Chapter 1

PREPARING FOR THE ESCAPE

Reconnaissance

Many escapees take an initial reconnaissance trip to their favored destination before actually relocating. This strategy allows you to plan your escape with minimal risk before making any major life decisions. A 2 - 3 week trip may be long enough to establish contacts, arrange long-term accommodation and investigate local work or business opportunities.

The main advantages of a reconnaissance trip to paradise are listed below:

The main disadvantage of the reconnaissance trip is the initial additional cost.

Preparation

Research the countries you are most interested in and plan your itinerary. Read about the culture and customs of the countries you will visit.

Store your possessions with friends or relatives and arrange a mailing address. Throw away your junk and sell or give away whatever you don’t need. Avoid spending money on storage because the service is expensive. If you own your home, find a reliable property management agent to take care of it and bank the rental income into your bank account; otherwise instruct your real estate agent to sell your home.

Cancel all unnecessary standing orders and direct debits which are no longer required. Axe all recurring expenses unless absolutely essential. For example cancel your subscription to your local dvd club. Free yourself of all financial limitations!

Where is Paradise?

Your idea of paradise is probably different from mine. Your paradise depends you’re your values and priorities. Your choice of destination depends upon many factors such as climate, work, business and educational opportunities, exchange rates, political stability, level of crime, language issues, expat community, state of the country’s development and environmental factors.

Your choice of destination also depends on visas and immigration policy. Some countries are more receptive to foreign immigrants than others. Foreign policies are continuously changing.

Social Life

Do you need an expat social life or can you blend into the local culture and easily adjust to a completely different lifestyle? Some countries such as Singapore and Costa Rica have a large expat population offering unlimited luxuries and social activities for expatriate night owls and socialites. Other countries, which are less developed, have a smaller expat community.

Climate

If you are sensitive to climatic conditions you should research the weather in your preferred country. Worldwide climate charts are available on the internet (http://www.climate-charts.com). Consider whether you need to bear the additional cost of air-conditioning, or will electric fans suffice?

Cost of Living

Despite the weakening of the dollar, many countries are considerably cheaper to live in than America. Part of your homework is to estimate your monthly cost of living in your preferred country. Cost of living surveys are published by Mercer Human Resource Consulting.(http://www.mercerhr.com/costofliving). If money is not a limiting factor, focus on locations offering the best quality of life. Mercer Human Resource Consulting also publish the Worldwide Quality of Living Survey.

Can you live without Starbucks and McDonalds? If not, you need a much higher income. A local cup of coffee may cost one quarter of what Starbucks charge. Similarly a nutritious local meal usually costs a small fraction of what McDonalds charge.

Economy

If you want to own a business overseas, your success will be influenced by the local economy unless you sell to overseas markets. Many expats living overseas own guesthouses and hotels, bars, restaurants, cafes, mini-marts and internet cafes. These businesses are usually dependent on tourism which is sensitive to news about terrorist activities, crime or disease. Businesses in tourist locations need to make enough profit during the peak season to survive the quieter periods.

Employment

If you need to work there are many opportunities to teach English around the globe. Schools in some countries, such as Japan, Taiwan and South Korea, enable teachers to save money. However, these same countries have a high cost of living so part-time work is not usually an option. Some expats save enough money for a 6 month holiday after completing their 12 month teaching contract.

For more information about teaching English as a foreign language, refer to chapter 7 (Popular ways to earn a living).

Health & Safety

Health and safety is another important factor which varies between countries. Ensure you are protected against any prevalent diseases wherever you stay. Relevant information is available on websites for expats and travelers, and at the Centers for Disease Control and Prevention (http://www.cdc.gov).

Passports

Even if your trip overseas is for just 2 weeks, ensure your passport is valid for at least another 6 months. Many countries do not allow foreign visitors if their passports are valid for less than 6 months. Passports can be renewed for a further 10 years in your home country or at your local embassy in paradise.

Ensure you have enough unused blank pages in your passport in case you need to take regular border crossings to comply with immigration policy. Pages in your passport fill up quickly with visas and stamps by immigration officers in each country of your itinerary.

It is advisable to record contact information of your next of kin in or with your passport. In many countries foreigners are recommended to register their arrival with their local embassy or consulate.

Always keep your passport in a secure place and a copy of your passport in your wallet. If you lose your passport, notify your local embassy or consulate as soon as possible. Usually it is necessary to deposit your passport with motor vehicle hirers until you return the vehicle and pay the hire fees. Sometimes hotels and guesthouses hold passports of their customers.

