How to Retire Early and Live Abroad: Your Guide to Making FIRE Last (Plus: 2025 Gas Prices Explained)

15:06Sean Pyles:I've been loving using my European linen duvet cover every night. I'm such a warm sleeper and in these hot summer months I need it just to get to bed at night and it's so soft so comfortable and the color is delightful.

15:19Elizabeth Ayoola:I have only just realized that there our levels to towels. I got my first set of classic organic Turkish cotton bath towels, very fancy. And I must say they are so soft and fluffy. And honestly, it's changed my perspective on buying cheap ones.

15:35Sean Pyles:Look, Quince is helping us live our domestic bliss. I love that.

15:38Elizabeth Ayoola:Stick to the staples that are going to last with elevated essentials from Quince. Go to quince.com slash smart money for free shipping on your order and 365 day returns. Yep, that's all year.

15:52Sean Pyles:That's q u i n c e.com slash smart money to get free shipping and 365 day returns. quince.com slash smart money. Today's episode is sponsored by Rula. That's R U L A. You know, Elizabeth, sometimes talking with someone outside of your friends or your family or your partner can be really helpful just to get a perspective on the things that you're going through and process the tough things in life. And this is where Rula comes in because finding a therapist is hard enough, but finding one who actually takes your insurance, well, that's where most online therapy platforms fall short. Many don't work with insurance at all, which means you're stuck paying the full cost out of pocket or paying for an expensive monthly subscription.

16:31Elizabeth Ayoola:Rula does things a little differently. They partner with over a hundred insurance plans, making the average copay just$15 per session. That's real therapy from licensed professionals at a price that actually makes sense for your pockets. Now think about it. You use your insurance benefits to maintain your physical health. So I mean, like, why would you not do the same for your mental health?

16:52Sean Pyles:And Rula isn't just affordable. The experience is actually tailored around you. Other online therapy platforms might match you with the first available provider, whether or not they're actually the right fit. Rula considers your goals, preferences, and background to provide you a curated list of licensed in-network therapists who are actually aligned with what you need. Go to Rula.com slash smart money to get started today. That's R-U-L-A dot com slash smart money for quality therapy that's covered by insurance.

17:20Elizabeth Ayoola:Thousands of people are already using Rula to get affordable, high quality therapy that's actually covered by insurance. Visit Rula.com slash smart money to get started. Again, that's R-U-L-A dot com slash smart money. You deserve mental health care that works with you, not against your budget. it.

17:39Sean Pyles:This episode, we're joined by Ellie, who sent us an email with some questions about how to invest a sum of money to create passive income while living abroad. Ellie, welcome to Smart Money.

17:49Elizabeth Ayoola:Thank you for having me. All right, Ellie. So we're going to start off with a little icebreaker because we love icebreakers, don't we? Yay! Let's do it. So one of my questions I've been asking all my friends when we go to dinner is, we're now in June. If you had to describe the first half of a year, in one word, what would you use to describe your year so far? Madness. Oh, that's a juicy one.

18:14Sean Pyles:Okay, I need another two or three words after that. I must elaborate, don't I? Please, please. First of all, trying to move abroad with family is no easy task. There's a lot of planning, documentation, birth certificates, passports, and all of that. Added to all of it is kind of the madness outside. I am in Southern California and kind of in the midst of daily news. And so it's really hectic. It's really stressful, not ideal. So my word of choice is madness. It seems fitting. I'd like to hear a little more about your family situation and your timeline for moving, your plan, what inspired it? We have traveled to Spain quite a few times and absolutely loved it every time.

19:07And we've been to many places around the world, but you know, you never necessarily get that feeling of, oh, we could live here. And we're a family of four. We have two kids. And when we go to Spain, everyone feels that we could live here feeling. And when my husband and I started thinking about moving abroad, Spain was kind of just the go-to for everybody. We asked the kids, where would you live? And they're like, Spain, Spain. So it also makes sense for us, not just because it feels good, but we all speak Spanish. It's a lot less expensive to live there. Lifestyle is incredible. I mean, they just party all the time.

