Are Referral Links Really Killing You?

To say that there are a lot of referral links out there on the internet and in social media groups for online teachers would be a very fair assertion. Some teachers really push their companies. It’s the nature of the industry today, and I really can’t blame the teachers who do it. They are being ambitious and looking for an opportunity to earn a few hundred bucks a month in referrals. This can help pay the bills. It can fund travel. It can shore up a retirement account. Like when anything else gets overdone, there comes opposition to it. Some of that opposition is warranted, and some is without merit. 

Shameless Promotion

People get tired of the aggressive, “Join my company for full bookings!” when in fact the recruiter knows very well that it’s difficult to get bookings at that company. Many people drop referral links and refuse to answer questions or give any guidance. It’s not fair to the people that are counting on you to give them support. I don’t really push referrals because, quite simply- I don’t have time. I also make money in other endeavors that I really enjoy. Devoting a ton of time to referrals isn’t worth my while. When I do post referral links, I’ve always told people, “I’m happy to answer any questions you have, whether you choose to apply with me or with another one of the teachers at our school.” I’ve honored that promise on many occasions. It promotes a spirit of goodwill and trust within the community- from the person who is applying to your school and among your coworkers who know that you have their back.

Unjustified Complaints

My EdS focused on instructional technology. During my studies, AI in education was a hot topic. There were a lot of teachers who were angry about the rise of AI. One teacher quipped, “Some robot is gonna steal my job!” To which the principal responded, “If a robot can steal your job, it probably should.” There is a very good parallel to be drawn here with referral links- particularly people who feel this is going to invite under-qualified, inexperienced teachers who’ll take their jobs. If someone with a $19 online TEFL certificate and no classroom experience can instantly take a person’s job away, that says more about the person whose job is being taken and less about the person taking that job from them. Many teachers feel that they are incredibly well-qualified. If this is the case, then there’s no cause for concern, as an influx of under-qualified teachers will surely make those highly qualified teachers stand out.

 Teachers deserve to be treated with respect. Having said that, teachers need to be honest about their own qualifications and experience. Having a BA in Art History and an MFA in Creative Writing makes someone well suited for a career in the arts- not ESOL. A friend of mine, just in the last few months, began working with a major company. He is on the top of the pay scale. He is also fully booked. His biggest problem is that he doesn’t have the time to open all the slots that the company wants him to open. He also has a PhD in applied linguistics, extensive classroom experience, and a wealth of publications on his resume. A teacher with a Bachelor of Political Science, an online TEFL certificate, and two or three years of experience likely isn’t going to get the same rate of pay or be as in demand- that should be understandable to all reasonable people.

Meeting the Needs of the Company

Keep in mind that companies aren’t tasked with providing us with employment. They have a fiduciary duty to their shareholders- to maximize shareholder wealth. It’s the responsibility of the companies to ensure that they get the best teachers to cover their classes without gaps in the scheduling. The companies need, first and foremost, to consider the demands of the parents. Again, this is an opportunity for well-educated, experienced teachers to separate themselves. China is the largest market, and they place a very high value on education. It only makes sense that they would be more inclined to book better educated, more highly experienced teachers. Again, if you’re exceptionally well-educated, this is your competitive advantage.

You might say, “OK, I’m not like your friend. I don’t have a PhD in applied linguistics. I’m being negatively impacted by the oversupply in the labor market.” Fair point. Make this an opportunity to create your own competitive advantage. You might not have the most diplomas on your wall, but you can set yourself apart in other ways. I know teachers who have no university education whatsoever. They are outstanding teachers. They give back to the profession. They are also booked solid and earning over $20 per hour. How? They are incredibly reliable and dependable. If you are not the person who has outstanding qualifications, you can still be the most ambitious, most dependable person. Don’t take holiday time. Don’t ask for sick leave. This may not align with expectations for workers in your home country, but we’re seeking work in an intercultural environment. Again, China is the largest market and a very strong work ethic is consistent with Chinese culture. Both the parents and the company expect the teachers to be available and to be flexible. It also helps if you are willing to start at the bottom and work your way up.

