FIRE in poor country - recommended?

[lazyMustache]

Hello, first post after reading and browsing around the forums and site for the better part of 6 months. Nice to meet you all.

I have a question, but before I ask it, I should probably give a recap of my current situation.

I'm 27 years old, I have two bachelor degrees in scientific fields which are in high demand. I work at a relatively high paying job as a software engineer, this is my first job out of the academia.
I am single with no kids, and no current aspirations to change this situation.
I live in Israel, which has a criminally high cost of living. I am not religious and feel no special ties to Israel.
I currently live with my parents at a luxurious apartment they bought for me (It's registered under my name) rent-free and I have no expenses at all. 95% of my income is invested in mutual funds (which sadly seems to be 1 step forward 2 backwards currently), the other 5% is for beer with friends / video game etc.
My family is relatively wealthy by Israeli standards.

Ok, now the question - Have any of you tried achieving financial independence in a poor country? I am in the process of acquiring a passport of a poor country somewhere in eastern Europe and the idea of moving there really appeals to me.
I could rent out my current apartment and the rent will yield me at least 10 times the average salary in the poor country, without lifting a finger. I will achieve immediate financial freedom. That will very likely never happen in Israel.

Has anyone tried this? What are your thoughts?

[meadow lark]

Do your parents own another house they would move into?   Would they be fine with you renting out the house they gave you?

This might all work beautifully - I have certainly considered moving to places with a lower cost of living.  The difference for me, as an American, is that there are some pretty cheap places to live in the US, if I chose too.   So moving to less expensive places for Americans is usually about how to get more for your money (an ocean view, a nicer climate,  a housekeeper, be able to eat out more).  I've been to Israel once (so beautiful!  I loved it!) but Obviously I don't know much about the cost to live there.

[lazyMustache]

Thanks for your input.

My parents are wealthy. They own several apartments in Israel, but from what I know they plan on buying a house for themselves (and another for me) in Bulgaria. My dad showed me real estate prices in Bulgaria just outside Sofia. It is chump change for my parents (but obviously not for me, as I just graduated and started working). They are fine with me renting it out, but even if they aren't, its my property. I'm not going to kick them out on the street because I am a decent human being, but it won't come to that.

The situation in Israel is absolutely abysmal. It is dire by any standard imaginable. If you are interested in learning more I would suggest reading https://en.wikipedia.org/wiki/Olim_L%27Berlin and https://en.wikipedia.org/wiki/2011_Israeli_social_justice_protests

I'm very fortunate to have been brought up in a wealthy family and that I have a high paying job. If you don't have that you can forget about ever owning your own place. It's not going to happen, ever.

[meadow lark]

It sounds like you are in an excellent position, then!

My father just came back from spending the year in Jerusalem (he has done this 3x for work).  When we went to visit him we stayed in a lovely neighborhood, and he mentioned it gave a very distorted view, as the university was putting him up in an apartment he never could have afforded, if he was employed by the university, as opposed to a visiting scholar.

I did read some for sale posters in the windows of a real estate office, and after dividing by 3.75 was still thinking, "Wait.  That's got to be one too many zeros!"

[former player]

If you are getting a Bulgarian passport, you will be an EU citizen with the right to live (and work) anywhere in the EU, which gives you many great options.

One thing to think about is potential currency fluctuations.  If you will be permanently living in the EU enough of your investments should be in Euros for financial security should other investments become relatively worth less.

[lazyMustache]

If you are getting a Bulgarian passport, you will be an EU citizen with the right to live (and work) anywhere in the EU, which gives you many great options.

One thing to think about is potential currency fluctuations.  If you will be permanently living in the EU enough of your investments should be in Euros for financial security should other investments become relatively worth less.

I realize that, and truth be told that was the plan until very recently. I even studied german to prepare for living in Berlin.
But after 2 months of working at my current job, my opinion changed. I realized I want financial freedom more than I want career advancements. I realized I don't want to grind away 9-10 hours per day without even counting commute, making money for someone else. You say I have the right to work anywhere in the EU and that's true, but irrelevant, as I don't intend on working. That's why I prefer Bulgaria, and I was wondering if someone made the move I'm considering doing.

[former player]

If you are getting a Bulgarian passport, you will be an EU citizen with the right to live (and work) anywhere in the EU, which gives you many great options.

One thing to think about is potential currency fluctuations.  If you will be permanently living in the EU enough of your investments should be in Euros for financial security should other investments become relatively worth less.

I realize that, and truth be told that was the plan until very recently. I even studied german to prepare for living in Berlin.
But after 2 months of working at my current job, my opinion changed. I realized I want financial freedom more than I want career advancements. I realized I don't want to grind away 9-10 hours per day without even counting commute, making money for someone else. You say I have the right to work anywhere in the EU and that's true, but irrelevant, as I don't intend on working. That's why I prefer Bulgaria, and I was wondering if someone made the move I'm considering doing.

