Tales abound about the vast wealth in the Middle East --- and how your average American consultant can profit with untold riches through a consulting engagement in that region of the globe! Fact or fiction?
While it is true that your average American consultant can profit, there are a lot of myths and misconceptions! It is possible to rack up one's net worth immensely over a shorter period of time than what is normally possible Stateside, but it is also possible for your average John Q. Public of a consultant to get burned more than from the desert sun, financially and career-wise.
Some innocent, unknowing (and I'm tempted to say, ignorant) Americans are lured by both the siren songs of immense wealth, a club-like lifestyle, and promises of state-of-the art technology that is possible only with a wealthy client.
Wrong!
Mainframer John Q. Public could end up toiling with obsolete IMS/ADF on one of the oldest models of the 370 that the local sheikdom has managed to resuscitate. And using IMS that is two versions old, to boot.
... living in a bungalow apartment shared with two other unfortunate consultants.
... sharing one company car with the two other unfortunate souls.
... getting paid $45,000 for the year for his trouble.
... most of which he ends up spending on his R&R leaves to Europe which he feels he desperately needs to maintain his sanity in the restrictive sheikdom and tightwad contracting agency.
... and returning back to the U.S. from his one year of career torture, he finds that he's fallen behind the times, technology-wise, and now he can't get a job.
... so he spends the rest of his Middle East savings on his day-to-day sustenance.
... and then he finds out that the IRS is disallowing the foreign tax exclusion that he assumed was naturally his, due to his unknowing failure to meet overseas residency requirements.
... and now in debt to the government, our hero ends up at entrances and exits of freeways with a cardboard sign asking sympathetic citizens for a little help with his daily living.
Poor John Q. Public. If only he'd have known!
Actually, with a little more information, Mr. Public could have a story like the following.
John Q. Public has committed to some lifestyle sacrifices to reach some financial goals. He's halfway through his mortgage, and because he abhors debt, he'd like to end that mortgage once and for all, and he'd like to accumulate an additional quarter of a million dollars over the next five years. Then, he'd like to resume his consulting career without financial pressures.
And, Mr. Public would like to do a little world travel, see different cultures.
And, he's willing to make some lifestyle sacrifices along the way.
There are some technical skill sets that allow some consultants to realize the above goals without working outside of the U.S. A hotshot project manager skilled in delivering client/server systems using PowerBuilder and Oracle 7 with financial applications can make $150,000 to $200,000 per year in New York, with a little overtime. With this annual amount, and some amount of self-restraint, it is possible to save a quarter of a million dollars over five years, even with regular (sizable) contributions to Uncle Sam.
However, our hero John Q. Public is your mainstream, average mainframer. He's used to working with COBOL on a 309x environment with the MVS operating system using IMS DB/DC and DB2. He makes $50,000 in the States, and he's lucky if he can save $10,000 of that in one year.
So Mr. Public decides that the only viable solution is to work in the Middle East.
For over six months, Mr. Public keeps his feelers out for overseas opportunities. He subscribes to Computerworld and the International Employment Gazette, never failing to peruse the classified advertisements for Middle East jobs.
Most importantly for Mr. Public, he does plenty of research about the realities of overseas employment and networks with other consultants who have been there before. He finds out about what contracting agencies to avoid and what the prime contracts are.
Mr. Public responds to a few ads, and manages even to secure a technical telephone interview. In fact, he's fortunate to receive a telephone offer to Saudi Arabia, sight unseen --- which is typical for a lot of contract positions; and this may be surprising to a lot of Americans.
However, after talking with a consultant who has worked there for several years, he declines the offer. Verbal, telephone promises of a luxurious condominium complex, complete with racquetball courts, an Olympic-size swimming pool, gourmet restaurant, Western hotel-quality accommodations were made. But checking one of his contacts, Mr. Public finds out that the accommodation promised is a Third World standard apartment with an un-maintained pool that nobody but a few children use, an unsanitary cafeteria, and wildlife-infested room --- in a dilapidated part of town.
He also finds out from his contacts that this contracting agency is notorious for having consultants who have had to focus their day-to-day energies on battling with the agency to have their substandard air-conditioners repaired, fighting for better beds, squabbling over per-diems, and so forth.
Furthermore, he received a taste of what it would be like working for that agency. He was warned about the need to bargain up his a salary in bazaar-like fashion, so he successfully negotiated up a rate from $60,000 to $65,000 --- but only because he agreed to have the agency not include overseas travel expenses.
With all of this, Mr. Public declined the offer.
And wisely so!
With perseverance, our hero finally lands a contract with a reputable agency. He is offered a modest $70,000 for the first year, all expenses paid on a one-year, renewable contract.
Mr. Public makes sure that all terms of the telephone negotiations are documented and finalizes his decision only after seeing the terms in writing.
He shells out $200 to his accountant to check up on foreign tax exclusion, which he determines he can qualify for by maintaining residency abroad in excess of 330 days in the next 12 months. This will enable him to get foreign tax exclusion from federal taxes for the first $70,000 that he earns each year, which in his case is his total first year salary.
Since our mythical Mr. Public is from Florida where there is no state tax, he does not have to worry about paying any taxes at all during his first year, as long as he ensures overseas residency.
The agency provides him a company car, for his exclusive use. He has an apartment for himself, and he receives a per-diem for his gasoline and meals. On top of that, he has 30 days paid vacation each year and the agency takes care of the airline tickets for his trip home.
Our hero spends $12,000 on his first year on his vacations to Europe, Asia and Africa and manages to save $50,000 on his first year. It looks like he's on his way to stashing away a quarter of a million dollars in five years at this rate.
And looking ahead, Mr. Public will have the opportunity in his second year --- if he stays as planned --- to negotiate a percentage contract. This arrangement means that he earns a flat percentage of the billing rate to the client --- a percentage which he skillfully negotiates, and he no longer relies on the agency to cover his expenses; he's now on his own, which is okay because he now knows his way around his new environment.
With the negotiated percentage contract, our Mr. Public could get a salary of $110,000 in his second year, which ends up being about $85,000 after expenses.
He can inch up his negotiated percentage in each of his next three years.
As importantly, Mr. Public finds that the client company that he's been assigned is as state-of-the-art as any outfit back in the United States. In fact, the client company, a major oil producer in the world, spares little in ensuring that its large staff, including consultants, is kept up-to-date in the industry.
A happy ending for Mr. Public! Nothing extraordinary, easily attainable --- with some good planning and good advice.
Enjoy!
Ruperto Elpusan Jr.