The End of Tax-Free Living in Portugal?

I wanted to get away from writing about life here in Portugal, but some potential changes in tax laws have come to light in the past week that merit the attention of this week’s posting. First, I’ve written about the tax benefits of Non-Habitual Residency here in Portugal. Accounting firms have referred to it as Europe’s best kept secret. The Portuguese Communist Party has been pushing for an end to NHR for several years without any success. However, this year, they may be able to push through changes to the retirement scheme for pensioners. This week’s blog is going to preview those changes and outline how you can plan to best keep your own tax bill at a minimum. 

What is NHR?

The system of NHR available in Portugal allows foreign residents to avoid Portuguese tax, or to pay a reduced rate, for a period of ten years. For more on this, check this posting

Why NHR?

The Portuguese people aren’t foolish. They aren’t giving tax advantaged residency to foreigners just to be nice. The influx of foreign money is beneficial to the local economy- particularly in rural areas. The Portuguese minimum wage is 700 a month. Many foreigners come with more cash to spend. I easily spend triple the Portuguese minimum wage in restaurants alone each and every month. Plus, after NHR expires (ten years), expats who are Portuguese tax residents will be subject to the same tax rates as locals- which are HIGH! The highest tax bracket here in Portugal is 48%. Even those earning over 36,856 are taxed at a rate of 45%. So, there is the potential for substantial future tax revenue for the Portuguese government. 

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Why do people want change?

There are a lot of Portuguese people who absolutely hate NHR. That’s understandable. They pay high taxes themselves and get to see new foreign residents enter their country and pay nothing- or next to nothing. What’s more, is that those same foreign residents get access to Portuguese social services, such as universal healthcare. The other side of the argument is that those foreign residents are bringing more money to the local economies than many local people do. There’s truth in both sides of the argument. 

What changes are coming?

It appears that the preferential tax rate for income earned within Portugal will remain in place (20%). The list of high value professions has been amended, as is common with many governments who try to attract skilled labor. However, the proposed changes will be to pension income. There is a lot of noise at the moment, and some sources have indicated that the government hopes to charge a minimum of 7,500€ or 10% of pension income (whichever is greater) to foreign retirees. What seems clear is that the government is seeking to tax pension income (which would previously be tax-free) at a reduced rate. 

What does it mean to you?

If you’re collecting a pension, it means you may have to pay. If you’re an American, you may be able to apply the foreign tax credit to your US return. Depending on your income, this may not affect you much. If you’re a low earner, who is just getting by (and the 7,500€ minimum really does come to pass) then these changes could be seriously life altering. I have spoken to several expats who fund their retirements almost exclusively through social security and would be forced to leave Portugal if they incurred such a heavy tax burden. There is also talk that those who are previously part of the NHR scheme will be grandfathered in. Again, there is a lot of uncertainty at this point. For me, being far from official retirement age, the proposed changes are scary because they indicate that the government is tightening the purse strings and more taxes may be likely in the future. I love Portugal, but if I were working for 52 cents on the dollar, I would be gone in a New York minute.

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Planning For Change

I see three possible approaches to the impending change:

Leave

Some people will do this. I think this may be the only option if the rumor of a 7,500€ becomes a reality. That seems incomprehensible to me, but this is a country with an exceptionally high tax burden placed upon its citizens. Having said that, it would be a real letdown as Portugal is a beautiful country that really offers so much to citizens and expats.

Pay the Tax

Many people will choose to pay the tax on their pension income here and look into taking advantage of the foreign tax credit. If US residents who pay a reduced rate in Portugal have a very large US tax bill, they may receive a credit for the amount of tax they pay in the US. Thereby reducing their US tax bill by the amount of Portuguese tax which is paid. This would be effective for those receiving pension income, as this income would be taxable in the US regardless of where you are in the world. If the Portuguese government decides in the future to scrap NHR altogether, this would be huge hit to those who are earning income here in Portugal (digital nomads).

Get a Passport and Become a Non-Resident

 

Six years. That’s all it takes to get a Portuguese passport- six short years. After five years living here, you can become a permanent resident. After one year living as a permanent resident, you can apply for your passport. After you have a Portuguese passport, you can come and go as you please. Americans who own property here (like me), can enter and stay as long as they like. If you choose not to be a tax resident of Portugal (wise given the outrageous tax rates here), you can choose to stay for less than 180 days and avoid the pitfalls of Portuguese taxation. This would be a decision that each person would have to make based on his/her own financial situation. I’m not sure that paying exorbitant taxes for six years is worth it to receive a second passport, but that is decision that each person will have to make.

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Final Thoughts

Portugal is a great place to live. Whatever your opinion of the tax regime and the proposed changes to NHR, the Portuguese government needs to do what is in the best interest of their citizens. By the same token, those who’ve chosen to make this country home or are considering doing so, need to make an informed decision about what is best for themselves and their families. It would be best if the government would come to a decision on this and communicate it clearly to all residents and prospective expat residents. Like many things here in Portugal, there is not a lot of clarity and transparency on the issue. Hopefully this will be sorted out sooner rather than later. 

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Portugal: Living in Lisbon v. the Silver Coast

I started writing this week’s blog from a café on the side of Rossio Square in the center of Lisbon, and I’m editing it from a tiny bar in Peniche on Portugal’s Silver Coast. I moved to Portugal seven months ago and have been living in a very small fishing village on the Silver Coast called Consolação. It’s less than ten minutes south of Peniche. This past week, I packed up, rented an apartment in the heart of Lisbon, and decided to experience a week of city living. This week, I’m going to revisit my decision to move to the beach by comparing and contrasting life in Lisbon and life in my tiny town on the Silver Coast.  

All For Big City Livin!!!
The Benefits of Living in Lisbon

Internet

Let’s start here since this is a must have for most digital nomads. Fast internet is everywhere in Lisbon. On the other hand, getting fiber can be a real issue in some parts of Portugal. Peniche offers fiber, but my town of Consolação does not. 

Energy

There is so much to see and do in Lisbon. It has the ‘feel’ of a busy city. As a result, I felt so motivated and productive. When you’re around people who are always working and moving, it puts you in that same state of mind. You also come into contact with people who are entrepreneurial and successful. In small town Portugal, that’s something that is exceedingly rare. Portugal is the poorest country in Western Europe. In my town, most people make the minimum wage of 700€ per month. Living in such poverty is not easy. As a result, you can see it in the faces of the people and feel it in how they carry themselves. 

