You're listening to Radio Aysha, and in this episode, I would like to talk about the very many issues that expats and people who somehow live an international life face when they deal or don't really deal with their finances. Okay, so this is a topic that's very dear to my heart because I'm Swiss, currently living in Switzerland.

But before that, or let's say in between, I've been living abroad. I spent over 10 years in New York, in Dubai, in Amsterdam, in Munich. I also studied in the UK and in San Francisco at some point. So I moved around. And I was paid in different currencies. I had accounts in different countries, bank accounts, investment accounts.

I have pension contributions and social security contributions in different countries. That's why I'm very, very familiar with the issues that come with it. And there are many, I made the whole list of things I want to discuss. And let's start with the fact that when we move or when we live internationally, and that's the case also for a lot of the people who join our program, it's difficult to plan ahead for the future or to organize our finances because essentially you may not be sure where you're going, when you're going, and especially once you're there, how long you're staying.

Okay, so all this uncertainty, you know, it's kind of like, ah, should I open an investment account here? But what if I move back to my country? Or what if I move to another country in two, three years, but we're not really sure that we're going to go. So what should I do? Or, ah, I have An investment account back home in, in Australia, but now I'm here in Germany and we might stay, but we might go back.

So should I keep that account? Should I move things to Germany? But then if I keep the account in Australia, there are like transfer costs for, and the currency exchange costs. So it becomes difficult to plan and to organize because there are so many moving parts and so many uncertainties as to where are you going to go?

How long are you going to stay? All right, so I would say that's one of the main reasons that people either they are struggling to organize or basically they froze. Actually most people freeze and they don't do much, but they feel terrible about it. And another thing that comes to my mind. is, is related to tax.

And the first one is not understanding the things that you can do to reduce your taxes in this new country that you live in, because you don't know the system, you don't understand the system, maybe all the information is in the local language, you might not, you know, master it to the level that would enable you to read some tax information.

So that's one thing. And on the other side of that is also not really understand Your tax obligations in that country. If you have investments in that country, or let's say if you own maybe apartments in another country, and how does that impact your tax obligations in your host country, et cetera. So this whole kind of concept of tax, it's a, for most people, it's very difficult to understand if you live in your own country.

But of course, if you live in a different countries and you're moving around, it makes the whole thing a little bit more complicated and more stressful. Okay. And I just touched on that, but I want to elaborate a little bit more on the language issue because now we have Google Translate and we have ChatGPT, which is actually doing an amazing job at translating about anything.

Highly recommend if you're not using it yet for that. But still, when you go quickly to a website or when you get some documentation printed, or when you have to interact and call some people, Typically these public services, they don't have everything translated. Now it depends where you are. And some countries are more English language friendly.

Some others only have all the documentation related to tax and pensions only available in the home language, which makes it even more difficult to, uh, to figure it out, you know, or for example, even it's not only the documentation, but just opening an account or managing. Your account. So for example, let's say you have pension contributions in one country like I have in the Netherlands.

I still have pension contributions there that are blocked. And if I want to kind of log in on their portal, everything is in Dutch. So I speak Dutch, more or less. I learned it there, but it's very rusty and it's quite limited. So for me, that's a pain in the neck to have to go on their portal. That's all in Dutch, right?

So that's, that's typical example. And then another thing that I have on my list is having accounts scattered in different countries. So for example, I used to have accounts in the Netherlands for a while, even though I was not there anymore and I was not using it. I just had a thousand euro on it. And somehow I was like, just there, almost forgotten.

Or I used to have also still an account in the US, right? And that's not such a good idea. So the thing with that is that if you have bank accounts, but also investment accounts, and obviously you will have very likely also pension contributions, social security benefits. It gets very difficult to keep an overview of what you actually have.

How much do you have? When you don't have a clear overview of how much you have, it's a bit hard to strategize and to optimize. Okay? The simplest and the clearest you set up, the easier it is to really make decisions. To organize everything. And also when you have accounts all over the place, it gets sometimes hard to access these accounts.

So a typical example is that when you want to log in somewhere that's a little bit protected, you have this kind of like double sign on where you have to log in or they send you an SMS and you have to confirm the code and this kind of thing. So this is very common. But if you moved to another country, you may not have this phone number anymore.

All right. So basically you cannot sign in, log in anymore because you cannot get the SMS. You don't have the number anymore. And then you have to request. The worst case that was close to me is my sister and business partner, Fanny. She used to live in India and work in India, and she had a bank account there.