This doesn’t apply to everyone, but ask yourself if this is your argument, “I have no degree, or my degree is entirely unrelated to TESOL. I don’t have a wealth of experience. I want the flexibility to take holiday time. I need the ability to call in sick when necessary. And I can’t get bookings because the market is flooded with teachers as a result of referral links!” If you think this sounds reasonable to you, then nothing I say will make any sense to you. If you look at this argument rationally, you can see that there is still a lot of opportunity in this field for people who want to do the work. 

A Great Profession, But...

When I decided to make the transition to teaching fifteen years ago (I was 27 years old), I was walking away from a job in the accounting department of a large financial institution. I had just finished my MAcc and MBA and decided that taking a job teaching in the inner-city for $36,200 per year was the way forward for me. My mother, who had been a teacher for 30 years, thought it was fantastic. She encouraged me. My dad was more direct, “It’s a nice thing to do, but it doesn’t pay the bills.” He was right. Teaching is a phenomenal profession, but it’s an awful job. If you love what you do and you’re passionate about affecting change, you can really touch lives. If you think this is a job where you can get rich easily, you’re in the wrong field. It’s a thankless job that requires a tremendous amount of ongoing professional development. You might spend hours working on something that goes well in a class, only to have it go entirely unnoticed. You have to be able to look past that and think of the kids. You have to think beyond the pay raises and the bookings. If you are in it for the cash, get out. You don’t make anything teaching- especially online ESOL.

If you’re looking at teaching as something that is entirely necessary to pay your bills, then look into working in the public schools in the states. Good districts pay comfortably in excess of $100k for well-qualified, highly experienced teachers. I have a friend in NY earning $130k with a MEd+60.  If money is a concern, then online ESOL is not the place to find a solution to that concern.  

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Final Thoughts

The nature of this job is such that there is a lot of insecurity. We work contract to contract, and some teachers don’t even have a contract. It could end at any time. If my job ended tomorrow, I would be grateful for the time I’ve had and the money I’ve earned. Most of all, I’ve enjoyed the ability to connect with my kids. I’ve also been smart enough to work hard to build financial security. My greatest sense of security comes in being well-qualified and highly experienced. If online teaching ended, I’d start over with something else. If I had to, I’d simply go back into the classroom- something I greatly enjoy.

Thankfully there are still a lot of opportunities with online ESOL. It suits my lifestyle perfectly. If you want to earn a few bucks while you travel, then great! But accept it for what it is- some part-time work for a little spending money. If you are going to make this a career path, then start to look at ways to professionalize. 

Love0

The Challenges of Being on the Road

It’s no secret that I love living the life I have. Last week, I was drinking red wine in Portugal. This week, I’m surfing in the Canary Islands. I have plans for New York and Bali this year as well. With any luck, I can also fit a few new European countries into my travel plans for 2020. Don’t get me wrong- having the freedom to travel and live freely is amazing. But, like anything else, there are drawbacks. This week, I’m going to address some issues people thinking about entering this lifestyle should consider. This posting is an expanded look at a chapter of my recent book, Teaching English Online: Leave Home, Live Rich, Retire Early

Loneliness

This is one of the biggest challenges that a lot of nomads face when traveling abroad. The idea of getting away from it all and getting out on the road by yourself can be really tempting at first. After a few weeks or months, you may begin to notice how different things are without friends and family around. This is entirely normal and something that I think all digital nomads go through at one point or another. It can also be a great opportunity to get your new life off the ground.

 

If you find that you’re not as comfortable being alone as you thought you would be, this automatically forces you to make an effort to go out and meet new people. It forces you to operate outside your comfort zone. It might be getting involved in a project at a co-working space, volunteering in the new community, or partnering with other nomads or entrepreneurs in your new home. 

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Boredom

If you’re burned out on your job and taking off to teach English is a way to escape it- GREAT! You probably deserve the time off. The limited teaching schedule will likely serve as a much-needed break. However, after your batteries are recharged, you may find that you miss the grind. Coming home and sitting at the pool may now feel more like a wasted day than a well-deserved respite.