There's a small trend of UK people doing it -
http://www.bbc.co.uk/news/uk-26324564

[SwordGuy]

The point about currency fluctuations is a good one.   If you use your excess income and convert it to investments that produce income in Euros you can mitigate that risk.  (Plus you'll make more money! :))

The other thing to think about is that, if you're from Israel, you're probably Jewish or a Palestinian.  Make sure it's a place you will be welcome.  Both groups have places in the world where they aren't wanted.   

[AZDude]

Hello, first post after reading and browsing around the forums and site for the better part of 6 months. Nice to meet you all.

I have a question, but before I ask it, I should probably give a recap of my current situation.

I'm 27 years old, I have two bachelor degrees in scientific fields which are in high demand. I work at a relatively high paying job as a software engineer, this is my first job out of the academia.
I am single with no kids, and no current aspirations to change this situation.
I live in Israel, which has a criminally high cost of living. I am not religious and feel no special ties to Israel.
I currently live with my parents at a luxurious apartment they bought for me (It's registered under my name) rent-free and I have no expenses at all. 95% of my income is invested in mutual funds (which sadly seems to be 1 step forward 2 backwards currently), the other 5% is for beer with friends / video game etc.
My family is relatively wealthy by Israeli standards.

Ok, now the question - Have any of you tried achieving financial independence in a poor country? I am in the process of acquiring a passport of a poor country somewhere in eastern Europe and the idea of moving there really appeals to me.
I could rent out my current apartment and the rent will yield me at least 10 times the average salary in the poor country, without lifting a finger. I will achieve immediate financial freedom. That will very likely never happen in Israel.

Has anyone tried this? What are your thoughts?

You say you have a high paying job and live rent free in a luxury apartment saving 95% of your income. Yet you say you will never achieve financial independence?

Lets say you make $75,000 a year. You are saving 95% of that so... You are living off roughly $5,000 a year while saving $70,000. If true, then you would be financially independent in two years. Assuming that is an exaggeration, FI is still going to happen relatively soon.

I'm reading that thinking... What are you really trying to escape from?

[lazyMustache]

Hello, first post after reading and browsing around the forums and site for the better part of 6 months. Nice to meet you all.

I have a question, but before I ask it, I should probably give a recap of my current situation.

I'm 27 years old, I have two bachelor degrees in scientific fields which are in high demand. I work at a relatively high paying job as a software engineer, this is my first job out of the academia.
I am single with no kids, and no current aspirations to change this situation.
I live in Israel, which has a criminally high cost of living. I am not religious and feel no special ties to Israel.
I currently live with my parents at a luxurious apartment they bought for me (It's registered under my name) rent-free and I have no expenses at all. 95% of my income is invested in mutual funds (which sadly seems to be 1 step forward 2 backwards currently), the other 5% is for beer with friends / video game etc.
My family is relatively wealthy by Israeli standards.

Ok, now the question - Have any of you tried achieving financial independence in a poor country? I am in the process of acquiring a passport of a poor country somewhere in eastern Europe and the idea of moving there really appeals to me.
I could rent out my current apartment and the rent will yield me at least 10 times the average salary in the poor country, without lifting a finger. I will achieve immediate financial freedom. That will very likely never happen in Israel.

Has anyone tried this? What are your thoughts?

You say you have a high paying job and live rent free in a luxury apartment saving 95% of your income. Yet you say you will never achieve financial independence?

Lets say you make $75,000 a year. You are saving 95% of that so... You are living off roughly $5,000 a year while saving $70,000. If true, then you would be financially independent in two years. Assuming that is an exaggeration, FI is still going to happen relatively soon.

I'm reading that thinking... What are you really trying to escape from?

This is a temporary situation. Going by your logic a 7 year old is also financially independent. But eventually my parents will tell me to start paying for myself (electricity, food, clothing, water, everything) whereas currently I only pay for fun stuff (games, movies, outings with friends) and not the basics. This won't last forever.

[Linea_Norway]

I am probably very prejudiced, but I have a not-well-documented feeling that countries in the eastern part of Europe might have more corruption than what I am used to. So I would be reluctant moving there without having insider information about the country. I think a wealthy foreigner in such a place might attract some ill-meaning people.
Anyway, I think you should investigate the rules in that country, not least the taxes, healthcare etc.

A lot of Norwegians are spending there retirement days in Spain, at least in the winter half year. I guess they do this both for the temperature, but probably also for the lower cost of living. This way, they can afford to live the good life, drinking beer and going out for dinner with other pensioners. I don't know what they do with their house in the winter.

[damyst]

There are a lot of older folks decamping to "the global south" in retirement, partly to take advantage of the fact that their savings go a lot further in Panama or Vietnam than they do back home. There are some younger people following this route (like this couple in Puerto Rico), but they seem to be much more rare. I feel like, if you're going to do this at a young age, you want to have some idea of what you'd like to accomplish in your life (beyond "winning the game" financially), and whether the move would get you closer to or further away from those goals.
It sounds like you've potentially already covered that base, and it's also fine to not have an answer, or to change your answer later. Just something to consider.

[AZDude]

Hello, first post after reading and browsing around the forums and site for the better part of 6 months. Nice to meet you all.

I have a question, but before I ask it, I should probably give a recap of my current situation.

