This page summary, takeaways, and transcript were generated
by AI from the video captions.
The video itself remains the source of truth.
Adopting minimalism as an expat is crucial for financial security, flexibility, and avoiding potential pitfalls like asset loss, lack of social safety nets, legal restrictions, and reduced earning potential.
Expat life and minimalism are closely linked due to practical considerations like limited carry capacity and the risk of asset loss from natural disasters or the need for quick relocation. Accumulating expensive items that cannot be easily transported or are susceptible to damage can lead to significant financial and emotional loss. The advice to 'not buy anything you can't afford to walk away from' is particularly relevant for those living a mobile lifestyle.
Expats often lack access to social safety nets available in their home countries, making financial prudence paramount. Without local social security or comprehensive healthcare, individuals must budget more for unexpected expenses, especially as they age or face health issues. This necessitates foregoing luxuries and prioritizing savings, such as maxing out retirement accounts, to ensure financial stability abroad.
Legal restrictions on property ownership in some countries can make buying land or homes inadvisable, turning such assets into liabilities if one needs to move. Furthermore, expats may face reduced earning potential in their later years due to career stagnation or health issues, making a minimalist approach to consumption essential for a secure future. Avoiding status games and conspicuous consumption is also vital, as displaying wealth can attract negative attention and put expats at risk in certain environments.
Practical tips for expat minimalism include finding a like-minded partner, avoiding overcommitment on housing, and gradually reducing consumption before moving. It's also important to avoid acquiring new status symbols and to focus on financial education and long-term goals. By moderating consumption and living a more modest lifestyle, expats can enhance their financial freedom and ensure their dream of living abroad remains sustainable.
Expat minimalism for financial security means intentionally reducing possessions to enhance financial stability and flexibility while living abroad. This approach helps mitigate risks associated with relocation, asset loss, and the absence of social safety nets.
Minimalism helps expats financially by reducing the costs and risks associated with moving and owning many possessions. It encourages saving more, consuming less, and avoiding commitments like property ownership that can be difficult to liquidate or move.
Expats often lack the social safety nets available in their home countries, making a financial buffer crucial. This buffer covers unexpected healthcare costs, future needs, and potential emergencies, ensuring financial stability in a foreign land.
Buying property abroad can be risky for expats due to potential legal restrictions and the difficulty of liquidating assets if relocation is necessary. A minimalist approach often advises against significant asset commitments that cannot be easily moved or sold.
Avoiding status games involves moderating consumption and refraining from overt displays of wealth. This can prevent attracting unwanted attention and potential harm, contributing to a safer and more financially sound expat experience.
Practical tips include gradually reducing consumption before moving, avoiding overcommitment on housing, and focusing on financial education. It's also beneficial to avoid acquiring new status symbols and to prioritize long-term financial goals.
Expat life and minimalism are closely linked due to practicalities like limited carry capacity and the risk of asset loss. The video suggests adopting a 'one in - two out' rule and avoiding acquiring new status symbols. It's also important to focus on financial education and long-term goals.
Minimalism is crucial for expats because it eases relocation and reduces the risk of losing possessions due to natural disasters or sudden departures. It also helps build a financial buffer, as expats often lack social safety nets and must budget carefully for unexpected expenses.
The video recommends gradually reducing consumption before moving and adopting a mindset of only buying things you can afford to walk away from. One viewer shared they are getting rid of 95% of their clothes for an upcoming move. Another viewer mentioned a rule of 'one in - two out' to stay on track.
Expats need a financial buffer because they often lack the social safety nets available in their home countries. This requires careful budgeting for unexpected expenses, especially related to healthcare and future needs, making financial prudence paramount.
0:09 Hey YouTube, Alex here. And in today's video, I want to talk about why expat life and minimalism go hand in hand. I know because I used to not be a minimalist at all. This is evidenced by the storage unit I have back in the United States that I'm overpaying on. This is a mistake on my part; it's full of junk, some valuable, some sentimental items, but also a ton of junk. And I don't want you to make that mistake. So, in today's video, we're going to cover why I think expats should consider minimalism. They should consider moderating their consumption and talking about the benefits of doing so, but more importantly, discussing the potential drawbacks of not doing so.
0:45 Hey YouTube, I'm here in Dagat, Philippines, and I wanted to go into the question: why does expat life and minimalism go hand in hand? I think you could call me a bit of a minimalist. You know that I don't buy tons of stuff these days. I think that a lot of expats would also call themselves minimalists, or at least those who wish to moderate their consumption. And there's a number of reasons for this, but I picked out five that I think are the most important.