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Diversity

Portugal has a well-known colonial history. As a result, you see many immigrants from former African colonies like Mozambique and Angola in Lisbon- not to mention the thousands of immigrants like myself who’ve come to make this country home. Portugal also has a booming tourist industry. Most tourists make Lisbon their jumping off point. As a result, you come into contact with people from all over the world. This is less common in my small town. 

Socializing

In Lisbon, I had the chance to meet up with and hang out with people from all over the world. It’s not just the expanded access to social opportunities. It’s the type of people that you’re going to have contact with. I had dinner or drinks with people who had interesting and exciting careers, people who were entrepreneurs, and those on exciting journeys of their own in life. By contrast, my sleepy little town has a dearth of such residents. People who get a good education and who have big dreams usually take off for somewhere else- either a large city like Lisbon or Porto, or outside of Portugal. As I mentioned, many of the people in my town have jobs that don’t offer them very much. They may be working in a café or a grocery store and that’s all they will likely ever do. It’s difficult to connect with these people that don’t have much on the horizon.

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In Favor of Silver Coast Living!
The Benefits of Living in Peniche/Consolação

Cost of Accommodation

Absolutely no comparison here. Lisbon is EXPENSIVE!!! Small studio and one-bedroom apartments (and I mean SMALL) are expensive in Lisbon. I saw a few places on Idealista that were listed for around 150k€ and only about 26 meters squared. By comparison, my place in Consolação has a two-bedroom downstairs (115 meters squared) and a separate studio upstairs (16 meters squared) for only 130k€. The same place in Lisbon would likely go 2-3X that price. My place is actually expensive for this part of Portugal. Many small flats can be found for less than 100k€.

 

 Rents are pricey too in the capital. A friend of mine just rented a nice two-bedroom flat in Areeiro for 1,000€ per month. By comparison, my friend here in Consolação has a one-bedroom flat with an ocean view for 350€. Another friend of mine has a one bedroom flat in Peniche for only 300€. There are other expenses that I am going to outline below which add to the cost of living in Lisbon, but accommodation is the most glaring difference. 

Parking

Parking in Lisbon is difficult and can be expensive. The accommodation I stayed in this week had underground parking that was a short walk from Rossio square. However, it cost 48€ PER DAY! You are able to rent a spot by the month for just under 200€. You can also rent a spot by the month for overnight parking only and that is just under 100€. Bear in mind that this was in the very center of the city and prices may be more affordable as you move away from the center. Many places have street parking that is free overnight. Parking in Alfama is free all day (except Tuesdays and Saturdays). Metered street parking usually has a four-hour max. 

Traffic

It goes without saying that there is going to be more traffic in a big city. What makes Lisbon traffic so tough is the tiny, narrow streets, which are also quite hilly. It can be difficult to drive. The fact that most cars here have manual transmissions only magnifies the problem. By comparison, my little town offers tons of free parking and almost no traffic. 

Nature/Ocean

Lisbon is a coastal city and so is my little town. If being by the beach is a ‘must have’ on your list, then the Silver Coast may be the place for you. Peniche and Consolação are awesome, but other spots like Areia Branca and Nazare are beautiful beach towns as well. If you want to be closer to Lisbon, but also want to be by the beach, look into places like Carcavelos, Estoril, Caixas, and even Cascais. I have a short and quiet walk to the beach every morning, and I would never trade that for big city living. 

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It's a Toss-Up!

Food

Wherever you go in Portugal, you’re likely to find good food. The food is fantastic and affordable. Lisbon offers a lot more variety of course- including pricier options. If you enjoy going out to eat or having drinks out, you will likely experience the higher costs of dining in Lisbon. I actually enjoyed having the opportunity to put on some nice clothes and go out to dinner at a few nice restaurants. The atmosphere was fantastic. Having said that, the fish and the glass of wine that I paid 25€ for in Lisbon didn’t taste any better than the fish and wine I would have paid 10€ for in Peniche. This is close, but I have to give the edge to Lisbon for the sheer variety. 

Safety

Portugal is a really safe place. Big cities always have the reputation of being more dangerous and that’s probably true of Lisbon when compared to Peniche/ Consolação. Despite this, I never felt unsafe while in Lisbon. Portugal has very liberal drug laws, and the thing you probably notice most is people trying to sell you drugs on the street- especially in the city square. These people are more annoying than they are dangerous. If you just say, “No thank you,” and keep walking, they don’t bother you any further. I go running alone around 4:30 AM and never felt unsafe. This morning, I walked a mile to my car carrying my laptop at 6:30 in the morning and never gave it a second thought. Again, this is a close call, but I’ll give it to the small town on the Silver Coast. 

Final Thoughts

It’s pretty hard to make a bad choice in terms of where to live in Portugal. I have obviously spent much longer on the Silver Coast than I have in Lisbon, so my experiences are far from complete. However, I hope this article helps inform your decisions on where you may choose to visit- or maybe even call home here in Portugal. 

Boa Viagem-

 

Jay

Love1

Considerations for US Expats

This week’s blog is not aimed at people looking to travel and work abroad for a few months. Rather this is for those who are packing up, selling everything, and moving abroad. I recently sold my homes in America, got rid of the car, packed, sold, donated, gifted, or trashed everything that was left over and purchased a place on the beach in Portugal. The freedom is indescribable. I no longer walk into shopping malls in Jacksonville, Florida and wonder if some nutjob is going to open fire in another American mass shooting. I go to the pharmacy and pick up prescriptions for a few euros instead of a few hundred dollars. My insurance premiums are 20% of what they were in America, and I don’t have to open my wallet to go to the doctor. My property taxes are less than 10% of what they were back home. All this, and I don’t pay taxes for the first ten years that I’m living here. Like all good things, it’s not all sunshine and puppy dogs. There are some real consequences to no longer having ties to the States. This week, I’m going to outline some of the challenges that I’ve run into living full-time in Europe, as well as debunking some myths that some may have about moving abroad. 

Mutual Funds and ETFs

This is huge. I currently keep my accounts with Schwab. I have a regular brokerage, as well as two tax advantaged accounts. I hold a mix of individual stocks, mutual funds, and ETFs. I enjoy picking stocks and have been really high on dividend stocks as a way to build a steady stream of income. Thereby making working less a reality. However, stock picking is a lot of work. On the other hand, mutual funds are professionally managed and allow you to purchase a mix of stocks that mirror a particular index or segment of the market. If there was a major correction- which many believe is coming, it might be wise to put money into a fund that mimics the market. Examples include VTSAX or SWTSX. However, if you move abroad, mutual funds may be off limits to you. When I changed my address to an international address, I was no longer allowed to invest in mutual funds. Further, because I had an EU address, ETFs were also off limits to me. I was told that I could keep the mutual funds that I have and reinvest any dividends. I could also keep my ETFs. However, I could NOT reinvest the dividends paid by the ETFs. I had to take the cash. My last ETF dividend payment was successfully reinvested, so that leaves some questions. However, before moving abroad, be aware that these financial instruments may be off limits to you. 

