ExPat Finances: 3 Secrets to Keeping Your Expat Finances in Order

By Nick Hodges, President of NCH Wealth Advisors

At the outset, Kathy and John look like the average young family. They both work full time while raising their two children, ages five and six. Kathy worries about having enough life insurance in place, funding their children’s education, saving for retirement, and taking care of her aging mom in New Jersey. They own rental property in Florida and want to buy another home in New York.

However, Kathy and John’s world is more complicated than that. They are expatriates from different countries: John is from Ireland and Kathy is from the U.S. They have lived and worked abroad for over 12 years. Kathy hasn’t filed her U.S. tax return in a couple of years because the tax professional she used closed the practice. They have bank accounts in U.S. dollars, Euros, and Dhs. Kathy’s career changed this year when she moved from the non-profit sector into the corporate world, increasing her income three-fold. Neither of their employers sponsors a pension or retirement savings plan.

1. Taxes. For U.S. Expats, it always starts with taxes. Even though Kathy earned less than the Foreign Earned Income Exclusion during the previous two years, she still must file her returns in order to receive the exclusion. Kathy needs to bring her U.S. tax filings up-to-date as soon as possible. This is a critical year for Kathy because she will earn more than the Foreign Earned Income Exclusion amount. She will need to have a detailed tax projection calculated before year-end to evaluate ways that she can legally reduce her tax liability. The other tax landmine for Kathy is U.S. Social Security taxes. While she was working for the non-profit organizations, they handled the U.S. Social Security taxes associated with her wages. This year, Kathy will be completely responsible for them, and may owe as much as $15,000 in unavoidable U.S. Social Security taxes. Kathy needs to find a tax professional knowledgeable in U.S. expatriate tax regulations to help her manage these issues.

2. Future Planning. Kathy and John are conscientious savers and planners. They live well within their means and have some very good goals for the future. However, because their funds are scattered across several bank accounts worldwide, they do not have one place that they can monitor their entire financial world. We talked about ways that they can simplify this process by utilizing a secure, online financial platform that would allow them to connect and track all their account information in one place.

Kathy and John need to establish an organized savings schedule to effectively meet their goals. They need to:

a. Calculate their monthly expenses and set aside at least six months’ expenses in a local savings account.

b. Research the price of homes in New York and begin to set aside a calculated amount that will allow them to purchase property in 12 months.

c. Establish college savings plans for each of their children and begin contributing the maximum annual amounts to each plan.

d. Research the associated travel, shipping and other expenses that will be associated with their return to the States in five years, adding at least 20%. Then they will understand how much they need to save annually to fund their return without worry.

e. Start saving now for retirement. Since their employers do not sponsor a retirement savings plan, they should take advantage of the tax benefits of investing in individual IRA accounts. If they still have excess cash after maximizing these contributions, they should consider other investment products specifically designed to build a strong asset base for retirement, investments with special features and no surrender charges.

3. Protection. Like many stateside Americans, Kathy has legal concerns about her family. Her first concern is that their personal desires for their children and affairs will be honored in the country they live in. While I am not an attorney, we did discuss their desire to change the executors of their wills. I suggested they consider speaking with an attorney about creating a living trust for their assets. With a living trust, they can separate the duties of the trustees between who will be the fiduciary of the money and who will be the guardian of the children.

Kathy is smart to realize that they need life insurance to protect her children’s future should anything happen to her or John. Her employer provides a modest life insurance policy, but we determined that it is not enough to protect her family. John does not have any life insurance at this time. Where an insured lives and works affects amounts and costs of a policy. It is very expensive to use a U.S.-based insurance company to insure someone living and working abroad. When Kathy mentioned that she has personal contacts at Zurich Life, I recommended that she pursue placing policies with them: a 15-year term policy on her husband for $1 million, and another one for $350,000 on herself. The recommendations were based on the age of their youngest child, who will be substantially raised in 15 years when the policies terminate.

