8 Steps to Prepare for a Life of Travel
Step 1: Pay off your debts
Before making a big move abroad, you absolutely must get debt-free. If you have a financial obligation that’s bleeding your savings at a rate of 16%, we can’t even begin to start talking about how you’ll be making income. Having your debt weigh down on you while you’re living abroad would rob you of a fully enjoyable, immersive experience. Pay off your debts first, whatever you do.
Hack the System Resources
- If you want to become a sophisticated player in the credit card game, follow The Points Guy. He explains all the metrics from which your credit score is measured, with how much weight each metric affects your score, then how you can game the system and optimize sign-up bonuses to your advantage — invaluable information a smart traveler would not want to pass up.
- To access your free credit score at any time, from any device, Credit Karma is a trustworthy and secure platform from which you can view and manage your score from all three of the major credit rating agencies: TransUnion, Equifax, and Experian.
- Flyertalk — This is not so much get-out-of-debt-related but a lifehack related forum. I haven’t personally used this but a friend, Parag, an avid life-hacker follows it religiously. You’d scroll Flyertalk for free/discounted flight deals or to get free upgrades. He’s gotten complimentary business class seats and hasn’t paid full-price for a flight in the two years he’s been traveling.
Step 2: Sell your stuff
Let’s talk about your car. The value of your car is rapidly depreciating by the minute and you can’t take it with you, which means it’s not worth holding onto and storing while you’re away for however long. Sell it. The $5,000–10,000 you’ll get back for it will take you far (literally), funding your travels for 6–12 months depending on where you’re going.
I spent a little less than $1000/month living in Ubud, Bali, and that included everything: food, flights, transport, housing, phone, entertainment, massages, etc. And those who follow my travels on SnapChat know that the quality of necessities like housing can be on par with western standards for a fraction of the price.
Because your dollar stretches so far out there, it is definitely worth your time to sell even small-ticket items like a used laptop or a new North Face jacket you haven’t worn, which in exchange could pay for three days’ expenses abroad (again, depending on where you’re traveling to).
- Get the numbers in terms of cost, weather, air quality, safety, and even fun-factor from Nomad List. Based on my subjective experience and comparing it to the numbers shown on the site, I’d say it does a good job at quantifying them objectively. Also — fun fact — the guy who founded Nomad List developed it in Ubud. 😉
Step 3: Earn passive income
Passive income is money you generate without much time or energy exertion. Initial set-up takes time and energy but after that, it’s set and forget with occasional maintenance. This should be small income that supplements your primary revenue stream. Examples could be: investment interest income (see Step #6), real estate rental income, e-book income, YouTube video income, etc. If you own a house for instance, you could rent it out monthly and hire a property manager or become an Airbnb host and coordinate with a trusted friend to manage it for you while you’re gone. Airbnb provides free photography services and will send a professional photographer to shoot your home. Once you’ve set up a profile and found someone to manage your home, you’re ready to start doing short-term rentals. Rental income from a single-family home in a good location in the states could gross $800–1,600 in revenue a month. That kind of supplemental income is enough for one person’s month-long living expenses abroad.
If you want to make passive income into your primary income source, there’s a caveat; it’ll take much heavier lifting. There’s a direct relationship with how much effort you’re willing to put in at the start with how much money you expect to earn down the line. Put bluntly, the more you want to make without doing much later, the more you’ll need to work now. People hear this term thrown around and think easy, quick, or free money. Not so.
Step 4: Establish an online business
Interchangeable or can be integrated with Step #5 depending on your business. Extra credit if you do this before the big move, but it’s not necessary if you have money saved.
When you decide to live a life of travel, it’s important to understand that you don’t need to start from scratch; you take your skills with you and can sell your services online. You’ll likely take a pay cut and be without health benefits but it’s also just as important to consider that outside of the states, the cost of living in most nomad-concentrated areas is reduced by more than half. So even if you’ll be taking a 20% pay cut, your budget will be bolstered by 50% for the same goods and services. Let that sink in.
