How Important is Money?
In the comment string of Accountability and a Comfortable life, a reader challenged my statement that “it all boils down to finances” when it comes to my quest to travel and become location independent. I have thought about this a lot over the last couple days and it begs the question: how important is money?
Whether it is traveling, starting a business, or life in general, money seems to be the #1 deterrant in our quest to fulfill our goals. The more I have thought about this question, the more I can’t help but feel that we only use money as an excuse to not venture into the unknown.
When I tell people about my plans of world travel, I get the same response almost every time: “how are you going to pay for it?” And every time I answer, “I’m not worried about it, I will figure it out.” However, that is bit of a lie. I am concerned with how I am going to pay for it. There is always fear in uncertainty. But one thing I do know, is that I am getting a head start. I came across Ryan Stephens’ “Don’t Underestimate a Head Start” as I was writing this article and found it fitting to my current situation. I may not know every detail of how I will support myself in the future, but I am doing a lot to prepare. Whether it is building a network of interested readers, learning from people who are doing the things I aspire to, refining my Location Indepdent Business Plan, or any number of other things, I am taking control of my life. And let me tell you, it feels good.
Another part of getting a head start is becoming familiar with the places you are thinking about traveling. The concept of Geographic Arbitrage has become very intruiguing and may play a pivotal role in answering the aforementioned question regarding money. For those that are unfamilar, geographic arbitrage is when you make money in one currency (in my case it would be the $), while living in another country where the local currency is weaker than the dollar. Thailand is currently looking like a fantastic destination, and for more on someone who is actually doing this check out Cody Mckibben’s site Thrilling Heroics.
So this brings us back to the question, how much is enough? $500, 5,000, 50,000? The answer w ill be different for everyone, but I believe if you have enough money to get where you are going, the rest will work itself out. If any of you have stories of success or failure in this department I would love to hear them!
For many it isn’t about how much money they need, but how much they are willing to spend on their business or travels. A while back Chris Guillebeau figured out that his goal of traveling to 100 countries would roughly equate to the cost of buying a new SUV. Most people would probably buy the SUV, stay in their current lives, and complain about how they don’t have the money to travel. In reality, it isn’t that they don’t have the money, but rather that they chose to spend it on something different. Over the past year I have realigned my priorities and am currently trying to sell my car so I can pursue things I have deemed more important in life.
With that I ask you, what is more important: “Bankruptcy of the wallet, or Bankruptcy of the Soul”?
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Great article Sean.
I am glad my challenge gave you food for thought. I love this interaction of blogosphere. We learn from each other.
You inspire me.
Rasheed
Great thoughts Sean. Thanks for the mention. Although I’m going through some financial tough times with the economy right now, it is mind blowing how much easier/cheaper it is to travel or live abroad than you think. John had a good interview at JetSetCitizen.com about living abroad yesterday too. I’m brainstorming more on geo-arbitrage soon…
Awesome, Sean. It’s so great to read about someone else with similar desires to be Location Independent… and admit that the issue of funds is a perplexing one. I am working on just imagining the ultimate destionation or life, and not worrying about the ‘how’… but easier said than done.
@ Rasheed, Glad that you have learned something as well!
@Cody, I was looking at some bungalows in Thailand and couldn’t believe how cheap they were. Even though the economy is tough, at least you are some place where you can get the most out of your money!
@Karen, Its like you want to just say screw money, im going to go and make it work out. But society tells you it won’t work. So who is right society or you? Quite the question. So what is your ultimate destination?
Great post, Sean. I’ve just come across your website recently and have really enjoyed going back through the archives and reading your posts.
Like you (and many other people, it seems), I’d love to do more traveling and not be tied to a certain location because of a job. Good for you for trying to sell your car - one thing I have accomplished over the last year or so is minimizing my number of fixed expenditures. I have a month-to-month lease, don’t have a car payment, and don’t have any debt, so now that I don’t owe anyone anything, I’m hopeful that I’ll be able to save up enough money by the end of the year to just take off and see what happens.
I do think we sometimes use money as a way to put off things that are scary. In my personal experience, the times when I’ve thrown caution to the wind and moved somewhere else without a job and with very little money (like, $200) it has all worked itself out, and pretty quickly at that, BUT, I did have a free place to stay all of those times until I got a job and found a place to live, which definitely helps. On the other hand, of course money is important, because there are lots of things you can’t do without it. It’s not fun to be unemployed (or be making a pittance) and not be able to go to concerts with friends or travel abroad for extended periods of time because you don’t even have the means to get there, or once you do get there, you don’t have the money to see or do the things you’d like.
