Would you move abroad to reach FI faster? That wasn’t Brooklin Nash’s original goal when he left the US and began freelancing from afar. But now, years later, he realizes how much of a leg up he has financially by going all-in on “geo arbitrage.” He’s saving a boatload in Guatemala, paying less to live the life he loves, and enjoying a tiny tax bill. Now in his mid-thirties, he’s already Coast FIRE and works when and where he wants.
But Brooklin’s money story didn’t start so stable. Being raised in a home with “risky” finances, to say the least (pyramid schemes, gambling, etc.), left him scarred and constantly worrying about keeping enough money in the bank. Thankfully, he changed his ways and realized that making money, rather than just saving every cent, was crucial to becoming financially free.
He’s paid off a significant sum in student loans and did it all while making a very meager income. Then, he scaled from freelancing abroad to building an entire business, making a phenomenal income while living in a low-cost-of-living area. He’s living his dream life outside the US, making more money than Americans at home. Imagine what THAT can do for your FIRE number!
Mindy:
We are very excited to have Brooklin Nash on the show with us today. brooklin grew up in a household with unstable finances, but he was able to break the generational cycle with a few creative moves, namely geo arbitrage and starting a small but very profitable writing business. These are going to set him and his kids up for a very different financial future. With your current circumstances, you may be a long way from fire, but what if relocating was the only thing that it took for you to reach your financial independence number and should you do it? Hello? Hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen and with me as always is my not arbitraging his geolocation quite yet. Co-host Scott Trench.
Scott:
Thanks, Mindy. Good to see you. Never get tired of trading out new introductions for me. Alright. Pickpockets has a goal of creating 1 million millionaires. You’re in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting.
Mindy:
Brooklin Nash, welcome to the BiggerPockets Money podcast. I’m so excited to talk to you today.
Brooklin:
Me too. Thanks Mindy.
Mindy:
So brooklin, let’s jump right into it. We understand that your family had a sort of unstable or risky relationship with money growing up. Can you share a little bit about what that looked like?
Brooklin:
It was risky is the word. All the financial advice that has become so prevalent over the last decade with Ramit safety and even, I dunno, all the fundamentals weren’t there necessarily, so I do give them a little bit benefit of the doubt, but there were a lot of pyramid schemes. There were a lot of get rich quick schemes. They were Y 2K preppers. We had pampered chef in the house, like those shows, Excel phone lines. They did the essential oil thing, pyramid scheme, like anything to make a buck. And then on the flip side, they’re also very, very frugal. So they were good at being frugal with their money, but then on the bigger investments, on the flip side of that equation, they didn’t stay the program. So it just turned into 20 years of financial upheaval every few years. Some context, sorry, now I’m rambling. But they bought a house in Southern California in 2005 from Seattle, moving from Seattle. So we know how that ended up a few years later. Yeah, so it was a lot to untangle.
Scott:
So can you give us a couple of example? Are you saying basically that your parents would accumulate, they would try these get rich quick screams, they would blow up in their face and despite their frugality they would lose everything or there would be a bankruptcy or there would be a forced lifestyle reduction? Is that how I understand that?
Brooklin:
Yeah, there were the big ones in the small ones. Pyramid schemes I don’t think ever took a huge toll, but my dad would do the risky betting on Wall Street, wall Street bet type stuff, penny stocks, when I don’t pretend to understand that, I just stick it in an index fund. So there’s a lot of cycles of losing money that way. And then similarly for housing decisions and just kind of buying more than we could afford and those were the bigger impact stuff.
Mindy:
So what lessons did you learn from watching your parents go through this? Because after 500 plus episodes of this show, I find that people either are exactly like their parents or the polar opposite of their parents based on what their parents were doing either right or wrong.
