A digital nomad is someone who desires the freedom to work and live anywhere and uses technology to make this desire a reality.
Want to live and work around the world? It’s the dream for many people – a nomadic lifestyle of travelling to cheap hotspots and earning money online. But can everyone do it? The work & travel subculture that has exploded in the last 10 years has many faces. Technology changes rapidly but Internet cultures, subcultures, and communities evolve and morph at a blistering pace.
Is location independence 2020 different than back in 2010? Is the digital nomad definition outdated? How many digital nomads are there and how do they make money?
I’ve been location independent for 5 years and I’ve spent the last 20 years living in countries like Argentina, New Zealand, and Thailand for years at a time. Here’s my definition of Digital Nomad.
Who Are The Digital Nomads?
Think of nomads as people who travel on a continuous basis, hopping from country to country while building or maintaining online businesses. Someone who lives in a different country to their own and works online can include themselves in this group.
Two digital nomad lifestyle essentials:
- You have a business that primarily uses technology (communications and the Internet) to sell, market, or deliver products or services.
- You travel or live abroad and work at the same time.
Fun Fact: According to Wikipedia, Tsugio Makimoto and David Manners wrote a book in 1997 called Digital Nomad. This is likely to be when the phrase was coined.
The stereotypical persona is the guy casually checking his email in a cafe in Bangkok or kicking back in a hammock on a beach in the Philippines (probably while checking his dropshipping affiliate sales). This is a reality for some people. For most, the truth is different. And even if it were possible, the Piña Colada-sipping beach bum is not what most people aspire to be.
How Many Digital Nomads are There?
Hard to say. It would depend on how you define the genre and would take some serious research to get accurate numbers. Not everyone talks about their online businesses and not everyone wants to use the term digital nomad.
I’m quoting from the New York Times (that quotes Gallup) when I say that almost half of the workforce (43%) in the US worked remotely for some time in 2016. This number is sure to be higher in 2018. That’s a step towards remote working but it’s far from digital nomad territory.
According to Pieter Levels, the guy who started NomadList, a.k.a., the Internet-age Yellow Pages directory for digital nomads, there will be 1 billion location independent professionals by the year 2035. That’s only 7 years away. Levels based the numbers on the statistics for freelancers in the US (about 30% of the workforce). He also used the trends in Internet broadband speeds, mobile data speeds, rising rents, homeownership numbers, and lower costs of technology to predict that the number of nomads will almost equal the population of current-day China in a few years.
Digital Nomad Lifestyle Motivations
If it’s not obvious by now, I’ll give you the main reasons
- Travel – This is often one of the main motivations. The nomadic lifestyle is appealing to many people.
- Location arbitrage – For most people, charging in one currency and spending in a weaker currency gives them more spending power and a higher standard of living than they would back home. The cost of living in Thailand, Indonesia, Georgia, Ukraine, Bulgaria, Colombia, and many other countries around the world is far lower than in most Western European cities and in the United States. Taking advantage of this cost of living difference is part of the plan. It’s easy to spend months in these countries for the same costs of living a few weeks in cities like London or San Franscisco.
- Networking – If you live overseas there’s a natural tendency to want to meet other expats for support. This is a great way of building your network. Long-term solo (as so many are) travellers tend to force themselves to meet new people (locals and foreigners) and this is a great way of meeting like-minded people and presenting yourself for opportunities.
- Inspiration – Living and working in another country is great for helping you to find new opportunities, learn other ways of approaching problems, and riding trends before they cross borders. Even seeing how other people do business can spark ideas.
Want to live and work on the beach? Yes, you can do that. Want to make money in the US but live in Bali? Get yourself to Bali. Fancy a job that lets you travel all over the world and use location arbitrage to live cheaply in foreign countries? In 2018, this is totally possible. There’s one caveat. You’ll need skills or an idea that makes money. Unlike a regular job, you’ll work harder, at least at first, and you don’t get paid if the business doesn’t make money.
A digital nomad is someone who desires the freedom to work and live anywhere and uses technology to make this desire a reality.
The Best Cities For Digital Nomads
Everyone has their preferences for the best nomad cities but this is a good place to start. Some of the most popular destinations for remote work are Barcelona, Bangkok, Medellin, Ubud, Ho Chi Minh City, Chiang Mai, Budapest, Lisbon, Kyiv, and Taipei. These are some of the best places in the world to live if saving money and having a good lifestyle are important.