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Alternatives

Check into financial instruments available in your new country of residence. I-shares has products that mimic the DOW. 

FEIE & IRAs

One of the great benefits to being outside the US is the potential to take advantage of the Foreign Earned Income Exclusion. While this doesn’t apply to investment income, it may allow you to exclude roughly the first $100k of your earnings abroad. The unfortunate downside to this is that the income you exclude is not eligible to contribute to a traditional or Roth IRA. The funds in these accounts are tax advantaged and grow tax free. Unfortunately, without taxable earned income, you can’t contribute.

Alternative

If you are self-employed, consider a SEP or SIMPLE IRA. A SEP lets you contribute 25% of your income, up to $56,000. A SIMPLE IRA lets you contribute the first $13,500 in earnings to your IRA. Just remember- no index funds or ETFs. 

State Business License / Incorporation

I’ve written before about the advantages of incorporation. However, you do not incorporate at the federal level, but rather at the state level. This requires you to have an address for your business. If you’ve sold your home in America, you no longer have an address to complete your registration paperwork. 

Alternative

There are literally tons of registered agents out there. I’ve used both Harbor Compliance ($99/yr) and Georgia Registered Agent LLC ($49). If you use a CPA or EA to prepare your taxes, they may allow you to use their address as a professional courtesy for using their services. 

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Credit Cards

Keeping your current credit cards shouldn’t be an issue. I was able to change the address for all of my credit cards without any problems. However, applying for a new card may present challenges. I hold an American Express gold card which carries a $250 annual fee. In my opinion, Amex is one of the best companies. I’ve always found their service to be outstanding. However, being outside the US, I use my card less frequently. I would love to cancel my card, save the fee, and switch to a no annual fee card. Unfortunately, without a US-based address, they won’t accept your application.

Alternatives

Check and see if you are able to apply with the address of a friend or relative and then switch the address to either your international address or one of the mailbox services listed below. 

Phone Certification

This should not be an issue, but it has been for me, so it merits a mention. I do my banking in America with two separate banks. One of my banks has made my transition seamless. The other… less so. It’s hard to believe in today’s global society, but many huge banks have software that won’t accept phone numbers that don’t conform to the standard US format. That is, a three-digit area code, three-digit exchange, followed by four additional numbers. I’ve been locked out of one of my banks online banking platform for seven months as a result. 

Alternative

Google-Fi has been a successful and cost-effective alternative for many expats. Also, see if a Skype phone number may work for you. I have never tried this, but some expats claim that it is viable option.

Why not just...

Use someone else’s address? Yeah, you can do that. If you have family who are living in the states and you still consider their home your permanent address, this may be an option for you. If you have a friend who is willing to allow them to use your address, you may choose to use this address. Be aware- this may incur legal consequences. In reality, it probably won’t, but you never know. For me, it wasn’t worth the risk- for me or my friends.

 

There are mailbox services that allow you to keep a permanent address in the states. Check out Traveling Mailbox or Virtual Post Mail. Bear in mind that these may present complications where taxes and legal issues are concerned. It’s always best to forthcoming about your situation. 

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Myths

I’m going to lose my Social Security Benefits!

Check and ensure that the country you are relocating to can receive benefit payments. I have friends who receive them here in Portugal, as well as in parts of South America and Asia.

There’s no more Medicare for me!

Again, check on this, but as long as you keep making the payments (deductions), you should be fine. My mother elected to keep her Medicare, despite the premiums. I knew an expat retiree living in Thailand who elected to go to the states for a surgery because his Medicare coverage made it more affordable.

I never have to pay US taxes again!

 

Sorry! Until America embraces some commonsense tax legislation, we are still subject to income tax on our worldwide income. The United States is alone with one other nation- Eritrea in Eastern Africa, as the only two countries in the world that enforce citizenship-based taxation. See if the FEIE can apply to you. 

Final Thoughts

Living abroad is awesome. The potential for a second (or even third) passport is really enticing and carries some tremendous benefits. These are some of the things that I wish I was aware of before I left the US permanently. Take the appropriate action to ensure all your interests are satisfied before you head abroad. Happy travels!

Love1

Online Doctoral Programs for Teachers

A doctoral degree is a huge undertaking. There is no shortage of options for prospective students to consider. One also needs to keep their professional goals in mind. Ask yourself, “Why do I want to have a PhD or an EdD?” In this article, we’ll touch on some of the concerns associated with an online PhD/EdD and name five of our favorite online doctoral programs.

Why do you want a doctorate?

There are a variety of reasons for someone to earn a doctorate. Some seek a salary bump, career advancement, a love of learning, and simply want the title, “Doctor.” Whatever your reason is, the choice to do a PhD or EdD is a huge one. If your goal is to go teach in a university, you may be better off doing your doctorate in-residence. Brick and mortar programs may offer greater access to students and classes for your research. Being a part of the university community may give you a better opportunity to publish and present your research to the academic community on campus and in your city. You also may gain valuable teaching experience as part of your program. However, many students have found success with an online doctoral degree. The cost can be enough to discourage some students. Listed below are five of our favorite (and most affordable) online doctoral degrees in education. 

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This is one of the most affordable online doctoral programs out there. The EdD in Educational Leadership is 60 credits and requires an MA for admission to the program. The excellent thing about this program is that up to 18 credits can be waived for previous graduate work (in addition to the MA required for admission). The cost per credit hour currently sits at $375, or $22,500 for the 60-credit program. If you are able to get the 18 credits waived for prior graduate work, the tuition falls to less than $16,000. They do not have a specialization in ESOL. However, you can do your dissertation on any topic that you choose. If you want to focus your research on applied linguistics, you can. The only catch is that your research should have a leadership focus.

 

One unique aspect of this degree is that all classes have a synchronous component. This may be problematic, depending on your time zone. However, there are no campus visits required. My conversations with the faculty and staff here have all been very positive, and I have found them to be very accommodating. 

The University of West Georgia offers an online Doctor of Education in School Improvement, with several choices for a program concentration. The cost of the program varies depending on the number of semester hours a student chooses to take. Students who take a 12-credit semester can expect to pay approximately $4,100. The entire degree consists of 60 credits, 12 of which may be transferred in from previous graduate work. Students who are able to transfer in 12 credits from another university and are able to complete 12 credits per semester (not always possible), can expect to pay as little as $16,400 for the degree.

