Retire Overseas Vocabulary Lesson

Visa Run, VPN, Vig, And Slippage–A Retire Overseas Vocabulary Lesson

Those who enjoy reading stories about the sea and sailing ships need a special vocabulary. Read Joseph Conrad tales or “Moby-Dick,” for example, and you need to know that petty, poop, port, and prop have specific meanings quite apart from what they might conjure up in another context. You need to understand scuttle, butt, and scuttle butt, and, yes, the notion of scuttle butt as rumor started on board ship.

Similarly, when you move overseas, you may need a bit more vocabulary. Here, following, I offer a few definitions for expats.

Visa run. A visa run refers to leaving the country before your permitted length of stay expires. The word “visa” seems like a misnomer at times. Malaysia, for example, gives most comers 90 days, no visa required. Still, if you leave Malaysia after the 89th day, cross the bridge into Singapore, and return to Malaysia the same day, that’s called a visa run even though no visas were involved. Once back in Malaysia you get a fresh 90 days.

Some countries, but by no means all, discourage visa runs. They may require that visa-run expats possess a certain amount of cash, have fewer than four recent entry stamps, and so on.

90-days. Similar to a visa run, 90-days refers to an extension of stay at the local immigration department. The difference between a visa run and a 90-day extension amounts to whether you make a quick trip out of the country or spend a long day at Immigration.

Note you might have to extend after 30 days, 60 days, whatever, depending on the country. After going through several visa runs and 90-days, you may want to apply for residency.

VPN. VPN stands for virtual private network. VPNs enable you to connect to the internet via a third country. For example, to get around the censors in Vietnam you would connect to a VPN server in nearby Bangkok, Thailand, or even Los Angeles, for that matter. In countries with heavy internet censorship, like Iran, China, and Vietnam, local censors try to block access to VPNs. VPNs for their part offer solutions, for example, new, numbered servers around the world. Cat and mouse.

VPNs also offer better security in airports, hotels, and other public places. And VPNs make Skype, Google Voice, streaming video, and similar voice-over-internet attempts work better.

VPNs come in free and pay versions. In my experience the free versions seem to have a hard time connecting to their servers, and, when they do, they slow down the online experience. But you may have better luck than I do. Do a Google search on “free VPNs” and give one a try. Pay versions cost between US$50 and US$100 a year.

Slippage. Slippage refers to the difference between inflation and devaluation in your chosen country. Suppose, for example, McDonald’s in Brazil charges 9 reais for a Big Mac (pronounced Bigi Maqui). With an exchange rate of, say, 3 reais to the dollar your Big Mac costs US$3. Suppose further that inflation drives the price of a Big Mac to 18 reais but that the exchange rate moves by the same percentage amount, that is, to 6 reais to the dollar. Your Big Mac still costs the same US$3, 18 divided by 6. No problem.

The problem arises when the price of a Big Mac jumps 100%, as in our example, and the exchange rate barely moves at all. We call that slippage. With no relief in the exchange rate, in the above example, the dollar cost of living has doubled. Ouch! Slippage affects only those living on foreign currency, in this example, dollars, but not those working in the local economy. Reason? Locals see salaries go up by inflation, keeping them whole. Only expats suffer.

Slippage can work in your favor, too, sometimes called negative slippage. With negative slippage, prices go up less than devaluation. Expats saw negative slippage in Argentina’s black market, for example, over the past year. The black-market dollar in Buenos Aires skyrocketed, making Argentina cheaper than before, at least for those with access to the black market. See below.

Slippage becomes especially important in hyper inflationary countries. Accountants use 100% over three years as a working definition of hyperinflation. By this yardstick, only Venezuela, Argentina, Zimbabwe, and a few other African countries have high enough inflation to make slippage a real risk. But with so many central banks around the world printing so much money so fast, we could see much higher inflation down the line. Unless more favorable exchange rates offset that inflation, expats will suffer from slippage.

Vig. Vig normally refers to the house percentage in a casino. In expat life, vig refers to those small but annoying charges we expats confront almost every day: foreign exchange fees on credit and debit cards, visa fees, exit fees, international airport taxes, the spread between the buy and sell rate of local currency, international phone rates, and on and on. Your neighbors back home face none of these charges. But just like in the casino, if you want to play, you’ve got to pay the vig. Expat life requires it.

Mail run. Mail run refers to the gathering of mail in expat communities abroad for later delivery in the United States via a fellow traveler. By using a mail run you avoid sending letters through the local post office. In Ajijic, Mexico, for example, the Lake Chapala Society sells U.S. postage stamps and provides a convenient box for your letters. Or at least it used to work that way. The next expat heading to the United States could stop by, pick up the letters, and drop them in the mailbox in Houston or wherever.

Email has made mail runs way less important than before. And, as travelers carrying the mail lack access to the contents of the letters, they run a certain risk. I’d guess the old mail runs might shut down soon, if they haven’t already. But mail runs will still function informally, among friends with small amounts of mail, in expat communities around the world.

Note that mail runs work for outbound mail only, that is, letters to the United States. For inbound mail you need a different system.

Black market. Black markets often seem to be viewed as mysterious, underhanded, dicey, problematical, and hugely profitable for dealers. But black markets are none of those things. Black markets arise when countries prohibit common, day-to-day, sometimes even required transactions such as buying currency, transferring money, or buying booze, sugar, aluminum, tires, silk, medicine, or whatever. Venezuela severely restricts the sale of dollars at the official rate. If Venezuelans want to travel abroad, they pretty much have to rely on the black market to buy the required dollars.

Thailand bans booze on Buddhist holidays, so restaurants serve it up in coffee cups. Argentina bans imports of English-language textbooks, including some required by public universities. Students must come up with the books to complete their course work, so they break the law.

$. The “$” sign in some countries refers to the local currency, not the U.S. dollar. For example, 10 Argentine pesos is written as “$10,” same as $10 in the United States. To differentiate you’ll sometimes see “US$.” In Singapore the local dollar is sometimes shown as “Sing $” or “S$.” Similarly, in Hong Kong you’ll see “HK$.”

IHT. IHT stands for the International Herald Tribune, founded in Paris in 1887. The New York Times owns the IHT and earlier this year announced that the newspaper will be called the Global New York Times. The IHT now has two editions, Europe and Global, with the Global edition focusing on Asia.

For decades expats have relied on the IHT for regional and world news. These days you can pay for a subscription and access the paper on a computer, tablet, or phone. You can also follow the IHT [@nytimesglobal] and The New York Times on Twitter. Provided you see the story in your Twitter feed, you can click and read the articles free of charge.

Paul Terhorst

Continue Reading: Finding The Confidence And Courage To Retire Overseas


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