EP 19: A Safety Net for Difficult Times: How To’s!
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Employees on work visas tend to be very hardworking (mainly in the STEM Space), very determined to pursue their version of the American dream, and with high incomes, anxious to start investing.
When we start working with them on a financial plan, we complete a full SWOT analysis, and without a doubt, one threat stands out like a sore thumb.
In this episode, we address the specific threat—all related to their visa—and suggest different ways of mitigating it. The ideas range from career enhancements to other legal ways of staying in the U.S.
We draw on our backgrounds as people who were once on work visas and some of the fears and concerns we felt, which apply to many foreign nationals on work visas.
By the end of this episode, you'll walk away with 4 to 5 ideas you can implement or start planning on that will help you shore up your financial plan.
The speakers' views and opinions discussed in this episode should not be considered financial, tax, or legal advice. Consult your advisor for any legal, cross-border tax, and financial advice.
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Speaker 1 (00:06):
Welcome to the International Money Cafe Podcast, the show where we filter out the noise on cross-border taxes, finances, and life in the us. I'm your host, Jen Hams, certified financial planner, founder and owner of elgon Financial Advisors,
Speaker 2 (00:21):
And I'm your host, man Nadi, enrolled agent, owner and founder of Amman Tax and Business Services. Join us on this journey as we explore the unique challenges faced by inbound outbound families and businesses on taxes, compliance, and financial planning. Let's get to the
Financial Freedom as a Foreign National on a Work Visa
Speaker 1 (00:42):
Show. Welcome to another episode of the International Money Cafe podcast. Today I'm doing a solo episode. Manasa is not available and that's all good. The biggest risk to your financial freedom in the US if you are a foreign national on a work visa is actually your visa or your immigration status. In today's episode, I'm going to be talking about or addressing how you mitigate this threat when I start working with a foreign national on a work visa. Again, remember work visas are non-immigrant visas we always had with obviously their priorities. What is it that brought them to me? But before we go too far down that priority list, we'll do what I call a complete SWOT analysis. This is where we look at the strengths in their plan, their weaknesses, their opportunities, and the threats. Anything that could impact that particular plan. It doesn't matter how good a plan is that we come up with if we don't address what could be threats.
Risk Mitigation for Foreign Nationals
Speaker 1 (01:57):
So think of it as literally risk mitigation factors or risk mitigation ideas. The thing I find for anybody, a foreign national on a work visa, their main threat is anything that impacts their way of earning and leaving. And we're talking about jobs. So this could be insurance, could be anything like that. But really the biggest threat is anything that could cost them to stop working at that job. What I'm addressing or what I'm talking about is the threat of losing a job when you are on a non-immigrant work visa. So before we talk about what that entails, let's sort of talk through the typical profile of what I see of foreign nationals on work visas. And by the way, I fit that typical profile because I was once a foreign national on a work visa. Most of these people, they're most likely the first in the family to move to the us.
Speaker 1 (03:06):
What that means is a lot of times there's some expectations that you're going to be helping family back home. You may be expected to help educate those who are coming in after you, which means there other competing demands on your income. Most of these folks tend to be young and by young I mean they tend to be in the ideal employment age, something like let's say 25 to around 50. And those are the best times to really make a great income to work on your career, to start saving free time and that type of thing. They tend to be really hard workers. They tend to be really the best from where they're coming from, especially the ones who really started out on as F1 student, which again was my situation. I started out as an international student, as an F1 visa student. They're very hard workers.
Speaker 1 (04:06):
They have great academic credentials, but that doesn't always translate into the US financial system, which is why I love, love, love to educate folks on the possibilities and what they can get out of the system.
Threat as F1 Students
But first we have to address that particular threat as F1 students. Like a lot of, let's say US college students, they really did have a great income. Remember, your working options are very limited on the visa. I like to think of college students as being relatively poor compared to people who were working and when that first paycheck hits, it can be maybe not overwhelming, but sometimes it's like, oh, I got all this money now I dunno what my priorities should be. Should I go out and buy a house? What should I do with this money? It's where I get a lot of people will call and say, okay, I just had this job and I'm wondering, should I buy a house?