19:50And then the climate's very similar to Southern California. So there won't be a big change there. My husband and I always plan to retire early. And then that was just how things unfolded and everything kind of aligned. And here we are. We are about two weeks away from our big move. Wow. That's so exciting.

20:14Sean Pyles:How old are your kids? My kids are 10 and 16. Okay. So they would be going to school in Spain. Yes, yes. And we were kind of worried how they would react, you know, because kids change their mind too. They're not necessarily excited about leaving their friends and their environment. They recognize the change is hard, but they were both really excited. And we also have friends in Spain. So that helps. We kind of have a community there already. So they were really excited to go. And we just said, you know what, we live once. Let's go.

20:44Elizabeth Ayoola:So you mentioned earlier that you and your partner were planning to retire early. So when did you start thinking about this? And also, what kind of strategy did you put in place so that you could retire early? And also, congratulations. Well, thank you. You know, it does take a lot of sacrifice. It's not an easy thing. We didn't inherit any big sums of money. We didn't inherit any property. So it wasn't like we were just born into it. So what we decided to do is just work really hard and really strategically in the early years of our building our careers so we can be done in our mid 40s and retire and just travel the world.

21:26And the way we did it is by building real estate. My husband's a contractor, so we would buy a property. He would expand it or separate it into units. And then we would live in one area, rent out the rest and things like that.

21:44Sean Pyles:Do you have continual income from rental properties? We do. And this is how we are able to move abroad. So if we were to stay in the United States, that passive income that we currently receive would not be sufficient to maintain our lifestyle. So we're still working. My husband's working. I'm done. I quit. But when we get to Spain, because the cost of living is so much cheaper, we would be able to cover our expenses with just the passive income and without working.

22:19Elizabeth Ayoola:You wrote to us about essentially having$150 ,000 in a high yield savings account. So can you talk to us a bit about that? So the way we have this cash is when we sold one of our properties to pay off some construction debt that we had, and then the rest of it, we put in a high yield savings account. The other thing we did is every time we had a little bit of extra money every month, we would send it there. And so it just kind of accumulates and it is now up to$150. And so what I wanted to do is instead of having it sit in cash, we wanted to somehow invest it to give us additional passive income.

23:02And I don't necessarily want to buy another property in the United States because we won't be here to take care of it. And as you know, the interest rates are so high right now to borrow. So I don't know that it would be beneficial for us to do so anyway. And, you know, investing it in one way here may be better, but I don't necessarily know how. I don't want to move the U.S. money to Spain because the dollar is so cheap right now. It is very expensive for us to move money to Spain.

23:40Elizabeth Ayoola:What's the interest rate that you're getting on the high yield savings account at the moment? It started with 5%, but it just kept declining. You went to 4.5 and now it's at 4. So I think your main goal here would be to put your money somewhere where you can maybe beat that 4 % so that your money could be earning more. And honestly, you have tons of options which could potentially give you analysis paralysis. But a few that you could do are dividend stocks, dividend index funds. You could also do dividend ETFs and all of these dividend dividends that I just mentioned pay you dividends on a regular basis could be quarterly, monthly, just depends.

24:18Elizabeth Ayoola:You could also do REIT, CDs, T-bills, bonds, and just so many other options. So are there any that you already have researched and thought about? No, I haven't. I looked at putting the money into the stock market and it just seems really risky to me because that is all of our money. And I also don't want to, since we're all the way in Spain, and if somebody doesn't pay their rent or we run into trouble here with one of our rentals, then we have to have cash available to us to cover expenses each month while that lasts.

