PhilFAQS

———Note: Certain claims here regarding income tax may or may noy\t be correct. Consult a tax advisor knowledgeable of both county’s laws.————–

OK, I doubt I’ll be able to keep this post up too long … people reading it and copying my idea are liable to crash my server … but hey I’ll post it anyway … a surefire guideline for how to become a millionaire in the Philippines … start with two million.

Yeah, OK, big ha ha … that joke is so old it has white whiskers … and it’s also a good description for how to make a million at ranching in Colorado, starting an aircraft charter service, buying and selling homes in the US, and several other businesses I have a nodding acquaintance with.

But seriously, I have some thoughts along these lines that maybe are worth putting down on (digital0 paper.  I’ve been thinking about this for a week or so now, ever since a guy made a comment on another guy’s blog (my friend Bob Martin, veteran of more than 8 years full-time in the Philippines who lives and blogs out of Davao City).  The comment was a compliment about something Bob had written and it wound up with the statement, "You could have been a millionaire if you had stayed in the US."

It really made me wonder a bit … what particular points would cause a rational man to hold the opinion that a person with the talent and drive to become a millionaire would be able to become one in the US and not in the Philippines?  I’ve thought about it quite a bit in the past week or so … unfortunately the gentleman who made the comment has not chosen to expand on his thoughts, even though both Bob and I have asked him to.

Neither bob nor I are dollar millionaires (although i suspect Bob is a lot closer to it than I am).  In my case I have the blessing (and curse) of substantial pension incomes that takes away a lot of drive I might have … although thoughts like that gentleman expressed almost make me want to try, just to see what will happen.  Bob is much younger than me, has many more years of experience as an independent businessman, has a college degree and a few other things in his background that makes him a bit better equipped, so I think it’s entirely possible he will become a dollar millionaire before he decides to sit back and coast … if he chooses to do so.

But agreeing, for the sake of argument, that either Bob or I could become millionaires will get us to the operative question … would it be easier to become a millionaire in the US or in the Philippines?

My opinion is, the choice of country to live in doesn’t make a whole lot of difference, but there are some specific and very real advantages to making money in the Philippines as opposed to making money in the US.  Here are a few of my reasons:

• Overall cost of living is much cheaper.  This is especially important to younger folks who still have families at home … kids have to eat even when income slows down.
• Labor is cheap.  need a maid to keep the place clean while you concentrate on making money?  $60 or $70 a month will do.  Want new power outlets so you can move your computer and make your home office more efficient?  $10 or $15 for materials and labor.  Need a typist, a bookkeeper, a lawyer?  All much cheaper than in the US.
• Tax structure is great.  Under Philippine law you do not owe taxes on income sourced outside the Philippines, and you don’t, of course, owe state and local taxes in the US.  You still have the same US federal income tax liability, but when I look at the amount of paperwork I had to deal with 9and checks I had to write) to run even a tiny business in Colorado I am amazed that I put up with that nonsense for so many years.  (Some US states try to ’stick their beak in anyway, but if your former state does, just ‘fire’ them … there is no requirement that you be a resident of any US state, so you can pick and chose to suit.
• The Internet makes it all the same world.  I do my banking online, handle my credit cards online, buy, administer and sell web properties online and with VOIP services, like Skype, I talk with clients or business partners exactly as if they were in the next room … for free.  the time difference is a factor, but it’s often a plus factor.  for example I have been doing some custom mapping work for a client in New York.  My business day starts as he is going home … he calls, discusses what he wants and then I have 16 hours or so to get things done and in his inbox before he comes to work in the morning … it can work well.

I guess i could go on, but this is already long enough.  I’m sure there will be a lot of people who have different thoughts on this, so please, sing out and le’s discuss.  Why do you think it’s easier … or harder … to get rich in the Philippines?

———Note: Certain claims here regarding income tax may or may noy\t be correct. Consult a tax advisor knowledgeable of both county’s laws.————–

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