ITP - 013: International Teaching Finances, Savings Strategies, and Financial Independence

Greg: In this episode of the International Teacher Podcast, I’m going solo because Matt the family guy is with his family or out on the golf course.

Our next guest is talking finance. He left California as an elementary teacher, went overseas to places like China and the Middle East, and he’s here to share knowledge about international teaching finances.

Greg: Welcome, Eric.

Greg: Welcome to the International Teacher Podcast with your host, Greg the single guy and Matt the family guy. We’re recording episodes from around the globe to tell you about the best-kept secret in education. That’s right—it’s teaching overseas. We’re glad to have you.

Greg: Welcome to our show. This is Eric, and he’s going to share with us, especially about finances today—his favorite subject for overseas teachers, right?

Eric: Indeed, indeed.

Greg: Welcome to the show, Eric.

Eric: Thanks a lot. It’s good to be here.

Greg: All right, Eric, let’s get started. Tell us a little bit about your work history for education. A lot of the people listening are overseas already, some might be thinking about going overseas. Can you give us a little pedigree in general leading up to the Middle East where you are now?

Eric: Okay, sure. I started teaching in 1990, so it’s been a little while—17 years in central California. During that time I started in one of the top-paying school districts in California, and that looked really good. Over time that dropped, and I found myself making a little less and a little less, and then starting to really relate to the main character on Breaking Bad.

If you remember that, all of your peers have surpassed you, and I’m teaching summer school constantly, doing extra jobs to make money. And then I came to international teaching and saw light.

Greg: How did you get into international teaching, by the way, if you can remember back that far?

Eric: One of my teachers at my first school had been abroad for a while—Central America was where he spent most of the time. We commuted together, and whenever we got really frustrated, he would tell a little story from time abroad—whatever it would be—and kept planting these seeds because he knew the freedom that was out there and wanted me to be able to have a taste of it.

So I was a slow learner. It wasn’t until the 17th year that I went abroad. Those stories always resonated, and I thought there’s got to be more to it than this.

Greg: So where was your first overseas stint?

Eric: My first overseas stint was in Shenzhen, China—Shekou specifically. It was a fantastic place. I started with a smaller international school group, although they do have many schools. It was just a fantastic spot to get started.

I cut my salary by more than 60 percent, but had an amazing time and ended up saving more money.

Greg: I was going to say, your savings potential might have still been there. It’s regulated by what you take with you, what you have back at home, what you’ve left.

So you left a job where you were paying for maybe a house, a mortgage, a car, and you’re paying taxes in California. Once you go overseas, you have—most of us never reach it in teaching—but once you went overseas, you did have savings potential incredibly, even though your base salary was cut by 60 percent.

Yeah, you still had at the end of the day—we like to say savings potential in overseas teaching because it’s not about what you make. It’s about what you can save at the end of the month, the year. It’s about what you don’t allow yourself to get caught up in spending.

Greg: So you’re more of a money man.

Eric: That’s definitely the case. It really is an amazing thing, Greg. When I look back to that first school, it was a very humble start. When I went to sign that contract and went from $72,000 or so to $30,000, I thought, what have we done? This is crazy.

But the folks who were hiring us and the other people we talked to said, just give it time. Across the system, you’re going to have a lot less expense in life. And it was amazing—we got abroad and suddenly we could live a style that we’ve never had before. Much more freedom, no commuting, a much more hyper-social life—way beyond anything I’d ever imagined.

And yet at the end of every month, there was this pot of money just sitting there. It was shocking to see how much that grew over time.

Greg: I love talking about that because usually people—I’m hoping if you’re listening to this, you’re not thinking about going overseas if you’re heavy in debt back home. If you’re heavy in debt, if you’re running away from something—let’s put it that way—and that’s just my opinion, you might disagree—but my opinion is that it doesn’t solve things to run away from them.

And even though you can have better savings potential overseas, wherever you are, it doesn’t make sense to me if you’re overwhelmed and trying to escape it because you’re still going to have money problems. They’re not going to disappear.

Eric: Exactly.

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Greg: I’ve known several people over the 14 years I’ve been abroad who did come abroad with big amounts of debt, whether it be student or home loans—those were two things—and because of the savings potential, they chose to attack that and have it disappear.

And we’ve had several people that you and I work with who came in the last five to seven years who no longer have student debt. Now, they’re also folks who don’t have a lot of savings because they got into lifestyle creep and spend a lot of money on buffets on a regular basis, brunch a couple times a month, those kinds of things.

Eric: Yeah, so it’s what you make it. If people want to come abroad and save, if they’ve got debt, this can be a fantastic place to take care of it.

