What is the Real Cost of the Permanent Travel Lifestyle?

56 comments
What is the Real Cost of the Permanent Travel Lifestyle? post image

If you asked me what the single most important feature/software/service/company in the last 10 years for the proliferation of the location independent lifestyle was, I’d guess Skype’s call to phone service.

Before Skype to phone came out, digital nomads were basically technologists. They were early adopters in the internet marketing scene, developers, or people who managed to build and automate themselves out of a business.

After Skype to phone, hustlers, builders, employees, and those with clients and small teams could hit the road and build wealth while traveling.

I was thinking of the impact of Skype last week when I booked an apartment for a week in Rome, for an excellent price, after just 15 minutes of browsing photos (using AirBnB’s “book now” feature).

IMG_1690

I’ve thought for a while that AirBnB is a great service, but last week was the first time I noticed the systematic impact it’s having. It (along with a host of similar services) has dramatically slashed the cost of living the famed “permanent travel” lifestyle (often just called PT)– a lifestyle that was once reserved for the mega wealthy and corporate warriors armed with company plastic.

Although I’m only staying for four days in this particular place (and 3 more in a place I booked in Florence), I could have booked the entire month for just under $3,000. This place has 2 bedrooms and an exceptional location, so lower prices were available.

Would it be possible to find a place like this in 2008? In anything less than a full day’s long search? It would be tough, and it would probably take much longer.

That’s an important shift because the key distinction of the famed “permanent travel” lifestyle was not the luxury and mobility, but the limited amount of lifestyle overhead PTs spent achieving it. Contrast that with slow travelers who spend a great deal of time organizing luxury and mobility in their lives.

In the classic PT lifestyle, it’s high end hotels that remove your lifestyle overhead. That’s what put it out of reach for most people. Replace 5-star hotels with great apartments and AirBnB’s “book now” speed (with the occasional Booking.com and Agoda.com booking), and the the cost of PT lifestyle gets slashed dramatically.

Skype helped make what in 2005 might have been a $2,000+ phone bill become $20 a month. Similarly, AirBnB (founded in just 2008) has maybe slashed the prices on the permanent travel lifestyle from $250-$400 a night to $50-$150 a night. Although on a percentage level the Skype change is much more profound, the AirBnB shift is more meaningful in terms of real dollars.

This all got me thinking about the relative costs of different permanent traveling type lifestyles. I figured I’d list out a few categories of people I’m meeting on the road and get an idea of what you think. I’ll do the pricing for singles since it’s easier to do the napkin math more generally.

I’ll start with a non-travel lifestyle to set the baseline…

*  *  *

The cubicle commuter.

You live in a major or secondary city because that’s where your good job is. Although, to get a place big enough to house your drum set, you might be living a little outside of the city. Your commute takes 1.5 hours a day. It’s not so bad because you listen to podcasts.

You spend a lot of time in that safe and reliable car you’ve got. Since you spend so much time in the car, you fantasize about getting a loan on a better one. After all, you can afford the payments and the career track that you are on requires that you stay there for 5 more years anyway.

Weekends are fun, friends are great. You’d love to go on a few more adventures– maybe those investments you’ve got on the side will pay off one day?

In the meantime you’ve got 4 weeks of annual vacation. That’s a 1 week visit to the parents, 1 week fixing up the lawn and garden, and a week or two in Mexico. Asia sounds fun but it doesn’t make sense to travel for 26 hours when you’ve only got 9 days for the trip.

Annual cost: $50,000 to $95,000 USD.

The baseliner (digital bohemian).

You’ve got the location independent bug, the desire to go out and experience new places and ways of living– to have a little bit of an adventure and to spend a quiet year luxuriating in your time. You tell your family and loved ones that you won’t be home for Christmas. You sell your stuff and arrange for a quiet room in a home on a beach in a developing country. Your WIFI goes out occasionally, but you are having a ton of fun.

Maybe you get a nice place in Saigon for $350 bucks a month– the WIFI is fast, and there’s a lot of people doing the same. You think you might stick around for a while. After all, Pho is the most delicious meal you’ve ever had, and it’s only $1.35 a bowl.

Annual cost: $15,000 to $25,000 USD ($45,000 with consistent travel and long haul trips).