Brooklin:
I think the biggest thing that I had to untangle was these two parts of the equation where it’s to reach financial independence, you can focus on earning more or saving more with what you’re earning. And my parents really overemphasized that second part and underemphasized the first part. It took a while for me to untangle that. The first fight that my wife and I both remember was over this. We were out, needed to get clothes at a mall and we were coming back. She was hungry, wanted food at the food court. I grew up really frugal. Going out wasn’t a thing. I’m like, well wait, can we go home? We’re half an hour from home and make lunch. And it turned into a big fight because we had very different upbringings and expectations and it wasn’t the next day. It was probably over a year or two slowly realizing that frugality can only take you so far and there’s a lot you can do, especially now to increase your income. So we started focusing after our first and second year of marriage away from let’s spend as little as possible and deny ourselves all these things. And instead, let’s turn our attention towards an abundance mindset and seeing what we can do income wise and what that can mean for our family and forgiving and for everything we wanted to do together.
Scott:
Could you maybe give us a little bit of the synopsis of the story here? How did your money journey go? I think we know that you met your wife in college. Can you give us how your personal financial story went In college, following college and in the last couple of years,
Brooklin:
My wife and I both went to a private university in Southern California. Probably not a great start financial wise, but thankfully we both got really solid financial aid for the four years. The debt that we did accumulate was more, it was housing and all these other factors which add up when you don’t have parents that can help out with college. We’re very grateful for the financial aid, but graduated between both of us with 80,000 in student debt. So our first year of marriage was, okay, debt is an emergency, let’s treat this as an emergency. Back then it was Dave Ramsey’s stuff. We were at that level. So we just focused on paying off the student debt first. We did very little investing, very little savings for I think two years. We had the bare minimum thousand dollars emergency fund just because we wanted to throw as much as possible at the student loans. I don’t mean to give as advice because we are very debt averse, so we very much overemphasize, let’s get this thing paid off as quickly as possible. So we paid it off in about five years when really looking back, we could have taken a more balanced approach and maybe should have been investing a third of that and over 10 years it probably would’ve served us better. But it did feel really good about five years in to just have it completely wiped and start with a net worth of zero.
Mindy:
And what year was this?
Brooklin:
Late 2017 or early 2018.
Mindy:
Okay. And where were you working? Were you self-employed or were you working for another company?
Brooklin:
It was a bit of both. So we moved right out of college. We moved to Israel for my master’s program and then we moved to Guatemala to work with a nonprofit. Nonprofit. Didn’t pay anything. We were essentially volunteers out of college and purpose-driven and all of that. And we were freelancing on the side to start paying off the student debt and savings and all of that. So for a while it was a whole mix of income. And those first five years was essentially all freelance income,
Mindy:
Freelance income. And you had a thousand dollars safety net. I’m not familiar with the economic conditions in Israel. Is that more of a high cost of living or a low cost of living area?
Brooklin:
Super high cost of living. Tel Aviv, super expensive.
Mindy:
Yeah, that’s what I thought. All freelance income, a thousand dollars safety net in a high cost of living area. Don’t do that listener.
Brooklin:
Well, I was one year out of five, so it balanced out. Then we moved to Guatemala, which is super low cost of living. So that was where
Mindy:
For a year you had that’s a lot of risk. Did you feel like it was risky or did you feel like, you know what, I’m okay with this because I want to get this debt gone so fast.
Brooklin:
I don’t think it felt risky to us at the time, although you’re right, hindsight, same thing. We should have at least saved up a bigger emergency fund with some of what we’re using to pay off the loans. But it didn’t feel risky at the time. And I know this isn’t what this podcast is about, but in general, I don’t think freelance income is as risky as most people think it is. If you’re a freelancer and you have six clients, what are the chances that in a matter of three months all six of those clients are going to churn compared to there’s a downturn, you have one employer, what are the chances that large employer that has very little runway is not going to go through a layoff and that you won’t be impacted by a single event? So it sounded a little bit like I got on my soapbox, but freelance income has been really great for us in terms of just, sure there’s a ceiling, but there’s I think a much higher ceiling. You can use your time and your skills and as you build up your client base, I think it can be not a riskier option than full-time employment.
Scott:
Alright, now a quick ad break when we’re back, brooklin will tell us how he was able to break out of bad financial circumstances and make his own path.