In general, going overseas—especially at solid schools, not just top tier but even mid-level schools—you can still make enough to save at the end of the month. And we still have a car, we still have help at home, we still have a lifestyle. I travel a lot. That’s the joy of this secret of moving overseas.

Greg: What are some things that teachers that are leaving the States or even living overseas now—what are some of the secrets of increasing your savings potential or really saving money at the end of the month or the end of the year so that if they get into dire straits, they have something to fall back on?

Eric: I think the thing I would tell people is you need to sit down and decide, why am I doing this?

We all get up, we go to work every day, we do our work, we enjoy our jobs—we enjoy them a lot more being abroad than we ever did being home. And then that salary comes along and it’s nice, and you spend it, you get into your habits.

But if you ask yourself, what do I want out of life at the three-year mark, in the next five years, in the next ten years, that can really help you solidify a direction for where you want to go.

And those folks who we work with who have been able to sit down and say, in the next three years I want to pay off student loans, in the next five years I want to buy a house, in the next ten I’d like to work toward being financially independent—if they set those goals and focus on it, those can all be achieved. And that isn’t just at premier schools. That’s something that can be done at a solid mid-level school.

I’ve got a couple I worked with at my very first school who have stayed at mid-level schools over the last 15 years, and what they’ve been able to accomplish is phenomenal. They own two beautiful homes in Oregon, they’ve got a phenomenal portfolio put together, and they live a fantastic lifestyle. They’re not paupers. They’re traveling somewhat regularly, they’re enjoying life, but they are careful with what they do, and what they’ve accomplished is phenomenal.

Greg: So it sounds like you don’t go extravagant, but you live well.

Eric: Oh, absolutely.

Greg: I can’t believe you and I both go business class.

Eric: No, no we don’t. I will go business class every time I’m able—if I can use points—but I don’t buy business class tickets.

Greg: Just like me. I always buy the cheapest—not the cheapest where I’m spending 30 hours going through five different airports—but we pick a nice route, something reasonable, but we’re not going to go overboard.

Eric: Exactly. Even if the school gives you a stipend that pays for a higher level, maybe you can find a way to go a little bit cheaper and save some of that money.

Greg: Absolutely.

Eric: Pre-COVID, when we were traveling, I think I did three or four trips that would have been once-in-a-lifetime opportunities when I worked in the States. I did everything I wanted to do, but I didn’t stay at the Ritz-Carlton, I didn’t stay at the Kempinski. I stayed at very nice mid-level hotels and spent way less.

I ate at local street food places with local people and had amazing meals for three to five dollars. It was a much more culturally relevant experience than fine dining at high-end hotels, and I came back with money.

Greg: When you do have money at the end of the month or the year, do you have advice for what teachers should do with that money?

Eric: Absolutely. First thing—get yourself educated. There are great resources out there.

Andrew Hallam has written a series of books called The Millionaire Teacher—phenomenal books.

I usually don’t pay myself at the end of the month—I start at the beginning. When that paycheck comes in, I automatically set aside a large portion. About 60 percent of my salary goes straight into investments.

I look at dollars as employees that go to work. I never see the money—it just goes out and gets to work in low-cost index funds. And what I have left supports the lifestyle I want.

I still travel, I eat out, I enjoy life, but it’s automatic. It just happens over time.

Greg: I’ve been at schools where they offer retirement setups where they take money out and match it. Is that something teachers should consider?

Eric: It’s worth looking at, but investigate. Spend time at the school before you commit. Understand the organization, the returns, the history.

For me, I usually just use low-cost options like Vanguard or Fidelity. For Americans, those are great—super low fees and strong long-term growth.

I would tell people—run away from the investment guy that shows up at your international school. They’re usually charging one to three percent in fees, and over time that can cost you hundreds of thousands of dollars.

Greg: I’ve seen those guys before, and I just ran away.

Eric: Yeah, and that’s the right instinct.

Greg: So the takeaway is start early.

Eric: Exactly. The sooner you start, the better off you are. One of the challenges abroad is that most of us don’t have built-in retirement systems, so you are responsible for your own long-term future.

If your school offers matching, great—take advantage of it. If not, start putting money aside in low-cost index funds and let it grow.

And if you’re in your 30s or 40s and haven’t started, it’s not the end of the world—but you need to start now.

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Greg: So you said educate yourself. You mentioned Andrew Hallam and those resources. You were going to tell us a story about him.

Eric: Yeah. So Andrew—right before The Millionaire Teacher book was published—I was at a conference where he was speaking. I had already been interested in finance for a while and had been reading quite a bit, so I went to hear him.

What was really interesting was that the financial planning group sponsoring the conference—the owners were in the back—and they spent the first twenty minutes trying to heckle him, asking questions and trying to prove that he didn’t know what he was talking about.