I'm 27 years old, I have two bachelor degrees in scientific fields which are in high demand. I work at a relatively high paying job as a software engineer, this is my first job out of the academia.
I am single with no kids, and no current aspirations to change this situation.
I live in Israel, which has a criminally high cost of living. I am not religious and feel no special ties to Israel.
I currently live with my parents at a luxurious apartment they bought for me (It's registered under my name) rent-free and I have no expenses at all. 95% of my income is invested in mutual funds (which sadly seems to be 1 step forward 2 backwards currently), the other 5% is for beer with friends / video game etc.
My family is relatively wealthy by Israeli standards.

Ok, now the question - Have any of you tried achieving financial independence in a poor country? I am in the process of acquiring a passport of a poor country somewhere in eastern Europe and the idea of moving there really appeals to me.
I could rent out my current apartment and the rent will yield me at least 10 times the average salary in the poor country, without lifting a finger. I will achieve immediate financial freedom. That will very likely never happen in Israel.

Has anyone tried this? What are your thoughts?

You say you have a high paying job and live rent free in a luxury apartment saving 95% of your income. Yet you say you will never achieve financial independence?

Lets say you make $75,000 a year. You are saving 95% of that so... You are living off roughly $5,000 a year while saving $70,000. If true, then you would be financially independent in two years. Assuming that is an exaggeration, FI is still going to happen relatively soon.

I'm reading that thinking... What are you really trying to escape from?

This is a temporary situation. Going by your logic a 7 year old is also financially independent. But eventually my parents will tell me to start paying for myself (electricity, food, clothing, water, everything) whereas currently I only pay for fun stuff (games, movies, outings with friends) and not the basics. This won't last forever.

No. A 7 year old has no money and is not making any money. A 7 year old is by definition a dependent. Rent/mortgage is going to be the #1 expense for most people for their entire lives. You do not have to worry about that, assuming I understand correctly(parents bought condo, gave it to you). This is a golden situation for you and you should ride it as long as possible. Even paying or utilities, food(you don't pay for your own food right now?), etc... you will still be way ahead of the game if you already own your own home/condo.

Plus, lets be honest here... What are the chances of success of a 20 something who has never fully taken care of himself(since apparently mom/dad buy your clothes right now) being able to move to a developing country, find a job, and live successfully in a challenging environment?

[lazyMustache]

You understood the situation almost correctly. Yes I have my own apartment but it's not suited for me to live in. It's quite big, luxurious, with several bedrooms, it's not a one person apartment.

The wise thing for me to do (so long as I am not married and don't have kids) is to rent it out and live more modestly.

You say I should ride the situation as long as possible and you are right. But I don't think it means living in a luxurious apartment. I think it means renting it out, and then living comfortably off the rent, in a much smaller apartment that is more suited for a single person.

And one more thing:"Plus, lets be honest here... What are the chances of success of a 20 something who has never fully taken care of himself(since apparently mom/dad buy your clothes right now) being able to move to a developing country, find a job, and live successfully in a challenging environment? "

(1) Buying clothes is easy. Having money to buy them is hard. I have a job and I earn enough money currently. I'm just cheap I guess.
(2) I'm not moving there to work. I want to move there so I don't need to work. Finding a job beats the entire point.

The entire point of me opening this thread was "can I live comfortably off the rent I get from a luxurious apartment, without having to work, in a developing country"

That's my opinion at least.

[ixtap]

It can actually be difficult for a single person to live comfortably on the average annual salary of an actual poor country. Not only do you need to be used to local foods and traditions to live according to local standards, you also need the network. These can be built, but it takes time. Also, the local traditions usually expect that someone who clearly has more to give more, making generous donations to the church roof funs, etc.

[limeandpepper]

Ok, now the question - Have any of you tried achieving financial independence in a poor country? I am in the process of acquiring a passport of a poor country somewhere in eastern Europe and the idea of moving there really appeals to me.
I could rent out my current apartment and the rent will yield me at least 10 times the average salary in the poor country, without lifting a finger. I will achieve immediate financial freedom. That will very likely never happen in Israel.

Has anyone tried this? What are your thoughts?

I would not make any major commitments, maybe do something like a test run first, and also have a backup plan. Have you spent a good chunk of time in Bulgaria (or even visited)? Even if you've been there and liked it, living in a place long-term is different to being there on holiday. Are you willing to learn Bulgarian? I'm also curious as to how you plan to spend your time there - it sounds like the main thing driving you is to not have to work anymore, which is understandable, but something that is often talked about on this forum is also having something to retire to... i.e., what does your vision of retired life comprise, what are your hobbies, and is Bulgaria compatible with that. Simply not working isn't enough to make you happy, if you can't also easily do the things you love.

I'm in sort of the opposite situation I guess. I am originally from a country with low cost of living. Moved to a high cost of living country and stayed there for the better wages. Have been saving a decent amount and could potentially retire in my home country. Now, I like my home country and I can see myself spending good chunks of time there... but for a permanent home base, I prefer my newly adopted country. Of course, everyone is different!