Visas

It is essential to have a valid visa at all times for any foreign trip or residence. Even if you have a 12 month visa, you may have to leave the country every 90 days or “check in” at the local immigration office periodically. Failure to comply with immigration regulations can result in fines and even imprisonment.

Part of your preparatory homework is researching the visa requirements (and options) for your country of destination. Visa information is available at consulates and embassies (for the country of destination) in your home country. Most consulates and embassies provide visa information on their own websites. Additionally there are many independent online travel websites offering forums specifically for travelers and expatriates.

Typical visa classifications are Tourist, Business, Marriage and Retirement. Visas are either “single-entry” or “multiple-entry” for the duration of the document. The single-entry visa expires when the holder leaves the country, whereas the multiple-entry visa is valid for the entire term. Some visas offer a choice of durations (typically 3 months, 6 months or 12 months).

Visa application forms can be obtained from local embassies and consulates. Also the forms can usually be downloaded from the embassy’s website.

Identify the most suitable embassy or consulate using either of the following websites: http://www.embassyinformation.com and http://www.embassyworld.com. Be aware that consulates and embassies often have different policies for issuance of visas in each country. Consulates tend to offer more favorable terms to visa applicants than embassies. Phone the embassy or consulate immediately before making the visa application to check that the terms and conditions of application have not changed.

Business or “non-immigrant” visas may enable residence in paradise for 3 months, 12 months or longer. The visa application may require an accompanying sponsorship letter by an appropriate local organization. Be aware that most immigration officers prefer to issue visas to smartly dressed professionals, students or businesspeople rather than scruffy hippies.

Business visas do not usually entitle holders to work. Foreign workers need to apply for a work permit. Usually business visas are a prerequisite for obtaining a work permit. Business visas can be used without work permits for research and investment.

If your journey is less than 4 weeks in duration you may be able to obtain a visa on arrival. Otherwise apply for a tourist visa (if appropriate) at the local consulate or embassy.

All visas applications require accompanying passport photographs, a completed application form and fee. Business or non-immigrant visas usually require additional documentation such as resume and letter of invitation by a local sponsor.

Never “overstay” your visa unless unavoidable. If it is not possible to extend your visa at the local immigration office, you must leave the country before the visa expires and apply for a new one in another country.

Health

If you register with a local hospital, keep a copy of your hospital registration card in your wallet always.

Information about health precautions and inoculations for each country is available at the Centers for Disease Control & Prevention (CDC) website: http://www.cdc.gov. Before leaving, ensure you have inoculated yourself for all potential diseases in the countries you intend to travel to.

Keep a record of all your inoculations with dates. Note when it is necessary to renew your inoculations.

Eye Care

If you wear contact lenses, keep a supply of spare lenses and a record of the specifications of your lenses. Pack a pair of spectacles in your luggage.

In some countries, where there is high humidity and air pollution, travelers are prone to conjunctivitis or other bacterial infection of the eye. Do not wear contact lenses if you catch an eye infection.

Malaria and Dengue Fever

Currently there is no antidote for malaria and dengue fever. If you plan to travel in places where the risk of contracting these diseases is high, do take precautions to avoid being bitten by mosquitoes.

Dengue Fever and its potentially fatal variant, Dengue Haemorrhagic Fever (DHF), affect hundreds of people around the world. However, dengue fever can be avoided.

Both malaria and dengue fever is transmitted by mosquitoes. Aedes Aegypti is the mosquito which causes dengue fever.

Symptoms of dengue fever include pain in the bones accompanied by high temperature. After 7 days of incubation, fever and headaches (behind the eyes) begin. The fever is also known as “Break Bone Fever” due to the acute muscle pains which patients experience.

Prevention of dengue fever begins at home. Ensure there is no stagnant water within a radius of quarter of a kilometer of your home. Common breeding grounds for mosquitoes include used car tires, saucers under pot plants and water tanks.

Other precautions include wearing long trousers and long-sleeved shirts. Apply mosquito repellent to exposed parts of your body. Ensure that your mosquito repellent contains DEET.

The most effective ways of preventing malaria are to use mosquito repellant containing DEET on exposed skin, sleeping under a mosquito net impregnated with Permethrin, using mosquito coils and wearing long clothes.

Medication for malaria tends to be expensive and ineffective. Chloroquine and Paludrine, which causes nausea, relieves the symptoms of malaria but does not prevent the disease.

