On Considering that Opportunity Abroad

You’ve been bitten by the wander bug and are applying for opportunities abroad in dream locations. Your application progresses through the interview process to an offer, at which point you feel the excitement dissipate like heat through an open window. You are currently earning $100K per year, and the offer…excellent, using the accompanying adjective, is for $50K.

This isn’t necessarily a bad offer. While it is understandable that you compared the compensation amounts, you might be surprised to know that it is not necessarily a good way way to analyze the offer, let alone the best way. You might pass on an opportunity that is really a good one.

Even markets within nations vary. If you are living somewhere with a relatively low cost of living, and considering a move to a location with a much higher cost of living, you will probably find that while the salaries are higher in the more expensive market, the uplift does not flatten the difference. In moving to the same type of position your standard of living will likely be reduced. Whether that is acceptable to you depends on a number of things specific to your situation, such as whether you currently have a fair amount of money left at the end of the month and are willing to reduce that padding.

The standard of living comparison is key, but it will better serve you to compare it in relative terms rather than specific ones. Looking at specifics can complicate and obscure something more important: are you alright with just living as well as you do now relative to the standard of living in the new locale? That is less complicated to grasp than a plethora of specifics, such as do you really need that large home abroad?

Do a relative comparison because standard of living is relative. A direct equivalence of your current standard of living might necessitate your becoming a maharajah where you would be going, while a relative equivalence, simply living happily, eating well and doing some traveling could very well be what you really require.

A way to approach a relative comparison is your earnings percentile. 

Look at a graph for your current location that shows in which percentile of the population your income falls. Do it based on your city or region, not the entire country. Your living standard in your current location is not dependent on the living standard halfway across the country. Now look at at the same type of graph for your dream destination. In what percentile would you be based on the offer? If similar, or at least acceptable, you can make a more meaningful decision than simply comparing dollar amounts.

Then look at the other factors and let them help you adjust the comparison. For example, I would be comfortable with my living standard falling some if the new location afforded me the opportunity to explore other nearby countries inexpensively.

While a more realistic way to compare, there are important caveats to using it: health, spouse, children, pets, debt and reentry. 

Do you have health issues? Chronic conditions? Are the medications you require available where you would be emigrating? Is the standard of care there acceptable or would you require evacuation to care under more modern standards were you to become ill or have an accident? If you will require that kind of health insurance, consider what that cost would be to your compensation, in that the cost could be a bigger bite out of your new salary than it seems when looking at it with the mindset based on your current salary.

If you have a spouse, and your spouse currently works as well and contributes a needed bump to the family economy, pay close attention to whether the work visa regulations allow your spouse to work as well. 

Do you have school-aged children? If so, and if you would want them to be in an international school rather than a local one, this could be an expense that fall outside a simple relative comparison of standard of living. Likewise, if you have a pet that you want to bring, some countries require the pet to be quarantined at an official facility for periods that could be lengthy at a cost that is not insignificant. 

If you have unsecured obligations that you will not be able to satisfy before emigrating, such as credit card or student loan debt, the amount you would earn in the new location is very important when translated to your current currency, because you would still be paying debt in the original currency. For example, if your unsecured debt payments are currently 500 USD per month, 10% of your monthly salary, and 10% of the new monthly salary would only convert to 100 USD, you could have difficulty in paying your obligations.

If any of your obligations are secured, you could well have more work to do before emigrating. As an example, if you currently have a car loan, it is unlikely that the lien holder will allow the car to leave the country, because they would have no way of repossessing it were you to stop paying. Of course, you can sell the car before going, but whether your loan is above or under water is a consideration. If you are leasing, it becomes even more difficult, because leases can be difficult and/or costly to end prematurely.

Do you plan on returning to your current country after a period of time? if so, consider the cost of reentry. You will be looking to reestablish your living standard in a location with a cost that could well exceed whatever savings your were able to put aside while away, and that’s without factoring in inflation. If reentry is part of your plan, it would be best to take the proceeds from liquidating your current assets and put them in investments indexed to inflation, so that they are available for your reentry upon return.

Life is all too short and typically a series of happenstances. We all have dreams, and should consider following them when the opportunity arises. Hopefully, the method of comparison that I’ve given will better help you determine if the time and opportunity are right.