When she moved, she left it open with some money on it. And then when she wanted to transfer the money back to Switzerland. She couldn't access it because she didn't have this phone number. She couldn't get the SMS. And she was trying out of Switzerland to call in India and try to explain this situation and that she couldn't log in.

And it was some kind of back and forth. At some point, she was even thinking she may never access this money again. Okay. Because it was just such a pain to actually get access back and be able to log in. It took her so much time and efforts. Okay. And in the end, she managed. But lessons learned. Having old accounts scattered in different countries makes it increasingly difficult to access them.

And that's something you need to keep in mind. So even either you have to keep really up to date about the changing login procedures and requirements. Or often it's actually a good idea to actually close the accounts when you leave. Now, obviously it depends. Is it your home country and you're going to come back?

You might not want to do that if this is your home country. But if it's a place you visited for a few years and then you move, it might make a lot more sense to actually close the account when you leave, when you still have the number and so on, etc. Another thing that makes the expat life a little bit difficult when it comes to organizing and optimizing our finances is the fact that, as you may already have noticed, pretty much every single guidance or guide.

Tips or help or documentations or websites or experts, like any, pretty much everything is single country focused. So basically, if you're looking for information about tax, you will find information about tax in Switzerland and they will explain what to do if you live in Switzerland. And so let's say you talk to a tax advisor.

This person will be able to tell you exactly what to do. But then if you start telling them, yeah, well, I have an IRA, which is some kind of pension account in the US, or I have some legacy accounts and investments. I have a stock market portfolio in the UK or in Australia, whatever. If you have stuff abroad and you're trying to think how to optimize that, typically, These people won't be able to help you because they only understand the rules in the country where they live.

And so for them, it's very difficult to kind of consider the implications of someone having an international life. And then if you ask them, ah, okay, they will give you some guidance that will help you in the moment, but it could well be that the moment you move to another country or you move back to your country or you move to the US or whatever.

That's whatever they've set up for you actually becomes detrimental over the long run for you because it's not recognized in the new country or it's taxed very heavily or it requires a lot of filing obligations in the new country, et cetera. So pretty much nobody is able to help with this kind of cross country strategy and optimization.

Okay. And that's really a problem because. For a lot of expats, it's one thing to, to really make the decision, okay, now I'm going to optimize my finances. But then if you actually can't find the information online and you can't find anyone to help you, so what do you do then? Right? That's really a mega issue.

Okay. And I've encountered that in Switzerland. I've encountered that in the US. I've encountered that in the Netherlands, et cetera. Right. It basically happens pretty much everywhere. All these things that I just said are amplified if you are American or if you have American children or an American husband, your financial constellations and set up and obligations and requirements and etc. Becomes a lot more complicated as you would have surely already noticed if you're an American citizen. And worst of all, It's very hard, actually, to open accounts at all, sometimes, in different countries, because the, and especially difficult to open an investment account, okay? Because a lot of financial institutions don't want to deal with Americans, because it comes with too much reporting requirements that are very stringent, and very costly, and expose them to more risk vis a vis the American governments, and they're just like, okay, no, we don't want to deal with Americans.

This basically makes Everything a lot harder for Americans. Also the filing procedures for your assets, for your revenues, for your investment accounts, for your investment products, everything is more complicated when you are American. And something that's particularly applicable to Americans, but to some extent also to a wider public, it's easy, or let's say easy, maybe it's not the best word, but it's quite common, unfortunately, for someone who doesn't really understand that.

Tax requirements or the tax requirements they are subject to in terms of their nationality, in terms of where they have assets. So if you own an apartment or whatever, or if you receive some money from your parents or from inheritance or a divorce settlement, because you live abroad, you don't necessarily understand how you have to declare this and what forms you have to file.

And then maybe if you don't do it, at some point you get fined. for that. And these fines can be very high, especially if you're American and you didn't file correctly. Okay. So this is something that's obviously if you live your entire life in one country, you're much less likely to run into this kind of problems and fines, and it can cost you a lot of money.

For many years, you were not compliant. And we are talking about tens of thousands, hundreds of thousands, literally. Okay. Another thing that I have on my list is that when we live in different countries and we have accounts in different countries or we move from one country to the other, often it also means we have to transfer money from one country to the other, or we start using cards or credit cards that we have from another account into the new country.