Tbilisi, Georgia – A hot digital nomad city that has world-class culture, wine, food, accommodation at rock bottom prices. Tbilisi is close to mountains, vineyards, beaches, and other fascinating cities in at the crossroads of Asia and Europe. My pick for the next best nomad hotspot.
Bangkok, Thailand – A hotspot city for expats with good public transport, amazing food, friendly people, and a big expat community. Cheap to live, especially if you earn Western wages or have an income in a strong currency. Long-term visas can be hard to obtain.
Chiang Mai, Thailand – More laid back than Bangkok. One of the top destinations for nomads. Great food, coffee, and very cheap living.
Taipei, Taiwan – Not really on the radar yet but an up and coming place for nomads and long-term expats. Superb public transport. Taipei is also coffee heaven – great for people that spend much of the day in cafes. Taipei has some of the best food in Asia. It’s a bit more expensive than Thailand, for comparison, but worth it. And 3-month visas are easy to get.
Medellin, Colombia – The rising superstar of South America. Beautiful weather, fantastic Latino culture in a city emerging from a violent past. The food is not to everyone’s taste. Some people may find that the onslaught of reggaeton music everywhere to be annoying after a while. The capital, Bogotá vies with Medellin as the best city for digital nomads in Colombia.
Ubud, Indonesia – There’s a well-established nomad base in Bali. Could be considered ground zero for the community. Hubud is here as well as several other excellent coworking spaces. Incredible food. Friendly locals. Easy, cheap living.
Plovdiv, Bulgaria – An up and coming location in Eastern Europe that has everyone buzzing because of the low costs and fast internet. Also check Bankso, Bulgaria.
Manila, Philippines – Before you say “traffic!”, I know how bad it is in the most densely populated city in the world. But if you can get around the fact that it’s pretty hard to get around, Manila is a digital nomad destination with friendly people and access to 7000 beautiful tropical islands.
Budapest, Hungary – One of the most beautiful cities in the world also happens to be inexpensive and welcoming. Fast internet, great European cuisine, ease of access to the rest of Europe.
Ho Chi Minh City / Saigon, Vietnam – A hotspot of South East Asia. HCMC is less-refined than Bangkok and feels even more chaotic. Fewer expats than Thailand and a very different cuisine and culture. Better than Hanoi, in my opinion. 3-month visas can be easily arranged in advance.
Digital Nomad Blogs
The originals are people like Tim Ferris, Chris Guillebeau, Matthew Kepnes, Jodi Ettenberg, and Dan Andrews. Many nomads start blogs to document their journeys. Travel blogs (like this one) are popular.
- Matthew Kepnes, a.k.a. Nomadic Matt is one of the longest-serving travel bloggers and successful online business owners.
- Andrew Henderson’s Nomad Capitalist is an in-depth guide to setting up a life in “the country that treats you best”. One of the best resources for learning about taxes, overseas bank accounts, digital nomad cities, and a lot more. Andrew’s book Nomad Capitalist is also a must-read for serious entrepreneurs.
- Nomadic Notes by James Clark is one of the most comprehensive blogs on the topics of long-term travel and nomadic travel. James has been travelling the world since 2003 while running a location independent travel business. On his blog, James shares a wealth of knowledge built on decades of travel and running businesses.
- Tim Ferriss, the man who wrote the bible for location independent entrepreneurs the world over, The Four Hour Workweek, no longer lives the lifestyle he espoused in the book. He’s more of a millionaire godfather to techies and lifestyle design entrepreneurs who likes to travel from time to time. But it can’t be denied that his book helped spark ideas for thousands of businesses, create independent boss-free lifestyles for countless people, and kicked off the whole “lifestyle business” trend.
- Chris Guillebeau visited every country in the world and documented his journey on his excellent travel blog. His book The $100 Startup is a great read if you’re looking for ideas for a side project business.
- His book How to Travel on $50 a Day is another must-read for budget backpackers and nomads.
- Matthew Karsten, A.K.A. the Expert Vagabond, is a superb blogger and photographer. And an all-around nice guy. Check out my Older Digital Nomad interview with Matt.
- Dan Andrews runs the Tropical MBA podcast, one of my favourite travel podcasts. In fact, it’s one of the best-produced podcasts on any topic and worth a listen for anyone interested in business. The focus is on living an independent, travel-filled life by creating your own online business. Dan spent years building his business from up and coming nomad destination, The Philippines.
