Am I Investing Fast Enough to Retire Early in Portugal?

Mindy:
Welcome to the BiggerPockets podcast show number 288, Finance Friday edition, where we interview Brandy and talk about self-employment, short-term rentals, tax planning, and geographic arbitrage.

Brandy:
Are we on the right path because we have net worth, but we’re so heavy in real estate equity at this point that even when I track our FIRE numbers and track the potential of moving to Portugal as an opportunity in the future, I just wonder, “Am I thinking of this in the right way?”

Mindy:
Hello, hello, hello. My name is Mindy Jensen and with me as always is my infant co-host who has never heard Rocket Man from Elton John, Scott Trench.

Scott:
Mindy, I really don’t like it when you take these intros and use them as an opportunity to projectile on me your frustrations with my youth.

Mindy:
I try to make these intros funny and Scott’s like, “I don’t know that song.” How do you not know that song? It’s Rocket Man by Elton John. I don’t know why it’s stuck in my head today, but anyway, Scott and I are here to make financial independence less scary, less just for somebody else, even little kids, which is not the guest today, to introduce you to every many story, even those of you who are starting a little bit later in life, which doesn’t apply to Scott because he’s 12, because we truly believe that financial freedom is attainable for everyone no matter when or where you’re starting, even if you’re 12 like Scott.

Scott:
All right. That’s right. Whether you want to retire early and travel to Portugal, go on to make big time investments in assets like real estate or start your own business, we’ll help you reach your financial goals and get money out the way so you can launch yourself towards those dreams.

Mindy:
Okay. Don’t take me ripping, Scott, as anything away from today’s awesome episode. We are to talking to Brandy today and Brandy did get a bit of a little later start saving for retirement and planning for her retirement goals. She discovered financial independence and she’s like, “Ooh, I would like to do that.” She is considering some geographic arbitrage by way of Portugal, moving to Portugal like I believe it’s Amon and Christina from the YouTube channel where they talk about leaving the Bay Area and moving to Portugal to live their best life, and Brandy would like to do that, too. So we have a really great show for you today. Bottom line is even if you’re starting later in life, you can still reach financial independence.

Scott:
Yeah. I really enjoyed today’s show with Brandy. I think she has got a very unique and complicated financial situation. It’s a strong one and a very specific goal of moving to Portugal. It’s fun to kind of discuss the options with somebody who’s got that kind of clarity and the potential and the ability to make moves the way that Brandy does. So I think this is a fun show, and I think, hopefully, we’ll get the wheels turning in thinking about what’s possible on what can I do and how soon can I do it to get what I want out of life.

Mindy:
She’s got a lot of different options, and some of them include staying where she is and continuing on, and some of them include moving to another country. There’s a lot of different levers she can pull. She can have a different combination of what she’s got going on, continuing on, putting it on pause. I love the options that she has created for herself. I think she’s really least set herself up well. So I disagree with her when she says, “Ooh, we’ve gotten a late start in life.” I think she’s doing really well.
So before Brandy joins us, I have to tell you that the contents of this podcast are informational in nature and are not legal or tax advice, and neither Scott nor I nor BiggerPockets are engaged in the provision of legal tax or any other advice. You should seek your own advice from professional advisors, including lawyers and accountants, regarding the legal tax and financial implications of any financial decision you contemplate.
Brandy and her husband got a later start on their journey to financial independence, but they’ve got three rental properties and an assortment of self-employment income to really boost their income generation. They plan on moving to a lower cost of living country, Portugal, to really get the most bang for their retirement buck. Brandy, welcome to the BiggerPockets Money podcast.

Brandy:
Thank you, Mindy, and thank you, Scott. I’m so excited to be here.

Mindy:
I’m so excited to talk to you today. Let’s get an overview of your money journey and then jump into your numbers.

Brandy:
Sure. So first, let me say going through my money story almost felt like therapy. I had to really look back and say, “How did I get here?” So it was an interesting process. So where I think it’d be interesting to start is looking back at when I was a child what were my earliest money influences, what do I remember about growing up, and what I can recall is really living paycheck to paycheck for a while, having a single mom who really worked hard, but then we had a major change when I was in elementary school where we moved to an upper class neighborhood in the Silicon Valley.
So we went from living paycheck to paycheck to suddenly being in an expensive neighborhood, and my mom had gotten remarried, and he was a real estate investor and worked in the corporate environment, but what I remember is they just were not on the same page financially.
So this would influence me later in life because, eventually, he would buy properties without including her and do things without including her in the conversation. So this really, as you’ll hear my later story, makes sense how I got into Dave Ramsey and Financial Peace University and making sure that my relationships had me and my husband on the same page.
So that my earlier years. When I started getting into my 20s, I didn’t know much about money. I worked hard. I started working at 15. My first job I made $3 an hour, and I remember just being happy to have a job, but later, I actually started a business. I started a store in the Bay Area, and unfortunately, I was not prepared to have a business. I did not reinvest my profits. I borrowed heavily on credit cards, and unfortunately, I ended up going through bankruptcy, and on top of that, ended up owing a large amount of money to a family member when I had borrowed on all of these credit cards. So not only did I go through bankruptcy, but I had this obligation to pay my family member back. So this was really the start of my money journey, personally, because as a result of this failure, this business failure, I decided to learn about money. So I went back to school.

Scott:
What year was that business failure and all that? When did that all transpire?

Brandy:
So that was in the early 2000s.

Scott:
Early 2000s, okay. Thank you. Sorry about that. I just made sure to get the timeline.

