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.
The pre-tax wage in 2010 was around $36,000, according to the U.S. Census Bureau, but when you deduct the average amount of taxes that most people in the United States pay, the take-home pay comes out to around $25,000. This means most Americans (the average) are barely breaking even in terms of pay versus cost of living. Meanwhile, the location independent workers of the world are enjoying the lowered cost of living in foreign countries while at the same time taking advantage of lower tax rates by choosing countries that have a lower tax rate and a tax treaty with the United States, which means you pay local taxes and then present that proof to the IRS to show that you are still paying taxes, just in your new home.
The appeal for many digital nomads is that they can go to a country like Colombia, where the upper middle class exists on a cost of living that is around $10,000 per year, or Bulgaria where it is around $8,000 per year, and while enjoying a lower tax rate and their same wages from back home, put a significant portion of their income back in their pockets. Being location independent means you can take a $30,000 a year salary and live like a rock star because you only need about $10,000 of that for your cost of living, and the other 20k can be spent however you see fit.
The beautiful thing about the digital nomad lifestyle is that you don't have to be part of the current work force to take advantage of the lowered cost of living in other countries. Pensioners have been choosing to retire overseas for years, and this is one of the primary reasons. You can take your $1,000 a month pension (or rough equivalent) and use it in a place like Cancun, Mexico where you can live on $600 per month, leaving you with $400 per month to spend as you see fit. And because the healthcare is free you don't have to spend hundreds of thousands on medical fees, plus you have access to the beach and a lush, tropical environment to enjoy every day of the week.
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.
The pre-tax wage in 2010 was around $36,000, according to the U.S. Census Bureau, but when you deduct the average amount of taxes that most people in the United States pay, the take-home pay comes out to around $25,000. This means most Americans (the average) are barely breaking even in terms of pay versus cost of living. Meanwhile, the location independent workers of the world are enjoying the lowered cost of living in foreign countries while at the same time taking advantage of lower tax rates by choosing countries that have a lower tax rate and a tax treaty with the United States, which means you pay local taxes and then present that proof to the IRS to show that you are still paying taxes, just in your new home.
The appeal for many digital nomads is that they can go to a country like Colombia, where the upper middle class exists on a cost of living that is around $10,000 per year, or Bulgaria where it is around $8,000 per year, and while enjoying a lower tax rate and their same wages from back home, put a significant portion of their income back in their pockets. Being location independent means you can take a $30,000 a year salary and live like a rock star because you only need about $10,000 of that for your cost of living, and the other 20k can be spent however you see fit.
The beautiful thing about the digital nomad lifestyle is that you don't have to be part of the current work force to take advantage of the lowered cost of living in other countries. Pensioners have been choosing to retire overseas for years, and this is one of the primary reasons. You can take your $1,000 a month pension (or rough equivalent) and use it in a place like Cancun, Mexico where you can live on $600 per month, leaving you with $400 per month to spend as you see fit. And because the healthcare is free you don't have to spend hundreds of thousands on medical fees, plus you have access to the beach and a lush, tropical environment to enjoy every day of the week.
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.
About the Author:
Marginal Boundaries is a leader in location independent living around the world, and you can find more information on retiring early in a country such as Mexico by visiting their website.
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