I've done that in the past many times, right? I remember when I transferred all my money from the U. S. back to Switzerland. Uh, when I transferred from Switzerland money to go to Dubai, okay. And at the time I didn't do it the very optimized way. I just transferred the money into my new account, except I was sending USD from the U S into Swiss francs account in Switzerland, okay, which means I lost some money there.

Because the banks took a big fat fee to convert the money. Okay, so there are better ways to go about it. Now I know much better and I'm now very, very careful about this kind of things. Because this is a typical way that people who live an international life lose money without even noticing the banks take a lot of fees that are published but also mostly hidden.

And you don't necessarily see that. on your accounts and you don't pay attention to that or you think it doesn't matter but actually does over time. You lose a lot of money due to these transfer fees, conversion fees, etc. And they are really ways to optimize that once you know about it and also ways that are not very complicated.

They just need to be put in place once and then you're really in a better position. Another thing that I want to touch on comes back a little bit to tax, although it's not necessarily tax. It's more of the topic of bilateral treaties, okay? Countries have treaties with one another and they agree on How to basically tax people if some people meet the criteria of being a resident in two different countries, or if they have assets in one country or the other, which country is going to tax what and who has the priority and how to go about it. Okay. So these treaties, you can literally Google it and you can find them. It's not exactly an interesting read. And sometimes it's a bit difficult to actually understand what they are saying in there. But essentially 99. 99 percent of people who live an international life never bother to check treaties or to inform themselves about these treaties.

And this means that they can happen to be taxed twice because they are taxed by two countries. But actually, if they were aware of the rules, they would be able to be taxed only once by one country. And another thing, and that's something that's really touched me. That it was my case. It's about pension benefits. Okay. So my husband passed away six years ago already. And when he passed away, he left me with two kids to raise by myself. And I had to figure out what does that mean now for financially? Of course, I always had my own income from my professional activities, but there was this whole thing. Okay. What does it mean now for my children?

Because their father passed away. So what are they entitled to from the pension system? Okay, so it was difficult to figure that out because I had lived the expat life and we had to figure it out in different countries. It was a lot of work and most notably, I really hesitated looking into this topic for a time in the U.S. Because I was like, well, you know, the U. S. is not exactly the most social oriented country. I don't think we're going to get anything from them. And anyway, I don't have time for this. And I was completely, of course, emotionally overwhelmed and everything. All right. And so my father in law did the work anyway to basically claim these benefits.

And the first thing that came out was Actually, you need to have spent 10 years from the Googling that we did or that he did. You need to have spent 10 years and worked 10 years in the U. S. to be entitled to benefit. So I was like, well, we stayed there four years, so well, it's not even worth the trouble because we are not entitled to anything.

Turns out the U. S. has a tax treaty with Switzerland, which says that the time you spend in both countries count towards the 10 years. The counting is very specific and is a little bit strange. And what counts as one year is you need to really kind of look and calculate. And they actually, when you make the request, they calculate that for you.

And it turns out that we met the requirements. And now I receive basically often allowances for my children. Now, obviously this is not breaking the banks, but it definitely. Does make a difference on a monthly basis. Okay. So the point here is that when you live internationally, it's everything more complicated and most people don't really understand how the tax treaties work and how to actually make the most of what you're actually entitled to.

Another thing that makes everything more complicated is not understanding how and where and when you can actually claim benefits. Okay. Because the benefits, once you get in retirement, they are not going to rush to send you money. That's for sure. They're going to wait nicely until you kind of bother doing the procedure.

And if you're a little bit late, they're for sure not going to send you whatever missed benefits you will have missed. So it's your responsibility to actually figure out the procedure and claim the benefits and understand when, at what age you can claim in what countries, et cetera. So obviously this makes it a lot more complicated.

Yeah. It's another. Yet another challenge of living the, an international life. Okay, so obviously there are more things to cover, but these are the things I had noted down and that I wanted to address in this podcast episode. And these are things that we do address in our Invest at REST program. And it's the typical headache things that actually make investing difficult, right?

And I often say to people, actually, you know what? Contrarily to what people think, investing is Easy part is figuring out all the rest that's actually much more difficult. And that's really a lot of the value add that we bring inside our Invest at REST program. Now I've been thinking for a long time about how we could make more people benefit from all this kind of cross border financial knowledge that we have.

And I have a few ideas and I have one in particular, and I will let you know more about it. Next week in another episode.