Yes that is my wallet. Yes it is a rubber band. Its tightly wrapped around various cards, metro passes, and at least three different types of currency. Money matters and traveling the world is by no means a cheap endeavor. Yet with careful planning it is very realistic. In terms of financing a trip around the globe there are three important points plus an optional fourth point that need to be carefully considered and executed.
- Define a burn rate
- Define a stop
- Secondary source of income (optional)
1. Save. This is the simplest tenet but deserves tomes worth of text because saving is really a lifestyle more than a series of discrete actions. I’m gonna refrain from detailing how to save (for now) because, 1. I aint yo daddy, and 2. If you can’t save and budget properly you probably shouldn’t be considering world traveling at this current juncture. Anyway, back on track. In the context of saving for future travel, there are two important numbers; total amount saved and percent of total amount you are willing to spend on travel. For my current situation I have saved a target amount over the course of 2.5 years and have set my travel spending threshold at 15% of my savings. This 15% is my total travel budget.
2. With total travel budget set, definition of a monthly burn rate will determine not only the maximum duration of time off as well as travel flexibility. As of 2017, I would peg 2,250 dollars as a realistic upper limit for a monthly burn rate. 750 dollars for air/rail/bus travel costs offers maximal travel flexibility. 1,500 dollars would provide for a tight but comfortable 50 dollars a day for housing and living cost (we are talking Airbnb and guesthouses here, not the Sheraton). Hotel travel is priced for the one to two week excursions of salaried employees and is not financially suitable for long term travel (unless you are stupid rich).
3. total travel budget / monthly burn rate = # of months free. This is your hard stop. This isn’t rocket science. Stick to this and don’t be an ass and dig yourself into financial ruin buy ignoring this.
4. Secondary source of income. I consider this optional because sticking to the total travel budget and monthly burn rate should make globe trotting financially sound. That said, burning through cash isn’t easy and developing a secondary income stream lessens the hurt. Many of my fellow world travelers that have secondary income streams do so by working remote contract positions in front end web development. There are a litany of opportunities and resources out there on the web. While I would never, ever, ever, ever recommend this as a safe way to generate income, my personal approach is retail stock trading in the tech sector which I have been doing on and off since 2011.
There you have it. The biggest difficulty in terms of finances is the preparation phase and overcoming that initial fear of disengaging from what I would consider the normal way of living.