 

Students work within a cohort, but all the coursework is completed online. However, students are required to complete a two-day intensive orientation prior to the start of the program. This is held on-campus in Carrolton, Georgia. This orientation is mandatory, and applicants should consider the cost of travel and lodging in their total program cost. 

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ACE is quickly becoming one of the more popular online study options for educators. The reviews are mixed. I have a colleague who completed his MEd with ACE and found the coursework to be rigorous. He did complain about a lack of feedback from some of his professors. However, he also indicated that if you apply yourself, you can get a lot out of the degree. This is an important consideration, as most doctoral students require frequent and detailed feedback from their advisors to complete their research project.

 

Some huge advantages to ACE are their course offerings, rolling admission, and the ability to finance the degree through monthly payments. Students can choose from a Doctor of Education in Educational Leadership, Curriculum and Instruction, or Instructional Technology. Each program consists of 64 credit hours and costs approximately $24,000. However, students may transfer up to 18 credits from another doctoral program. If a student has completed an Education Specialist degree or was all but dissertation (ABD) in another doctoral program, that student may transfer up to 27 credits into the EdD program. This knocks the cost down to approximately $17,700 and $14,500 respectively. 

UNG offers a Doctor of Education in Higher Education Leadership and Practice. The program is completed in cohort fashion. All cohorts begin in the fall, and it includes an optional on-campus orientation. The 60-credit program is fairly affordable, at approximately $1,000 per 3-credit class. This brings the total program cost to approximately $20,000. UNG does accept transfer credit. However, they are quite strict about finding classes that specifically replace courses in their program. The program can be completed in approximately three years.

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The university offers both an EdD and a PhD in Educational Leadership. This is an incredibly accelerated program which can be completed in roughly two years. In order for students to complete the program in such a short time, an EdS degree is required for admission. The university also considers students who have prior doctoral coursework- such as ABD students. The degree is completed in a cohort format with a two-week on-campus visit required to prepare for the dissertation. New cohorts begin every spring.

 

The current program cost is $585 per credit with a $95 technology fee due per semester (not per credit). The EdD consists of 36 credits, while the PhD consists of 41 credit hours. This brings the total tuition to approximately $21,000 for the EdD and $24,000 for the PhD (not including the mandatory technology fee mentioned above). While this is a bit pricier (per credit) than some of the other options, it has the advantage of requiring fewer credits and being completed in a shorter time frame. 

Final Thoughts

There are literally a ton of options available for people looking to do their degree online- including at the doctoral level. Many doctoral degrees require some residence component- even if it is only for a few days or weeks. Consider the reasons for getting a PhD/EdD, along with the reputation of the institution you are interested in, as well as the cost. The universities listed above are all American institutions. There are many academically rigorous options available all over the world. Check for in-residence, as well online programs in the location where you live. 

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Pros and Cons of the IOA TEFL Certificate

This is sure to be a topic that people have different and strong opinions on. I have seen people comment both ways on this certificate being great and others saying it’s awful. So, I’m going to spend this week breaking down what I see as the pros and cons of the International Open Academy (IOA) aka Groupon TEFL certificate. Be aware- this website contains affiliate links to the IOA certificate, and I also completed the very same certificate to satisfy the Chinese government requirements of a 120-hr TEFL certificate. Still, I’m trying to offer an honest appraisal of what I see as the good and bad points of the certificate. I’ll alternate between the pros and cons of this online qualification. 

+ Cost

This is the obvious advantage. The online certificate can be completed for only $19. This is a steal. With many CELTA courses costing $2,000 or more, this is a fraction of the cost. To be fair, the experience & knowledge gleaned from the IOA program is not going to be in the same universe as what you’ll learn in a CELTA. Many other online TEFL certificates may be more rigorous. However, they usually cost over $100 (and some much more than this). IOA is available at a fraction of the cost. 

- Rigorous Academic Nature of the Program

The IOA certificate is a 120-hr certificate. However, if you really require the full 120 hours to complete this certificate, I would be totally shocked. I clicked through the program and took the tests and scored 88% across all the modules. I spent less than 90 minutes to complete the entire certificate. To be fair, I had just completed the Florida state exam for ESOL certification, so I was familiar with most of the material in the course. If I had not recently studied all of this, it would have taken me significantly longer. Having said that, I can’t see the qualification taking anywhere near 120 hours to complete. If you’re putting less time in, you can expect to be getting less out of the program.

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+ Low Risk

There is so much uncertainty in the online ESOL teaching environment. I’m very fortunate to be with a great company for many years and have all my time slots booked. However, many teachers are not so lucky. This is especially true of new hires. Tons of prospective teachers are asking questions like, “Will this company book for me? How many hours will I be guaranteed? How long does it take to get to full-time hours?” The answers really vary depending on the teacher and the school. Many teachers are reluctant to make a significant investment in their own training if they’re not going to be able to secure a decent income (or perhaps any income at all). At $19, the IOA represents a low risk route to get in the door at most companies. 

- Assessment

In my opinion, this represents the biggest opportunity for the certificate to improve. You only need to score 55% to pass. This is exceptionally low. Also, the nature and scope of the test questions make it incredibly easy to pass. As a result, many teachers complete the program without a lot of the experience and knowledge that they should have before being in a classroom. Even at the university level, people often say that you can judge the quality of a degree by the quality of its graduates. If people are able to get through the program without any knowledge of language teaching, the reputation of the certificate is going to continue to suffer. 

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+ Opportunity for Self-Directed Learning

Learner autonomy is a huge part of online learning. Learners need to be self-directed. If students choose to learn only what they are assessed on, they won’t get much out of this certificate. However, there is some very useful material in the program- but students are going to have to make an effort to learn, apply, and extend this on their own. Application of what is learned in the program is going to be especially difficult since there is no observed teaching practice. Having said that, if prospective teachers want to get the most they can out of this program, there is some very useful material in the course. 

- Interactivity / Tutors

This is one of the biggest drawbacks of the course. I did an online TEFL certificate with Bridge TEFL that was fairly rigorous and included an online tutor as a form of support. This is absent in the IOA program. It is entirely self-directed reading and online assessment. Having said that, Bridge is a costlier option. When you are entirely new to the field of ESOL, having a tutor or mentor to help you make sense of things is huge. There are other online certificate programs, such as Promise Opens Doors, that offer this type of support and even teaching practice. 

