In this video, I am going to tell you about 7 Stupid Mistakes Retirees Make in SE Asia that can screw up their new lives. I refuse to embarrass or harass the actual people. But I do want to help you avoid these.
So, I am going to use the fake name Charlie and share stories about Charlie’s mistakes. That way, I can warn you without embarrassing the real people.
I am going to tell you 3 short stories about Charlie’s mistakes. The first story I will call “Blind Love.” The second story I will call “If it’s so cheap, why am I going broke?” and the third story, “Why do they do it this way?”
After each story, I will explain how to change your behavior while making the same choices without getting hurt so badly. As I tell you the Blind Love story, see if you can spot Charlie’s biggest mistakes, and tell me what you would do differently in the comments.
I left the US in 2007 at age 46, and 19 years later, I am 65 and have lived outside the US this entire time. People use my reports, videos, and courses to live a better life overseas.
Blind Love
Charlie is from the USA. Charlie’s wife of 37 years divorced him. She got the house, her 401 (k), and her Social Security, and she decided to keep working for now.
Charlie got his 401 (k) of $328k and his $1,800 per month from Social Security. But Charlie was worried he wouldn’t have enough to retire in the US. But then he saw his friend Jerry posting photos on Facebook from his new life in SE Asia.
Jerry was living at the beach with a beautiful younger woman for half of what his life in the US cost.
So, two weeks later, Charlie jumped on a jet to SE Asia. As soon as Charlie landed, he signed up for online dating. For the first few weeks, all of the women seemed to care only about Charlie’s money.
Then Charlie met Maria. Maria was 25 years old, beautiful, easygoing, a yoga instructor, innocent, and unmarried. Maria was different from all the other girls. Within a few days, Charlie and Maria were spending all of their time together. After a few months, Charlie realized he loved Maria more than he had ever loved his wife.
Maria was from a poor family, and Charlie wanted to make sure Maria never had to worry about money again. So Charlie married Maria on the one-year anniversary of their first meeting.
Charlie’s father died at 68, and Charlie was already 64. So, Charlie wanted to make sure Maria would have a place to live in case Charlie died young. So Charlie found a small house to buy so Maria would have a home when Charlie was gone.
When Charlie made an offer to buy the house, he learned it could not be titled in his name. So, Charlie decided to put the house in Maria’s name. The house would be in Maria’s name anyway when he died.
Charlie needed the cash in his 401(k) wired to buy the house. But when Charlie tried to open an account overseas, the banks said he couldn’t do so in his own name alone. The bank would allow Charlie to open a joint account with his new wife, Maria.
Charlie and Maria opened a joint account, and Charlie had $250k USD wired from his 401(k) to the new bank. He used $120k of the money to buy the house.
Charlie and Maria used another $30k to buy new furniture, appliances, and a 3-year-old economy car. Things went really well for the first year, but then Charlie felt distance growing in their relationship. Maria was gone for hours on some days, visiting family and friends, and Charlie started feeling lonely.
Charlie had to go home to the US for a few months when his mother was diagnosed with stage 4 cancer. Maria wanted to go, but she couldn’t get a visa to the US. So Charlie went alone.
After Charlie’s mother passed, Charlie flew back to see Maria. But she was cold and distant when he returned. Maria even slept in the second bedroom.
Within a few weeks, Maria asked for a divorce. A lawyer told Maria that since the house was in her name, she could ask Charlie to move out. The lawyer also told Maria that, since she was a signer on the joint account, she could move the money into a new account in her own name, so she did.
The next day, when Charlie returned home from fishing, he was served with a restraining order. He was never allowed to enter the home he had bought for Maria. He thought he was securing his future retirement, but all he did was buy Maria a home and lose the money in the joint account.
Six months later, Charlie received a letter from the US government demanding a $10k fine for opening a foreign account and moving substantial assets into it without properly reporting it to the US government on the proper forms.
Marriage, Real Estate, Foreign Banks, Failing to Report Foreign Accounts, Tax Consequences
Before getting married overseas, Charlie should have consulted a lawyer in his new country to learn how to protect his premarital assets. Charlie is too old to work now, so he should have been more careful about protecting what little money he has left.
Luckily, he still gets his Social Security.
Charlie loved Maria and wanted to protect her. But he should have structured the real estate transaction so that he retained possession of the house until his death.
There are many ways to structure real estate transactions that vary from country to country, such as trusts, mortgages, and long-term leases, so that Charlie could remain in possession of the property as a pre-marital asset. Since the law varies by country in Southeast Asia, Charlie should have consulted a lawyer before purchasing the new home.
There is nothing wrong with falling in love, but you also have to love yourself enough to protect your financial security in retirement overseas.
When Americans open foreign accounts, there are several laws they must comply with, and many carry very stiff penalties. Make sure to talk to your accountant so you don’t end up with stiff penalties. Uncle Sam is watching.
In my free eBook, I explain why you should keep your money only in your home-country bank during the first few years. Putting money in foreign banks for the first few years of living overseas is not a good idea until you understand the consequences.
My free eBook also includes 9 other things I did before I retired overseas. And they have kept me out of trouble for 19 years so far. You may decide to do things differently from what I did. But listen to my logic and then discuss it with your lawyer and accountant before moving overseas.
If it’s so cheap, why am I going broke?
Charlie was heartbroken after Maria kicked him out. After Maria drained the joint account and Charlie drained the rest of his 401(k) to pay U.S. taxes on the $250k he pulled to buy the house, Charlie was flat broke.
All he had left to live on was his $1800 monthly Social Security.
So, Charlie rented a room from Jim. Jim was another single expat who lived just down the street and had an empty bedroom. Jim’s 2-bedroom house already had furniture, so Charlie only had to pay $250 month in rent plus utilities. Charlie decided to stay away from serious relationships and just have fun for a while.
