Travel and the Power of Compound Interest

How to leverage travel experiences and maximize your return on investment.

Compound interest isn’t exclusive to financial investments; the concept is true of most things in life, especially travel. The earlier you invest in travel, the more time you have to call upon those experiences, and the higher your return on investment. The difference being that instead of capital gains, you’re rewarded in perspective, character, and invaluable life lessons.

My Grandmother used to tell stories of how she wished she would have traveled more at a younger age. She was well-traveled but ended up spending many years taking care of my Grandfather before he passed away. She joined a travel group after his death, but at that point in life, distant trips were no longer feasible. Her situation was in no way unique, but her advice highlights the opportunity cost of forgoing travel in one’s formative years.

The assumption that you’ll always have a block of time to travel when you’re older is dangerous for a handful of reasons:

1) There’s no guarantee that you’ll live to see 79, the current average lifespan in the United States.[1]

2) If you are fortunate enough to make it that long, you certainly won’t be as spry as you were decades earlier. The act of travel demands proper mental and physical condition, to say nothing of the activities available to you at 65 vs. 25.

3) If you are healthy enough to set off on an adventure, at that point the experiences you garner are only available for a limited number of years. If you retire at 65 and live to be 79, that’s a small window with an even smaller margin of error. 14 years is not much time to capitalize on the knowledge gained during travel and better yourself as a result of those experiences.

It’s not my hope to deter anyone from traveling later in life. Instead it’s to encourage those who recognize the benefits of travel to set aside the time and money earlier, rather than later.

You should still make intelligent financial decisions. It’s important to invest and pay off your debts. But keep in mind, capital is the only potential return on financial investments. It won’t improve the quality of your character, impart any life lessons, or afford you more time.

You can always make more money. You cannot make more time. Prioritize accordingly.

If you take time to travel at a younger age, you can leverage experiences from your travels to promote your position in life. It’s a far more effective (and enjoyable) path to self-actualization than checking the traditional boxes. Whether you decide to pursue your art, climb the corporate ladder, start a family, you name it, each offers opportunities to harness the wisdom attained during travel.

V = T x R ^ (79-n)
V (future value of travel experiences), T (travel), R (growth rate), 79 (average life span), n (current age)

It’s worth noting that there’s no inherent value in the act of traveling. Only a fool would assume that setting foot on foreign land without any further effort guarantees life-altering wisdom. That’s on you. If you regard travel only as an escape or distraction, you’ll never come away with anything to show for it. In the words of Socrates, “How can you wonder your travels do you no good, when you carry yourself around with you? You are saddled with the very thing that drove you away.”

You must meet your adventures with a deep level of mindfulness and introspection. These experiences are an opportunity to practice compassion, resourcefulness, and other virtues on which you wish to improve.

Unlike money, experiences are inexhaustible and can be called upon at any point in life, no matter your position. That’s what makes travel the best investment available. The earlier you pursue travel, the higher the number of compounding periods (years you have left), and the greater the compound interest in the form of opportunities you’ll have to implement and embody these lessons. That’s tangible progress towards becoming a better person. And that’s what life’s all about. Becoming the best version of yourself.

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