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+ Deductibility

The IOA certificate is very much a program that helps teachers get in on the ground floor. If you read the blog last week about deductibility of business expenses, then you know that an initial qualification necessary to do a job is NOT deductible. So, if you do your IOA certificate, you are unable to deduct that $19 from your taxes. However, as a self-employed US taxpayer, you ARE able to deduct training or qualifications that help you to keep your job or do your job better. So, if you decide, after using your IOA certificate to get a job with a company, that you’d like to get a CELTA to expand your skill set, that certificate may be deductible. If you spend $2,000 on your CELTA and are in the 20% tax bracket, that saves you $400! If you did the CELTA first (as your initial qualification), then you would not be able to deduct this expense. 

Reputation / Professional Growth

There are a lot of people who come down on the IOA qualification, for many of the reasons mentioned above. If you’re serious about teaching as a career, you definitely should look beyond this initial qualification. If this is your only qualification, you may find it difficult to advance your career- even if you put in a lot of extra effort to get everything you could out of the certificate. To be fair, this short online course is not a substitute for a university qualification in TESOL- and it isn’t designed to be. It’s an initial qualification to get teachers in the door and give them some background on teaching culturally and linguistically diverse students. If you are certain that TESOL is going to be a career path, then look toward MA TESOL programs that can really catapult your career and expand your professional knowledge. 

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Useful Tax Deductions for Self-Employed Teachers

As 2019 draws to a close, the start of 2020 means the start of tax season. Most online teachers are not employees (do not receive a W-2) and will be getting ready to report their self-employment income prior to the April 15* deadline. Listed below are some deductions to tally up prior to the end of the year, and/or to keep in mind for 2020.

Some Straightforward Deductions

Props & Realia

Do you use puppets? Stuffed animals? Whiteboards and markers? All of these things are tax deductible expenses that can offset your business income. Anything that you purchase to create the background necessary for teaching is a business expense.

Professional Subscriptions

Do you belong to any professional organizations? TESOL.ORG or your local chapter of TESOL? These professional affiliations may be tax deductible, as well as subscriptions to any professional journals.

Office Supplies

Anything that you use strictly for your work as an online teacher (e.g. notebooks to take notes about the students in your classes) is tax deductible. The pens, pencils, or markers that you use are tax deductible. Similarly, paperclips, tape, etc. is all tax deductible if you are using it strictly for business.

Rented Office Space

 

I maintain a rented office space that I use 100% for business use. This is more a product of the fact that I don’t have adequate internet at my home as opposed to my desire to have a separate workspace. However, the 250 euro I pay each month is a tax-deductible business expense. Similarly, any utilities/internet expenses associated with this office space are tax deductible since they are used exclusively for business use. 

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More Complex Deductions

Expenses for Business Use of Your Home

If you work from home, you can write off a portion of your expenses that are relevant to the business use of your home. You can complete the IRS Form 8829 and file this along with your Schedule C. Bear in mind that when you complete this form, you are depreciating your home. This is a ‘cashless expense.’ That is, you are taking an expense for the decline in the useful life of your home. This is nice at tax time! You get money back for an expense that you never paid! Too good to be true? Maybe… This lowers the cost basis of your home. So, when you sell your home, you will have to recapture that depreciation- that is, pay tax on a gain that never actually made. There is a simpler way- the simplified version.

The home office deduction is available for those who work out of their home as their principal place of business. This home office must be used for “regular and exclusive use.” The simplified version (which allows you to deduct $5 per square foot up to a total of 300 square feet). This does not impact the cost-basis of your home. Further, if you are using the actual expense method, you MUST keep detailed records of all expenses. Many people opt to simply use the simplified version of the home office deduction because the record keeping is far simpler.

That TEFL Certificate

Most people your TEFL would be a straightforward business expense. Not really. You are allowed to deduct any education and training that you do which helps you to do your job better or is necessary to keep your current job. I have been employed with my company for several years. I was able to get hired with a 100-hour TEFL certificate. Since I was hired, the government of China instituted a law requiring teachers to have a 120-hour certificate. I took an online TEFL to meet this requirement and keep my current job. This is a deductible business expense. However, if you are a new teacher who took a TEFL in order to get a job or to switch careers, this is NOT a deductible expense.

Internet

 

Much like the TEFL, this seems like something online teachers should absolutely be able to deduct. You are generally able to deduct the portion of the internet usage that you use for business. If you pay $50 per month for your internet service, but spend only half the time on the internet, then only $25 per month would be deductible. NOTE: If you are claiming the simplified version of the home office deduction, you are not able to deduct separate expenses related to the business use of your home. The internet usage is included in the $5 per square foot. If you use mobile data, such as a hotspot that allows you to teach from a variety of locations, this is not an expense related to the business use of your home and should be tax deductible on your Schedule C. 

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Final Thoughts

ALWAYS consult with a tax professional regarding your own personal situation. This posting is informational, but it is always a good idea to get the specifics of your own return handled by a CPA or Enrolled Agent. Taking advantage of the deductions available to you as a self-employed person is important. Not only does it reduce your income tax liability, it also reduces your self-employment tax liability. Remember that as a self-employed individual, you are paying the employee AND the employer share of your SE-tax: a whopping 15.3%!!! Remember to always keep good records. Running a small business as a teacher is fairly easy and doesn’t require a ton of record keeping. Making an effort throughout the year to keep track of your income and expenses will make things dramatically easier come tax time. 

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Winter Getaways for Digital Nomads

December brings a lot of holiday joy, but it also brings colder temperatures. Even here in southern Europe, things are starting to get chillier. One of the huge advantages of the digital nomad lifestyle is being able to pick up and escape winter whenever you want. This week’s post covers four locations that have warmer temperatures, a relatively low cost of living, and are just plain cool places to post up for a few months.

Canary Islands, Spain

Tenerife, Canary Islands

I’ve visited the Canary Islands several times and always loved it. The Canaries are part of Spain, but located off the coast of Morocco. They do experience winter, but being situated further south, the weather is milder than it is on the peninsula. With January highs around 20, it’s a warmer alternative to European winters. Playa Las Canteras on Gran Canaria is always a busy tourist destination. Other islands may offer a quieter pace of living. El Cotillo on Fuerteventura is a terrific destination for surfers and people who want to cruise in a mellow beach town. La Famara on Lanzarote is quiet town by the beach, while Puerto del Carmen in the south is far more happening. Spain offers great visas for those looking to stay longer term. At present, Americans can still travel there without a visa for 90 days within a 180-day period.

 

Apartments in Las Canteras were equipped with fiber optic internet connections- perfect for conducting online classes. Your 6 pm Beijing time classes will start at 10 am in Las Palmas. There are a ton of vacation rental options on Booking and AirBnB. Check out Szilvia Mender, who has some vacation rentals at reasonable prices.

