Thinking about relocating? Read this first: The Unhappy Expat

Panama, Casco Antiguo, Casco Viejo

Six years ago (wao!) we wrote two articles about the people we met through the years moving abroad, specifically relocating to Panama.  This week, we re read the articles and were surprised on how relevant they still are, and worth sharing again.

If you´ve been thinking on relocating (to Panama or anywhere), we do recommend you to read both of them from A to Z.  I know, reading these days takes time, but worth doing for such a big decision. Can´t we just make an infographic? humm…. no….  =) A video would be fun though!

They were two articles: The Happy Expat (Part I): Unhappy Expats  and the second one, about those who make it or “The Happy Expat”

Here it goes! First delivery:

The Happy Expat (Part I): Unhappy Expats

A couple years ago, Malcolm Gladwell wrote an article for The New Yorker about how there are certain jobs that defy our ability to predict who will be successful and who will fail once they are hired.  The article cited schoolteachers and professional American football quarterbacks as two examples of jobs where almost nothing we can learn about a candidate before he is hired will tell us how well he will do in the job. The article got me thinking about the many people I have seen succeed, and the few I have seen fail, transitioning from a developed country to our little corner of a developing one.

I am a real estate broker in Casco Antiguo with Arco Properties, a walled colonial town that abuts bustling Panama City.  During my six years in the business, I have sold or rented to approximately 120 foreigners.  I even married one.  All of these people brought their hopes and dreams to my country. They came excited to make a new life for themselves. The vast majority have flourished.  They’ve built businesses, started families, made friends (and in some cases fortunes). They’ve engineered a special lifestyle for themselves they could never have anywhere else and, I am sure, will never return to their home countries.  They are now hyphenated Panamanians; part of a growing diaspora of developed world expats who I believe will prove to be one of the great sea changes of this century.

But a few wound up regretting their decision to move. Somehow Panama didn’t live up to their expectations. The trials and frustrations of a developing country, the inefficiencies, the disorganization took their toll and pushed these people past their breaking point.  But everyone here, particularly foreigners, are subject to the same conditions, so why do some foreigners thrive while others become frustrated, burnt out and eventually leave?

I had both personal and professional reasons for wanting to be able to better predict who would transition successfully and who would fail.  Obviously, unhappy clients are bad for business, and part of a realtor’s role is to help her clients make the right decision for themselves, but in my case it is even more personal than that.  In a small historic district like ours, your clients are your neighbors and your neighbors are your friends.  You want everyone to be happy. To see someone slowly burn out and become frustrated, knowing that at some level they relied on you to make such a large life decision is a heavy burden.

So I meditated on the question and analyzed case-by-case the happy and the unhappy expats I had dealt with here.  As I did, I began to see some patterns emerge. It’s nothing scientific–and probably couldn’t be since you never really know what is going on inside someone else’s’ mind– but it’s given me some insights that help me better counsel my clients.  The context is people moving from a developed country to a historic district in a Latin American country because that is what I know, but I would think that the insights apply to anyone moving from a developed country to a less developed one.

For those who feel there might be a fit between them and a historic district like our Casco, I am publishing a separate series that goes into the nuts and bolts of successfully engineering what we have come to (half-kiddingly) refer to a Cosmotropical life style in our historic district.

UN-HAPPY EXPATS ARE ALL ALIKE

In the famous opening line of Ana Karenina, Tolstoy says “Happy families are all alike; every unhappy family is unhappy in its own way.” My father-in-law is fond of saying that old Leo got it backwards: it’s the unhappy families that are all alike–they’ve got one of several problems–money, infidelity, substance abuse, love gone cold, kid issues–but the happy families each have their own special little chemistry that keeps them together despite the vicissitudes of life, and that chemistry defies being reduced to a formula.

I tend to think my father-in-law is right, and that his philosophy applies to expats.  When I look back at my list of hundreds of expats I’ve known, it is much easier to see patterns among the few who left than the majority who stayed.  Not that there aren’t things to learn from the happy expats, it’s just that there are fewer things that I would consider predictors.  Below I’ve touched on the three main predictors of unhappiness, and in the second part of this article I will look at some of the ingredients I’ve seen in the chemistry of the happy expats.

1. If you are not happy anywhere, you won’t be happy here.

In my experience, the most frequent cause of unhappiness among expats is that they were simply unhappy people to begin with. Somehow they had convinced themselves that “getting away from it all” and “starting over” in a new place would bring them true happiness.  I’ve now become very attuned to people who quickly dive into stories of how unfair life has been to them, the complaints, the broken relationships they need to get away from.  My advice when I hear it is “get a shrink”–expatriating is not the answer.

