of money.
Once you start thinking in terms of local currency instead of dollar conversions, this won’t be such a disorienting problem. But that could take a long time depending on how well you adapt to your new environment.
Budget Delay and Denial Syndrome:
Most of the above problems can be handled more quickly and easily if you don’t fall into the Budget Delay and Denial Syndrome. This is a syndrome where you know things are not going well because you are depleting your emergency savings, but you remain in denial about it.
You tell yourself that things are just temporary and later you will get serious about living within your means. But you keep telling yourself that and letting time pass, as you watch your emergency fund get lower and lower.
You say things to yourself like, “I will look at this more closely later,” “Maybe I will start teaching English so I don’t have to worry about my budget,” “I deserve to have this fun right now … later I will get serious,” or “Money always just works out for me, so I am not going to worry about it.”
To overcome the Budget Delay and Denial Syndrome. Quit lying to yourself and get serious today. Here are some ideas of how to quit hemorrhaging money before it’s too late.
Set a maximum ATM withdrawal amount per week and stick to it no matter what. Set a rule, Friday is withdrawal day. When the money is gone, at the end of the next week, get creative on things to do to have fun without going to the ATM machine. Just this simple awareness might save your retirement in paradise.
Set a team priority to get everyone involved in the “save my retirement project.” Enroll your significant other in the budget goals so they know why you are saying no sometimes, and yes other times. They will know why.
Brainstorm as a team about living within the maximum ATM withdrawal. What food is cheap in the grocery store. If we drink at home or at the beach how much could we save? What if we only go out once a week to restaurants for date night. Think it through as a team so your partner feels part of the team effort.
Almost all of my retire cheap in paradise destinations have cheaper healthcare than in the west, and some are even higher quality depending on where you go.
Some ex-pats buy health insurance, and some are self-insured, like me. But eventually, we all get sick. So if you don’t have insurance or another plan in place, you may end up on a flight home someday.
To reduce the number of times you get sick and to increase how quickly you recover, consider eating better and exercising. Also, get enough rest and drink enough water to stay hydrated.
Some ex-pats get seriously injured in scooter accidents overseas. Even if you are an experienced motorcycle rider in the west, it is very unlikely that you have encountered the crazy driving behavior that is common in many retire cheap in paradise destinations.
So stay away from scooters and use other types of transportation. But if you do decide to rent a scooter, go really slow and wear a helmet. To learn more about my thoughts about healthcare, insurance, and money, review my report, The Two Biggest Risks of Retiring Cheap Overseas, link provided.
Another reason people fail at retiring cheap overseas is because of unrealistic expectations. They assume things about their new world before they get there that may not be true. Then they get disappointed.
One of my good friends that watched me travel for years finally took her first international trip about 5 years ago. She went to Paris, France. She was booked for 10 days but came home after 4 days because she didn’t know what to eat. She had unrealistic expectations about being able to find her favorite foods outside her home country.
Food was also one of the main things Qiang struggled with when she first left Malaysia with me. The food in Asia is generally much healthier and spicier than most other places around the world. She missed her home food badly by the time we returned to Asia, 18 months later. For more examples of unrealistic expectations, review my report, “What Sucks about the Philippines and why you will love it anyway,” link provided.
The way to avoid unrealistic expectations is to do exploratory visits before deciding where you want to retire. If you pick your top 5 or 10 places based upon YouTube videos and my written reports, make sure to do exploratory visits, with boots on the ground, before making any final decisions. Review my Ordered Steps To Retire Early Report, link provided.
Visa Rule Changes:
Countries change their rules from time to time about who can stay in their country and for how long. The speed of visa rule changes around the world has increased in recent years.
That is one of the other reasons you should do exploratory visits to your top 5 countries before settling permanently in your favorite. That way you will know where to go if your present country gives you the boot.
Other people eventually feel guilty about being away from their family after many years and want to return for more constant contact. Still others decide to return home to help with aging parents or parents that have been given just a few months to live.
Some people are comfortable doing zoom calls more regularly when they miss family. Others return every year or so to keep close contact with their family. This will all depend upon the size of your emergency fund and your desire to spend more time with family back home.
For me personally, one of the benefits of having the freedom to be anywhere in the world at any time, was my ability to be with both my father and mother when they passed away over the last 10 years.
If I had a more normal life, I would have had to return to work or other commitments after a few weeks at the bedside of my dying parents. But because I have total freedom to be anywhere in the world, for as long as I wanted, I was with both of my parents when they passed away.
To learn more about how my hobby business helps me pay for this freedom and lifestyle, come review my Hobby Income Course, link provided.
I have included the following other resources that are related to this topic:
Thanks for reviewing my report “why some people fail at retiring cheap overseas.” This is Dan of Vagabond Awake, the Youtube Channel for VagabondBuddha.com. The world is your home, what time will you be home for dinner?