Zihuatenejo, Mexico

Zihuatenejo Sunset

If not for the movie The Shawshank Redemption, most people probably would never have heard of Zihuatanejo. Before Andy Dufresne’s character popularized this small Mexican beach town, it was well-known with American surfers traveling south in search of its powerful beach breaks and hollow left-hand barrels. With January highs reaching into the 30s, you will experience real summer weather here. Rental properties can be had for a few hundred dollars a month, but be sure you get a place that has fiber optic internet service. TelMex provides fast internet speeds. Just ensure that your host has signed on to a fast connection. If you’re staying longer term, check out your options for fiber. Plans can be had for about $50 USD that should deliver speeds more than adequate for teaching online. 

Madeira, Portugal

Madeira, Portugal

Like the Canary Islands, Madeira experiences winter. However, it’s also much milder than on the Iberian Peninsula. With highs around 18 in January, Madeira is far more pleasant than the Portuguese mainland. While visas for long-term stays on this Portuguese island are fairly easy to obtain, visas are still not required for Americans who stay less than 90 days within a 180-day period. The capital city of Funchal is the busiest area of the island and definitely worth a day trip. To really experience Madeira, get out into the more remote parts of the island. Places like Paul do Mar are quiet with beautiful beaches. Accommodation is incredibly cheap in Madeira. Though you do need to be mindful of the internet speeds when you get outside of Funchal. I stayed on a vineyard overlooking the ocean and had adequate Wi-Fi in my accommodation. The island really is something to be experienced. It’s a very chilled out place with outstanding food, beer, wine, and the best coffee in all of Portugal. Having said that, if you’re a person who craves action and excitement, Madeira can be less than what you’re used to. It’s a very slow pace of life. 

Penang, Malaysia

Penang, Malaysia

Situated on the west coast of Malaysia, January is the dry season in Penang with February being the hottest month. Highs above 30 are common, so you should enjoy true summer weather in this Southeast Asian country. A good getaway spot for those digital nomads living in Asian countries further north, Penang won’t disappoint. George Town is a huge destination for expats and retirees from abroad. English is widely spoken in Malaysia. With Starbucks and Coffee Bean, you may not even notice that you are outside of America. Penang is only 113 square miles, so nowhere is too far from the beach. AirBnB’s can be found for around $300 a month and the Wi-Fi should be more than adequate. I used internet toggles during my time in Malaysia and found it to be sufficient. Local internet service should be adequate, but have a toggle as a backup is good idea. 

BONUS

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For those in the US that just want to be somewhere warmer, but want to stay stateside, check out these two locations. Both offer warmer temperatures and (relatively) affordable prices. 

Galveston, Texas

 The Gulf Coast vacation destination offers fairly warm mid-winter temperatures and a low cost of living. Expect to pay more for an AirBnB in this Texas city than you would in the four international locations listed above.

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Palm Coast, Florida

Situated on the east coast of Florida in between Daytona and St. Augustine, Palm Coast is one of the cheaper areas to live in Florida. Though a bit further north, the winter temps are very agreeable. Time your stay around spring break if you want to avoid the high prices associated with this week of partying. 

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Formative Assessment Tools for Online Instruction

Formative assessment, also known as informal assessment, is a tool to help drive instruction. It can take many different forms and should be the most frequently used form of assessment in most teachers’ classrooms- including virtual classrooms.

What is formative assessment?

Formative assessment is a tool to gauge students’ learning. It helps teachers understand if students are ‘getting it.’ Do students need additional instruction in a particular area? Where do teachers need to improve? Seeing where students may be struggling is a tool that teachers use to help them understand how to adjust (or in some cases revamp) their lessons to promote student achievement. While summative assessments, which are typically end of unit tests that measure student achievement, tend to be more formal and result in a grade for student learning, formative assessment can be very simple.

Varieties of Formative Assessment for the Online Classroom

Anecdotal Notes

Anecdotal notes based on classroom observation is probably the most common form of formative assessment in a brick and mortar (B&M) classroom. The utility of this type of assessment extends to the online classroom, too. This can include taking notes on skills & strategies that students are struggling with, frequent grammatical errors, as well as points of exceptional student performance.

In order for anecdotal notes to be a useful tool of formative assessment, they need to be well-organized. Leaving a pad full of post-it notes next to your computer isn’t going to cut it. Teachers need the ability to look back on well-organized information, recognize patterns, see student growth, and develop a plan based on that. When I was teaching in the classroom, I used accordion folders for all my students. It allowed me to add dated anecdotal notes (in chronological order) along with samples of student work. Creating a Word doc for each of your students that you update immediately after each class is a great option. It’s important to update the notes as soon as possible so all the information is fresh in your mind. You can also paste in samples of student work to support the notes that you take.

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3-2-1 Exit Cards

I absolutely LOVE 3-2-1 Exit Cards in the classroom. This can take the form of a post-it note or an index card that students complete prior to exiting the classroom. Teachers can also share a link with students to complete an online exit card. A 3-2-1 Exit Card contains:

Three things I learned today are:

Two things I found interesting are:

One question I still have is:

This can result in incredibly rich data for teachers to use when planning instruction or creating supplemental material for their online classes. You get to see what’s working well, what students are interested in, and where students may need additional support. I am personally fond of adapting this for the online classroom- particularly for young learners. I would simplify it to two things that I either learned or found interesting, and one question that I still have.

Running records help to ensure that a child is reading on the appropriate level.

Running Records

There are advantages and disadvantages to using running records. However, they can be incredibly useful for measuring a student’s reading ability and helping to discern whether they are reading texts that are on their level. As a teacher, this helps you to understand how much support you need to provide throughout the lesson. Scholastic has a fantastic guide that introduces teachers to taking running records.

For those of us teaching in Chinese schools, one major challenge to utilizing running records is that parents may be resistant to students reading aloud. They may view this as an inappropriate use of class time. It’s always important to respect the parents’ wishes. However, if you can work with parents to get them to see the value in occasionally using this type of assessment, it can be a tremendous benefit to the child. Another challenge with running records is that they can be difficult for teachers to take. Like anything, it takes time to become comfortable with it. If possible, listen to recordings and develop your skills taking running records. You’ll be surprised how fast it becomes second nature.

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Three Questions/Three Things

This is a great way to gauge possible misunderstandings by having students create a list of three questions that other students may have or three things another student may misunderstand about the topic. While it’s always important to help students understand that it’s OK to admit that they don’t get it, many students may be reluctant to admit that they’re having trouble learning. Three Questions is a great way to allow students bring possible areas of confusion to the attention of the teacher without students having to admit that they don’t understand. This can be done during or after class.