In conclusion, it’s hard for expatriates to find their tax and planning answers in one place, even though they need someone that can advise them on their entire financial picture. Kathy and John need an advisor that understands how to help them properly file their expatriate tax returns and keep them on-track with their goals for the next five and ten years. However, please consider your own risk tolerance and investments objectives and goals before deciding your financial affairs.

Thank you to NCH Wealth Advisors 714-459-7020, for this excellent article

INDEPENDENT CONTRACTOR OF MONEY CONCEPTS INTERNATIONAL, INC.
All Securities through Money Concepts Capital Corp. Member FINRA/SIPC
11440 N Jog Rd., Palm Beach Gardens, FL 33418 Tel: (561) 472-2000
NCH Wealth Advisors and Money Concepts are not affiliated.

ABOUT THE AUTHOR

Nick Hodges, President of NCH Wealth Advisors, provides US expatriates with the best tools, strategies and planning techniques to help expats manage their tax and financial goals and dreams on a day-to-day basis regardless of their location. To claim your free gift, ExPat Life Portfolio Kit, visit his site at http://www.ExpatCFO.com.

5 Reasons to Hang Out in San Jose

Let's face it, when you come to Costa Rica you don't exactly want to make San Jose a destination. I mean, there's so much more to Costa Rica. But then again... You'd be surprised about all the fun things there are to do in San Jose.

Since I love to host friends and family at my house and I live in the Central Valley area, I've been able to explore San Jose extensively. So trust me when I say that it's actually a fun spot!

1. Avenida Central - I always start here. This closed off central street is like a promenade filled with shops and some-what decent restaurants. At one end stands the famous Mercado Central, in the middle is the elegant National Theater and at the other end you can hop on a bus going to San Pedro and other happening spots around San Jose.

2. Mercado Central - This is a must! The oldest and largest Central Market of Costa Rica is always full of excitement and activity. Hundreds of fruit /veggie stands, fish stands, butcher shops, poultry vendors, souvenirs and food stands occupy the indoor arena. You can enjoy a typical Costa Rican lunch while shopping for typical souvenirs to bring back home. Be careful though, pick-pocketers are on the loose and they will get you. Keep all your possessions as close to you as possible and even better if you leave most of them in your hotel room.

3. National Theater - This is one of the most beautiful and elegant buildings in all of San Jose, at least I think so. If you have a chance to catch a show, do so! The tickets can range from $2 - $30 and it hosts a variety of shows: dance, opera, symphony, and much more. Right in front of it is a great park filled with hundreds of pigeons so if you're equipped with kid, they'll have a great time burning off that extra energy running after them.

4. La Sabana Park - Every city has a grand central park and San Jose is right up there with the best. Sabana Park is amazing! With a huge man-made lake and a beautiful cemented trail that takes you all around it, you'll feel like a true local. I always get my son a horsey ride and then let him burn more energy off at the playgrounds. However, after dark it becomes a bit dangerous, so make sure you pack up before sundown.

5. Museums - That's right! Get some culture while you're at it. My absolute favorite museum is the Children's museum. First of all the building is impressive, but once you go in, you'll never want to leave. Even my five year old is stimulated for 3 to 4 hours! And if you have time check these out too, Jade Museum, Museo Nacional de Costa Rica, Museo de Oro Precolombino.


Thank you to Marina K. Villatoro, The Travel Expert Blog (all you need to know about travelling in Central America) for this exceelnt story and you can also follow Marina on twitter @marinavillatoro

Want to volunteer to help the Sonafluka Community Development Project

Basecamp International Centers offers a number of worthy volunteering opportunities worldwide and many in Costa Rica.

If you have some building skills and want to volunteer to help the Sonafluka community development project have a look at the Base Camp International site here.

This is a particularly rewarding project as the volunteer will be a part of the community and actually see the contributions they have made.

Reasons to Visit Costa Rica

by Arthur P. Maxwell

We all love a vacation to the beach. But when you think of Costa Rica do you think of jungles, wildlife, and zip lining over the jungle treetops or just a leisurely hike through the jungle to amazing waterfalls. Well now you can.

