Over my years of living in the Philippines, I have literally met thousands of expats. Some have become friends, others I have only met once or twice. There is one thing, though, that impacts nearly every single expat that I know or have met. That thing is financial. Nearly every expat that I have run across over the years always has limited funds. They came here with plenty of money, but spent it unwisely. Some came here thinking that their pension would be plenty for a super life in the Philippines, especially when added to their “significant” (they thought) savings. Somehow, though, those funds in savings never seem to be enough.
Hey, I am not belittling anybody here, I got myself in the same situation a couple of times over the years, but luckily have always been able to work my way out of it. My first incident where the financial alarm bells were buzzing happened just 2 years after I moved here. I came here thinking that I had plenty of money and it was not even a worry. I had ideas for businesses to supplement my savings too, but my savings ran out a lot faster than I thought they would. When this happens, you know it is happening, but you tend to ignore it. When you finally face reality and accept that you are in trouble, it is usually late in the game, when things get critical. That is how it happened with me. But, I went into action, and was able to save myself and my family. In fact, I came back stronger than ever and was able to earn a great income in the Philippines.
I recently got an inquiry from a fellow who is not yet in critical condition, but he sees his savings beginning to dwindle, and he wants to save his situation before he is forced to move back to the States. That was a real motivator for me too, as I was loving life in the Philippines and did not want to leave.
A friend that is quite close to me came here a few years back with about $20,000 in savings, and an adequate retirement pension, he thought he was set. I cautioned him to preserve his savings as much as possible. But, it was only months and the savings was gone. That is a tough situation to be in, believe me. My friend has been trying different ways of supplementing his income, and I think he is experiencing some success.
In today’s podcast, I address this financial issue that seems to arise for virtually every expat, and I explain how I got out of the problem. Hopefully the things I did can help you also overcome the problem or avoid it all together.
Listen in, hopefully you will learn something, or perhaps you have information based on your experience, and you can share that with other readers and listeners! You would be most welcome to do so!
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Thanks again for listening, everybody!
Bob,
You are spot on with your take. I worked hard to have a sizeable savings before coming here. Mine has actually grown since arriving. I save at least 40% of my pension and still live comfortably. I think having a health insurance plan to supplement Philhealth is smart in case you have a long and expensive hospital stay that can be financially disastrous. Even though healthcare is quite cheaper here, bills can still become very high. But the main thing is to have a wife that is kuripot like my Anne that can really save a peso lol.
Smart. Having the kuripot partner is huge. If you’re on a budget, a gold digging gf may not end well. Find a good partner. Filipinos live on $250 a month. $1000 goes a long way.
Eating out every day at Starbucks and TGI Fridays is more expensive there than in the states. You will go through money very quick.
Hi PapaDuck – Yes, I completely agree with you. Problem is, there are so many expats that don’t follow this advice, and quickly get into big financial trouble. It is so common!
I have always done well making money in the Philippines.
I moved to Davao when I was doing SEO and then morphed into the call center business.
Here is a great litmus test for if a job will work out. Try “working from home” in the US and earning income. Set up your PayPal, deposits, etc. ahead of time.
I am in my 30s and have no retirement income, so I have always needed to have a solid income.
My dad did well on his $1100 a month in SS in Davao. That wouldn’t have worked in Manila or maybe even in Cebu.
Hi DC – you and I seem to be a lot alike. I moved tot he Philippines i my 30s – no pension, no retirement or any other type of income. I had to make it on my own, and I did.
You are so right about people making it work before coming to the Philippines. Get it working while you are still “home” and then you can transfer to the Philippines smoothly and no problems.
Great advice there … I’ve tried to give it often before myself. Especially for those “waiting out” a few years, waiting for their pensions to mature, just do this.
Love in the Philippines while in the USA. The average American would be shocked if they seriously went after every penny they are spending and reduced or eliminated everything possible.
Not only would this condition them for living cheap here in the Philippines, it would also build up a sizable “emergency fund” if the savings were put away somewhere safe.
That sounds great. So many need to hear what you’ve been successful at. Filipinos, and X-pats, are looking to make some extra money. Seems they’ve tried almost everything.
Rusty
The things that I have done to succeed are available through my books and also free on my other blog – Ways to Make a Living.
Bob, etc., I’ll pass your information (about ways to make money) to those I know. Maybe they’ve tried a call center, or other business, on Bohol. However, I haven’t heard that they’ve tried it.
Bob, I love your site. There is a wealth of information on here. It sure beats the other sites dealing with life here.
Rusty
Hi Rusty – Thank you. Really, working at a call center is not a way to make serious money, though.
I’m sure you’d know as you’ve been successful. I’m not sure what those I know would want to do. I’ll check on your website.