Speaker 1 (05:05):
What should I be doing with this money? But what I say is, okay, hold on. It's great you got this great income, but let's address what could really be a threat to this great income. And by the way, most of them, they're single. They have young families with kids who were born overseas or kids who were born in the US but relatively young.
Laid off on a Work Visa
Let's talk about what it means to be laid off when you're on a work visa. The one thing I say to everybody is in the us, the norm for cutting costs, the first thing a lot of companies will do is lay people off across the board. So I like to really explain that this is not personal, it's just a US thing and it's not really a matter of if it's going to happen, but it's really a matter of when because we know it's likely to happen.
Have a Plan and Be Prepared
Speaker 1 (06:03):
Let's have a plan and be prepared. Okay? The first thing you want to be thinking about is when layoffs come, I really would like to be the last person to be kicked out. So what can I do to ensure I'm the last person to be kicked out? And for those who may not be aware of this, the reason why it's so critical, one that you are hopefully able to stay is when you get laid off on a non-immigrant work visa, you typically have about 60 days to leave the country or find another job on another visa, most likely the same visa that you are on. Or for some of them it could be a different visa. So if let's say you'll hear on a TN visa from Canada or Mexico and you laid off, then you have to find another job on the TN visa or H one B.
Speaker 1 (07:03):
The problem is with the H one B visa, you have to go through the lottery system. Each visa is a little bit different, but overall you need to find another job, the equivalent of where you just came from in the visa options that you can switch to a little bit limited. And by the way, I'm talking about all non immigrant work visa, so H one b, H one B one or one L one tn in the E three visa. That's the first thing, okay, when you get laid off, you won't leave the country within 60 days. Your other options are you can switch this to a visitor's visa, so a B one visa, you can also switch to an F1 visa, so go back to school and become a student. But when you think about it, if your source of income has taught, unless this is the only option, it's probably going to be really, really tough to go back to school and start spending money that you may not have.
Speaker 1 (08:09):
And by the way, most international students, most schools will charge you the same as what they charge out of state students. So it means your tuition is going to be way higher than the other students around. The plan that we want to put in place first of all is one, let's make sure you have an emergency fund. So when we start working together, if you don't have the cash, that's the first thing I'm going to say is we need an emergency fund. And I typically go for six to 12 months. I like to be conservative Again, when you're in the situation where your income stopped and you don't know when you're going to be able to make another income, I want to be safe. One of the things I talk a lot about is this six to 12 months needs to or needs to be enough to have enough money for you to buy return tickets for the whole family if you have to go home because they've said you need to leave.
Speaker 1 (09:08):
And it's not always when you've been asked to leave. For a lot of us who've been in this situation, we know emergencies come up back home and you're forced to make a trip you hadn't planned to. So I'm now at an age where my parents are older things are happening home. So getting that midnight call as we say, where you need to come home because something's happened to somebody in the family, it's not unusual. And when you go out to buy a ticket at that time, it's probably when the tickets are the most expensive. You understand why I want you to have a nice chunk of money in that emergency bucket and this money really should be in a high yield online savings account that I find is the easiest place to put it because you want it to be easily, easily accessible. Let's defer big money decisions.
Can I Buy a House as a Foreign National?
Speaker 1 (10:04):
The one question I get a lot about is, okay, I want to buy a house or so-and-so's daughter or son bought a house. Can we go out and buy a house? And I'll say, yes, but hold off. That's a really big money decision and that's a decision that I want us to think about. If you're not sure, is this a decision that calls for me to really be permanent in the us? So if it's that kind of a money decision, I'll probably hold off a little bit because there are other things we want to do with this money that I'll be talking about as we go through. When it comes to investments, again, I know we are very keen to invest. We have all these great ideas, passive income, active the whole nine years. What I'll say is, okay, let's start with a 401k and go up to the march if your company has a march, but you don't need to rush off to do the Roth IRA.
Prioritize a Taxable Account
Speaker 1 (11:02):
There are actually some issues with that depending on where you are coming from or where you think you're going to end up being. But if you really have to invest, prioritize a taxable account. This is very flexible. It can be used for a lot of things. It's a great way for you to start going down that path. If we need to, again, we have some other money decisions we want to make, but this is if the question comes up and then it's going to be really, really key that we maintain our tax compliance. So by tax compliance, I'm talking about overseas assets. For example, filing FBAs or reporting overseas assets. If you have accounts overseas that are more than 10 K, then you need to do the FA. And I've seen lately a lot of people that really haven't been doing anything with them or they never filed because they didn't know, and I completely get it, it's not like somebody scans there when you're getting your immigration papers and say, oh, remember to do this.
