A Layperson’s Guide to Digital Nomading

Damir Kotorić
Oct 21, 2018 · 18 min read

Digital nomading is so-hot-right-now, and on my journey I learned a few things that I wish I had known from the start. These are my opinions. Your mileage may vary.

“A post about digital nomading. So hot right now.”

Why?

You might just wanna do it for the YOLO of it, and that’s fine too. I find that having a meaningful reason why I’m doing this helps in tough times—and there are more intense times than at home, for sure.

“He who has a why to live for can bear almost any how.” — Nietzsche

Personally, I love to travel, experience new cultures, expand my horizons, and enjoy life. I loathe nationalism, conservative closed-mindedness, and the daily grind. Digital nomading to me represents the idea of being a global citizen and ultimate freedom. A sort of Marco Polo with a laptop.

Throw in a pair of flip flops, and you’re good to go.

Remembering your reason helps when you go through a rough patch: feeling isolated, sickness, feeling outside your comfort zone. I don’t think I would enjoy “just coasting around” without it having a purpose or a greater philosophy tying it all together.

Becoming a digital nomad

There’s tons of blog posts about this only a . I’m not gonna beat a dead horse, especially because I know it’s not as easy as all the digital nomads make it out to be.

I know a ton of highly talented people who would like to have a location-independent lifestyle but haven’t been able to get a lucky break with finding remote work. If you’re in that camp, I feel for ya. I’ve been in the same boat for years. It’s a dog eat dog world out there, and no one will hand you a remote job on a platter. You’ll just have to fight for it.

I’ve managed to find two great remote jobs via . I’ve kept my eye on and , and others but AngelList has been by far the best for me. One word of warning is that you’ll have to scout these companies yourself because a lot of them set themselves up as “the next great thing” while they’re hardly making ends meet, yet they’re hiring anyway hoping things’ll change in the next 6 months for them. Make sure to ask them about their financial status! You don’t want to be joining a dying startup.


Choosing a destination

Here’s my formula:

Great digital nomading location:

(Progressive, open-minded people + beautiful nature +
interesting culture +
hipster friendly for like-minded people, healthy food, yoga, spirituality) / cost of living and getting there

Cost of living

Having lived in some pretty expensive places in my life, “rent” has suddenly become a lot cheaper. And when I really do my diligence, it can be cheaper by a factor of about 4x. Financial independence to me is core to the feeling of freedom, and this is one of the top variables in my formula.

It’s important to factor in the cost of getting there as well. If accommodation costs EUR €500, but the flight there costs another EUR €500, then the cost for “rent” that month is € 1,000.

Plus you have to factor in that everything is more expensive in the first month in a new city. You’re new, fall for tourist traps no matter how many blogs you read, and it takes a while to get adjusted.

Finding a place

Like almost every other digital nomad I use to look for inspiration for places to go.

It’s a valuable tool to start the inspiration process, but I don’t take it as gospel. Same with internet blogs. For example, I went to Taghazout, Morocco after seeing it highly rated there and reading tons of great blog posts about it online:

Long story short, I went home early because I didn’t like it there. But 95% of the reviews online were positive. What’s nice for one person isn’t nice for another, no matter what people say online. I mean we all kinda know that, right? But what surprised me was how vastly different my impression was to other nomads.

Figure out what is an minimum requirement for you. Regarding things like cleanliness, drinkable tap water, safety, weather, culture etc. And don’t feel lesser listening to Western hippie philosophies of “push yourself beyond your horizon” and “step out of your comfort zone” and all that shit.

If you’re a woman you’re not gonna have a good time in an Arab country by yourself. No matter how many blog posts promise otherwise. Sure you might throw the dice, and get lucky and everything turns out fine, but why risk it?

Or if a squeamish Westerner like myself who can’t stand insects, I know I’m not gonna be able to shut an eye in a jungle hut, and I know this from experience.

