Why Your Money Needs A Global Plan
As we continue into the 21st Century, we are experiencing 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, consultant, or tutor. Tennis pros and even dog trainers can now teach a global client base. Technological advancements allow information to be transmitted digitally, giving us a global reach and more time, more freedom and more options for a globally mobile lifestyle.
This new globally mobile lifestyle is exciting — and no longer served by the traditional plans we’ve been told to follow in the past.
But what is this new model?
Most of us don’t have role models to provide financial or personal guidance that can help us successfully navigate a globally mobile life. Our life and wealth training came from watching our parents, who may have been skilled in the old model but not in this new one.
should be. The way we see things is the source of the way we think and the way we act.
We must learn to recognize our cultural and familial imprints regarding money, wealth, work and roles, and to support our partners in recognizing theirs.
4. Laws are jurisdictional
Despite some international conventions, laws are jurisdictional. More specifically, although the world is increasingly “flat,” tax, matrimonial, and succession laws are still defined by national boundaries. This means that if you own assets or have family members living in more than one country you can’t assume that the laws that apply to those assets, or to the people resident in another country, apply the same way. We must understand that these different areas of law are defined by national and local boundaries and sometimes by citizenship so we can make good decisions.
Why Do We Call it Cross Border?
The term “global” refers to the entire world, whereas “cross border” really refers more specifically to activity or movement across a border, physical or not, between two countries.
If you live in one country, are a citizen of one country, are single, have assets located in the country in which you live, and none of your personal goals involve another country or a cause in another country, then you are probably “single country” and thus a “single country personal financial plan” is probably sufficient.
But when your life and the facts associated with your life, your lifestyle, and your financial assets expand beyond one country’s border you most likely become “cross border.”
Jamie and Robert quickly found out that the planning they had done while living in a single country wasn’t sufficient for their new cross border life. They have a “financial advisor” in the United States who focuses on investments, including the money in Robert’s traditional IRA. As an employee benefit, another person handles Robert’s US income tax return.
But it all just feels very cookie-cutter and disconnected to Jamie, and doesn’t really address the daily reality of how they need to live more intentionally, and how to live internationally.
What if they decide to return to the US early, or what if they decide to continue to live in Spain for the next decade (or more)? How does that impact their money, their taxes, their insurance, and their family plan?
Traditional financial planning isn’t enough now that they are living cross border.
How Cross Border Financial Planning is Different
Cross border personal financial planning is “the process through which coordinated, comprehensive strategies and techniques are developed and implemented as a result of analysis of the laws of two or more countries to achieve the client’s goals and objectives”.
Cross border personal financial planning is the process of “making strategic decisions for your wealth based on what is important in your life, across all the country borders that are relevant”.
Cross border complexity: Imagine that there are five key areas of personal finance where decisions may need to be made (e.g., cash management, tax and tax return preparation, gifting and charity, estate and legal, and investing). Now, imagine that your personal life (including your career or your business), spans three countries. Take the three countries and multiply that by the five key areas of personal finance and you have at least 15 areas where decision fatigue and overwhelm are easily found. I refer to this as the “Exponential Nature of Cross Border Complexity.” To harness it, we just need to learn the formula.
Sometimes we are caught between dreams and borders – at least that is how it can feel.
If you haven’t yet reached a cross border life of your design, it’s not necessarily because you’re doing the wrong things. Living such a life means you’re coming from your strongest self. Your mind, your body, your relationships, and your daily activities all seem to hit the mark. Some people never experience that.
Planning for Uncertainty and Flexibility
We are wired to hate uncertainty. So much so, that we prefer a certain bad outcome, rather than an uncertain one.
Traditional plans come with uncertainty. Uncertainty from the markets and changing life circumstances. But when you live in one or multiple countries, you are now planning with even more uncertainty.
Will you stay in that country forever?
/Would you like to eventually move back to your home country?/
/What about your family, your kids, your job? Where will those things take you?/
What if you could test different scenarios on paper before taking action? What if these scenarios could go far beyond what traditional planning can offer you, because when you live cross-border you have more opportunities, and more traps.
What if only AFTER you’ve tested scenarios and decided which work best for you, goals are set. Would this make planning for uncertainty and building in flexibility easier on you? What if, only after you got this level of clarity, a specific action plan is created to take what has now become your new plan, forward? What would that be like?
How Do You Begin This Plan?
Having a process helps to move us past the fear, stress, and fatigue many of us experience in life.
We’re all dealing with fatigue. We’re overwhelmed. There’s a lot of stress. We’re trying lots of things, but perhaps we’re not getting the progress, the breakthroughs and the fulfillment that we really want. It’s possible that fatigue is happening because of distractions but also because there are a lot of opportunities available to us right now.
There’s also a lot of fear. We may be fearful and stressed because we may not be ready, or think we’re ready, for what’s next. We’re worried that we won’t be able to deal with life’s challenges because life seems to be getting more chaotic.
Or maybe you’re fearful that after all these years, you’re still not where you thought you’d be. Perhaps you thought you’d be so much further along. Or the real fear is that you’re stuck, and you’re wondering, is this is all there is?
It’s fear that the life you’re living isn’t what you wanted, dreamed or imagined your life would be like.
What stops us from achieving that life? What do we fear most? One of our greatest fears is uncertainty. One of the questions I pose often, particularly when working with a client who has a lot of options and a lot of complexity with those options is: what can we flip from an unknown to a known? We simply cannot plan when we have too many variables.
How do we do this? The Life and Wealth Achievement Formula.