24:56Sean Pyles:Let's talk about timeline a little bit because that can direct what kinds of investments might be most appropriate for you. How long are you planning to stay in Spain? That's a loaded question. And we originally thought about two years. We then expanded to probably four. And right now we just don't know. It's open-ended. I haven't heard of anyone moving to Spain and saying, you know what, I can't wait to go back to the States. I can't wait to have all these health care expenses in the United States again. Exactly. Just one of the things. I just, I really don't know. But we're leaving it open-ended.

25:34Sean Pyles:And when do you think you'll need the money? It seems like you'll want it pretty continuously immediately. Is that right? Correct. Yes. So the way that our budget is going to work, we have, and again, it's because the dollar is so inexpensive right now. The money that we're getting from the United States to support us in Spain will be less than what we had originally budgeted. And as a result, it's not going to cover, for example, our fund travels and it's going to cover our expenses every month, but it won't be for a lot of fun and kind of additional activities. The savings, what I'm hoping it'll do is going to give us some of that fund money, our travel money.

26:20Sean Pyles:For short-term investments, things like T-bills, treasury bills, and certificates of deposit can be a handy way to have continual money, although often you'll have to wait maybe a year to be able to see the money return to you. So in the absolute immediate term, less than a year, that high yield savings account might be the easiest way for you to get some money coming out. Depleting your savings might make you a little bit nervous, but that's just going to be one of the easiest ways to get funds to fund your day-to-day life and travel that you might want. There is a strategy called a CD ladder where – are you familiar with certificates of deposit and how they work?

27:01A little bit. I wouldn't say I'm an expert by any means. Sure.

27:04Sean Pyles:I'll give you a really brief rundown. It's an account where you can put a sum of money in and you get a set return if you keep the money in that account for the specific term. Some may have a term of a year. So with a CD ladder, you would have a bunch of CDs, kind of like rungs on a ladder. So after the first year, you're getting some money from it, but then you have another CD that was maybe a two-year CD. So then after that, you're getting the money the next year and so on for as many years as you want to establish this ladder for. That can be a helpful way to ensure that you're getting continual amounts of money.

27:37Sean Pyles:And generally, the longer the term on your certificate of deposit, the better rate you're getting. So that might be a system that you could set up. You could also invest in something like a real estate investment trust or REIT, which Elizabeth mentioned earlier. They are pretty great ways to get money back from investing via dividends. But one thing to keep in mind is that it's really important if you are going to be investing while living abroad to establish the accounts like a brokerage account before you go. Because there have been some laws changed recently, especially related to the Foreign Account Tax Compliance Act or FATCA, which has made it more challenging for people to set up brokerage accounts while living abroad.

28:21Sean Pyles:So I also would encourage, strongly, strongly encourage you and your husband to meet with a CPA who has experience helping clients living abroad because you don't want to find yourself suddenly in a difficult tax situation where you aren't able to open a brokerage account that you need to open or you find yourself owing more taxes than you expected because you didn't know that something existed like the VATCA. So that's something that would be smart to do in the next couple of weeks.

28:50Elizabeth Ayoola:Thank you. Yes. So I know you have this lump of some$150 ,000. Do you have an emergency savings anywhere or is that just all of the liquid cash that you have sitting around? This is it. That's why I was thinking maybe we pull 50 of it and have it stay in the savings account so we can access it as soon as we need it. And then the other hundred maybe go into one of those other options that you guys were saying. Yeah. And honestly, I want to point out, especially since you said one of those options, you have a nice sum of money to work with. You don't have to choose one. So you can diversify and put your money in the different places.

29:30Elizabeth Ayoola:And also, I want to encourage you to play with a compound interest calculator, which we have on nerdwallet.com, because it'll help you see essentially different scenarios. So if I put X amount in a CD or inside a treasury bill or wherever else, how much potential returns could I get? So that might help influence or help you make a more informed decision about where to put your money as well. That's a great idea. Thank you. I'll use that tool.

