Work from anywhere, live anywhere, travel freely.
Digital nomad, location independent, or freed from the tyranny of geography.
Whatever you call it, it’s definitely a fantastic asset for your lifestyle. And making a living with the personal enterprise approach gives it to you.
Now that more people are experiencing remote work, more people see the possibilities. Maybe you’ve gotten your feet wet with a flexcation, where you travel to somewhere cool for a while to redefine “working from home.”
Being able to retire and travel the world is a common fantasy. But more and more, people are working while traveling, integrating purpose and adventure, paying the bills while exploring and enjoying.
These people quit their jobs not to retire, but to start location-independent businesses that enhance their freedom. I call this “unretirement.”
Originally, unretirement was a more literal concept. People who had already retired realized it wasn’t all they thought it would be, and went back to work.
Then, the meaning shifted to people nearing retirement age who are actively planning for their next phase. And it wasn’t about perpetual golfing in Florida. More often than not it involved starting a small business.
I use the term for anyone who wants to start living the life they want right now (or in the much nearer future). Working a job that you find unfulfilling until you can retire at 65 or 70 seems like a ridiculous strategy.
And that assumes you can save enough money to live without working for up to 30 years, and don’t lose your job in the crucial years leading up to retirement. What seems more risky?
The personal enterprise approach fixes this lunacy. And if you build your components with an eye toward being unconstrained by geography, you can also live an extraordinary life beyond work while ensuring you have multiple income sources in your later years.
The Joy of Travel
Travel is an activity that’s practically guaranteed to change your life for the better. In fact, research establishes that Mark Twain was right when he said “travel is fatal to prejudice, bigotry, and narrow-mindedness,” as spending time in diverse locations really does broaden the mind and increase your acceptance of and trust in others.
Other research tells us that extended travel enhances your personality in positive ways, much like your personal projects allow for change and even transcendence. Still more research reveals that your experience of time slows down when you’re traveling, which allows you to better savor the adventure.
I’ve been location independent for 15 years now, although far from what you would call a nomad. I’ve gotten to take my family on some pretty special trips because of it, including one around the world in 2018-19.
But I’m really just getting started. My plan is to live in different parts of the world on a more-or-less permanent basis when both kids are out of high school in two years.
Right now, lots of people have been introduced to “working at home” under less-than-ideal circumstances. It’s not for everyone, and having it forced on you might not be jazzing you up.
The real question is, where’s home? Do you wish it were somewhere else? Or perhaps the location could change periodically, from one cool place to another as the mood strikes?
In that case, what you really want is the freedom to live and work from anywhere. And while that may sound like a dream, the ability to pick up and leave is also a pragmatic necessity given the current state of things.
If you’re rightfully worried about political division and continued violence in the US, you don’t have to move to Canada. Instead, spend the summer in Canada, then head to Costa Rica and Panama for the winter. Or spend six months down under, split between Australia and New Zealand, before popping over to Europe.
Traveling the world used to be a retirement dream. But now, it’s more viable to create a location-independent life for yourself than it is to amass the kind of money it takes to quit working altogether.
Quicker, too.
Wait Until Retirement to Live Your Best Life?
Our whole lives, we’ve been fed a story. Go to school, get a good job, raise a family — and then when you’re 65, you can do what you want.
Take a moment to think about how crazy that sounds. And yet, that’s the script most people live by.
Luckily, there’s time to rewrite the story. To create a plan that gives you what we really want sooner, instead of the traditional retirement narrative that’s more of a fiction than ever.
James Clear succinctly summarized a smarter approach in a tweet:
Instead of working toward retirement, work toward your ideal lifestyle.
— James Clear (@JamesClear) November 12, 2020
There is usually a path to get there in a few years instead of a few decades.
Wise words, and they’re true. It’s much easier to start planning to live the life you want now and get there in a few years than it is to save enough to live well for 25 years (or maybe longer with advances in longevity science) without working.
Even people who have retired are finding it unsatisfying. And that’s why “unretirement” is gaining traction, even for those who are 20 ore more years away.
Unretirement became a thing thanks to retired Baby Boomers coming back into the workforce due to boredom and a lack of purpose. Then it expanded to Boomers who aren’t retired yet.