1:09 Number one is that you can only carry so much stuff. If you're moving from place to place or going from country to country, then it doesn't really make sense to buy a bunch of furniture. To buy, even if you're staying in a certain place, if you haven't committed to that location, you're not married to somebody there, then I don't know that it makes a lot of sense to be buying a lot of high-end stuff that you can't take with you if you have to leave. I think Paul puts it really well: don't buy anything you can't afford to walk away from.
1:37 If you got some inclement weather coming and you expect your area to be flooded, if you're living in an area, all of a sudden there's a typhoon warning, there's a major storm warning, and you think that your home may be totally flooded, well, all of a sudden your expensive furniture may be ruined, your electronics may be ruined, and your insurance, depending on what type of insurance you have, may not cover it. Maybe it's not insurable. It depends on where you're at. It depends on a lot of different things. You may be in an inclement weather situation that totally destroys your stuff, and you don't necessarily feel attached, and you don't want to have to lose all that stuff, right? You put your hard-earned money into it, and you hate to give it up. Like, I don't want to lose these sunglasses. It really bothers people when I wear these Ray-Bands over my regular sunglasses. Oh yeah, you like that? How about that? How do you feel when I do that?
2:28 So all this stuff that you might accumulate may go to waste in the case of a natural disaster, or you run into some kind of issue, you need to jet out, you need to leave quickly. You can't pack all that stuff into your suitcase. Maybe you can pack some of it into your suitcase. I don't think you could pack a TV into your suitcase.
2:47 Number two is that there are typically no social safety nets for expats living overseas. If you're somebody that you're expecting to get certain kinds of assistance, but you haven't attained citizenship, which is the case for most expats, most expats do not acquire citizenship. And so the social programs, whatever they may be, aren't applicable. They aren't going to qualify for local Social Security programs. They may not qualify for various health insurance plans, and they're really on their own. So they have to be extra careful about their finances in ways that they might not have to be back home.
3:21 I know that for Canadians, for Brits, they've got a single-payer healthcare system. They've got an NHS in the UK. Can't remember what the Canadian one is called, but you're probably familiar if you're Canadian. These systems shouldn't be taken for granted. And if you're living abroad and you can't count on those systems, you need to have extra room in your budget for your healthcare, for when you reach the age that you're no longer able to work. That might require giving up certain luxuries. That might require giving up the latest iPhone every year. Maybe you take fewer vacations.
3:55 When you're preparing to move abroad and the years preceding it, you want to make sure you max out your 401k plan, your IRA. You make sure you're making big contributions to Social Security if you're an American. And you forgo some of those niceties to give yourself some extra wiggle room in your budget living overseas. There's no expat that's ever said, 'I've got too much money.' You'll never hear that from anyone living overseas or in your home country, for that matter, but especially not overseas.
4:26 Other people may say it, but you're not going to hear somebody say that about their own home bank account. Extra money is always nice. You never can tell what kind of costs may come up that are unexpected. You may not be legally allowed to buy a home. You may not be legally allowed to own land. So it may be inadvisable to fill these things up with stuff, right? If I am just renting a condo and I've decided on a location to stay there for a year, well, maybe my feelings change over the course of the year. Maybe I get some neighbors that move in that are super loud. Maybe I decide that I'd prefer to live in another city. Maybe I have healthcare needs and need to go to the main city in the country, the big city in the country.
5:05 All of a sudden, I've need to change locations, and I'm not owning it. So I can't like hold on to it and rent it out to somebody else, which may not be allowed based on your visa anyway. Such that you've got this albatross that's hanging over your head. Maybe it's not super expensive, maybe your maintenance fees aren't too bad, but maybe it's this thing where you're like, 'I really wish I didn't buy this house.' If you can even buy it. In other cases, you can't buy it, you're just a renter. So it's worth consideration. Okay, if I try it for a while and it doesn't work out, what am I going to give up? What is not easily moved? What can I not just transfer to my new location? What's going to be expensive to ship? Really think about these things.
5:49 It seems like when expats, whatever reason they need to go back to their home country, which is a more extreme scenario, they've got to have a fire sale. They've got to get rid of things for pennies on the dollar. You hear Mike talk about this from Mike's Philippine Retirement, where your best deals on stuff are often going to come from guys who they've got to get out of town. They've got a month left and they need to go back to their home country, and they're willing to take a modest sum of money for their motorbike, for their TV, for kitchen appliances, for a washer dryer, whatever it may be that they thought, 'Man, I'm going to get a lot of use out of this.' Maybe they give up after a year, maybe it doesn't work out after a year, and they really got to try to get something back as opposed to just giving it away if they can. It's more expensive to go back home than it is to come over here.
