Traveling hopefully, and doing business while away from home...

podborski says on Oct 1, 2007, 21:32:

I have to get some sleep, but be back tomorrow to continue this one.

But just to start off, one area that I think could really help people is in thinking about tax consequences of taking long periods of time off (I am talking about taking 2 or 3 months at a time, to make it worthwhile).

(I only really know Canadian tax laws, but US laws would be similar, and likely other countries as well.)

So some advice for Colombiche;

1) first talk to your company about taking a sabbatical, some companies have plans that help smooth out your income over a period of time that will lower the taxes you pay

2) try to plan your trips over 2 calendar years (so if you are going for 4 months, go from November to end of Feb, not from June to to end of Sept, which is nice to do if you live in canada anyway).

the benefit is again to have 2 years where your income is low, rather than have one year at full salary and one where you earn zero.

3) RRSP.s First, you have to make all the contributions you can afford, but don't be afraid to take money out when you are in a low income (travelling) year. In fact, as long as you are disciplined (meaning you'd eventually save money inside or out of an RRSP), I'd say this is a great strategy.

4) Don't forget how much your living costs COULD drop while on a sabbatical. No more work clothes, no expensive lunches downtown, no subway pass, no car parking costs, no car insurance etc etc.

If you put it all together, you can find it really costs very, very little to take a year off.

Especially true if you go from a high cost country to a low cost one like Colombia.

more tomorrow.

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christobeldawg says on Oct 1, 2007, 22:04:

thanks Pod, maybe we can get this idea going after some inspired rest. I hope to wake up to seeing some interesting ideas from some of our friends from the UK.

admittedly, arriving can feel great too

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kat1 (Moderator) says on Oct 2, 2007, 00:30:

Another way will be if ou have properties, maybe renting them, and live from the rent.

or many business you can run it online now, take a laptop with you and you can run your business from everywhere, i can run mine from Colombia but i still have to do few trips to the UK. but some don't need to do that.

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slguy says on Oct 2, 2007, 01:05:

I'm VERY close to beginning this. Starting two new busineses, and combining business travel with "new place to live" search.

Years ago, I learned that almost anywhere in the world one goes, there are outstanding business opportunities, if one just keeps their eyes and ears open - and has a little working capital.

Two examples.

I happened to be in Costa Rica just before the government there turned over the importation of rice to the rice miller "cartel". The exec. director of that milling trade association happened to be an alum of the same college as me. I imported rice into CR for many months - until the big boys swatted me like a fly.

Using US government-backed loans, I exported solar equipment for rural electrification to several west African countries for a while- until the corruption over there just became too much to stomach. (BTW- latin american official are mere pikers, compared to the corruption levels of African officials. The final price sometimes TRIPLED, due to required payoffs - for technology that provided some villages their first EVER electricity. Electricity that provided much-needed irrigation, refrigeration, etc)

My new businesses will allow me to live wherever I please, with frequent trips throughout suramerica, and monthly trips to the US to see my sons and do a little business. I have a product that I'll have manufactured in either Peru or Colombia, for south american distribution (the similar US product is too pricey for latin america)

The second business is exportation of US capital equipment, primarily heavy construction machines and expensive medical equipment, again with low-cost financing, compared to bank rates aavailable locally.

Almost all the heavy lifting for these businesses will be phone/internet stuff. In fact, part of the year I'll work from my sailboat in the Caribbean.

Given the communication technology available today, almost any international trade can/is handled by email/phone, once the relationship is developed a little.

Before you throw me out, make sure I pay my bar tab

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kat1 (Moderator) says on Oct 2, 2007, 01:14:

Or chris why don't become a flight attendant hehehhe

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pedro says on Oct 2, 2007, 01:17:

Pod, your thoughts about living well while young are very close to mine.

I will add a few random thoughts, stuff I have learned while funding frequent trips over the last 10 years.

1) You can sometimes get good tax deductions for travel ideas if you structure it well. For example, I managed to claim a decent part of my flight costs and expenses for a 6 month language course in the south of France.

2) Student exchange programs and study grants are worth looking into. Especially if you are Swedish. Most of my class in that south of France language school were Nordics who were getting student grants to be there. Soaking up the sun and showing up to class when they felt like it. I know a Swedish dude who is in Bogota studying at the university. He doesn't live extravagently, but his student allowance pays for everything.

3) Professional education is key. If you try and travel the world when all you have is unskilled cash jobs, it's a struggle. Get a professional job with contract rates, and your travel dreams just got a whole lot easier to accomplish.