Mindy:
Welcome back to the show. Okay, that’s actually really good to know because I don’t have freelance experience, so I’ve just always assumed that it’s kind of risky. But that’s a really good point. If you have six sources of income and one goes away, now you have five sources of income. If you have one source of income and one goes away, now you have zero sources of income. So that does make sense. I like the way that you look at that,
Brooklin:
Especially if you’re already financially minded and you are saving what, 30, 40, 50% of your income, you could lose half your clients and still cover your expenses without touching your emergency fund.
Scott:
Yeah, it’s also hard to pick up a second client when you work a full-time job probably really shouldn’t. And on the freelance side, it’s probably not too hard to pick up the seventh or eighth client there to 10 or 20, 30% increase your income. So I think the freelancing world, I think that’s right. I also want to talk about, there’s a side tangent, I’ll just mention really briefly here where people talk about unemployment in this country. Well, something’s brewing in this freelance and gig economy because I think there was something some 40 odd million Americans who participated in the gig economy last year and that was up like 300% from before the great recession, for example. And so what happens when a freelance, surely a lot of those folks found fewer clients, it’s harder to get rides for Uber drivers or whatever in there that doesn’t show up on the official unemployment statistics, right?
Scott:
Because as people don’t go on unemployment, they’re not losing their job, they’re just getting less income. So something’s brewing there that I don’t think people have good data on, and I think that that’s impacting the economy in ways that are not fully appreciated yet and we’ll shake out over the next couple of years. But just something I have observed and thought about a lot recently on this. So let’s bring it back to your story. However, so we have our freelancing in Israel, we’re doing that, we pay off the student loans in five years. When does the journey become less about paying off the student loans and more about financial independence?
Brooklin:
Pretty early actually. So even I think year two we discovered financial independence through the subreddit. That was the origination. And then from there, Mr. Money Mustache and Ramit Safety and BiggerPockets and just really dove into everything like 20 14, 20 15 and paying off student loans was for us that first step. We didn’t do the more balanced approach that is probably a lot smarter and that you all recommend and much smarter people than us recommend. But to us, the debt represented a fresh start. So from year two, paying off that debt became the first goal. And then once we paid it off, then we’re like, okay, what is the next goal that’s increase our income to X, Y, Z and hit 100,000 in investments. And then we started hard charging towards that.
Mindy:
And how long did that take you to get to a hundred thousand in investments?
Brooklin:
Within a couple of years because around that time is about when we stopped working with the nonprofit, started working full-time and marketing and writing work. So we pretty dramatically increased our income around that time.
Scott:
Awesome. So let’s walk through that part of the journey. So how long were you in Israel and when did your situation begin to change? I believe Sneak Peak is still international to this day, but can you walk us through the journey and the steps?
Brooklin:
Yeah, so we were only in Israel for a year for my master’s program, and then we moved to Guatemala, which that’s the biggest context here because this literally wouldn’t have been possible if we were living in the United States because for a few years there we were able to live off of 10 to $12,000 a year, which helped us achieve our goals. So the four years, four of the five years were here, Guatemala paying off student debt, working with the nonprofit, and then the last five years have been out of the nonprofit, really focused on what can we do to maximize our income and meet our next goals. And we’re still here in Guatemala.
Scott:
Okay. So you guys are, can you give us a little bit some guidance on are you able to earn six figure salaries doing this from Guatemala? How does this career growth happen from an international perspective to provide opportunities that you wouldn’t have had access to otherwise? Or how did you get into this and decide to go to Guatemala, stay in Guatemala and build your career from there?
Brooklin:
Yeah, it was a very indirect path. So we came to Guatemala not for any career moves or the money sense, it was just to work with the nonprofit. We both graduated with sociology degrees and international development and social work and really wanted to dive into that world. We kind of discovered financial independence along the way and it worked out that we were working in the low cost of living and then it was just a matter of putting the puzzle pieces together.
