I am so, so glad that she did because her story is one of the most inspiring that I\u2019ve ever heard.<\/p>\n
Ashley Thompson: Teacher, Landlord, Traveler, 20-Something Retiree<\/h2>\n
Ashley teaches English as a second language (ESL). Though she happens to have a bachelor\u2019s degree in teaching, it\u2019s worth noting for aspiring teachers that a degree is not strictly necessary to teach ESL.<\/p>\n
Her husband Kevin is a former civil engineer. How former? Well, he hasn\u2019t worked as an engineer in over six years because he quit his job to join Ashley on her travels abroad.<\/p>\n
\u201cTravels\u201d may be too loose a word to describe their adventures. They\u2019ve lived in multiple countries and visited over a dozen others.<\/p>\n
At 28, Ashley and Kevin have nearly reached financial independence. They own eight rental properties<\/a>, with more under contract. Retirement is in the books in less than two years.<\/p>\n But we\u2019re getting ahead of ourselves. Let\u2019s start from the beginning, shall we?<\/p>\n \u201cSince I was 12 years old, it was always my dream to teach abroad,\u201d explains Ashley. \u201cAfter graduating from college, I accepted a position to teach English in Japan, and Kevin quit his engineering job to join me for the adventure.\u201d<\/p>\n But here\u2019s the thing about most teachers who move abroad: They spend, and travel, and spend, and travel. At the end of the school year, they\u2019re lucky if they\u2019ve saved anything at all, despite often having housing provided for them. (I should know\u2014many of my own friends are international teachers, from my wife\u2019s school.)<\/p>\n Ashley and Kevin? They didn\u2019t succumb to all that indulgent spending, despite the perks of provided housing and no income taxes. \u201cKevin worked part time at a private school in the evenings and did tutoring on the side. We worked opposite shifts so that we could share the car and cell phone to save money. While I was at work, he would study real estate and investments. We lived off his income and saved my salary.\u201d<\/p>\n That\u2019s pretty incredible: They lived off Kevin\u2019s pickup work and side gigs and saved her entire full-time salary.<\/p>\n Still, they managed to do plenty of traveling, both within Japan and around the region. They simply did it on a lean budget.<\/p>\n When I asked what inspired them to live so frugally and save so ambitiously, Ashley named an old favorite of mine. \u201cWhen I was 18, my boyfriend (now husband) Kevin introduced me to Robert Kiyosaki\u2019s Rich Dad Poor Dad<\/a><\/em>. Soon after graduating from university, I came across Mr. Money Mustache, and we took some extreme measures to save as much as possible in order to reach our outrageous financial independence goals.\u201d<\/p>\n Personal finance writers love to bicker and drone on about the savings-versus-earnings argument. But getting ahead financially requires both<\/em>: On the offensive (earnings) side, it\u2019s critical to maximize your earnings however possible. That could mean a new (higher-paying) job, or a raise, or better benefits, a side gig, rental properties, or any number of other income streams. Yet it doesn\u2019t matter how much money you earn if you spend it all. I\u2019ve known people who earned $200,000\/year who were always broke because they lived in a large house, drove a fancy car, and so on. On the defensive side, it all comes down to how much money you can save in a given year, contrasted with your living expenses.<\/p>\n This is what Ashley and Kevin got right: They maximized their income by taking a job with excellent benefits (e.g. free housing) and by taking on as many additional sources of income as possible (e.g. Kevin\u2019s tutoring). Then, they slashed their expenses to the bone, living on Kevin\u2019s pickup work and saving the majority of their combined earnings.<\/p>\n \u201cAfter four years in Japan, we returned to America and used our savings to buy five foreclosed properties.\u201d<\/p>\n Five properties! That\u2019s what is possible, from saving even a moderate teacher\u2019s salary for four years.<\/p>\n \u201cAll of our properties are in working class\/middle class neighborhoods. Currently our rental properties are single-family homes, but we are interested in expanding into multifamily housing<\/a> and apartment buildings.\u201d<\/p>\n Ashley hadn\u2019t lost her dream of living and teaching abroad, however. She accepted a job teaching in Korea and departed again after only a few months at home in Northeast Ohio.<\/p>\n Meanwhile, Kevin had found his new calling in real estate investing. \u201cKevin managed the rental properties, rehabs, and new purchases. Once we had a good team in place, he began traveling back and forth, spending months at a time with me in Korea or on travel adventures around Asia.<\/p>\n \u201cWhile I was in Korea we accumulated another three properties and successfully completed our first flip<\/a>.\u201d<\/p>\n Ashley just returned home after two years in Korea. But has everything been hunky dory every second of every day?