Using Technology

There are a lot of terrific apps out there that can help teachers administer formative assessment. Flubaroo is a great add-on for google sheets. It not only helps you to see students who are struggling, but allows you to identify topics that the class as a whole struggled with. This data can really help you identify areas where you need to reteach. Socrative and Kahoot are also fun quizzes that students can take on their smartphones. One feature I dislike about Kahoot is that students receive points and a ranking, which promotes competition and gives it the feel of a summative assessment, as opposed to one that simply promotes learning. On the plus side, in many cultures where competition is the norm, this may be something that motivates students. While these computer-based assessments are incredibly easy to administer and the data is organized for you almost instantly, it is not the richest form of data. Multiple choice and true false questions are easily impacted by guessing. Further, as with all types of technology in the classroom, teachers need to ensure that students have equitable access.

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Final Thoughts

With virtual classrooms are becoming more and more commonplace, teachers need to begin to transfer and adapt best practices in the B&M classroom to the online classroom- this includes assessment. Formative assessment should be used by teachers to drive the planning and revision of instruction for their students. While this is particularly valuable for teachers who see their students over an extended period, it still has value for teachers who see their kids only sporadically. Formatively assessing students allows teachers to understand when a concept needs to be retaught. It allows these teachers to adjust lesson delivery on the fly based on students’ needs. However you choose to administer it, consider adding formative assessment techniques to your classroom.

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Is Investing in Rental Real Estate a Good Idea for Digital Nomads?

Buying a house is a way to put down roots in a particular place, which really runs counter to being a digital nomad. So, for those who are constantly on the move, is rental real estate a good idea? What about the risk? The old saying, “It’s safe as houses,” indicates that investing in real estate is the safest way to enjoy long-term growth of your investment. Many people who invested at the height of the sub-prime mortgage bubble might disagree. There is a real risk to investing in rental real estate. However, it remains a really attractive option for growing your nest egg. This week, we’re going to break down some of the basics of investing in real estate, tax considerations, and some special considerations for digital nomads.

The Basics

So, you buy a home and rent it out to tenants. You are responsible for the mortgage, taxes, insurance, and any maintenance issues. The rest is yours! Easy enough! Well, there are a few things to consider.

Finding a Home

Homes are relatively illiquid assets. You can’t log in to your Schwab or Vanguard account and sell off your investment with a few clicks of a mouse. With this in mind, do some research and figure out where to buy. Remember that this is an investment, so think cash flows. When you’re buying your forever home, you may want to splurge a little bit on things that YOU want. This probably isn’t a good idea for a rental property. Anything that brings you an additional expense should be justified- that is, it allows you to charge additional rent. Think about areas that are likely to have strong demand for rental real estate regardless of the economy. Universities and military bases usually produce a steady flow of individuals looking for a home to rent.

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Financing

It always pains me when I see young people who can pay their bills disregard them because they think it doesn’t matter if payments are late. The truth is that your credit is going to be front and center on the mind of lenders when you are applying for financing for your rental property. Make sure your credit is where it needs to be. If it’s not- take steps to right the ship.

Most of the rentals that I purchased required a 25% down payment. This can be a substantial sum for many young buyers- especially digital nomads. If you see rental real estate in your future, begin growing your nest egg so you have adequate funds for a down payment. Securing additional financing usually comes at a premium (paying a higher rate). Bear in mind that most lenders want to see six months of payments in reserve. This is in addition to any closing costs and prepaid expenses associated with purchasing the home. Depending on where you are buying, it may be customary to ask the seller to cover these expenses- freeing up additional funds for you to apply to your down payment. Again, do your due diligence here.

Taxes *this applies to Americans- check w/ your local tax authorities

Passive income is such an important part of being able to retire (hopefully early). It is especially important if you are a digital nomad and have a job, such as online teaching, that lacks stability. Bear in mind that any income you earn from rental real estate is taxable. As digital nomad expats, many of us get to enjoy the foreign earned income exclusions (FEIE). However, this applies only to earned income. Income from rentals is a form of investment income that cannot be excluded. So, it is taxable. However, there are many tools that can help minimize- or even eliminate the tax liability associated with rental income.

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Mortgage Interest, Taxes, Insurance, & Repairs

This is where accountants utilize the matching principle. Any expense incurred in the process of producing assessable income is deductible. So, mortgage interest and property taxes are deductible. These may also be deductible on your primary residence (depending on your tax situation). However, rental real estate allows other expenses to be deducted. This includes any insurance that you pay on the property, homeowner’s association dues, and any repairs that you make. If you have leaky faucet in your own home, the plumber is an expense that you have to absorb. If it’s your rental real property, you get to write that off.

Depreciation

This is perhaps one of the biggest benefits to owning rental real estate. Your home is an asset which has a useful life. Most assets decline in value over their useful life and are expensed accordingly. So, what does that mean? You get to write part of the value of your home off your taxes (as an expense that you never paid) throughout the period of your home’s useful life. The IRS uses the Modified Accelerated Cost Recovery System (MACRS) to determine how much of the value of your home you can expense. Rental real estate is considered to have a useful life of 27.5 years. Let’s look at an example:

Purchase price of rental unit = $130,000

Value of land = $30,000 (land cannot be depreciated)

Value of the home = $100,000

$100,000 / 27.5 years = $3,636 per year in depreciation expense

Recapturing Depreciation

There is a downside to the depreciation expense. You need to recapture the depreciation that you claim. Internal Revenue Code is clear here- it is claimed or allowable depreciation. So, even if you don’t receive the benefit of the depreciation, you need to recapture it. Let’s look at what that means. Your asset (rental property) has a cost basis. In the example above, it is $130,000 (including land). Imagine you own the home for ten years and claim $36,363 in depreciation. Your cost basis is reduced by this amount. The new cost basis in your home is $93,637. This will impact the capital gains that you have to pay in the event of a sale.

Capital gain = Sale Price – Cost Basis – Transaction Costs

Recaptured depreciation may incur a higher rate of taxation than normal capital gains as well.

There is a way to defer this capital gain. If you roll the proceeds of the sale of your rental real estate into a new (more expensive) rental property, you can take an adjusted cost basis in this property- thereby deferring your gain until you sell that new property. This is called a 1031 exchange (or like-kind exchange). Check with a title company or a tax attorney for assistance as there are guidelines pertaining to how and when funds can be used.