Scott:
Yeah, I would love to get the next piece there. Tell us about how the career developed. Look, how did you get a job in marketing that pays enough to sustain financial independence from Guatemala? Is this another repeatable path for folks? Maybe we’ll take a quick edit and that would be really helpful. Think about this from the perspective of someone listening who’s like, Hmm, I’m starting my career and I’m thinking about doing something similar. What are the takeaways that I can get from brooklin and think about in terms of opportunities for me if I want to live internationally or build a career in another country?
Brooklin:
So year one, about five years ago of going full-time into freelance writing and marketing, my goal was to make $40,000 in that calendar year. I think that first year we hit like 65,000 and then it grew from there. So I do think it’s repeatable now, A and B, it was just a matter of discovery. So yeah, getting a full-time job, especially a remote job at that time probably would’ve been close to impossible. Freelance opportunities were abundant. I started on Upwork and then grew out from there. Once we started building our network and just kind of slowly started realizing which types of work A were more interesting and sustainable for us, and B, which gigs paid more. So over a couple of years we honed in on B2B Tech as our main client base. So narrowing in on that part of the freelance world really helped increase our income and solidify our network.
Brooklin:
From there, I also took a full-time job for two years while we maintained our freelance business. This whole time it was my wife and I working together on it. Those two years were game-changing in a couple of different ways. Number one, financially, the full-time income and the freelance income really just kind of skyrocketed what we were able to do. I don’t recommend it for more than the course of a couple of years, but it was the first two years of covid, we couldn’t do anything anyway, so it was just two years of 60 to 80 hour weeks to jumpstart what we were trying to do. Then once our freelance income outpaced my full-time income, we decided to jump back out of full-time and go all in on the business. So we around that time turned the freelance business into an agency. So some numbers, Scott, year one goal was 40,000 in the first year we hit more like 65,000 by the time we launched the agency. Just the freelance income between my wife and I was around 300,000, split it right down the middle. It’s a solid six figure for each of us, but that was about the limit of what we could do ourselves, which is why we turned to an agency model to keep learning and growing and seeing what we could do.
Scott:
Awesome. So tell us about that. So you turned in jobs money for time and you just used the word agency. Can you tell us about this? Is this a business that you’ve now built and when did that start and how’s that going?
Brooklin:
So far so good. We started it, launched it about two and a half years ago, and yeah, it’s kind of flipped the switch. It’s less trading our own time for money and more. Okay, we’ve got something unique here that there is a demand for. How can we build a team around it so that this thing can be a machine of its own and run without us down the line. That doesn’t mean necessarily selling and it doesn’t necessarily mean completely stepping back, but it gives us, we look at it as an asset that we can use how we want. So yeah, the last two and a half years have been about building the business. We have a full-time team of five and about 20 contractors that we work with around the us.
Mindy:
So you are creating jobs and then you make money off of when they do work, you bill them out at X and you pay them Y and then the same with the contractors. So you’re making money, I am not phrasing it, but you are connecting these people who are doing a job with people who need a job and that’s your agency now?
Brooklin:
A little bit like that? Yeah, I mean, yeah, you’re putting the financial model, but that’s essentially, it’s a type of arbitrage, but it’s less of a marketplace or recruitment of just connecting people and more. We have our full-time team focused on strategy for clients. So it’s very much long-term partnership. Like some of our clients we’ve been working with even before we launched the agency on a freelance basis and then they transitioned in with us. So it’s this long-term relationship on one side with the client. And then on the freelancer side, we were both freelancers for almost 10 years, eight years before we launched. And so we want to provide a really good experience for freelancers. So yeah, we charge one thing to clients and we’re able to pay out to our contractors another, but the idea is that in the middle we’re taking off their plate all the time sucking stuff like client communication and handholding the strategy work, the briefs, and we’re just letting our writers be writers and our designers be designers.
Mindy:
And you’re running this for American clients, but from Guatemala?
Brooklin:
That’s right. Yeah, so all over the us, some in Europe, but yeah, mostly US based.
Mindy:
So this geographic arbitrage that you have been able to take huge advantage of is the difference between a 10 plus year PHI journey and do you consider yourself financially independent right now?
Brooklin:
No. No, not yet.
