While exploring exotic locations is certainly one aspect of traveling the world, the primary benefit for most location independent travelers is the savings. When you can cut your cost of living down from $25,000 per year (the median cost of living per working adult in the United States as of 2010, according to the U.S. Census Bureau), to a mere $8,000 to $10,000 while retaining access to all of the exact same amenities you are accustomed to, all that money goes straight back in your pocket rather than disappearing into thin air.
Using the same numbers presented by the U.S. Census Bureau, you can see that as of 2010 the average take-home salary for a working adults was around $25,000 per year, after taxes. This means most people are just barely breaking even when it comes to the take-home pay versus the cost of living. But what most people don't realize is that your pre-tax median wage of around $36,000 can actually be utilized to a greater extent when choosing to pursue the location independent lifestyle, because you can enjoy lower tax rates in countries like Mexico where there is a tax treaty in place. What this means for the digital nomad is that you can pay the tax rate of the country you are living in and then submit your proof of payment to the IRS, thereby enjoying a lower rate.
One of the primary reasons location independent travelers choose to go to a country like Colombia, Greece or Italy is because the median cost of living in those countries is between $8,000 and $10,000 per year. Not only that, but the tax rates are generally lower than what they are in the United States, which means your take-home pay on a median salary of $36,000 per year is significantly higher than 25k. Plus, since you only need 8-10k to live the digital nomad existence you can take your extra 20k or so per year and utilize it as you see fit, either living like a king or putting the money away for further travels.
The cost of living in other countries doesn't only apply to those people who are still part of the active work force. Pensioners living on a monthly allotment of around $1,000 per month can take advantage of the digital nomad lifestyle just as easily, and they actually have been for years. When the cost of living in a country like Mexico is around $600 to $800 per month, you can use your $1,000 per month to enjoy the tropical destination, rather than barely scraping by. And since universal healthcare is the norm in most countries around the world, you don't have to worry about paying thousands for medical care and medicine.
The location independent lifestyle also allows people to either retire early, or drastically reduce their number of working hours. The choice really depends on your goals as a digital nomad. If you are simply looking to enjoy a reduced cost of living, you can work fewer hours per day and explore your destination in your off hours. Or you can choose the route many working professionals are opting for, which is working the same hours for the next three to five years, saving up that extra money they get by utilizing a foreign destination. This allows you to retire early, between the ages of 30 or 35 on average, rather than waiting until you are 60+ to be debt free. When you consider the fact that houses cost (on average) around $35,000 in places such as Guatemala, Italy or Bulgaria, you can very easily save up the money to completely pay for a house and then retire comfortably in a few short years.
Using the same numbers presented by the U.S. Census Bureau, you can see that as of 2010 the average take-home salary for a working adults was around $25,000 per year, after taxes. This means most people are just barely breaking even when it comes to the take-home pay versus the cost of living. But what most people don't realize is that your pre-tax median wage of around $36,000 can actually be utilized to a greater extent when choosing to pursue the location independent lifestyle, because you can enjoy lower tax rates in countries like Mexico where there is a tax treaty in place. What this means for the digital nomad is that you can pay the tax rate of the country you are living in and then submit your proof of payment to the IRS, thereby enjoying a lower rate.
One of the primary reasons location independent travelers choose to go to a country like Colombia, Greece or Italy is because the median cost of living in those countries is between $8,000 and $10,000 per year. Not only that, but the tax rates are generally lower than what they are in the United States, which means your take-home pay on a median salary of $36,000 per year is significantly higher than 25k. Plus, since you only need 8-10k to live the digital nomad existence you can take your extra 20k or so per year and utilize it as you see fit, either living like a king or putting the money away for further travels.
The cost of living in other countries doesn't only apply to those people who are still part of the active work force. Pensioners living on a monthly allotment of around $1,000 per month can take advantage of the digital nomad lifestyle just as easily, and they actually have been for years. When the cost of living in a country like Mexico is around $600 to $800 per month, you can use your $1,000 per month to enjoy the tropical destination, rather than barely scraping by. And since universal healthcare is the norm in most countries around the world, you don't have to worry about paying thousands for medical care and medicine.
The location independent lifestyle also allows people to either retire early, or drastically reduce their number of working hours. The choice really depends on your goals as a digital nomad. If you are simply looking to enjoy a reduced cost of living, you can work fewer hours per day and explore your destination in your off hours. Or you can choose the route many working professionals are opting for, which is working the same hours for the next three to five years, saving up that extra money they get by utilizing a foreign destination. This allows you to retire early, between the ages of 30 or 35 on average, rather than waiting until you are 60+ to be debt free. When you consider the fact that houses cost (on average) around $35,000 in places such as Guatemala, Italy or Bulgaria, you can very easily save up the money to completely pay for a house and then retire comfortably in a few short years.
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Before moving abroad, research living as a digital nomad at places like Marginal Boundaries, where you can find more information on the location independent lifestyle and how to take advantage of the drastically reduced cost of living in other countries.