Long after the abolishment of the Costa Rican army, Costa Rica still has one of the most politically stable countries in Central America. With its diverse landscape from the beaches to the Cloud Forest Mountains it allows you to experience both mountainous landscapes as well as the coast. Costa Rica has two coastlines, the pacific side and the Caribbean side.

Traveling on a shoestring budget? Not to worry, Costa Rica has many hotels to meet every budget. The country is safe and easy to get around in and everywhere you go you will find the friendliest people who are willing and eager to assist you. Many of the luxury hotels offer all inclusive packages if you want to leave the planning to someone else.

Despite the size of this small country, Costa Rica is packed with adventure. Whether you choose to explore the jungle forest of Monteverde, or just relax on the beach, you might find that your time here is not long enough. You can zip line through the treetops, horseback ride from the active Arenal volcano to the beach, and so much more.

Many honeymooners visit Costa Rica to just sip cocktails and relax on the beach. But for those who are seeking adventure, you have come to the right place. You can enjoy extreme repelling down a waterfall, hike to the Continental divide or just explore this paradise by hiking through the Rain Forest.

As we have said, Costa Rica has a very diverse landscape and with that comes a very noticeable change in season. If you choose to travel to the northern part such as Monteverde, always remember to check the season for the time you are expecting to travel. Rainy season is typically between October and mid November, but this too can change.

You can start your vacation at the amazing beach of Manuel Antonio. Lush forest and sandy beaches with amazing wildlife will kick you vacation off to a great start. Then head up north to Monteverde, howler monkeys, toucans and the sloths await you. From there, horseback ride to the active Arenal volcano for the finishing touches to adventure.

This country is full of amazing people that will add to your vacation memories. They are warm, friendly and always willing to offer a helping hand when choosing your next vacation destination. Whether you decide to hit the hot springs of Arenal or choose to travel somewhere off the beaten path, help is always there.

If I had to choose over a packaged tour or going it alone, I would choose the latter. Costa Rica is rich in scenery, back roads and amazing little off the beaten path places. Touring with a large structured group will hinder you for having the incredible experience this country can provide. Live outside the box and take the roads less traveled, there is where the experience is.

About the Author:

The author, Author P. Maxwell, recently had the time in his life at a Papagayo Gulf Costa Rica Beach Resort with his beloved. They both had a Costa Rica Beach Wedding and Honeymoon there several years ago, and will always have a special place in their heart for Costa Rica.

If you enjoyed this post, make sure you subscribe to P. Maxwell's RSS feed!

Article source:University Articles

Costa Rica - A Good Medium Term Investment Opportunity?

Join us for a Webinar on September 2

Space is limited.
Reserve your Webinar seat now at:

https://www2.gotomeeting.com/register/296345586

James Cahill from Costa Rica Invest will talk about Costa Rica, land in Costa Rica, development land, the Costa Rican economy and the future plans of the principal emerging economy in Central America.

James will touch briefly on Costa Rica Invests current project.

Judy Ferguson will be available throughout the meeting to answer all your questions.

Looking forward to meeting you there.

Title: Costa Rica - A Good Medium Term Investment Opportunity?

Date: Wednesday, September 2, 2009

Time: 1:00 PM - 2:00 PM EDT


After registering you will receive a confirmation email containing information about joining the Webinar.

System Requirements
PC-based attendees
Required: Windows® 2000, XP Home, XP Pro, 2003 Server, Vista

Macintosh®-based attendees
Required: Mac OS® X 10.4 (Tiger®) or newer

Costa Rica ranks no. 2 for foreign investment in Central America and the Carribean

Costa Rica has just been ranked as the number 2 most attractive country for foreign investment in Central America and the Caribbean.

It ranked just 3 points short of Puerto Rico according to a study “Countries of the future for Foreign Investment 2009-2010″. This analysis is conducted every two years, by the IDF Magazine, a publication specializing in the field of foreign investment produced by the Financial Times Publishing Group.

Local talent and the country strategy to attract foreign companies listed as the main advantages.

The evaluation included analysis of seven categories:

• economic potential
• human resources
  
• cost effectiveness
  
• quality of life
  
• infrastructure
  
• friendly business climate
  
• attracting investment strategy
  

Invest In Costa Rica

Costa Rica is a country open for business and particularly to foreign investment. The Costa Rican government and its laws specifically encourage direct foreign investment.