Mindy:
But it’s the difference between this much longer because America has a higher cost of living than Guatemala does. I mean you were living on 10 or $12,000 a year in Guatemala that doesn’t really get to a lavish lifestyle in the United States.
Brooklin:
Yeah, it’s been the biggest difference honestly, the last 10 years. I mean now that was a few years in a row before kids we were able to live off of that. Now we’re a lot closer and even a little bit above I think average American household income, but we’ve also been able to increase our income at the same time and that 60 to $80,000 goes a lot further here than it would in San Diego where we’re from.
Scott:
Let’s add a couple of facts out here. Where in Guatemala do you live?
Brooklin:
We are just outside Antigua, Guatemala, which is just outside the capital city. It’s the main expat spot. The first five years we were way up in a mountain town called Wayo, which has even within Guatemala has a much lower cost of living. It’s like living in a Kansas City versus la.
Scott:
Okay, awesome. And do you plan to live in Guatemala for many more years? Is this your home now for the foreseeable future?
Brooklin:
It is, yeah. Both our daughters were born here. We bought a house here, so we’re here at least the next decade as they move through high school and into what comes next for them.
Scott:
And then could you give us an idea of how close you are to financial independence and what that target looks like for you?
Brooklin:
Our goal has definitely shifted. Like I said, when we started it, the yearly income was 40,000. Our FI goal was 800,000, something very much the lean Fi side of things. And then as we grew up and realized things and had kids and we’re like, oh, okay, that’s not realistic, let’s go back to the drawing board. So we don’t actually have a hard fi number to be honest. We’ve kind of shifted our thinking, sorry, I’m saying we, but that’s just because my wife and I talk about this a lot, so I feel grateful that we’re very much on the same page, but now for us it’s much less about, okay, we’re going to hit 1.8 million by 36 so that we can never work again. And it’s much more about, okay, we like work, we like this creative stuff, we like working with people. We don’t want to do it for 40 or 50 hours a week and we don’t want to do it for 30 or 40 years, but we like it. So what can we do now to reduce the time that we’re spending working but not eliminate it altogether? So right now is more about adjusting our schedules, adjusting the level of involvement in the business so that we can be not PHI and not retired early, but be able to work 20 or 30 hours a week and be able to do school activities. So right now it’s much more about adjusting to what our current goals are rather than our goals for a decade from now.
Mindy:
One more quick break and we’ll be right back with brooklin Nash.
Scott:
Let’s jump back in.
Mindy:
Okay, so you like what you’re doing, but you don’t want to do it 40, 50 hours a week for 20 or 30 years. I totally understand that. Have you sat down and made a list of the things that you want to do or what’s the process for figuring out your balance between how much you want to be working versus how much you want to be making?
Brooklin:
A lot of conversations and trial and error. I think those two years of working 60, 80 hours really showed me a, I don’t want to do this forever and B, okay, let’s walk this back. And instead of we hit over those two years, I think that’s when we broke three 50 or around 400,000. And so we laid that really solid foundation. We’re Coast PHI essentially right now rather than phi. Going back to your question, Scott, if we were to not put another penny in savings, we would be beyond our FI number in quotes at 55. So we’re like, okay, coast Fi is taken care of. Now what do we want to do? So Mindy, it’s more talking through, okay, we have it taken care of. All we have to really worry about is our current expenses, which we have covered, and then just keep talking about what the next three to 10 years look like. So over the next few years, we both envision ourselves staying involved in the business. We don’t want to step back completely, so we’re good taking our salary, working in the business 30 to 40 hours a week, and then over the next couple of years, the next goal for both of us is how do we get down from 30 to 40 hours to maybe 20 to 30 hours?
