Three Countries From Thailand: What Have I Seen And Learned So Far?

When I was first asked to fly to the Middle East, I didn’t know what to expect. 

Some international schools and businesses had asked me to speak about saving and investing.  I didn’t want to charge a speaker’s fee.  But they covered airfare and accommodation.  We usually stayed with other teachers, making new friends out of the deal.

My wife, Pele, and I flew into Dubai in early January.  We announced what we were doing on Facebook. 

Before long, Pele was working full-time to accommodate the ever-increasing number of bookings. 

We spoke at business organizations, schools, private homes and clubs.  We spoke in Dubai, Abu Dhabi, Jordan, Qatar, Bahrain, Egypt, Oman and Kuwait. So far, I’ve given 53 talks.  By the end of May, that will total seventy-eight. 

My priorities differ. If I’m speaking to Americans, I’m more focused on the amount that they’re saving and investing.

They aren’t contributing to Social Security or Defined Benefit Pension plans.  As such, like most other expats, they are clearly on their own.  They’ll make or break their futures depending on how well they’re planning.  Are they saving enough money?  Or are they living a delusional dream?  I’ve now seen a few expats retire into poverty–after living the life of Riley while they worked overseas.

Few American expats, in my opinion, will have the same disposable income levels that their homebound American teachers will have when they retire. 

The United States might not be the land of milk and honey.  But I believe its teachers retire with more disposable income than the typical international teacher does.  Expatriate American teachers live a front-end loaded lifestyle.  American teachers in the United States live a back-end loaded lifestyle.

Yes, I talk about specific, low-cost investing with Americans.  But I’m more concerned by how much they save. American investment products aren’t typically crooked.  If an American expatriate teacher plans well, saves well and invests intelligently, there’s no reason why they can’t enjoy a great lifestyle while they’re working and a great lifestyle when they retire.

My bigger purpose in the Middle East is to help British (and other non-American) expats.  Their issues are two-fold. 

Like many of their American counterparts, I don’t think they save enough. 

But even when they save, they usually put the money into a dragon’s den–and the dragon feeds on money.

I was born in England.  My parents are British.  As I explain to my father, “Brits over here screw Brits.”

Many investment firms that operate in the Middle East are horribly expensive.  They convince naïve British salespeople that they can earn big commissions by selling hole-riddled financial boats.  Commissions are so high, these salespeople (I can’t call them advisors) sometimes offer iPads and free trips to the Maldives, in exchange for names and telephone numbers.  

But not all of the salespeople are naïve.  Many are downright crooked.  They hurt British expats, and they don’t seem to care a lick.

Fortunately, over the past week, I had a short reprieve from these heartbreaking stories of betrayal.  I spoke at TAISM (The American International School In Muscat. ) It’s a non-profit school with a great active and professional culture.  Of all the schools we’ve seen in the Middle East, this was one of our favorites.

 

 

Most of the teachers are American. When I gave my “What’s Your Number?” workshop, I found that a higher-than-normal percentage of teachers were on track with their financial freedom goals. 

The school doesn’t offer a matching saving’s incentive.  But there’s a strong culture of financial learning.  Most of the teachers had either read my book, Millionaire Teacher or The Global Expatriate’s Guide To Investing.  They talked about the books, shared them, and urged each other to save and invest.

 

At some of my talks, attendance was mandatory.  For example, at GEMS Modern Academy, in Dubai, all 200+ teachers had to attend.  But when a school’s administration doesn’t mandate attendance, participation ranges typically from 20 percent to 50 percent of the teaching faculty. 

It was noticeably different at the American International School in Muscat.  Almost all of the teachers came to hear me speak.  Only about a dozen of the teachers didn’t.

 

After our two days at TAISM, Pele and I enjoyed a trip to Bimmah sinkhole.  It takes about an hour and a half to drive there from Oman. We jumped off the side into the deep salty water.  An underground cave leads to the ocean. 

We’re not huge fans of the Middle East.  It’s too much concrete and sand for us. 

But we love Oman.  Of all the schools I’ve seen since January, if I had to work at one, TAISM would be my pick.

