Financial Planning for Global Living Read online

  Praise for Jennifer Patterson and

  Financial Planning for Global Living

  “Having suffered the trials and tribulations of going expat in my mid-career in the 1990s, I wish that I had been given the information in this book those many years ago. Jennifer Patterson takes a complex and emotional subject and lays out a clear strategy for any individual or family trying to navigate the many conflicting forces at play when you move country, move job, and move out of a safe “home” environment. Jennifer lays out a bold manifesto, based on solid principles and experience. This book can save you money, your marriage/partnership, and a lot of emotional turmoil that normally leads to ill-health. Well worth reading and acting on the key ideas.”

  — Lorne Mitchell,

  Managing Director, Objective Designers Ltd.

  “Although this may be the financial planning profession’s best resource on cross-border planning issues faced by people navigating among a variety of national and local tax jurisdictions, Financial Planning for Global Living also serves as a valuable guidebook for how to live a better, more prosperous, more intentional life.”

  — Bob Veres,

  Publisher, Inside Information

  “Jennifer Patterson is passionate about the importance of creating a financial foundation that supports individuals and families living globally. This book is the culmination of her many years’ experience — both personal and professional — of the realities of cross-border living, and it resonates with the warmth and wisdom she brings to this often neglected part of our lives. She blends practical guidance with a firsthand understanding of the challenges cross-border families face, helping us to achieve long-term security in an ever changing world. “

  — Rachel Yates,

  Creator, The Expat Lifeline

  “Jennifer Patterson has written a must-read primer for anyone amidst or considering cross-cultural living… Read this book — and learn from one of the best. Financial Planning for Global Living is the exhaustive field guide that should be included with every international assignment so the issues that matter are dealt with from the start of this wonderful global adventure.”

  — Andrew Jernigan,

  Expat Insurance Broker and Co-founder, International Care

  “A must-read for anyone considering a globally mobile life, Financial Planning for Global Living provides practical tools to overcome the paralyzing fear of uncertainty to help us move our lives forward. Jennifer Patterson shows us the way to plan for a cross-border life with enough flexibility to adapt to an ever faster changing and unpredictable future, and to the complex constraints of conflicting local laws. Her process allows for both long-term flexibility and short-term focus, never losing sight of what is important: Today, right now, we can design and live a personally fulfilling life on our own terms, consistent with our core values and personal aspirations that recognizes the importance of our human capital as a key component of our wealth. Enjoy!”

  — Marina Hernandez EA, CFP®,

  MHtax

  FINANCIAL PLANNING FOR GLOBAL LIVING

  Go Beyond Cross-Border Tax and Legal Complexity to Location Independence, Financial Freedom and True Life Satisfaction

  Jennifer A. Patterson, CFP®, CIMA®, TEP

  FINANCIAL PLANNING FOR GLOBAL LIVING

  Go Beyond Cross-Border Tax and Legal Complexity to Location Independence, Financial Freedom and True Life Satisfaction

  © 2018 Jennifer A. Patterson

  Published by: Make Your Mark Global, LTD.

  All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system without written permission from the publisher, except for the inclusion of brief quotations in a review. For information on licensing or special sales, speaking inquiries, email [email protected]

  This publication contains the author’s opinions and is designed to provide accurate and authoritative information. It is sold with the understanding that the author and publisher are not engaged in rendering legal, accounting, investment planning or other professional advice. The reader should seek the services of a qualified professional for such advice; the author and publisher cannot be held responsible for any loss incurred as a result of specific investment or planning decisions made or not made by the reader.

  The information contained in this book is not intended to be “written advice concerning one or more federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.

  The information contained herein is of a general nature and based on authorities that are subject to change.

  Tax law is continually changing. This book reflects U.S. income tax law as it applies to taxable years ending on or before December 31, 2017, and is current as of November 30, 2017. At the time of this publication, the U.S. Congress had taken up consideration of significant revisions to the tax law that could have an impact on your tax obligations and the way your taxes are calculated in tax year 2018. Any reference to H.R. 1, originally known as the Tax Cuts and Jobs Act, should be considered preliminary guidance, based on analysis and understanding at the time. Further guidance by Treasury, regulations or future technical revisions are expected. Even more than usual, applicability of the information to specific situations should be determined through consultation with your tax adviser.

  CFP®, CERTIFIED FINANCIAL PLANNER®, and are certification marks owned in the U.S. by Certified Financial Planner Board of Standards Inc. (CFP Board) and outside the U.S. by Financial Planning Standards Board Ltd. (FPSB). CFP Board and FPSB permit qualified individuals to use these marks to indicate that they have met CFP Board and/or FPSB initial and ongoing certification requirements.

