Time sure does fly by when you're having fun!
(Updated with a touch of credit card rewards information.)
A Bit of Recap
By early June 2019, I had sold my last house, car, and sold or donated the majority of my worldly possessions. I visited family and friends for a few weeks, then took my first one-way international flight which led to many more. You can see all the cities and countries I've lived in or visited, by month and year, in the Itinerary section of this site.
My goals for living abroad and nomadic are:
to explore and learn about what life is like living in many countries around the world,
simultaneously reducing my annual expenses while increasing income, to grow the savings gap and investing for my future,
and to reach financial independence.
I originally set off with an expectation of living in around 4-6 countries a year. And in the past 4 years, I have spent time in about 20 countries. Even with long stints of time in some countries, I've still averaged about 5 countries a year. I found my sweet spot is about 4-6 weeks in one location. Anything less than that is just too short and feels more like a vacation. And when I stay longer, it's because I truly enjoyed what the community has to offer and I had much more to learn there. The number of other travelers I have met was unexpected. It's amazing to know there's millions of nomads or people on long holidays, all around the world. I love learning from them and about their countries, which gets me excited to visit where they are from. And of course I absolutely love the local people I meet in each destination. Any time I can share coffee or tea with a native, and listen to their stories or ask questions, is a fabulous day.
My financial goals have been going great too. I grew my mathematics editorial services business which I had began back in July 2017. While my business was growing and I was living abroad, I dropped my annual expenses radically. That combination allowed me to save radically and invest purposely, leading me to reach my CoastFIRE number by the end of December 2020. And in February 2021, I was able to start "coasting." I changed my role in the business so I was only working around 10 hours or so a month; quite a difference from those 60 to 80 hour work weeks I was use to from my prior work history. By May 2023, I decided to change how I run my business, from having a little work going on all year, to only taking on projects a couple times a year. I am very curious to see how I like this new business structure of working a few months a year. I don't know if it will stick or if I will get antsy and want to see income coming in on a more frequent basis. Time will tell!
Nomad Expenses
This is the part of my journey that I am always fascinated about, and I know others are too. In the past 4 years, I have learned about patterns in my spending habits, and feel good about spending more on certain things while passing on others. The big mind-blowing differences is with the overall annual spending. Although I did not keep detailed records of my spending in the past, I can estimate that during 2015-2019, I was spending between $80,000 to $120,000 annually. As my income grew, so did my spending. We call that, lifestyle inflation, and I caught that bad habit. By living nomadic abroad, I reduced my annual spending by half to nearly two-thirds at times. That's amazing!
Amounts in table rounded to the nearest hundred dollar for simplicity.
​ | 2022 | 2021 | 2020 | 2019 (June - Dec, 6 months) |
Accommodations* | $31,300 | $14,000 | $12,300 | $8,300 |
Entertainment | $4,200 | $5,900 | $5,900 | $500 |
Food & Groceries | $9,900 | $15,100 | $9,400 | $4,500 |
Shopping & Clothing | $3,100 | $2,400 | $3,500 | $1,200 |
Flights & Transport | $7,500 | $3,300 | $2,700 | $1,300 |
Miscellaneous | $2,200 | $2,800 | $1,900 | $800 |
SUBTOTAL | $58,200 | $43,500 | $35,700 | $16,600 |
Cash Back Rewards from Credit Cards | $1,200 | $200 | No Data | No Data |
TOTAL Annual Spending After Cash Reward Redemptions | $57,000 | $43,300 | $35,700 | $16,600 |
*The Accommodations categories include cruises. In 2022, I cruised for 7 weeks; in 2020, 2 weeks; and 2019, 2 weeks. Because I tend to cruise a lot, I have decided to create a separate category for that expense moving forward. Look forward to that category in future reports.
The past 3.5 years of expenses average to $43,600 for annual spending after considering the cash back from using credit cards. That's quite a bit lower than the $80,000 to $120,000 that I had been previously spending in my former lifestyle. What a change?!
Recall, the year 2022, was my "year of yes." I said, yes, to anything that I truly wanted to do and politely declined things that I wasn't passionate about. Besides wanting to live my best life, I was interested to see if I had a natural upper limit to my annual spending as a nomad. It made me feel good to know that I could spend freely and with intension, while still only spending a fraction of what I use to when I lived a more traditional lifestyle in the US. This information is very helpful for my future financial planning and early retirement.
Credit Card Cash Back Rewards
One aspect of the financials I have not put much thought into are the cash back rewards I earn from using major credit cards. For most of 2022, I used Bank of America (BoA) Norwegian Cruise Line (NCL) MasterCard and BoA Travel Rewards Visa. Between the two cards, I claimed $1,200 worth of rewards in 2022 (about $1,000 from NCL MasterCard, and about $200 from the Travel Rewards Visa). During 2019 through 2021, I had been using a Citibank American Airlines MasterCard for most of my purchases, and I used the accumulated points for flight purchases. I stopped using that card when I left North, Central, and South America because I was no longer going to be flying American Airlines or their partners. I don't have the use for earning points specific to one airline or hotel chain, since I'm living globally around the world, and there's a million options to choose from.
