We’re in our third year of full-time travel and we’ll continue to do this. People always want to know how we afford it, so here’s a quick explanation.
We’re Incredibly Privileged
First off, it’s pure luck that we have access to America’s economic infrastructure and can travel freely to most parts of the world. We have to recognise that it would be much harder to achieve this lifestyle without one of the stronger currencies and passports in the world.
Lower Cost of Living Abroad
Long term travel costs less than you might think. Because we have total flexibility, we can avail ourselves of cheap flights and long-stay discounts on Airbnb. Weekly discounts often give you the 7th night free and a monthly can be 30-40% off. We also alternate between expensive countries like Australia and cheap countries like Serbia to even out our expenses.
What we’ve found is that the cost of living in most countries is significantly lower than in our home city of Boston. We end up spending less on all our expenses combined than we would on rent or a mortgage at home, while maintaining a comparable standard of living.
What kind of standard of living is that? Not lavish but not too budget either. We book one-bedroom apartments on Airbnb, occasionally a studio or hotel room for short stays, mostly fly economy, go out to eat a few times a week, work out at the gym, go to movies, and visit tourist attractions. We also carry global medical coverage and visit the dentist routinely. Occasionally we take a guided tour but usually we travel independently and rent our own car.
It’s really quite similar to the life we had in Boston, minus the office. In lieu of going to work, we spend an extraordinary amount of time exploring new places on foot, grocery shopping, and cooking.
Numbeo’s cost of living comparison between Boston and Budapest, for example:
Three Buckets of Income
We have three buckets of income: stocks, rental property, and an Airbnb. We currently live off our Airbnb income, but if any one bucket takes a hit, we can dip into the other two. It’s nice to have some diversity.
These income streams didn’t appear overnight. Before setting off to travel, we spent the better part of a decade working, saving, and investing. I worked 11 hour days and half a day on Saturday for seven years, saving about 80% of my after-tax income. Aaron has always worked for himself, mostly in real estate and e-commerce. We both lived below our means and invested the rest, which we continue to do.
Just as important as saving, investing is the key to creating a lasting income stream. We recommend index funds for their broad stock market exposure and low fees. Rental properties with mortgages don’t throw off that much cash, but when done right, the return on investment can be much higher than stocks, it’s simply captured in equity payoff and growth. An Airbnb can quickly generate cash flow, but it’s also a lot of work!
So, in a nutshell, that’s how we afford to travel full-time.