Personally, I just want to volunteer at a school. I used to be a teacher in the States. I tried once but found out I was a distraction. The kids just wanted to pay attention to me instead of their teacher. You know the white guy in the classroom. The kids, where I volunteered, just weren’t used to having/seeing a foreigner at their school.
Rusty
Bob;
You know my story, I was living here for years and flying off to a new ship and getting paid well. I have friends here that had the same job and the same advantages who went through their pay check like grain through a goose and can’t figure why I live better. When they were working, they lived “The Millionaire” for a day life style and tried to continue it after the big paychecks were gone. One guy I know is in Texas and is a security guard working to get himself back here while his wife and three kids live on $200.00 per month. Luckily he owned a house free and clear. I wish him well, but I also know where he went wrong.
Hi Paul – what you describe is so true! I think we have all been there at one time or another, I know that I have done it, overspent, and wasted money. Now, though, I learned my lesson and live a more frugal life, save money when possible. It is something that we all have to learn. Some of us learn it before it is too late. Others don’t learn until they are in real trouble.
You don’t just see that happen there. In a few years, I will be eligible for a pension. Many of the people I work with, I can already see, are in for a big surprise when they discover that their big government pension isn’t that big. The average person in our pension system gets 60% of what they were making. Notice that is average, so definitely some get less.
Well, for those folks who have been spending 100% (or more with credit card debt) of what they make, life is going to get very interesting very quickly.
Hi Tom – Absolutely, expats are not the only group who get a rude awakening. Another thing… I know you live in California, and I think some of those “government pensions” that you are mentioning are California State government pensions. California is on shaky financial ground, and if those pensions were to be reduced or even disappear completely there would be chaos. People think that if it is a government pension there is big money sitting in an account somewhere to pay it.. but that is generally not the case. That money was spent years before and a pile of IOUs is what is in the “account”.
Bob,
I am fortunate the Florida State Retirement System is very well funded and in great shape.
That is certainly a good thing!
Not sure where California is now, but at one time California would have been the 7th largest country in the world, if it were it’s own country. I would not worry about California pensions. I would worry more if I lived in Wisconsin, Texas, or Florida where the local governments are big on privatization of public services.
CA is the 8th largest economy. Any type of pension, I believe, depends on the economy. The pension could be in Iowa, NY, or Germany. It really, again in my opinion, depends upon the company/portfolio manager/type of investments.
Rusty
Bob, Great Post. So many need your advice. Even Filipinos are trying to do whatever to make extra income. We have Filipino friends that are working with MLM companies to earn extra money. Actually, the right MLM company can be great. I sure wish them the best.
Rusty
I have never been an advocate of MLM. I Just feel that is a wrong move in most cases.
Very True. I’ve also never been involved with a MLM groups. Some seem to be successful and like them.
Rusty
Bob,
You are very correct. For my particular pension, they finally put some in some changes that should allow it to continue, but it will require everyone (participants, the state, and the employer) to all put in more. It also changed what happens for future employees. It took years for this to make its way through the legislative process.
However, that only takes care of one of our two large pension plans.
You are also correct that there is no large pile of money somewhere. The way the system works is that they take your money and go out and make more money with it. Some folks think it is like a savings account, but you never end up contributing anywhere near what it takes to pay you in retirement.
So I am much more hopeful now than I have been in years past. Still, I have a secondary retirement that I contribute to as well.
Glad to hear that it may well work out OK.
Part of the problem is we go and in the process forget how to say no. People will quickly drain you if you are not careful:)
True
Americans are too generous
For most expats they are generous beyond their means and to their own detriment.
I don’t think it is the Americans that are generous. Filipinos cannot deny their families of their fortunes. When going on vacation and having my wife control the money we spend twice as much as when I control the money. It is more difficult for them to ask for money knowing they are giving it to the family. Gon’t get me wrong, I am generous but not to the point of going without. I know several Filipinos that say they could never afford to retire in the Philippines because they cannot support all their family.
In my experience, Filipinos are generous with their family. Americans, though, unlike many other people, are generous with complete strangers. I know few Filipinos who will give money to a complete stranger. I am sure there are some, but it is not the norm, in my eyes. With Americans it is quite common.
Hi Bob , work hard use common sense and live within your means, i worked
Hard back home to setup a business in the Philippines which now gives me and my family a nice lifestyle I retired at 52 been in the Philippines 7 years I can do
What I want with my time now, yes I’ve seen expats here on the breadline but
Some of them you can’t help who have wasted their money and they haven’t
Got enough money for a air ticket to go back home, Derek in pasig.
You sure are right on that, Derek. Some people just can’t learn, or if they can they just don’t want to. Making mistakes when you are too young to know better is one thing… but to go to a foreign country at middle age and throw everything away is simple crazy.
There are some bad news on the horizon regarding the USD.
The buck will hit $ 0,50 cents in the near future.
The near future is before the end of this year, or even sooner…!!!