Rewards Point Structure on the BoA Cards
NCL MasterCard | 3x points on NCL purchases | 2x points on Flights & Hotels | 1x points all other transactions | No Annual Fee; No Foreign Transaction Fees |
Travel Rewards Visa | 1.65x points on all transactions | ​ | ​ | No Annual Fee; No Foreign Transaction Fees |
I use the NCL MasterCard to book all flights, any hotels, NCL cruises, and any charges onboard while on an NCL cruise. The Travel Rewards Visa is the card I used anytime I was out an about and could use a credit card (groceries, restaurants, shopping, Grab, FoodPanda, Uber, etc.
In June 2023, I signed up for the Chase Sapphire Preferred Visa card. This card had a 80,000 signup bonus at the time I opened an account and is known to have some of the best reward perks. They offer 2x points on all travel categories such as flights, hotel, taxis, trains, buses. They offer 3x points on dinning and 1x points on other transactions. Additionally, there is a $50 statement credit if you book a hotel through their portal, and they give you a 10% anniversary point boost. There's many more perks you can read about here. I am interested to see how I like the different ways to redeem points, where the two BoA cards I have been using are for cash back or statement credit only. I will be curious to see how much this card will save me in the future. Every bit helps!
FIRE Numbers
If you're new to my blog and have not heard of FIRE or the FIRE communities, you can get a brief crash course here. Knowing my average annual spending and my end of spending helps me determine the best FIRE number for how I live life, and to secure my financial independence.
Your FIRE number is found by multiplying your annual spending by 25. Because your annual spending can dramatically change from year to year, it's good to estimate your lifetime average annual spending. I value buffers and over planning, so I round up the data I know about my spending. We saw above my average annual spending in the past 3.5 years was $43,600, or approximately $44,000. For the sake of providing a nice buffer, let's round this up even more to $50,000. Therefore, my FIRE number can be calculated as $50,000 x 25 = $1,250,000. This means I need about 1.25 million dollars saved and invested, and then I can "retire" or start living on those funds. However, the lower end of my FIRE number, which is called, LeanFIRE, could be $44,000 x 25 = $1,100,000. Whereas, a high end FIRE number I could calculate could be $60,000 x 25 = $1,500,000 (choosing the 60K as a base number because of my 2022 high annual spend). Regardless of what base number I use, it's just a guideline to help for future financial planning.
The abbreviated concept behind the 25x multiplier (also called the 4% rule), is that once you've invested your FIRE number amount, you will withdraw and live on 4% (or less) of it's earnings. The hope is to earn 8% or so, and when you take out only 4%, you never touch the principle amount invested, and there's always additional earnings you never touched. With compounding on your side, you will outlive your wealth. However, not everyone wants to do that. Many people want to die with zero, or spend it all on themselves and others. That gets into different drawdown strategies. If you are interested in those topics, join all the financial independence groups, read the bestseller books, and listen to a bunch of the podcasts and vlogs. There's tons of content for you to consume and learn more.
I have previously mentioned that I reached CoastFIRE back in early 2021. You can read my prior post to learn about that formula and the basis. For me, I have saved and invested a large portion towards my FIRE number, and I am letting my investments do the heavy lifting now. I earn enough income from my business and other means, to cover my annual expenses. I no longer focus on earning more than I need to live on, which frees up more time for me to live life. However, if I do choose to earn more, that gives me the opportunity to invest more each year, which will speed up the timeline for reaching my full FIRE number. I am turning 44 in July 2023, and I anticipate to reach full FIRE in my early 50s, if I keep my current low-work plans. Of course, if I ramp up my business again, then I will speed up that timeline. It doesn't matter what I actually do, a positive factor of being financially independent is having many choices.
2023 Spending Goals
I began this year estimating I would spend $36,000. I had hoped to spend around $2,100 per month from January through October since I planned to be in Southeast Asia, and I knew it was a lower cost of living region of the world. However, I have been averaging just under $2,400 per month from January through May. In November and December, I will be on a bucket list trip to Australia and New Zealand with my mom and estimated to spend around $15,000 for those two months. Yet, within the past two weeks, I've found some cool opportunities that I would like to participate in later this year which will cost more than I had originally accounted for. At this point in time, mid-June, I predict I will spend around $40,000 by the end of the year. Although it's over my original spending goal, it's still well under my base FIRE multipliers I had used above (44K, 50K, and 60K), and that feels good.
Comparisons with Others
Comparing yourself to others can be vicious but we all seem to do it for reference in some situation or another. In 2019, I thought I would set off living on around $2,000 per month or $24,000 per year. I got those numbers from reading articles about Expat life; those people that left their home country to live in another country for less. And as I met nomads from Europe, South America, Asia, I found many of them were living on $1,000 to $1,500 per month, which is $12,000 to $18,000 per year. As you can see with my numbers from above, I am no where near those annual spends, and it's A-OK!!! On the flip side, I have met some great FatFIRE nomads, who spend well over $100,000 per year. I find both sides of the coin to be fascinating. I value knowing I have a long list of friends on both spectrums of spending, and I can learn valuable lessons from all of them. When it comes down to my journey, I found a comfortable spending level that supports living my best life.