Mindy:
And is that your goal 20 to 30 hours a week or is that just the current goal and then you’ll step because I mean I think it’s really valid. There’s this idea that, oh, I’m going to reach financial independence. I’m going to retire early and I’m never going to do anything again. And I live in Longmont, Colorado. I hear from a lot of people, I have a huge community around me of people who have reached financial independence and they’ve quit their day job, but they don’t stop working and the reason that they quit their day job is kind of the reason that they started pursuing financial independence in the first place. They weren’t happy there, but it sounds like you are happy where you’re at. You’ve created this job that you love. So stepping away from it is, I don’t want to say silly or foolish because if you don’t want to work anymore, then that’s what you want to do. But when you’ve got this, what is that stupid phrase? If you love what you do, you’ll never work a day in your life. It’s also kind of true though. It’s silly, but it’s true. I mean, I’m a real estate agent and I get to talk about money and real estate on a podcast. Why would I not work?
Brooklin:
Yeah, we feel very lucky in that we have that realization of, okay, most of the people in these forums and on the subreddit and you have full-time jobs and there’s not a lot of flexibility. We were able, because we were self-employed to navigate to something that we find interesting and creative and we get to do fresh things with our clients over the last few years. So that’s helped a ton. That said, I have higher priorities in my life. I want to go to my daughter’s dance recitals. I want to pick them up from school. I want to go camping. I want to take surfing lessons with them. I want to be able to take anytime they’re off of school, I want to be off of work. Those are my priorities, even if I find work interesting. So yeah, going back to your question right now, the goal is to reduce to about 20 to 30 hours by the time we hit in June will be the three year anniversary of our launch. Current goal is very much more time-based than is income-based.
Scott:
I love the framing of that goal of anytime they’re off school, I want to be off work that’s like an awesome in-between state for financial independence and full-time work that I think will resonate with a lot of people. I want to ask a couple of mechanical questions here that relate to you investing in building wealth and building a business out of the United States. Is there particularly special things about Guatemala that make this easy or attractive or do you think that Yeah, I guess that’s what I want to parse out here. Can you tell us how easy is it for an expat to start a business in and found it and incorporate in a place like Guatemala?
Brooklin:
Yeah, I should have Becca in here. My wife, she’s our head of operations and knows the mechanics much better than I do, but in short, Guatemala doesn’t have any special advantages financially. What the biggest advantage is, no matter what you do, whether you’re full-time or self-employed is the foreign earned income exclusion. So up to, I forget what it is this year, but it’s getting higher and higher every year, just like 4 0 1 ks and tax credits. It’s in the six figures of income that you earned while physically out of the United States. I’m not a CPA, so check this. And there’s exceptions and there’s a lot of rules but is not taxed at the federal level. So beyond just the cost of living savings, we’ve paid a lot less tax than if we had been living in the United States. The only requirement there is that you’re out of the United States for 330 days out of a 365 day calendar.
Scott:
Do you pay income tax to the US government on any of the income earned in the United States?
Brooklin:
That’s what I mean. The federal earned income exclusion is we don’t pay federal tax on up to when we started it was like 120 something thousand and it just has gone up from there.
Scott:
Okay, got it. Sorry, that’s for the US government. And then how about for Guatemala? How do the taxes work there?
Brooklin:
Certain taxes for being residents and owning property? There’s some property tax, but there’s no, because our income isn’t from a Guatemala company, we don’t pay income tax either. So tax burden here has been I think a couple grand a year.
Scott:
Awesome. Okay. And do you have to be a citizen in order to incorporate a business that is headquartered in Guatemala or how does that work?
Brooklin:
Getting in the mechanics, we’re actually a US business, so we don’t have a Guatemalan presence. So even though our business is registered in the us, we live physically outside of the us So we’re able to A, attract us clients because we’re a US business and paperwork and connecting payments and all that is seamless, but we’re also able to claim the earned income exclusion because we’re physically out of the US for 11 out of 12
Scott:
Months. This is super fascinating and stuff I don’t know anything about. I’d be interested to hear commenter’s perspectives on the of this and brooklin, I suspect that as your business grows, some of these things that you’re saying will not actually be able to scale into larger revenue items. For example, California ain’t going to let you get away with that for very long once you get past a couple hundred thousand in revenue from that state.
Brooklin:
That’s the sticking point. California, we don’t at all. We’ve paid very little in federal tax and I don’t even know how much in California tax the last 10 years, even though we haven’t been in California for 10 years.
