Can you live abroad comfortably from dividends and having an online business?

I often write on Quora.com, where I am the most viewed writer on financial matters, with over 274.5 million views in recent years.

In the answers below I focused on the following topics and issues:

  • Can you live abroad comfortably from dividends and having an online business?
  • Why do people want to emigrate to Singapore despite high living costs? Is it a good place for expats to live?
  • What are some of the easiest places for a US citizen to emigrate to permanently? I speak about the numerous routes available.

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I heard some people are living abroad and having a comfortable lifestyle by living off their dividends and having an online business. How hard is it to accomplish that and how long does it take?

A reasonable percentage of these people are retirees who have accumulated for decades, and now have an income from the investment pot.

You are right, though. The world is changing. More business is going online and a greater number of people are interested in investing.

How long it takes depends on

  • What you have now
  • How much money you will add to your investment accounts.
  • Your skills and experiences if you are looking to set up an online and remote business
  • Where you want to live, which is linked to your future spending habits
  • Your expectations about quality, which will affect your budget and costs.
  • How many calculated risks you are willing to take.
  • Some things out of your control, like luck/chance, which aren’t worth worrying about because you can’t control it.

Let’s start with retiring from an investment portfolio. The academic evidence shows you can take 4% of a portfolio out every year without running out, with some caveats.

Yes, it is possible to take much more if you go for more risky strategies like renting real estate in some markets.

But the 4% rule has been found to have worked even in extreme situations like if somebody retired one day before the 2000 stock market crash and therefore eight years before the 2008 financial crisis.

The 4% rule therefore means every $100,000 should be able to buy you $4,000 a year of income for life, and you can increase that 4k in line with inflation.

If you have $300,000, that is $12,000 a year. Quite a few people can build up that kind of investment pot.

Believe it or not, there are quite a few countries in the world where you can live comfortably on $1,000 a month, especially if you have a partner who is sharing the bills.

I know some people living in places like the Philippines and Bulgaria who only pay about $300-$400 a month in rent for decent places.

Most people are going to want to double that figure, and some countries would require you to more than quadruple it.

A business is a very different thing. If you are already successful in your area, you can set up a remote and online business quickly and have some chance of success.

For example, if you have been a consultant or recruiter in your home country for ten years, of course you have a chance to set up an online (and therefore remote) business in this area.

That doesn’t mean risks are involved, of course, and you will need to take calculated risks.

Alternatively, you might want to learn a new skill, like affiliate marketing, but any new skills might take at least a year to get good at, if not much longer than that.

I would play the long-term. Get good at something and then think how you can make it work remotely.

At that stage, then think about the practicalities like visas, health insurance and so on. Take it step by step.

As a final comment, I would get ready to work hard. Many people have this fantasy when they think about remote work:

They think it will be easy. It won’t. Many people want to do it, and few succeed, often due to expectations vs reality.

Running a business in general is tough. So, if you prefer an easier option, I would focus on investing first and then take a workable dividend from the portfolio every year.

The quickest way to achieve this is to invest hard, and then emigrate to a low-cost country, which will make the aforementioned 4% rule of retirement more workable.

Why would someone want to migrate to a lousy country like Singapore, When you can go to Europe and enjoy much higher standards of living and wages than Singapore?

There are two major surveys which are done to ascertain expat satisfaction:

  1. Internation
  2. HSBC

There may be more, but I am not that familiar with them. InterNations, despite having loads of professional expats on the website, have fewer professional expats.

Expats going to such events come in all shapes and sizes – the professionals, the retirees, those between jobs, students etc.

HSBC, on the other hand, more focuses on career and money-focused, high-end expats.

It should, therefore, come as no surprise that Singapore does well on the HSBC survey, but it also does well on InterNations as well:

The reasons are simple:

  • Expat packages can be good in Singapore
  • It is clean and orderly
  • Loads of travel opportunities exist regionally
  • It is expensive, but less so than the likes of Switzerland. You say that the quality of life is lower in Singapore with worse wages, but nowhere in Europe has better expat packages, and even the average salary is higher than most European countries.
  • Taxes are low on local sourced income and usually zero on overseas income. That is one reason why many wealthy people are interested in moving to Singapore, as taxes are part of the cost of living.
  • It is a convenient place to live due to the prevalence of English speakers.
  • It is international and open (in some ways) in the way which few European cities are. Places like London are an exception to that rule, but most European cities are quite localized. For example, Madrid is very Spanish and conservative, to an even greater degree than some small Spanish islands that get loads of tourists. So, Singapore isn’t great for a localized experience in the way that Japan or China is, but it appeals to people who just want to live an international lifestyle.