So here’s a radical idea: stop trying to change yourself by constantly pushing yourself out of your comfort zone. Pick a place where you feel safe, and then explore. Go paragliding, hiking, diving, dancing, or whatever you consider pushing yourself out of your comfort zone.


Travel

Okay so say you find a place to go. Now it’s time to go there. I normally use a combination of and to get a finger-in-the-air estimate of the cost and options available.

Then there are travel hack sites like , but I haven’t tried those — and I’m not sure I’m willing to try — although I appreciate them exposing unethical cost structures created by airlines.

I’m not one of those people collecting airline miles, and I don’t like to spend hours trying to find a €100 cheaper inter-continental flight. If I see a good price with a good airline I book it, and when possible I travel by train. Air travel and that semi-modernised 1960s Mad Men style flying experience and the “high fashion” airport advertisements make my stomach turn. Let alone the security procedures and cattle herding.


Gear

I don’t travel light. Hipster blasphemy! I have a big-ass suitcase that I check-in and a backpack for carry-on. You’ll figure out the gear as you go. No need to overthink it. Just bring what you know you’ll need. You can buy the rest there.

Make sure to bring a battery pack. You don’t want to be running out of battery, especially in an age where the electronic boarding pass is often our one and only way into the plane. Just , and that these numbers are clearly printed on the outside of the battery pack.

It’s probably a good idea to pack some basic medicines as well.


Accommodation

I use Airbnb and Booking.com for accommodation. You pay about 2x the amount of expats living in that location. And I’ve heard people whine about how expensive this is, but it doesn’t really bother me. Especially when I visit a city for the first time. In Sarajevo I paid €850 for a month in a 1-bedroom apartment, right in the center of the city, fast Internet, comfortable. Could I have gotten the same for €400 a bit further out? Yep. Maybe next time.

You have to factor the following into your accomodation:

  • Length of accommodation. The locals that pay 50% less than you, they have signed up for a minimum 1-year lease. That’s a big reason why it’s cheaper. The landowner doesn’t have to worry about constantly getting new tenants, so for them it makes financial sense to offer it for less. If I was to stay in a place for more than a month, I wouldn’t be using Airbnb either.
  • Save money with Airbnb when staying for 30+ days. Then you get a monthly discount of about ~33%. Booking.com doesn’t offer any discounts on the other hand. So don’t make a mistake of choosing to stay 29 days. That extra day could literally save you hundreds 💰
  • Reviews are your friend. Accommodation providers are generally nicer when they count on reviews for money. So in case I’m new to a place, don’t speak the language, etc. having that middleman is a joker up my sleeve.

I can see the value in not going with Airbnb for anything longer than 1 month though. Or if I already have a contact somewhere and know I like the place. So the end goal is to not rely on them, but I try not to sweat too much about it if I’m only staying one month.

Minimum 1 month in one place

I work 40 hour weekdays, so for me it’s important to hit the ground running come Monday. Ideally I want to have already scouted out a co-working space or cafe, filled the fridge with groceries, and done a bit of walking around the neighbourhood before starting work.

Changing locations is stressful. Especially if you’re going to a place where you haven’t stayed at before. Changing locations is also expensive, so I try to stay for 1–2 months in one place. Once I find a few hubs around the world, I’ll probably extend that to 2–3 months at a time. Visas often stopping me from staying longer than 3 months.

You need a few days to get into a routine

Routines are a good thing. I loathe the Groundhog Day, soul drenching 1.5 hour, rat race commutes I did in the past. But having no routine at all kills productivity.

If every day you have to figure out what you’re gonna have for breakfast, where you will go to work that day, when you will start, where you will have lunch and when you will finish, this all becomes a mental drain.

Instead you wanna have a Steve Jobs-esque morning routine: the less you need to think about it, the better. And then when you feel like it, you can mix things up, and try new things.