The exiled expat.

I can’t help but to bring up the exiled expat– an almost mythical character that ends up in a foreign land, picks up the language, and lives like a local for a few years. The exile occasionally journeys to the capital city to pick up items she can’t find in the countryside.

This is a real possibility and I’ve seen it happen quite a few times. I’ve never had to do it myself, but I always like to think that I would enjoy it and rise to the challenge.

Generally a strong business focus keeps you out of the category of those needing to eat rice and fish heads, but there’s something comforting about knowing that you can still experience the world, have an adventure, meet interesting people, and win your time back all at the same time (and for a great price).

Annual cost: $10,000 USD.

The backpacker.

You’ve got a love for all things web programming, or a small portfolio of niche websites, or a small productized service and a few Odesk gigs and you figure you’re going to travel the world. Why the hell not?

You spent a lot of time hustling up good WIFI connections and reasonable lodging. Realistically you might spend just as much time on lifestyle overhead as you did when you were a cubicle commuter. Instead of oil changes on your Camry, you are getting tours of Angkor Wat and co-working sessions in Saigon or Spanish lessons in Argentina.

Hustling up a living isn’t so difficult, as long as you’ve got a good group of friends. Adventures, travel, and artisan lifestyle are intoxicating to you. Maybe after you have a few adventures you’ll settle in to a good baselining spot and scale your cash flows.

Annual cost: $25,000 to $45,000

Business class.

You save money where you can, cash in your miles when appropriate, but you have no tolerance for bookings and arrangements that take a significant amount of your time. On occasion, you’ll book into 4 and 5 star hotels, especially in the developing world so that you can get your workout in and get on conference calls with your team without missing a beat.

You travel freely between developed countries and developing countries in order to meet friends, organize interesting serendipities, give yourself something fun to do, and follow up on projects and key relationships.

When in developed countries you focus on AirBnb as a means to quickly secure high quality, cost affordable lodging.

Annual cost: $50,000 to $85,000

Permanent traveler (PT).

[One of the main questions I’m exploring in this article: is AirBnB so disruptive that what we traditionally used to think of PTs are simply “business class” travelers who don’t use AirBnB when in developed countries?]

You think the lifestyle business concept is– at best– odd. After all, why not just go out and get rich like you did and then, ya know, travel is just when you want to go.

You stay in 5-star hotels or nice boutique joints that you have a special affinity for wherever you go. You don’t worry about the tab. Why fret? Your platinum membership with so-and-so hotel chain hooks you up with deals and perks.

You often swing by one of your few homes (and those of your friends) for some down time. There you spend time with your family and to manage your investments.

Also, your friends have boats.

Annual cost: $150,000+ (???). 

IMG_0931

As always, I would love to hear your thoughts. Do you think these dollar figures are accurate? Would you include any other categories?

Cheers,

 

Dan

PS, We’ve really been ramping up our email efforts lately, sharing some of our favorites stories (and podcast highlights) every week. If you’d like to receive a weekly email from us, it’s worth tossing your email address into the form below:

Published on 03.18.14
  • Not an Airbnb fan myself. I’ve found decent hotel sleuthing gets equal or better properties for less. I’d say I’m in the business class category, although I refuse to stay at 5-star hotels in the developed world if they’re $500/night. (Ritz-Carlton in KL still my best value pick, and service is phenomenal for about $175 a night)

    Staying at a nice Ibis hotel in a great location in Seoul or Geneva (places that are typically quite pricey) is cheaper than Airbnb and dealing with some nut job.

    I would argue the backpacker lifestyle is less than $25k, though. If I wanted to I’m sure I could manage in a $20/night hotel in your Angkor Wat example, and since I focus on “living” rather than “visiting”, I can eat almost anywhere in the world on $20 a day if I want.

  • Kevin Nas

    I have to travel a lot for my business, mostly in Europe and Asia, but often in the states to cities like Las Vegas. I used to use sites like Travelocity to book my flights and lodging, but I stumbled upon the better way to find deals: go to the second level sites – those like http://hotelsmixmatch.com who compare the hundreds of different booking sites in one single search. You’ll not only see Trivago or Expedia deals, but ALL OF THEM in one place.

