How do you plan for the future?
It’s a question that comes up a lot.
When people hear that I’m traveling full-time, moving around between the Swiss Alps, Mexican coastlines, Croatian islands, and Slovenian valleys, there are plenty of questions that come up a lot. How do I afford it? Do I get lonely? How do I take my dog?
And this one: How do you plan for the future?
In other words, what about retirement and savings and stability, you crazy hippie?
It’s a fair question…sort of. But it’s founded on an incorrect assumption…that full-time travelers are not earning, saving, and investing just like people who stay put.
Because that’s the answer really. There is no magic bullet, no special thing that I do differently, no just-for-travelers retirement plan. I plan for the future the same way other people plan for the future: by (generally) spending less than I make, saving money, and (hopefully in the near future) doing some investing.
Those concepts don’t change once you pack a bag and board a plane.
So here’s where a big misunderstanding comes into play, because you might be saying “Well, duh, but how do you spend less than you earn when you’re traveling?”
And so it all comes back to the misconception is that my lifestyle is expensive.
I get where this comes from. If you’ve ever taken a whirlwind two-week jaunt through Europe, you probably ended up spending a whole lot of money. And I live in Europe full-time at the moment, so I must be spending a whole lot of money too, right?
Because that two-week trip through Europe means lots of flights and trains and full days of sightseeing, attractions, cafes, restaurants, and not to mention nightly B&B, hotel, or even campground prices. It adds up quick.
The difference between my lifestyle and your two-week vacation is that I stay a lot longer and spread out my expensive attractions, events, and evenings out. I’m also working, so I’m not out sightseeing every day. And I don’t have some really big ticket items that your two-week vacation comes with. Namely, round-trip airline tickets and (the biggie) expenses back home.
Let’s unpack that one a little: any trip becomes way more expensive if you are trying to pay a mortgage, a car payment, two cell phone bills, cable TV, car insurance, and health insurance back home while also paying for accommodations, transportation, food, travel insurance, and other daily needs and wants abroad.
Of all the things I just listed, the only ones I pay are my expenses on the road. I don’t have any payments back in the US. No TV. No phone. No mortgage, car, or US insurance.
The other difference between my lifestyle and that two-week trip is that I travel slow. When you’re moving around every two days, you are paying a premium both for transportation and accommodation. Think about it in your home city: how much does someone pay nightly at a mid-priced hotel? Now, how much does your monthly rent come out to nightly? There’s probably a big difference. You’re spending a lot less than the hotel stayer.
It’s the same in other parts of the world. Staying in a hotel for two nights in Paris costs a ton. Renting a very small studio apartment for a month could cost as little as $1,000. Renting that same studio apartment for a year could cut that monthly figure in half.
The same goes for transportation. You can spend $50 – $200 on train tickets every two days to head across the border to the next European country, adding up to a whopping $300 – $1,200 for two weeks. Or you could stay in Ljubljana or Paris or Barcelona for a whole month and spend less than $50 total using public transportation to explore the city and a few choice countryside locations nearby.
And those are just a few examples of how full-time travel is actually very affordable, even here in Europe.
Many full-time travelers who are just starting new businesses choose to hang their hats temporarily in Southeast Asia where you can live reasonably well on very little money. The same goes for South America and even Eastern Europe.
Let’s say you start a new business, perhaps as a copywriter or a graphic designer, something you can do remotely (whether remotely means your living room in Boston or a beach hut in Belize), and you are only making about $1,000 a month to start. Would you rather be making $1,000 a month in Buenos Aires, Argentina (where the estimated monthly living cost is about $900), Split, Croatia (where I spent about $1,300 per month), or Denver, Colorado, where the estimated monthly living cost is $2,500?
Or, let’s say you have an existing remote-run business in San Francisco that makes you about $3,000 per month and you’re struggling to make ends meet (since $3,000 is rent in San Francisco). You could easily start putting over half your income into savings and investments by heading to Toledo, Spain (where I spent less than $1,500 per month). Or you could go really crazy and head to Chiang Mai, Thailand (cost of living estimated at $500 per month) and start saving 75%+.
And so we tackle the first bit of advice that any good financial advisor would give you: from the road, it’s easy to live within your means, to save, and to plan for the future. It just means traveling differently.
Shifting gears a bit, here’s another way I’m planning for the future:
I am spending time and energy on things other than work and saving. All the retirement accounts in the world won’t give me back my health if I squander it on long hours at the desk, unhealthy eating habits, immense stress, and a sedentary lifestyle (all things I was absolutely guilty of when living in the States full-time).
Travel encourages me to get outside, spend more time in fresh air and sunshine, exercise more, and eat better (in Switzerland, there are no GMOs to worry about; in France, fresh, local, seasonal ingredients are essential and anything else is bad form).
Don’t get me wrong. I’m working hard and I’ve definitely had a lot of stress, especially in the past 1.75 years spent starting my new venture. But the light at the end of my tunnel (if all goes well) is a sustainable profitable passive income, which means I can work less and still be earning. I can take a vacation and still be earning. I can someday retire and, you guessed it, hopefully still be earning.
And so traveling full-time makes me live a little better now and to, very naturally and easily, slip into healthier habits that will (one hopes) lead to better health as I do get toward retirement age.
Finally, it’s important to understand that when I think about retirement, I don’t think about the US. This makes a huge difference in what I’ll have to save in order to retire. Retiring in a country like France, lauded for its public healthcare system, means saving a ridiculous amount of money on healthcare. Retiring in Southeast Asia or Central America means that a modest budget can still buy you a maid and other household help that you may need as you age. It also means plenty of sunshine and fresh air.
I don’t know where I’ll retire specifically, but I do know I have lots of non-US options with great healthcare, good weather, and lower costs of living.
And so my answer to planning for the future is the same as a small entrepreneur who stays put might answer. It’s about saving. It’s about being aware of your incoming and outgoing money. And in my case it’s about keeping my options wide open to the world.