If you feel on the verge of a nervous breakdown, moving to a developing country is probably the worst thing you can do.  You need a predictable, stable environment, where you can focus on yourself, work through your issues and repair your relationships.  You may have an idealized conception of the tropics as more laid back, less regulated, less stressful, but unless you are on holiday, it takes a while before it becomes those things.  For your first couple of years it’s tough. It bumps you around, it challenges your assumptions of what’s logical, fair, right.  If you are not very comfortable in your own skin and don’t have good coping mechanisms the developing world will make you more nuts than you already are.

2. The best way to become a millionaire in Latin America is to start with a billion.

The second most common reason for unhappy expats in my experience is that they get themselves into financial trouble.  This is most often the case with entrepreneurs, which many expats here tend to be.

It is well known that most new businesses fail within the first two years.  It is also well known that it is more risky to start a business in an environment you are not familiar with than it is to start one in your own back yard.

It is therefore astounding to me how many people move to Panama and put their life savings at risk starting a business in an industry they do not know, where they don’t speak the language, know the customs or have personal networks.  Sitting bleary-eyed in your New York office at three a.m. behind a pile of papers, you might convince yourself that opening a bar in a tropical paradise like Panama is a quaint, stress-free way to make a living, but ask yourself: would I take the risk on the exact same thing down my own block? If not, listen to your own excuses for not doing it on your own turf: too much competition, too many legal hassles, cost of living too high, don’t know anything about bars….

Well, the deck is stacked against you even more here.  It’s certainly possible–but you cannot go in making unsupported assumptions about the time things take, the cost of doing things right (meaning at the level you are accustomed to), who you can trust or the quality of the labor pool.  You must do your homework and leave large cushions of time and capital, otherwise you are very likely to find yourself a very unhappy expat for a very good reason: you’re broke.

It’s too early in my area’s development to really know the failure rate for expat businesses, but of the thirty or so I’ve seen open, only a few have failed.  I think the reason it is not higher is because this is a fast growing market and often expats come in with insights into where the market is heading that makes up for some of their other competitive disadvantages.  If they have a decent idea, enough capital and stick it out long enough they normally do fine, and some even get rich.   But my experience is that the best bet is to have a nest egg or a source of income outside of Panama that allows you to take advantage of its low cost of living without being overly exposed to its tricky business climate.  If you want to dabble in a side business to see how it goes, great. But whatever you do don’t take one big roll of the dice on a bumpy felt like this one. And if you do and it goes wrong, please don’t blame the country–statistics say it probably would have happened at home.

3.  Living in your own private Panama.

The previous two reasons account for almost all of the unhappy expats I have seen.  There is another condition that often accompanies one or both of the others that I define as unrealistic expectations.  Essentially, these are people who want Panama to be something that it simply isn’t and when they realize it, they refuse to adjust and become unhappy because they feel that they have been betrayed.

If naivety is a legitimate excuse, then this feeling is justified; there is an unlimited amount of propaganda floating around on the internet selling Panama as a species of tropical paradise that it isn’t (and nowhere else could be). If you’re expecting paradise, pretty much anything that really exists in this world is going to disappoint you.

What I’ve learned to listen for in this respect are the words “should” and “ought”.  If someone recently arrived in Panama frequently mentions that “Panama should” do this, or “they ought” to do the other, I can be pretty certain that this person will soon become an unhappy expat. Whether or not they are correct on their observations, the fact that they are focused on how things should be rather than trying to understanding why they are the way they are tells me that they probably don’t have the coping skills they need to deal with this imperfect environment. It’s got it’s good and it’s bad; the job of the expat is to do his research before moving to make sure that the rough edges between his personality and Panama are a good fit.

Interestingly though, I have found that quite often the things they think “should” be, if done, would create exactly the circumstances that they say they didn’t like in their home country.  A typical case is when people find out that there is no real cause of action for negligence here. They claim to hate the litigiousness of the US, but the first time they step in an open manhole they think that they ought to be entitled to compensation.

The key to happiness here, as anywhere, is focusing on the positive and the things you can change and letting the rest go. As an expat, it is important to have the cultural intuition and curiosity that allows you to understand why things are the way they are.  Everyone, including locals, occasionally meanders into the land of should and ought, but living there is a sure fire way to make yourself miserable no matter where you are.

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