    I must have saved over 3,000 Euros since I started using them. I sincerely believe that using only one of the top booking sites is not necessarily the best idea.

  • You had me at “napkin maths”

    Business class all the way for sure, your numbers are spot on.

    Permanent traveller – I think you have the wrong title, to me First Class would be more appropriate…might be another class between backpacker and business class…maybe an executive class

    divertiti!

  • JakeReed

    In what universe does a cubicle commuter get 4 weeks of vaca? I get 2, including sick time…

  • In a magical land called “Europe” !!! :)

  • 4 Weeks is normal in non-US companies. I live in Texas, but worked for a non-US based company as a remote worker and started with 22 days of vacation per year.
    Only US companies offer the ridiculous 2 Weeks of vacation and expect to get away with it.

  • good point there! also many US companies offer 4 weeks + to employees who’ve hung around for a few years

  • I prefer your updated to the wording as well… you are right about executive class as well, which i hope is inspiring for people looking to get into the lifestyle, it just isn’t that expensive

  • love this comment… i’ve got a lot of stories like yours in KL… for example Radisson in Cebu can often be booked for 110$ a night and it’s off the charts…. I agree sorta with the Ibis call..but only if I’m doing between one and four nights… if longer I gotta say, with the instant book feature cutting down the BS of back and forth with the property owner, and the fact that since day 1 I’ve basically stayed in nicer places on airbnb Ibis spots, for much cheaper (more space is the biggest thing generally) that for extended stays i’m converted. I think that’s part of the reason I was inspired to write the article is that I think since I first heard of AirBnB in 2009 (bossman told me it’s gonna be huge!) I fundamentally distrusted it. Like whos’ gonna want to do this, but the reality of my experience has been very different than my assumptions. For example, the last 3 places I’ve checked in to have combined taken shoter than the last time I checked into the Penninsula in Makati (10-15 minutes). So I’ve always been worried about the random nutball owner, but haven’t yet ran into them.

    ANYWHO thanks for your insight here. Totally agree with you about the best 175$ you can spend btw… great values to be had in Asia.

  • John Pangilinan

    Great post Dan, I ask myself sometimes why I didn’t start extended travel sooner… but I’m not sure if the resources we have now were available even 10 years ago. Certainly backpacking’s been around for a while, and many of the places that we know now as major tourist destinations were discovered by a curious and enterprising traveler.

    But now there’s more options for those that want adventure, but don’t necessarily want to totally “disconnect”. There’s enough variation in the travel world now that there’s so many different “types” of travelers now, as you’ve laid out in your post. And are we still at the beginning of this movement? I wonder what things will be like 10 years from now?

    In any case it’s an exciting time to be location-independent entrepreneur or traveler!

  • Also your comment got me thinking that I left out “slow traveler.”

  • I don’t know what you’d call it but another category you could add might be ‘Bikers’ or something.

    I have noticed there are quite a few people doing bike trips around the world (Asia in particular since it is much cheaper than Europe or USA), they camp or stay with host families or stay in a hotel ($5 or less for the hotels in Asia). I have one friend who does them for probably around $10,000 per year for anywhere from a few months to 1.5 years.

  • JakeReed

    Haha that’s cool you listen to this podcast. I actually used your woocommerce usaepay plugin at work (with a slight modification), and sometimes read your blog.

    But yeah, I think that the U.S. in general expects people to be able to perform at top efficiency with little to no time off. We have a “busy” sickness…

  • I listen to every episode! Thanks for using the plugin. Interested to hear about the mod. Use my contact form and let me know about it if you get a chance.

  • Nutball was an exaggeration, I suppose. Airbnb is a bit of the wild west. My last stay had to be cancelled because the “near the city center” flat was in the middle of a drug-ravaged battlefield. (Another exaggeration?) ;)

    I do agree the Peninsula in Makati is not so great service-wise. It’s a shame since it’s a nice place. Service at New World is good but the rooms are old. Shangri-la, man.