<\/p>\n All real estate investors are well acquainted with Murphy\u2019s Law. The Thompsons, for all their successes, have had their own share of bumps in the road.<\/p>\n \u201cOccasionally, we\u2019ve had to chase down late payments and we have had one eviction<\/a> to date. The eviction was difficult to deal with, and the tenants trashed the home.<\/p>\n \u201cWe also had a situation where a tenant was late paying rent and disappeared altogether. They skipped on the property without informing us.\u201d<\/p>\n Sounds familiar. Not everyone likes to pay their bills.<\/p>\n And, of course, there are regulations and inspectors. Ashley understates: \u201cDealing with city inspectors and keeping up with regulations can be… a challenge.\u201d<\/p>\n Remember Tim, who house hacked so successfully<\/a>? He had similar problems with city inspectors.<\/p>\n Renovating older homes also comes with its hiccups. \u201cWe miscalculated the rehab cost for one of the properties that ended up having a lot more structural damage behind the drywall than we had anticipated. We ended up having to spent about $10,000 more than expected, but the house currently appraises for twice what we have invested into it and we have a pending purchase offer.\u201d<\/p>\n As all entrepreneurs know, obstacles pop up all the time. But if you can remain nimble in navigating them, they have a way of working out in the end.<\/p>\n \u201cAll of the issues to date have been great learning experiences or blessings in disguise.\u201d<\/p>\n When Ashley recently returned home from Korea, she and Kevin sat down to evaluate their progress.<\/p>\n They own eight rental properties that cash flow roughly $3,300\/month after all expenses (including vacancy rates, repairs, CapEx, etc.). That comes out to almost $40,000\/year in income from their rentals.<\/p>\n Ashley and Kevin could live the rest of their lives on that income, given their frugal lifestyle. On the five-step ladder from middle-class to wealthy<\/a>, they\u2019re somewhere between financial contentment and financial independence.<\/p>\n But that\u2019s not quite enough for them. They will likely live frugally regardless of how much money they earn, but they want to keep expanding their portfolio\u2014if for no other reason than that they just plain like real estate investing.<\/p>\n \u201cI definitely don’t want to retire living a paycheck-to-paycheck lifestyle. We want to have enough left over each year to keep investing, travel, and spend winters in Thailand.\u201d<\/p>\n What comes next then? Easy: one last teaching contract, this time in China. \u201cI just accepted a two-year contract in China to teach for a couple years while we continue expanding our real estate portfolio. Our plan is to work just a couple more years until we have enough income from real-estate to provide our desired lifestyle.\u201d<\/p>\n Note that they didn\u2019t succumb to lifestyle inflation as they started earning more money from rentals. Sure, they no longer shared a cell phone. But they\u2019ve maintained a tight grip on their expenses, even while watching their friends stay at five-star resorts while traveling across Asia. You can be sure that the Thompsons haven’t been traveling that way. I asked Ashley what advice she has for others looking to work toward financial independence.<\/p>\n Ashley and Kevin spent much of their time in Japan educating themselves about real estate investing. But there comes a time when you just need to jump in. \u201cReading and taking courses is great, but meaningless without taking action.\u201d<\/p>\n And for anyone struggling to get their finances in order, it can help to start by tackling your debt<\/a> head-on before throwing all your money into investments. \u201cHaving a good credit score and history really helps. Starting with strong cash reserves for down payments, rehabs, and emergencies can really make a difference.\u201d<\/p>\n Of course, the Thompsons were also willing to make deep lifestyle sacrifices, especially in the first few years, to aggressively save money. “I kept track of every penny that left the house. We didn’t use air-conditioning or heat even when it snowed. We also worked seven days a week in opposite shifts so that we could share a cheap prepaid cell phone and the car.<\/p>\n “The memories, experiences and relationships we made in the rural Japanese mountain village were priceless, but living that frugally to get started on the road to early retirement wasn’t easy.”<\/p>\nThe Move Abroad<\/h2>\n
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Offense & Defense in Financial Planning<\/h2>\n
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\nRelated:<\/strong> At Age 26, I\u2019m on the Brink of Financial Freedom: Here\u2019s How I Did It<\/a><\/em><\/p>\nReturning Home to Start Investing<\/h2>\n
Challenges & Hiccups<\/h2>\n
Financial Independence and What Comes After<\/h2>\n
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\nRelated:<\/strong> How to Set Short, Mid & Long-Term Goals on Your Quest for Financial Freedom<\/a><\/em><\/p>\nThe Thompsons\u2019 Advice for Others<\/h2>\n
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