I’m not much of a mechanic but when I was less than half the age I am now, back in the ’70’s, first with my little 50cc motorbike and then with various cars, two Vauxhall Viva’s, one Ford Cortina, a couple of Ford Escorts, I did pretty much all my own maintenance work. I learned through experience, the workings and operation of the basic internal combustion engine. With the Cortina, I actually stripped down the engine and rebuilt it with stage 2 head, twin Weber carbs, added a Corsair close ratio gearbox and repainted it, for some strange reason that I cannot today fathom, what I can only describe as a kind of shitty brown. In my mind it was always going to be electric blue but for whatever reason, it ended up brown.
I was pretty proud of myself until I put it on the road and blew the diff. Too much power to the weakest link. Of course, my basic knowledge gleaned from books and a few ‘experienced’ mates down the pub, did not make me the boy racer I yearned to be. Of course, now I know you need to upgrade the brakes, they were drums not discs in those days, a hydraulic clutch might have been nice, it was cable back then.
Nowadays, I lift the bonnet (hood, if you’re not British) of my Mini Cooper and I don’t recognise anything at all. What did they do to the Mini? What happened to that cute little 850cc shell of a car I used to race on grass tracks in Sussex every Sunday? Lucky for me the washer fluid reservoir and oil caps are clearly marked, not that I ever dare put oil in it. It’s a 20 minute job, for an expert, trained ‘technician’, to get the battery out!
In 2014, my car tells me when it wants an oil change, it tells me when it’s brake pads are wearing thin but on the downside, a sensor malfunctioned a few months back and the engine refused to fire up because it was “too cold” outside. It was 34 celsius outside a shopping centre (mall) but my car thought it was somewhere in Siberia.
The Fatboy is not that much different. I can just about get oil and brake fluid in this bike, but anything more than that and I’m screwed. I tried to fit a new seat a few months ago and ended up calling my mechanic to do it properly. Yes, the seat.
While the world of personal finance and investing has come on in leaps and bounds since the 70’s, sadly it has not progressed to the same level as the car (automobile). The technology may not have kept but, like my car, most people reading this have lives far more financially complex than almost all of the people back home. Add to that the fact that governments all around the world are looking at ways of increasing the tax-take while not impacting too negatively on votes and you could be in for trouble.
Being an expat, either on a temporary basis or for life (no comments from the purists please; I know by definition you cannot expatriate temporarily), complicates one’s finances enough to make them dangerous to your financial health. If you’re unfortunate enough to be an American citizen and/or taxpayer, there’s an above average chance you will be ‘touching your toes’ for the IRS in the not too distant future.
The resistance among the ‘expat’ community to seek expert advice on their personal finance is surprising to me but again I believe that much of the resistance is a bit like men not wanting to ask directions while driving, or there’s the age old fear of being sold something they don’t want or need. The former is of course, ridiculous, I always consult my SatNav, and the latter, well, the latter is easily overcome by taking the time to check that the person you are talking to is educated either formally or by experience and preferably both. These days it’s real easy to do that background check.
So, do you need financial advice? I would say, with very few exceptions, yes, you almost certainly would benefit from seeking the opinion of someone versed in the area. It’s generally free for the initial meeting and I am still, after 36 years in the industry surprising people every day with simple facts they did not know, but need to know. Just this month I have highlighted potential Inheritance Tax liabilities in the millions of pounds that people assumed they were not liable for.
I saw yesterday the example of an American expat who was quoted US$250,000 by a US tax accountant just to file his PFIC returns going back only 5 years. That’s not the tax bill, that’s the bill for sorting out the mess through not taking the correct financial planning advice.
We have the facility now, to give just one example, to be able to punch in all your relevant data and tell you, based on certain scenarios that you choose, how long your money will last which makes it easier for us to plan together how to fix the problem of living too long.
Once you know stuff like that, the rest of the puzzle is relatively easy.
So I ask you? Do you feel lucky? Will you be living with your kids in your retirement years?