  • wow that’s interesting i haven’t really noticed this but that sounds doable for sure, this is in the style of old-school backpacking…. budget drifters! :)

  • absolutely ! i remember distinctly around 2005 time frame really wanting adventure but i wasn’t willing to “disconnect” from my career because i was worried about ending up a life-failure with no retirement !!! it was only skype / internet marketing et all that helped me to visualize a future that had both

  • hahaha too bad to hear that…haven’t had that experience yet. i’ll tell you what New World renovated rooms FTW! check them out ….

  • John Pangilinan

    Yeah, this is really bizarre, don’t even countries like Vietnam have government mandated holidays? US is one of a few that don’t really have any gov’t mandated holidays.

    Is it that people in the US don’t demand enough time off, or that other countries have a different concept of work/life balance than the US?

  • For you Business Class travelers out there – what would you estimate your cost to stay 1-2 months per location? Asia/Berlin/Prague pricing levels. 50-85k seems high – even 4k/month seems lux. To compare, I’m at about $1500/mo just for apt rent and food in the US. That doesn’t include car costs, utilities, etc., which I wouldn’t have when traveling anyway. Does anyone have actual cost breakouts that you’d want to share?

  • John Pangilinan

    Perhaps it’s different now, in that nowadays there’s less “job stability”, but more opportunity for designing different lifestyles, as long as you’re willing to forgo the life “career script” that most people still subscribe to.

  • Hey Dan,

    I would say that these are almost progression levels for most entrepreneurs.. PT’s or First Class Ballers is the ultimate goal, is it not? Making great money, travel where and when you want, visit family and friends all over the world.. But to get there, many modern day entrepreneurs will begin at backpacker or baseliner.

    Unless you posses a specific skill set you can sell such as programming or app development, you must create a skill set and learn the ropes as a freelancer and in online business – whatever genre you go into. Eventually this will lead to a product or services model which would take you to the baseliner category. I think one reason that travelers develop into strong entrepreneurs is because they have a strong passion to create a permanent lifestyle of travel. I would almost merge backpacker and baseliner into one grouping.

    The exiled expat could be the baseliner who fell in love with a city, location or woman while on the road!? They came for the cheap costs and stayed for the lifestyle, learned the language and became a part of the local society. Not everyone shoots for the PT. Some people are quite happy and content living a simple life, and that is their right.

    Business class is when the baseliner reaches a much higher level of income. Ideally you don’t want to be living in squalor while on the road. Nice hotels, business meet-ups, good food and networking to grow your business. That is where the progression is at..

    Permanent Traveller… A bit of a conflict of ideas. I guess it depends on how they got there. This kind of reads like a person who created a high income business from there home country without much need for travel. They can travel when they want to because that was not there lifestyle choice previous, they worked hard and now they can do whatever hey want. If they managed this via traveling, networking, building a business on the road then why would they see the lifestyle business concept as odd? It would be what they were desiring all along..

    Now these would all vary depending on where you come from. Not everybody starts off as a backpacker and scales the ranks, some would not leave the US or UK without a profitable business model to take away which is respectable in its own right. There is a lot to grateful for when you climb out of hectic hostels for nice hotel rooms and not having to worry about doing activities or spending money on meals. I think the figures are about right :)

  • Hey Dan. The other key element you didn’t touch upon is the role of co-working spaces. These days there’s a movement to set up global coworking passes so you can pop into any country and enjoy the benefit of effectively having an international office on the cheap (have you seen this article on the ‘coworking visa’? http://www.deskmag.com/en/coworking-space-visa-programs-lexc-copass-local-cards ). Quick story…If you listen to Dumas’ EOFire podcast, he asks folks “what was your I’ve made it moment”? Well mine was having a coworking space about 20 steps from the Picasso museum which was a dream for someone who loves art. Here’s another interesting piece about different types of travelers and how they use coworking
    http://www.deskmag.com/en/pursuing-your-travel-dreams-with-coworking-trips-731

    great content as always…./SA

  • Claus

    Flashpackers (high-end backpackers) would be another category. They stay in quality/luxury hostels (great internet + luxury environment etc…) not because they don’t have the money but because it’s more fun. They’re baselining their costs for stay so they can spend most of the money to LIVE.

  • I’m glad you brought this one up – this fits my circumstance. Similar budget (for me at least) to business class, but more of it spent on local comfort and exploration, rather than long-haul or short international trips.

