Foreigner's Finances

On Thursday we took a look at why Americans working abroad can’t invest in a Roth IRA and how to avoid double taxation on foreign income.

We learned you don’t have to pay taxes on your income while working abroad. Great! But how do you save for retirement without access to tax-deferred accounts like 401ks and IRAs?

Unfortunately, you’re hands are tied as a foreigner working abroad – at least compared to our friends in America with access to 401ks and IRAs.

You still have the option of investing your money in taxed accounts in America through a broker like Vanguard, Schwab, E*trade, or Zecco but you don’t receive any tax benefits and have to pay taxes on your gains and dividends.

These accounts don’t require you to be in America so you’re more than willing to set one up to start your retirement savings.

Retirement seems far away, but the sooner you start, the easier it is to properly save. Don’t let the absence of tax-efficient accounts scare you away from starting your retirement savings.

A taxable account can be a great start for your money and then when you eventually return home, you can take your progress and continue on with a IRA or 401k.

Here’s what you should know before you invest, and some options if you choose to take the plunge into investing for retirement.

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The following is a guest post by Kevin Fleming. Kevin runs CreditShout, a personal finance blog dedicated to educating people on how to manage their finances and reviewing the best credit cards.

College students who travel abroad often bring credit cards along with them in order to easily facilitate their overseas transactions. If you fit into this category, there are a few things you should consider when traveling internationally with a credit card.

Not only does the type of card you choose to use matter immensely, so does your record-keeping and your pre-planning.

Here’s a quick guide on going abroad with credit.

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This is a guest post from Mr Credit Card of www.askmrcreditcard.com. Mr Credit Card used to work and live in Japan years ago and today, he is going to give us some tips on how to earn airline miles for a trip back to America.

I worked and lived in Japan a few years ago and during that time I’ve been able to get quite a few free business class flights for my vacations.

The reason is that the company that I worked with gave me a business credit card, which happened to be an American Express. Whenever I took any business trips or gave client entertainments, I always charged to the card and earn reward points. I also had a personal AmEx card and I was able to combine accounts to really boost my point earnings.

That essentially, was my little secret to getting lots of miles.

This is particularly important for expats living abroad who want to save money on trips back home or on vacation somewhere else. So below are some of my tips for earning miles when you are an expat abroad.

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This post originally ran as a guest post at Green Panda Treehouse.

Finding a cheap plane ticket for a vacation or trip abroad is always cause for celebration. However, excessive celebration can blind you from the fact that the plane ticket is just a sliver of the entire travel expense.

The actual travel portion of a trip – plane, bus, gas for the car, subway, etc. – is usually the most expensive aspect of traveling and the most deceiving for budgeting. It is the hidden costs of travel that can cause an exciting adventure to quickly turn into a financial nightmare.

I’ll show you a real life example of this and demonstrate how adding an extra 70% to your travel budget can cause those hidden travel expenses to be handled properly. Leaving home and seeing the world is a  great time in anyone’s life so plan ahead so you can stop worrying about money, and start enjoying your trip.

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As you’re reading this I’m somewhere in Tokyo. Hopefully I know where I am.

My girlfriend arrived in Japan on Saturday. She will be temporarily moving in with me as we try to find her a job at an English school. The plan is to have her stay for a year or two but she needs to be sponsored by a company to get a work visa. It’s difficult for Americans trying to find work in Japan and she will only have three months to find a job and get her visa changed. Thankfully with a large English-speaking community in the area we have some leads and can hopefully find her something soon. More updates are sure to come.

This long weekend we will forget about work and visa issues and enjoy four days in Tokyo. Her arrival timed up perfectly with Silver Week so I have three days off school and can pick her up. This will be my third time to Tokyo and I’m still excited and anxious to get there. Adding to the excitement is the fact that it’s my girlfriend’s first trip overseas so I have to play tour guide and show her why I like this country so much.

Tokyo is difficult to digest at first. The city is split into multiple downtowns which all could be considered large cities by themselves. My girlfriend and I both enjoy people watching and big cities so we didn’t set many plans. Instead, we’re going to explore the different sections of the city and let ourselves wonder and get lost in the hysteria. I can’t wait!

I made a short list of places I’d like us to visit. If you’re unfamiliar with Tokyo, consider this Tokyo 101 in two minutes!

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Japan is a closed culture. The people tend to stick to themselves and rarely speak out or do anything that would shed light on an individual. I once read a quote about the way Japanese people view the rights of an individual, “In America they say you have the right to free speech. In Japan, they say they have the right to silence.”

Being conservative has had its disadvantages for the Japanese society as of late. The birth rate is declining and a lack of family time due to excessive work hours has plagued the economy. Japanese workers are also not using their paid work holidays and have too much money saved. A large percentage of the countries GDP is made up of spending, and with the Japanese not using their cash, the country struggles to progress.

Too much savings? How is this possible?

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I wasn’t expecting to write a post about this topic tonight, but money stories tend to pop up out of nowhere.

My girlfriend is arriving in Japan next Saturday. We’ve decided to make a long weekend out of her arrival in Tokyo since September 19-23 is a national holiday.

We looked into different accommodations for our time in Tokyo. Hotels were out of the question due to high prices. We looked into CouchSurfing, but we didn’t want to burden anyone with two pieces of luggage and didn’t want to constrict ourselves to a stranger’s schedule.

We settled on staying at a hostel. There are hundreds of hostels in Tokyo, and like any city, they vary in price and quality. I did my research through some third-party websites that specialize in finding hostels in big cities. These sites are really helpful as they organize all of the information and create a simple template for finding a hostel in a city.

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Planning to go abroad can be a stressful process. From insurance to Visas to money, there are a lot of areas to cover before departure. One of the most important areas to cover before leaving for a vacation or move abroad is your financial accounts – bank, credit cards, investing accounts.

It’s vital to simplify these accounts before departure so you can enjoy your time instead of wondering about that extra $43 sitting in an unused checking account somewhere. I’ve spent just two-weeks abroad and I’ve spent up to three and a half months, so I’ve seen the best and worst ways to prepare your accounts before departure.

This will be the first of a mini two-part series in preparing financial records before a trip. Today, I’ll show you how to go about preparing financially for a vacation, a month in time or less.

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