That will hit the wallet like a sledge hammer.
For those who believe, explaining is is not necessary.
For those who don’t believe, explaining is not possible.
Hi, PalawanBob.
i am wondering if what you say is connected with the $ losing its world reserve currency status; i know that some countries are doing business among themselves with their own national currencies and de facto abandoned the $.
In the big scheme of things i can expect that the euro will bite the dust too and i wonder if i’ll be able to buy land and build a house in the Philippines with a devalued bunch of euros.
Forgot to add a comment about the Euro currency.
It will fall at the same time as USD and it will be bellow the value of the USD.
Europeans better be prepared for this.
For those who may be questioning how I know this: there are a few things one learns over a period of 35 years as a market trader. Among others, technical analysis.
But of course, you don’t have to believe me.
It looks like you replied to my comment while i was typing it.
Bad news for sure!
Then there are Filipinos, and others, who just live life to the fullest without contemplating what might, or might not, happen. No worries. No stress.
Rusty
Not True, the $ will be stable!
Since you know what will happen what can one do? What caused this to happen? How many years did this take so the collapse will happen?
Rusty
I teach online college classes and I hope to make extra income from that when I move to the Philippines. I need a fairly fast reliable internet connection. I am concerned that I won’t be able to get that in the Philippines. Is it possible to get fast reliable internet there?
Thanks,
Joe
Oh, online teaching is a great thing to do from here! I have done some of that myself. A good solid connection is available where I live, in Davao, in much of the Philippines that would be a problem, though.
Very true, Bob. I know PLDT/SMART laid fiber optics on Bohol. Did that happen on all islands? I wonder how many more years it will take before the fiber optics is up and running?
Rusty
There seem to be a TRIGGER EVENT coming. It will prompt the collapse of both currencies at the same time. It will be sudden, a one day event. The date is clearly identifiable on charts, but unfortunately I can’t reveal it on public forum.
All I can say is this; be ready!
I was totally floored when I saw this on charts. My knees almost buckled.
Could that trigger event possibly be a economic collapse in China?
I checked all the indicators (about 40 of them) and I could NOT find a single one suggesting an economic collapse in China or USA.
Prior to any kind of economic melt-down, it will always take at least 6 months for the pattern to develop. That is the minimum!
Contrary to what is being said on TV, an economic melt-down is NEVER an un-expected event. As a matter of fact, traders usually make money when everyone else loses money.
At this time, I see nothing of that kind developing.
Hi Bob,
I could not agree more with you on this. I have been through having no money, but it was here in the US. I have become really prudent with money. My wife has always been conservative with money. She is not the typical Filipina as she will tell her family no to sending money, unless it is a life threatening emergency. We have been setting up our move for years. We started a couple of businesses and have properties that have been paid for and have clear title too. In Leyte we have a restaurant, a 13 hectare farm right across the road from it, 2 rice farms, and a couple of other businesses in Gensan. My wife is quite the business woman. Next on our list is building apartments somewhere in either Davao or Gensan.
If the US Dollar does collapse I plan to have a income in PH Peso. While we will have some money in reserve in the US just to be prudent. I am not going to have all my eggs in one basket.
LIving prduently is a great habit, Scott, but not enough people do it, and it can get you in trouble to not live like that.
Absolutely you should have a good plan before you move to the Philippines. What I have seen is that so many foreigners seem to lose their minds when moving to the Philippines. They start to spend money like they are rich, when even by filipino standards they are not rich. You must have a plan and a good one.
I know of many foreigners that live a good solid life in the Philippines on between $1000 to $1500 a year. Some much LESS than that. It really depends on the type of lifestyle you want to live. If you want to live, for example, your American lifestyle in the Philippines it could actually cost more in the Philippines.
As far as Americans being more generous to strangers that filipinos are to strangers. I completely disagree. I have never seen that to be the case. Filipinos will do triple backflips through fire to help their families…but I have seen many many filipinos help complete strangers. The difference is that MOST Americans have much more funds to help complete strangers than what filipinos have. To a filipino their first goal is to help their families because the need is so strong in that area. But if the average filipino had the funds available to them that Americans have…they would help just as much.
Hi Ruby – foreigners living a good solid life on $1000 to $1500 per year? I just don’t believe that to be true. Is it possible that you meant that amount per month? I can agree on that.
OOOOOPSS! Sorry Bob, yes per month I meant! Actually I know of foreigners who seem to be pretty happy on $750 a month or so. It really depends, as you know, on what a person thinks is necessary to be happy.
But I have talked to so many foreigners that realize that all the things they THOUGHT they needed in their country to be happy….they didn’t need in the Philippines to be happy.
May I add one final note.
Despite of what is being touted all over Internet, I don’t think a total economic collapse is in the cards. Yes, the USD and Euro will get hammered but not so for the rest.