If you contract malaria, aim to check into a malaria clinic within 24 hours of developing the fever. If you decide to use medication, Malarone is the most effective drug.

Culture & Customs

Research the local culture and customs before you leave. Culture Shock! Publications provide cultural guides for each country.

The general rule for expats is to respect the local culture, customs, religion and monarchy. Always dress appropriately, particularly at government offices and places of worship. Never behave aggressively with locals and settle any disputes immediately if possible. Remember that we are allowed to stay in paradise as guests.

Learn about the laws of your host country and keep out of trouble. Expats are best advised to blend into the culture instead of attracting unnecessary attention.

Money Matters

Objective

Minimize your monthly expenditure and cancel all financial commitments unless they support your plan to relocate abroad.

Emergency Cash

It is advisable to carry with you some emergency cash with you at all times. Do not use this money unless you need to settle a dispute on the spot. A small cash settlement may enable you to avoid legal disputes, physical danger, police custody and even imprisonment.

Secure your Cash

If you plan to travel in a relatively dangerous area, divide up your cash and valuables and keep them in different parts of your clothing and luggage. Buy a second cheap wallet and fill with a small amount of cash to throw away in the event of a possible mugging.

Travelers’ Checks

Buy some travelers’ checks in either dollars or euros and keep a separate record of the check numbers in case you loose them. You can apply for a refund if the checks are lost or stolen. Travelers’ checks are a useful backup in case you cannot use credit cards or ATMs. Some countries have few, if any, ATMs.

Exchange rates for cashing traveler’s checks are usually favorable compared to bank notes or withdrawing cash from the ATM.

Buy enough travelers’ checks to enable you to buy a flight ticket back home if necessary.

Online Banking

Keep control of your finances. Open an online banking account so you can manage your money from anywhere in the world. Keep your online security details, including password, secure at all times. Avoid the possibility of fraud and never respond to any emails requesting your online security details.

Bank Charges & Interest

If possible, pay off all your loans and overdrafts before moving overseas to avoid the expense of bank interest. Keep your bank account in credit always. Cancel all unnecessary standing orders and direct debits. Maximize your bank interest receivable on your savings by switching accounts as required. Arrange a direct debit to settle your credit card balance each month.

Taxes

A U.S citizen or resident alien is generally subject to U.S. tax on total worldwide income. However many countries have double taxation treaties with USA, enabling Americans living in those countries to benefit from a tax credit for any taxes paid overseas.

Further information about filing tax returns with the IRS is provided on their website (www.irs.gov/faqs/faq13-7.html). The international tax law telephone hotline number is (215) 516 2000.

The IRS website (http://www.irs.gov) explains how to file your tax return electronically from another country.

For information about tax exclusions for Americans residing overseas, refer to the following IRS webpage: http://www.irs.gov/publications/p54/index.html. American citizens who are working legally (and subject to personal taxes) abroad can earn up to $82,400 (in 2006) without liability to U.S taxation. It is necessary to remain outside USA for at least 12 months and to spend a maximum of 29 days in USA each year to be eligible for these tax exclusions.

Social Security

U.S. Treasury Department regulations prohibit sending payments to you if you are in Cuba or North Korea. If you are a U.S. citizen and are in Cuba or North Korea, you can receive all of your payments that were withheld once you leave that country and go to another country where payments can be sent.

Social Security restrictions prohibit sending payments to individuals in Cambodia, Vietnam or areas that were in the former Soviet Union (other than Armenia, Estonia, Latvia, Lithuania and Russia). Generally, you cannot receive payments while you are in one of the aforementioned countries nor can payments be sent to someone on your behalf. However, there are possible exceptions for certain eligible beneficiaries in countries other than Cuba or North Korea.

To qualify for an exception, you must agree to the conditions of payment. One of the conditions is that you must appear in person at the U.S. Embassy each month to receive your benefits. Contact your nearest U. S. Social Security office or U.S. Embassy or consulate for additional information about these conditions and whether you might qualify for an exception.

For further information about social security, refer to the U.S. Government’s website at http://www.ssa.gov/pubs/.

Wills

If you plan to transfer money or assets overseas you should write a will and keep a signed copy with your lawyer and next of kin. A will is a legal document declaring who you want to benefit from your estate when you die. The document must be signed, dated and witnessed.