Brandy:
Yeah, no problem. So it was a really hard time for me. I was single. I’d gone through this business failure, and realized I just was not prepared to have a business, but it was a good lesson to learn because I decided to go back to school and learn everything I could about money.
So I pursued an MBA at night. I landed a full-time job working at a CPA firm. I wasn’t financially savvy enough to work in the accounting department, but they actually gave me a position in their retirement plan department, interestingly enough. At that time, I spent several years working full time, going to school at night, and I also landed three clients on the side, bookkeeping on weekends, at nights, and just spent two years just hustling to get out of that $80,000 debt.
So that’s what I ended up doing. I ended up paying that off in a couple years, and then graduated with my MBA very tired, but ended up finishing that, and that was about the time that I met my husband right after that.
So at that time, my mom, who was originally from New Zealand, had already moved over to South Carolina from the Bay Area, and she had been wanting me to move to South Carolina for a while, and it was just the perfect timing where I had graduated. We were starting to look at properties in California, which were half a million dollars for a small place.
My mom called me up and said, “Hey, I found a property in Hilton Head, South Carolina across from the beach.” It was $75,000. We could have a tenant already living on one side and we could live on the other. So it was a duplex opportunity, and I already had a remote position with a California job.
So my husband and I decided to, well, my fiance at the time, we decided not to get married at that time and use the money we would’ve used for the wedding to put down on this property. So we moved across the country without actually seeing it other than pictures and just decided it’s a no-brainer. I’d never been anyone to take any risks like that. I’ve always been very, very risk averse, but this just seemed like it made perfect sense. So we moved across the country, and I kept my California income, worked from home. We could walk to the beach every day and we had that long-term tenant.
So this was 2010 that we moved across the country and did this, and then after the tenant moved out, that’s when I started getting into Vrbo, which most of my neighbors in the complex were doing, and then eventually got into Airbnb very heavily.
So from there, both my husband and I found local jobs in Hilton Head, South Carolina, and I kept renting out the property, managing it myself, and eventually just got into the rat race, corporate rat race. So we had our son and we moved to a neighboring town about 20 minutes away and bought a property out there, our home now. That’s when I started to rent out our property more full time, really heavily on Airbnb. Spent the next several years just getting promoted at my job in South Carolina, but really just still following that same mentality of just work hard, keep grinding, never really pursuing anything that I was passionate about, although I loved the people that I worked with.
So because of that, I then started to really find you guys. I started to research what were the other things that I could do to help us get caught up financially because we never really had a lot in retirement, nor my husband or I. So I found BiggerPockets. I started to find out about Dave Ramsey. I started there with paying off all of our debts, paid off my student loans, and then started to find out what are the other options.
So in using BiggerPockets, that’s actually how I found our second property, our rental property is I used some of the advice that you guys use to analyze deals. Also, I had heard a podcast episode about someone talking about purchasing a rental property to pay for education, college education. So I found that really inspiring with my then two-year-old thinking, “Okay. If I buy another rental property, I could use this as this college education.” So we ended up buying a second property in Hilton Head.

Scott:
Is that the idea? Are you about to explain what you did to pay for the college education?

Brandy:
I’m sorry.

Scott:
Are you about to explain that? I’m sorry. I just wanted to give a highlight on how that strategy works if you were not-

Brandy:
No. You can go ahead and explain. I was just going to continue the story, but no, you’d probably do a better job of-

Scott:
Is that where you buy a duplex, you put down $60,000 in a $240,000 duplex, put on a 15-year mortgage, let it get completely paid off, and then when your kid goes to college, you just cash out, refinance, and pay for college or you can cashflow with a payoff property, and then you put on a 30-year mortgage and then you pay for the grandkids’ college by doing the exact same thing downstream. So I really like that very simple approach to paying for college. If you can, of course, come up with a down payment or buy the property today.

Brandy:
Right. Yeah. So yes, that was pretty much the idea, even though I didn’t put it on a 15, I did put it on a 30-year. So that our second property, which we ended up getting just a few blocks away from the first, but this time it was beachfront. So it’s a beachfront condo in Hilton Head.
So again, just continued on with working, taking on a lot more work, a lot more responsibility, but just started getting burnt out and just saying, “Okay. What else is out there?” So got to the point where decided to go ahead and quit my corporate job, to spend more time with my son who’s in elementary school, figured I can’t get this time back. So this was all pre-COVID. This was all I would say this summer right before COVID, and we ended up by our third property at the same beachfront location, and this was just a few months before lockdown when we closed on that property.
So at that time, I was very scared. All of our reservations were getting canceled by Airbnb. I didn’t know if I’d made the biggest mistake of suddenly being self-employed. When I say self-employed, I forgot to mention that I had had an eBay side hustle, and I had figured instead of going to work at 7:00 in the morning, coming home at 8:00 at night, working on weekends for my corporate job, I figured I can come up with the money myself to replace this corporate income.
So I decided to pursue my eBay side hustle full time. I also manage our own properties and do the cleaning, which actually, that’s something we can talk about if that makes sense, but it did bring in at least $25,000 extra income instead of having to pay that out, also cutting daycare costs. With COVID, I ended up reaching back to my employer and was able to take on contracting income.
So all of this ended up putting us in somewhat of a better position once we got through COVID into the other side. So that’s really how we got here. Funny enough, I would clean my properties last summer, and with all of this equity in our properties, I would start to listen to the Finance Fridays and just think, “Oh, if I could just talk to Mindy and Scott and just say what would they do in our position, are we on the right path,” because we have net worth, but we’re so heavy in real estate equity at this point that even when I track our FIRE numbers and track the potential of moving into Portugal as an opportunity in the future, I just wonder, “Am I thinking of this in the right way?”

Mindy:
Well, Scott, I think in order for us to really get a good feel for her residential real estate, we are going to have to go spend a week at her beachfront property and really get a feel for what she’s got there before we can go any further with our advice here. So we’ll be back in a week.

Scott:
Think of what’s she’s doing at the property in February. Yeah.

Mindy:
Yeah. Last week would’ve been great. Last week it dipped into the negatives here. So first of all, I think you are doing really, really well. What is your duplex across the street from the beach worth now?

Brandy:
So we bought it for 75. In the complex itself, we had a recent sale almost 500,000.

Mindy:
Oh, my.

Scott:
It’s pretty good.

Mindy:
So yeah, you’re doing okay on that one property.

Brandy:
On that one property, yes.

Mindy:
Then you have two beachfront condos that are in the same unit or same property.

Brandy:
Yes.

Mindy:
What did you pay for those and what are those worth?

Brandy:
So I paid between 140,000 to 150,000 each, and they’re up to about 280-290. They’re much smaller units, but it’s the location. They’re really great for rentals because of the location.

Mindy:
Yeah. So you’ve basically doubled your money on those?

Scott:
Are they all short term rentals?

Brandy:
Yes.

Scott:
Okay. Well, great. Why don’t we go through all the rest of the numbers here and start with that profit and loss and then go and circle back to the rest of the assets?

Brandy:
Okay. So for our profit and loss, I’m going to use based on our numbers from last year, but also based on where I think we’re going to be this year. So I’m still doing the contract work part-time to bring in some extra money. So I anticipate that will be about 16,000 for the year. So these are going to be annual numbers that we’re looking at. My eBay business is up to about 95,000 gross annual, and my husband’s W-2 salary is about 67,000 annual.
The rental income before cleaning income is about 115,000 for all three properties combined. Last year, I brought in about 25,000 in cleaning income instead of me paying it out to someone else. This year, I’m looking at outsourcing that, especially as I start to travel and scout to Portugal. So I expect a drop in that cleaning income to maybe $8,000. So that gives us a total of about 300,000.

Scott:
Awesome, and where’s that going? What’s offsetting that?

