The Migrant (How to Boost your Income).

Passive income and investments in general are great to help you reach your financial goals but the best way to get there fast is to increase your main source of income. For all of us still ‘old school’, this means the salary.

I wanted to write a post about my experience. All being equal, leaving Italy to work somewhere else represented by far the most effective choice to boost to my salary I could ever take. Then I realised how much my story, and my considerations!, are linked to my personal circumstances, where and when I was born. It is like being a white man that feels discriminated for the first time in his life: while it might be a novelty for you, there is a whole world out there that was born with that feeling. Depending who you, the reader, are, you might find the following as a truism or, hopefully, a push to do better.

It’s been 15 years that I left Italy and 16 that I left my hometown. My grandparents, all 4, were born, raised, got married and lived in the same place. My parents, same story. By brother’s partner is from our town…at least they now live 40km away. This is a recurrent joke that my wife loves to poke me with. She has 5 siblings, all of them live in different countries, on 3 continents and with 2 of them she does not even share the same passport.

Some people have serious reasons to move, others just do driven by curiosity. I have met people that left and never came back, others that after some years (or months) decided they took the wrong choice. I have never understood those that tell me “no, I will never leave my hometown/country” while they never even tried to experience anything different. You were born in that place by chance, what are the odds that it is the best place for you? It’s like deciding to marry your cousin when your cousin is the only person you have ever dated.

If you met me when I was 20 and my brother 18, you would have bet your retirement nest that I would not be the one ending up living outside our hometown. During high school he spent one summer in Orlando to study English while even the idea would ring like a punishment for me. Not because I thought it would not be fun but because I would have never made it by myself. I am here writing this blog because 25 years ago I asked myself what’s the job where I can be successful without having to sell anything, especially myself? Trading. I put a big 0 on my interpersonal skills.

After graduation, my wife left to spend one month in Tokyo just because she liked the idea of the trip. It was the first time in Asia for her and she was 100% alone. One thing is to be in a place where you do not speak the local language, another is not being able to even read indications in the tube (and guys, no iPhones back in the days). After she managed to reach her rented room from the airport, she spent the rest of the day crying in the bed and asking herself why she did it. That night, she thought she would spend the entire month in that room. Then the next day she forced herself to go at least for a walk outside…she ended up staying three months and came back to Europe just because her family dragged her back. In my 20s, I was sure I would have stayed in that room for a month. To be more accurate, I was sure I would have pushed myself back into that room after failing to build any meaningful interaction.

Just to be clear, it is not like those movies where the viewer skips the hard part and jumps right into the protagonist enjoying their new life. Going back to my wife example, not only 99% of Japanese people speak only Japanese, they are…racist and misogynist…not more racist and misogynist than most of the people in Europe, something like my grandfather…but still. There is no hiding because anyone can spot you just by looking at your face. But if you manage to embrace your diversity instead of being crushed because of it (again, not easy!), good things come. She managed to stay three months because she found a job. In a shop. Facing clients.

Why you should move away from home: the basic

The archetypical migrant moves out of necessity, because of a total lack of jobs or basic life security; sometimes is straight persecution. I was not in any remote way close to those situations. Historically Italy has always been in a middle spot: shitty enough to push people away but never a total basket case nation. Plus, if you pass the point where you basic necessities are covered, it is a great place to live (if you were born there and, more recently, if your aspect conform to the idea of how a person who was born there should look like). It is hard even to talk about Italy itself because the migrant aptitude changes from area to area: in general, the southern you go, the more likely you are to prepare your luggage and get out.

What I want to talk about here is a basic arbitrage: for various reasons, the same job can earn you different amounts in different part of the world. Some of these reasons are out of mine or your control, so I will not cover them; others depends on our decisions and they will be the subject of this post. Some are objective, like the bureaucratic process of moving around and other are subjective, our preferences and preconceptions.