Charlie’s new roommate, Jim, loved to go out to eat at tourist-style restaurants, shoot pool, drink imported whiskey, and go to the disco to meet local women three or four nights per week.
Charlie loved getting out of the house with Jim and having fun. It got his mind off of Maria, whom Charlie still loved. But Charlie was going through money fast, hanging out with Jim.
Maria had taught Charlie where to eat in local-style restaurants for $2 to $3 per meal. Charlie had grown to love the local food and knew a bunch of cheap places to eat. But Charlie couldn’t get Jim to go to any of the local style restaurants. Jim refused to eat Asian food.
All Jim wanted to eat was burgers, steaks, pizza, pasta, and chicken wings. When Charlie went with Jim to tourist-style restaurants, he was paying $8 to $12 for his meals.
Whenever Jim took Charlie to the tourist discos, Jim would start buying rounds of whisky and mixed drinks for both of them and whatever women they found each night. So Charlie felt like he had to buy rounds of drinks to keep up with Jim. So Charlie would end up spending over $100 per night, several nights per week.
After a couple of months of this, Charlie realized he couldn’t keep up with Jim. Charlie was running out of money before the end of the month.
Recreating Your Old Life in a New Country, Keeping Up with the Joneses
Charlie loved the local food and could eat for $2 to $3 per meal. Charlie also enjoyed hanging out in local-style bars and coffee houses where beers and coffee were $1 to $2 each. Charlie loved talking to local people who wanted to improve their English by chatting with him. Charlie felt like he was learning about the new culture when he hung out with locals.
But Jim didn’t like the local food. He didn’t like the chill local-style atmosphere. Jim wanted food, drinks, and music from home. Jim enjoyed the high energy that reminded him of home when he was younger.
But Charlie honestly loved learning about the new culture, foods, music, and lifestyle. Plus, Charlie moved overseas partly because he realized that $1,800 a month could buy him a better life than he could find in his home country. And living like Jim was causing financial stress for Charlie.
Jim has the money to eat only at tourist-style restaurants and party only at western-style establishments, and he takes great joy in doing so. There is nothing wrong with that, and he can afford it, so why not?
And living like this overseas for Jim is probably 50% cheaper than the same life would cost in his home country. So it is perfectly fine that Jim is happy creating his old life in a new country. It’s his money and his right to enjoy it however he wants.
Charlie is loving the temporary distraction, but he is tired of keeping up with the high-energy life that Jim wants to live. So, Charlie should probably cut back to one or two nights a week with Jim and spend the rest of the time living a more local life, which he loves.
Why do they do it this way?
After 3 months with Jim, Charlie decides to get his own place. He does the math and realizes that if he eats more locally and hangs out in more local areas, he can easily save a few hundred bucks per month. His money will last beyond the end of the month, so he can start saving again in case of an emergency.
Charlie loves walking in neighborhoods. While walking one day, Charlie finds a small one-bedroom apartment in a local area renting for $400 per month plus utilities. It’s near some of his favorite local-style restaurants and across the street from one of his favorite coffee shops.
So he decides to live on his own for a while and just spend a day or two per month with Jim.
On the day Charlie moves into the new place, his new neighbor Hank stops by to say hello. Hank has been living in the building for 5 years. Hank is from Canada. Hank worked as an electrician, plumber, and handyman before he left Canada 6 years ago.
Hank offers to show Charlie around the new neighborhood. Charlie explains that he will stop by and see Hank once he gets settled in his new apartment.
Charlie wants to develop more local friends this time. But Hank keeps dropping by, offering to help and sharing what he knows about the neighborhood. Hank is a bit chatty and lonely, so Charlie ends up having several conversations with him in the first few weeks.
Most of the conversations Hank initiates concern differences between local culture and back home. Hank believes the locals do so many weird things that he doesn’t understand. They don’t know how to do plumbing or electrical work correctly.
Hank explains that, back home, all of these apartments would be immediately condemned as dangerous and unlivable. They are not grounding the electrical right as we do back home, and the way they do plumbing here, they would be lucky if it lasts 3 years. Back home, our plumbing can last 20 or 30 years.
In another conversation, Hank explains that the landlord had a guy come out three times to fix the plumbing, but it never worked properly. So Hank finally decided to go to the plumbing supply store, but they didn’t have any of the right tools to do the job right, as they do back home.
Hank also shared how they don’t know how to drive here, that the police are all idiots, and that the locals are so lazy and stupid that he is just getting so tired of how they do things here.
Why do they do things this way here? If they just learned how we do it back home, life would be so much better and easier, but they just can’t get it together here.
Bitter Negative Expats
When you first move overseas, the first few years, you may meet expats who want to show you around and give you the inside story on your new country. They are trying to be helpful. They want to bring you up to speed so you don’t have to suffer problems they did.
But be careful. If they are overly negative about the country or its people, their skewed negative view could easily rub off on you. You may end up hating a place that you would have ended up loving had you learned about it through your own eyes.
Some people are glass-half-full people, and others are glass-half-empty people.
Charlie already has a generally positive view of his new country, even though his first year didn’t go as smoothly as he may have hoped. But if Charlie starts listening to Hank too much, Charlie could easily get Hank’s skewed view of the country that he would have loved through his own eyes.
Some expats spend their time and energy trying to teach locals and other expats how to do things as they do back home. That view of a new country will never help you integrate or have a successful life.
My view is that it is better to be a student in a new country than to be a teacher of how things are better in your home country. If you really can’t stand a place and that opinion stays firm, I recommend you slow-travel around that part of the world for a few months and find a place that fits you better.
But in the early days, before you have your own complete opinion about a palace and it is still forming, you stay away from the bitter, negative expats.
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