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

Summary

NerdWallet's Smart Money Podcast: How to Retire Early and Live Abroad
Release Date: July 3, 2025

In this insightful episode of NerdWallet's Smart Money Podcast, hosts Sean Pyles, CFP®, and Elizabeth Ayola delve into two main topics: the intricacies of retiring early to live abroad through the FIRE (Financial Independence, Retire Early) movement, and an in-depth analysis of gas price trends for 2025. The episode is enriched with expert opinions, practical advice, and real-life scenarios to help listeners navigate their financial journeys with confidence.

---

1. Navigating the Road to Early Retirement Abroad

Listener Spotlight: Ellie's Journey to FIRE

The episode kicks off with a heartfelt listener question from Ellie, who shares her family's ambitious plan to retire early and relocate to Spain. With two young children aged 10 and 16, Ellie and her husband have strategically invested in real estate to generate passive income. This financial foundation allows them to consider a life abroad without the immediate need to work post-move.

Ellie's Financial Strategy and Challenges
Ellie explains, “[...] we’ve built our wealth through real estate investments, allowing us to generate steady rental income” (18:25). However, she faces a dilemma with $150,000 sitting in a high-yield savings account, which she hopes to invest further to enhance passive income without the complexities of property management abroad.

Expert Advice: Diversifying Investments
Elizabeth Ayola responds thoughtfully, advising Ellie to explore various investment avenues to surpass the current 4% yield of her savings account. She suggests options like dividend stocks, index funds, ETFs, REITs, CDs, and Treasury bills. Elizabeth emphasizes the importance of diversification, stating, “You don’t have to choose one; you can diversify and put your money in different places” (25:57).

Sean Pyles on Investment Timelines
Sean adds, “It’s crucial to consider your timeline when investing,” highlighting that Ellie's open-ended plan to stay in Spain necessitates a balanced approach between liquidity and growth. He recommends establishing a CD ladder to ensure continuous access to funds, which can be particularly beneficial for travel and unforeseen expenses.

Real Estate Considerations
Discussing Ellie's existing investment property in Utah, Sean advises maintaining the asset for its steady, albeit modest, income stream. He shares, “It might be wise to wait at least six months to a year to see how well you really like living in Spain before making any short-term decisions” (28:23). This approach provides financial stability as Ellie transitions to her new life abroad.

Tax Implications and Regulatory Considerations
Both hosts underscore the importance of understanding tax obligations and regulatory changes, especially the Foreign Account Tax Compliance Act (FATCA). Sean strongly recommends consulting with a CPA experienced in international finances to avoid unexpected tax complications, ensuring Ellie’s investments align with both U.S. and Spanish regulations.

---

2. Gas Prices and Travel Insights for 2025

Guest Expert: Aixa Diaz from AAA

Shifting gears, the hosts welcome Aixa Diaz from AAA to discuss the current state of gas prices and what consumers can expect as summer unfolds. With a record 61.6 million anticipated road travelers this Fourth of July weekend (01:45), understanding gas price dynamics is crucial for budgeting and planning.

Trends in Gas Prices
Aixa provides a comprehensive overview of gas price trends, noting that 2025 has seen relatively stable prices compared to the volatility of previous years. She states, “We’re not as low as 2021, but we’re certainly getting close” (02:36), highlighting that the average price per gallon has edged up slightly from last month but remains significantly lower than the previous year.

Seasonal Influences on Gas Prices
Explaining the seasonal impact, Aixa elaborates, “Summer blend gasoline is more expensive to produce because it doesn’t evaporate as quickly with the higher temperatures” (03:50). This seasonal shift, combined with increased demand for travel during the warmer months, typically drives prices higher in spring and summer and lowers them in the fall and winter.

Effect of Geopolitical Factors and Policies
Addressing potential influences from foreign policy and tariffs, Aixa remarks, “The main impact this year has been the price of crude oil,” indicating that while tariffs have been discussed, their direct impact on gas prices remains minimal as of mid-2025 (04:55).

