Here are ten big life and money lessons from digital nomads that can benefit all of us. Digital nomads take the idea of location independence to an extreme. While most people will never make the lifestyle and career jump to full-time nomad, we can learn a lot from those who do.
Know the value of multiple income streams
If having multiple sources of income gives sedentary people a greater sense of security, imagine how much more true that is for people far from home. Nobody wants to be stuck in a foreign place after losing their sole source of income.
That’s why so many digital nomads are self-employed contractors who do work for several different clients; or, even if they have steady remote employment, they are wise to start a side business for additional security, just in case. This way even if you lose one source of revenue, you will have something to fall back on without dipping into your savings until you can replace the lost part of your income.
Take debt seriously
In the words of one wise traveler, “Digital nomads with debts tend not to be digital nomads for long.”
Becoming a digital nomad is not an escape from the practical considerations of life. The reality is that most people who can sustain a nomadic lifestyle either begin without debt, or when they already have a stable income that safely exceeds their monthly debt payments.
So, unfortunately, running away to Fiji won’t make your debts go away. Debt collectors are very good at finding people (and freezing bank accounts). Even in Fiji.
Life and money lessons from digital nomads: Budgeting is critical
Many digital nomads know firsthand the terror of being stuck in a foreign country with no job, dwindling savings, and no way out. Those who aren’t good at budgeting don’t get to travel very far.
The most experienced nomads use a daily budgeting system to ensure they never have to dip into their emergency savings. If you don’t know how to make a budget, start here.
There’s something to be said for the stability of a nine-to-five
Every job and every lifestyle has its ups and downs. One of the “downs” of being a digital nomad can be the lack of stability that comes with the lifestyle. Many people really do love being able to work from absolutely anywhere all year round. Other people try this kind of freedom and discover pretty quickly it’s not for them.
Add to this the high likelihood that you’ll be working as a contractor, or working on multiple revenue streams concurrently, and the predictability of a nine-to-five job begins to become a little more attractive.
That doesn’t mean that the freedoms afforded those who put the work into building a nomadic lifestyle aren’t worth it. You’ll have to decide that for yourself.
Life and money lessons from digital nomads: Share resources
Public transit; hostels and AirBnbs; meals and local knowledge. Hospitality and communal living have been the hallmark of nomadic peoples since time began. It’s no different today. Veteran travelers (I have found) are some of the most generous people you’ll meet.
Practically, it makes sense. Most of us who travel are not wealthy, and sharing resources is a necessity to keep costs of the staples of life down, so that we can spend our budgets on whatever we truly love about traveling.
But it’s also just a better way to live. Sharing is caring, whether you’re a hostel-surfing writer or a wall street tycoon. It’s best to live life with a traveler’s generosity.
Become the leader of your own financial team
If you own a house, investments, a car, or any other assets, knowing how to enlist high-quality managers for these possessions while you’re away is invaluable. It’s very difficult to enjoy travel while you’re worried about far-away assets you can’t get to.
Hire a property manager to take care of renting out your home while you’re away; put the time into finding a good investment portfolio manager; find yourself an excellent bookkeeper or accountant. Work these costs into your budget and plan accordingly.
Even if you’re not a digital nomad, putting together a financial team is essential for decreasing stress, ensuring steady growth of wealth, and maintaining your overall financial wellbeing. But it’s especially true if you’re far from home.
Life and money lessons from digital nomads: Understand the value of an emergency fund
Veteran travelers will tell you that you must have enough saved up for the journey home.
READ – have enough cash on hand to get the hell outta there when the revolution starts; when you haven’t found another job in three months; when your health fails.
Unforeseen financial circumstances are hard enough when you are in your own hometown, surrounded by your own people and community. Financial disasters can be even worse when you’re on your own in a foreign land. so one of the easiest life lessons from digital nomads that transfers to everyday people is the critical need to have a personal emergency fund.
Passive income is hard, but awesome
Digital nomads are constantly extolling the virtues of passive income. As well they should. With one caveat – there is no such thing as passive income. There is such a thing as more passive income.
While it is entirely possible to build passive income streams, it’s never risk-free, easy, or entirely hands-off. It can take years of frontloading work on a passive income system before it’s ready to pay you to sit on a beach in Thailand. Even the best system will not last forever without you monitoring and tweaking it. And even then, it will continue to change as the markets and the world do.
That’s not to say passive income isn’t doable, or awesome. It’s just to say it’s not as easy as many people who are trying to sell you courses, books, or products designed around the digital nomad lifestyle will tell you. But nothing is easy. So don’t let that stop you!
Read our guide to passive income to get started.
Earn money in high cost-of-living economies and spend it in lower-cost-of-living economies
Digital nomads routinely participate in wealthy information economies remotely while living in much less expensive places. This means they can get paid say, Santa Monica wages, and spend those wages in Thailand, where a beachfront house costs a fraction of what it would in California. This vastly increases their spending power.
You don’t have to live and work in entirely different countries to do this, either. Sometimes the difference in cost of living between American states can feel like the difference between a first- and third-world country.
For example: I grew up in New Jersey, the land of incredible bagels. And incredible taxes. And incredibly expensive everything. Lots of people live in Pennsylvania and work in New Jersey so they can make that Jersey money without those Jersey expenses. Other people work the majority of their lives in New Jersey, then take their Jersey money to less expensive states to retire.
The concept works even on an intrastate level. Many commuters do something similar: they want to be paid the wages of a big-city job, but don’t want to pay big-city rents. So they work in the city but live in the suburbs.
Life Lessons from digital nomads: It’s not all about the money, or the freedom
Being a digital nomad can give you a whole lot of financial and lifestyle freedom. But all good things require sacrifice. While I lived a financially successful life of adventure on the road and between cities for a couple of years, the biggest lesson I learned from my time as a nomad is this:
It is expensive in so many ways to settle down in one place, to invest in the long-term success of a community, city, business, or family. It costs you money, and a certain kind of freedom. But it’s worth it.
This was the biggest life lesson from my own time as a digital nomad. For the most part I loved my time as a wanderer, but I came to realize it wasn’t for me. I think there are two kinds of chronic travelers: Those who are searching for something, and those who think they’ve found it.
Of course, everyone’s life and calling are different. For me, being a traveler amounted to running away from commitment: to community, family, career, and a mission. That may not be true for you. But if you are planning to become a digital nomad, I encourage you to think about whether you are running toward or away from your life.