Digital nomads have long realized this and are taking advantage of their western-baseline income from their online businesses while being physically present somewhere off in a “remote”, under-developed place. Digital nomads are, by definition, location-independent and can earn their income by selling their products/services digitally. Examples of digital nomads are: professional bloggers, professional photographers, artists, journalists, copywriters, social media marketers, drop shippers, developers, graphic designers, virtual assistants, and so on.
Questions to ponder
- What do you know how to do and what are you good at?
- What do you enjoy doing?
- What are you passionate about?
- Can you integrate your answers to the above and make a living from doing something at the center of all three (think the sweet spot of a Venn diagram)?
- If you’re thinking about selling a good, like a coffee scrub, Instagram is a powerful, free engine to get your product out to its 400 million active users. Frank Body, for example, is an Australian eCommerce startup that excels in social media marketing and are in the tens of millions in revenue after only eighteen months out of the gate.
- Drop Shipping. This is a business model you’ll find commonly being implemented in digital nomad hubs like Chiang Mai, Thailand. One of my good friends and fellow blogger, Aaron, wrote a great guideline about what drop shipping is, how to set it up, and so forth. In a nutshell, it’s about selling those products like hair curlers or water bottles that you see on Amazon without you actually holding the inventory.
- Payout method. Consider Bitcoin. PayPal, other payment providers, and remittance services alike will take a cut of about 3% plus a small flat fee from sellers while charging buyers ~1.5% before sending a small pigeon with a bag of coins on its feet that will arrive at your bank in 3–4 days. A bitcoin transaction costs $0.02 and is instantaneous.
- Freelancing.com and Upwork are job posting websites where you can establish yourself as a freelancer.
Step 5: Establish an analog business
Interchangeable or can be integrated with Step #4 depending on your business.
An analog business is one where you need to be physically present with the end-user to deliver your services. So if you’re a yoga instructor and you hold classes, talks, immersions, or teacher trainings, you can take that with you anywhere in the world, hold pop-up workshops, and earn income. Other examples of analog nomads would be consultants, acupuncturists, life/business coaches, musicians, personal trainers, alternative medicine healers, the list goes on.
This route is usually cash-based and when it comes to US tax filing obligations, as of 2016, the Foreign Earned Income Exclusion (FEIE) allows you to earn up to $101,300 without you needing to pay taxes on it if you’re living in a foreign country for over 330 days out of the calendar year. That’s another 15% on federal and ~10% on state, depending on the state, alone that you’ll save in tax obligations. I believe the phrase, “Fuck bitches get money” applies here.
- Join Facebook groups. Interest groups on Facebook are communities of people who’ve self-selected into a specific niche telling you exactly what they like, watch, and follow. The work of finding your new network is already done for you; proceed to Go; collect $200. Leverage these groups for support, doing the outreach, and generating leads, especially when you’re just starting off.
- Word of Mouth Marketing: How Smart Companies Get People Talking by Andy Sernovitz. If you’ll be working face-to-face with your clients, especially if those clients are talking to each other in a close community like a Facebook group, then it’s valuable to get the theory behind the power of word of mouth then end up hearing people raving about you and your services.
- How to Talk to Anyone: 92 Little Tricks for Big Success in Relationships by Leil Lowndes. While we’re on the topic of client facing businesses, this book is valuable because it breaks down the top qualities that customers and people in general value, like ability to empathize and being consciously aware about other peoples’ times. Leil Lowndes goes into a deep dive on this topic, emphasizing the obvious “tricks” that not enough people do as well as the non-obvious that only the successful know to do, which makes this book basically a modern-day version of Dale Carnegie’s How to Win Friends and Influence People.
Step 6: Invest your money
Optional but highly recommended.
I can write volumes on this topic (and there have been volumes written about it) as it can’t be stressed enough how beneficial that savviness in personal finance is to your life, even if you’re not in Finance. It’s up there alongside fitness, being a leader, and being a charismatic communicator on the list of Ultimate Life-hacks. I’ve been investing my savings since 2010 and have been making much of my passive income through this channel, so it’s highly worthwhile for someone who is on the move who can’t be working forty hours a week.