Considerations for Digital Nomads

The biggest consideration is that you may be on the other side of the world. How in the world are you going to be able to manage the property? Truth be told, unless you have a very special situation, you won’t be able to manage it on your own. You need to decide if you want to have a property manager or if you would prefer to have a friend or family member manage the property for you. Of course, there are costs associated with having a property manager. They usually charge a leasing fee and take a percentage of the monthly rent. I have always had a property manager. The fees may vary significantly. In Georgia, the property management company I used took a leasing fee that ranged between $100-200 per month. In addition, they took 10% of the monthly rent. In Florida, the leasing fee was equal to 75% of the first month’s rent for the same company. When you add the regular cut of 15% of monthly rent in FL, the first month’s check wasn’t all that much. Consider these costs when you are researching where you want to buy.

Benefits of having a property manager are many. If you are overseas, they handle the leasing, rent collection, and repairs for you. This makes the income truly passive for you. You also get a nice document at the end of the year that makes your tax preparation easy to handle. Property management companies vary in terms of cost and service as much as properties vary in what they offer a prospective buyer. Find a company that suits your needs.

If you are considering investing in off-shore real estate, check out this great blog from The Entrust Group on doing your due diligence as an off-shore real estate investor.

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Final Thoughts

Being thousands of miles away from an investment as big as a home is a big leap to take and can be a huge source of stress. It can also help to build substantial wealth. When you are considering your own financial future, think of the potential of rental real estate as way to solidify your financial future.

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The Advantages of Relocating to Nicaragua

I absolutely loved Nicaragua! The lifestyle is super laidback, with fresh fish and some of the world’s best coffee. The people are incredibly kind. The landscape is stunning. The waves are great, and the water is always warm. What more could you want? Oh yeah, it’s also perhaps the cheapest landing spot in Central America. This week, we’re going to look at how easy it is to make Nicaragua your home.

How long can I stay in Nica?

I entered Nicaragua without a visa and was able to stay for up to 90 days. For those who wish to make Nicaragua their permanent home, the visa requirements are incredibly easy and very well-suited to digital nomads. It is considered a pensioner visa, but you don’t necessarily need to have the income from a pension. That’s one of the big advantages of this visa.



Visa Requirements

The income threshold to qualify for this visa is incredibly low- $600 USD per month. Unlike Colombia, which prefers that all pension income be sourced from a government pension (such as Social Security), Nicaragua does not. This is a huge advantage, as you have to wait until at least age 62 to begin drawing your social security. This visa does have a minimum age requirement of 45, but this can be overlooked if you have a stable income history. If you don’t have a government or private pension, you can apply for a different type of visa that requires you to show economic self-sufficiency. The requirement jumps to $750- still a very small monthly income, but this may be the perfect avenue for digital nomads. While salary is not an acceptable source of income, investments and business income may help you qualify. If you have rental income or dividend income, that’s fantastic. Business income may help you qualify- such as by setting up your own company. It’s always a good idea to consult with a local attorney and see what is best for your situation. However, this represents another advantage of incorporation.

Stunning landscapes are everywhere in Nicaragua.

Another great option is the investor visa. Many countries have requirements for an investment visas that are simply out of reach for most digital nomads. Here in Portugal, the golden visa scheme requires purchasing a property for 500,000 euros, transferring a million euros to Portugal, or investing several hundred thousand euros into a Portuguese business. By contrast, Nicaragua requires the purchase of real estate valued anywhere from $50,000 to 100,000 USD. Check out Central American Citizenship Specialists for more info on the requirements. The Escape Artist recently published a great article that outlined how you can qualify for an investment visa with a $35,000 investment into Nicaragua’s Reforestation Program. 

As will all immigration and visa issues, it is advisable to contact a professional with detailed knowledge of the process in that country.

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Tax Benefits

Nicaragua offers fantastic tax benefits to those looking to move to the country and invest there. You can receive up to 10 years tax exemption within Nicaragua. This may be extendable. The benefits of living tax-free can really boost your savings rate and fast track your retirement. For those relocating to Nicaragua, they are able to send many goods to Nicaragua (including household goods and automobiles) duty-free. Building materials may be purchased free of VAT up to $50,000 USD.

Cost of Living

There is a reason the income requirements to retire to Nicaragua are so low. It is an incredibly cheap country to live in. Renting a place is incredibly affordable. Numbeo estimates that an apartment in the center of Managua would go for $225 per month, while one in Granada would set you back $400 per month. Costs further south in San Juan del Sur, where there is phenomenal beaches and surf, can be even lower. Eating out is incredibly affordable and the local Nicaraguan food is amazing! Nicaragua is one of the premier coffee producing countries in the world, and the local beer is fantastic! There is nothing better than a cold Tonia after a surf.

 
Granada has a thriving expat community.

Expat Community

Granada has a huge expat community. San Juan del Sur and Popoyo are always packed with foreign surfers. One thing that impressed me about Managua was that it didn’t seem to be a city that was inundated with expats. This, to me, made for an authentic experience. If you are looking to be in the center of an expat community, those areas are surely available in Nicaragua. You also have the option to get to explore places that will give you a true Nicaraguan experience. Bear in mind that Costa Rica (and its huge expat population) borders Nicaragua to the south. 

Considerations

Stability

It is hard to ignore the civil unrest that has plagued Managua for the last few years. I have several friends who live and work south of Managua and say that everything is tranquilo.  However, it remains something that foreigners wishing to move there need to keep an eye on, as violence may erupt at any time.

Healthcare

The healthcare system in Nicaragua definitely has room to improve. Many reports characterize it as being overburden and understaffed. Those with the financial means will have access to far better care at the larger hospitals in Managua. I would not consider travel to Nicaragua without comprehensive travel insurance. International Living cites something akin to private insurance at a larger hospital in Managua.

Internet

The internet infrastructure in Nicaragua also leaves room for improvement, though 4G service is becoming increasingly available throughout the country. Those living in larger cities, such as Managua and Granada, will enjoy a much faster and more stable connection. A colleague who lives and works in Managua reports no issues at all. Other digital nomads have suggested always having a mobile hotspot as a backup- even in larger cities like Granada. Local hotspots services, like Movistar are available for around $30 a month. The larger international mobile hotspot providers offer packages that range from $200 to $300 USD per month for unlimited 4G, but local access should be sufficient and can be topped up.

San Juan del Sur offers some of the best beaches and surfing in Central America.

Final Thoughts

Again, I loved Nicaragua. The tension in recent years is something that everyone should consider and make their own decisions on. I personally would not let it dissuade me from visiting Nicaragua or relocating there. It is an incredibly easy country to obtain a second passport. The investor visa essentially allows one to purchase a second passport, while the other retirement visa options allow you to get a second passport after only five years.

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