Financial independence and mobility: Can you have both?

Devin’s article interested me enough to reach out to Featured.com and LinkedIn to see what various financial professionals and business owners thought about this question. Devin himself concluded that “maintaining financial independence while traveling is possible with the right strategy.”

Indeed, my view is that regular travel is associated with retirement at least. In fact, you’ll notice that Devin’s blog includes several photos of Ruth and I taken in Malta and Italy, which try to convey the idea of ​​combining business and pleasure.

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Few would argue that regular retirement is entirely accompanied by a long journey; that seems to be the dream of those who are still employed full time. But increasingly, FIRE [Financial Independence Retire Early] mobility and/or semi-retirement or early retirement may be accompanied by working at least part of the time, usually some of it on the road.

Hence the term “digital nomads,” for those whose primary occupations allow them to travel and work anywhere a laptop and internet are available. Of course, running a financial website like I do, and writing an occasional column like the one you’re reading, can be done anywhere.

Our family’s routine of spending six weeks every winter abroad (usually a different place each time) was shaped after a similar trip in late 2022 to Malaga, Spain. We repeated what happened last year in the Bahamas and this year, as mentioned, in Malta. In all cases, we commit to at least one month at one Airbnb location; the prices are lower if you do that. We consider elevator access and mod cons such as dishwasher, microwave, washer, and dryer, as well as standard kitchen appliances such as toasters and coffee makers.

As we explain to friends who are confused by our choice to live in one small place for a long time, our schedule abroad is not that different from what we do in Canada: we like to walk every day near a lot of water (at home is Lake Ontario), and we try to eat a lot of food at home. Usually, we find a farmer’s market and/or a grocery store a short walk from our temporary home.

As a result, our monthly food expenses are no more than they would be at home, although one tends to eat out a bit more, of course.

The Internet helps digital travelers

Obviously, the Internet is essential to the life of a digital nomad. For us, the most important applications besides Airbnb are Netflix and YouTube—the latter is useful for getting local travel advice from professional travel bloggers, as well as providing music and even a limited amount of news. We don’t rent cars, preferring buses and trains, but if we did, we’d undoubtedly rely on mobile apps like Waze or Google Maps.

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By the time of the deadline for the featured article, I had received 84 submissions from various financial experts, travel experts and business owners: too many to summarize in this short column. Sadly, even in the long run of my website, I had to limit myself to about 25 responses. Most agreed with Devin’s first premise that travel is indeed associated with financial independence. As Rex Freiberger of Kibble Facts puts it, “Travel planning as a threat to financial independence is often a myth made about the most expensive version of travel.”

Travel doesn’t have to be expensive, agrees Joshua Wahls of Insurance by Heroes: “Business-class flights, five-star hotels, and $40 cocktails at the pool of your choice. A $500 round-trip flight and $60 per night on Airbnb in a country where your dollar travels three times is still a trip.”

Some of the ideas submitted to “have your cake and eat it” include renting recreational vehicles (RVs) for long trips, and making your base a permanent vacation community, essentially facilitating a “lock and go” approach to outdoor travel.

I even came across a new term that I had never come across in my previous reading or travel: bleisure, which is an abbreviation of business and leisure. Wikipedia defines bleisure as “the practice of combining business travel with leisure activities, often by extending business travel to include personal time.” The main idea, says Jay Ellenby of Safe Harbors, is to let your work pay for your trip: “We often help clients combine vacation days into business trips to offset personal flight and lodging expenses.”

Geoarbitrage

Several sources have mentioned the concept of geoarbitrage, which is staying where the cost of living is affordable. Devin Partida reviewed this on a previous guest blog. This, in turn, allows you to continue to grow your investment portfolio, as explored by Jay Samit in his book The Second Act Advantage. “By earning hard cash while living and exploring affordable parts of the world, everyone can enjoy a rich, exciting life while actually spending less,” he says.

The key is to move from vacation to geoarbitrage, writes TripFrog’s James Tech. “Strategic traveler focused on FI [financial independence] prefers to live for a medium term in regions where the cost of living is lower than their home base. By spending months in places like Portugal, Mexico, or Southeast Asia, you can often live a high-quality life for 40% less than in major Western cities. In this model, travel actually accelerates your path to financial independence by lowering your monthly burn rate.”

Another novel suggestion is to make the trip a regular fixed expense that you plan to incur each month rather than treating it as a ‘free change’ payment after all other ‘necessary’ expenses have been paid. To me, this evokes the old advice about The Rich Barber author David Chilton says “pay yourself first” by allocating a fixed percentage of your savings checks.

Achieving financial freedom doesn’t require becoming a monk, says Scott Brown, founder of MintWit. “The trick is evolving from expensive, random trips to planned trips that help you reach your FI goals … What we’re telling people instead is to embrace slow travel, stay-at-homes, credit card hacks, and occasional travel: not cut out travel altogether.”