 

I believe it’s absolutely essential that you take time management into account when you’re becoming a digital nomad. We usually think of time management as a way to prioritize things when we don’t have enough time. It’s equally as important to figure out how we’re going to manage all the extra time we’re going to have. Whether it’s a hobby, like surfing, yoga, or writing, make it part of your daily schedule. If you want to engage in a side hustle (or you need to in order to live), then plan for it. 

Fatigue from Travel

This is something that I believe many people fail to consider. If you’re reading this, you probably love traveling. I’ve been obsessed with travel my entire adult life. It’s one of my favorite things to do- but it wears you down. If you’re not settled and you’re bouncing around with a laptop, it can be exhausting. The buses, airplanes, taxis, and then logging into class to teach? It can take a toll- both physically and mentally.

 

Remember that the beauty of this lifestyle is the sustainability. You can make this a long-term gig. If you find you’re worn down, stick where you are. Find a place that suits you and spend a few months until you’re ready to get back out on the road. If you think home is the where you need to be for a bit, and it’s an affordable option for you, then perhaps consider a few months at home with family and friends. It might be just what you need to inspire a new run on travel experiences. 

Missing Out on a US Salary

This website is really all about making this lifestyle sustainable for digital nomad English teachers. Getting on the road and teaching English is a great way to avoid the rat race at home. You can take advantage of geoarbitrage and live an outstanding quality of life on a significantly reduced salary. However, keep in mind that it is going to be just that- a significantly reduced salary.

 

This is an important consideration for digital nomad ESL teachers. I really can’t stress this enough. You may feel you are disgusted with America (or wherever you call home), and you’ll never go back. Just remember, never is a long time. If you forgo a US salary, you may find it difficult to relocate back to America later in life. Make financial planning a priority if you choose to embrace this lifestyle. 

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Missing Out on Life at Home

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It definitely hurts to go without that US salary, but the things many people find that they miss are the those which can’t be quantified. You may find that you’re missing weddings, funerals, holidays, graduations, and celebrations that you always thought you would be a part of. Even if you choose a new home which is relatively close, you’ll likely find that the frequent trips just may not be feasible. That doesn’t mean you can never go back. Just be realistic about how often you’ll have to say, “no.”

 

This is tied closely to the previous challenge because I think these things become increasingly important as we age. Hitting the road in our 20s seems easy, but when we get to our 50s, we may want to be home more often. Make sure you plan your financial course carefully enough to make this a reality. 

Complacency

Whatever you choose in life, you need to always keep moving forward. If it’s making a living, pursuing a hobby, or working at a relationship, you have to constantly seek out ways to improve. When you’re working online and not going into an office, this can be more challenging. You don’t have immediate contact with colleagues who will challenge you. You need to find ways to challenge yourself. Further, this lifestyle is really easy. It can be too tempting to just sit back and let life unfold.

 

In some ways, you should take it slow. After all, that’s why we’re here, right? We want to live the good life. We also have to remember that teaching is a profession. We owe our students our best efforts. This includes our professional development- whether it’s reading, studying a course, we need to move forward as educators. Our personal interests are just as important. We need make an effort to learn the language in our new home, adapt to the culture, write the book we always wanted to, or learn to pick up a hobby that we’ve been meaning to for far too long. 

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Final Thoughts

I hesitated writing on this topic because I hate to even mention challenges. I usually only focus on the positive. However, I think for people who are considering online teaching and geoarbitrage as a full-time lifestyle, these considerations are important ones. In my humble opinion, there is no better way to live than to take your life on the road. It’s also important to remember that no matter what life you choose, there are always roadblocks. Overall, this life still represents one helluva good choice! Enjoy the ride-

Jay

 

