I feel like I am stating the obvious—of course you need income as an expat, yet so many people are sold on the idea of cheap living in foreign countries that they don’t have a realistic idea of how much income they will need. Yes, for US citizens, it is usually cheaper to live in another country. If you live in a city in the northeast United States or if you are used to California prices, living just about anywhere is going to be cheaper. You can move to parts of Iowa or Nebraska and exclaim gleefully over the cost of living.
It’s the same when you move to another country. Yes, you are most likely going to spend less on housing. But I could easily spend more on housing. I am spending roughly the same amount on housing here in Portugal as I did in Florida. I could find a small, one bedroom apartment two or more flights up in a not-so-charming apartment block for a lot less. That’s not how I want to live.
I can’t tell you how many articles I’ve read in glossy magazines saying how the writer eats delicious five course meals with wine for under €10. Can you get a decent meal with wine for that much? Yes, particularly if you are outside of the cities. Most of my lunches have run about the same as they do in the States, maybe a little less. But then, I haven’t gone hunting for bargain lunches. It’s not my goal in life to eat as cheaply as possible. (My goal in life is to avoid cooking and doing dishes.)
As Americans, we are spoiled and expect certain amenities. We want reliable electric and wifi, decent appliances (FYI: You can pretty much forget about a dryer if you’re renting), easy access to shopping, restaurants, and recreational areas.
And that takes money. Not outrageous amounts, but some.
Unless you are very wealthy, life is a series of trade-offs. If I buy this, I will have to forego that. I found a fantastic waterfront apartment that was a little bit over my budget. It is an Uber ride into town to get groceries. That’s also an added expense. I don’t have a car here. I am saving on insurance, a car payment, gas, and maintenance. That’s a lot of Uber rides. At some point I might want to buy a car, but for now, I don’t need one. There’s a give and take, an upside and a downside, to almost every decision. We go with what’s important to us.
How Much Money Will You Need?
A friend continuously asks me how much I spend on groceries. I have no idea. Probably about the same as I spent at home which was between $50 and $75 a week. I have been spending more these past few weeks because I am setting up household. So sheets, towels, a blender, basic tools, kitchen staples… they add up. But I expected these expenses. If and when I return to the States and set up house again, I know it will take a few thousand dollars to do so. This expense was expected and budgeted.
Living costs money. And most countries want to see that you have sufficient income to pay your own way. For Portugal, it is low, about €700 or ($730) a month last time I checked. (And please, don’t think you can live the life on $730 a month. You’ll be living in a studio, eating pasta most nights for that.) Costa Rica requires that you receive at least $1,000 per month from a pension source. Italy requires a retirement income of €31,000 for a single person; €38,000 for a couple. The average Social Security check, if you retire at 66, is just under $1,500. Great for some countries, but unless you have a second (or third) source of income, you aren’t living in Italy.
Don’t Expect to Get a Job Here
Many people are sold on the idea of picking up part time work, maybe teaching English as a Second Language or consulting to bring in some extra money. Jobs in Portugal are few and precious. The majority of Uber drivers I have met have university degrees. Many young, educated Portuguese have moved to other countries to find decent paying jobs.
Can you earn income as an expat? Yes, you can work here, but you can’t just go down to the local Pingo Doce and get a job as a bagger. For one, they don’t have baggers—you bag your own groceries here. But you need to register and get a work permit. There are tax implications. You may need to be fluent in Portuguese. Most of the immigrants who work here speak three or more languages. Most Portuguese speak some English and usually another language or more. It’s a competitive market. Hell, I saw a tri-lingual dog the other day. (Portuguese, English, and well, dog.)
If you’re going to work, it’s best to have that set up before you arrive. If COVID taught us anything, it’s that many jobs can be done remotely. If you’re employed and you can work from anywhere, then by all means, the world is your oyster. Your biggest challenge may be dealing with the time differences (I have given up on doing business with anyone in Australia) and sometimes unreliable wifi. But there are areas in the US with unreliable wifi. At least my unreliable wifi comes with a great view.
The D2 Immigrant Entrepreneur Visa
Portugal has a special visa for those who want to open a business here. It doesn’t have to be a huge business—small and medium size businesses are welcome. You do need to have proof of your business’s viability, a professional business plan, reasons that you have chosen Portugal, specifically, to locate your business, and show that you have invested financially in the company (social capital). There is no set amount for how much money you need to have invested, but it needs to be enough to make sure the company is real and viable. For more information on the D2 visa, check out this article on BePortugal. They recommend that you start your business in Portugal before you apply for the visa.
And there is, of course, the Golden Visa where, if you have enough money, you can invest it in any number of countries and gain residency or citizenship quickly. Portugal was one of the easiest countries to gain citizenship through a Golden Visa program (example: minimum investment of €290,000 in real estate) but it the program is going away at the end of 2023. If you’re looking for quick citizenship outside the US, Golden Visa Programs are the way to go. (There’s a reason at least one Supreme Court Justice has a property in Nevis/St. Kitts.) But most of us move because we want to experience a different way of life, a different culture, not because we’re fleeing the country.
Prepare Yourself to Need Income as an Expat
I’ve been earning my living through the Internet for over 15 years now. That made it easier for me to make the transition. No matter where you move, whether it’s Portugal or Thailand or Mexico or any one of dozens of countries that welcome expats (and their US dollars), you will need some sort of income. How much depends on where and how you choose to live. If you want a country club style retirement with daily golf, tennis, and a social whirl, you can find it just about anywhere. Truthfully, in many countries, you can have that lifestyle with a monthly income of about $3,000 for a couple. That’s not international jetsetter, let’s take the yacht to Greece for a month or so level. But it’s a “I’m living a comfortable retirement” level.
I’m still working and plan to do so for the foreseeable future. I don’t need to make a huge amount of money to meet my needs. I never have. But I did need provable income to qualify for my visa and be allowed into the country. Line up your income, make sure you can show it, and know the guidelines that your new country needs you to meet. Then exceed them. Bottom line, you can live more cheaply in other countries. You cannot live as cheaply as its native citizens. In every country, there’s an informal, separate pricing structure for immigrants. I pay more for this apartment than a Portuguese person would have. I understand that and I’m okay with that. I pay less for this apartment than I would for a waterfront apartment just about anywhere in the US. A lot less. And I’m very okay with that.
I’ll say it again: Living costs money. Moving to another country doesn’t magically change that. You need income as an expat, to enter a country as well as to live day in and day out. Figure out what you’ll need, get your ducks in a row and make the jump.
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