Is A Location Independent Life Cheaper Than Living In One Place? Just How Much Money Do You Need? A 12 Month Breakdown.
Photo by noahwesley
There are some things in life that are just accepted; the notion that a life of permanent travel is expensive and only for movie stars and famous people is one of them.
In this post, I might just blow that myth right out of the water.
I mentioned a while ago that I’d be sharing the nitty gritty of the financial aspects of our location independent lives. It’s taken me a while to trawl through all our bank statements, pull off the data and then do something with it - and in between some rather major bouts of procrastination and a few long walks on the beach this weekend, I finally sat down to pull it all together.
If you keep reading, these are some of the things I found out, which you might be interested in too:
- Whether a life of permanent travel is more expensive than living in one place all year round
- The cheapest place to spend a month and still live like a King (or Queen in my case)
- What major mistakes we made last year and the things we’re doing differently this year which means we’ll save a whopping £6k ($12k)
So without any more waffle…here’s the analysis:
Let me start with some brief notes which give you a basis for how I’ve completed the analysis…
- All figures are calculated on a monthly basis
- All figures are calculated in GBP
- Accommodation costs are based upon a *nicer than average* fully furnished 1 bedroom apartment with all bills included
- Living costs are cash withdrawals and are based upon food & expenses for 2 people who don’t like to go without but equally aren’t super extravagant!
- Credit card charges include things like car hire, day trips, more expensive meals out and other non-vital purchases
Firstly, let’s look at a summary of the costs in each place we stayed last year (2007):
Panama - average monthly cost = £1,500
- Accommodation: £800
- Living costs: £600 (which includes approx. 3 meals out per week)
- Credit card charges: £100
Notes for Panama: This is probably not a fair representation of costs in Panama, as we decided to stay in one of the nicest apartment in the city on the Amador Causeway (to help overcome the shock of having started our LIP lives!!). Typical apartments can cost between £350-600 to give you a more representative view, meaning you could live in Panama quite easily and comfortably for under £1,000 per month.
Buenos Aires - average monthly cost = £1,100
- Accommodation: £650
- Living costs: £350
- Credit card charges: £100
Notes for Buenos Aires: Once again, we chose a more expensive apartment than average in one of the nicest parts of town with average costs being between £300-500. Again, you could live a fantastic life in Buenos Aires on under £1,000 per month.
Toronto - average monthly cost = £2,750
- Accommodation: £1,300
- Living costs: £450
- Credit card charges: £1,000
Notes for Toronto: Not one of our finest moments in LIP history! The accommodation ended up being so expensive as we left earlier than planned and weren’t able to take advantage of a longer term, more preferable rate. We also discovered the delights of Whole Foods grocery store (we’re big organic fans) and ended up spending a small fortune on the credit cards every time we went (which was about twice a week).
Grenada - average monthly cost = £2,000 with car hire or £1,700 without car hire
- Accommodation: £1,000
- Living costs: £400
- Credit card charges: £300 (or £600 with car hire)
Notes for Grenada: Despite negotiating long term accommodation deals, once again we chose to stay in some of the more expensive options (we won’t in future having found just as nice but far cheaper options).
So, would staying in the UK have been more cost effective than moving around every few months?
Adding up all the above (including a month in the UK with a side trip to Italy), the grand total we spent on accommodation and living costs in 2007 = £18,500; Add £4,500 worth of flights (and fees for changing flights) on to that and the total for 2007 becomes = £23,000
UK - average monthly cost = £2,400 (based on our former lifestyle with a car, mortgage and social life)
- Monthly mortgage on a 1,500sq ft apartment + additional fees/insurance: £1,200
- Living costs: £800
- Credit card charges: £400
Multiply the UK total by 12 and it gives us = £28,800
Conclusion? Travelling to and living in the Caribbean, Panama, Buenos Aires and Toronto worked out to be more cost effective for us than living permanently in the UK - even if you take flights into consideration.
And where is the cheapest place to stay if you don’t want to compromise on lifestyle and live like a King or Queen?
Here’s a summary table of the above information sorted by decreasing cost:
- Toronto : £2,750
- UK : £2,400
- Grenada + car : £2,000
- Grenada - car : £1,700
- Panama : £1,500
- Buenos Aires : £1,100
Conclusion? Buenos Aires - which is even cheaper than our figures if you stay in cheaper accommodation which is plentiful. Panama would also be a good choice - although of course, in both places you will need to learn Spanish (Latin American for Panama; Castillian for BA) if you plan to get the most out of your stay.
