Ashley Thompson messaged me on Facebook out of the proverbial blue.
We had never met before, but she’d noticed my post on a Facebook group for Mustachians. (If the term “Mustachian” is new to you, check out Mr. Money Mustache’s classic personal finance and early retirement blog.) She saw that I too lived abroad for most of the year and that my wife is in education, and she reached out to introduce herself.
I am so, so glad that she did because her story is one of the most inspiring that I’ve ever heard.
How to Invest in Real Estate While Working a Full-Time Job
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
Ashley Thompson: Teacher, Landlord, Traveler, 20-Something Retiree
Ashley teaches English as a second language (ESL). Though she happens to have a bachelor’s degree in teaching, it’s worth noting for aspiring teachers that a degree is not strictly necessary to teach ESL.
Her husband Kevin is a former civil engineer. How former? Well, he hasn’t worked as an engineer in over six years because he quit his job to join Ashley on her travels abroad.
“Travels” may be too loose a word to describe their adventures. They’ve lived in multiple countries and visited over a dozen others.
At 28, Ashley and Kevin have nearly reached financial independence. They own eight rental properties, with more under contract. Retirement is in the books in less than two years.
But we’re getting ahead of ourselves. Let’s start from the beginning, shall we?
The Move Abroad
“Since I was 12 years old, it was always my dream to teach abroad,” explains Ashley. “After graduating from college, I accepted a position to teach English in Japan, and Kevin quit his engineering job to join me for the adventure.”
But here’s the thing about most teachers who move abroad: They spend, and travel, and spend, and travel. At the end of the school year, they’re lucky if they’ve saved anything at all, despite often having housing provided for them. (I should know—many of my own friends are international teachers, from my wife’s school.)
Ashley and Kevin? They didn’t succumb to all that indulgent spending, despite the perks of provided housing and no income taxes. “Kevin 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.”
That’s pretty incredible: They lived off Kevin’s pickup work and side gigs and saved her entire full-time salary.
Still, they managed to do plenty of traveling, both within Japan and around the region. They simply did it on a lean budget.
Offense & Defense in Financial Planning
When I asked what inspired them to live so frugally and save so ambitiously, Ashley named an old favorite of mine. “When I was 18, my boyfriend (now husband) Kevin introduced me to Robert Kiyosaki’s Rich Dad Poor Dad. 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.”
Personal finance writers love to bicker and drone on about the savings-versus-earnings argument. But getting ahead financially requires both: On the offensive (earnings) side, it’s 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.
Related: At Age 26, I’m on the Brink of Financial Freedom: Here’s How I Did It
Yet it doesn’t matter how much money you earn if you spend it all. I’ve 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.
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’s tutoring). Then, they slashed their expenses to the bone, living on Kevin’s pickup work and saving the majority of their combined earnings.
Returning Home to Start Investing
“After four years in Japan, we returned to America and used our savings to buy five foreclosed properties.”
Five properties! That’s what is possible, from saving even a moderate teacher’s salary for four years.
“All 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 and apartment buildings.”
Ashley hadn’t 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.
Meanwhile, Kevin had found his new calling in real estate investing. “Kevin 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.
“While I was in Korea we accumulated another three properties and successfully completed our first flip.”
Ashley just returned home after two years in Korea. But has everything been hunky dory every second of every day?
Challenges & Hiccups
All real estate investors are well acquainted with Murphy’s Law. The Thompsons, for all their successes, have had their own share of bumps in the road.
“Occasionally, we’ve had to chase down late payments and we have had one eviction to date. The eviction was difficult to deal with, and the tenants trashed the home.
“We also had a situation where a tenant was late paying rent and disappeared altogether. They skipped on the property without informing us.”
Sounds familiar. Not everyone likes to pay their bills.
And, of course, there are regulations and inspectors. Ashley understates: “Dealing with city inspectors and keeping up with regulations can be… a challenge.”
Remember Tim, who house hacked so successfully? He had similar problems with city inspectors.
Renovating older homes also comes with its hiccups. “We 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.”
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.
“All of the issues to date have been great learning experiences or blessings in disguise.”
Financial Independence and What Comes After
When Ashley recently returned home from Korea, she and Kevin sat down to evaluate their progress.
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.
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, they’re somewhere between financial contentment and financial independence.
But that’s 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—if for no other reason than that they just plain like real estate investing.
“I 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.”
What comes next then? Easy: one last teaching contract, this time in China. “I 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.”
Note that they didn’t succumb to lifestyle inflation as they started earning more money from rentals. Sure, they no longer shared a cell phone. But they’ve 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.
Related: How to Set Short, Mid & Long-Term Goals on Your Quest for Financial Freedom
The Thompsons’ Advice for Others
I asked Ashley what advice she has for others looking to work toward financial independence.
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. “Reading and taking courses is great, but meaningless without taking action.”
And for anyone struggling to get their finances in order, it can help to start by tackling your debt head-on before throwing all your money into investments. “Having a good credit score and history really helps. Starting with strong cash reserves for down payments, rehabs, and emergencies can really make a difference.”
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.
“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.”
In other words, extraordinary results require some extraordinary measures. No, you don’t have to go without heat, but take a red pen to your budget and see what you could cut. What would it take for you to live on half your income?
She also notes that real estate investing truly is a team sport. “Find partners who compliment your strengths and weaknesses. Creating a trusted and skilled team can really benefit your goals of being a real estate investor.”
But one of the most important pieces of advice that the Thompsons offer is also one of the least often emphasized. “Working towards financial independence has allowed us to provide housing and jobs in our neighborhood while helping to improve real-estate values. Being successful not only benefits you, but can benefit family, friends and the community around you.”
It’s this meaning that has helped sculpt their success thus far, and that is already shaping their post-retirement plans.
Retirement by 30
What do you do with the rest of your life, when you’ll be retired by 30?
“We plan to stop working conventional forms of employment,” Ashley offers as a start. “At that point, we would like to travel around the world and live seasonally in different locations such as Thailand. Winters are really brutal in Ohio, so Kevin and I want to spend the winter months in the tropics of Thailand and we plan to spend a month each year exploring new parts of Europe and elsewhere.
“We would have the option to work or not work, and volunteer without negatively impacting our finances. I would love to volunteer part time to teach children in third-world countries.”
And, of course, they plan on continuing to invest in real estate, when at home in Ohio. “Oh, I’m sure we will continue flipping and expanding our rental portfolio as well.”
Oddly enough, this is the same answer that most early retirees end up giving. What do they do after retiring? More of the same, it turns out, but with more emphasis on meaning and less on money.
The Thompsons will still be spending large amounts of time in Asia, still teaching and working with children and still investing in real estate. Which, ultimately, is a sign they’re happy with the decisions they’ve made so far—even when finances no longer require it, they’ll continue living much the same life.
What can be more redemptive of your life choices than that?
Willing to share your own financial and retirement goals? What sacrifices are you making to reach them? What can you do to get there even faster?
Let’s talk below!