  ISBN: 9780999257913

  Library of Congress Control Number: 2018935522

  Printed in the United States of America

  Life + Wealth Achievement Plan and Cross-Border Life + Wealth Achievement Plan are brands powered by Life+Wealth Achievement Formula™

  The Life & Wealth Compass and 8 The Facets of Daily Living are adapted from the “Wheel of Life” Copyright ©, Money Quotient, Inc. Adapted and used by permission of Money Quotient, Inc.

  DEDICATION

  I want to dedicate Financial Planning for Global Living to my clients, who, over the years, have shared their concerns, ideals, secrets, fears, failures and hopes for the future with me and allowed me the privilege of working with them. Without you, my work and subsequently my life would have less meaning.

  And to my financial planning friends and colleagues from around the world for their collective and individual wisdom. Specifically, Brian, Dale, Devang, Terry, Raoul, and Rob: I am grateful for our early work as the Cross-Border Planning Alliance. We can be proud of the fact that a search for “cross-border financial planning” brings up so many new names. To Marcia, from the early days at the broker-dealer through the last ten years at Patterson Partners, thank you for listening to my ideas, helping to filter them and assisting with carrying out the ones that survived. And, more recently, to David for also listening and filtering, but more importantly for carrying the torch into the future.

  Also, to my husband, Jeff, without whom my cross-border journey would not have happened. We’ve discovered, firsthand, the many challenges and unique features of cross-cultural marriage by simply going through life together over the last twenty-five plus years. Although we’ve had our highs and lows, the journey is one I would not have wanted to take with anyone else.

  And
thank you, Curtis and Megan for being your unique selves, as your dad and I tripped through the weaving of three cultures into our family traditions and way of being, and for turning into such strong but caring multinational, multicultural, young adults. I look forward to seeing your contributions to our global village.

  CONTENTS

  Foreword

  Epigraph

  What is Financial Planning for Global Living?

  Introduction

  SECTION ONE: Your Life + Wealth

  1. Life in the Global Village

  2. Personal Financial Planning in the Global Village

  3. A Model and Methodology for Modern Cross-Border Living

  SECTION TWO: Build Your Cross-Border Life + Wealth Achievement Plan

  4. Inventory Your Assets

  5. Life Design

  6. Understand Your Tax Filter

  7. Cash Design

  8. Financial Capital

  9. Protect the Plan

  SECTION THREE: Cross-Border Life + Wealth Tactics, Tools and Traps

  10. Cross-Border Life + Wealth Mindset

  11. Cross-Border Life + Wealth Information Management

  12. U.S. Income & Estate Taxation of U.S. Citizens and Residents

  13. Employee Benefits and Retirement Plans

  14. Wealth Transfer and Legacy

  15. Cross-Border Divorce

  16. Cross-Border Entrepreneurs

  Conclusion: Your World

  End Note: A Manifesto for Cross-Border Couples

  About the Author

  Resources

  Chapter Notes

  FOREWORD

  I did not know what I did not know, until I met Jennifer Patterson.

  I have served as an officer for the world’s largest retailer, worked in fifty-three countries, dealt with nine-figure P&Ls, built and sold numerous entrepreneurial ventures, and worked with coaching clients around the world. I assumed my financial savvy was more than enough to meet my goals.

  I could not have been more mistaken. I now realize that my corporate and entrepreneurial experiences, coupled with investment and financial planning advice born out of the 1920s, are not adequate in today’s globally mobile marketplace.

  When I met Jennifer I was instantly intrigued and impressed by her wisdom, experience, and responsibly maverick approach in challenging the financial planning stalwarts I had heard previously. She had all the normal industry designations (CFP®, CIMA®, TEP) and the résumé of an industry veteran, but I could immediately tell something was different about her.

  While attending an entrepreneur’s mastermind event in the Caribbean, I paused briefly in a lush tropical courtyard just off the lobby to say, “hello.” Two and a half hours later, I stood in the elevator stunned at the financial concepts and options that I did not know nor thought existed, much less were available to me. I quickly realized that I was not well equipped to build the lifestyle I want today and the legacy I want to leave.

  As a fifty-year old entrepreneur with a desire to continue building my business for some seasons to come I have a vast vision and numerous ideas of how my wife and family want to live in the months and years ahead. We have multiple business interests, friends and clients around the world, and a growing passion for sailing with a lifestyle that matches our globally mobile business.

  One would think that an observant ear, consumed with gleaning your true goals and dreams, would be the norm for the top-tier financial advisor world. Sadly, my family’s interest in cross-border living was loosely considered, as other teams dusted off rote plans and stale approaches, proving their inability to understand what is most important to us.

  What Jennifer really showed me were options.