What some people may find surprising is that your dream life in the Caribbean however, may be more achievable and cheaper than you thought; or at least cheaper than your current lifestyle in the US/UK
Just what have we learned and how are we going to save so much money this year?
If you read through the notes above, you’ll see in some places where we made some errors in judgment… selecting more expensive accommodation over cheaper (just as nice, in some cases) options; the fact that we didn’t plan our overall route particularly well from a flight planning perspective and the fact that we were in many cases, simply feeling our way with the places we chose and why we chose them.
This year however is different:
- We’re way more clued in to the kinds of things we look for in a place and the kinds of things we don’t like, so we’re being far more careful and thoughtful in our selection of destinations - meaning we won’t be leaving places early because we’re not happy, therefore we won’t be forfeiting any long term discounts we’ve negotiated nor paying for additional flights.
- We’ve roughly planned our itinerary out for the year so we maximise costs on multi-leg flights and keeping things more flexible - meaning we won’t end up paying so much in fees to change flights.
- We have once and for all taken our own advice and no longer book more expensive accommodation that we’ve seen on the internet in advance, waiting instead until we’re there to sort it out - meaning we avoid any costly ‘mistakes’ and can often get a better deal being on location.
- We’ve deliberately chosen the places we’re staying in this year for their lower costs but good quality of living - meaning we can continue to live the good life, knowing we’re not paying through the nose for it.
Is our strategy paying off? Absolutely, here’s a forecast of what this year’s costs are looking like (with 1 month in the UK staying with family):
South Africa - average monthly cost = £1,000
- Accommodation: £4-500
- Living costs: £300
- Credit card charges: £200
Total for 6 months = £6,000
Thailand - average monthly cost = £8-900 (we’re not there yet but these are forecasted based on figures we know to be true)
- Accommodation: £250-300
- Living costs: £250
- Credit card charges: £300
Total for 3 months = £2,700
Somewhere in Europe - average monthly cost = £1,400
- Accommodation: £6-700
- Living costs: £500
- Credit card charges: £200
Total for 2 months = £2,800
Therefore our grand projected total for 2008 = £11,500 and including all the flights = £15,500; that’s just over half of what it would have cost us to stay in the UK in 2008.
Whilst it’s not the most dazzlingly accurate analysis you’re ever likely to come across, it is based on real life examples of people (us) who’ve been living this lifestyle for over a year.
It might be surprising for some of you to read that this life of permanent travel we lead works out to be far more cost effective than if we’d have stayed in the UK. I’m sure you can pick apart the analysis and the arguments if you really want to but our bank balances tell the truth and the truth is that our current lifestyle costs us far less than ’settling’ in the UK.
On the other hand, I’m hoping this analysis is beneficial for those of you who might be pursuing this lifestyle to realise that it could actually work out to be more cost effective for you too - and that with a bit of sensible money management, your dream life might not be such as dream after all.
For more detailed cost of living information on each place we visited in 2007, check out the book (which will shortly be rising in price!).
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Comments
Very nice breakdown. I wish I could switch to your travel system! But I’m on the road with my husband… and he’s on the road for work. Meaning he goes where they tell him to go, and stays however long they need him. With no ability to schedule ahead of time!
But that’s ok; at least now I can travel with him. Last year I was stuck home working 8-5 with him gone more than he was home. Now, I’ll definitely go on USA/Canada trips that will be 5+ days, Latin America for 3+ weeks, or the rest of the world for 1+ months.
So sometimes I’ll still get left behind. But I don’t actually want to tag along to a week-long trip to China. With two full days of flights to get there, and to return, and a 12-hour time difference, that week-long trip nets just over two days in China!
I’ll just keep my fingers crossed we switch to all long-term assignments by 2009. In the mean time I’ll count my lucky stars that this hotel room is going on his expense report 
Thanks for sharing these figures. It’s great to know that with a little local knowledge and good planning, it really is possible to live like the “New Rich” on a middle class (or even lower, in some areas) budget.
Fascinating analysis. Your lifestyle is a lot nicer than mine but it’s good to see a consistent analysis across various countries. Thanks for the report.
Thanks so much for taking the time to do this, Lea. I’ll be following in your footsteps within the next two years and this kind of insightful analysis is very helpful.
Thanks so much for the analysis on this post, Lea. It’s very helpful. Do you have any ideas for doing all of the above with children? I would think the cost add-ons would only be food and more activities/childcare/tutoring as needed.
