# New Here. I've made my decision... any input?



## Steel_Fitter (Mar 26, 2014)

Hello Everyone,

My name is Steel_Fitter, and I have decided to retire in the PI. I have never been there, though I will get there at least once before I retire, but I have lived in Japan, South Korea and Malaysia (and I loved Malaysia) as an English teacher. I currently build oil rigs in Houston, TX and, as you might imagine, I am shooting for a very early retirement... I am currently 37 and hoping to be out of the "rate race" in eight to ten years. Sooner if I could ever land a prime $100,000+ gig in Kuwait!

As such, I would like some input and advice from anyone who feels their comments might be worthy. Here's my general plan... oh do please tell me where you think I am going wrong (and feel free to point me toward any online resources you think would help) as I am no financial guru:

In eight to ten years I am certain I can have at least $400,000 (USD) on hand spread out between index/bond funds from which I could draw say 4% per year and still manage to reinvest the remaining 4.5% average annual return. This would afford me $16,000/yr income (and would allow for some small growth) which I think would be exempt from US taxes... am I wrong? And here I admit that this number could be a bit less or significantly greater. I do "manage my own portfolio" and have only just become knowledgeable enough to start buying individual stocks with the hope I can drastically increase my yearly gains.

I will have the required $75,000 cash in a PI bank. This money could be used for anything from a home purchase to finding some kind of income generating business, yes?

I would seriously consider buying into an annuity which could increase the income of my first 5-10 years... as a simple example... a $100,000/ 10 yr paying $10,000+(2-5%) per year.

I also would have assorted IRAs and a 401K for further long-term financial stability and/or as a cash-out option.

And I would be moving there as debt, wife and kids free as I am right now!

So, if I kept my annual income from overseas investments/payouts at around $25,000-$40,000 (and here's hoping for $80,000) for the first 5-10 years... doable, IMHO... I wouldn't be killed by Uncle Sam via taxes due to my earnings being less than $92,600, yes? Now what about my tax liability as far as PI codes... any input there?

Thank you in advance for any advice. I have been so looking forward to finding a way to escape overseas and turn my back on... well... pretty much everything about living in America! After much daydreaming, false starts and wishing for a way out, I have found that the only way is through hard work, good investment practices and staying focused on my goals. The PI seems like an ideal place: beaches, low cost of living and a visa avenue for people under 50 to get their foot in the door!

Stay safe,

Steel_Fitter


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## Pedro Reklamo (Mar 6, 2014)

That's a doable plan not unlike my own.

I have been in the PI 3 yrs now. I quit work in the mid 45-55 age range.
I rent an apartment with a plan to buy a house when I'm 65 or so. Not for me but for my partner for after I've expired. I like the feeling of being able to get up and go somewhere else.

I own a car bought brand new but looking to sell and buy a used one as the new car is wasting. I also have a motorcycle which is preferable for local getting around. Driving here is easy once you get used to their bad habits.

My budget start of 2011 was $1,000 per month for rent, utilities etc. Due to xrate I was averaging $1,200. Since I separated my Filipino wife last February, I can manage on $1,000.

I live in the city of Lipa which is about 75km south of Manila. It's higher altitude so a bit cooler. It's near the toll road so easy to get to the airport for local or international jaunts. It is not much affected by the 'bad' typhoon weather.

I would not deposit a large sum in a PI bank. Get a global bank like HSBC. With your savings you would become a Premier customer and get free global online money transfers. Maintain an address in the USA.

You could live here on tourist visa. I heard the periods have been extended. Plenty of guys are into that.

Don't fall in love with the first girl. Don't get married. Don't become a daddy. Don't live near her family. Don't be impatient. Don't become a prize.

Sounds like your off to a great start. Good luck .


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## JimnNila143 (Jul 23, 2013)

*Living in the Philippines*



Steel_Fitter said:


> Hello Everyone,
> 
> My name is Steel_Fitter, and I have decided to retire in the PI. I have never been there, though I will get there at least once before I retire, but I have lived in Japan, South Korea and Malaysia (and I loved Malaysia) as an English teacher. I currently build oil rigs in Houston, TX and, as you might imagine, I am shooting for a very early retirement... I am currently 37 and hoping to be out of the "rate race" in eight to ten years. Sooner if I could ever land a prime $100,000+ gig in Kuwait!
> 
> ...