Insurance

Introduction

Insurance is a financial product which offers peace of mind for people worried about the unexpected costs arising from accidents, robberies, sickness and other disasters. Insurance is no substitute for preventing disease, driving carefully or securing your personal belongings.

Your insurance requirements depend on your ability to pay unexpected bills, your age, state of health and lifestyle, the value of your personal property and the risk of crime, accidents and disease in the country you are visiting.

The most common problems involving insurance claims are vehicle accidents, malaria or dengue fever and loss or theft of property. Many “developing” countries are safer than parts of America and Europe.

Insurance policies contain exclusions, thresholds and excesses (or deductions). Exclusions are items which are not insured. The Threshold indicates the maximum amount of the claim for each classification under the policy. The excess is the amount deducted from each item claimed. The policy premium increases if the policy has a lower excess.

Book an insurance policy with a reputable company. Some insurance companies have a reputation for paying out a small percentage of claims after months of correspondence. Other companies have a reputation for settling insurance claims in full, quickly and without any fuss.

Travel Insurance

Travel insurance is a multipurpose financial product for a specified term. Many travel insurance products are designed for overseas holidays of up to 12 months in duration. It is not possible to claim on travel insurance policies after relocating abroad. In the event of a travel insurance claim, the insurer may ask for evidence that you are not permanently residing overseas. For example they may ask for a copy of your return flight ticket and passport. Apply for special expatriate insurance when you officially reside overseas.

Be aware that in many countries motorcycles and cars are rented without any insurance. This means that if you have an accident you may have to pay for repairs and medical costs even if it is not your fault. If your hired motorcycle is stolen, you would have to buy a replacement. Therefore check that your travel or expatriate insurance policy covers these potential losses.

Travel insurance policies typically cover medical expenses relating to accidents and sickness, replacement cost of personal property if lost or stolen, costs incurred in the event of death, loss of passport, or delay or cancellation of any flights booked and paid for. Be aware that even though the cost of hospitalization may be one tenth of that charged in USA, the expense could still exceed $1,000.

Travel insurance is valid only for the period of your holiday or the term of the policy (if it lapses before you return home). The insurer may pay for medical treatment while you are staying overseas, but not after you return home.

Travel insurance policies usually provide benefits in the event of flight cancellation or delays. If a flight is cancelled, the airline is responsible for your alternative travel arrangements which may include hotel accommodation. If possible, use the same airline if you have connecting flights so your airline will book you on their next flight at no additional cost. Always allow at least 3 hours between estimated time of arrival and departure time of your connecting flights. Some airlines and online travel agents offer optional flight insurance.

If you are traveling overseas for the first time on a reconnaissance trip of up to 3 months, you are strongly recommended to take out travel insurance.

Expat Insurance

Unfortunately there is no multipurpose insurance policy for expats covering medical expenses, home contents, life, and motor vehicle. Most expats take out medical insurance policies which are specifically designed for people who live overseas.

If you have dependents you should consider an offshore life insurance policy or term insurance. Term insurance is a composite health and life insurance policy for a defined period (usually one year).

Many of the most reputable expat insurers are based in UK. The need for medical insurance - and the cost - increases with age of the insured person.

Step 1: Identify the Insurance You Already Have

Many travelers and expats waste money by doubly insuring themselves. Whilst taking out more insurance than necessary may provide extra peace of mind, it is an additional drain on your finances.

The major credit card companies insure all products and services purchased using their payment system. Therefore, book any flight tickets and valuables using a credit card such as Visa. If your flight is cancelled you can claim a refund from the airline or your credit card provider.

Whether you buy or rent a vehicle, ensure you have a motor insurance policy covering medical expenses in the event of an accident. I have successfully claimed all hospital expenses on my motorcycle policy in Thailand and the annual premium cost less than $20.

If you work overseas, your employer should provide health insurance as part of your remuneration package.

If you travel with your computer notebook maybe you already have worldwide insurance cover for loss, theft and repairs. If so, keep a copy of your insurance policy with you. Why not scan the policy and download it on your flash drive?

Citizens of the European Union may be entitled to free medical treatment under the National Health Scheme. Therefore some expats from Europe may choose to return to their home country to receive free medical treatment if they get chronically sick.

Step 2: Establish Your Insurance Needs

Even though medical bills may be a small fraction of the cost in America, an operation in paradise can still cost $1,000+. Accidents and disease can strike us at any time. Your decision about insurance depends on your ability to pay unexpected bills, your age and state of health, and your perceived risk of injury, accident or robbery.