  • Here’s an interesting comment from a reader I received from a reader via email that gave me permission to post it publicly:

    “Just to let you know, I think you’re drastically underestimating the cost of living in a nice city in the US. I work and live in San Francisco. Developers like me make $130k+ here when they’re 25-30. And we still live with roommates in shitty, swampy apartments from the 60s because rent is so crazy.

    $3,000 for a month of AirBnB in one of the most historically significant cities of the world for a 2 bedroom? That’s funny, because my friend just started renting a 2 bedroom on Market St in SF for $4,600 – a regular lease, no hotel or AirBnBing.

    So $150,000 for the boat lifestyle is not even close, I’d say. I doubt that you could pull it off even with 10x that – that barely gets you a house in San Francisco, let alone a boat.”

  • Yeah Jed the business class distinction I was going for is basically when you start permanent traveling– that is, no leases, no time spent on arrangements, just showing up and staying AirBnB, hotel, etc.

    If you want to stay for 2+ months you can really control your expenses. It’s the travel that always blows it out (but less so now b/c of Agoda/Booking/AirBnB) which is what inspired me to try and think about this.

    That said, if you want to live in relative comfort do do businessey class things like eat out at nice places and order wine, you can do so in Berlin/Prague/Bangkok/Saigon etc you can do so easily for $2,000 to $2,500 monthly.

  • Hey Adam… it does seem like there is a progression happening especially with a lot of people in our community. It seems that for many of us it’s the travel bug that got us first so we are happy to become backpackers and cut our business teeth while bopping around or becoming an exiled expat.

    I guess that’s part of what got me out on the road. The worst case: the exiled expat, was a better situation for me than my corporate warrior deal, so that’s part of what gave me the courage to give it a go.

  • hey that’s a great point. These things are certainly part of the infrastructure and are popping up everywhere (it would be very interesting to see stats on both this and WIFI cafes / 3rd spaces popping up).

    Thanks for the link btw I was not familiar with that.

    Hell of a made it moment too :D I remember sitting in a Hanoi cafe smelling of flowers and jasmine writing all day long thinking “hell fucking yeah.”

  • Great point Claus I would add that category if I made a V2 of the article.

  • You might have outlined the most outlier location in the entire US, but you might have a point there for some of the major major spots… although I know digital nomads who live well in Brooklyn and Silverlake for 4K a month all in. Part of what LI allows you to do is stay away from “bubble spots” because if your location isn’t impacting your earning so much, why invest funny money to try and live near wall street near the market district etc etc.

    I think then we can uniquely go find “great values” like Montreal, Bali, etc. Speaking of trends, that’s sorta one. There are all these spots that have a great lifestyle quotient but poor earning/career infrastructure for active entrepreneurs (a spot like Bali would be a good example of this, amazing lifestyle but bad for career movers and shakers). So it seems that many digital nomads are coming in are finding a nice space in the middle of the market.

    But yeah if you stay out of the world’ 5-10 most expensive cities most of the year, I think 150K is pretty fair to ball it out!!! :D

  • Cool. Haven’t been there since December. Maybe I was in an old room.

  • Or Australia. 4 wks leave + 1 week sick/carer’s leave + 1 week’s worth of public holidays (or some variation on that theme!)

    Of course most people are so crazy they don’t take their leave. I once had staff with 2 long service leaves saved up (for 7yrs of service – so she’s saved them for 14yrs!! + 6 weeks annual leave. I fail to understand why salaried employees work so many (unproductive) hours and don’t even take their earned time off!

  • yeah yah know that’s a big thing in America too it seems lately is the “kinda” vacation. Smart phones and career pressure are making it difficult for people to cash in the days off they worked so hard to build up.

  • I think this is a great summary actually and I’d been mulling on a post like this since traveling in japan with a bunch of digital nomads with very different setups and goals.

    Japan is obviously not a cheap place to travel (but it is amazing) and as a result this wasn’t a trip for the budget conscious.

    It made me realise I’m probably your Permanent Traveler person but don’t fly business class ;) I do however book into places that are comfortable, often quite lovely, sometimes – especially in SEA even swank, because I figure I’ve built a business to afford a better lifestyle than my days of backpacking, and I also deserve it.