Scott:
Let’s talk about, so you’re not a citizen of Guatemala, you are a US citizen living in Guatemala for many years.
Brooklin:
That’s right. We have residency here, which just means we don’t have to leave every three months, every 90 days. We can stay put. Both our daughters were born here, but yeah, we’re not citizens. We’re US citizens. Daughters are Guatemalan and US citizens, which is a whole other can of worms for down the line.
Scott:
What do you do for benefits and those types of things? Health insurance, all those goodies.
Brooklin:
We have an administrator in the US that provides benefits for our employees. We technically could take advantage of that if we were in the us, but because we’re not, we just pay out of pocket for international global health. With Cigna, it’s a, what’s it called? High deductible. There’s an acronym for it, but it’s a high deductible one. And that’s worked well. We just pay out of pocket because a doctor’s visit and dentists are so low here, it doesn’t make sense for us to pay premium when we could just pay out of pocket.
Scott:
How about the mechanics of investing? What do you invest in? And I’ve heard that some folks have no issue investing in things like an index fund, a US stock market index fund internationally, and some folks have to go to great lengths to get creative to try to replicate that because it’s not offered to their countries. Can you tell us about your experience with that?
Brooklin:
Yeah, because we were from the us, we’re able to participate in the stock market. So we have Bogle heads will be happy. We have a Vanguard account, we’re in vt, sacs and bonds, whatever, BLTX, and that’s about it. So yeah, across our 401k and our brokerage, it’s pretty much just index funds with the 90 10 split. Very boring.
Scott:
Now you got to put up a whole other can of worms here. If you don’t pay any federal income tax and you don’t pay any tax in Guatemala, what is the advantage of contributing to a 401k?
Brooklin:
It’s only up to a certain amount. So we’re earning for married, filed jointly. We’re earning well above what the limit is. So contributing to a 401k reduces what we’re paying off on top of the exclusion.
Scott:
Okay. So you do contribute to US national debt reduction on an ongoing basis?
Brooklin:
Yeah, we’re not, I sound like such a jerk over here. Yeah, I haven’t paid taxes. Well, look at you. You live internationally, you don’t partake from the system and you contribute. So thank you. Yeah, that’s wonderful of you. Yeah, we think of it as fair because we don’t live there, so we pay whatever’s, but 11 and a half months out of the year we’re not there. So that’s where we’re at. But yeah, we do pay into federal taxes and feca is still a thing, especially as a business. But yeah, federal income, the exclusion has been a big chunk more than half of what our current W2 salary is.
Mindy:
Okay. So brooklin, this geographic arbitrage angle that you have invented, ha. It sounds like a really amazing way to game the system. So you’re making high income, you’re living in a low cost of living area, and you still have citizenship in America. So should something happen in whatever country you’re living in and you could move back, how did you decide to take this jump? Was it hard to say goodbye to your family and leave all your friends with the internet? You can talk to anybody and you can send gifts with FedEx and it gets there in a day and a half, but is it hard to walk away?
Brooklin:
It wasn’t 11 years ago, so this is probably a moot point, but at 21 we were like, yeah, worlds are oyster, let’s get out there. And sure, our parents were like, what are you doing? We’re like, yeah, we’re doing it. So the same reason we just went whole hog on paying off student debt. We just didn’t know what we were doing. We were just jumping into things. So it was hard the first few years, but then once we realized we started, Guatemala started to grow on us and we realized the financial impact and we started growing. These financial goals stayed put and the middle part was a little hard. And then now the last few years with our girls growing up in a solid school and a community here, this is just home. We can’t imagine leaving it now. So I don’t know how relevant that is for a 36-year-old who’s looking at making a change.
Brooklin:
But I will say I spent a lot of time talking to folks in this space, LinkedIn and Twitter, I won’t call it the other thing. And a lot more people are starting to do this even as an experiment. So there’s people who will go, let’s go here for three months and let’s see how it feels. And then they’ll come back and then they’ll reassess what their relationship to money is and their house and work and the balance with their kids. And a lot more people are just starting to talk about and think about this, which has been really fun the last couple of years. So it’s not like you have to jump in and be like, I’m going to Guatemala for 10 years. We came here and we were going to stay for one year, and here we are 11 years later and 10 years later and we’re still here. So I think you can take it in chunks and go for a few months and see if you like it, and then try a year and see what impact it makes.