Brandy:
So this is where I do use the zero base budgeting where I give every dollar a job. So I have actually outlined that all that 300,000 would go to, we would be maxing out our HSA this year, my husband’s family HSA. We would max out my husband’s traditional 401(k). I don’t know if you want me to give you numbers as I go through for those.

Scott:
Yeah. I think that would be helpful.

Brandy:
Okay. So maxing out the HSA would be around 7,300. The traditional 401(k) for 2022 would be 20,500. I would like to increase our emergency funds. I have three emergency funds, one for personal, one for my eBay business, and one for our rental properties. As I’m sure you’re aware with rentals, especially in our area, we’ve got peak seasons. So suddenly in March through August, it goes through the roof, but for the rest of the year it’s very slow. So really, we’ll eat into the emergency funds through the winter. So right now, they’re pretty low. So I’d like to get them back up. So I anticipate putting about 20,000 back into the emergency funds.
Our household expenses, I’ve got estimate at 62,000 for the year. The rental expenses are pretty much about the same, 62,000 a year. So with short-term rentals, the expenses are high. My business expenses are estimated about 27,000. I took a total guess on taxes and plugged in a number of 38,000. We will usually do improvements in the rental properties when it’s low. So I’ve got some improvements planned like replacing water heaters, doing some kitchen improvements for about 20,000.
This is the worst time for this to happen, but one of our cars may possibly be going out. So I need to look at purchasing another vehicle. So I’m putting in a line item of 20,000 just with what’s going on in the market right now, even though I’d like to get the cheapest car possible. Then travel, I have 10,000 because, again, we’re going to be going to Portugal to start scouting. So that gives every dollar a name of that 300,000.

Scott:
Let’s go through these by income stream real quick. So we have a contractor, you said your $16,000. What’s offsetting that? What are the expenses associated with being a contractor?

Brandy:
Well, there are no expenses other than taxes.

Scott:
Okay. What is that nature of that work again?

Brandy:
So I do project work with my old employer.

Scott:
Okay. Great. So you can do that from anywhere around the world, right? So that is something you can continue to do from Portugal.

Brandy:
Actually, yes. I have asked them and they said they don’t see a problem, but we’ve also had a change in ownership. So that’s up in the year, but right now, I have a contract that’s active with them.

Scott:
Okay. Great. Then give me a refresher on the eBay business again. That brings in 95,000.

Brandy:
Yeah. So the eBay business, I pick up things that I see have value, and then I resell them. So this started as a side hustle because we have an upstairs bedroom and I looked at, “Do we end up renting it out for extra income?” My husband never felt comfortable with that. So I figured let me turn that into an office workspace. So I have all my inventory upstairs, and I just pick up things and sell them and it’s slowly grown. So that’s where the income’s coming in. When I say eBay, I also mean sites like eBay, Poshmark, Facebook Marketplace, and then as far as the expenses for that, I don’t have very high expenses. It’s really buying inventory, business supplies, shipping expenses, and site fees, and then I reinvest 100% of the business profits.

Scott:
Okay. So this is not something that you could easily take with you to Portugal.

Brandy:
No. So if we go to Portugal, I would anticipate the eBay business would stop 100%.

Scott:
Okay. Great. Then W-2 salary, would that also stop or would there be other work that you guys would look for in Portugal?

Brandy:
That would also stop. What we’ve looked at for Portugal is possibly pursuing the passive income visa, and either looking at me continuing with contract work over there or potentially keeping one rental property here while we’re exploring that, but I know for myself I’ve always worked. I’d like to potentially get an Airbnb in Portugal or more. So I know I wouldn’t do nothing. As far as going and getting a job in Portugal, that’s not something we’re looking at right now.

Scott:
Okay. Great. We’re just going through these, right? Your contractor income could continue. Your eBay business will not. Your W-2 salary will not. Your rental income will continue most likely with that with zero cleaning income coming in from that. So all the other things will be managed remotely it looks like, and there’ll probably be some other expense that you layer in, but you should generate about $50,000 in profit from that business, plus maybe another 20,000 between other items like contractor work or other things that you could fairly easily generate where you do move. Is that a reasonable assessment of the current income state and what would happen after the move?

Brandy:
Yeah. That sounds reasonable.

Scott:
Okay. Great. Let’s go through assets, the net worth here.

Brandy:
Okay. So for the assets, sorry, let me just drag this over. So for our emergency funds, again, they’re lower than I’d like, but right now, I have about 10,000 for the rental properties. I have 8,000 for our household and 12,000 for my business, all just in regular savings accounts. I also want to note we have an unused HELOC also as a backup for $40,000. That is an active HELOC, but that’s been paid off, and we’ve been slow to investing, but we do have non-retirement index funds that we’re investing in of about 61,000. Both of our cars are paid off. We have about 7,000 in HSA.
Now, I still struggle with this one, but for my business, I do not have a solo one 401(k) or anything I keep hearing on the show. I have a simple IRA that my CPA has recommended. So I have 12,800 in there. So I do want to start looking into the possibility of the backdoor Roth and things that I’ve heard you guys talking about.
Then I have Roth IRA of 7,000, and then we have other retirement accounts of a total of about 135,000. We have 10,000 set aside for college, and for the real estate value that I’m seeing today like on mint.com and Zillow for the three rental properties is about a million dollars for the three of them combined. Then as far as what we owe on those properties, and we have about 353,000, so that would bring the net worth to about 910,000.

Scott:
That’s awesome.

Brandy:
That’s not including our home. So our home we bought for about 200,000 and now they’re selling for about 585 in our neighborhood. We owe about 172 right now. So if I included our home, that would give us a net worth of 1.3 million.

Scott:
So I think you can include your home in this scenario because you’re going to be moving, and presumably, you’re going to do something with the home equity when you move. What is your plan?

Brandy:
Well, so my plan would be to buy a house cash in Portugal. I don’t know if that’s the right decision, but that’s something that I’ve always … If I considered being financially independent, retiring early, to me, it made sense to buy a house cash. Now, if we pursued Airbnb properties in Portugal, I would not pay those cash. I would finance those. So that’s why I didn’t include the home, but in a perfect world with what I’ve seen so far, I would cash out the home here, pay a house in cash over there, but then also buy one or two investment properties with the difference because the home values are just not as high.

Scott:
I’m sure it’s obvious, but I would love to hear from you. What’s the appeal of Portugal? Why do you want to move there?