Weekends for traveling

I prefer to travel on weekends if — and that’s a big if — it doesn’t increase travel costs more than 20% for that trip. Travel on weekdays is usually cheaper, and less stressful. But I find those few days of settling in really valuable, and come Monday my head is in a good space to start work.

And when I get a thought in the back of my mind saying “but now I’ve lost a weekend on airports, buses and traveling”, I remind myself not to be a spoiled, whiny millennial.


No two digital nomads are the same

Before diving head first into digital nomading I just thought they’re all more or less the same. Millennial hipsters with backpacks staring at laptops in cafes. Surfing, working, traveling, that sorta thing. How different could they all be? Well the labels are in the process of being coined, but here’s one way of looking at it:

That means that you write your own rules, but it also means that getting advice can be more difficult, which particularly applies for the next section.


Banking

Cashless is king. It’ll help you avoid fees, and bacteria. What you’ll want to do is do some research and get yourself a good travel card. is amazing, but there are lots of options for all countries these days.


International Taxes 😱

The thing that stops most people with remote income to actually go all-in on digital nomading.

Nothing is certain, but death and…

Disclaimer: I’m just an internet idiot, not a financial advisor. Don’t listen to me. Check everything yourself. Apparently people writing their experiences need to put this disclaimer so they don’t get sued by even bigger idiots who stake their whole financial life decisions on a blog post they found on Medium.com 😒

I have earned myself a minor degree in international tax law as a result of getting informed about taxes around the world. The problem us nomads have is that the rules are yet to catch up to our lifestyles, and every country has different rules.

What I learned is that my citizenship and passport are very small factors regarding tax. It’s all about my place of residence, or as the suits call it “resident for tax purposes”. Remember that term. You’ll come across it again. So you might ask, when I’m perpetually traveling, what is my place of tax residence?

And now it all gets weird, subjective and finance woo-woo.

The answer is “it depends”. Which is not a great answer, but there is no one answer that applies to everyone.

My story is of one guy who lived in Australia, then The Netherlands, then Bosnia and Herzegovina, and established Bosnia as his home before commencing his digital nomad journey. My story is surely different to yours, but one thing I found useful is to hear a lot of different stories (even countries that have nothing to do with me). You develop your general tax knowledge like this, and as watching-paint-dry boring as it absolutely it, it’s also valuable.

I had one tax advisor give me the best answer to this saying “Damir, you’ve got a complex situation regarding your recent travels, but it all basically comes down to this… Where is home?”

Establish a home somewhere

So what you need to do is establish a home somewhere. Where? Well that depends on your situation. Not every digital nomad is the same. Are you a UK citizen who will digital nomad half the year, and stay in the UK for the other half. That’s easy. The UK is your home.

Are you a perpetual traveler? Spending a few months here, a few months there? In that case, your home is where your place of residence is most closely tied to. And this is where it gets a bit subjective, and this is where the different tax authorities will try to snap you up like an attractive female in a night club. And that’s why, just like that attractive female in the nightclub, if you want all others to stop pestering you, then you have to pledge allegiance to one tax authority, and one tax authority only.

And, fascinatingly, that analogy goes even further 😄

Just like that attractive female in the nightclub your verbal allegiance to one tax authority won’t always stop all the others from pestering you. So you need to prove your allegiance.

And the way to prove your allegiance as a perpetual traveler is by creating your closest ties to your chosen country. That can mean having a place of residence there. Owning things like property or cars there. Filing your taxes there. Spending most of your time there. Having a bank account there, paying bills there… You get the idea. If you have enough of these factors tying you to that one place, all the them otha fellas goin’ be leavin’ on the snap of yo’ fingers mmmhhmmm.

Unless you’re an American citizen. The American government is like a hot-blooded Sicilian womaniser out on a Saturday night. Even if you once had a fling with him, he’ll never leave you alone. The American IRS is definitely the most clingy of all the tax authorities out there.

So as long as I can prove that my tax residence is strongly tied to one country I should be good right?