Any amount of disposable income that you have should be put into an investment vehicle that earns you more than a meager 0.5% from a savings account. A megatrend these days and my go-to investment vehicle is the rise of peer-to-peer networks. Lending Club is one such network that cuts out the middle men (central banks) and links lender (you, with the disposable income) directly to borrower (your neighbor, John, trying to buy a new car) at rates much more favorable for both you and John. It can earn private lenders anywhere between 6–12% return on investment right off the bat.
It’s daunting to know where to even begin if you haven’t dabbled in finance, but below is a good place to start.
- The Intelligent Investor by Benjamin Graham. I hate to admit it but I haven’t read this yet. But since Warren Buffett thinks that it’s “by far the best book about investing ever written”, it’s good enough to be recommended.
- Sovereign Man. One of my favorite blogs that I follow. Simon Black, the Morpheus of Money, opens his palms with the red pill clasped in the form of sobering economic news around the world and in the US especially, showing how you, personally, are being affected. Then he helps you make a backup plan.
- The Daily Shot Newsletter. Taken from their page’s meta description, “The Daily Shot is a chart-based newsletter covering select global economic and market trends. The newsletter is distributed via e-mail once a day and is intended to be succinct, to the point, with no self-promoting nonsense and no long-winded opinions.” It provides great context into what’s happening in the rest of the world that’s affecting the price of goods and the value of your currency today.
Step 7: Audit the country you’re thinking about living in
Optional but highly recommended.
There comes a time when there’s not much more to be drawn from other peoples’ experiences and you want to see the place for yourself. It’s a good idea to do a test drive for a minimum of two to four weeks. You’ll learn quickly whether you’re inclined to live a low-budget lifestyle, like that of a backpacker’s, or if you can’t live without comforts and are willing to shell out more for something closer to the standard of living you’ve become accustomed to.
Questions to ponder
- Do you want to base yourself in a foreign country and travel sporadically to nearby regions?
- Do you want to go somewhere, live for a month, then go somewhere else, live for the next month, then repeat as a country-hopper?
- Do you want to be constantly on the move and seeing as many places as you can?
These are important questions to ponder because if you change any element in your travel style, you’ll face a different set of concerns. If, for example, you decide to base yourself in one place, then you have the luxury of checking on 50 lbs of luggage on top of a carry-on bag to use for your mini trips. If you want to be a country-hopper, then at the start you’d need to leave all your stuff at home or in storage and bring just two carry-ons with you (or just hand luggage, yes it is possible); checked-baggage costs for frequent intra-regional flights add up very quickly. If you want to see as many places as you can in a given amount of time, you’d consider buying a mobile home abroad and camping from it. And so on.
Step 8: Quit your job
Unless of course your boss allows you to work remotely, as in remotely from another country. I’ve only met one such person, TJ, who is pulling this off. And he’s a badass.
When you’ve checked these off and you’re ready to go, just do it. Pack your bags and embark the next arc of your life. There will never be a perfect time. That perfect moment for when you’re going to give the girl a rose, sweep her off her feet, tip her under the light of a full moon and kiss her softly doesn’t exist. You just gotta give her the rose, sweep her off her feet, tip, and kiss her even when the moon’s an imperfect crescent.
Most people are so worried about the future that they forget to live in the present. Some think they need a nest egg of at least $100,000 to have as padding before they feel ready to take the plunge. Americans especially are sold on the idea that they need to save for retirement and buy their own homes. Most people think travel is expensive. Most people think that life is first and foremost about making money and secondly about being enjoyed; that the latter is reserved for the rich and privileged. The reality of it is, you’re not going to get the insights to combat the limiting beliefs of most people if you’re in one place around the same mindset, which keeps you locked in a well-defined path, preventing you from expanding the vision for a different, perhaps even more thriving life.
Are you ready to live your most thriving life?
Until next time,
What are some of the things that are holding you back from living a life of travel?