Hello Steel_Fitter,

After reading your profile there are some things that you should be made aware of. With your planned income agenda you would be able to live very well here in the Philippines but there are some requirements to become a permanent resident. As a foreigner you can buy a condo to live in. If you want to become a permanent resident, you are required to be married to a Filipina, she would have to petition you for that permanent residency. Any property purchased, especially land, she would be the one to own it, in her name. During the time of the 1 Year Probationary Phase, you cannot leave the country, once you have been approved to get the ACR card, to leave the country you still have to have permission from PBI to do so. Your current plans for a monthly income of $1,600US would be very nice indeed, roughly 72,000+/- pesos. As far as any building on your wife's property, both of you can own it in your names, however, if something happened to her, the property and house would go to her family. You would have usufruct of the house but the property is in her family name. 

As far as any US tax codes, any funds coming to you from the USA are subject to income taxes. Any profits from any investment made are taxable, whether they are from a ROTH IRA, a 401K plan, etc., even income from any oil and gas leases that you may own. Any work that you do being employed by an American company, i.e., in the oil drilling business where you work for that company overseas, i.e., Kuwait, that, too, would be taxable. 

You and your Filipino spouse can own a business here, 60% is hers, 40% is yours. In order for you to work here you have to have a work permit. I have not done much research on this but I understand that the Philippines has a very rich offshore oil and gas capability that could be built up that can help this country. 

True, it is very inexpensive to live here and there are some very nice places to live, however, beach property is very high cost. Any income that you have from a business here is subject to PRS taxes. My wife has a small store and she has to keep up with everything. She is also a Certified, Licensed Caregiver so she has income taxes that she is responsible from that as well.*<Snip>*


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## JimnNila143 (Jul 23, 2013)

Pedro Reklamo said:


> That's a doable plan not unlike my own.
> 
> I have been in the PI 3 yrs now. I quit work in the mid 45-55 age range.
> I rent an apartment with a plan to buy a house when I'm 65 or so. Not for me but for my partner for after I've expired. I like the feeling of being able to get up and go somewhere else.
> ...


Pedro,

You are correct on all counts and I highly recommend anyone who is new to this to follow your suggestions. It takes time for any relationship to become a real deal. On the periods for a tourist visa they still are every 59 days renewal and the first year the tourist has to leave the country for 24 hours, then they can return. There are some requirements for those planning to live here, especially on a permanent basis.


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## jon1 (Mar 18, 2012)

Jim is right about the taxes. Any income from the US, be it Investment, 401K, Roth, Pension, etc., are completely taxable. You are only eligible for the Foreign Earned Income Credit on money earned abroad. For example, you could be working for a US Company in Kuwait and as long as you are there for 330 days/tax year you are eligible for the $97,300 deductible (in 2013). You still have to pay FICA (up to a certain amount) and never can stop paying Medicaid. I have been doing something similar for the last 7 years. 

Since you seem to have a decent long term plan, I would factor in working an additional 5 years for crap you can't foresee. I was where you were (but had more debt) 7 years ago. My goal was to retire by 50. I have now had to adjust to 55. That is due to some other life changing events but I am still way ahead of the game compared to many people my age in the states.


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## JimnNila143 (Jul 23, 2013)

jon1 said:


> Jim is right about the taxes. Any income from the US, be it Investment, 401K, Roth, Pension, etc., are completely taxable. You are only eligible for the Foreign Earned Income Credit on money earned abroad. For example, you could be working for a US Company in Kuwait and as long as you are there for 330 days/tax year you are eligible for the $97,300 deductible (in 2013). You still have to pay FICA (up to a certain amount) and never can stop paying Medicaid. I have been doing something similar for the last 7 years.
> 
> Since you seem to have a decent long term plan, I would factor in working an additional 5 years for crap you can't foresee. I was where you were (but had more debt) 7 years ago. My goal was to retire by 50. I have now had to adjust to 55. That is due to some other life changing events but I am still way ahead of the game compared to many people my age in the states.