6:36 Now, I know in some places, some people will say, 'Oh, my girlfriend can own a home,' or 'my boyfriend can own a home,' 'my husband can own a home,' 'my wife can own a home.' Can you own a home if you can't own a home? You really need to be prepared that you may not be able to hold on to it depending on the circumstances. Now, I don't wish tragedy on anyone. I don't wish hard times on anyone, but I have heard a lot of horror stories and I've even seen a few myself, unfortunately. I want to and I don't want any of these bad fates to befall you.
7:12 Now, this one doesn't apply to younger expats as much, but it definitely applies to expats who are longer in the tooth. You may no longer be in your peak earning years. So if you overspend, if you overdo it, which happens. Some expats, they come over here, 'Oh, I've got this budget.' They blow it out of the water. They go way overboard. Now they're rushing back home to try to get back into work. They might not be capable of earning what they were earning in the past. They might struggle to get a job. 'Wow, sir, you're wanting a job here, but you don't have any experience for the last three years. We've developed this new technology and you don't have any familiarity with it, so I think we're going to move forward with another candidate.' Or maybe the work dries up. Maybe your industry was booming when you left, and you go back and it's in a decline, it's not doing as well, and you're struggling to get back on the ladder.
8:00 Maybe a health issue came up when you were living abroad, and you're no longer able to work the same number of hours. Maybe you have some kind of injury. I know some guys unfortunately get in a motorbike wreck, and their health and mobility is permanently impacted. There's no telling what could happen. You, some people call them black swans. I think Donald Rumsfeld is famously quoted as saying, 'There are the things we don't know we don't know.' And you never know what could happen. So you may be in a position where you're not capable of earning what you could earn before you left. And many of us would benefit from having a more minimalist perspective and consuming less because we may have to go back to work.
8:38 Something could come up, and for us younger guys, we don't know exactly what that looks like. We want to have some padding in our budget for a soft landing as opposed to a hard landing. And I've experienced both of those things going back home from abroad. It's much nicer to be to have your first month's rent, your deposit, a vehicle, and some couches you can crash on, rather than landing and being like, 'Okay, where am I?' You're going through culture shock. You forgot what your home country was like. You're stressed out because your quality of life is probably not as good back home as it is abroad, or you wouldn't have gone abroad in the first place. And so this is a big reason why I think minimalism can be so important.
9:27 Is that if you're not in your peak earning years, or you haven't had the career growth that you would have had if you'd stayed working in those years, inflation has probably done a number on your home country's economy, and so your...
9:40 Your home country's economy and so your prices are higher and you haven't seen your income go up with that. I have friends that have worked in the US and so while everything for them has gone up 50%, they've also had their income go up 50%. So they haven't gotten ahead, but they also haven't fallen behind. If you're not making the big bucks anymore, then there's no need to live like that.
10:02 I found that in many countries outside of the US, people are less materialistic. It doesn't mean people are not materialistic at all, but I think their expectations are lower than what you would expect in the US. Finally, you do not want to play status games around people who are struggling.
10:21 A substantial number of expats want to play high roller. They want to live in the high-end community, they want to drive a big car, a big truck, they want to have the latest iPhone, the latest electronics. And to each their own, right? I'm not here to judge people. I know a lot of guys have worked really hard for what they have, they've put in a lot of time and effort, they want to enjoy their time in later years.
10:49 But when you're going around saying, 'I'm a high roller, I make this much money, I'm a big shot, I'm a high status guy,' this is potentially really problematic in some countries. In Colombia, they have this phrase, 'no dar papaya,' which means don't show your valuables. If you are an expat living abroad and you have heard about the unfortunate circumstances or situations in Colombia, then you're all too familiar that there are guys that go down to Colombia and they're wanting to show off their high status.
11:19 They're wanting to stay in the high-end places, they're wanting to dine in the finest establishments and to entertain all kinds of random ladies. This put a big target on their head. Some of them have woken up missing all of their valuables, and in some cases, had their health impacted by the events that they were not mentally present for.
11:43 I've got to be careful about what I say, but you get the gist, right? I mean, if you're thinking, 'I'm going to show off, I'm going to show these people how awesome I am,' this neo-colonialist attitude, this idea that everybody needs to bow down to me because I'm the greatest thing ever, you're going to attract a lot of desperate people in some countries.
12:03 Now, I know it differs by countries. Some countries are safer than others, some have less issues than others. But depending on where you go, you could attract attention from the wrong people who don't have a problem trying to take what's yours. I get that this video could be perceived as negative, and I think minimalism and the financial independence movement are generally positive things, but there are push factors.