Travel Tips Amid High Demand
With summer travel in full swing, Aixa offers practical advice for road trippers:

• Emergency Preparedness: “Pack an emergency kit with extra water, snacks, and a phone charger” (09:50).
• Travel Timing: Avoid peak traffic hours to minimize delays and frustration.
• Financial Savvy: Plan ahead to curb unnecessary expenses during the trip, ensuring that the increase in gas prices doesn't derail the vacation budget.

Regional Price Variations
Aixa points out that gas prices can vary significantly by region, with states like California and the Pacific Northwest typically experiencing higher prices due to state taxes and environmental regulations. In contrast, southern states like Mississippi and Alabama tend to have lower prices (08:58).

---

3. Practical Financial Takeaways

Maximizing Passive Income for Early Retirees
Ellie's case study offers valuable lessons for others aspiring to retire early. Key takeaways include:

• Diversification: Spread investments across various instruments to mitigate risk.
• Liquidity Management: Maintain accessible funds for regular expenses, especially when living abroad.
• Long-Term Planning: Assess the sustainability of passive income sources and prepare for potential market fluctuations.

Understanding Gas Price Mechanics
The discussion with Aixa Diaz equips listeners with a clearer understanding of what drives gas prices and how to adapt their travel plans accordingly. By anticipating seasonal trends and regional differences, travelers can better manage their budgets and enjoy stress-free road trips.

---

4. Community Engagement and Resources

Listener Interaction and Support
The hosts encourage listeners to engage by sending their financial questions via voicemail, text, or email. They also announce a book giveaway sweepstakes, enhancing community interaction and providing additional resources for financial education.

Tools for Financial Planning
Elizabeth highlights NerdWallet's compound interest calculator as a valuable tool for visualizing potential investment outcomes, aiding listeners in making informed financial decisions.

---

5. Final Thoughts

As the episode concludes, Sean and Elizabeth reiterate the importance of strategic financial planning, especially for those pursuing early retirement and international living. They emphasize the value of expert advice, diversified investments, and proactive budgeting to achieve and maintain financial independence.

Notable Quotes:

• Sean Pyles: “It’s crucial to consider your timeline when investing.”
• Aixa Diaz: “Summer blend gasoline is more expensive to produce because it doesn’t evaporate as quickly with the higher temperatures.”
• Ellie: “We're still working, but once we move to Spain, the passive income will cover our expenses.”

---

By blending practical financial strategies with real-world applications, this episode of NerdWallet's Smart Money Podcast serves as a comprehensive guide for listeners aiming to achieve financial independence and navigate the complexities of living abroad. Whether you're planning a road trip or contemplating early retirement, the insights shared offer valuable tools to empower smarter money decisions.

Transcript

[Sean Pyles]

Today's episode is sponsored by Dell. Let's talk about the new Dell AI PC powered by the Intel Core Ultra processor. It's not just an AI computer, it's a computer built for AI. That means it's built to help do your busy work for you. So you can fast forward through editing images, designing presentations, generating code, debugging code, categorizing your financial transactions, running lots of apps without lag, creating live translations and captions, summarizing meeting notes, extending battery life, enhancing security, finding that file you are looking for, organizing your receipts, managing your schedule, meeting your deadlines, drafting financial summaries, responding to Cody's long emails, leaving all the time in the world for more you time and the things that you actually want to do. No offense Cody. Get a new Dell AI PC starting at [e-mail] AI PC that's Dell.com AI PC how those ahead, Stay ahead. You've done it. You've achieved fire financial independence. Retire early. An amazing accomplishment. But now how do you take all that hard earned money and put it to work for you? We'll answer a listener's question about what follows fire. Welcome to NerdWallet's Smart Money podcast where you send us your money questions and we answer them with the help of our genius nerds. I'm Sean Pyles.

[Elizabeth Ayola]

And I'm Elizabeth Ayola. Later this episode, we're going to be talking with a listener about what happens when you've achieved your dream of early retirement. But first, our weekly Money news roundup where we break down the latest in the world of finance to help you be smarter with your money. Our newest colleague, Ana Helhoski is back. And Ana, any plans for a road trip this Fourth of July holiday weekend? What you got going on?

[Ana Helhoski]

No, I. You couldn't pay me enough to get on the road and deal with traffic this Fourth of July.