    Plus it makes a big difference to your mindset when you’re staying in the right environment and not watching your pennies all the time.

    That said I’m still fiscally savvy and I don’t blow big bucks just for the sake of it.

  • Mmm well if you’re going to rename that to Brendan’s suggestion then I’m going to change my category above ;) A Slow traveler is also a good category. And then I think there’s the Seasonal Traveler – as in lives in one place for 3 months, 4 times per year – that’s going to be my form of travel and location independence as of next year (she says realising it didn’t happen this year that way…)

  • Dustin Donham

    Hey I am glad you brought up Airbnb… I been using this site for a while and I won’t get a hotel if ever I can prevent it. I like that I can leave reviews and also be reviewed.

    Here is a pro tip… never use the “Book Now” feature. Just email the host and throw down an offer… Most will either say yes or no. Some will rebuff you with another offer, I used this tactic successfully to save me money and still get the Apt I wanted. Remember if they don’t rent it out they are losing money anyway.

  • good point there! I tend to be so johnny-last-minute that book me ends up being worth it but you are right there!!

  • thank you Natalie would love to read your thoughts on the issue…. it’s nice to graduate from the backpacking days for sure!!! i’m not too far from mine, but i’d be happy to go back if it meant sustaining the lifestyle

  • not sure of the core reasons, sure it’s a matter of some debate… .deep issues like protestant work ethic plus favorable laws for companies +++++ who knows!? :) perhaps lots of competition for workforce as well.

  • Dustin Donham

    All my haggles were done a few days prior or the day of… it tends to work better at last minute cause the bird in hand is worth 2 in the bush!

  • Dustin Donham

    This guy has obviously never been to Asia.. 150k per year in China, Thailand, Vietnam, Phillippines ect you are living like a rockstar!

    Hell 50k a year is still an damn good living in the Philippines.

  • interesting! thought terrifies me maybe i’ll try it next time!

  • Dustin Donham

    if it doesn’t work there is always the hotel mate!

  • John Pangilinan

    Yeah, this can get into a big multi-faceted, sociological discussion for sure… I think you’re on to something Dan about the “protestant work ethic”.

    I’m wondering if our neighbor Canada has the same concept. I’m not sure, but I don’t think Canada has the protestant work ethic internalized in the same way we do, correct me if I’m wrong friendly internet folks? :)

  • I was all for using Airbnb in NYC last year, renting a place by myself, until I got drawn into the legalities present in that concrete jungle where dreams are made of… It seems that tenant-free short-term lets are just plain illegal, and I imagined rocking up to my holiday pad and being turned away because they’d been busted.

    It won’t put me off using them in the future elsewhere, though – I know someone who successfully rented out their LA home through Airbnb…

    Oh btw I love your ‘made it moment’ comment, Dan :)

    I’ve added you on Twitter – hope to connect there sometime! Selina

  • hey Selina thanks for following along and commenting… yeah it’ll be interesting to see if the resistance to Airbnb holds up…

  • Hello,

    This is a very interesting post. I’d agree with Brendan on your definition of Permanent traveller. I think First Class is more appropriate in the sense that you are talking about. I am a long-term traveller and my income is so very far below $150,000 and also incredibly far from the budget you have applied to Backpacker. I would consider myself somewhere between the two and have spent, in the last one year very little money whilst experiencing a lot more than I did when I travelled with money.

    This article has had me thinking a lot and I thank you for that.

  • Hey Anthony thanks for that!!!!

  • SXPT

    I disagree with a lot of this

    What started the whole trend of “yeooohhooo, im working from my laptop in thailand, its so cheap and so friendly here” is not skype, it’s wifi (circa 2006)

    The only times I use skype is when im forced to deal with the type of people who crave human contact and/or can’t make themselves understood in a few lines of email (or properly read mine…!) or even fill a contact form.

    Sure if I was accepting phone calls I could make an extra 30% profit or something from housewives and social people but I choose not to. The “social marketers” out there can grab my share of the “social clients” market pie, but personally I focus on automation…

    Airbnb prices are overall the same as budget hotels and since agoda has been around forever, i can’t really see the difference…? Except you can get more picturesque or local flavor accomodation with airbnb.

Next post: