What’s the worst thing that could happen to you while living overseas?
Caught in a revolution?
Work visa not renewed at short notice?
Death of a loved one?
While it’s pretty hard to argue against the last item on the list being the worst, any of the above can be quite shocking when they actually happen to you.
And they do happen.
I have personally known expats who have faced all of the above situations: friends evacuated from civil wars Africa; massive redundancies due to economic crisis; debilitating accidents; death of a spouse, leaving the remaining spouse alone to take care of the kids; and, very recently, the sudden death of two colleagues, affecting many in our community on a very personal level.
Often, disaster is a multifaceted affair: Civil war causes evacuation, hence you have no more job to go back to. Perhaps you were also injured in the melee.
Not the best of circumstances.
Yes, despite all the positive aspects of living overseas, disasters do happen.
Quite regularly in fact.
And when disasters happen to us while we are expats, the fallout is often very challenging to navigate because we are not living in our home countries.
Thus the need to plan ahead even more than ever.
You guessed it: I was a Boy Scout when I was a kid, and that motto has stuck with me ever since.
Somewhere along the line, I was also taught to
“Expect the best, prepare for the worst.”
Thus, I try to live every day in a positive frame of mind. However, I can only do so because I feel confident that I am prepared for whatever comes my way.
But how does one prepare for the unexpected? Can it even be done?
In fact, there are plenty of ways to prepare for what many might term a “Black Swan” event.
For one, you can start by heeding yet another quote:
“Expect the unexpected.”
Once you become aware of the possibility that disaster might strike, you can start to solidify your financial, legal, and psychological preparations.
In my experience, good financial preparation has the ability to effectively mitigate the fallout of many disasters.
If you are a regular reader of this blog and have started following some of the saving and investing principles, then you are well on your way to being financially prepared for disasters such as loss of employment or an evacuation situation.
Here are some actions that we have taken that would help us easily navigate treacherous waters:
- Have at least 1 year’s worth of expenses in cash or very liquid assets that could be sold quickly. The key word is expenses here. Calculate what it would cost you to live a simple lifestyle for a year back in your home country and put that aside. DO NOT put it aside in a bank in the country in which you are an expat! If there is a revolution, you may not ever get it. If your spouse dies, you may not have access to it for a long time. Better to keep it in an offshore account or in your home country.
- Keep enough funds close at hand to get out. By close, I mean very close. Like in your home or buried in your garden. By funds, I means something that anyone would recognize as currency. Like gold. Do I sound paranoid? Maybe, but ask anyone who has experienced massive civil unrest, a revolution, or a financial crisis how fast it happened. Usually it is unexpected. It happens literally overnight. Think Egypt, Libya, Cyprus. Banks don’t open the next day and your credit cards won’t work. Forget buying a ticket on the internet because communications have been cut. But the guards at the airport usually like the look of gold. It’s small and can be easily hidden. An ounce per family member should do the trick;-)
- Have medical insurance that you can count on. It could save you from massive bills in the case of a serious accident or illness. See our previous post on expat health insurance for more details.
- Have adequate life insurance to take care of your family’s needs. Nobody likes to think about their own death, but unfortunately it is always a possibility. Don’t leave your loved ones scrambling to survive. More info in our previous post on why you should assess your need for life insurance.
1. Protect your assets – and KIDS – with a will
I recently wrote an post on why you might need a local will in any country that you hold assets. The point was to ensure that your foreign-held assets are allocated as per your wishes and not the local law in the case of your death.
Of course, you should also have a will in your home country to cover any assets you have there.
However, what I didn’t talk about was the subject of children. A will covers much more than financial assets. It can also state what you would want to happen to your children in the case of simultaneous death of both you and your spouse (or just you if you are a single parent). Who would take care of your kids? How would their financial needs be met? These are two EXTREMELY important questions that you really have a moral obligation to answer, and to answer in a legally binding document so that your kids aren’t ever caught up in a confusing mess if this incredible disaster were to ever take place.
2. Register at your embassy
This one is very important in the case of civil unrest or war. If the embassy has the details of you and your family members, they will be able to quickly contact you and give you instructions on how to proceed. It will also help them contact your family if you are involved in an accident or medical emergency.
While financial and legal preparation for disaster are rather concrete tasks, psychological planning is a little more nebulous. How can we mentally prepare for a major disaster?
While I’m not a psychologist, I can at least share what we do.
The most important thing we have done is follow our own advice above and prepare both financially and legally. We have enough liquid assets set aside to last years in either of our home countries. If we lost our jobs or had to evacuate tomorrow, it would not be a crisis.
We have emergency funds close at hand.
We have followed every other piece of advice I have given above, and hence our minds can rest at peace knowing that we are well prepared.
I personally also regularly remind myself that everything in life is impermanent, and that I should expect change right around the corner. I’m a bit of a Buddhist that way. 😎
In short, I’m always ready for my bubble to burst, so if it ever does happen (and I hope it doesn’t!), I won’t be in a state of shock. I’ll be able to take immediate action instead of standing in one place in disbelief.
Perhaps the best way to look at all this preparation is like insurance: you hope you never need it, but you and your family will be glad you have it if you ever do.
How about you? Do you have any tips on preparing for an unfortunate event for our community? Share your wisdom by posting your comments in the box below.