This attitude pro-business attitude is shared by the two major political parties and has been actively implemented since the early eighties. Over the past 15 years the continual improvement of conditions destined to attract foreign companies has been the "Costa Rican trademark".

To support this effort, Costa Rican Investment and Trade Development Board (CINDE), a private non-profit organization, was set up to assist and guide investors and companies in the set up of their operations in Costa Rica.

A further step on this effort was the establishment of legislation to provide significant tax and operational incentives to companies in export related activities. These particular incentives are: the export contract, the free zone and the temporary admission system, all of which include total or partial tax exemptions and expedite customs clearance services among other simplified operational aspects.

Costa Rican laws, regulations and practices foster competition and do not discriminate between locals and foreigners, for the conduct of business. The only exceptions to this are the entities that are constitutionally precluded from total foreign ownership such as telecommunications, energy generation and insurance. Tax, labor, health and safety laws are also business and investment positive and are designed to help rather than to hinder.

This investment-friendly climate and government policy of making Costa Rica "the Silicon Valley of Latin America" has enticed commercial leaders such as Acer, Microsoft, GE, Abbot Laboratories, Continental Airways and Intel Corporation to make sizable investments here, both financially and physically, with major production and distribution facilities.

Western Union has chosen Costa Rica to host its Latin American regional operations center.
Costa Rica is now earns more from high technology exports (electoronics, pharmaceuticals and software) than from coffee, bananasm, pineapples or even its lucrative, thriving tourism industry.

The World Bank has given Costa Rica an excellent bill of overall political and economic health. The bank lauded the country as possessing "one of the most stable and robust" democracies in Latin America. It went on to praise the Costa Rica's "healthy economic growth rate" and "some of the best social indicators" on the continent.

The Economist Intelligence unit in March of this year listed Costa Rica as the 7th most politically and socially stable country on the planet - an ideal country in which to invest.

According to a report issued by the CINDE, thirty multinational firms set up new offices in Costa Rica in 2008, bringing $428 million in investment. A number of IT multinational companies (Intel, Microsoft) and pharmaceutical multinational companies (Abbot Laboratories, Johnson, Merck Sharp and Dome) have set up production units in Costa Rica. Companies such as Procter and Gamble, HP and Dell have also installed their regional customer service offices for the American continent in San José. In addition an important high quality textile industry has been developed.

The government maintains an open environment towards foreign investment especially in the high technology end. Generally speaking, foreign investment is concentrated in manufacturing (45%) and agriculture (25%, mainly banana and coffee interests). Other investments are placed in the railways, tobacco, communications, airlines, government bonds, and real estate. The US, Costa Rica's major foreign investor (78% in 1998), has interests chiefly in computer chip manufacturing, agriculture, petroleum refining, and distribution, utilities, cement, and fertilizers. The continued high level of trade with the US has been conducive to private foreign investment, especially in export industries. Investment incentives include constitutional equal treatment guarantees and free trade zones. Foreign direct investment in Costa Rica in 1998 was $530 million, or 5% of GDP.

Another industry that has been strongly flourishing in Costa Rica is the opening of medical equipment manufacturing companies. Foreign investors have not only found that Costa Rica’s political environment is stable and offers attractive incentives, but that the workforce is one of the most highly educated in the region.

Foreign investment is also strong in the real estate and hospitality industry. Costa Rica hotels have grown to include large exclusive beach resorts in the Northern Pacific Coast visited by high profile business people and Hollywood stars.

Costa Rica has enjoyed an average income that is among the highest in the region. And Costa Rica enjoys the fame as the Safest Latin American Country for Multinational Investment.

Now Costa Rica has already done so much and is ripe for foreign investment politically and physically. Costa Rica is building a competitive advantage for itself and the many high-tech companies who have chosen or are pondering the option to operate here. It is a country at a turning point in integrating itself into the modern world economy.

Costa Rica - the principal emerging economy in Central America