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Our Expat Journey Begins

Earlier in my career, I traveled around the world as a technical expert for the U.S. delegation that negotiated the ISO standard for financial planning, ISO 22222. After spending the day negotiating and drafting the language of the standard with representatives from other countries, I often attended evening receptions sponsored by the host country, an opportunity to decompress and socialize.   At one such reception in Berlin, I was telling the spouse of one of my fellow U.S. delegates that I owned a firm called Mexico Advisor, that specialized in providing financial planning services to Americans moving to or living in Mexico. As the words came out of my mouth, I could see her eyes grow big, in horror, and before I could even finish my sentence she blurted, loud enough to turn heads: “Why for heaven’s sake would anyone ever want to do that!!”  I am certain that if you live outside of the U.S., or have plans to move abroad, some of your family and friends also think you are nuts. I have lived as an expatriate in Venezuela, Sudan, the Republic of Georgia, and in Mexico and the U.S. I can tell you that living abroad can be a wondrous and fulfilling experience.  While it might not be the lifestyle for everyone, it’s definitely not nuts. The expat lifestyle is full of rewards, but there are also challenges, and many of those revolve around personal financial planning.

Expats are in good company. According to the U.S. State Department about 8.7 million U.S. citizens lived outside of the U.S. in 2016. To put this in context, less than a dozen U.S. states have populations above 8.7 million. Imagine that! According to Wikipedia, there are at least 8 countries on the so-called American Diaspora with over 100,000 U.S. citizens. The largest number of Americans live in Mexico by far. Though we are many, it is really hard to find a certified financial planner with the experience and knowledge required to work with expats.

International financial planning looks at three scenarios: outbound planning, inbound planning, and cross-border planning. Outbound and inbound planning deal with financial issues from the perspective of only one country. U.S. outbound planning deals with people and assets that leave a U.S. context. Inbound U.S planning is the opposite, people or assets that are coming into a U.S. context. One country’s outbound planning is another’s inbound planning. Cross-border planning is the marriage of both inbound and outbound planning, with the idea of providing a holistic approach to the best interests of the client. It is also very unusual to find planning, or a planner, that takes into consideration financial aspects of two or more countries.

To give you an example, an American couple moving to Mexico needs to know what the U.S. tax implication are for such a move. They may contact their CPA of many years for help, and are typically told that he is able to address U.S. issues, but that he is not an expert on Mexico, and they should consult with a Mexican accountant. That is outbound planning. When they get to Mexico, they dutifully contact a Mexican CPA. The Mexican CPA proceeds to tell them that she is happy to work with them, she can provide inbound tax planning, but has no expertise on U.S. tax matters, and should coordinate with the U.S. CPA. Does this sound familiar to you? It is a common experience. The fact of the matter is that what works from the U.S. perspective may not work from the perspective of your new home, and vice versa. In addition to technical and legal incompatibility, there may be cultural and linguistic barriers to overcome as well. Even the job titles of the professionals involved on either side may be different.

A cross-border planner knows the tax laws and regulations of both countries, and will develop a tax plan that is coordinated and covers filing on both sides of the border.

During my professional life, I have counseled many international families, literally more than a thousand people. I am a U.S.-Mexico cross-border planner. I am also a Certified Financial Planner™ in the U.S., and an Enrolled Agent, authorized to practice before the U.S. Internal Revenue Service. As a fiduciary, when you work with me, I represent your best interests, always! This new website, blog, and related podcast are designed to help you with many of the pre-move expat planning questions you may face, some unique to people like you and me. And while I will concentrate on U.S. and Mexico issues, many of the topics I deal with will touch upon U.S.  outbound and inbound planning and should be useful to those Americans that live in places other than Mexico, and to non-U.S. citizens that have U.S. interests.

My goals for these communications:

  • Provide you value
  • Educate you
  • Learn from your feedback
  • Problem-solve on your behalf
  • Have fun

Given the volume of inquiries I have received in the past, and the inability to provide proper advice without gathering a significant amount of information, I will generally not be available to answer personal questions unless we sign an engagement letter. Pinnacle Advisory Group is a U.S. registered investment advisor (RIA) providing comprehensive financial planning since 1992.  We get paid in two ways: preparation of comprehensive financial plans and by managing the investment portfolios according to one of our specific investment models. Our minimum required investment for international clients is $1 million (USD), but exceptions can be made on a case-by-case basis.  If you are interested in our valuable services, please explore our website, and feel free to make an appointment with me by accessing my personal calendar here, or click on the calendar icon below.  I would be happy to explore how we can work together!

Main takeaways:

  1. There are millions of expats all over the world.
  2. Most accountants in Mexico are not certified. Try to work with a Contadores Públicos Certificados (CPC) who has met education standards, which requires 3 years of supervised experience, has passed a rigorous exam, and is required to adhere to a code of ethics.
  3. Cross-border financial planning may be difficult to find, both in the U.S. and in your new home country.



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