He very politely, very adeptly answered every one of their questions, but they kept interrupting him. There was this tone in the audience where people were getting really frustrated.

Finally, someone behind me stood up and said something like, “Interrupt him again and I’ll break your jaw.”

And I thought, wow. These financial planners are so threatened by what this guy is saying—that you can save money on your own using things like Vanguard—that they’re embarrassing themselves publicly. And he’s just calmly dismantling them.

It really gave what he was saying that much more validity. What’s in his book is gold for teachers. It’s a simple path to wealth if you’ll read it and follow it.

You won’t notice the changes at first. Maybe the first month or two you’ll think, wow, all this money is disappearing—but those employees are going to work for you. Within a year or two, you look back and realize how much you’ve saved.

Greg: That’s incredible. I love that.

Eric: And I’ve seen it firsthand. There’s a teacher we both know—I sat down with her about four years ago. She was just getting started, had a bigger paycheck than she was used to, and said, “Why don’t I just save half of this into an index fund?”

She did it. She’s leaving this year and has financial independence for years after.

Greg: I don’t even know what that means, but I love the sound of it.

Eric: It means she has enough saved that her money generates income on its own. She’s got a large enough nest egg that it can support her lifestyle.

Greg: That’s the dream.

Greg: I tell you what—I don’t know where to go beyond that. Financial independence is not something I’ve ever had. But even if you’re working in Central America, where you’re making less, it still applies.

If you start early, even small amounts grow. Eventually, that becomes the goal—financial independence.

Greg: I’d love to be able to just go teach anywhere I want and not worry about salary.

Eric: Exactly.

Greg: All right—besides The Millionaire Teacher, any other resources?

Eric: Yeah, I really like the blog Mister Money Mustache. It’s written by a Canadian engineer who retired early. The idea is simple—save a large portion of your salary, live below your means, and invest the difference.

He talks about how we’ve normalized luxuries—things like daily coffee or constant upgrades—and we don’t question them anymore.

For example, before I left the States, I used to stop at Starbucks and grab a five-dollar coffee. It felt great at first. Then it became a habit. Then I was standing in line complaining about waiting ten minutes for something I didn’t even enjoy that much anymore.

When I did the math—five dollars a day—that’s about $100 a month. Invest that over time, and it turns into thousands of dollars.

That’s when I stopped and started making my own coffee at home.

Greg: You’ve hit the nail on the head. That’s great advice.

Greg: All right, I’ve got a game for you. I want to test your money knowledge overseas.

Greg: I’m going to name a currency, and you tell me the country.

Eric: This is where I fail.

Greg: All right, easy one—pound.

Eric: UK.

Greg: Okay, dirham.

Eric: UAE.

Greg: Dong.

Eric: Vietnam.

Greg: That’s one of my favorites. You go to the ATM, pull out a hundred bucks, and you’re a millionaire.

Eric: Exactly. And they have amazing coffee.

Greg: I’ve told people that on the podcast before—Vietnam is incredible.

Greg: All right—lempira.

Eric: Honduras.

Greg: Nice.

Greg: All right, I’ll leave you alone on the currency game.

Greg: Before we wrap up—anything else you want to say about finances for international teachers?

Eric: I’d say look at your lifestyle and ask yourself what’s become habitual.

What are you spending money on that doesn’t actually bring you value anymore?

For example, brunches. They’re amazing—but if you’re doing them three times a month, they stop being special and just become expensive habits.

What could you cut back on slightly and still enjoy life just as much?

Greg: That’s a big one.

Eric: And then take that money and put it into something productive—low-cost index funds, long-term savings, something that builds over time.

Greg: I’ve been doing something similar. I went through all my subscriptions—apps, streaming services, everything—and realized I was spending hundreds a month on things I didn’t even think about.

Once I cut those out, I started saving a lot more without changing my lifestyle much.

Eric: That’s lifestyle creep.

Greg: Exactly.

Greg: All right—last question. What’s one thing you spend money on that you don’t regret?

Eric: CrossFit. About $100 a month. It’s worth it—physically, mentally, everything.

Greg: That’s a good investment.

Eric: And I cover it with tutoring. Two hours a week pays for that and more.

Greg: That’s something we should emphasize. Tutoring is a huge opportunity overseas.

Eric: Absolutely. Depending on where you are, that can be $40 to $200 an hour. It adds up fast.

Greg: That’s a great place to end it.

Greg: Eric, thanks for coming on the show. We really appreciate it.

Eric: Thanks for having me.

Greg: And to everyone listening—thanks for tuning in.

Greg: We’ll see you next time.

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Greg: Thank you so much, Eric. We’ll be in touch again down the road.

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