“You’re living rich,” writes Retirement Planning Correspondent Paul Terhorst. “Congratulations.
“In the past, being rich meant spending a lot of money. But then came low-cost jet travel, ATMs, satellite TV, computers, Skype, and iPads. Millions of expats suddenly were able to move to places where they could live better and have more fun, sometimes way more fun, with the money they already had.
“In some countries you can live rich just on your Social Security benefits.
“I figure we need an up-to-date definition of rich, and here it is. If you live well within your means, you’re rich. If you spend more than you have, no matter how much you have, you’re poor.
“Note that living rich has to do with how you spend money, rather than how much money you have. To live well within your means implies adaptability, the ability to change or modify the what, where, and how of your lifestyle.
“Your ability to adapt might allow you to do something you never had thought possible. In the late 1990s, someone wrote to us and explained how we could live in Paris for little money. Wow! We had always thought Paris would be way too expensive. Six months later we flew to Paris and settled into a cozy, furnished, fifth-story walk-up in Montmartre that cost us around US$600 a month.
“Later Montmartre became trendy. But, when we lived there, Montmartre seemed little changed from when Van Gogh and Picasso painted there. We lived full-out in Paris for one-and-a-half years. Later we continued with shorter stays, balancing the ever-increasing cost of living in Paris with longer stints in cheaper Thailand.
“We had to adapt. Our building had no elevator, and those five flights of stairs tired us out. We had to wash clothes at a laundromat. We learned to live with a bathroom so small that the entire bathroom was the shower stall. We had a closet-sized kitchen with only a small fridge, hotplate, and toaster. We had no TV and dial-up Internet. Yet we barely noticed what we lacked. Instead, as we saw it, we lived rich, overjoyed with the window of opportunity that allowed us to live in the City of Light.
“These days to live better overseas we need to adapt to a declining dollar. Vicki and I have a house in Argentina, where the dollar cost of living doubles every three years or so. So we’ve adapted. We take fewer taxis, stay in neighborhood hotels, and eat out less. And every year it seems we spend more time elsewhere, in Thailand, China, or other lower cost countries.
“I figure that, if you’re reading this, you are already, or you soon will be, living rich simply because you have a passport. A passport enables you to live and travel abroad, thus giving you numerous options and opportunities to live rich.
“You’re among the few. Only some 37% of Americans have passports, and most of them use their passports to go only to Canada or Mexico. (Canadians and Europeans are more likely than Americans to hold passports, by the way.)
“So you have a passport. This means you can take advantage of the flexibility that comes with it. Can’t afford an extended stay in Seattle? Try Odessa, Ukraine. Can’t afford to be a snowbird in Miami? Try Hua Hin, Thailand. Can’t afford the eternal springtime of San Diego? Try Chapala, Mexico.
“To live rich you simply move to where your most important needs can be met at a cost you can afford. And you expand your comfort zone.
“Vicki and I have French friends who never travel overseas. They suppose that if they travel they might find themselves among people who don’t speak French. We have American friends who travel only to countries where English is spoken. Vicki and I have traveled all over the world, and I’d certainly agree that speaking the local language makes traveling easier, more comfortable.
“When we travel to countries where we don’t speak the language, we become more creative, courageous, and dynamic. We enjoy an intensity that comes only when we’re out of our comfort zones.
“We all have our comfort zones, and some people refuse to budge out of them. Recently we were told of young Canadians who visited expat relatives in Portugal. The guests from Canada arrived and installed themselves in the living room with TV, WiFi, DVDs, and computers. They spent their entire two weeks in Portugal doing exactly what they’d have done if they’d stayed home, that is, they played DVDs and video games.
“Our French friends, American friends, and the young Canadian visitors have trouble getting out of their comfort zones. They lack the flexibility it takes to live overseas. This lack keeps them from living rich.
“You do have that flexibility, an adaptability that nurtures an ever-expanding comfort zone. You’ve traveled, you’ve lived overseas, or at least you’re thinking about it. You have a sense of adventure.
“You realize there’s more to life than DVDs. If you meet someone who speaks a different language, you learn tricks to get around the problem. You’d be amazed at how much can be accomplished with just a calculator. And a genuine smile.
“Go back to my definition. If you live well within your means, you’re living rich. In most cases, by retirement age, our means have been set up. Often, our means are fixed and may look like too little for a comfortable lifestyle. Yet, we can do a very great deal about living well within those means. We can move from high-cost countries to low-cost ones. If we’re already in a low-cost country we can move from a high-cost rental to a lower-cost rental. Adaptability enables us to live rich, especially when we stay focused on the overall picture, focused on what matters most to us.
“You’re living rich, in the sense that you have so much more flexibility than the other guy. If need be, you can move to a cheaper country, get health care abroad, and live on less. Congratulations. Your adaptability might be even better than money. After all, money can go away. Adaptability stays with you as long as you can expand your comfort zone.”