Love2

Comparing the Canary Islands and Portugal’s Silver Coast

With a week off for Chinese New Year, I packed my bags and headed to Las Canteras Beach in Las Palmas, Gran Canaria. It’s been eighteen years since I’ve been back to the Canary Islands. I last spent time here studying Spanish as an undergrad. I absolutely loved it then and love it just as much now. So much so, that when I first set foot in my Airbnb, I thought, “I’m not leaving this island without buying an apartment.” While I still may make a purchase here, I think it will probably be later in the year. Since I’ve spent the last few days comparing the tiny beach town where I live in Portugal to this urban beach in Las Palmas, I decided to make that the subject of this week’s blog. Bear in mind that Portugal is a big place. I recently wrote on the differences between Lisbon and my home on the Silver Coast. Likewise, the Canary Islands (and even the island of Gran Canaria) may be quite different depending on where you are. I’m going to compare my town, Peniche, with Las Canteras Beach here in Las Palmas. 

Cost of Accommodation

There’s no comparison here. Portugal is FAR cheaper. I purchased a two-bedroom condo in Portugal, directly across the street from the ocean, for 130,000. It includes a small studio upstairs with a separate entrance. The living space is 115 m2 downstairs and 17 m2 upstairs. By comparison, a small studio near the beach in Las Canteras is about the same price. You’re likely to only get about 25 to 40 m2 for a fairly new studio apartment between 100,000-150,000. I saw some small apartments that were further from Las Canteras (near Confital) for lower prices. Also, as you go west on the northern coast, prices drop significantly, too. Being in the center of Las Canteras will of course drive the price up.

CLEAR ADVANTAGE- PENICHE

Social Life

Las Canteras is an urban beach environment. As a result, it has much more of a city feel than Peniche, which has an incredibly small permanent population. Tourism is huge in Las Canteras, but you also have a lot of permanent residents in the area. There are tons of people to go out with, and there’s so much to do. By comparison, Peniche is a sleepy little beach town. I also find the people in Gran Canaria to be incredibly outgoing. The Portuguese, while friendly, are very private, somewhat somber people. Even the two months I spent in Canteras years back, I remember how friendly and welcoming the people were.

CLEAR ADVANTAGE- LAS CANTERAS

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Weather

The Silver Coast of Portugal is warmer than most of continental Europe in the winter. However, it’s still continental Europe. Winter months in Peniche are cold, windy, and rainy, with highs that struggle to reach the upper teens (Celsius). By comparison, Las Canteras offers sunshine and temperatures in the mid-20s, even in the month of January. It’s common to see people sunbathing and running on the boardwalk in just a pair of shorts. The ocean temperature is also MUCH warmer.

CLEAR ADVANTAGE- LAS CANTERAS

Cost of Groceries

I found the cost of groceries to be fairly comparable. There were a few things that I saw in Las Canteras (almond milk, vegan products) that made me say, “Wow! That’s cheaper than back in Portugal!” Similarly, there were also a few things (chicken, juices) that I thought were slightly more expensive than back in Portugal. Ultimately, this is really splitting hairs. I think the costs are very comparable and shopping for food in either place won’t break the bank.

ADVANTAGE- EVEN

Coffee

Both countries are known for their coffee, and it’s good! Both Spain and Portugal offer a variety of coffee drinks depending on your taste. Coffee is about the same price in both places, but the Spanish coffee really can’t be beat. Café con leche and cortados in Spain can’t be matched by their Portuguese counterparts. Even a head to head comparison between straight espresso goes to the Spanish coffee.

ADVANTAGE- LAS CANTERAS

Wine

Much like the coffee, you won’t be disappointed in the wine in either place. However, one of the things I noticed right away upon arriving in Las Canteras is how much more expensive the wine is- and not only in the touristy restaurants. I found the price of wine in the grocery stores to be considerably higher. This is where Portugal just can’t be beat. There is such an amazing variety of wine and it is so cheap. It’s not uncommon to go into the grocery store in Portugal and find a very drinkable bottle of red for 2-3€. Being in a smaller town in Portugal, wine in restaurants and bars is far cheaper too- both by the bottle and the glass.