Brandy:
So I actually have never been to Portugal. What’s funny is that just like listening to BiggerPockets, getting interested in the FIRE community and all of these different things that I’ve started researching over the years, I found a couple that were originally from the Bay Area and have a YouTube channel and started talking about how they had pursued FIRE and retired early and fell in love with Portugal. So I didn’t intend to go down that path, but once I started seeing their reasons for moving to Portugal, I found this huge community of expats that have moved to Portugal, a huge community of American expats that are pursuing FIRE and have moved to Portugal. The reasons really are Portugal is the third safest country in the world, whereas the US is the number 190 or somewhere way down on the list. The cost of living, even though it’s increasing over the years, it’s much better over there.
So I figured, “How can we speed up the process to take advantage of a lower cost of living but with a better quality of life?” We’re big foodies. We love to eat out, and over there, it’s supposed to be very affordable to eat out, travel, and do a lot of the things that I would like to start enjoying more in my life now. I feel like we’ve been grinding for a while, and I’m ready to now look at the next chapter of how do we really enjoy life more with the money that we’ve accumulated.

Scott:
Awesome. Well, I love it. Well, thank you for sharing all this detail and the goal. What’s the best way we can help you today?

Brandy:
So where I’m at and why I wanted to reach out to you guys is, really, it’s been driving me a little crazy over the last year of just seeing the market go really increase with the properties and seeing 70% of our net worth in real estate equity. I’m just wondering, is there something else that you would recommend to, one, help us achieve FIRE sooner because I’ve calculated what our FIRE number I think would be, and it looks to be about a five-year plan, I think. So I wanted to see if there’s anything you would recommend to maybe tap into the equity. If it was you, is there something different that you would do to help get us there?

Scott:
Why are you not there right now?

Brandy:
For FIRE?

Scott:
Yeah.

Brandy:
Well, I mean, I use the 4% rule, and it seems like we would need about at least … No?

Scott:
I’m shaking my head, sorry. The 4% rule, in my opinion, does not apply to your situation at all because most of your net worth is in real estate. So it’s simple. It’s simple. What’s your income less your expenses at this point, right? The 4% rule applies to a mixed 60/40 stock bond portfolio. You don’t have hardly any stocks. I mean, that’s I think 15% of your position if I’m doing that back at the napkin, right? So I think I think it’s income less expenses here. Sorry. Go on. Keep going.

Brandy:
No, no, no. I mean, that’s why I wanted to get your input because maybe that’s where I’m getting confused is I started thinking, “Okay. We’ve got all of this equity in our properties. We’d love to move to Portugal. Should we consider at some point cashing out those properties and putting that equity, for example, into the stock market?” I know, and that scares me after death.

Mindy:
So what I’m seeing, we’re recording this on March 1st, it’s not going to release until I think April 6th or something, April 8th, down the road, and right now, we are in the very beginning of the Ukraine and Russia war conflict, whatever we’re calling it. So the stock market is down, and it came up yesterday a little bit. It’s definitely in a position of volatility. What I’m seeing from your numbers is that your household expenses are $62,000 a year and your Airbnb income is $115,000 a year.

Scott:
No. It’s $53,000 a year if we net out the expenses that she said against that, right? Her Airbnb is coming in with-

Mindy:
Oh, yeah, yeah, yeah. Okay. So there’s a little bit of-

Scott:
She’s going to move to Portugal with a paid off house. So what is the state after the move if that’s the goal that we’re looking for, which Brandy has also provided for us, which is very nice. So thank you for the extreme preparation. This is awesome.

Mindy:
Yes. So there’s a lot of moving parts, but I’m still seeing either well-covered or almost well-covered, almost completely covered expenses based on what you have right now. I would not sell the properties because they have a proven track record for you. You’ve been taking care of them. I would almost look at what’s going on with that properties right now and say, “Okay. These are the big capex expenses in the next 10 years. Let’s take care of them this year. It’s going to dip into our income, but I’m working, he’s working. I’ve got my eBay business. I’m going to ramp up my eBay work because that’s almost pure profit. I’m going to do an audit of what I have been selling. Oh, books are the highest profit margin and crochet books are the most highest profit margin,” which is horrible English, and I don’t even know if it’s true, eBay selling-wise. I don’t sell on eBay because everything I’ve ever bought nobody wants. So my eBay-

Scott:
She doesn’t need good English anymore.

Mindy:
My eBay selling career was a disaster, but that’s okay because you’re not competing with me anymore. Good for you. I’m glad you’ve been able to find something that you can sell because I couldn’t, but this isn’t about me. It’s all about you. Take inventory and take stock of what is selling really well for you and then go pursue those items to really generate as much income on eBay as you can this next year while you’re still at home. When are you planning to move to Portugal? Two and a half or three years from now?

Brandy:
That’s the original plan. Now with everything going on in the world, I don’t know how this may change things, but originally, I thought while my son is young to help him get situated or acclimated over there. So definitely in the next couple years or potentially longer because I guess the big question for me is when I’ve looked at other real estate investors that have done the same thing, most of them say, “Don’t keep properties over here and try and manage them from afar.” So that’s the question that I have of do I keep them and move to Portugal and keep the properties here because they’re doing well or do something else with that equity.

Scott:
Well, I’m just observing this and I think you could make the move right now, today. I think you’ve you finished the journey at a bare bones level to this and probably would be just as successful or if not more successful over in Portugal with this based on the very high level understanding that I’ve got going of your financial position. It sounds like the biggest thing would be your eBay business and your husband’s job, but it sounds like I bet you could probably recreate those pretty quickly over in Portugal, and you don’t need them necessarily. You would be able to barely make it without either of those things, and you’d almost, based on your willingness to do something, you’d probably easily be able to cover the remaining buffer.
So I think you’re good today to make that switch over if that’s what you wanted to do. So I think the question is less about whether you can do that or what your financial position will bear and then how do you just pad that as much as possible in the next couple of years while you’re actually contemplating getting serious about making the transition. Am I framing that correctly or do you agree with that?

Brandy:
I think so, but what are you recommending with the properties we have now? To sell them and then reinvest it in Portugal?

Scott:
Why not just run the P&L with a property manager and say, “What does it look like if I have a property manager in place here?” If you’re going to move over tomorrow, you probably need a good six to nine months to actually pull off the transition, but I think you’d need a good property manager and you need to say, “Great. I’m going to do short-term rentals. I’m going to bake in 15%-20% for my property management fee on that, and I’m going to have no cleaning expense. What does that look like? Do they do a good job for me without me being involved in there?” That’s an investment I’m going to make over the next six to nine months knowing that it’s income I could be generating, but I know that I can be confident that I’m never going to have to talk to them, and I’m going to tell them my goal. My goal is to move away from here and not have to do this.
So if this works out, then I’ll be able to do that. I don’t know, but if you can figure that component out, I think you’ll have a good chance of success. While you’re over in Portugal, if you decide, “Hey, I’m going to get a better ROI by selling those properties in the US and putting that cash into new properties here in Portugal,” you can do that gradually over time with that if that’s what you decide, but that’s how I’d be thinking about the situation.