Don’t get me wrong, though, it depends on the industry. There are some industries that, I am sure, pay better in places like Southern Europe, with lower costs of living.

Few people want to actually retire in Singapore as well. I have seldom met a business owner or remote worker who prefers to live on the island.

That doesn’t mean it doesn’t have key advantages.

What is the easiest country for US citizens to move to permanently? I’m looking for a country with a relatively easy to learn language, isn’t too hard to move to and has a job market for computer programmers within Europe that wont leave me broke

Firstly, the answer below will be relevant for many nationalities, and not just Americans.

So, to get to the point, it depends on several factors, including:

  • If you can get a job offer
  • How much capital you have and how much of it you want to deploy
  • How picky you are about opportunities/countries
  • If you have any family links to some places and some other factors.

If you aren’t overly picky about opportunities, it isn’t true, as has been suggested below, that all countries require job sponsorship to get in.

Panama and Cambodia are just two examples of many countries which allow you to effectively buy residency.

Let’s take Cambodia as an example.

All you need to do is:

  1. Fly in
  2. Get a “business visa” at the airport. This visa isn’t appropriately named. You don’t need to have a business or job to get it. You can only get 1 month at the airport

3. Then extend the visa by up to 24 months. It costs about $370 a year, unless things have changed.

4. Then you can also buy a work permit if required, and it also costs about the same as the visa. There are agents that will do it legally.

5. Unless the rules change, you can keep renewing indefinitely, even if it isn’t technically permanent residency.

In Panama and some countries in some America like Paraguay, you can also get a visa via a small deposit into a local bank account.

There are other options too

  1. Ancestry. If one of your parents, or even grandparents, was born in another country, you can sometimes get residency and even citizenship on that basis
  2. Marriage. If your partner is non-American, you can usually get into the receiving country. Some make it tough, others easy.
  3. Education. Take the UK, where I am from. Previously, it was possible to study for three years and get a four-year visa. Therefore, if you got a job after studying, you could stay. After five years, you can apply for permanent status and even citizenship. That was cheaper than golden visa schemes (more on that below)
  4. Golden visas. This is essentially buying residency, permanent residency and even citizenship. Don’t assume this is only for “elites” though. Typically, you do this by putting money in the bank or buying property or government bonds (or other government approved investments). Some schemes are very expensive, like Switzerland, at $2million. Some aren’t cheap but perhaps more accessible than people assume (you can live in Monaco with a 500,000 Euro bank deposit). Others are much more accessible, like Georgia at 100,000USD into a property investment, or the aforementioned Paraguay or Panama options which are much cheaper than 100k. You could also put “Investor visas” into this category. If you agree to invest into local firms, sometimes you can stay in the country, assuming it isn’t a stock listed on the stock exchanges.
  5. Starting your own business, even if it is essentially just an on-paper entity. You can often do this from a few thousand up. 
  6. Of course, the traditional route of getting a job first. In many countries, if you stay long enough, you have a right to stay even if you quit the position. This isn’t the case everywhere. In some countries, the employer owns the visa, and you can be forced to leave soon after the position is terminated. 

Of course, these rules always change. A few years ago, the Georgia residency by property scheme was available for $30,000.

Now it is $100000. Other countries have closed down their schemes entirely.

Either way, there are always options which are better than trying to live long-term on a tourist visa, or other noncompliant tactics.

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Financial Planner - Adam Fayed

Adam is an internationally recognised author on financial matters, with over 274.5 million answers views on Quora.com and a widely sold book on Amazon

Further Reading 

In the article below, taken directly from my online Quora answers, I spoke about the following issues and subjects:

  • Why do people below the age of 50 want to be rich? Is it a misconception in the first place that younger people are more motivated by getting rich compared to older generations? 
  • Does the experience of living in China make many Western expats to reconsider previously held opinions? I suggest why many expats do, indeed, change their minds about China, but perhaps not in the way you would expect! 
  • What is the easiest country to start a business as a resident, or for that matter, non-resident? This one might surprise you!
  • Is Thailand a good place to be as an expat if you want to settle for the long-term? I consider many factors including the quality of the medical facilities, ease of obtaining visas and so on.

To read more click on the link below.

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