Have you Been Tax Compliant?
Speaker 1 (12:07):
So I completely get it. And IRS also gets it because they've actually provided ways that you can go back and do something called streamline filing that actually allows you to come into compliance. And you may say to me, why is it important that I'm compliant? The reason why you want to be tax compliant, because when you're getting, let's say your citizenship or your green card, one of the questions they ask you is, have you been tax compliant? Have you followed all the US tax laws? You want to be able to answer yes and have the evidence to show that let's make sure we are being tax compliant as we're putting this plan together. And then we'll come to your spending plan. And this is where I said, I know there are things you want to do with the money, but there are two very distinct buckets that I want to see in your spending plan and that I recommend that we highly, highly fund and actually use.
Spending Plan Buckets
Legal Bucket
Speaker 1 (13:10):
The first bucket is the legal bucket. This legal bucket is every foreign national on a work visa really needs to make sure they have an immigration lawyer in their corner. Companies have their own immigration lawyers that will do all the filing for you. But when you really think about it, that lawyer is working for your company, they're not really working for you. It's important that you have somebody in your corner and what I suggest to forces reach out to them, have an initial consultational conversation. This is money worth pending. So you can talk to them about your situation. They've seen a lot of these type of situations. They may be able to advise you on any, let's say, legal immigration moves that you need to make. Like I said, if you're looking to switch visas, I would never ever do any of that stuff without taking the guidance of an immigration lawyer.
Career Advancement Bucket
Speaker 1 (14:12):
The second bucket that I want to see is what I just call the career advancement bucket. And the overall goal of this bucket is you want to make yourself as attractive as possible to future employers. In other words, how can you set yourself apart from everybody else around you that has the same skillset and does not need to be sponsored on a visa? Let's talk about these a little bit. For those that work in the tech field, you are aware of all the latest technology, whatever the cutting edge technology is. So when I go back to my situation, my first job, I worked as a QA engineer and what I noticed right away, we used to do all this software testing, I realized we had a whole bunch of databases and they want too many people who were interested in doing that. And so I raised my hand and I said, okay, I would really like to learn and teach myself about, I think I started with Oracle and that actually gave me a position where if anybody needed something to do with the Oracle database, they could reach out to me.
Speaker 1 (15:30):
And because these were QA databases, it was easy to trash them and rebuild them and that sort of thing. That allowed me to get my next job as a proper database administrator. And from there I was able to start looking at other databases. So think of the same scenario. I dunno what tech hack you are working with, but right now I'm sure you know what the latest is. What can you do to ensure that your skillset, the technical skillsets, are up to par? And if somebody or an employer was looking for somebody with that skillset, they'll be able to say, yes, we want you are exactly the kind of employee that we are looking for. The next skillset that we need is what I call soft skills or leadership skills. And we used to joke when I was in tech, one of the requirements that we had for CE was we kind of said, oh, I guess you have to go and get your soft skills in.
Have Different Skills
Speaker 1 (16:32):
I'm so glad we actually had those even though we used to. You know what I mean? These were things like communication, business writing, verbal communication, things like conflict resolution, time management, teamwork, working with people in a cross-cultural setting. I did end up working with a lot of people, for example, let's say from India in other places, working with these outsource teams, how do you work with those teams? And it's not just the cross-cultural, it's also how do you work with five different teams and keep everybody happy and not look like, for example, you are favoring any of them. So different skill set that makes you a complete individual. And where you find is it's possible to have some amazing tech skills, but as we say in quotes, if you don't have the people skills to match it, you won't be as attractive as the next person on the list.
Join Professional Organizations in Your Industry
Speaker 1 (17:34):
This is something you really, really want to work on as much as you can. And one way to do this, and it's sort of tied to this, is you want to learn how to network. And by doing that join, let's say professional organizations in your industry volunteer. Find out what it takes to be a leader in that organization. What are the leadership skills? What are the technical skills that you need to become a leader in that space? Find mentors in this space. Find somebody who's 2, 3, 4 years ahead of you and this is where it's important for you to learn how to network because it's not enough to ping somebody on LinkedIn and say, can I pick your brain on something? You need to be thinking more about how can I benefit this person? Yes, I know I want to learn. I know I want to become a valuable employee.