4) Invest. If you can build a capital base, you get away from the idea of the "work - earn wages - spend" cycle. You now have some passive income and hopefully portfolio apprecation too. This is the key book to read, it can change your life: http://en.wikipedia.org/wiki/The_Richest_Man_in_Babylon_(book)

5) Look for an understanding employer. One of the major banks in Australia has just launched some innovative incentives for staff. Among those is a "gap year" program. You sign on for five years, working four years and taking the fifth year off as paid vacation. Your salary is apportioned out so you earn 80% of full-time earnings in all five years. In a hot job market, many employers will be flexible.

6) Internet. Look for internet-ready jobs. Something with little interaction with colleagues, but many phone calls, producing documents, helpdesk, analysis, that kind of stuff. Work-from-home infrastructure is getting pretty standard these days at big companies. Once you've built a good relationship with your employer, what does it matter if your home now happens to be Colombia?

que nota!

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podborski says on Oct 2, 2007, 16:14:

I have read a lot of comments on PBH from people looking for a well paid job in Colombia, and I think for 99% of people that just isn't going to happen.

But that's ok, the whole idea is to get away from a cubicle anyway, right?

One big reason why I think there are such great opportunities in SA is due to lack of capital and/or credit, and I mean even small amounts are hard to come by.

So if you can come up with some capital, you have a huge advantage, and the opportunities to make a good living, maybe even a great one, become very real.

For example, I know some young american guys here who opened a burrito stand. As far as I know they are doing very well. They told me they were profitable almost from the first month.

That is not a business that took a lot of capital to start, but it took some.

Some Israeli guys RENTED (didn't buy) a huge old house and then did some quick renovations, paint, cheap furniture, and now they have a youth hostel, where rooms rent for up to $35 USD (not argy pesos) a night! And they are full.

I just met some young americans today who want to open a café here. I think it has great potential (although I haven't crunched any numbers yet).

The ONLY difficult part in that would be finding the right location for a reasonable rent. But you are talking about a $1,000 USD a month rent (for a smallish place). You find the right place, you get your creative friends to paint and decorate it, buy some antique chairs and tables at the flea market, your food and drink suppliers will give you your first month of supplies on credit, and you get going.

But you have to have access to some capital (I'm talking, $10,000 USD maybe, obviously more is better), and the willingness to put in the effort, and maybe lose it all too. (good education for the price I think).

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podborski says on Oct 2, 2007, 16:28:

Getting back to colombiche's original dilemma, where all her friends say she should keep her head down working and saving, I think you have to keep an open mind about that too.

In Canada, if you have a high income in retirement, the government 'claws back' some benefits that you would otherwise get (old age security). You get punished for saving, to an extent.

So depending on your exact financial position, you might look at it as being dumb to save too much, unless you are REALLY able to save a fortune, and then the gov't clawbacks don't really matter.

But if you are unlikely to be able to save a fortune, you might be better off to save next to nothing, and let the gov't look after you. Or maybe at least you could put your savings into capital gains earning investments rather than interest earning ones.

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podborski says on Oct 2, 2007, 16:33:

RRSPs (IRAs in the USA are similar I think)

RRSP's in Canada are designed to allow people to defer taxes by lowering their taxable current income (while they are working) by shifting it to retirement years when income is likely lower (but tax rates might be much higher!)

These plans can be perfect for taking sabbaticals though, put the money in and get your tax deduction while working, then just take the money out in your sabbatical year and pay a lower tax rate.

You really don't give up much, maybe nothing, by doing so.

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podborski says on Oct 2, 2007, 16:52:

Another idea I sometimes toy around with, really totally apart from financial planning, is that these days it seems to me that you can live just like a very wealthy person with dramatically less money.

(this appeals to my 'efficiency obsession')

So, for example, I used to have a cabin on an island in lake Muskoka, north of Toronto. It was pretty basic and was probably one of the least expensive properties on the lake. Some of my neighbours had places that were 10 times the size of my place, at 10 or 20 or even 50 times the cost. (Hell there are 10 million dollar properties there now.)

But we all swam in the same lake, saw the same sunsets, heard the same loons, saw the same northern lights.

And I paid far less taxes, insurance, upkeep, etc.

Some of the huge monster places even had lawns (and tennis courts and basketball courts) that had to be cut. They looked like crap, and were a lot of work.

I actually preferred my small place to their giant ones.

