For several years, people have actively been seeking a way to break the traditional mold of how we work.
From strategizing how to retire early or remote working, there has been a series of movements that have been popularized and the F.I.R.E movement and nomadic retirement are very popular ones.
Some of these movements had a slow start in the beginning. Some of them also sound a bit too tough to go through for most people. There is also a sense of these movements just being a fad of the moment.
However, the pandemic has reshaped those thoughts. Nowadays, remote working has become a part of the working set-up.
The Nomadic retirement and the F.I.R.E movement ideas have slowly become mainstream because let’s be honest, who doesn’t want to retire early and live life on their own terms?
Let’s discuss this topic in this guide.
Table of Contents
- Digital Nomads and Nomadic Retirement – Summary
- The F.I.R.E. Movement (Financial Independence, Retire Early)
- How Remote Work Transitioned Into Early Nomadic Retirement
- Conclusion – Nomadic Retirement and the F.I.R.E. Movement
Digital Nomads and Nomadic Retirement – Summary
A massive number of people lost their jobs when the pandemic hit globally.
Since everyone was locked down inside their homes, the internet paved a way to rekindle lost businesses through digitalization.
Others created new ones which were online which led to a trend of online jobs and work from home opportunities. The pandemic has certainly accelerated the “new normal” way to work and do business.
In the following section, we’ll dive deeper into these two movements as two major alternatives in a new era of working and see what’s the best choice to take.
Are they stable enough to achieve financial freedom? Is It possible to have an early nomadic retirement?
The F.I.R.E. Movement (Financial Independence, Retire Early)
The concept of the F.I.R.E. movement began in 2010 from a 1992 book written by Vicki Robin and Joe Dominguez, “Your Money or Your Life”.
But its popularity often got linked with the Mr. Money Mustache Blog. It generally promotes economical living and the utmost ways of saving money. The main goal is to save and invest zealously, around 50-75% of your income, and retire at around 30-40 years old.
People on F.I.R.E. (and early nomadic retirement) focus on 2 things:
- Looking for ways to raise their income
- Keep their expenditures very low.
The essence of this idea is the higher the income and the lesser your expenses are, you can rapidly achieve financial independence at the target age that you want.
The word financial independence doesn’t mean living extravagantly but being able to attain the ability to stop working if you don’t want to.
Below are the pointers to take note of and acquire from the F.I.R.E movement:
Keep Your Expenses Low
Followers of the movement carefully check how they spend their money. They characterize wants from their needs and leave off unnecessary spending.
They fix a certain budget and strictly follow it. Being able to save from time to time can go a long way to reach your goal the soonest.
Having a good tax reduction strategy is also key.
Find Ways to Earn Extra Income
It can be a side hustle work at night or on weekends aside from your day job. You can also sell in-demand products online or provide services you can offer like a carwash.
Whatever it is, additional income resources will play a huge part in making it easier to save money.
Work Hard and Collect Assets
To some, saving 50% may sound too much. You can adjust it accordingly depending on what you are comfortable setting aside.
The main point is that you have to start somewhere. You can also try investing 15% of your income after paying off all the monthly living expenses or debts on your plate.
The ideal is to save 3-6 months’ worth of expenditures to build an emergency fund. Also, moving your business to a tax-friendly country will only help saving more and investing early.
Calculate Your Safe Withdrawal Rate (SWR)
The F.I.R.E. movement has a so-called safe withdrawal rate (SWR) or the “4% rule”.
It is explained by investments with average gains of 7% per year: 3% is for inflation loss and the remaining 4% income is the allowed withdrawal that you can live on.
For example, if you have $600,000 worth of assets, you have $24,000 to live off for a year for a family of 3, which is 4% of your total income.
So now you have some ideas about the culture of early retirement, let’s go through the other financial independence movement.
How Remote Work Transitioned Into Early Nomadic Retirement
When authors Tsugio Makimoto and David Manners released their book Digital Nomads in 1997, they did foresee a world with continuous innovations in technologies.
They also discussed a new form of work that has now manifested into a reality. In this digital era we are in, a lot of workers have transitioned into Digital Nomads which is practically doable for most industries.
The beauty of this is that this work can be done anywhere with a laptop and an internet connection.
The trend of remote work has paved the way for what can be called an early nomadic retirement. This new lifestyle blends working remotely with the freedom to travel and live in different places, much like retirement but earlier in life.
Essentially, it’s starting to enjoy the benefits of retirement without fully stopping work, thanks to the flexibility and opportunities provided by remote work.
Many people take advantage of living in low-cost countries for digital nomads, hence saving more, which allows them to invest, and eventually follow the F.I.R.E. movement.
Benefits of Being a Digital Nomad
Thus, the myth of becoming a digital nomad suddenly started to become a viable option for workers. The lifestyle of a digital nomad is definitely an exciting opportunity than the usual 9-5 work life.
Below are the benefits and the realities of the life of a digital nomad:
Salary of a Digital Nomad
According to an article by Digital Marketing Institute,1 out of 5 digital nomads makes between US $50,000-$99,000 yearly.
An average rate of $10-$30 per hour is the expected pay for remote workers in general. We should keep in mind that 49% of digital nomads earn a much higher income than compared to the typical 9-5 jobs. 81% of them are very contented with their current job situation.
This confirms essentially that how much you can make as a digital nomad is correlated and will depend on how happy and motivated you are. Productivity happens because you simply love what you do.
Traveling Can Benefit Your Lifestyle
Traveling to new places gets you out of your comfort zone. You get to adapt to new environments every day and experience engaging with locals and their cultures.
Traveling is a sure-fire way to learn new things. Another benefit of traveling is it makes you kinder and more considerate as you meet variety of people and get a first-hand experience of their way of life.
Digital Nomads Can Easily Make Passive Income
You need specific skillsets to become a digital nomad, and this eventually gives you higher chances to make passive income, as opposed to a traditional 9-5 job.
By leveraging online platforms and tools, they can create income streams that require minimal ongoing effort. This can include earning from digital products, affiliate marketing, investment returns, or content creation like blogging.
This passive income allows nomads to focus on their travels and projects without constant financial pressure, providing a steady flow of earnings while you explore and work from different corners of the world.
Conclusion – Nomadic Retirement and the F.I.R.E. Movement
The F.I.R.E. movement is an ambitious and courageous task by working as hard as you can. It may also mean you have to sacrifice the best years of your life just to achieve early nomadic retirement.
It’s saving up a big chunk of your salary so you can have enough when you want to stop working. The icing on the cake would be that once you retire at an age that you personally choose, you can finally do anything you want without working at all.
With digital nomadism, you earn income by doing the things you love, whether it is a business or a freelance remote job. When you love the “work” that you do, you won’t even want to retire
The convenience of digital nomadism is the freedom to create both financial wellness and location independence. Digital nomads have time to enjoy their entire lives and travel to different places with their loved ones, doing all of these while working and earning money.
Both of these movements have credibility to it. Both are great alternatives to the traditional working-till-retirement at 65.
have also seen people who have done both and are now living the best times of their lives. Whether you choose to mix them both, ultimately it is up to you to go for a strategy that is aligned to your own values and goals. Whatever you may decide on, just commit to it and enjoy the process.
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