29:55Sean Pyles:Ellie, you also mentioned to us before the recording that you have an investment property, I believe, in Utah. Is that correct? And you're considering maybe selling it. Talk with us about this property and why you're thinking of selling it. So we bought this property not too long ago. Interest rates were already pretty high. It was a single family home that we turned into three separate units. We got all the proper signatures through the city and it's all legit. And then we were able to rent out each unit. However, because it's so expensive to pay mortgage and the utilities, what we make from that property is about$700 a month on average, which can easily go away with just one plumbing challenge or a roof leak.

30:44and then that's a few thousand dollars to fix. And if we were to hire a management company, we would pay them about that much as well to take care of the home. So I'm not sure what to do with it, whether to wait and see if interest rates go down and refinance, because once I refinance, it'll be a significant difference if interest rates go down to four or even 5%. But if I sell it, then we would have more liquid cash. And I don't necessarily know how what I would invest it. Ideally, we originally thought to move this money to Spain and buy property there, maybe buy a duplex where we live in one and we rent out the other or have it for our guests.

31:36But again, because of the value of the dollar, this becomes a very expensive strategy, and I don't know that that's ideal.

31:45Sean Pyles:Well, one good thing is that you already have this asset and you have some amount of equity in it and it's bringing you money on a regular basis, even if it's not a lot. So the part of me that also just became a landlord and is renting out a house I was considering selling thinks that it's not a bad idea to hold on to this source of money, even if it's not a tremendous amount. And for me, my property manager charges 10 % of my rent. So say you are paying$70 to keep this money coming, you're netting$630 a month. That's not bad, even though, yes, you're being hit by the conversion rate. And living abroad in Spain, you're going to have continual currency risk as the value of the dollar changes.

32:30Sean Pyles:but I think for a sense of security and consistency, it might be wise to wait at least six months to a year to see how well you really like living in Spain, what you might want to do with this money and this equity before making any decisions in the short term. No, that sounds good. And I also listened to, you had a guest on a previous podcast not too long ago who said, don't ever sell. Yes, our fellow nerd, Lisa Green, these words ring in my ears almost daily. She said, after selling properties, whenever she's done it, she's very shortly thereafter regretted selling those properties. And I've heard this from other people who've done a lot of real estate investing too.

33:11Sean Pyles:You've already gone through the hassle of acquiring the property. You might as well hold on to it again, at least for a little while. And of course, I'm not telling you what to do with your money here, but I think it's important to be really measured in how you're making big decisions like this and understanding once you're living in Spain, what your monthly and daily cash flow is really like. You might be able to get by on less than you expect. And if money does feel too tight, you could begin to branch out and maybe your husband could look into some contractor work out there, or you could look into building a house there.

33:41Sean Pyles:Are you going to be doing any work there, you or your husband? I think so. I just don't want to have to go to work. But we're still very young. We're in our early 40s. And so we will probably do something. I'm sure he's going to build something. He loves building. It's like playing with Legos for adults. And then I have a master's degree in English. And so when I was shopping around for schools, there was so much interest in me joining a school somewhere to teach English. So that's always an option.

34:19Elizabeth Ayoola:And Ellie, just for listeners, I want to point out that it sounds like your husband is doing a little bit of barista fire, but barista fire is essentially when you have saved enough where you can work part-time and do exactly what your husband is doing, what he loves doing, building things, but you don't have to worry too much about money in that sense. So do you guys have a long-term plan in terms of how long your savings are going to last for? How far ahead have you thought in terms of how much you saved? We've thought lifelong because this cash was supposed to be another property investment.

34:54So we have more than the house in Utah. We met in our early 20s and we were very strategic about how we want to go about this. And the sacrifices included not traveling like our friends did and not going to Palm Springs every weekend to have fun with the water slides and things like that with the kids. All the extra money went into buying properties and then building properties.

35:23Elizabeth Ayoola:Since most of your income came from real estate, how much went into investment accounts, if at all? None. We didn't put it into the stock market or any other investment?

