Achieving Financial Independence as an Expat in Saudi Arabia

How does saving $85,000 a year sound? Read on! Today I have a guest post from Don who is living as an expat in the Kingdom of Saudi Arabia (KSA). Don Owens is a Chemical Engineer, US Expat, FIRE Enthusiast, Author, and Frequent Traveler. He blogs about life as an Expat in KSA, his journal toward financial independence, travel, and science. Let me know if you would like to guest post on RFI.

As a US citizen living and working in the heartland of America, moving to the Kingdom of Saudi Arabia (KSA) was probably one of the furthest things from my mind. However, after working for more than 10 years in corporate America, with little to show in the way of long-term savings, I knew that something would have to change if I wanted to achieve my dream of financial independence. I had already done some research into the FIRE movement, GEO Arbitrage, House Hacking, and many other lifestyle and investing strategies; but with a wife and two kids to consider I knew that it would be tough to implement some of the more radical cost cutting lifestyle changes required by many of these approaches. After switching jobs a couple of times, and trying and stopping several FIRE efforts over the course of a few years, I was prepared give up on the whole concept and resign myself to the idea of continuing on the 9 to 5 grind for the next 30+ years, until one day in late 2015 when I ran into an old friend from college who had just returned from a 2-year expat assignment in Saudi Arabia. I had a vague notion that living in Saudi Arabia could be financially beneficial, but having grown up in the US I had an innate fear of moving to the Middle East and never really even considered the idea. However, after spending some time talking to Matt and then later doing my own research online, I realized that a lot of my preconceived notions were wrong. Having now lived in KSA for more than 2 years, I can tell you that the reality is nothing like what you hear on the news and the financial benefits can be even better than you would probably expect. In this article I will try to give you a high level feel for what living and working in KSA is really like, and I hope that for some of you out there this might just be the trigger that starts you down your own path to financial independence as an expat.

What Life is Really Like as an Expat in KSA

Life in KSA is certainly different from life in other western countries, however most expats taking jobs in Saudi Arabia (engineers, lawyers, teachers, doctors, nurses, accountants, administrative assistants, etc.) will end-up living in large western style compounds. Every compound is different but for the most part they are designed to give their residents as many of the standard comforts of home as possible. From community gyms and pools, to grocery stores and restaurants, to after school sports, we have found that many of the things we remember and enjoyed from back home are available and a part of everyday life in KSA. Our family specifically has been lucky enough to end up in one of the larger communities in KSA called KAUST, which is located along the Red Sea on the western coast of Saudi Arabia. If you are interested in learning more about KAUST, and compound life in KSA in general, you can check out our multi-part series on Compound Life.

In addition to providing many of the comforts of home, living and working in KSA can also expand your family’s cultural horizons in ways that would not be possible living in the US alone. For example, our next-door neighbors are from New Zealand and our kids and their kids play together every day after school. My son’s best friends are Saudi, Greek, British, and South Korean and his teacher this past year was from New Zealand; while my daughter has made friends from KSA, India, France, and Australia and has had a teacher from Germany and another from Norway. Even though she is only six my daughter can now sing happy birthday in English, Arabic, and Norwegian, and even knows some basic words in German as well.

Another aspect of life as an expat in KSA that we have enjoyed is the opportunity to travel. From a location standpoint, KSA is ideally positions for trips to Africa, Europe, and the Middle East and flights are relatively cheap and don’t require huge time zone shifts like when traveling from the US. Additionally, in KSA there are two major holidays that are each a week long and most people add a week or two of their own personal days on top of those, which allows for nice long adventures that would be hard to do in US. Heading to South Africa for two weeks during the first EID Holiday and then Scandinavia for another 2-3 weeks during the second EID Holiday is a common occurrence. Additionally, since nearly everyone else in the region is also traveling or on holiday’s with family during this time there is little of the constant nagging e-mails and work requests that you tend to have when you work in corporate America.

Financial Benefits of Being an Expat in KSA

Last but certainly not least are the financial benefits that come from living and working in KSA as an expat. Again, every situation is different and depends on the specifics of the expat’s contract and their country of origin, but in general working as an expat in KSA can be truly transformative in most cases. Some of the key factors that make working in KSA so attractive are the complete lack of income taxes, free health care, and free or subsidized childcare/schooling, utilities, transportation, and housing. As we detail in our post Top 10 Financial Benefits of Becoming an Expat a typical US expat making $100k in KSA could easily save over 85% or $85,000 per year out of their $100,000 take home pay in KSA, without having to make drastic cost cutting life style changes. This is an incredible advantage and savings that would be nearly impossible for the average corporate employee in the US to achieve. Saving at this rate means that every year spent in KSA can be worth anywhere from 5-10 years of saving in the US, and this is how many expats in KSA are able to drastically accelerate their own paths toward Financial Independence. This is what my family and I have discovered and want to share with others who might be in the same position we were a few years ago.

Is Working in KSA for Me?

Of course, nothing in this world is perfect and nothing comes for free. As with any major life and location change there are challenges and living and working in KSA will not be for everyone. For us some of the most important things you should consider before getting serious about looking for work in KSA are the following:

1) Long Distance from Family and Friends: For many people this can be a real challenge, especially if you have loved ones that need special care. At a minimum it usually requires ~24 hours door to door to travel to most locations in the US from KSA and sometimes this can be delayed further based on flight availability.

2) Constraints on Certain Freedoms: Even within the compounds certain items and practices are not allowed. For example, alcohol and pork products are forbidden and not sold anywhere within the Kingdom, and possession of these materials or trying to bring them into the country can get you immediately deported. Worship of other religions within your own home is allowed, however practicing or prophesizing outside of the confines of your own home is strictly forbidden. Finally, although some changes have occurred recently (such as the right for women to drive) there are still strict rules and societal norms expected for both male and female dress outside of the compounds.

3) Weather and Climate: Saudi Arabia is also primarily a desert climate, and while very mild and pleasant conditions exist in the winter, temperatures can become extremely high in the summer, routinely reaching well above 100° F. In addition to this, sand and dust storms are also common especially in the central and eastern portions of the country, which can create poor air quality and can create especially difficult conditions for those who suffer from certain allergies and asthma.