12:28 I think about the things that have pushed me away from living in the US, and I think about the unfortunate circumstances that could pull me back. And I want to avoid those. In regards to struggling, there's a lot of struggling in a lot of places. Post-pandemic, inflation has done a number on a number of economies. Some people have found that their standard of living has declined.
12:50 So be very careful when it comes to trying to be a show-off. There's no need to impress anyone. The right people will like you regardless whether you have a fancy car or you don't have a fancy car. You don't want to attract the wrong kind of attention.
13:10 What are some of my tips for minimalism? Well, one, get a minimalist partner. Find somebody who's not super materialistic, somebody who's happy with a moderate consumption lifestyle. There are plenty of people in the world that are like that, especially these days, that will not push you to spend above your means, to spend above your budget. Be patient, take some time to vet these people out. Don't just marry the first person you meet because you're so lonely back home, you're willing to commit to somebody who, due to their spending habits, may enable you to ruin your expat dream.
13:43 I would say number two, don't overcommit when it comes to housing. Don't go and sign a lease for a mansion for a year a week after you arrive. Take some time to vet out different places, check out different neighborhoods, see what you like, see what you don't like. Stay outside the city, stay on the outskirts of the city, stay inside the city, try different parts of the city to figure out, okay, I like this about here, I like this about here, I don't like this about here.
14:14 Try different cities, even if you like small towns, try different small towns. Even if you like big cities, try different big cities. There's something for everyone in a lot of these countries. But in my opinion, it's worthwhile to do some digging so you don't overcommit to a certain location, make financial commitments that you don't want to keep up and waste money that could be better spent enjoying your life.
14:37 Number three, start moderating your consumption before you even go overseas. Start selling off stuff you don't need. You got a boat? Get rid of it. You got three cars and you only need one? Get rid of a couple. You have a big house? Wait until you get closer to the end date to get rid of it. You're, I don't know about the liquidity in your area or when you're watching this video, but start to reduce your consumption before you come because then you're going to be more accustomed to a modest standard of living. You're going to be more accustomed to being frugal, to being thrifty, and it's not going to be such an extreme drop-off of, 'Oh, I went from a high roller to now I'm trying to pinch pennies.'
15:16 That way, it can be a gradual decline and you can get used to a more and more modest standard of living. Number four, watch channels like mine that talk about a modest lifestyle overseas. There are plenty of other channels that also provide insight into how you can live abroad on a modest budget. Educating yourself is a big part of living a minimalistic lifestyle and working toward a more financially free way of living.
15:44 You may have not done a lot of that in the past, right? I think a lot of us are uncomfortable about money. We don't want to talk about it, we don't want to think about it. Approaching the topic head-on, just bearing the brunt of it, getting over our anxieties about money, our insecurities, our frustrations, or stresses will help you to better understand what makes you happy. For me, owning my own time makes me happy, doing what I want, working on my business. Having that freedom gives me far more happiness than any kind of material thing.
16:15 Number five, don't pick up any new status symbols. If you know you're moving abroad in a couple of years, don't buy that new boat. Hold on to your truck. Don't go out and upgrade your house. That's a mistake that I made when I was trying to initially learn about financial freedom. I thought, 'Oh, I'll buy this thing and then I won't buy anymore.' No, each purchase I made forced me to buy more stuff. I couldn't just buy the video game console, I had to buy the new video games. I couldn't just buy the computer, I had to buy the microphone. I couldn't just buy the new camera, I had to buy all the accessories to go along with it.
16:51 It feels like each purchase we make nowadays comes with a subscription service. So avoid those new purchases as tempting as they may be, as much as you want to get this or that. See if you can put it off. Think about if I still want it in a month, or I still want it in two months. Maybe then I'll buy it, but right now I need to focus on my goals. I need to moderate my consumption because what I'm aiming for will bring me far more fulfillment than any short-term joy that I could get from buying this thing or that thing.
17:21 Let us know down below what kind of tips do you have for people looking to moderate their consumption, looking to live a more minimalistic lifestyle? Were you a big-time consumer like I used to be when I was younger? Have you moved toward making more financially sound decisions? I'd love to get your feedback, and the audience would benefit from your contribution as well. So let me know what you think down in the comments below. Do you agree with these sentiments? Do you disagree? Do you think some of these are overblown?
17:48 Let us know which country you're interested in living in, if you feel comfortable sharing that. I get it if you don't. Are you a minimalist? I see myself as a minimalist. Curious if you feel the same way. Give us a thumbs up if you want to see more content like this. And finally, if you enjoyed this content, you want to see more content like it, please subscribe to the channel down below.
Follow the journey through expat life, travel experiences, and the realities of living abroad while exploring different places, cultures, and everyday life overseas.