CLEAR ADVANTAGE- PENICHE

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Beer

Both places offer great beer. The larger brands, such as Super Bock or Estrella, are very drinkable. Both places have craft beers (or artisanal) that offer beer lovers a bit of variety. You probably won’t find a West Coast IPA in either place, but the beers are good. Las Canteras offers a bit more variety than Peniche. However, a bottle of craft beer in a bar or restaurant in Las Canteras will likely set you back about about 6-7€. Whereas a similar beer in Peniche will likely set you back about 3€.

TOSS UP- LAS CANTERAS FOR THE VARIETY/PENICHE FOR THE COST

Eating Out

As for the quality and taste of food, it would be really tough to make a call. The food in both places is amazingly good. However, living in small town in Portugal, eating out is incredibly cheap. I could literally eat out every meal in Portugal and still manage to live with a reasonable budget. Dinner for two with a few glasses (or a bottle) of wine will set you back about 30€ in Peniche, while that same meal in Las Canteras will likely set you back about 50€. Bear in mind that Las Canteras is a huge tourist destination, so this will have a huge impact on prices. Another determining factor is that I found beer and wine to be more expensive in restaurants and bars here. If you enjoy a meal without alcohol, you may find the prices to be more comparable.

ADVANTAGE- PENICHE 

Surfing

Both places are huge surfing destinations that offer great waves. However, if we focus solely on the areas of Peniche and Las Canteras, it’s a clear win for Portugal. Las Canteras offers a few waves within walking distance of the city. All are fun, and the water is warm. Having said that, the variety and quality of waves in Peniche bests Las Canteras. Because of the peninsular shape of Peniche, it’s far easier to find a place with offshore winds. Portugal is truly one of the most wave-rich countries on the planet. Though, the ocean temperature in Portugal in winter can be a bit brisk.

CLEAR ADVANTAGE- PENICHE

Visas

I wrote about some of the visa options in both Spain and Portugal. In my opinion, it depends on exactly what you are looking for. Spain’s non-lucrative visa allows you to live in Spain, so long as you don’t work in Spain or access social services. After ten years, you can apply for a Spanish passport. Portugal, on the other hand, offers a path to an EU passport in about half the time. You’re also able to access social services, such as public healthcare in Portugal. Though, in my opinion, you will want to have private insurance in both places.

ADVANTAGE- PENICHE 

Final Thoughts

Both spots offer a lot and you really won’t be sorry wherever you choose to post up. Las Canteras is a busy and very touristy spot. If you like the quiet life, finding a beach town on Portugal’s Silver Coast might be a better option. Or you can just get an apartment in both places and split your time. Life as a digital nomad has its advantages…

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Love2

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. 

Love1

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

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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Is Estonia’s E-Residency Program the Right Choice for Digital Nomads & Entrepreneurs

Starting a company can often be a difficult and complicated process. It’s made even more difficult when you’re a digital entrepreneur without a physical place of business. This is often the case with digital nomads who want to run an online teaching business or some other type of location-independent start-up. This week, we break down if the Republic of Estonia’s E-Residency program may offer the answer.

What is E-Residency?

E-Residency is just like what it sounds like- a digital form of residency. It is not physical residency and does not allow you to live and remain in Estonia. It allows you to open a company based in Estonia with access to the Estonian banking system and EU markets.

What is the process for starting a company in Estonia?

Step 1: You need to apply for a digital ID in Estonia. This allows you to securely sign all business documents electronically. There is a 100€ cost to obtain this ID.

Step 2: Obtain an Estonian address and legal contact person. You can utilize a range of providers available on the Estonian government’s website. Some offer services that are limited to being a contact person and providing an address. Others offer guidance on accounting and compliance issues. The cost varies depending on the scope of the services provided (more info below).

Step 3: Register your Estonian company with the government. There is a 190€ registration cost.

Step 4: Open your company bank account in Estonia.

What is the cost?

There is a state fee for setting up the company in Estonia. This has risen considerably since this program was first introduced and now stands at 190€ (step 3). If you feel you can not navigate the paperwork yourself, you can hire an agency to do the work for you. Many consultancies offer this service for 250€ (which includes the state filing fees).