Brandy:
Okay. I was going to say, it’s funny because I tend to overanalyze and think about the different scenarios, but, again, being so busy and jumping from one thing to the next, this is where I thought if I could just get the right people in the room to have that conversation.

Scott:
Oh, yeah, absolutely. I mean, I’m sure the day to day of the last several years has been managing these properties, cleaning them, running your businesses, and you have multiple entrepreneurial pursuits going on right here, and that’s created this situation of optionality where if you pop up and look at a strategic year you’re just like, “Great. Let me hire property manager.” You’ll reduce the income to some extent, but it will be probably close to enough to put you there or if it’s not, then you know, “Okay. I need two more properties or three more properties or this other income stream that I need to figure out,” and that will help you back into that timeline. You’re not paying property management today, is that right?

Brandy:
No. I’m doing everything myself.

Scott:
So I think that would be a good potential step for you because you may not want to sell at least all of them as to at least get quotes and maybe hire one of them for at least one of your properties to see how that goes in the short run.

Mindy:
Yeah, and you could talk to them.

Brandy:
I think this summer will be a … Oh, I was going to say I think this summer will be a good opportunity because I’ll be in Portugal for a good three weeks. So it’s my first time I’m needing to outsource the cleaning and also a mini property manager since I’ll be out of the country. So it would be my first introduction to that to see how it goes without me, which I’m sure will be fine.

Mindy:
Yeah. I would start maybe even a month before you’re going to be gone. Test them out while you’re still there to catch any pieces so you personally aren’t suffering in case they sell you a bill of goods and then they actually don’t do what they say they were going to do because, yeah, property management is squeegee, and sometimes finding a cleaning person can be very difficult. Once you find them, treat them like gold, give them everything that they ask for, and be really, really nice to them, and they’ll prioritize your properties other people who are yelling at them and being mean. I certainly would.
I have several questions for you based on the things that you have shared with us. First of all, you said you have an emergency fund for your eBay business.

Brandy:
Yes.

Mindy:
Why?

Brandy:
So I just have a three month emergency fund. So I think I’d started that, especially with lockdown, because I wanted to make sure if I needed to have money for buying more inventory that I could just cover it. So I have three months of expenses for the eBay business, but everything over that, I’ve now been just putting it into index funds, but I haven’t been spending any of the business income.

Mindy:
Okay, and your business expenses or your rental expenses are $62,000. What is a short-term rental expense?

Brandy:
So let me pull that up. Also when I say expenses, even though they’re not expenses, I have included any improvements that we’ve done for the year.

Scott:
Mortgage?

Brandy:
Well, definitely mortgage. Our HOA fees are really high since we’re beachfront properties. So those are very high. Those can be close to $500 each property alone for the HOA.

Scott:
Per month?

Brandy:
Yeah, a month, but let me pull up the … I think also the cleaning fees like the cleaning supplies are a part of it, but definitely the HOA fees, the mortgage, the taxes, the rental property taxes are increasing greatly, the cleaning supplies, advertising for the properties. So for the short-term, it definitely seems much higher than obviously if we have long-term.

Mindy:
Okay. Something that I really don’t want to bring up but it doesn’t change the fact that this could be an issue, in Florida, there was the surf side condo collapse, and you have a beachfront property on the saltwater ocean. Where is the structural support of your building? Have you had a structural report? Have they done anything? Because it’s a different state so maybe your state’s not doing anything about it. I know in Florida they demanded that all condos have a structural report within the next, wasn’t it two years or something? I only know enough to be dangerous, but I know that those people owning that building and now nothing.

Brandy:
Right. Yeah. That’s something I need to look more into. I haven’t actually. I’m obviously very aware of that horrible situation, but I’m not sure where we’re at as far as structural.

Mindy:
I don’t love condos just because of the HOA fees because $500 a pop, what is that? Five nights that you’re renting it out just to pay for HOA fees. So that’s five-

Brandy:
The other thing that has been challenging for us is we’re really having more issues with hurricanes. So that was another reason why I thought it might make sense to move somewhere else because, luckily, we haven’t had any hurricanes hit in our area, but we had several years in a row where it was just every year hurricane, hurricane, hurricane, evacuation, which then as far as a rental perspective, lose out on that income. So we’ve been very lucky, knock, knock on wood, so far, but that’s also a concern of what the future holds with having beachfront properties in this area. So that’s a concern as well.

Scott:
What does work look like in Portugal? Are you allowed to work? Do you have to get a work permit or something like that?

Brandy:
No. You can work, I mean, under the visa that we’d be looking at.

Scott:
Okay. So we’re really not looking at, “Am I ready to retire and move to Portugal?” question, we’re looking at, “Can I move to Portugal and then continue working and continue building wealth from that?” If I just reframe it like that, the answer to that is a resounding, “Yes, of course, you can do that,” from your position. It’s actually going to be cheaper to live in Portugal than this. You guys are creative and resourceful enough where there’s no doubt in my mind that there would be several income streams that would blossom within the first year, and you would have plenty of cash flow to cover that or cover that even if that didn’t materialize. Is that a helpful way to reframe the challenge here?

Brandy:
It’s helpful. I don’t know why it still seems like, “Is it possible?” I don’t know why.

Mindy:
Because this isn’t normal, because in the whole context of your life, you start working when you graduated from college and you work until you’re 65 and then you retire and then you get to live the life that you want to live. So this is completely not normal and it’s very difficult to wrap your head around it. Even if you listen to the podcast, even if you’re surrounded by people who live this life, it’s still weird to quit your job when you’re 40. So I get it.
My husband, we were financially independent before he retired. We got to 2x our fine number before he retired, and it still took me having a full-time job for a year before he felt comfortable leaving his job. Even then he was like, “Maybe I’ll just go part-time for a little bit,” and when he finally left his job, he was like, “Oh, my God! I should have done this years ago,” and I bet when you finally leave your job, you finally go to Portugal, you’d be like, “Oh, we should have done this years ago,” and that’s okay.
It’s much better to have that mindset, I think, than to be, “Oh, I’m done. I quit,” and then you’re like in two years, “Oh, my goodness! What have I done? Now, I’m scrambling to find a job and I’m no longer relevant in my field because I haven’t kept up-to-date with all of my continuing education,” or whatever is involved in your field or your husband’s field.
So there’s a lot of push-pull. We sit here on this podcast and we’re like, “Oh, you should just quit your job,” but we don’t go into the mindset of it, and there’s a lot there to unpack. Carl is now okay with it, but-

Scott:
Absolutely. I think those are great points, Mindy, and I think that it is a mindset thing and we’re like, look, sitting from my seat I’m like, “Oh, yeah. You could clearly do this right now with your position-”

Mindy:
Scott has no emotion.

