What is the digital nomad lifestyle?A digital nomad has location-independent work and relies on telecommunication and the internet to make a living. The nomadic aspect means that these people tend to minimise expenses for fixed costs such as rent to prioritise travel and change their location frequently. The digital nomad lifestyle can be appealing for various reasons: work-life balance and quality of living, freedom and flexibility, travel, experiencing other cultures, meeting new people, learning languages and maximising earnings. However, among the challenges are finding a reliable work environment, the logistics and strain of constant travel, working and networking across time zones, possible insurance and tax problems, economic insecurity and the difficulty of maintaining steady relationships and friendships.
Pros and cons of being a digital nomad
|Location-independent||No roots or permanent home|
|Work a flexible schedule||Hours can be tough and success or failure is completely on you|
|No fixed hours||Pressure to work efficiently|
|Choose your destinations||Visa requirements, travel restrictions, time zones, no face-to-face with clients|
|New people and experiences||Less connection and presence with friends and family|
|Achieve work-life balance||Struggle with work-life balance|
|Exotic locations and adventures||Unpredictable conditions and infrastructure|
|Possibility to reduce cost of living||Necessity to spend on travel and accommodation|
Step by step: how to become a digital nomadSo you want to escape the drudgery of an office job and traditional work environment, avoid the high cost of living in your home country or be independent of a disastrous job market? Here are the steps that will get you there.
1. FinancesYou need a plan for how you’re going to pay for the digital nomad lifestyle. Ideally, you have a predictable and reliable income form at least one sort of digital or online job before you take off. It’s not impossible, but difficult to build a career or business from scratch while you’re on the go. Tabulate your current monthly costs and calculate your likely spending. Your cost of living at your first destination should be lower to give you breathing room. It’s recommendable to save up an emergency fund as well. Expenses that you need to account for include:
- Food and drinks (groceries and eating out)
- Leisure expenses (outdoor activities, hobbies, fun)
- Visas and extensions
- Transportation at the destination
- Internet and communication (local SIM, data connection, WiFi)
- Co-working or office space
- Ongoing subscriptions (software and services)
- Insurance (health, travel, property, liability)
- Payment and currency conversion fees
- Travel tickets (planes, trains, boats, buses)
2. LogisticsNomads need to travel light while still being prepared for all eventualities. Apart from your work equipment, you need to bring clothing appropriate for most of your locations and other gear. Reduce, downsize and optimise as best as you can, but keep in mind that everything you have to buy abroad creates additional costs. In terms of logistics, these are important things to consider and address:
- Passport and travel documents
- Business licence and taxes: Depending on your kind of work, you’ll be employed or paying taxes somewhere in this world. Some nomads try to avoid taxes altogether through travel, but that’ll catch up with you sooner or later. You’ll most likely still owe taxes in your home country, so set up a system to deal with that.
- Payments and bank accounts: PayPal is so retro. Digital nomads use services like TransferWise, Payoneer, smartphone banking and even payments in crypto.
- Communication: You’ll need to reach your clients or employer through VoIP or by phone. A dual-SIM phone or international data connection can be helpful.
- Mail: If you rely on traditional mail, you’ll need to set up a forwarding or digitalisation service
- Medication: Figure out how to get your prescriptions abroad or bring enough from home.
- Driving: Obtain an international driver’s licence and familiarise yourself with international laws around driving.
- Administration: Allow time for client acquisition, bookkeeping or job hunting on the go.
3. The 80/20 ruleAs a digital nomad, you’ll constantly assess your situation to improve it, both in terms of lifestyle and earnings. To that end, you can reduce costs and work more or smarter. Be honest with yourself about your wants and needs and what sits well with you – and what doesn’t! You’ll likely find that the 80/20 rule holds true, meaning 80 percent of your earnings or benefits come from just 20 percent of your efforts. Create and optimise ways to capitalise on those 20 percent. Define your metrics, then track and analyse.
4. MindsetBecoming a digital nomad means you simplify and optimise your life, both in terms of work and style. Keep an open mind and don’t intend to create the life you know at home while travelling. There is no big mystery to it: with the steps outlined above, nearly everyone can do it. But ask yourself these questions to find out if the digital nomad mindset is for you:
- Are you a natural hustler with self-motivation and patience, willing to apply methodology and seize opportunities?
- Are you able to adapt to ever-changing situations and remain compassionate?
- Do you have a clear vision, goals, sense of purpose and know what you want in life?
- Are you able to plan ahead, make decisions, work with discipline and good judgement?
- Do you have a high tolerance for frustration and can take unexpected setbacks?
5. Social responsibilityLastly, be aware that the digital nomad lifestyle is one of privilege. Especially when you’re staying in places with a lower cost of living, the contrast can become quite stark. You’re always passing through, but that is no excuse not to respect the locals, their conditions and daily life. Because your work is elsewhere, your interaction with the local economy is through your spending. Try to give back or contribute to the communities you encounter and avoid being snobbish when the locals lump you in with the tourists. Your behaviour also has an influence on the experience of anyone coming after you.
Digital nomad jobs: how to make money while seeing the world
The freelancerThis type of digital nomad works individual freelance gigs, longer projects and might have long-term clients with regular work. Apart from putting in the hours to earn your living as a freelancer, you need to scour job websites for new work and clients and do your bookkeeping and taxes. There is a level of uncertainty regarding how much you’ll make, which contributes to the challenge. Digital nomad freelancers work all sorts of jobs in the digital economy, but content writing, SEO, design, coding or administration are common. Since there is stiff competition, you might want to upskill and take courses on web design, coding, or SEO to increase your chances of getting hired.
The remote workerSome people work as employees where their physical presence is not required. They have a steady paycheck, file taxes in their home country and can be anywhere in the world. This setup offers more stability and predictability than the freelancer digital nomad has, but can be limiting if you need to adhere to certain hours or have to take part in video calls and team meetings. However, there is a general trend towards remote teams in many digital economy companies.
The entrepreneurThis digital nomad is similar to the freelancer, but entrepreneurs don’t provide a service. Instead of selling their time, they sell a product or market themselves. People who’ve read The 4-Hour Workweek tend to fall into this category. They have tried-and-true earnings from affiliate blogging or marketing, drop shipping with Amazon, Shopify or BigCommerce and sell t-shirts, CBD oil and similar products online. If you’re a more innovative and inventive entrepreneur, you successfully monetise your app, podcast or YouTube channel, sell stock photography or receive other royalties. Entrepreneurial digital nomads tend to strive for passive income where a minimum of work is required, but getting to that stage actually requires a lot of work and hustle. Others have income from rent and real estate, stock trading and mining or trading cryptocurrency.
Best places to live for digital nomadsNow where to begin your trip around the world as a digital nomad? Here are the top 10 destinations most accommodating for the digital nomad lifestyle, based on factors such as cost of living, internet access and speed, safety, weather, air quality and nightlife.
- Canggu, Bali, Indonesia
- Lisbon, Portugal
- Berlin, Germany
- Buenos Aires, Argentina
- Belgrade, Serbia
- Bangkok, Thailand
- Chiang Mai, Thailand
- Puerto Vallarta, Mexico
- Singapore, Singapore
- Prague, Czechia
Open doors to new experiences.
Learning a language can open the door to the digital nomad lifestyle and help you to integrate wherever you are in the world. Visit the Lingoda website and sign up for your free 7-day trial to learn English, German, Spanish or French.