As mentioned above, you need a local office address and a local contact person. This results in a cost to you that is ongoing throughout the time you have the company open. Some consultancies will provide this service for approximately 125€ per year. You can seek out more full-service consultants who will also handle accounting, bookkeeping, and compliance issues. These all-in-one consultancies often have fees attached that are representative of the scope of their services.

How is E-Residency different from actual physical residency?

You are not permitted to remain in Estonia an E-resident. You are not a resident for tax purposes. Your company, on the other hand, is a tax resident of Estonia.

Are there tax consequences?

As you attempt to grow your business, you likely want to keep the money in the business. This means reinvesting what you make. In my opinion, this is the biggest benefit of the Estonian E-Residency scheme. You are not taxed on the money you earn until you withdraw money from the company. That is the money you reinvest (retained earnings) is not taxable.

If you pay dividends to yourself, you are taxed at a flat rate of 20%. If dividends are paid regularly, then you may be eligible for a reduced rate of 14%. There are certain guidelines that you must follow when declaring and paying a dividend, including registering and paying in adequate share capital. This is money that is used to run the business. The minimum share capital is 2500€. Dividends may not be paid out of this money. Dividends can only be paid out of the business’s earnings.

You can choose to pay yourself a director’s fee. This is also subject to a 20% income tax rate and may be subject to an additional Estonian social security tax. This is where it is helpful to have a local tax advisor.

Salaries paid to employees who are tax residents of Estonia incur income tax, as well as social tax withholding. If you are a one-person digital nomad, this is unlikely to apply to you.

Be aware that any payment of fringe benefits that you charge to your company may trigger an Estonian tax consequence. This may include income tax and/or social taxes.

The tax consequences of paying yourself out of the earning of your Estonian company can be a bit complex. It is always a good idea to contact a local tax professional.

Be sure to familiarize yourself with the tax consequences of having an Estonian company. Consulting a local accountant is always a good idea.

Who might this be good fit for? Who might this NOT be a good fit for?

This is probably a good fit for digital entrepreneurs because of the luxury of reinvesting money in the business without tax consequences. If you anticipate a very healthy stream of revenue and don’t wish to have your business attached to your home country, the Estonian E-Residency program may be an option. It’s also a potential solution is you have no physical address in the USA. However, contracting a registered agent in the USA would also solve this problem and is relatively affordable – even more so than in Estonia.

If you have an income from teaching or some other location independent endeavor that you live off of, you can keep that separate from your Estonian company. Your Estonian company can be limited to your new entrepreneurial adventure. Again, you can keep reinvesting the profits as you attempt to scale the business. When you decide to withdraw profits, you can deal with the tax consequences of dividends.

I personally don’t see the E-Residency program as a good fit for digital nomad English teachers because of the relatively high tax rates, complexity of the tax laws in Estonia, and the cost of consulting for accounting & compliance issues. The start-up and maintenance costs also exceed what one might expect to pay in the US. I find the 20% tax rate to be outrageously high for online English teachers.

Final Take- not worth it.

Other considerations

US residents who own a foreign company need to fill out form 5471 and file it with the IRS indicating that you have an ownership interest in a foreign company. This does not trigger a tax consequence, but it is more of a disclosure. You need to let the IRS know that you own a foreign company.

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Teaching & Surfing in Morocco

Welcome back to ESL Gypsy. Before we get into this week’s post, a big ‘thank you’ goes out to the beautiful and talented Sabrina Leskovsek for sharing her insights on Moroccan travel. This week, we’re going to take you back out on the road to the beautiful town of Taghazout in southern Morocco. Southeast Asia, Mexico, Central and South America have been hotspots for digital nomads because of the awesome quality of life and low cost of living. Parts of Europe are becoming more and more popular too as digital nomads seek to set up camp in places like Spain, Portugal, or Italy. Africa is an often-overlooked part of the world for digital nomads seeking adventure and a low cost of living.

 

There’s beauty in Morocco beyond the perfect waves.

The Town

Taghazout is a small fishing village with a population of roughly 35,000 people. It’s a super chilled out town that was part of the North African ‘hippie trail’ throughout the 1960s and 70s. Today, it has been transformed into a popular tourist destination, with lots of hostels, hotels, and guesthouses. With plenty of surf camps and yoga retreats, Taghazout retains that same Bohemian vibe that it had 50 years earlier.