Scott:
“… from the numbers you’re saying there,” yeah, for sure. I think from the emotional side, things you could do in the next year to make that more palatable would be to build up the emergency reserve a little bit more, and have that cash that’s set aside so you have a year, a year and a half or whatever it is of expenses set aside so that you’re not having to worry about it if you have three problems at once at the rental properties, and things are harder than they seem. I think on the other side of $100,000 in cash you’ll feel way better about the risks of that move will seem much lower. So that would be one potential suggestion. That might be even more valuable than the next investment there.
Another question that you had was around, “Are we overweighted in real estate right now, and what does that mean from a diversification or asset allocation perspective?” I don’t think there’s a good answer to that question, that fear, that question in 2022. I think a lot of people on BiggerPockets are overweighted in real estate because real estate’s done really well over the past five, 10 years. So you buy a property for $75,000 and it turns into 500,000, you’re overweighted in real estate. That’s not a problem with your strategy or anything like that.
The question is where are you going to put it in if it’s not in real estate? Are you going to put it in cash or are you going to put it in the stock market? Are you going to put it in Bitcoin? Are you going to put it in a business that you buy? Are you going to … I don’t know the answer to that, but my instinct is that real estate is a reasonable place to park the money even in spite of the fact that there’s going to be interest rate increases coming this year in the US, but there also seems to be inflation that may offset some of that. Rents may increase even if property values go down.
Interest rate increases are also likely to impact the stock market, right? I can’t predict the market, but companies also need to borrow cash to finance things, and increasing the borrowing rates increases the cost of capital for the market as a whole, which will impact valuations, right?
So I just don’t know where to go with that money. I don’t think you have a great option at this point from a strategic lens of a safe cash flowing place to put that money other than in these properties. You’re not very highly leveraged, which means you actually have more equity at risk, depending on how you want to look at that, right? If you have more leverage, you could risk that going underwater. That seems very unlikely for your properties unless, of course, a hurricane hits and then they’re literally underwater. That’s a terrible joke. Look at Mindy.

Mindy:
You’re a horrible person, Scott.

Scott:
I don’t know that analysis. I don’t think you have a good, a great option there to redeploy the capital in those rental properties unless you were to find properties, for example, that you have more control over in Portugal that you think could generate more cash flow and that you’d be willing to operate directly. The best use of cash in your business, in your life, to me, looks like properties that you control and businesses that you control because you are a serial entrepreneur and have five things going on. That’s my assessment of the situation at a really high level, but I don’t have a good answer for you either.

Brandy:
Okay.

Mindy:
Google tells me that there are both eBay and thrift stores in Portugal.

Brandy:
Yeah. I haven’t researched it that much. So I haven’t-

Mindy:
I don’t know how to look at the Portuguese eBay because when I choose eBay in Portugal, it shoots me back to eBay in America. I think you need a VPN to really do some research, but you did research here and you found what worked. So I’m sure you could do research there and find what works there.
I’m wondering if it would be worth it to stock up on stuff while you’re here and have somebody sell it for you here, but maybe not. Let’s see. What other questions did I have? Oh, you are saving for a car. Do you really need a car? How can you get by with one car? Can you drive? Does your husband go into the office?

Brandy:
Yeah. So I believe we need two cars. So my husband is a wine rep and he drives from account to account to account, and then for myself, I’m picking up son, going to the condos, sourcing for the eBay. So definitely, I would love to ride my bike everywhere but I can’t.

Mindy:
That is a really good argument for two cars. Okay.

Brandy:
I went recently to look at a used vehicle and was quoted $30,000 or something crazy. So I said, “That’s insane,” and I left, but I know that I’d at least need to spend something to get a reasonable car. So we need something, but we also maybe moving. So I just put a reasonable line item, but maybe too high. I don’t know.

Mindy:
What is wrong with your car? Could you get it fixed?

Brandy:
So we did get a quote. It’s about $4,000 to put more money into it. I just find that every time we put money into it it just seems like this car repeatedly has issues.

Mindy:
Okay.

Brandy:
So we could. I mean, that’s something we’re looking at. Do we just patch it for now for the next couple years or year, spend 4,000 to 5,000 on repairs or do we get another car that we could potentially sell before we leave?

Mindy:
Okay. I don’t know enough about cars to discuss that intelligently.

Brandy:
Yeah, but I definitely thought about buying a car for my eBay business so at least I could expense the miles and use it as a business deduction, but I’ve always followed the mentality of I don’t need a fancy car. I’ll drive a beater as long as it’s reliable. So not sure what the option is there, but I-

Mindy:
Well, you could still expense the miles. Those are a business expense.

Brandy:
Yes. You’re hearing how used is now becoming more expensive. I don’t know. It’s just the worst time to buy a car.

Mindy:
Yeah. Oh, your HSA. Portugal, are you becoming a Portuguese citizen when you moved to Portugal?

Brandy:
Not initially, no. So I’m not sure about what we’ll do with the citizenship, but we are pursuing a passive income visa where you could be a resident for five years or so.

Mindy:
Okay, because that, if you can cashflow your any health expenses you have right now, save the receipts and cash out while you are still here so you get a little bit of income right before you move over there.

Brandy:
Oh, I was going to ask about the backdoor Roth because I heard a recent or maybe it wasn’t recent. I heard the episode with the mad scientist where he was going through the different options. That’s probably because of our income that it seems like we don’t qualify really for the Roth, but I wanted to see if it would make more sense to put money into retirement or if no, we should be really stocking up the cash.

Scott:
What do you expect your income, your AGI to be for 2021?

Brandy:
I’m not sure right now. It may be very similar to these numbers as far as what I’ve outlined here, but I’m not sure. I don’t have it off the top of my head.

Scott:
Well, your eBay business is bringing in 67. Your rental business is bringing in 53. You have 67 in W-2. Yeah. You’re probably going to be just over that limit. Maybe 10, 20, $30,000 over. Okay. Yeah. Back to Roth, it’s a viable option for you. That would be something that you could probably pretty easily do with just looking up how to set up a IRA, and then transfer the money in there, and then transfer it from that to the Roth IRA. So that would be a mechanic you could certainly take advantage of I think in your situation if you wanted to put money into the Roth.

Brandy:
Okay.

Mindy:
I was going to say I have a self-directed solo 401(k) because I have an LLC and self-employment income, and I have no other employees other than my husband. It doesn’t sound like you have any employees other than your husband. Maybe not even your husband.

Brandy:
Yeah, not even my husband.

