What is the Real Cost of the Permanent Travel Lifestyle?

If you asked me what the single most important feature/software/service/company in the last 10 years for the proliferation of the location independent lifestyle was, I’d guess Skype’s call to phone service.

Before Skype to phone came out, digital nomads were basically technologists. They were early adopters in the internet marketing scene, developers, or people who managed to build and automate themselves out of a business.

After Skype to phone, hustlers, builders, employees, and those with clients and small teams could hit the road and build wealth while traveling.

I was thinking of the impact of Skype last week when I booked an apartment for a week in Rome, for an excellent price, after just 15 minutes of browsing photos (using AirBnB’s “book now” feature).

I’ve thought for a while that AirBnB is a great service, but last week was the first time I noticed the systematic impact it’s having. It (along with a host of similar services) has dramatically slashed the cost of living the famed “permanent travel” lifestyle (often just called PT)– a lifestyle that was once reserved for the mega wealthy and corporate warriors armed with company plastic.

Although I’m only staying for four days in this particular place (and 3 more in a place I booked in Florence), I could have booked the entire month for just under $3,000. This place has 2 bedrooms and an exceptional location, so lower prices were available.

Would it be possible to find a place like this in 2008? In anything less than a full day’s long search? It would be tough, and it would probably take much longer.

That’s an important shift because the key distinction of the famed “permanent travel” lifestyle was not the luxury and mobility, but the limited amount of lifestyle overhead PTs spent achieving it. Contrast that with slow travelers who spend a great deal of time organizing luxury and mobility in their lives.

In the classic PT lifestyle, it’s high end hotels that remove your lifestyle overhead. That’s what put it out of reach for most people. Replace 5-star hotels with great apartments and AirBnB’s “book now” speed (with the occasional Booking.com and Agoda.com booking), and the the cost of PT lifestyle gets slashed dramatically.

Skype helped make what in 2005 might have been a $2,000+ phone bill become $20 a month. Similarly, AirBnB (founded in just 2008) has maybe slashed the prices on the permanent travel lifestyle from $250-$400 a night to $50-$150 a night. Although on a percentage level the Skype change is much more profound, the AirBnB shift is more meaningful in terms of real dollars.

This all got me thinking about the relative costs of different permanent traveling type lifestyles. I figured I’d list out a few categories of people I’m meeting on the road and get an idea of what you think. I’ll do the pricing for singles since it’s easier to do the napkin math more generally.

I’ll start with a non-travel lifestyle to set the baseline…

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The cubicle commuter.

You live in a major or secondary city because that’s where your good job is. Although, to get a place big enough to house your drum set, you might be living a little outside of the city. Your commute takes 1.5 hours a day. It’s not so bad because you listen to podcasts.

You spend a lot of time in that safe and reliable car you’ve got. Since you spend so much time in the car, you fantasize about getting a loan on a better one. After all, you can afford the payments and the career track that you are on requires that you stay there for 5 more years anyway.

Weekends are fun, friends are great. You’d love to go on a few more adventures– maybe those investments you’ve got on the side will pay off one day?

In the meantime you’ve got 4 weeks of annual vacation. That’s a 1 week visit to the parents, 1 week fixing up the lawn and garden, and a week or two in Mexico. Asia sounds fun but it doesn’t make sense to travel for 26 hours when you’ve only got 9 days for the trip.

Annual cost: $50,000 to $95,000 USD.

The baseliner (digital bohemian).

You’ve got the location independent bug, the desire to go out and experience new places and ways of living– to have a little bit of an adventure and to spend a quiet year luxuriating in your time. You tell your family and loved ones that you won’t be home for Christmas. You sell your stuff and arrange for a quiet room in a home on a beach in a developing country. Your WIFI goes out occasionally, but you are having a ton of fun.

Maybe you get a nice place in Saigon for $350 bucks a month– the WIFI is fast, and there’s a lot of people doing the same. You think you might stick around for a while. After all, Pho is the most delicious meal you’ve ever had, and it’s only $1.35 a bowl.

Annual cost: $15,000 to $25,000 USD ($45,000 with consistent travel and long haul trips).

The exiled expat.

I can’t help but to bring up the exiled expat– an almost mythical character that ends up in a foreign land, picks up the language, and lives like a local for a few years. The exile occasionally journeys to the capital city to pick up items she can’t find in the countryside.

This is a real possibility and I’ve seen it happen quite a few times. I’ve never had to do it myself, but I always like to think that I would enjoy it and rise to the challenge.

Generally a strong business focus keeps you out of the category of those needing to eat rice and fish heads, but there’s something comforting about knowing that you can still experience the world, have an adventure, meet interesting people, and win your time back all at the same time (and for a great price).

Annual cost: $10,000 USD.

The backpacker.

You’ve got a love for all things web programming, or a small portfolio of niche websites, or a small productized service and a few Odesk gigs and you figure you’re going to travel the world. Why the hell not?

You spent a lot of time hustling up good WIFI connections and reasonable lodging. Realistically you might spend just as much time on lifestyle overhead as you did when you were a cubicle commuter. Instead of oil changes on your Camry, you are getting tours of Angkor Wat and co-working sessions in Saigon or Spanish lessons in Argentina.

Hustling up a living isn’t so difficult, as long as you’ve got a good group of friends. Adventures, travel, and artisan lifestyle are intoxicating to you. Maybe after you have a few adventures you’ll settle in to a good baselining spot and scale your cash flows.

Annual cost: $25,000 to $45,000

Business class.

You save money where you can, cash in your miles when appropriate, but you have no tolerance for bookings and arrangements that take a significant amount of your time. On occasion, you’ll book into 4 and 5 star hotels, especially in the developing world so that you can get your workout in and get on conference calls with your team without missing a beat.

You travel freely between developed countries and developing countries in order to meet friends, organize interesting serendipities, give yourself something fun to do, and follow up on projects and key relationships.

When in developed countries you focus on AirBnb as a means to quickly secure high quality, cost affordable lodging.

Annual cost: $50,000 to $85,000

Permanent traveler (PT).

[One of the main questions I’m exploring in this article: is AirBnB so disruptive that what we traditionally used to think of PTs are simply “business class” travelers who don’t use AirBnB when in developed countries?]

You think the lifestyle business concept is– at best– odd. After all, why not just go out and get rich like you did and then, ya know, travel is just when you want to go.

You stay in 5-star hotels or nice boutique joints that you have a special affinity for wherever you go. You don’t worry about the tab. Why fret? Your platinum membership with so-and-so hotel chain hooks you up with deals and perks.

You often swing by one of your few homes (and those of your friends) for some down time. There you spend time with your family and to manage your investments.

Also, your friends have boats.

Annual cost: $150,000+ (???). 

As always, I would love to hear your thoughts. Do you think these dollar figures are accurate? Would you include any other categories?

Cheers,

Dan

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