If you drive a motor vehicle overseas ensure the vehicle is insured. If you travel where there is a high risk of malaria, protect yourself from mosquitoes. Avoid traveling with valuables if possible. Keep your passport and valuable items in a safe place such as a safe deposit box.

Step 3: Identify Appropriate Insurance Policies

Look for an insurance policy with a reputable company which fills the gap in your insurance needs.

Beware! There is no insurance policy covering loss or theft of data stored on your computer or mobile phone. So take regular backups of important data onto an external drive or on paper. Remember that no insurance claim will fully reciprocate the loss of any sentimental photographs or gifts from family or special friends.

Your choice of insurance policy depends upon many factors. If you have sufficient savings to cover all possible problems you may even decide to forgo the expense of insurance.

How To Make An Insurance Claim

If you are involved in an accident or robbery and you want to file an insurance claim, obtain a written report from the local police station as soon as possible. It may be necessary to attend the police station with a local representative unless your language skills are up to par.

You will need to complete the insurer’s claim form, which may be downloadable from the internet. Usually the insurer will require the original purchase invoice for the property lost or stolen or other evidence of its value and your ownership.

Small claims of under $100 may not be worth the time and inconvenience. The cost of your claim may include return travel to a local police station, photocopying, postage and phone calls. The claim may be settled after several months’ correspondence and follow-up telephone calls from overseas. Finally, remember that insurance policies do not offer any compensation for the time involved managing the claim.

Your Cost Of Living

When you relocate your cost of living will plummet hopefully. It is useful to estimate your revised cost of living so you are aware of any deficit which needs to be offset by earnings.

The main costs to include in your budget are:

Add any costs incurred in your home country such as bank charges, storage costs or annual membership fees of clubs or associations. Subtract any interest received on your savings accounts and any other investment income.

Your cost of living depends on your lifestyle. Estimate your monthly cost of living by referring to standard wage rates of expats (such as English teachers) in your country of choice. For information about teaching English abroad, refer to http://www.eslcafe.com.

Standard accommodation costs in Chiang Mai, Thailand, are $60 per month for a basic room with separate bathroom, $190 per month for a one bedroom condominium, and $600 per month for a 4 bedroom house. Search for houses or apartments for rent in your chosen location using an internet search engine to research accommodation costs.

Your cost of food and drink depends upon whether you eat local or Western food in restaurants, or whether you cook your own food. Local food is usually much cheaper than international cuisine. Don’t expect to save much money by cooking your own meals unless you have sufficient people to share the cost with.

You may choose to buy or rent a motorcycle or car. Ensure that your vehicle is properly insured. In many countries, motor insurance just covers medical expenses in the event of an accident. Consider applying for a local driving license if you plan to stay.

There are many places where escape artists can enjoy a good quality of life on under $1,000 per month. Cost of living is higher in locations which are more “developed” or fashionable. You can live extremely cheaply if you can quickly adjust to the local lifestyle and avoid McDonalds.

Prohibited Businesses & Occupations

Some countries protect their domestic economy by prohibiting foreigners from engaging in specified businesses and occupations. Before starting a business or working freelance, check the country’s laws pertaining to prohibited businesses and occupations for aliens.

What to Pack in your Bags

Always carry some form of ID with you. Keep a photocopy of your passport in your wallet at all times. It is also useful to keep either a local driving license or an international driving license.

Keep your passport (with valid visa) secure always. Keep the document in a safe place - preferably under lock and key - whenever you are not traveling. If you lose your passport it may take your embassy weeks to replace it.

The following is a list of items you should take with you:

Check the baggage allowance of your airline carrier. This information is provided with your flight ticket. Most airlines allow between 15Kg and 30Kg plus additional hand luggage of around 7Kg. Charges for overweight baggage can be expensive and must be paid at the airline’s check-in desk. Avoid paying excess baggage fees if possible.

Don’t pack too many clothes if you are traveling to the tropics where clothing is cheap to buy. Use your coveted baggage allowance for items which are difficult to buy or expensive at your destination.

If you wear contact lenses, keep a record of the relevant specifications with you and pack a pair of spectacles.

Information

Keep a backup of all important contact information. Backup all important data onto a computer or memory card whether you keep your contacts in your mobile phone, notebook or address book. Be prepared for the possible loss of your mobile phone, luggage or wallet. Many travelers recommend sending themselves an email with an attached file containing all important contacts, references and scanned certificates.