Instead of working on their golf game in anticipation of age 65, they’re starting side business and other ventures that will become their work once they leave the career they have. So why not do the same at a younger age?
It may surprise you that the average age of a digital nomad is 38, so it’s not just for the “kids.” And this will blow your mind — digital nomadism will increase exponentially, with projections of a billion digital nomads by 2035.
If this lifestyle appeals to you, start putting your plan into action now. With the right mindset and revenue model, it’s perfectly doable.
And that takes us right back to the personal enterprise approach. As you move further up the personal enterprise pyramid, the more control you have over your time.
And know this … your time and quality of life amount to the most precious wealth of all.
Travel the World and Keep More of Your Money
Now, you may be thinking that all of this sounds expensive. Sure, building your personal enterprise will give you the opportunity to make plenty of money, but are you going to blow it all on travel?
The good news is that not only can you live a less-expensive lifestyle in locations that look like paradise, you can basically save enough money in taxes so that airfare and other costs of moving around are more than taken care of.
First of all, building a digital business that allows you to work from anywhere opens up new opportunities for geographic arbitrage. What is that, exactly?
Geographic arbitrage means taking advantage of the differences in prices between various locations. You earn money in a market that allows you to make plenty of money (the US and other western countries) and spend it in a less-expensive economy (Thailand or Panama, for instance).
If you’ve ever chosen a vacation spot based on the relative strength of your native currency, you’ve engaged in a form of geographic arbitrage. Even spending stronger U.S. dollars in Australia qualifies as a win.
For example, I know a diverse group of internet entrepreneurs who spend much of the year in Medellin, Colombia. These folks sell their products and services in lucrative western markets, while enjoying the “eternal spring” weather and low cost of living in Medellin, all while contributing to the local economy.
A less exotic trend due to the pandemic is for people working on the expensive coasts of the U.S. to work remotely, which allows them to live somewhere vastly less expensive than Silicon Valley or New York. People are moving to Texas and Florida, both because of the lower cost of living, and notably, a lack of state income tax.
Let’s talk about taxes next. Because as a former resident of Texas, I know the state gets its money from property and sales taxes that effectively equal what you’d pay in state income taxes elsewhere. And you can’t avoid federal taxes at all.
It’s literally more prudent to travel the world than to stay in the U.S. when it comes to taxes. So it’s simple … you just up and leave.
But there’s one big problem. The U.S. taxes your worldwide income whether you reside in the States or not. That’s right — good ol’ Uncle Sam wants you to keep paying taxes even if you leave the country and never set foot on American soil for the rest of your life.
Now, I’ve never had a problem paying my fair share of taxes. In fact, I’ve paid millions of dollars in taxes over the last decade alone. But if I’m no longer benefiting from what we pay taxes for because I’m not physically present in the country, that doesn’t seem fair.
The United States is unique in this sense. For example, if you’re Canadian and decide to relocate yourself and your business to a different county with much lower tax rates, you can do it. The same applies to Australians and the British when leaving their home countries for greener pastures.
Fortunately, U.S. citizens do have a way around this worldwide taxation, at least up to a point. It takes a thorough understanding and compliance with certain tax laws, but if you get it right, you can reduce your taxes significantly while living the dream.
For U.S. citizens, the Foreign Earned Income Exclusion gives you a substantial tax break just for being out of the country for the majority of the year. In 2021, the exclusion allows you to earn $108,700 tax-free while living overseas. And if you include your spouse in your business, you can double the exemption for the two of you combined and make over $200,000 a year while paying minimal to no federal or state taxes.
And this is before you start exploring the benefits of second residencies, second passports, golden visa programs, international corporate entities, and foreign investment opportunities. You need to make sure you understand the rules and work with competent professionals, but again, this is totally doable with a personal enterprise approach.
How do I know?
Because I’m currently setting these things up for myself. My wife and I will travel the world continuously for a bit, and then eventually decide on a new home base — which will definitely not be in the United States.
No matter your travel objectives, you’ll be richer in both life experience and net worth. In other words, when it comes to dreams of travelling the world, it’s more financially prudent to live the life you want now than it is to wait until the mythical day you can retire.