What to Do

Surf.  Morocco is famous for offering some of the best righthand pointbreaks on the planet. Killer Point, Anchor Point, Hash Point, and Panorama are some of the most famous pointbreaks in Taghazout. Other great surfing spots include La Source and Mysteries. One of the best things about Taghazout is that it offers a range of spots from beginners who want to give surfing a try to more advanced surfers looking for world-class waves.

 

No Caption Necessary…

Many of the surf schools and accommodation in Morocco are based around a surf/yoga retreat package. Many of these, including SurfMaroc and Waters Edge, can be a bit pricey. But if it’s an all-inclusive package that you’re looking for, then they do meet all your needs and provide a great travel experience. My concern as a digital nomad is the quality and stability of internet in these camps. If you’re interested in going to Morocco for the yoga, then perhaps look to schedule your classes after you arrive as you may save a bit of money off the all-inclusive packages and you can focus on being in an area that will allow you to teach.

In addition to all that Taghazout offers, Agadir is only a short trip to the south (23 km). It offers beautiful beaches, great surf, and fantastic shopping in old bazaars. It’s definitely something to plan for a day!

 

SunDesk provides a great spot for digital nomads to get their feet on the ground when they first arrive in Morocco.

Working from Morocco

Internet can be spotty in remote parts of Morocco, particularly in the mountains. However, the 3G and 4G internet toggles are sufficient for online work from bigger cities and coastal resort areas. For those interested in staying in Taghazout for a short stay of only a few months, accommodation at SunDesk may represent the easiest and most convenient option. SunDesk is a modern coworking space that offers private Skype rooms. It doubles as a co-living space that allows location independent workers to live right on sight. Prices are reasonable, with a shared twin room going for 20.50€ per person per day for a one month stay (including access to office space with internet and daily breakfast). For those staying two months or longer, the price drops to 18€ per person per day.

SunDesk also organizes surfing, yoga, and running activities. Unlike the pricier all-inclusive yoga packages at some resorts, SunDesk allows you to pay per class (10€), so you can practice when you feel it’s most convenient for you. Renting surfing equipment is also far more affordable than many spots in Europe, with daily equipment rentals starting at 7.70€ per day. If you’re staying for a bit, ask them about long-term rental options.

 

Beautiful Sunsets & Great Surf…

The Visa

Things move a bit more slowly in Morocco, but that’s not to say things are inefficient or impossible. For those wishing to stay for 90 days or less, no visa is required. However, there are visa options for those who want to stay longer. If you intend to be in Morocco for more than 90 days, apply for a residence card prior to your departure. This takes a few months, but once you have the card in hand, you will be able to bank in Morocco. The card is good for one year and can be renewed. For more info on the specifics of obtaining your residency card, check out the terrific article by Brooke Cobb on the Escape Artist.

Booking.com

Final Thoughts

The world is definitely shrinking. I can remember going to Ubud in Bali twenty years ago and seeing nothing but rice fields. Now, villas and Eat, Pray, Love tours make it difficult to steal a moment’s peace. While North Africa is gaining traction as a destination for location independent workers- even as a hotbed for start-ups, it still remains a more off-the-beaten-path location when compared with places like Bali and Thailand.

Keep searching…

Jay

Love3

Does the Italian Land Giveaway Make Italy a Good Landing Spot for Digital Nomads?

 

The health of the Italian economy has been in question for many years now. Many young Italians see better opportunities in other parts of Europe and are increasingly leaving their home country. Those that do stay, often relocate to the bigger cities in Italy- such as Rome or Milan. This leaves the small, picturesque villages of the Italian countryside in danger of becoming ghost towns. Italy’s especially low birth rate only compounds the nation’s population problems. The Italian government has been aggressively trying to prevent this from happening. Small towns throughout the country have begun giving away land or selling it for only 1€. The blog Italian Fix did a great article on this, outlining the challenges as well as the benefits of this incentive.