Congratulations on your exciting lifestyle and thanks so much for sharing your experiences ~ I’m starting out as a freelance designer and this is exactly what I want for my future as I’ve got a globetrotter burning inside 
Your blog showed me already many times how I was close to realize my dream. I still need to build a steadier income, but hey, it may be a question of years, or even months… Wow! Thank you, especially for this eye-opening article ~ I’ve always thought that flights would end up necessiting a bigger budget.
Hi Lea,
Really interesting stuff,in terms of tax do you have to pay any or does the constant moving mean you are non domiciled for tax purposes.It would also be really interesting(sorry for volunteering you for more work) to see whether your Monthly Disposable income was a lot higher.As I guess although it is a lot cheaper than staying in the UK how much you can earn doing what you are doing also plays a big part. Whatever the outcome though not many people can say they are doing/have done what you are doing so good on you for showing us that there is more to life than big companies and a commute !!
Alan
Hi all - glad you found the analysis useful; it was an interesting exercise for us to do too and highlighted many of the mistakes we made last year that we won’t be doing again this year!
@Monica - we don’t have kids so don’t have to factor them into the equation (altho we do often think about how we would). I would guess that the additional costs would include bigger accommodation (we only need 1 bedroom apartments), more food, tuition and more activities plus, if you are trying to run your business on the move, some daycare for when you need to work and don’t want them running round the apartment.
@Alan - we are non-residents in the UK (non-domiciled is a bit different and we’re never likely to be non-domiciled as we’ll probably always have “interests” in the UK) so don’t pay tax on our business income although we have a rental property on which we pay tax on the (minimal) profit we make from this. From this perspective, it’s another “saving” in that we obv keep what we earn without tax deductions.
Our monthly income very much depends upon the work we’ve got on - last year it dipped in the middle of the year which coincided with a tough time we were having on the road and a lack of focus on the business. This year it’s much more of a priority and is staying stable at a higher level. Combine that with the fact that we’re then staying in cheaper places means for a healthier bank balance all-round!
Great analysis, Lea. Thanks for taking the time to do (and share) the math.
It counter-intuitive, but we’ve always found the same thing: getting away/being mobile doesn’t have to cost more.
Great analysis! Since I graduated college I’ve been struggling with the decision to stay and work in the U.S. or travel the world exploring the things that I am most passionate about; but it has always been the issue of money and funding that keeps me rooted here. This post definitely gives me something to think about Thanks!
Christina
Brazil is a big country, but even here in the (relatively poor) Northeast life is more expensive than in Buenos Aires. I’m already looking into the possibility of switching to Panamá and your analysis only encourages me. I only move twice a year to save money on travel and moving expenses, so anyone considering this lifestyle needs to factor this frequency as well.
We’re heading to the road soon (with kids in tow), but will have to come back to earn money when it all runs out! We own our own home and have a couple of rentals - but the rent from the our place will be taxed and what’s left will only just cover the shortfall on the rentals (which are only finanacially useful when my hubby is working) and insurances. If there were just two of us, we could live off the income, but not ten of us! I’m dreaming and scheming, trying to find ways of staying on the road for longer. Off to look more fully at your site now.
Awesome analysis, the only thing would be finding certain streams of stable income that would allow the flexibility of travel or setting up a good process for that.
-eric
http://www.whoissick.org
@Dan - you’re so right about it being counter-intuitive to be less expensive to travel and I think that’s what stops so many people from doing it…I suspected that this might be the case when I started the analysis so was pleased to see the numbers proved it!
@Christina - passion…go with that!!
@Ernesto - check out the info on the Destinations blog for more about Panama…yes, the travel can add to the costs and it’s something we’re being more savvy about this year. Enjoy Panama!
@kiwi-family - ten of you?!?!? Wowser, that’s inspiring! Good luck on the trip - where are you going?
@eric - indeed you are right…and that’s what my next book is about! But yes, in all seriousness, as LIPs one of the big pre-requisites is that we have a relatively stable business/income stream that we can run from anywhere.
Hey there!
This was quite an insight. I’ve been trying to get my home income stable for a year and have dreamt of travelling as I can work from anywhere. But I daren’t.
I’ve not been abroad and it’s just me. So for now I just sit and dream of renting a flat somewhere hot overlooking a beach. Although it might be possible for one person I need to double my income to be able to pay for that. Or maybe at some future point I’ll find somebody else who fancies doing that too!
