From Location Independence to Financial Independence

Location independence is a huge unfair advantage in the quest for financial independence.

Financial independence comes down to increasing your saving rate. You can do so by decreasing your expenses or by earning more, or a bit of both.

Most people assume traveling is expensive. It is true if you travel like everybody else, at the same time period. If you work remotely, there is always a way to find a cheap ticket and an inexpensive accommodation.

Here is how I do it as a digital nomad. I open Skyscanner, I enter my departure location, and I ask the website to search anywhere for cheap tickets over a whole specific month. Then, I write each cheap destination on the list in Airbnb and I add a few criteria: an entire place under $500 for a whole month, with a kitchen, Wi-Fi, and a washer. It’s quite common to find whole places rented under $400 for tickets under $100. You just need a health insurance and a budget for food. It’s not hard to leave under $800 without sacrificing your living conditions.

And don’t get me started on living in an eco-community, where I currently reside on less than $100 per month to cover my basic expenses―food, rent, water, electrivity, Internet―by volunteering.

Living on less means you can invest more money in things you care about: people, time, and experiences. I choose a location-independent lifestyle straight out of college because it gave me the opportunity to dedicate myself to things I really believe in.

If you spend $1,000 a month while earning $3,000, that’s a saving rate of 66%. Not bad. At an annual interest rate of 4%, that’s $300k in index funds over 10 years, including $50k in compound interests. $750k over 20 years. $1,4M over 30 years. 

Now, the average annual interest rate of a Vanguard-like index fund is closer to 10%. Personally, I would consider myself set for life with $500k invested. I’d only need 12 years to reach this position in these conditions. 9 years on a 75% saving rate. 7 years on a 80% saving rate. 6 years if I were to earn $6k per month. See how impactful decreasing your housing costs could be?