Speaker 1 (18:36):
I know I want to improve my skillset, but you need to approach the relationship as how can I help this person? What can I help them with? Because people are very busy and trust me, I think people have gotten to the point where they're a little tired of, can I pick your brain as much as they want to help? It's not always possible. So again, think how do you stand out when you reach out to somebody. Along the same lines, don't be afraid to switch jobs. I think if you're at a job 2, 3, 4 years, at some point, if you're not careful, you're going to end up losing the cutting edge technology that may be prevalent in that industry. So don't be afraid to switch jobs. The only thing I'm going to say is as you're switching jobs to improve your skillset, keep an eye on your immigration status.
Have an Immigration Lawyer
Speaker 1 (19:30):
And this is where it really helps to have that immigration lawyer in your corner. Because let's say for example, you on the H one B visa and you have an approved I 40 and you end up switching jobs and I think you've been at the job for between three and six months, I don't remember the exact number. You end up losing that privilege. So when you go to the new job, they have to start the whole process all over again. But if you wait until I think after the six months and you move over, you switch jobs, then you are able to make a complete transfer and that just carries over, that just carries forward. Keep an eye on that. Timing is really, really key with every career move that you are making when you're a foreign national on a work visa. The other thing to consider is if you want to stay in the country permanently, that means you want to get a green card.
Other Ways to Get the Green Card
Speaker 1 (20:24):
Are there other ways that you can get the green card and what can you do along those lines? So most companies that are willing to file for you though, most likely file it. And I think it's either the EB three or maybe the EB two category. Try and find out, and again, this is where having this immigration lawyer help. So other people who in this space that have done that, is there any way you can start to build your eeb one category or even possibly E-B-N-I-W, which is actually a category where you can actually file for yourself. So find out what the skillset is and don't assume that you can't qualify before you say, yeah, I can't seriously look into it and see what's possible. What is it that you need to do to start building that profile? And again, like I said, I've seen a ton of people on LinkedIn that talk a lot about some of that.
Speaker 1 (21:23):
Other ways of getting your green card can see that. The green card lottery, I do know people that have won and have ended up staying in the US because of that, and at least that means their job is not as highly impacted or their livelihoods are not as impacted if the company was to let them go. If you are married, is your spouse on a dependent visa? If they are, remember that career advancement bucket, can we use some of that money to help them gain skills that allow them to get a job in their area, in their space? Because if they get a job and they get their own work visa, at least if one of you is kicked out, you at least have each other to fall on. Remember what I talked about with the dependent visas? You can do that and the things that we can be thinking about.
Speaker 1 (22:18):
You're talking to everybody. I think we've talked about talking to everybody, the networking. Oh, finally, I know this was the one thing I said, I don't want to forget. Interview, interview, interview, interview. Please, please, please, please, if you can do more interviews. I talk to people and I ask them, if you to interview for this particular job, what would they be looking for? And they're like, oh. Or be, what are your strengths? What are you bringing to the table? Everything else you get good by practicing. So practice your interview skills, keep your resume updated. Again, the key thing is to make sure one, your career is moving upwards. And of course the good thing about that, that actually does help you make more money. But at the same time, if something was to happen to your primary job and they say, okay, you out of here, hopefully you'd be the last person to be kicked out.
Speaker 1 (23:17):
And if you're the last person, you still have an opportunity or a chance to find something else in this space, hopefully that helps you really start thinking about that particular thread because it really can and does impact your idea of the American dream in your financial freedom. And with that, manasa typically does this little bit. So I'll do my best. If you like this episode, please go to our website, the i am cafe.com, the im cafe.com, and join our newsletter and let us know what you think about the episode or if there are other ideas or things you'd like to see us address. And with that, thank you so much. Bye.
Speaker 3 (24:07):
Thank you for listening to the International Money Cafe podcast. The content is for informational and educational purposes only, and should not be used as a substitute for professional advice. Seek the advice of your qualified service provider with any questions you may have regarding your cross order finances and tax needs.