Good luck to you both! Sounds like you’re having a great adventure.
Great article. Keep it up.
Just one comment: I am argentinian, and the language spoken in the Rio de la Plata area is not pure Castillian Spanish, it is called “Rioplatense Spanish”. It has influences from italian and is the language spoken in tango.
I know you first wrote “Catalán”, which in turn is another language - not a dialect - spoken in the east of Spain (Catalunya) and southern France; someone must have told you that was a mistake, but Castillian is also not quite correct. The whole Latin America speaks Castillian, or a dialect of it. Castillian == Spanish as viewed from a global perspective.
Thanks for the great info.
Thanks Angel - when I wrote Catalan originally, I didn’t mean to (I’ve been to Barcelona/Catalan region) but just had it stuck in my head!
What, in your view, is the difference between the Castillian Spanish spoken in BA to the Spanish spoken in Panama? To our ears, it was really quite different - even the basic words. My language teacher in Panama called it “Latin American Spanish” as opposed to “Castillian Spanish” so that’s really where I got it from.
Hi Lea.
Panamanian Spanish is a mix betweeen the dialects spoken in the Caribbean and to Colombia’s (Panama was part of Colombia until the turn of the 20th century). Rioplatense Spanish is, as you said, different in many ways.
The “voseo” is mainstream in Argentina, while it is not in Panama. (It is in Costa Rica and the rest of Central America, though.)
One similarity is the supression of the ’s’ sound in the middle of words. e.g.. “bastón” is pronounced “bahtón” in both countries. (’h’ sound as in English)
The real difference comes in the vocabulary. Panameños have, in my opinion, a very extensive informal vocabulary. This is where you can perceive the greatest difference.
In any case, I don’t think it’s fair to call either of them “Latin American Spanish”, since there’s no predominant way of speaking in Latin America. For example, there’s a huge difference between the languages spoken in Panama, Mexico, Chile and Argentina. Much less difference between Panama, Colombia and Venezuela.
To summarize, no country in Latin America speaks pure Castillian Spanish. Argentina is one of the most different. Pronunciation, intonation, conjugation, vocabulary — it’s all funny to a Madrileñan or Segovian’s ears.
Cheers!
p.s. Where did you guys live in Buenos Aires, and for how long?
To my Puerto Rican ears, Argentinean Spanish (especially porteño!) sounded very different from Caribbean Spanish AND very different from the Castellano in Spain. While you can probably group Cuba, Puerto Rico, Panamá, Venezuela, and the Dominican Republic into one semi-homogeneous language group, it is much more difficult to create groups in the rest of Latin America. For instance, while nearby Colombia uses very formal Spanish, it was VERY easy for me to understand them, while understanding Argentinean “voseo” (and some of the bizarre verb conjugations that result from it) was a definite challenge. Both beautiful in their own way, both I could understand, but one easier than the other.
I’m thankful that Spanish is my native language.
Thanks Angel - we lived in Palermo (Las Canitas) for a month which was lovely…very leafy, lots of locals enjoying coffee on the street, kids playing etc. The only thing we *hated* were the dogs and endless piles of dog poo on the pavements (and the mosquito invasion at the time)!!
Hi,
Just found your blog and I think your blog is exactly what bloggers want to look into
Live independently is highly related to bloggers - so, it’s also my passion to live independently
Keep on writing great post…
Cheers!
Hi,
Sounds great! What about breaking down the travel/moving costs? You have to figure those in for a true comparison.
(You mentioned: Therefore our grand projected total for 2008 = £11,500 and including all the flights = £15,500; that’s just over half of what it would have cost us to stay in the UK in 2008.)
Burton
Hi Burton - as you said, we have already factored in the travel/flight costs but not sure what you mean about ‘moving’ costs? Other than flights we have no moving costs - everything we need, we carry with us and if we don’t have something, we buy it on arrival in a new place which is factored into our weekly grocery spend.
My mistake, I thought there must be more to moving than just what you carry on the plane. Good for you!
Burton - we’ve got travelling light down to a bit of a fine art (although we learned from some very big & costly mistakes the first trip!!). I wrote a post a while back about how we travel for 3-6 months with less than 30kg between us http://tinyurl.com/64g24g
Because we stay in furnished apartments everywhere, we generally need nothing more than clothes, some toiletries and business equipment…saves us carrying the kitchen sink
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Aaron Wakling