The house for 1 € will likely require some work.

(Almost) Free Houses!

Most of the stories about people who move to Italy for the 1€ homes also include stories of significant expenses for renovations and a mountain of red tape. Some people wind up pouring 100,000€ into their ‘free home.’ This seems well-suited to a retiree who has the time, patience, and funds to build a vacation home in rural Italy. But would does this really make sense for a digital nomad? I loved visiting the Italian countryside, and could easily why someone would want to live there. However, digital nomads- especially online teachers, need to find a place that will support their lifestyle and budget.

Cash for Moving to Underpopulated Areas

Some regions have gone a step further by actually offering those who move to these rural Italian villages a living stipend. According to an article from CNN, there is a village in northern Italy that will offer residents 9,000€ (paid over three years) to a family that will move there. The catch is you have to have a child and an income of 6,000€. Assuming you do have a child, earning the 6,000€ from your online teaching job is very realistic. Again, you will need to find a place that you are able to live. While I’ve seen no information indicating that Locana is offering 1€ homes, there are several homes available for reasonable prices that require some renovations. It’s worth noting that Italy has the worst internet service in the EU according to The Local. Even mobile hotspots report a loss of coverage in more remote areas. Locana’s mayor has been trying to attract remote workers, so WiFi here may be a better than in other small towns. A contact living in the area reported download speeds of 21.6 Mbps and upload speeds of 5.7 Mbps- which certainly seems adequate for online teaching. Other things to consider include schooling for children, social activities, and access to services- all of which may be limited by Locana’s remote location. Though Turin (less than 50km away) may offer more options.

The beauty is picturesque, but what will you do with your free time?

How About a Monthly Living Stipend?

The municipality of Molise has been offering people a living stipend of up to 700€ per month for a period of three years to go and live there- IF you start a business. You must commit to living in a village with a population of less than 2,000. Again, these are remote locations and concerns about internet access do exist. While 700€ per month goes a long way in remote parts of Italy, it’s important to note that you will be responsible for the start-up costs associated with your business. An article in The Guardian points to the difficulties associated with supporting a business in these villages. After, surveying some of the villages, it seems that some areas may support businesses in the tourist sector. Those with a strong background in marketing may be able to make a business successful here. The living stipend eliminates some of the risk associated with starting the business, particularly if you can live and work out of the same location. Teaching a limited schedule online, in addition to the living stipend, should be enough to keep you afloat as you try to make your new business venture a success. Due to restrictions surrounding funding, this program is limited to forty people. Applications are now open. The article in The Guardian makes this stipend even more interesting, as remote work may qualify if those living there are contributing to the local economy.

If you’ve always dreamed of living in the Italian countryside, these incentives may represent the push that you need to make it a reality.

Final Thoughts

No one loves free money more than this gypsy, but I don’t see these incentives as being significant enough to lure me to Italy. Options for free or reduced priced housing may be something that suits an already retired individual with the funds to invest. Similarly, if you’ve been dreaming of a life in the Italian countryside, then these programs might be just what it takes to push you to finally make your dreams a reality. However, the infrastructure required for stable and reliable internet in areas like Molise presents challenges for a digital nomad. This, in conjunction with the lack of demand in the local market and the reported red tape associated with running a business should raise some serious red flags about Molise’s program. Anyone seriously considering such a program would be wise to do extensive market research and visit the area in person to see if the IT infrastructure will support your teaching venture- which will likely be much needed income.

Locana’s incentive to move to the region is a nice bonus, but remember you need to have a child. A stipend of 9,000€ paid over three years is not much- especially when you have a family. Again, if this area of the world is someplace you’ve always wanted to call home, it might be a nice incentive. However, the stipend by itself doesn’t make it an attractive area to move to. Finally, as someone who’s visited the remote areas of the Italian countryside, I can say it offers truly breath-taking beauty. Having said that, there is not much to do. I can remember thinking, “What would I do if I lived here?” If you are interested in hiking, running, or cycling, these outdoor activities might suit you well. It would be wise to go for a visit and see if you could really live in such a remote location.

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