35:35Sean Pyles:We don't generally suggest that people invest in the stock market with money they'll need for sooner than five years because of the ups and downs of the stock market. So that is why we have been turning you towards something like T-bills or CDs to look into, just so that you can have that liquidity. But again, since you don't have anything in the stock market besides your retirement account, that would be something I would just really strongly encourage you to look into. Well, I know we've run through a lot and there's still a lot of open questions and you are moving in two weeks. So I assume your life is in boxes right now.

36:07Sean Pyles:How are you feeling at the moment? And what do you think your next steps might be? I'm really excited. But we are in boxes. We are pretty much all packed. We are renting out our home too. My next steps are really to go over the list of ideas that you guys shared and see what would work best. And I think to Elizabeth's point, I may have to split things because I do want to have access to some of the money immediately as I need it. And then I don't really think we're going to need all of it. So I can take maybe bigger risks.

36:45Elizabeth Ayoola:Well, great job on retiring early. Again, congratulations. And please, please, please keep us posted. We want to know how Spain goes, how your kids love it. We want all the juicy details. So please write us, text us and share. Awesome. I would love to and will do. Thank you for your help. Thank you. And that's all we have for this episode. Remember, listener, that we are here to answer your money questions. So turn to the nerds. You can call us. You can send us a text at 901-730-6373. That's 901-730-NERD. You can also email us at podcast at nerdwallet.com. We want you to join us next time for our mid-year money check-in and to hear us speak with a listener about how to get a handle on their spending.

37:29Elizabeth Ayoola:You can follow Smart Money on your favorite podcast app, whether that's Spotify, Apple Podcasts, or iHeartRadio. And when you do that, you're going to automatically download new episodes. If you're listening on Spotify, leave us a comment right on the platform.

37:43Sean Pyles:Here's our brief disclaimer. We are not your financial or investment advisors. This nerdy info is provided for general educational and entertainment purposes and may not apply to your specific circumstances. This episode was produced by Tess Vigland and Anna Helhosky. Hilary Georgie helped with editing. Nick Parissimi mixed our audio. And a big thank you to NerdWallet's editors for all their help.

38:04Elizabeth Ayoola:And until next time, turn to the nerds.

38:13Sean Pyles:Smart Money fan, if you're getting this, it's because you live in the Chicago area. And guess what? Elizabeth and I are going to be in Chicago the week of October 19th. And we want to talk with you.

38:24Elizabeth Ayoola:We're going to be recording episodes and we want you there. So do you have money questions around how to overcome any money fears you have? Maybe you're trying to save for the holidays and don't want to overspend and want us to help you look through your budget.

38:36Sean Pyles:Also, guess what? It's almost 2027. So it's time to start thinking about your New Year's financial goals. Elizabeth and I can help you sort those out too. Or if you have any other financial question, talk with Elizabeth and I about it live on the podcast in Chicago the week of October 19th. If you're interested in joining us, send an email to podcast at nerdwallet.com with the subject Chicago and let us know what's on your mind and hopefully we can find a time to talk. You can also send us a text or leave a voicemail on the nerd hotline at 901-730-6373. That's 901-730-NERD. One more time, Elizabeth and I will be in Chicago the week of October 19th and we want to hear from you.

39:15Sean Pyles:Send an email to podcast at nerdwallet.com with the subject line Chicago.

39:18Elizabeth Ayoola:We can't wait to meet you. And I promise we're really fun in real life.

39:22Sean Pyles:And after we finish recording, we might just go to Portillo's together. We'll see.

39:26Elizabeth Ayoola:See you soon. Push your limits. Train with precision. See the results. At Equinox, that's high performance loving. Iconic spaces that inspire. Personal training backed by real data. Unlimited group fitness classes from yoga and Pilates to strength and conditioning. Elevate your post-performance ritual with saunas, steam rooms, cold plunges, and more. Everything you need to lock in and unlock your potential at Equinox. Start today at equinox.com.