When I arrived in Luxembourg, I met some people that were working as external auditors. If you remove the language aspect, the external auditor job is exactly the same everywhere in the European Union (it is the almost the same everywhere in the world but there are small differences just because accounting rules are different…but not that much). The same job is organised by the same four companies (PWC, Deloitte, KPMG and EY): despite that, those same companies pay very different salaries to their employees. I had Italian friends in Luxembourg and in Italy that were doing the same thing and one group was paid two to three times as much, how was that possible?

• “Luxembourg is a shitty place to live“

The first argument I heard was this one. It is also a pretty vague one, in reality it means that the weather sucks and the choice of activities you can do outside office hours are limited. I cannot argue with that, those two elements are real. When you are stuck inside an office 8, 9 or 10 hours a day, 5 days a week, whatever is happening outside has a limited impact on your life. I am the first one that gets depressed in winter because the are only few hours of light per day…but I will be MORE depressed if I was working my ass off all year and paid a very low salary. You can always get whatever you are missing by travelling around, being the weekend or your holidays. On the plus side, and this is rarely mentioned because is not that sexy, you get to live in a place where things works (if you exclude UK, UK is a policy clusterfuck). Any admin work that takes minutes instead of hours is a godsend.

A corollary to this statement is about things that are not really shitty but are simply different. Yes, the coffee you drink outside Italy is not the same as in Italy. Yes, you go out for dinner and the table next to you order order a cappuccino at 9pm or, even worse, a pineapple pizza. Trust me, you get over these things quite fast. On the other side, you get access to things that you did not even knew existed and then become an integral part of your life. Like watching movies in their original language.

• “Yes you earn more but costs are also higher”

The important part of the equation is not how much you earn nor how much you spend but how much you can save. The goal is to avoid what I call ‘value traps’, land a job that allows you to save more than you were saving before without having to sacrifice your social life. I had a friend that got a job NYC and she was super happy about it; then she realised that rents were so high in Manhattan and Brooklyn that had to go to live in New Jersey and commute every day. Here life outside the office entered a drastic bear market, a cab after a night out (I think Uber was not there yet) costed her like $150.

When I went to Luxembourg I lived the opposite: high salaries and low costs. Obviously these situations are not permanent, the market eventually close these ‘opportunities’. When I left 9 years ago I sold my apartment for 250k, now that apartment is worth 500k: this piece of data is not about my acumen as a real estate investor but to give you an idea on how the cost of living can change.

Geneva might represent the best example: high salaries and high costs. Despite the high costs, taking into account few tricks to reduce the burden like the weekly trip to France to do grocery shopping, I was able to save in % terms the same that I was saving when I was living in Milan. While in relative terms my life in Geneva was the same as in Milan, in absolute terms was quite different. 20% (my saving rate) of 100k is double than 20% of 50k and it compounds way faster. The only instance where this becomes irrelevant is if you plan to retire in that country, which at least based on the people I met so far is quite unlikely. Even if you stay in the country, most likely you will move outside the big city where you work. The added benefit of living in the most expensive country in the world (Switzerland) is that when you go on holidays (again, outside Switzerland) your budget becomes Jay-Z equivalent.

I do not know exactly when it happens but at a certain point in your life you stop referring how much you earn as ‘net per month’ and start using ‘gross per year’. This shift can imply meaningful differences when you compare salaries in different countries because of the different tax regimes. Different countries applies different rates also when you are married and/or have kids. Switzerland ‘punishes’ you when you get married, God knows why, while in Luxembourg you get plenty of benefits. This is obviously very relevant if you are looking for a job abroad, always check your net salary based on your personal circumstances.

• “What is the law of the land?”

I never worked outside Europe, in geographical terms, but this is a very relevant question if you are planning to work in the Gulf States (Dubai, Qatar), Singapore or Hong Kong. While culturally very different between themselves, these places have few things in common: you will always be considered a guest in the country and if you do not respect 100% the local law you will be put on a plane without having a chance to explain yourself (if you are lucky, because local prisons are definitely not the place you would want to pay a visit to). By respecting the law I do not mean felonies but things that at least I did more than a few times like driving after a couple of beers, throwing a cigarette butt or…living with your girlfriend. Hong Kong in particular passed from best of the bunch to worst in just the last few years; now that is 100% China, local police can search all your socials and if they find something that is even tangentially contrarian to the regime, like a Winnie the Pooh picture, you can go to jail for terrorism.