 

 

 

After swimming at the Bimmah sinkhole, we drove another 30 minutes to the great Wadi Shab.  We had visited the same place last year.  But we didn’t have enough time to get to the famous keyhole.  It’s a narrow slit in the rocks in a deep swimming pool of warm, clean, blue water.

 

 

 Swimmers can barely fit through the crack.  But once you’re inside, it opens to a cavern with water cascading into a deep pool. 

 

 

We only had 90 minutes to make our way from the Wadi Shab parking lot to the keyhole and back.  We had to visit a British school later that afternoon.  So we ran up the wadi and back.

 

 

Then we raced off to the British School of Muscat. 

That’s where nasty investment advisors sunk their teeth into teachers’ bones. 

I’ve seen dozens of teachers’ investment platforms, provided by firms such as Friends Provident, Royal London 360, Aviva, Royal Skandia (Old Mutual), Zurich International and Generali International. 

To date, I haven’t seen one that is ten years old (or older) that has beaten inflation. 

Below, you can see annual inflation levels in Great Britain, according to inflation.eu.

 Source:  inflation.eu

Inflation compounds annually.  For example, inflation in 2007 was 2.12 percent.  In 2008, it was 3.11 percent higher than its ending level in 2007.  In absolute terms, it means inflation increased the costs of goods in Great Britain by a total of 25.41 percent during the 10-year period ending December 31, 2016.

 

So… if an investment portfolio grew from £10,000 in 2007 to £12,541 in 2017, it wouldn’t have made money.  The buying power of that portfolio in 2017 would be the same as it was in 2007.

 

If you have a policy with one of the firms I listed above, and if it beat inflation over the past ten years, I would like to see it.  To date, I have seen dozens of these portfolios.  None have beaten inflation over a period of ten years or longer.

With these investment schemes, fees are often so high (and the fund selections so poor) that many investors add money for ten years and have a portfolio that’s worth less than what they contributed–and that’s without any consideration for inflation. 

What’s worse, they can’t sell (penalty-free) before a designated date in the future. 

In some cases, circumstances are far beyond horrific. 

One British woman I met in Oman (she teaches at the British School of Muscat) can’t cash in her investment scheme without penalty until she’s 85 years old.  That “advisor” deserves a short-term stint in prison. 

Financial salespeople also convinced many British teachers to cash in their UK defined benefit pensions so they could invest that money.

I feel nothing but heartbreak, after speaking and listening to teachers at British international schools.

Two days after visiting Oman, we flew to Kuwait.  It wasn’t a smooth ride.  We arrived at the Dubai airport at 12:30 pm. 

After a series of delays, we finally took to the air a full 13 hours later.  Rain delays had the airport looking like a MASH unit. 

Some dudes will sleep almost anywhere.

 

 

But there’s always a silver lining.  At a makeshift stand-up desk, I started, completed and submitted a story for The Globe and Mail.

 

 

After finally reaching our destination, I spoke to teachers at the American International School of Kuwait.  They also invited educators from some of the nearby international schools.

 

 

One of the teachers stood out.  He attended my, “What’s Your Number?” talk.  But he asked a question before the investment session began.  “I don’t want to invest any money,” he said.  “Do you think my retirement will be hopeless if I don’t invest?”

I asked if he had a trust fund.  “No, I don’t,” he said.  “Did you marry into money?” I asked.  “No, but my wife is great,” he replied.  I don’t think he owns real estate, so I was baffled by his reluctance to look beyond the present.

But that’s exactly what expatriates need to do every day.  We need to live for the present, with a careful eye on our future.  That means tracking what we spend and treating our financial households as if they were businesses.

After all, we’re custodians for the older person who lives inside of us.

Finally, Pele and I are just three countries from Thailand. 

In a couple of days, we’ll fly to Tanzania, Kenya and Ethiopia for some talks. 

We’ll be wrapping it up in Thailand, where I’m scheduled to speak in Phuket, Bangkok and Chiang Mai. 

After that, inshallah, we’ll be taking a little break.

 

 

 

 





Andrew Hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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