The Problem of Health Insurance
One question that many people who retire early with real estate face is what to do about health insurance. “Unless provided through an employer, marketplace health insurance in Anchorage is ludicrously expensive. It would have been north of $20,000 per year to insure just me
“So, I did a little research about expat health insurance in foreign locations and very quickly realized it was a heck of a lot cheaper everywhere
else in the world. Terry and I now have a policy that covers all the normal wellness stuff, emergent care, hospitalizations, medical evacuations, etc. It’s un upper-end private policy for Europeans. And it cost $7,200/year for both of us. Boom! Do the math.”
Yes, Martha and Terry are saving money, even as they yacht around Europe’s most famous cities and enjoy a waterfront view every evening from their deck.
Moving onto a Boat in Europe (Again)
“Terry went on a buying trip last spring and got us a gorgeous Dutch steel cruiser. In the last 14 months, we have been touring Holland, Belgium, the UK, and France.”
At the time of this interview, Martha and Terry were in beautiful Strasbourg, France.
Like everything else about the Robinsons’ experience, from saving money to buying a first rental property, they went about it conservatively.
“We didn’t go overboard with buying the boat. I think, all in, we spent about $70,000 for the 35-year-old boat.
“We paid for it by withdrawing cash (rents that had accumulated) from our self-directed real estate IRA. And we’ll lose money when we go to sell her, I’m sure. Maybe $10-15,000. But we’re happy to pay that “penalty” for such a great adventure!”
Actually, the math is pretty favorable. The Robinsons have been sailing Europe’s waterways for the last 14 months. Imagine they sell their boat after two years of ownership, for a $10,000 loss. That puts their housing at $5,000/year, or $417/month.
What kind of home can you rent or buy for $417/month? Certainly not a waterfront home in any of Europe’s best cities.
What It Takes to Create Your Dream Life with Rental Properties
For the Robinsons, it started with a different mindset around money than the Average Joes in this country. The Robinsons never thought in terms of “What’s the most I can afford to spend?” on a house or car or dinners out. They instead thought in terms of “What’s the least I can spend, and still be happy?”
They don’t consider themselves hard-core personal finance experts or saving nuts. “Our story is more about mindless saving, avoiding financial commitments (no big house debt, car payments, etc.), and avoiding those investments we don’t understand.”
Second, it took a retirement investing mindset shift. They could have kept plugging money into mutual funds in their retirement accounts. Instead they decided to learn how to become a landlord, to buy a first rental property despite not having any experience.
It’s worth noting that, for all their legal and tax acrobatics in putting their rental property inside an LLC inside a trust inside a self-directed IRA, they didn’t have to do that. They could have bought their first rental property the old-fashioned way, and still have the lifestyle they have today.
Martha and Terry face the same challenges as other expats (myself included), which mostly come down to missing family back home. “Our daughter is too far away, and Dad isn’t doing so great; I suppose those are my biggest complaints. With the advent of the Internet and Google Translate, you can hunt down and find just about anything you need. We still have our bank accounts in the US and access funds through debit cards. For communications we just buy SIM cards for the country we are in, making sure there’s a good data pack.
“It is hard to find peanut butter. Oh well!”
I asked Martha for a final thought on their experiences over the last six years (yes, it’s only been six years since they went to buy a first rental property and become a landlord, subsequently reached financial independence from real estate, retired and moved abroad).
“Do we have any regrets about our savings and investing? Only that we should have dumped Wall Street sooner!”
What about you? What are your dreams for financial independence from real estate? Want to travel the world? Stay put? Have already taken the leap to become a landlord, or do you have yet to buy your first rental property?
More Ideas to Help You Reach Financial Independence with Rentals!