As I recently wrote about, the Internet is such an amazing invention. And it allows one to live a life that’s almost completely digital and borderless.
Upon my relocation to Chiang Mai, Thailand later this week, my life will actually still look a lot like it does here in the US.
I’ll still be spending a lot of my time reading, writing, and managing investments. I’ll be waking up with no alarm clock. I’ll be at the gym six days a week. I’ll be exploring my beautiful surroundings. So on and so forth.
Life won’t be terribly different. But it’ll be a lot cheaper. And I believe it’ll offer more opportunities for serendipity.
As great as that is, however, I need to make sure that my online access is secure and looks the same as it does in the States. I need to make sure my mail is handled. I need to make sure my money can be managed while I’m abroad. I need to make sure I can access local currency and pay for things without foreign transaction fees and other forms of friction costs.
It’s these small details that need to be taken care of before you move abroad. That’s because one replicating one’s domestic life to a certain degree is necessary for long-term viability as a dividend expat, especially in terms of being able to go about completing everyday financial tasks.
As such, I’m going to reveal five financial tools that I’ll personally be using to take care of a lot of the minutiae that’s involved when relocating abroad and becoming a dividend expat.
Money management should be the same abroad as it is in the States; however, it’s perhaps even more important that one is on top of their dividend income, daily spending, etc. That’s because one lacks the safety net that’s almost omnipresent in America.
Personal Capital is an excellent money management tool that works no matter where you are in the world. It culls all of your financial information/accounts and pulls it together into fantastic visuals and tools that give you a great heads-up view on what’s going on with your money. It’s a high-level view of your total financial picture. And it’s totally free. You really can’t go wrong.
And for straight-up budgeting, it’s hard to do better than Mint. While one has to manually input cash transactions, Mint is a resource I’ve been using for years now to manage my budgets and know, down to the penny, exactly what I’m earning and spending. And I’ll obviously continue to use it for as long as I’m abroad. It works the same no matter where you are in the world, although one will just have to make sure they’re doing the currency conversions themselves when inputting cash transactions.
A VPN is a virtual private network. It allows you to browse as if you’re actually physically present in another country. This is a product that’s absolutely vital if you’re going to be abroad, as you want to make sure your browsing is not only safe and secure, but you also want to access sites as they’re supposed to look in your native language.
There is also access to be concerned about, as censorship is unfortunately somewhat common in other countries. And some music/movie streaming services might not work the same (or at all) abroad. In addition, some financial services may restrict you if you access your accounts from a foreign IP address.
So you need to browse as if you’re still domestic.
I’ve been using TunnelBear for years now. Not necessarily because I’ve had to worry about language/access, but because I regularly access sensitive data (like my investment accounts) from non-secure locations (like local coffee shops). In fact, I’m at a coffee shop right now, writing this article. And I’m using TunnelBear. While unlikely, it’s possible that someone could hack my information when I’m accessing public Wi-Fi.
I used TunnelBear when I first visited Thailand 18 months ago. It worked flawlessly. Highly recommended – even if you’re not planning to move abroad. If you are moving abroad, though, this is absolutely necessary.
Unless you have someone handling your mail when you’re abroad, you need a digital mail service.
I personally use Traveling Mailbox.
It’s just an awesome service.
You get a physical US mailing address, which is often necessary for credit cards, a brokerage account, etc. It’s difficult, or impossible, to conduct your US-based life from abroad if you don’t have an address in the States.
When you receive mail, Traveling Mailbox uploads it for you, digitally, into a secure website that you can access. You then manage your mail. Traveling Mailbox will scan your mail for you, upon which time you can save it permanently and then have it shredded. Or they can forward it to you, wherever in the world you may be.
Of course, I selected a Florida address, which is where I’ve resided since late 2009. Not having to worry about state income tax (or mail, for that matter) while I’m abroad sounds mighty nice to me.
If you’re going to buy things abroad via a credit card, it’s imperative that you select one that has no foreign transaction fees. This is fairly obvious.
But if you can land a credit card that has no annual fee, even better. And one that also has a nice cash-back program is fantastic. A sign-up bonus, too? Now we’re really talking.
There are a number of credit cards out there that can accomplish all of the above. I’ll personally be using the Capital One Quicksilver card, but it’s far from the only one that can/will work.
This card is great, though. No foreign transaction fees. No annual fee. Free credit monitoring. And 1.5% cash-back rewards on every purchase. That means when I’m buying things in Thailand, I’m benefiting from not only the much lower cost structure, but I’m also getting 1.5% cash-back on top of that.
It’s also prudent to have at least one backup card (which would always be kept separate). I recently signed up for the TD Cash card (for my backup), as it works very similarly to the Quicksilver card. The cash-back scheme isn’t quite as appealing, relegating the card to backup status. There’s a $200 sign-up bonus right now, though, so I decided to take advantage of that before I leave.
While having the credit card figured out is important, it’s perhaps even more important to figure out the ATM/debit card. That’s because you’ll need to be able to access local currency regularly, especially considering that a lot of vendors overseas aren’t yet accepting credit cards.
Just like with the credit card, you’re going to want to limit your friction costs with a debit card. ATM withdrawal fees that are charged when you withdraw money abroad can add up in a hurry.
The best debit card for this, in my view, is the Charles Schwab Bank debit card that comes with the Schwab Bank High Yield Investor Checking Account.
I already discussed why I transferred most of my assets to Schwab, but the Investor Checking Account I have attached to my brokerage account is perfect for becoming a dividend expat, as the debit card I received with my account has unlimited refunds for ATM fees worldwide. Since these fees can be somewhat significant, especially if you’re withdrawing money frequently, this further saves one money and headaches.
While this deal from Schwab could change/expire at any given time (just like the free brokerage account trades noted in the linked article above), it’s a very appealing offer that wasn’t at all lost on me when I signed up. My switch to Schwab saved me brokerage fees and foreign ATM withdrawal fees. That’s a big score.
Becoming a dividend expat can offer significant quantitative cost advantages via geographical arbitrage, as well as wonderful improvements in one’s social and love life.
However, one needs to make sure they handle the small details that allow them to manage their money, go online with no issues, collect and view mail, and pay for local transactions with minimal or no friction costs.
These are some of the best products and services I know of. And if you’re ever considering becoming a digital expat, they’re practically necessary. Even if you’re not interested in living abroad, though, quite a few of them are extremely helpful. The money management tools, in particular, are invaluable (and free!) for anyone aiming to achieve financial independence, regardless of whether or not you ever plan to relocate abroad.
Are you planning on becoming a dividend expat, or are you already one? Do you use any of these products and services? Find them useful?
Thanks for reading.
Image courtesy of: Sira Anamwong at FreeDigitalPhotos.net.
Special note: Some of these links are affiliate links. I’m only recommending what I’ve personally benefited from, and I only recommend what I think others can benefit from. Using these links will cost you nothing extra, but I may be compensated if you sign up for products/services.