[Sean Pyles]

But.

[Ellie]

But.

[Ana Helhoski]

AAA says a record 61.6 million people will travel by car during the holiday period that began June 28 and runs through Sunday, July 6. Now, more cars on the road means demand for gas will be higher too. And as far recording, the average price for regular gas in the US is about $3.18. And that's about 4 cents higher than a month ago and about 32 cents lower than a year ago. Today we have Aixa Diaz with AAA here to explain more about the prices at the pump and what drivers can expect moving deeper into the warm summer months. Ayiksa, welcome to Smart Money.

[Aixa Diaz]

Hi. Great to be here.

[Ana Helhoski]

So, first off, I'm hoping you can take us through some of the trends in gas prices in recent years and how current prices are comparing to a year ago.

[Aixa Diaz]

When you look at a chart and you look at what gas prices have done the past few years, 2021, for example, was a very low gas price time in terms of what we were paying at the pump. And in fact, we're not quite there yet. We're not as low as 2021, but 2021 was pretty low. When you look at 22, 23, 24, 25, and you look at the whole year, and obviously 25 is just halfway through. What you'll see in those previous years, for example, is gas fluctuates. Typically it spikes around springtime, summer, and then comes back down. But there can be other sort of drastic fluctuations throughout the year, depending on geopolitical situations or domestic tropical storms. What we've seen in 2025, which makes it so different, is that that line is pretty much straight across. So, yes, we've seen a few fluctuations here and there, but they have not been dramatic spikes. I mean, at the beginning of 2025, we were paying for the national average, let's say around 308, 310, and now we're at 318. That's not much of a difference considering this is supposed to be the highest time of the year.

[Ana Helhoski]

And we know that gas prices tend to shift with the seasons. Can you explain some of the differences between winter and summer gasoline and how that switch impacts what we're paying?

[Aixa Diaz]

So think about it. As far as the weather. So spring and summer is when most people want to take road trips, most people want to travel. And that means that if gas demand goes up, gas prices go up in the fall and winter as the weather, it's getting a little bit colder. Yes, people are still traveling, but in parts of the country, you can't really drive when it's snowing and when it's, you know, icy on the roads. So gas demand goes down in the fall and winter, and gas prices go down with them. Another thing to consider is the actual gasoline you're putting in your car. Summer blend gasoline. Think of it like coffee. So there's summer blend and there's winter blend. The summer blend is more expensive to produce because it doesn't evaporate as quickly with the higher temperatures of the summer. So because that's more expensive to produce, that price then ultimately gets passed down to the consumer, so drivers will be paying more. Winter blend gasoline is cheaper to make Therefore, gas prices come down in the wintertime. So those two things combined demand and what type of blend determine then are we paying more or paying less?

[Ana Helhoski]

On the foreign policy front, are 2025 tariffs affecting oil imports or gas prices?

[Aixa Diaz]

That has been so fluid, and the headlines on tariffs have changed so much that we haven't really seen an impact on, on gas prices as of yet. So the main impact this year has been the price of crude oil. When we talk about crude oil prices, it's a certain amount of money per barrel. And obviously the average person doesn't care about this, right. They're not going to be like, you're not thinking about how much, how much crude oil is for an average for the barrel. But, you know, nerd wallet, we're gas nerds, so we kind of have to watch this stuff. Right now, we're about $65 per barrel of crude oil. Think of $100 being like, okay, wow, if we're at $100 per barrel for crude oil, we're going to be feeling it at the pump. 80 to 90 range, that would still be pretty high. 65 is. It's all relative, but it's on the lower side. I mean, last year, I think the average for 2024 was maybe 80. So we're, we're less than we were in 2024. And even after the conflict in the Middle east with Iran and Israel, that flared up a couple of weeks ago, the spike initially that we saw in crude oil prices right after that was maybe low 70s. So we still didn't get up to the 80s and 90s, where if we do, that's when we really start to feel it at the pump and we start seeing the changes. But the bottom line is you can't predict gas prices because they're dependent on so many variables and so many things you cannot control or predict. Again, like geopolitical events and like the weather. Obviously, you don't know what the weather's going to do. So what we can do, though, is sort of put it in perspective as it goes on. And right now, we don't anticipate that July 4th drivers are going to pay not nearly as high as we were paying last year. And we're not probably going to be as low as 2021, but we're certainly getting close. July 4th week in 2021, we were paying an average of $3.12.