Scott:
I am obviously very happy with my job and don’t not looking around on these things, but I know, oh hey, if I wanted to work remotely at Digital Nomad, I would want to go to New Zealand. That’s a country that’s been in my mind for a lifetime and one of these years I’ll spend a year in New Zealand maybe five, 10 years from now, and that is a place where you cannot work. It’s very clear you’re not allowed to work a job even remotely from New Zealand with a visitor without a visa from their immigration center. So that’s where I was kind of going with that question. It sounds like that issue just does not exist for you in Guatemala and in some countries it’s easier than in others, but do you have any commentary or thoughts on that for folks looking at geo arbitrage, right, there’s two extremes. Guatemala sounds really easy. New Zealand don’t move to New Zealand and then figure out where work situation later, you’re not going to be allowed to do it. They’re not going to let you do it.
Brooklin:
Yeah, I totally botched it on that, Scott, because I was thinking about the disadvantages of Guatemala, or sorry, the advantages of Guatemala rather than disadvantages elsewhere, but you’re totally right. Do your research ahead of what is required. Guatemala, if you’re not a resident, you have to leave every 90 days, so you got to plan for that, and that’s an additional expense. A lot of countries like New Zealand, Israel or first year, you can’t technically earn an income there. You got to work around things. So I was working at the student writing center at the university, and that was one way around, and then I was like, that’s why we started on freelance income. The only way we’re going to make money is by going back to US companies or clients and seeing if we can make money there. We can’t earn money in Israel, so it really depends on the country. You’re right, Scott. I think that just went right over my head the first time around.
Scott:
I was impressed with what seems to be a very favorable environment for you guys in Guatemala that encourages or allows this and that makes sense, right? Guatemala is probably a different view on immigration than New Zealand does for various reasons. And I think that that’s just something you take into account if you’re looking to take the lessons learned from brooklin story and apply ’em in your own life. If you’re listening to this, I will
Brooklin:
Say this is very in the weeds of the mechanics that you’re asking about, but the time zone makes a big difference. Guatemala is central time and mountain time. We were in Spain and Portugal last summer and the seven hour time difference, I was like, we were there three months. I’m like, this is not going to be sustainable. So we were exploring what would it look to move to Portugal. We’re like, Nope, Guatemala is home. This makes it easy. We get to work with US companies and work a normal nine to five.
Scott:
Yeah, I think that’s a big deal. And that was also probably a big damper in my New Zealand dream there because that’s a wild, a different time zone. But
Brooklin:
Yeah,
Scott:
I don’t even know what
Brooklin:
Time is over there.
Scott:
I mean, if you have a client and they’re in mountain time, you need to be available during mountain time. I assume these folks are entrusting you with big parts of the strategy around that, and you got to be available for those types of things. And your employer, if you’re working remote, it’s probably going to make you work on their time zone, redo at BiggerPockets. So that’s something to consider as you think about this arbitrage component. Yeah. Well, brooklin, where can people find out more about you
Brooklin:
On LinkedIn, brooklin with an I instead of Y Nash and our company’s beam content? It’s beam content.co. If you want to find out more about the team and what we do. But yeah, I always love talking about this stuff. So if you’re thinking about the geo arbitrage stuff or digital nomad or moving with your family, I’ve gotten on a few calls the last six months with folks and it’s always fun to chat through. So feel free to reach out.
Mindy:
Awesome. brooklin, thank you so much for your time today. This was a lot of fun. I enjoyed meeting you in real life. We have been online friends for a long time, so thank you so much for your time today.
Brooklin:
Thanks Mindy. Thanks Scott.
Mindy:
Alright, thank you for listening. That wraps up this episode of the BiggerPockets Money podcast. He is Scott Trench and I am Mindy Jensen saying, until next time, key lime.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