- Jodi Ettenberg is a travelling ex-lawyer who blogs about food. Her site Legal Nomads is very popular in the nomad community.
- The “travel and work” life isn’t just for young singletons. The World Travel Family website follows Alyson, a mum and leader of a digital nomad family blogging about her experiences on the road.
- The Reddit Digital Nomad page (subReddit) is a lively discussion board for wannabe and current nomads.
- NomadList.com has grown quickly to become a resource for finding quick information on digital nomad essentials like housing, internet speed, and costs in cities around the world. I wonder why nobody thought of doing a site like this before. The format is simple. Each city is categorised and ranked based on its appeal. The ranking criteria include the cost of living, Internet speed, safety, coworking spaces, and access to airports. It’s a fantastic resource for remote workers thinking about relocating to another country. It’s easy to compare cities like Bangkok, Barcelona, and Ubud, Bali and see which one works best for you.
- Digital Nomad News is a daily online newspaper and email newsletter that curates articles serving the digital nomad community.
Finding a job isn’t easy. There’s a limited supply of jobs for an ever-growing nomad population. It’s probably easier to get yourself some freelance clients. Employers are coming round to the idea of their staff working out of sight and on their own time. It’s still too much of a leap for many companies but hiring remote staff can be one of the most beneficial moves any firm can make. One thing is certain: highly skilled people in niche markets can convince employers to get over their qualms with remote work.
If you’re based in San Francisco (even as a remote worker) then the salary is higher than it would be if you live in Buenos Aires. Salaries generally keep in line with salaries for office-based workers. Your productivity and work should be the same, if not better, so employers have no reason to pay less.
Companies like Automattic and Basecamp are almost completely remote-based businesses. Their employees work wherever they choose. There are restrictions on hours in some cases and performance levels to maintain so it’s not quite the same as having a lifestyle where you can roam and work freely. It certainly beats commuting to an office and sitting at a desk all day.
Here are some of the most popular and lucrative careers for the globe-trotting entrepreneur:
- Remote developer – Many companies see the value in hiring staff who work remotely.
- Affiliate Marketer – A great way to get going without a product or service. It takes a lot of work upfront but once affiliate marketing starts to work, it’s a great business model for the independent entrepreneur.
- Drop-Shipper – Dropshipping is huge. This is one of those industries that most people don’t talk about, especially the ones that are killing it with their businesses (for fear of copycats). If you can find a profitable niche drop shipping businesses can be easily automated, freeing up your time for other projects or for more travel.
- Freelance writer – freelance writing jobs are great because they are asynchronous. You receive a project brief from the client and then you deliver the draft. You decide hours you work and you arrange the delivery date with the client. Jobs like this that don’t require a lot of face-to-face work are great options for working remotely.
- Proofreader – If your English skills are better than average and you enjoy reading and editing, proofreading can be lucrative. You can jump on Upwork and start pitching clients but newbies to the game should get some proofreading business training first.
- Blogging (niche websites) – It takes a lot of work at first, but the rewards make it worth it. One of the advantages of investing your time and money into a blogging business is that blogs can be great sources of passive income. That should “passive income” (in quotes) because nothing is every fully passive. However, a monetized blog that gets traffic is a digital asset that perfectly compliments the digital nomad lifestyle.
- Social Media Manager – Almost every business wants to be on social media. Almost everyone lacks the time and energy to invest in building and maintaining social accounts. If you’re a social media expert and you have systems in place for managing multiple accounts, there’s a huge market for social media managers. One place to start is Upwork but there’s no reason why you can’t just reach out to businesses that are doing it all wrong. You might have a better chance of closing the deal with these business owners.
Building your own business online might involve a combination of all of the above. Running a business online is the dream of many and can be the quickest way to financial freedom. It’s also the riskiest way to go out on your own. The general advice is to have a business that makes money before you set out on your travels. Then again, following rules is not the way of digital nomadism.
Sustaining a travel-based lifestyle from a passive income stream is the holy grail of the laptop lifestyle. You can monetize almost any idea, niche, or concept you can think of. It just takes some work finding the angle. But you can always copy proven strategies. For some passive income methods that work, check this post of over 45 different passive income businesses.
Tools, Apps, and Services
The most important technological advance for this lifestyle was, of course, the Internet. Without the Internet, it’s still possible to work but it means relying on phones, faxes, and ‘outdated’ technologies.
Check out this list of essential digital nomad tools for remote work for some ideas.