[Ana Helhoski]

And speaking of some factors that play into gas prices, are there any energy policy decisions, drilling permitting, pipeline approvals, refinery regulations, fuel taxes, that kind of thing? That could move gas prices this summer or in the fall.

[Aixa Diaz]

We don't see anything right now that would affect that. I think for gas prices right now, the, what oil is doing and how much oil there is and supply and demand. And even though we have seen demand overall not be quite as robust as it used to be, there are many theories as to why that is. One of it is, did electric vehicles entering the market affect it? Yeah, to some extent. Also, after the pandemic, a lot more people work remotely now. And even though a lot of people have gone back to the office, a lot of people still have that flexibility, at least to maybe not go to the office as frequently. So people just aren't driving as much as they used to. And, and the price of gas has not shown to be a deterrent. Like, people aren't going to stay home if gas prices go up and they're not going to be motivated to go drive if the prices, gas prices come down. It's sort of this thing where it's in the background. It's a talker. People like to have opinions about gas prices, but at the end of the day, not a lot of people make decisions travel wise when it comes to gas prices. Just because travel is something that's so emotional for people and it's something that brings people so much joy that they're going to find ways to do it. It's just the, the icing on the cake when gas prices come down. When you take your road trip, it's just not going to be quite as expensive.

[Ana Helhoski]

And there are going to be a lot of road trips coming up. And summer travel demand is higher than ever during the July 4th holiday travel season. Is it expected to remain pretty high throughout the rest of the summer? And are people just generally planning more road trips at this point?

[Aixa Diaz]

We definitely anticipate that the demand's going to be there. Road trips are just convenient. Even if you have to drive 8 to 10 hours or even longer. There's people who go from, you know, New England down to Florida. It's still economical for families, especially if they have a lot of people in their families and they don't feel like, okay, I don't want to pay $500 a ticket for a flight. Let's just all pile in the car. And road trips also just give you flexibility. You can leave when you want, you can come back when you want.

[Ana Helhoski]

What are some of the highest and lowest prices right now? And are some states or regions more vulnerable to price spike?

[Aixa Diaz]

That's interesting when you do that Those type of cross state road trips, even if you don't go too far, you see the difference. I mean, last week I was just in North Carolina and I live in D.C. so and I could see the difference. Especially when you go through beach towns or you go through a smaller towns, you see those fluctuations. And it is interesting to note California out west, Pacific Northwest, those are going to be your most expensive states. And they always have been down south like Mississippi, Alabama, those are your cheapest states. And then the other states sort of fall somewhere in the middle up in New England. Some of those states tend to be higher as well in the D.C. area because of the fact that it's a major metro. So some of the more rural states tend to be a little bit less. But it also has to do with state taxes. All of those things play a role as well.

[Ana Helhoski]

Is there any other piece of advice that you would tell road trippers as they're heading out?

[Aixa Diaz]

Pack an emergency kit. Pack something that's within reach for the driver or you know, ideally the passenger. But if you're driving solo, you know, have something then next to you like extra water. Make sure you have your charger, your phone charger, extra snacks, things that won't melt in the car. Go through your mind. Okay, if I were stuck in traffic for hours, there's a bad crash on the interstate and all lanes are shut down. What do you need to have in the car with you to keep yourself comfortable, to keep children entertained? If you have pets in the car, what's going to keep them in good condition? Because keep in mind, if you're driving through places where there's a lot of heat, what would happen, let's say, if your AC broke or like if you had to turn off your car. And again, these are all just emergency things, you may not need to use them, but it gives you a little bit of comfort and peace of mind to have these extra things with you, you know, in the vehicle. If there were to be some sort of backup and you're stuck in traffic.

[Ana Helhoski]

For hours, do you have any other savings tips to share with people?