Of course not. Why would it be so easy. Have you heard of double taxation?

Double taxation

Double taxation is an ugly phenomenon where you’re asked to pay for income tax in two different countries.

As you can imagine this is a digital nomad’s nightmare. You want to pay tax, but you don’t want to do it twice. A four-year-old (if that four-year-old could understand the concept of taxation) would say “daddy that doesn’t make sense. You’ve paid your contribution to society. Why should you have to do it twice?” And the most progressive thinkers in our world would come to the same conclusion as that four-year-old. But unfortunately it’s not so simple.

In a better world we’d track our travels, and would pay taxes depending on where we spent time most. You know, like once a year we did a tax return with UN Tax Authority, and give them our travel history for that year, and we pay one amount, and they give each country their cut of our taxes.

But we don’t live in a better world. We live in a nationalistic, divided world, which only care about their own borders.

Imagine you live in Country A and work remotely for Country B. Then tax time comes in those respective countries and they both knock on your door asking for tax money. I’m being a bit poetic here with the language, no one chases you right on the tax deadline, but if one country thinks that you ought to have paid tax there, they’ll get in touch to ask why you didn’t file a tax return there.

From my understanding this applies to employees, not freelancers. You should be good as long as you don’t stay long in Country B, where your employer resides. How long is too long? You’ll have to inform yourself.

If you’re a freelancer on the other hand, you should be okay as long as you also don’t stay long in country B.

“Should” is another term you’ll get used to. The rules here are so complex and convoluted that even the experts won’t really tell it to you straight.

[By the way I’d love to hear from others in regard to this. Don’t take any of this as gospel. It’s all a little blurry for me, and I’ll update this post as I find out more.]

You want to do everything by the book, and then some

Playing by tax rules goes without saying, but you, dear digital nomad, will need be even more diligent than the average Joe. Personally I believe that taxes are a necessary evil unless you want a society like Somalia or Mad Max. But even this alone isn’t enough. You can’t just expect to cruise along and play by the rules.

In your home country it’s much easier. People around you are talking about “it’s tax time again”, and you overhear conversations about it in a meeting happening at a cafe next to you. The rules are well established and clear. It’s a lot easier to just go in auto-pilot mode and worry about other things.

Not when you’re digital nomading. There’s no auto-pilot, not at least when you’re starting off. Figuring out your tax situation will become a part-time job for at least a few months, and even after that it will be more of a “thing” than you’d normally have in your life.

Left: What the average Joe’s tax situation can look like without any dramas. Right: What the average digital nomad’s tax situation has to look like to avoid dramas.

The general public, and people in institutions have a skeptical view towards digital nomads. They get images of John McAffee, Panama Papers leaks, Apple and co. evading tax in the billions in off-shore bank accounts. On top of all this, because you have a good awareness of international finance and tax law, you can be interpreted as a shady conman. Especially if you’re a single guy, or if you check any other demographics that could be used to put you in a “we need to show them!” pile.

And us digital nomads have to work against this stigma until the world becomes a less nationalistic, and a little more enlightened, and worldly. But that’s gonna take decades. In the meantime, our financial situation has to be crystal clear, and we have to work harder to not raise unfair suspicion than non-nomads.

Tax time for regular folks.
Tax time for digital nomads.

So you have to be on your A-game. But, I like to believe that the system is ultimately fair if you do your due diligence, if you keep your financial matters organised, and take all the steps needed to follow the rules by the book.

Tax authorities function like businesses too

Their interest is to find shady people who act unlawfully. And I believe the vast majority of the people in those places have their hearts in the right place. But their structure can get the best of them. Like a business they’re focused on KPIs and trying to squeeze out every last penny for country.

