Dave’s Dirty Dozen

Many people visit here to find answers to questions about living in the Philippines (and hey, thank you all, I appreciate each and every page view )

Many also write me with questions that seem to show they didn’t really read much of what I posted here.  That’s OK, each person learns at the own rate and by their own favorite means … and goodness knows I sometimes run a little “long” when I get on a roll.

So in the interest of serving those who want to know the “quick and dirty” on what they need to think of when they are considering a move to the Philippines (or any other overseas location), here’s something along the lines of what we pilots use to stay alive 65 years (and many more, I hope).  A checklist.

The pilot’s handbook for an airplane can be hundreds of pages of text and diagrams, but if you want to take off and make sure you live to proceed to a landing, the “quick and dirty” that you need to memorize and check each time is summed up in the acronym CIGAR.  Learn what that means and follow it and you might not qualify as expert on every evaluation, but you won’t die on takeoff.

2 SOPS, USAF, Keeps them Flying ... with a Checklist

The lady in the picture is keeping a different sort of flying vehicle in the sky.  High in the sky, actually.  When you get a position from your GPS, or watch the moving map in your care, remember that the reason the GPS works is people like SrA Ramos in the photo there … running checklist after checklist to keep those nearly invisible birds in the sky.

Here’s a quick and dirty dozen things you need to think about before making your Philippine move”:

1.  Recognize No Place Is Perfect: (Including the one you are living in now).  No climate is ideal. No country or city is 100% crime-free. Manage your expectations.

2.  Realize that no other country on Earth is as Comfortable and Convenient us the USA: I’ve lived in many of them.  And I don’t just mean so-called “Third-World” countries when I make that statement.  You can go to highly developed countries like France or Japan or Australia and, you name it, the US is still, without a doubt, the most comfortable and convenient place on earth to live.  Just ask Rupert Murdoch or any of the hundreds of thousands of rich and famous who have become US citizens or residents over the years.  Their sure didn’t come to the US to get rich in many cases … many of the US foreign-born “movers and shakers” were well off before they ever made the move.

3.  Make Sure You Are Including Your Significant Others in Your Plans: I wish I had a dollar for every time I have talked with a guy or gal who was all hot to trot to make their plans fro the Philippines and then … inexplicably … lost interest.  Why?  They didn’t sit down and plan with their children, their moms ad dads … heck in some cases even with their spouses.  If you don’t talk it through before you start down the panning highway you are virtually guaranteeing yourself heartaches ahead.

4. Don’t Leave Your Good Sense at the Border: In particular here I am talking about property purchasing and ownership.  If you have read this far you already know that the Philippine Constitution and the law of the land prohibits foreigners from owning property and businesses (except certain Freeport Zone exceptions).   This being the case, I wonder why so many people write me and argue about how they have found a “loophole” that is going to let them be the exception to the law … often expressing the notion they are “smarter” than the rest of us “sheep” who just live by the law.  You are not smarter than the law and it ain’t going to happen, legally, so get your head right before you make a commitment.  If the actual outright ownership of property is essential to your well being, I suggest you consider somewhere else to live, instead.

5.  Set Your Priorities: Be be honest in the process. What matters to you most? Evenings at the theater? Friends whose company you can enjoy in English? Cost of living? A reliable Internet connection? Don’t kid yourself. If you can’t imagine life without a Maytag washer and dryer, for example, you may need to rethink the entire proposition.

6. Rent first: Don’t buy a new home in paradise until you’ve tried that paradise on for size for several months. Even if the country turns out to be your ideal retirement haven, maybe the city or the region or the neighborhood where you land at first isn’t where you ultimately want to be. Give yourself time to get the lay of the land before committing to a property purchase.  This advice has stood me in good stead even in the USA when moving.  For some reason we Americans have gotten so “converted” by the “renting is bad” chants of the real estate hypesters (many of whom are broke now trying to unload all those over-priced purchases they made and sweet talked their hapless clients into) that we have lost site of actual dollars and cents reality.  Especially in the Philippines where rent is quite cheap in comparison to purchase price and where there is no enforced zoning, residential use guidelines and the like, if you buy first (especially sight unseen) you are leaving yourself wide open for a disaster.  Don’t worry, inflation isn’t going to eat up that much of your profit while you rent … and the chance to avoid buying yourself a heartache can be priceless.