[Aixa Diaz]

The more you plan ahead, the better. I mean, obviously the part of the fun of vacation is exactly that. Giving in to whatever fun temptation when you see at the little convenience store or you know, at the souvenir shop and all, and all of that, but sort of planning ahead of again, pack enough snacks and food in the car so that you don't fall prey to those, to those temptations. But also be mindful of when you leave for the road trip. I was on vacation last week and we drove through I95. And obviously the D.C. area is just, I mean, anyone knows if you have to drive through it because you have to go from one end to the other of the east coast, it's pretty brutal. But it's always worse in the afternoon. It's always going to be worse after lunchtime. So if you are driving and you're going to do a pretty big trip, leave as early as you can, Get a good night's rest. First of all, when you wait until after lunchtime, that's when traffic really builds. And it builds because not only are people going on vacation, but people are just living their lives. People are going to work, people are driving around running errands, and there's just more congestion. And then if you are doing one of these massive road trips where, let's say you did leave Boston early, but then now you're heading into D.C. and, and you're about to catch D.C. around that time, be mindful. Can you do an overnight trip somewhere along the way and break up the trip? And if you have multiple drivers, switch off, I mean, ideally, we recommend every two hours, you should have a stretch break, pull over rest area, gas station, restaurant, get a snack, drink some water, use the restroom, and just stretch and ideally switch drivers. It makes a huge difference.

[Ana Helhoski]

All right, Aixa Diaz, thank you so much for joining us today.

[Aixa Diaz]

Thank you.

[Elizabeth Ayola]

And thank you, Ana. This is good to know because I do plan to make a road trip to New Orleans in August.

[Sean Pyles]

I have a road trip planned for eastern Oregon in a couple months, too, so I'm pretty excited for that. And hopefully gas prices stay where they are. Up next, we answer a listener's question about how to manage finances when you've saved enough to retire early. But before we get into that, a reminder listener to send us your money questions. Maybe you're wondering if you actually should get an electric car instead of a gas vehicle or if you want a new travel credit card for your lifestyle, but you aren't sure how to fund the signup bonus. Whatever your question, leave us a voicemail or text us on the Nerd hotline at 901-730-6373. That's 901730, nerd. Or email [e-mail] and before we move.

[Elizabeth Ayola]

On, we have one last announcement for you guys. We're running another book giveaway sweepstakes ahead of our next nerdy book club episode. Our next guest is Dana Miranda, author of you don't need a budget. Stop worrying about debt. Spend without shame, and manage money with ease.

[Sean Pyles]

To enter for a chance to win our book giveaway, send an email to podcastnerdwallet.com with the subject. Book sweepstakes during the sweepstakes period, entries must be received by 11:59pm Pacific Time on July 31st. Include the following information your first and last name, email address, zip code, and phone number. For more information, please visit our official sweepstakes rules page.

[Elizabeth Ayola]

In a moment. This episode's money question. Stay with us.

[Ellie]

What is Dadication?

[Sean Pyles]

The thing that drives me every day as a dad is Dariona. We call him Dae Dae for short. Every day he's hungry for something, whether.

[Ellie]

It'S attention, affection, knowledge.

[Sean Pyles]

And there's this huge responsibility in making sure that when he's no longer under my wing that he's a good person.

[Ellie]

I want him to be able to.

[Sean Pyles]

Sit back one day and go, we worked together. We did a good job.

[Aixa Diaz]

That's dedication. Find out [e-mail] brought to you by the U.S. department of Health and Human Services and the Ad Council.

[Sean 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.

[Ellie]

Thank you for having me.

[Elizabeth Ayola]

All right, Ellie, so we're going to start off with a little icebreaker because we love icebreakers, don't we?

[Aixa Diaz]

Yay.

[Ellie]

Let's do it.

[Elizabeth Ayola]

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?

[Ellie]

Madness.

[Elizabeth Ayola]

Ooh, that's a juicy one.

[Sean Pyles]

Okay, I need another two or three words after that.

[Ellie]

I must elaborate, don't I?

[Sean Pyles]

Please, please.

[Ellie]

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. It's really hectic. It's really stressful, not ideal. So my word of choice is madness.