Mindy:
Perhaps you should hire your husband and then both of you can contribute up to $20,000. 20,500 I think is the income limit or contribution limit for this year. So you can both put that in and then the company can match your contributions up to 25% of your income. So that’s an automatic 25% of $20,000, which is 5,000 additional dollars. So you have $25,500 that you’re putting into your 401(k) for you and for your husband provided you have that much income to go create those contributions, and that’s without the backdooring and the other things.
Now, he can’t contribute to his solo 401(k) and his company’s solo 401(k). What we do in our household is because I work at BiggerPockets and have the 401(k) option of BiggerPockets, we consider be to Carl’s 401(k) first and make sure that he gets his full match and max, and then we contribute to mine because I can always go to the BiggerPockets’ 401(k) and contribute that way as well.
Then right now, real estate’s humming right along so all of my income comes through my LLC and then I don’t have to worry about not maxing it out to the full potential. So that’s just another way to get tax deferred contributions, and then I’m not paying taxes. My business isn’t paying taxes legally, legally. I’m not doing anything squeegee, which is my favorite way. I would love to pay taxes. I would love to make so much money that I have to pay taxes again. I think that’s great. I think on my flip I’m going have to pay taxes on my flip and I’m so excited to pay taxes on my flip, which is-

Scott:
On a live and flip.

Mindy:
… on a live and flip, which is going to be-

Scott:
Yeah. That means there’s a large amount of profit there. That’s great. Yeah.

Mindy:
The house around the corner from me just went under contract at $800,000, which is, I don’t want to use the word insane, but it really feels unreal. This market is just unreal.

Brandy:
Can I ask you both for your input on the capex numbers that I was, because I usually don’t look at capex or, I’m sorry, not capex, cap rates, sorry, for my rental properties. So it’s my understanding that I would take my original purchase, the net income and divide that by the original purchase price. Is that how I look at it to compare?

Scott:
What’s the purpose of understanding the cap rate on your rental properties?

Brandy:
So one, I wanted to see how does that compare to just, for example, investing in the stock market as a comparison, and then the other would be if we did decide to purchase a property in the future, how to use the estimated income to determine what would be a good purchase price if we did decide to pursue another property.

Scott:
Okay. Great. So how are you calculating your cap rates?

Brandy:
So for example, with the rental property that we paid 75,000, I took the net income for last year and took that original purchase price, which would give me a 35% cap rate. Am I looking at that correctly?

Scott:
That’s probably true on your purchase price. What is the current value of the property?

Brandy:
So when I look at the current value, I took the lower, even though we saw one recently sell for 500,000, I just took 400,000 as a potential value. So then I get a cap rate of more of 6.5%.

Scott:
Okay, and that’s for the short-term rental situation?

Brandy:
Yes.

Scott:
Okay. I think that’s a more realistic understanding of the cap rate of your properties is what is their market value less their net operating income. Now, how are you calculating that 6.5% or how are you calculating the net operating income on that?

Brandy:
So I just took the income less the expenses for last year as an example.

Scott:
What did you call an expense? Did you have to replace the roof or the boiler or anything like that? Did you call that an expense?

Brandy:
I didn’t. I think the biggest improvement that we did, but my CPA said it would be an expense, would be replacing the flooring or even replacing vanities in the bathroom. So pretty much everything seemed like it was an expense. I didn’t have any roof replacement, stuff like that.

Scott:
The reason I asked is because if you did a roof replacement, you’d back that out and you’d capitalize that, and that would not be included in the expenses that would make up net operating income. So it seems like you’re calculating that appropriately, and then you could use that number to compare and say, “Okay. If I bought another property all in cash, how much income would it bring in if I didn’t have to replace the roof and do any of these other major capital improvements?” and that’s a good way to compare these types of properties. It’s not really commonly used as evaluation mechanic for the types of property. It’ll be based on comps, the property, just like mine around the corner in the same building sold for 300, therefore it’s worth 300, but I think that’s a good way to look at income generation against a variety of different alternatives.

Brandy:
Okay, because I was just wondering if that would be something to use when looking at the next property of whatever it’s listed for whatever price saying, “Okay. If I know that these are going to be the expenses, this is the math.” So I’m going to pay out of pocket to try and achieve a cap rate of say 8% or higher.

Scott:
Yeah. I think that’s right, and I think if you just buy a bunch of properties that are valued at $750,000 and then shortly thereafter could be worth five million, you’re going to be just fine if you just repeat what you did the first time with these. So yeah.

Mindy:
Yes. I would like to get in on those properties, too, please. If you can find some that are $750,000 properties that’ll be worth five million, I would like to invest with you.

Scott:
Yeah. So that’s the real trick, and that’ll be the challenge for you, and that cap rate, I would think about modifying that cap rate for your purposes based on what’s going to be the reality after you move, and that’s going to include no cleaning fee, which could be impacting some of that. It is going to include property management. So I underwrite with property management included in there and then say, “Okay. If I’m willing to, I’m going to do that myself and get that income,” which in your case will be 20-30 grand a year across the 115,000, yeah, probably in that ballpark of $20,000 to $30,000 per year, maybe more to property manage. That will impact your numbers and your analysis. So I’d make sure to include that kind of stuff because that’s the reality for your situation. I think it’s a useful tool to compare those, for sure.

Brandy:
Okay. All right. That’s helpful.

Scott:
Awesome. What else can we help you with today? What are some other questions or areas that we haven’t covered yet?

Brandy:
I think you’ve really helped me with a lot and given me some different ways to look at this. I think, really, it just am I doing everything from just a financial perspective. Is there anything else that you would look at in our situation that we may not be taking advantage of? Just to make sure that we’re trucking along and doing what we should be doing financially.

Scott:
I mean, you seem in a pretty good shape to me. You spend a lot less than you bring in. You’re taking advantage of most of the tax advantaged accounts that we have here. Mindy has already given a couple of great points on additional ways you could get more sophisticated about taking advantage or using tax advantage, retirement accounts, for example, to shield money from taxes.
I think that your situation is, because of the flexibility and the nature of the work that you guys do, I think you could zoom out and say, “It’s a matter of whenever I feel like it for when I want to move.” There’s a couple of remaining questions that I have, but your financial position is not something that would hinder you from making that move to Portugal. You just have to say, “When do I want to do it and how do I want to back into it, and what’s my situation look like afterwards?” which you’ve already done. You just have a couple of additional layers to loop in there.
I think that the cash reserve is going to be a huge item that I would prioritize even over some other investing, and I’d think about one big bucket for your life. You can break it up apart for your business and your properties and your personal life as well, but just what is that amount of cash that you need to feel really comfortable there. I think that will open up some decisions for you, and I think that, again, the property management piece is going to be a big one, understanding what the cash flow looks like when you move away and how that will be impacted by you not cleaning and not managing the properties yourself.