Thanks for the article, Sean. Definitely a topic I am struggling with as well.
@Martin, Thanks for the comment! I have been following your site for a little while now and think what you are doing is awesome. I need to take a page out of your book and revisit my list, really define the things that I want to do, get rid of the things I am not as serious about, and start writing more about the project.
@Brandy, I am glad you have enjoyed the posts! I think minimizing fixed expenditures can be a very difficult thing to do, but also one of the most beneficial (in so many ways). Have you thought about where you want to go? As I get closer and closer to traveling, I have some decisions to make, so I am always intrigued to see what others are interested in.
Sean,
I’d love to be in Sydney for New Years Eve and then travel around Australia and New Zealand for a few months, but I’m also aware of how expensive that would be. So, I’ve also been thinking about just heading down to Argentina and making my way around South America, or heading to Thailand and doing the same around Southeast Asia and maybe up into China.
Where are you thinking of heading?
Sean,
I love the topic of this post. People seem to place such an importance on the amount of money you earn or how much you have in the bank. I know that it is important to have some money for the essentials, but I like to view money just as a means to an end. I have automated my money as much as possible in order to focus on things that are more important. The idea of location independence and global arbitrage are very interesting to me and I have been thinking seriously of trying out a bit of my own. I agree with you that money is used often as a reason not to do something, but it should not get in the way of our dreams. Sometimes having too much money is worse than not having enough, because when you have too little money you are forced to be more creative than if you have too much.
@Benjamin, There is no denying that money is important for the basics. The question is whether it should limit you from pursuing your real dreams in life. Good for you for automating everything. That is where I am at as well, and I think the less you have to think about it, the better off you will be! Definitely check out Cody’s site (he commented on this thread) to learn more about global arbitrage. He just posted a video in which he talks about how he has implemented the concept in his life. Thanks for the thoughts!
@Brandy, For travel I would love to go sail in the Caribbean and see some more of Latin America (Belize, Costa Rica, Panama). If I were going to do more of a long term move I think I would head to Thailand. Australia and New Zealand would also be incredible as well, but you are right, they would definitely not be cheap! I got to spend one day in Buenos Aires in February and it was a really cool town, I would love to spend more time there. If you make it to Brazil, and Rio in particular, let me know! I have lots of thoughts, and if you look back in the archives there are some Brazil posts (actually a new one is coming today as well).
Just discovered your blog through Free Pursuits. Congratulations on deciding to create your own life on your own terms (a.k.a. the slick phrase “lifestyle design”).
After I finished school I saved up & spent a summer in Liverpool and landed a couple of informal internships in my field (art - one at a gallery & the other at a local arts center in a tough area of Liverpool). It was more expensive than SE Asia for example, but the US$ was doing better (relative to the pound) than it is these days. I had to quit smoking while there, as a pack of cigarettes cost more than three meals from the supermarket.
Friends in Liverpool would often say, “Oh you must be rich to travel like that!” No, you’ve just got to be resourceful & flexible. Determined. Save up around three months’ living expenses in the country you’re thinking of living in, in addition to the expense of getting there. There are plenty of sites and expats who can help you on that front. The first month is usually the most expensive - that’s when you’re figuring out where the deals are on food/drink, and how to find affordable accommodation. After that, it gets much easier.
["Geoarbitrage" isn't just for different countries; it's also done by people who move to the suburbs/small towns for the lower cost of living and quieter lifestyle.]
In a place like Thailand the cost can vary enormously. Rents in Bangkok can be reasonable or compare with those in first world capitals; or there are some fantastic deals on bungalows, especially during the off season. If you stay in a place long-term, you can get a very reasonable rate.
Recently I spent 11 days in a bungalow in eastern Thailand, while working on illustrations for my book:
http://elizabethbriel.blogspot.com/2009/06/sand-in-my-laptop.html
A beachfront coconut-wood bungalow was only US$5/night. It was fantastic.
Currently I’m spending 2 months in the beautiful town of Lijiang, China, learning Chinese & finishing those illustrations, staying in a traditional wood Naxi home (local minority culture) around a 200-year-old courtyard in the Old Town. Rent here is under US$300/month, thanks to a nice Taiwanese couple I met in a coffee shop on my first day here. They’re fluent in Mandarin, so were able to ask around for different places for me.