[Sean Pyles]

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?

[Ellie]

We have traveled to Spain quite a few times and absolutely loved it every time. And 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. And then the climate is very similar to Southern California. So there, you know, 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.

[Elizabeth Ayola]

Wow, that's so sweet.

[Sean Pyles]

How old are your kids?

[Ellie]

My kids are 10 and 16.

[Sean Pyles]

Okay, so they would be going to school in Spain?

[Ellie]

Yes, yes. And we were kind of worried how they would react, you know, because kids change their mind to. 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.

[Elizabeth Ayola]

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.

[Ellie]

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, really strategically in the early years of our building our careers so we can be done in our mid-40s and retire and then just travel the world. And 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.

[Sean Pyles]

Do you have continual income from rental properties?

[Ellie]

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.

[Elizabeth Ayola]

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?

[Ellie]

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 $150,000. 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. And 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 US Money to Spain because the dollar is so cheap right now. It is very expensive for us to move money to Spain.

[Elizabeth Ayola]

What's the interest rate that you're getting on the High Yield Savings account at the moment?

[Ellie]

It started with 5%, but it just kept declining. It went to 4.5 and now it's at 4.

[Elizabeth Ayola]

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. 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?

[Ellie]

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.

[Sean 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?

[Ellie]

That's a loaded question. 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.

[Sean Pyles]

I can't wait to have all these healthcare expenses in the United States again.

[Aixa Diaz]

Exactly.

[Ellie]

Just one of the things I just, I really don't, don't know. But we're leaving it open ended.

[Sean Pyles]

And when do you think you'll need the money? It seems like you'll want it pretty continuously, immediately. Is that right?

[Ellie]

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 fun 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.

[Sean Pyles]

That fun money, our travel money 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?

[Ellie]

A little bit. I wouldn't say I'm an expert by any means.

[Sean Pyles]

Sure. 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 year, two year cd. So then after that you're adding 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. 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, 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. 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 fatca. So that's something that would be smart to do in the next couple weeks.

[Ellie]

Thank you. Yes.

[Elizabeth Ayola]

So I know you have this lump sum, $150,000. Do you have an emergency savings anywhere or is that just all of the liquid cash that you have sitting around?

[Ellie]

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.

[Elizabeth Ayola]

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. 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.

[Ellie]

That's a great idea. Thank you. I'll use that tool.

[Sean 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.

[Ellie]

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. And. And 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, you know, 4 or even 5%. But if I sell it, then we would have more liquid cash and I don't necessarily know how 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. But again, because of the value of the dollar, this becomes a very expensive strategy and I don't know that that's ideal.

[Sean 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 630amonth. 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. 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.

[Ellie]

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.

[Sean Pyles]

Yes, our our fellow nerd Lisa Green. These words ring in my ears almost daily. She said I 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. You've already gone through the hassle of acquiring the property. You might as well hold onto 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. Are you going to be doing any work there, you or your husband?

[Ellie]

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.

[Elizabeth Ayola]

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?

[Ellie]

We thought lifelong, because this cash was supposed to be another property investment. So 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.

[Elizabeth Ayola]

Since most of your income came from real estate, how much went into investment accounts, if at all?

[Ellie]

None. We didn't put it into the stock market or any other investment.

[Sean Pyles]

We don't generally suggest that people invest in the stock market with money they'll need for like, sooner than five years because of the ups and downs of the stock market. So that is why we have been turning you toward 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. How are you feeling at the moment and what do you think your next steps might be?

[Ellie]

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.

[Elizabeth Ayola]

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.

[Ellie]

Awesome. I would love to and will do. Thank you for your help.

[Sean Pyles]

Thank you.

[Elizabeth Ayola]

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 9017-30-NERD. You can also email us at podcastnerdwallet.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. 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 gonna automatically download new episodes. If you're listening on Spotify, leave us a comment right on the platform.

[Sean 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 Viglund and Ana Helhoski. Hilary Georgi helped with editing. Nick Karisimi mixed our audio. And a big thank you to NerdWallet's editors for all their help.

[Elizabeth Ayola]

And until next time, turn to the Nerds.