7. You Need Tax Advice: It’s amazing to me how many people seem to ask tax questions like “how do you file your taxes from the Philippines’ after they are already here.  Even worse are the ones who believe they don’t have to pay US taxes if they live overseas.  There are some foreign-earned exclusions and such but the idea you are not subject to US taxes?  Wow, no way guy.  Did you look before you leaped?

Also, many folks rely on a generalism that you don’t owe Philippine income tax on money from outside the Philippines.  This is not always true … and for sure you owe Philippine taxes on money earned here.  And property sale taxes (back to that “I have to own my own home at any cost” feeling.  Can you spell 20% or so?  yep, buy or sell property here that falls under the rules for the Philippine VAT (Value Added Tax) … an many property transactions do) and you are looking at total tax bites as high as 20% … maybe the seller is going to pay it for you … or not.  Get competent tax advice (not opinions from some internet word jockey like me) before you make the move.

8. Your U.S. Health Insurance Night Not Cover You: For sure your Medicare and Medicaid won’t.  Other health insurance might … have you checked … from the company itself?  Also, major changes may be needed, for example if you are using TRICARE as part of the mix, you can’t use TRICARE Prime in the Philippines … as just one example.  Only you can find these sort of things out for yourself, because for example, if Freddy’s Blue Cross covers him, there is no assurance your particular Blue Cross policy will cover you … there are more than 50 different Blue Cross carriers in the USA alone.  Check first, be covered later.  I’ve written quite a bit about medical insurance coverage in the Philippines.  You might want to read it.

9. There’s No Perfection: There is no such thing as the world’s perfect retirement haven.  And certainly, the Philippines has its share of imperfections.  I see a lot of people wasting some of their best years as they sit and ponder and research different counties to death, never putting two and two together and making a move.  You need to make the best decision you can. but make it by all means.  If you hold out for that one special place that meets every need, might as well leave this article and start building a farm on Farmville, because perfection in the real world will not happen.

10. Remember You Don’t Have to Make a Move “Forever”: Strangely enough, there are the same number of airline seats available going back to the USA as there are coming here from the USA.  You can always make the move, try things on for size, and then go back to the USA or onward to some others country that may suit you better.  For example, I get a lot of queries from guys who ask me for ways around the rule about having an onward travel or return airline ticket.  “A one way ticket is cheaper” they will complain, and “I know I am coming to the Philippines forever, so why would I buy a round-trip ticket?”  My response always is, “forever” is along, long time.  Ask your travel agent, for example, about buying an open return ticket to fly to the Philippines.  maybe you’ll never use the return half.  But then again, what if you need to come back and you are dead broke, lost all your money in some ill-advised swindle or another and are thoroughly sick of the place.  Wouldn’t that return ticket be a valuable piece of insurance?

11. Pay attention to your gut. A place either feels right…or it doesn’t. All your research and figuring in advance is important, but nothing substitutes for the feeling you get when you hit the ground.  And I maintain, strongly, that you do need to get your feet on the ground here before you an really know if moving to the Philippines is the right thing for you to do.  You can’t learn to ice skate by reading a book on skating, you can’t make a decision valid for you and your own personal needs and desires by reading people’s web sites.  Get you butt on a plane and come try things out.  If you do decide you want to live here you didn’t really waste that much money … if you decide to flee back home … well just how priceless is the knowledge that it won’t work for you before any bridges are burned?

12. Be prepared for panic: You can rest assured that sometime after you make a move here you will suffer “buyers remorse”  (should that be movers remorse?).  No matte how well you plan and how things seem to look in advance, there will be things that “pop up” and cause you to be annoyed, change details of you plans or perhaps even cost you extra money.  Just as I don’t advise you to make any sort of move without at least a couple months living expenses in the bank, I certainly don’t advice making a move without some emotional savings in the bank as well.  If you decide to move here and make it through the first year without some sort of “Geeze Louise” moment where you find yourself wondering “What on Earth have I done here”? then you are indeed the exception to the rule.  As we used to say back there in Space Command where those satellites get flown, we do not allow for “mistakes”.  They are forbidden by law and regulation.  But, no matter how much you plan, “Anomalies Occur”.  Be prepared to deal with them.

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Related posts:

1. Philippine Rental Property — and US Tax Laws
2. Living in the Philippines Can Be Taxing
3. State Tax Breaks — In The Philippines?
4. 12 Little Things — Rule 2
5. 12 Little Things — Rule 10