Am having problems w/blocked websites (including Blogspot/twitter/FB) so was happy to be able to read your post.
Feel free to email w/any questions; I’ve lived, studied, & worked in France, England, Italy, Korea, Cambodia, Hong Kong, Australia, and have travelled extensively (got married too!) in Thailand.
Elizabeth, Thanks for checking out my site! It sounds like you have had a ton of travel experience. I have a feeling I will be sending you an email before too long to learn more about how you have made it all happen. I am particularly intrigued by the time you spent in Thailand. It would be a fantastic experience to go spend some time in a cheap bungalow on the beach. Were you able to get internet access where you were staying?
How far along are you with your book? What is it about?
Thailand is a really travel-friendly country on every level, from north to south. The bungalows where I stayed had no internet access; a 15-minute walk down the beach is all it took to find the nearest internet spot, where it cost around 100B/hour (just under US$3). That’s pricey compared to the mainland. It’s generally tough to get internet access on relatively unpopulated islands like Koh Mak, The signal comes in via satellite and if the wind’s blowing in the wrong direction, there goes your internet.
I’m a big fan of being an LIP http://www.locationindependent.com but chose Koh Mak to do mainly offline work. There are lots of great alternatives, though. Check out http://www.travelfish.org the most up-to-date travel guidebook on the web for SE Asia.
My book’s called The Paper Apprentice and it’ll be published by ThingsAsian Press next year (depends on writing time) http://www.thingsasianpress.com
The book’s about my quest through Thailand, Laos & Vietnam, to learn how make paper from the masters. I get covered in green paper pulp and get lectured and talk to people who make it from elephant dung and tree bark and bamboo; hilltribes who use it as spirit money during rituals or as clothing for the dead; and a memorable shaman who interrupted the construction of his house to talk to me about his sacred books, made of handmade and cement-bag paper.
Ok, time for a Chinese lesson. It’s great to hear about your plans, and keep up the great work on your blog!
I’m feeling this article.
I guess it helps that I’m not particularly picky about where I go (so I don’t end up in super-expensive tourist traps usually), but I’ve got my lifestyle down to the point where I really don’t need much money to survive nicely. This includes traveling in other countries, as well as making a home in the USA. I don’t consider myself to be making sacrifices in saving money, either — everything I’m avoiding are luxuries I don’t need.
I don’t make a ton of money or have a ton saved up, but because of the way I spend (and avoid spending), $1 to me is worth about $5 to most other people. In other words, I can live off of $20,000 like the average person lives off of $100,000. A $500 plane ticket very well could end up saving me thousands of dollars, simply because where that ticket takes me, everything costs way less. At the same time, I’m traveling the world. Not a bad deal. ($20,000 will last me just short of two years, at the rate I’m going now.)
Save up an initial lump sum, live with just your needs and minimize everything, and you’ll rarely have to worry about money. Bonus tip: also be from the United States, help cause a worldwide economic downturn, and take advantage of a temporarily super-strengthened dollar in other struggling countries. That helps too.
Clay makes quite a good point. I have worked it down to bare essentials and with my savings at the moment, i could probably afford to live without any additional income for 5 years, on a comfortable budget, and that is not even 6 figures in savings. The best bit for me is that there is a lot of room in that to cut expenses and take it out closer to 10 years+. What i think living on essential budgets does make you really think about what you spend money on and look at alternatives. Especially when it comes to entertainment.
On another note, the only thing i disagree with in your above post is the idea of being able to afford where you are going and the rest take care of it self. This will of course depend on where you are going the length of stay and the countries requirements, as some require you to provide proof of funds to be able to leave at the end of your stay or such.
@Clay and Joel, It sounds like both of you guys have put yourself in the position that I am currently working towards. While I don’t spend excessive amounts of money by any means, I definitely recognize that in order for me to achieve the lifestyle I want, further cuts are going to have to be made. And most of it is easy stuff like going out to eat and bars with friends, it just comes down to setting a budget and sticking to it.
You both seem to have your priorities in life figured out, and have set a budget it accordingly and that is one of the first steps towards being successful. Clay, I think I heard you were doing the Pacific Coast bike ride with Derek, and if your budgeting as allowed you to take the time to do that, you have obviously done a pretty good job with it!
Joel, You are right on that last point, it does matter where you are traveling to specifically as each country has their own requirements. Thanks for pointing that out. I am also looking forward to reading more from you on your blog.
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