Brandy:
Yeah. Okay.

Mindy:
Yeah, and I would tag onto that to run the numbers on a sale of the property if you’re still considering selling the property and just taking the money over to Portugal and investing there what are your capital gains taxes going to be. I don’t think you could do a 1031 out of the country, right, Scott? That’s not even an option. You would 1031 into another property locally.

Scott:
I’m not sure. I would guess no, but I don’t know. That would be a good question for-

Mindy:
I would strongly guess no as well. Do you do depreciation on the short-term rental, Scott? I think you do, right?

Scott:
Oh, yeah.

Mindy:
You take depreciation so then there’s depreciation recapture. So you will have a tax bill when you sell. If you have a million dollars in real estate and your equity is 71% of this, you’re still going to have some tax obligations to do what tax deduction.

Scott:
That’s a really good point that I didn’t think of, that we didn’t think of earlier, that, yeah, you cannot liquidate those properties and then convert all that equity into the same value in Portugal because there’ll be huge tax considerations. So I think a CPA budget would be a really good one to talk to, to think through how that move would look.

Mindy:
Yeah, not only a CPA, just CPA in general, but just in general tax planning. Maybe you sell one property and then you have some money to work with, maybe you sell your primary residents if you’ve lived there for more than two years. Your tax burden on that one is going to be significantly less. You said you bought it for 200 and it’s worth 580. So now, you’re married, so your section 121 exclusion is going to be $500,000. So even if you work through it, it doesn’t matter. You’re not selling it for a delta of more than 500,000. So all of that money is just going into your pocket after you pay off your mortgage.

Scott:
Another one to think through here is you’re already at 70% equity, right? 30% debt on these properties. It wouldn’t take you more than a couple of years probably to pay them off with your current rate. So if you could pay them off one-by-one, that’s not the math that Mindy and I love when we invest in real estate. We like the use of leverage and the ability to get to magnify those returns, but that’s not what you’re doing. If you were to take advantage of that, you’d pull out $300,000, $400,000 and buy more property and lever up with it.
So that would be one option that would pull that to an extreme and that could generate more cash flow, would also assume more risk, and put your position even more weighted towards real estate, but in the other extremes, you just paid off the properties, then those expenses, those 60 some odd thousand dollars in expenses on your properties goes down to, I don’t know, 30, offsetting a lot of the property management expense. So something also to think about there, and that creates a very luxuriously, simple situation for you downstream.

Brandy:
Yeah. Okay. Well, definitely not to think about. I think it does make sense to meet with a CPA and start doing some tax planning to say … Well, I haven’t done that yet. So right now, we’re in the phase of actually going to Portugal, finding out the different areas that we would consider moving to and starting to look at properties over there, but the next phase I think would really be sitting down within a accountant to say, “How do we get there and what does that look like? What’s the best way to get there, especially from a tax perspective?”

Scott:
One way is just to leave them as they are, property management in place. So yeah. Well, great. Well, I hope this was helpful and thank you so much for sharing your story and your goals with us. This was a fun discussion, and it’s always really interesting to have someone with such a complex and good and strong financial position come in and get to hear ways to beat that up and think about getting to the end state as soon as possible. Really enjoyed the discussion and really grateful for you coming on.

Brandy:
Yeah. Well, thank you. I really appreciate you guys sitting down with me and walking through this with me, helping me think about it from a different point of view.

Mindy:
This is a lot of fun, Brandy. Thank you so much. We’ll talk to you soon.
Scott, that was Brandy. That was Brandy’s amazing story. I’m jealous and I want to be Brandy.

Scott:
Yeah. I think she’s got some really cool things going on, clear goal, clear vision, and I think she’s going to achieve it, and I think she can achieve it as soon as she wants. She is ready to go out there and do it right now from a financial position as far as I’m concerned, and it’ll be interesting to follow her story and see what she ends up doing. I think that the biggest takeaway we could have from today’s show is, again, this concept of flexibility, where she’s got flexibility to a large degree in her life, but mac finishing the play on that, especially from a cash position perspective, I think, personally for me, would open up a lot of doors if I had her situation.

Mindy:
Yeah. I really like the options that she has. It’s like, “Which of these 50 great ideas can I put into play?” So setting yourself up and making great decisions throughout your investing career is always going to be the best option. I mean, it’s just setting her up with multiple best options.
Her biggest problem is the taxes that she’s going to have to pay on these enormous gains that she has realized, which is a good thing. Not everybody likes taxes, but that just means that you’ve made a lot of money. So I’m pro not paying any taxes you don’t have to pay, but I’m also very pro paying the taxes that you have to pay because that’s the cost of living in a society, and she has done very, very well for herself.

Scott:
Absolutely.

Mindy:
So yeah, I would love to check back in with her in about a year and see what decisions she has made, and they had originally talked about a two and a half or three-year timeline. I’m wondering if this conversation has allowed her to start thinking and speeding up that timeline.

Scott:
I hope so and I think so. I think that she can do it whenever she wants. So it’s about whatever they feel comfortable with and whatever they feel like is right for their lifestyle, but there’s not a lot from a holistic view from their financial perspective that’s tying them to one location or another, in my opinion.

Mindy:
Yeah. Now, it’s just getting comfortable with the idea of, “Whew! Okay. We can really do this. Now, we have to actually do it,” because it can be scary. I mean, it’s one thing to quit your job and still live in the country that you have lived in your whole life, but it’s another thing to quit your job and move across the country to … We didn’t even ask her if she speaks Portuguese. I’m guessing that she doesn’t, although I have a friend who lives in Portugal who said it was pretty easy to pick up, but leaving the country that you’ve lived in your whole life and all of your family and friends behind and moving to a new country with new languages and new customs and new traditions and new everything can be a little … It’s romantic when you’re thinking about it from a three years away perspective. It’s a little more, “Ooh, is this really what I want to do?” when you’re faced with the decision. Hey, you really can do it.
So now, start diving deep into is this really what you want. So I’m excited for her. I think she’s got a lot of conversations to have with her spouse and her child and a lot of deep thoughts to have, but it’s still really exciting.

Scott:
Awesome.

Mindy:
Okay. Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
From episode 290 of the BiggerPockets Money podcast, he is Scott Trench and I am Mindy Jensen saying, “Ooh, bang zoom to the moon.” Wasn’t that from The Honeymooners? You don’t know that one either, do you?

Scott:
Nope.

Mindy:
Did you ever see an episode of The Honeymooners? Maybe that’s not nice. I don’t remember. I never watched a lot of The Honeymooners either. Bang zoom to the moon. Maybe that was a mean thing that he said. Okay. I’ll say, “Be sweet, parakeet,” because that’s nicer. Bye.