  In Financial Planning for Global Living, Jennifer arms her readers with the information and questions to build the portfolio that will perform for them today, as well as far into the future, whether they are U.S.-based, Mediterraneans in-residence, or tucked away at anchor in a turquoise water adorned inlet in the Caribbean.

  The fact that I do not have to make those decisions yet – as we continue to invest – is genuinely liberating and exponentially calming.

  It makes complete sense (now) that I seek out a visionary financial planning team that understands a global economy that is more intimately linked by the millisecond. Why would I even consider investment models that had not taken into account the Internet, blockchain and the globally mobile business owner?

  With the introduction of the Cross-Border Life + Wealth Achievement Plan and the 5As outlined in Financial Planning for Global Living, my wife and I found instant clarity and focus that allowed us to understand the cause and effect of life decisions today and in the future. And when paired with our desire for options we can continue to build and invest from a significantly higher and infinitely better-informed place.

  I wholeheartedly invite you to be enlightened and challenged by Financial Planning for Global Living and encourage you to seek Jennifer Patterson’s expertise. You will not be disappointed.

  People often ask me, “What is the path?”

  Financial Planning for Global Living is the path. You are holding the roadmap in your hands. There are a million outside forces that can wreck your efforts. All are just distractions. Choose the process you believe in most and focus all your efforts on that process. When you do — your goals come to you.

  Learn.

  Take action.

  Enjoy the journey.

  — Kevin Breeding

  Entrepreneurial Mentor, Coach, and Speaker

  Dearly beloved

  We are gathered here today

  To get through this thing called life.

  — Prince

  WHAT IS FINANCIAL PLANNING

  FOR GLOBAL LIVING?

  As we approach the 21st century, we are witnessing a dramatic shift in the context of our relationships, how we work, and our lifestyles. Today it’s easier than ever to work remotely, to make money online serving a global client base as a coach, as a consultant, or as tutors. Tennis pros and even dog trainers can now teach a global client base. These days, technological and digital advances have given us a global reach and more time, more freedom and more options for a globally mobile lifestyle.

  But trying to be successful financially and have successful personal lives today while using the skills and processes developed for traditional lives lived in a single country simply doesn’t work.

  Most of us didn’t have role models to provide the kind of financial or personal guidance we need in our new globally mobile age. Our life and wealth training came from watching our parents, who may have been skilled in the old model but not in the new one.

  Today, we think differently, we live differently, we work differently, and we want options not restrictions. These days, we can live, work, play and make a difference anywhere in the world, not just because our employer offers it but because we want to. In our global village we can have financial success and stronger relationships. Our personal and financial lives have transitioned from a traditional one into a global one yet we don’t have the tools to fully grasp all the options available to us or to understand how to avoid the myriad pitfalls that can endanger our finances and even our relationships as we cross borders.

  In Financial Planning for Global Living you’ll learn the model and the methodology that will give you confidence—whether you’re relocating, straddling borders, facing repatriation or considering entering the global village—to not only find the destination of your journey but to create the financial map that will get you there so you and your family can live a full, financially secure, happy and well-structured life—across borders.

  This book is for you if…

  Financial Planning for Global Living is written for a myriad of readers in a multitude of situations.

  It will help you achieve that next level of financial success, joy and fulfillment in your life no matter where you are now—even if your life is well structured and you have total clarity about
who you are and where you want to go in life. Even if you know how your current assignment or business structure, skills, and current country of residence fit into the larger picture of your personal and professional life—you will find information and clarity within these pages that will benefit you and your family.

  Financial Planning for Global Living will also guide you, if:

  You’re in transition and you’re uncertain of what the next phase is and because of this you’re hesitant about planning for the future.

  You’re overseas, having worked through at least one cross-border relocation process, or you’ve been asked to consider a specific role overseas.

  As the “accompanying partner”, you‘ve put your career on hold to raise your family and it’s time for you to get back to sharing your skills and talents with the world.

  You’re considering the impact of cross-border living on your career or business, your relationship and your financial situation.

  You’re a national of two (or more) countries. You may have figured out that your life is “cross-border” by default rather than by choice and you find yourself with a lot of opportunity as well as complexity.

  You’re an entrepreneur who wants to, or already works, globally but you and your financial structure are legally limited to one country and you’re ready for the next level.

  Many of us are satisfied with where we are today but we rarely look to the future to consider the next level. For instance: how to improve key areas of our life such as our well being, social and interpersonal relationships, our career, or financial health.

  Maybe you’re considering how to take steps to leave a legacy for your children or how to structure your day-to-day activities to positively impact your future. If goals like these are important to you, have you considered what you would need to do, or stop doing, to obtain them? Or what would you need to develop—personally, emotionally, strategically or financially to accomplish them?