The biggest problem that US EXPATs have is the fact that all those years that you paid in on Social Security you still have to pay until you are 66 years of age, even if you retire early. Secondly, all the money you paid in for Medicaid and Medicare goes for naught because to receive Medicaid you have to reside in the US, and with Medicare it is no good here in the Philippines. Even though there are 600,000+ US Citizens living in the Philippines we cannot get Medicare benefits. If your Filipino spouse works she qualifies for PhilHealth, which helps some but not for everything, you still have to pay out of your pocket. Medical care, doctors, hospitals and meds can be expensive here. In my case I wanted to work until I turned 62 years of age but it didn't work out that way, I retired, due to medical conditions in 2001 but things didn't kick in until 2003.


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## DonAndAbby (Jan 7, 2013)

JimnNila143 said:


> The biggest problem that US EXPATs have is the fact that all those years that you paid in on Social Security you still have to pay until you are 66 years of age, even if you retire early.


I don't understand this statement. Can you elaborate?


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## bbazor (Nov 18, 2013)

Small correction! You do have to pay taxes on a regular IRA but not on a Roth IRA or a Roth 401K. The taxes were paid upfront when the original contributions were made. After that, the withdrawals are tax free (original investment and earnings/growth) as long as you wait until age 59.5 to start withdrawals. There are other exceptions, but this applies to most people that hold ROTH accounts.


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## esv1226 (Mar 13, 2014)

I will not comment on your financial plan but on other matters that may be considered with your plan.
One does not have to marry a Filipina to obtain residency. Look into other visa options such as retiring in the Philippines. I would live in the country and deal with people before making a commitment. Good luck.


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## JimnNila143 (Jul 23, 2013)

*Payments on Social Security*



DonAndAbby said:


> I don't understand this statement. Can you elaborate?


A lot will depend on what your income is when you retire early. According to the IRS if you have income that amounts to less that $25,000 in a calendar year, you are not required to even file a tax return, however, any amount larger than this you have to report it and you will be taxes. Any early withdrawal on any IRA you do pay taxes on it, otherwise it is tax deferred. An example is those who are retired military, usually when it is a high level pension, i.e., E7, E8, E10, etc., that is a very good pension, you still have to pay taxes on it as well as a Social Security deduction. Correct me if I'm in error.


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## Pedro Reklamo (Mar 6, 2014)

Are you sure it's 25k? When I was completing my 2012 return, I read in the 1040 notes it was 9xxxk. Maybe that's for non-expats.


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## JimnNila143 (Jul 23, 2013)

I never had to file a tax return since 2009, and I became an EXPAT in 2009


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## magsasaja (Jan 31, 2014)

JimnNila143 said:


> Pedro,
> 
> You are correct on all counts and I highly recommend anyone who is new to this to follow your suggestions. It takes time for any relationship to become a real deal. On the periods for a tourist visa they still are every 59 days renewal and the first year the tourist has to leave the country for 24 hours, then they can return. There are some requirements for those planning to live here, especially on a permanent basis.


There have been a few changes to tourist visas in the last year.

You can now extend your visa every 6 months instead of every 59 days. This can only been done in Manila at present, however this visa should be allowed at other BI offices in the near future. 
You can also stay up to 36 months without leaving the country.
On arrival at the airport you are now given 30 days instead of 21.


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## magsasaja (Jan 31, 2014)

magsasaja said:


> There have been a few changes to tourist visas in the last year.
> 
> You can now extend your visa every 6 months instead of every 59 days. This can only been done in Manila at present, however this visa should be allowed at other BI offices in the near future.
> You can also stay up to 36 months without leaving the country.
> ...


Honorable Secretary of Justice (SOJ) Leila M. de Lima approved Immigration Memorandum Circular No. SBM 2013-003 on 23 December 2013 which was recommended by Bureau of Immigration (BI) Commissioner Siegfred B. Mison. Said issuance provides for the policies and guidelines on the extension and updating of temporary visitor’s visa (TVV).

Allowable Extensions

Foreigners admitted under Section 9 (a) of the Philippine Immigration Act (PIA) of 1940, as amended, or Executive Order No. 408, as amended, may extend their authorized stay every two (2) months for a total stay of not more than:
a) Twenty-four (24) months for visa-required nationals; and
b) Thirty-six (36) months for non-visa required nationals.

immigration.gov.ph


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## Steel_Fitter (Mar 26, 2014)

Hello Again All,

I've been doing some research... and I mean extremely general research... about the Davo area. I think this might be a good place for me to visit sometime later this year.