You could extend this to, oh say, renting a porsche for a weekend drive to Napa or Lake Como. Who needs a $150,000 car that you will probably only have time to drive a few times a year?

So the idea is, with a bit of thought you can have, I dunno, 70%? 80%? 90%? of the things the super rich have, but with far less money and effort.

I think the really rich have a huge amount of wasted assets (cars, houses, boats) they don't use. So even though they have them all, you can only drive one car at a time.

Is having the other 30% worth working 24 hours a day?

I don't even think it's debateable. The rich probably know it more than anyone. But they have to have all the stuff to keep up appearances.

I heard a funny story the other day. Apparently when Lady Di was visiting Palm Springs one time, there was a big party for her. Everyone who was not invited had to leave town, for fear of not being able to explain why they were not invited.

Being that rich sounds like a huge pain in the ass to me. (although I would like a huge yacht... : ))

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christobeldawg says on Oct 3, 2007, 17:30:

I think many people go after making alot of money, but maybe don't think so much about exactly why they want to have alot of money, and then they just keep getting more and more stuff, and become slaves to all the stuff.
To me, having alot of money would just represent freedom, therefore I would hope that would then allow me to keep things simple, as far as accumulation of too much stuff.
I even know people who have more than one house, as in a vacation house in another location from their main residence, and it is a huge headache to keep up with.
I like your idea Pod, on just finding ways to live in many ways like the wealthy, without actually being wealthy financially. That seems to be a real key.

admittedly, arriving can feel great too

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bufalo says on Oct 10, 2007, 10:22:

My colombiana is calling me for lunch so got to go. Love this thread and it has some very eye opening info. Like what Pod said about HOW you live, been doing that for awhile now, swimming in the same lake, just not costing me as much.

I just have to learn about business for income, I honestly thought $10,000 was peanuts for a business....

"If you don't like it - lump it, take it down the road and dump it." - Archie Bunker played by Carroll O'Connor

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bufalo says on Oct 10, 2007, 13:22:

We have to go back to the US for at least 3 years, partly for lack of income (and an investment TANKED), partly to get my wife's citizenship. I'm honestly worried about ever making it out again. One of the things I'd like to do during our time there is to learn a new carreer that I can do "from anywhere". So far I've found:

"internet" many different type of jobs but tough to find out which ones are worth it.
"writer" once a base is formed this picks up and is easier to do
"international teacher" work in almost any city in the world (but you may have to deal with PIA kids"

I hope that when she gets her papers100% that we will be able to move on. Rather live so-so in interesting places than have tons of cash and have to keep up with it.

"If you don't like it - lump it, take it down the road and dump it." - Archie Bunker played by Carroll O'Connor

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bufalo says on Oct 10, 2007, 13:25:

Forgot to ask, where is the "other thread" (wow, but I'm using quotes a lot today, huh?)

"If you don't like it - lump it, take it down the road and dump it." - Archie Bunker played by Carroll O'Connor

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podborski says on Oct 10, 2007, 20:41:

the other one either was deleted, thanks to the ever-mature miguel clavo, or might be lurking on GIB's list of posts? I forget what it was about, but it evolved into retirement talk somehow..

oh i think it was GIB's post about 'you think you live in america', something like that.

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bufalo says on Oct 11, 2007, 13:10:

I saw the title and am now kicking myself for not reading the post....

"If you don't like it - lump it, take it down the road and dump it." - Archie Bunker played by Carroll O'Connor

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podborski says on Oct 11, 2007, 14:31:

you can still read it here i think:

http://poorbuthappy.com/colombia/post/some-of-you-on-this-board-think-...

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bufalo says on Oct 12, 2007, 09:37:

Holy crap but it took me forever to find that part of the thread, but well worth it.

Exactly how I think as well. Left the US 5 years ago because I wanted to live, not work 50 weeks to have 2 "given" to me. We have to go back now for at least 3 years (wife, one daughter) and it is going to be hell, but the plan is to get out once we have enough cash to go somewhere else and live again. Some sleepless nights thinking about it, but I guess that's normal.

I am kicking myself for not opening up something in BsAs 4 years ago when it was cheap, I just didn't have any business sense, not that I have a lot now, but am pretty sure I could make something work. We were also told we needed 100K for the visa, I know people get around that, but don't know how. Maybe I'll start another post on this...

"If you don't like it - lump it, take it down the road and dump it." - Archie Bunker played by Carroll O'Connor

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