First week I was in Luxembourg I got escorted by the local police to the nearest ATM because I was driving at 68km/h where the limit was 50…on an empty countryside road; not only I got a fine, they wanted me to pay it on the spot and made sure I was going to do so.

In 99% of cases all the above would be just funny stories you will share with your lads when you travel back home for Christmas (if they allow you to take holidays in those days, the 25th of December is celebrated as much as Thanksgiving in Europe). Since in this blog we love talking about tail risks, this is exactly one of them.

How to get your dream job abroad

There are two ways to land a job outside your home country.

1. The flexible plan

Start to work for a multinational company in your country and after a couple of years ask internally to be moved to another location (hopefully your desired one). There are companies where this strategy is easier, like the Big4 (PWC, and the other 3 I mentioned before) or American companies, where is almost culturally demanded that you rotate job anyway after some years. The easiest plan is to join an Italian company that has a need outside Italy, like it happened to me (I did not look for the opportunity, the opportunity found me). Ok this part might be relevant only for Italians, as few other parts later, I am sorry for the non-pineapple pizza haters reading. Even if the operations are abroad, the Italian company will have a way easier life dealing with a person that knows the company culture (i.e. would not complain for the almost 100% corporate emails in Italian) than not. Plus no one living in Italy wants to go abroad, so if you come forward the company would (maybe) see you in an even brighter light and help your career.

An Internal move is great because the company will help you in the transition, finding you a temporary apartment or paying for your stuff relocation. Yes, those stories where expats were getting a mansion, four slaves and access to the company helicopter are rarer than black swans in these days, forget about your father ‘relocation package’. The best you can get these days is a career jump and paid language school.

I called it the flexible plan because usually your company will decide the country where you will go based on their needs, not you. The positive news is that the first foreign country is always the harder to put on your cv. After that, it would be easier for you to get a job where you want to go because you will be able to demonstrate to your future employer that you know how to move around in a new situation.

2. The targeted plan

In this case, you know where you want to go and you will do everything you can to get there. Typically this means first to learn the local language. Then there are the regulatory barriers; even if you have a degree, you would probably need to demonstrate that your knowledge fits the local requirements. This step can be simple to complicated depending on the agreements in place between the two countries; in this sense, the European Union and single country rule harmonisation has been a boon…and equally Brexit a move that only this guy could celebrate.

Unfortunately in a lot of instances these steps would not be enough. If you can, you should already move there, find an address and a local phone number. Looking for a job locally is way easier then from abroad. A way to go around immigration rules is to get a local certification, like a degree or a Master. Yes, this means years of costs instead of revenues. Another, expensive, strategy that works in the US and I think Australia, is to move with enough capital to start your own company; it does not have to be a big company, just a consultancy shop so that you can work as an external advisor/consultant will do, but still means you would need to have savings in five figures area.

Another bad news is that in a lot of places, even if you get a job, for some years you will then become a ‘vassal’ of the company employing you, i.e. your right to work is not transferrable if you want to work for someone else. Do not think that these medieval rules apply only to remote countries, I have a colleague from New Zealand that could not change job here in UK for this reason.

Whatever your plan, the good news is that, like learning a language, the second step is way easier than the first and the third one easier than the second. Immigration rule will stay but your ability to convince your next employer with facts and skills will only increase.

Working abroad

Great, you got a job with a foreign company abroad! Now what?

Working in another language will be exhausting at first, because your brain will rarely have a pause. Your ability to multitask, even listening to someone while taking notes will seem almost impossible. But after a while you will get use to it. You will even start to dream in another language. Unfortunately it would be harder if, for example, you work in English while the office is in Germany. Even if all the work stuff is done in English, the informal chats would most likely divert to German, which will make it even harder to understand. Colleagues will use slang and dialects and…any other way to be incomprehensible to you. I still remember the first time I went to Liverpool, I entered a McDonalds and asked myself if I was still in England.