Making Money & Getting Paid
It’s getting easier every year to get paid online but people still waste a lot of money on services that offer poor rates, have bad customer service, and insist on inconvenient procedures.
Transferwise is my favourite money transfer service. The Borderless card is a must-have for people that need the convenience of bank accounts in multiple countries. For cross-currency transfers, it’s fast and reliable and the rates beat most competitors.
PayPal is the old favourite and works almost anywhere. You can invoice customers and clients directly through PayPal. Now, I’m not a fan of this service and if there were other options, I’d switch instantly. But the ubiquity of PayPal and the slow pace of financial innovations in payment systems (thanks to red tape and fraud prevention) means that Paypal is still one of the most common ways of sending and receiving funds on the internet.
If you want to set up a sophisticated, and high-converting sales page, try Thrivecart. An ideal solution for people that sell books, courses, or charge recurring consulting fees. You also don’t need to set up or maintain a website and the payment systems are taken care of. Many popular bloggers use Thrivecart for their businesses.
I avoid wire transfers as much as possible. It’s not the most reliable method and definitely one of the least convenient.
And then there’s the humble check (cheque). The United States, the most technologically advanced country in the world, is heavily dependent on checks. I haven’t personally even seen a cheque in years but in the US, they are still common for transferring funds. If you open a US bank account and plan on doing business with American companies, you’d better get used to dealing with checks.
Nomad Community & Events
- The nomad cruise is a remote work, networking, and travel experience that brings entrepreneurs together for a week or two every year. The cruise sees 200 or more entrepreneurs connecting through talks, masterminds, yoga classes, workshops, and parties on a Mediterranean cruise.
- DNX is a popular conference that takes place in Lisbon, Portugal every year around September. The event is akin to a conference that offers workshops, talks, and networking opportunities to entrepreneurs.
- The Dynamite Circle, the brainchild of Dan Andrews from the Tropical MBA, is a community for successful entrepreneurs. Definitely not for wannabes. Every year the TMBA guys throw a big conference for successful online business owners (many of whom are location independent) in Bangkok called DC BKK.
- The Global Digital Nomad Facebook group has over 30,000 members and is very active.
- Digital Nomad Girls is a community for female online entrepreneurs. The site has some free information but the focus is on signing up members for their “inner circle”.
- Bloggers should check out Travel Con, the biggest travel media conference every year. In 2019 the event takes place in Boston. Big names like Gary Arndt, Don George, Nomadic Matt, Johnny Jet, and Sean Ogle talk and mingle at this premier event.
- If you’re looking for something different, the Nomad Train is a quirky event that puts you on a train across Siberia for two weeks with other like-minded individuals. The trip includes stops in cities with coworking spaces and group activities to encourage interaction and collaboration.
Check out this post on successful older digital nomads who have designed their lives around working while traveling.
Insurance & Tax
Until ‘working online’ and travelling becomes mainstream, nomads need to make sure that their tax obligations are taken care of. A lawyer who understands the remote working scene will be better placed to advise you. There are some advantages and disadvantages tax-wise with working outside of the country where you pay contributions. This discussion on Reddit will help you find and choose a tax lawyer.
Travel insurance is an absolute essential. Do not leave home without it. Your business and your future plans depend on you not going bankrupt thanks to huge medical bills. Don’t say I didn’t warn you 😌
Frequently asked questions
What does it mean to be a digital nomad?
A digital nomad is someone who has the freedom to live in other countries supported by a job or business that they can manage online.
What jobs can you do as a digital nomad?
Jobs you can do as a digital nomad include:
- Remote developer
- Affiliate Marketer
- Web design freelancer
- SEO specialist
- Social media manager
- Ecommerce store owner
- Travel blogger
- VA – Virtual Assistant
- Freelance writer
How much does a digital nomad make?
How much digital nomads make depends on their profession, business, and commitment. The average digital nomad earns slightly more than the average wage of a US citizen, according to Flexjobs
How do you become a nomad?
The steps to becoming a digital nomad are easy to understand but hard to implement:
- Find or cultivate a job or business that you can perform regardless of your location in the world
- Build your income stream until you can support yourself financially in the countries you wish to work and live in.
What skills do you need to be a digital nomad?
Apart from the ability to make money, the skills you need to be a digital nomad are:
- The ability to work from different locations
- Good level of computer tech skills
- Ability to accept change, deal with problems, and get out of your comfort zone.
- Networking skills