For example, I’ve decided to set up my life in Bosnia and Herzegovina due to favourable tax laws. That’s after living in Australia for 20 years. As part of this I need to break ties to Australia. Except the citizenship. I’m holding on to my Aussie passport for dear life (it’s one of my most highly values possessions). And who knows, maybe one day I decide to go back to Australia. But for now, and the foreseeable future, my home is Bosnia.

So I can just wave goodbye to Australia, and that’s it? Right? Wrong! I need to break ties to the country financially, bureaucratically. That means closing my Australian bank account, removing my name off any bills I might have once paid for my parents, closing my stock trading account there. Just all-round hitting Delete on anything Australia-related. I don’t own any property there, so that makes things easier. Ha! I’m glad I refrained from drinking the Home-buyers Cool Aid everyone in Australia seems to be drinking.

All this makes it clear to tax authorities in Australia that I have no interest in returning to Australia. My present and future sights are set on Bosnia. Don’t be mad, I still love ‘ya Straya! 🇦🇺🏖️🌊🏄🏼‍❤️

Consult tax experts

To be able to play the rules by the book, you need to know the rules. And of course it’s all way too complex for us normal folks to understand.

The world of finance is old-school, sonny boy! And you better play by those rules if you want peace of mind about your tax situation. For me this meant getting in touch with tax advisors, meeting them face-to-face or via phone, informing myself, asking questions, writing notes, and paying them to write their tax advice down in an email. Then, to really feel like I’ve done my due diligence, I’d go to another tax advisor within the same jurisdiction to double check about the same situation.

Write it all down

Being a Trello fanatic I created a board and kept track of things there. Here’s what it looks like:

My system for keeping on top of my financial and tax matters.

Why would I pay tax advisors to formally write things down they told me face-to-face? Two reasons. I forget things otherwise, and it’s there to show you’ve done your due diligence in getting informed.

It’s the whole story that counts when moving your tax residence

This only applies to when you’re moving tax residence from one country to another, so skip if this isn’t you.

Tax authorities in Western countries like Australia, are quick to send you a tax bill, and put the burden of proof on you to make the case that you’re not eligible for tax in their country. At the same time though, I’ve been advised that they are reasonable and won’t pursue matters they see make no sense to pursue.

So if the tax authorities see that you’ve moved to this new country and have cut all ties to Australia financially speaking, they’ll leave you be.

Go where you’re treated best

is a good place to start learning about all the important tax matters without having to sit exams for a master’s degree in international finance. Admittedly I had to fight my inner reactions to Capitalism as a personal brand and the guy’s trust-fund-baby vibe.

The guy seems to know his stuff, and his tagline of “Go where you’re treated best” resonates with my philosophy of nomading.

Basically, the idea is to decentralise your life. Instead of living, working, socialising, banking, doing taxes, having all of your life in one country, pick the best place for each of facet. You can live in Thailand, do your taxes in Singapore, do your banking in Western Europe, and get any dental/medical work done in Eastern Europe, while you travel wherever you want.

Just do the work to check that you play nicely with all the rules, then pick what’s best for you.


International health insurance

From my understanding travel insurance is a lesser option to full international health insurance. Might sound similar but it’s different. With international health insurance you’re covered by private health insurance around the world.

Of course the only odd child out here is the United States again, which has dystopian health care, and if you want to be covered there, your costs double for good reason.

The best ELI5 explanation of international health insurance that I found.
The difference between travel insurance and international health insurance.

The great thing here is that international health insurance is a viable option for anyone. They even cover Bosnian citizens. Can’t believe it!


Pension and Income Insurance

I still have no idea what happens to my pension now that I’m digital nomading. My guess is that I’ll have to set this money aside on my own.

The concept of the pension seems to be becoming a thing of the past anyway, so I wouldn’t be surprised to see pensions disappear altogether in the next 50 years. They keep pushing them back further and further anyway.

, and this might be where we’re all headed. Having said that, I do see the value of the government forcing you into a pension plan. It’s a tempting thing to keep putting off.

Damir Kotorić

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Dreamer-upper of digital products.