What will happen instead with SP500, and this is strictly my opinion, is that we will be pushed to the edge of the abyss and then a totally “un-expected EVENT” will suddenly halt or paralyze all our trading activities, but this will not happen this year.
Consequently, no stock market crash will ever occur but suddenly we will be pushed into a different reality that will “exclude our present way of living”.
Now that I agree with! I am a retired Day Trader of the Emini’s (S&P).
Your all very wise. So what’s the solution?
Hi Bob
I will be retiring to the Philippines in 15 years and I have been trying to calculate the amount of money that I would require to do so.
I am lucky in that my house in Davao is paid up so there would be no rent to account for and this will greatly reduce the amount required.
The unknown factor is the worst to contemplate i.e. how long will I live?
In making my calculations I have taken the figure of what it costs to run my house at the moment, then doubled it, then doubled it again, then doubled it yet again. Hopefully this will take care of any inflation that may occur in the period. There are also other factors to add in such as trips back to the UK, an emergency fund and healthcare, insurances, running a car, etc etc.
Hopefully I will one day come up with a figure!
The thing that doesn’t help when trying to calculate is the lack of interest gained on any savings. I actually earn more on my savings in BPI than in any account that I have elsewhere in the world. There is a reluctance though to put too much money into bank accounts in the Philippines due to the amount that the accounts are insured for. I believe the limit from the PDIC is 500,000PHP although on checking this I have found . You have to consider whether you are taking a risk in putting any more in any account.
My head hurts now thinking about it!
Cheers
AJ UK
Hi AJ – I understand your thinking, and it is very common. For others (like me!)… I decided to move to the Philippines at the age of 38 and start enjoying my life. I didn’t want to slave away until I was 60 or 65.. God forbid 70! I came here at 38, started some businesses, some of which have been very successful, and enjoyed my life. In general, I only have to work a couple of hours per day, and I usually earn a pretty nice income.
So, your path is great, but mine is too.. we just took completely different paths, and there is nothing wrong with that.
I hear you Bob and if all goes well I will be looking to pack up work a lot earlier.
It’s the old catch 22 as I love my work in the oil industry. Living in Singapore is great and it allows me to get home direct to Davao when I feel like it via the direct Silkair flight. The job pays well at the moment and I get to travel to lots of countries around the world to work. Having said that, oil companies are reigning in their spending due to the oil price nose diving and work is getting a lot more scarce. I have a lot of friends in the industry who are out of work now so I’m counting myself lucky to still have a job.
I’m also saving up to start building a house so that will dictate things a year or so more yet.
One thing I will say though is that my quality of life has improved immensely since I got out of the rat race in the UK.
Have a good weekend
AJ UK
Great Advice Bob
I think the biggest problem is a New Expat retiring in the Philippines, most think that they need to have the same things in the Philippines as they have or had in the USA. A car to drive, a house that they own at the same standard they had in the USA, a turn key business, Land or Farms, entertaining friends and families, and eating out every day, or close to every day.
Problem is our perception of what is a good deal, on a meal or a place to live, isn’t what reality is when we move. Taking a group of 6 out to eat, at a nice restaurant, for $25 wouldn’t bother very many people in the USA. But in the Philippines that is what someone would work for 3-5 days (sometimes more) imagine taking a group of 6 out to dinner on what you made in a weeks time in the USA? Now I don’t know about you but I wouldn’t want to see that dinner bill of $400-800.
And Bob you have said it before. You don’t know if you really needed that car you purchased. Very few places you really need a vehicle in the Philippines, and Bob you have made great points on the “rent verses own” the place you live.
The Best advice is to live as meager as possible and then build up to something comfortable with your budget, while you are building other streams of income, rather than the other way around.
Hi, thanks a lot for quite informative & enlightening forum. By the way, what does MLM stands for?
Bob, what is your take on being INFO-PRENEURS for retirees, e.g. Amazon Affiliates. We’d like to engage on this to continue being productive (and eventually earn from it). Hope you can reply asap. More success to all your endeavors in Davao. God bless your family!
Hi Eilynne – MLM stands for “Multi Level Marketing”.
I have never had great success at affiliate marketing, but for some it makes huge money!
MLM is an inexpensive way for Filipinos, we know, or X pats to open a business. It definitely isn’t for everyone. Few will be successful with it. One should never enter MLM unless they really believe in the concept.
If someone gets involved with MLM, and they don’t believe in it, they have to be sold on it again and again. Life is too short to do something one doesn’t believe in. Instead open a taxi business, sory sory store, or whatever.
Everybody on this forum is a winner already. You already know 100 times more than the average bear. Especially the 18 year old that posts. Most people don’t know the difference between the Philippines and North Dakota.
Couldn’t disagree with you more. MLM is more or less a rip-off. The costs are super high, and the end game is almost non-existent.