And I am curious to know...

What might my chances be (any input is welcome here) regarding starting up my own metal working business (once I am married or something, I'm sure... I would want to settle in a bit before venturing out into my own business). Does The PI have a market for building/ repairing/ installing custom gates, fencing and doors? How about larger works like stairwells or fire escapes? I can't seem to find any welding/fitting service providers on Craigslist on any city page. Is there no such market?

I have read a good bit about raising chickens, growing vegetables and assorted service businesses (especially bars), but my abilities are elsewhere and I will still be young enough to get my hands dirty.


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## jon1 (Mar 18, 2012)

Steel_Fitter said:


> Hello Again All,
> 
> I've been doing some research... and I mean extremely general research... about the Davo area. I think this might be a good place for me to visit sometime later this year.
> 
> ...


There is a market for gates as most houses here have perimeter walls. I am sure that it is competitive as the labor rates here are in the dirt. You would have to provide a stellar product to be competitive. Another item is steel spikes for the tops of the walls. If going that route, I would also market yourself with subdivision developers.

But, as with everything, you have to be careful to not encroach on other's "territory" or you could end up with some dire consequences. It's tricky to find a special market niche over here. The safest is real estate/rentals.


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## Glen48 (Jul 6, 2012)

Hard to work out long term even yr to yr so you will need to find tune,,own a house could be a problem as an investment and maybe hard to sell if you need to shift, renting it out would be a night mare ..an mate purchased a house had a buyer? and went to see about selling it only to find out there is some prob with the deed so he has to go to court ..or Caughts as they are here
and a case can take yrs to settle.
But life here should be better than most other places guess it depends on who wins in 2016


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## JimnNila143 (Jul 23, 2013)

*Work in the Philippines*



Steel_Fitter said:


> Hello Again All,
> 
> I've been doing some research... and I mean extremely general research... about the Davo area. I think this might be a good place for me to visit sometime later this year.
> 
> ...


There is definitely a demand for manufacturing and installing security grills, gates, fencing, doors, etc. If you have the space to set up your welding shop, which would be 60% owned by your Filipino spouse, along with a work permit that you have to obtained and permission from the Barangay in which you will reside, this can be done. Once you are set up you and your spouse would need to advertise what you do, when you start doing and completing jobs and the work you do is approved, you should get good recommendations, as the saying goes, word of mouth advertising is the best advertising because it is free.


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## Gary D (Oct 28, 2013)

JimnNila143 said:


> There is definitely a demand for manufacturing and installing security grills, gates, fencing, doors, etc. If you have the space to set up your welding shop, which would be 60% owned by your Filipino spouse, along with a work permit that you have to obtained and permission from the Barangay in which you will reside, this can be done. Once you are set up you and your spouse would need to advertise what you do, when you start doing and completing jobs and the work you do is approved, you should get good recommendations, as the saying goes, word of mouth advertising is the best advertising because it is free.


Are you sure the 40-60% works for man and wife as the family code considers them to be a single unit. It would perhaps be simpler for it to be 100% owned by the wife.

Also the locals can be a bit funny about foreigner owning businesses as they often look on it as work being taken away from locals, and we are all obviously out to cheat them. Strange attitude but there we are. I think I have heard it called the crab mentality.


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## Glen48 (Jul 6, 2012)

Locals like the loot but not the work ..I have tried to work in with a few but they are not interested plus once some thing has been done one way there is no reason to chance...I been looking at DTG printers found a mob in china who seem to have a good name and switched on ..have a look on U tube


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## M.C.A. (Feb 24, 2013)

The most that you could shoot for is a condo, that's the only thing a foreigner can own so if you wanted to start a business then you would need to rent or lease another spot. 

Skills are very large here, (no shortage) in my small municipality they have several welders all professionals at what they do but the pay is from 500-1000 peso's max and if your thinking about doing the work most Philippine citizens will not want to stop and give it to you because of several factors, one is most foreigners can't speak Tagalog the other might be they are more comfortable having their own citizens do it... you would need to work from behind the scenes and have a Philippine worker do the work and collect the money, not good... 

I had our bicycle with side car wheel area fixed and the charge for welding on a small extension for the outer wheel came up to 20 peso's or about 45 cents.


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