The best are ‘neutral grounds’, places where there are a lot of expats. Inside and outside the office. If you are not German, working in Berlin is better than Frankfurt, which is better than Stuttgart. Geneva is better than Zurich not only because they speak French and not German but also because is full of institutions like the UN, the Red Cross and other employers that attracts people from all over the world. The more the people around you lived the same struggles you have, the easier is to mingle. It was quite a shock (in hindsight silly) when I came to work in London and realised the English people in my office were waaaaaaaaay different from the English I met outside England.

Prepare to be discriminated. Sorry, prepare to be discriminated even if you are not a woman or belong to another ethnicity. I have experienced both sides, as an Italian working for a non-Italian company and as a colleague of non-Italians working for Italian bosses. This is (still) the reality, if you want to climb the ladder you will have to work twice as much. Do not take it personally.

I could probably write an entire post on cultural differences, the faux and faux-pas, and I mainly worked with Europeans. The farther you go from your home, the bigger the culture gap. Be always mindful that what is normal for you, even simple things like the tone of your voice or how direct are you with ‘yes’ and ‘no’, might be received very differently by the person in front of you. Once I got to visit the principal office HR because I said to one of my reports “please stop lying to me” after he factually lied many times. This introduces 99 other related issues: sometimes you are direct simply because you are not speaking your mother-tongue and your vocabulary is limited, while the proper etiquette would require a convoluted message that does not use the banned words like…lying.

The opportunity cyclicality

Like most other arbitrage opportunities in the financial world, higher paid job openings come and go, they are not static. When I went to Luxembourg, the imbalance between job offers and skilled people was so big that several guys I knew could jump from bank to bank every couple of years and at each round get a salary 30% to 40% higher. Before 2012 there were very few Spanish and Greeks, then the crisis came and they moved in droves. Now, despite having built entire new areas like if it was Dubai, Luxembourg RE prices are through the roof due to the constant influx of people. Traffic is a mess. The opportunity might still be there but it is not like it was 10 years ago.

Brexit destroyed AND created opportunities at the same time. There are recruitment agencies that pay £3k if I find them a dentist or a nurse. Yesterday I took a day off and walking around with my daughter I saw several shops and bars looking to hire help: new regulations always create new opportunities…for people that can get them. The ‘Great Resignation’ in the US, combined with unfriendly immigration policies, is creating the same situation on the other side of the pond.

What about Remote Working? The regulatory environment is still a mess but I saw few companies hiring in ‘Europe’ and letting the employee decide where he/she would physically resides, as long as it is within the EU. I am talking about finance jobs so the situation might be more fluid in other sectors. I do not know how the salary aspect would work, if they have a budget and then it’s up to you to extract the value that you want or if they will scale it based on where you decide to live. I think this is a long wave that would probably erode some of the opportunities we saw in the past: part of your salary is currently linked more to your local expenses than skills; but then is also true that any job has tax implications attached to it, and taxes mean regulations and rules. I am not so positive governments will find the most logic rules around this.

Conclusion

When I started to write this post I had in my mind to cover more interesting topics, like how to make friends or dating tips. I will leave them for a second part…if I will manage to find the inspiration again (see the unfinished series on my story as a trader).

Just a few random, final thoughts. Do it when you are young and have no real connections. Once you start to have a family moving around becomes way more complicated. Please deeply consider the chances you have to eventually marry your high school girlfriend against the opportunity you are missing because she wants to live close to her grandma.

The place where you live will always feel worse than it is and the place that you left, or you would like to live, will always feel better than it is. We tend to forget bad things and preserve good memories, do not fell for it.

Moving around will enrich you and give you some skills that eventually will prove useful also in your career progression, like a thick skin and creativity in solving everyday problems.

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