130. | What will I live on?

You can’t speed up time, nor can you bring success forward.
The only thing you can control is your next step.

James Clear

I read this quote somewhere and added it to the notes for this post. Actually, this post was in my head as one of the “Missing posts”. The reason it didn’t get this tag is that the question is just as valid now as it was during the pre-departure preparation period. I’ve already addressed this question in posts like “How much does it cost to switch to nomadic life?”, or “Finding a job”, or “My first job application”, or “I quit”.

This article summarizes previous thoughts and facts learned in the meantime, and I would like it to be a kind of guide to questions that might be worth considering in connection with the question “What will I live on?”

Freedom is nice, but not free

“Okay, but what will you live on?” might have been the question asked by those people whom I slowly and carefully introduced to my plans. Interestingly, I don’t remember anyone (which doesn’t mean there wasn’t anyone!) who asked this question at all, let alone at first. I answered the question “what will you work on” to several people, so several people must have felt that I wasn’t going on a lifelong vacation, but rather that I would continue my life with hard work. But – as I recall – there wasn’t much emphasis on the question “what”.

I worked a lot on this question. I’ve been managing my family and my own life for a long time, so there was no question that it was important not only to dream about it, but to also come up with concrete plans! Somewhere in my head, there was also the idea that although I would like to find a job, I would not build my new life on a fixed salary, but on awareness. One element of awareness is planning. I have made quite a few tables, with parameters and numbers everywhere.

Don’t skimp on this work if you want to do yourself a favor!

What is my financial situation?

The first step is to assess your current situation. In my experience, many people are unaware of their own financial situation. I worked for years as a personal banker at Fundamenta, not to mention anything else. So I met a lot of people talking about financial situations. The picture I got to know at that time is more tragic than uplifting.

Most people only know about the financial world how much they earn. When we talk about disposable income or about summarizing debts, the picture is not always so clear. “Oh, yes, I also have a monthly phone payment of 30 thousand HUF.” How many times have I heard this. “Oh, there is already a mortgage on this house, I didn’t know that was a problem.” “I don’t have any debt. But I do, because there is child support deducted based on a court decision!” Hundreds of such sentences and similar ones came up during the conversations.

So let’s start at the beginning of planning by saying what we have. For example, I assessed what I keep in Hungary to support my children and how much it costs me. In an example image, I show how many cost items I currently calculate for Hungarian expenses: internet; iTunes; Xiaomi Home; 3 Google storage; YouTube Premium; Netflix; Spotify; 3 Yettel phone subscriptions; apartment: insurance, electricity, gas, common costs, garbage fee, water, university tuition, rent; accountant; entrepreneur contributions, monthly bank costs. In addition, there are periodic items.

What is something I no longer need and can sell? My musical instrument and its accessories, and my car were like that. I didn’t stop myself from frantically selling the movables from my apartment, because I couldn’t do that.

There may still be savings, but unfortunately not everyone has them.

When planning expenses, I recommend a monthly breakdown. I also realized after thinking about it several times that monthly averaging takes the plan in an irrational direction. I recommend creating a table broken down by item and month, at least for one year from the start. If you can, make it for two years: the first year will go by quickly…

Income sources – existing and planned

If you quit your job – like I did – your main source of income will probably disappear. I’m not saying that the first month when the phone doesn’t ring on the tenth will be shocking, but hang up your pants if that happens!

The question is whether you have another source of income and/or savings. If you do, you can at least finance the first period even if nothing else happens.

You probably want to create a fresh source of income. You will find countless materials and companies that help you for good money. Just register on one or two sites, and every week you will receive dozens of offers where they can show you how to be a prepared freelancer, how to write a proper CV, how to behave at a job interview, etc. Remember! These preparations only sell you the promise that everything will be fine! The promise will not make money, you will not be able to pay any expenses with it.

Finding a source of income is hard work. You can ask for help, but at the end of the day you have to find the job, your new business, the income opportunity that will allow you to continue financing your life. Use the free systems and put a lot of work into the search.

Passive/semi-passive income is a pretty big buzzword in today’s world. I’m still on the fence about this issue, I have no experience with it. My personal opinion is that it’s hard to get a decent income without a job. If you already have a background, it might be worth trying passive income sources, but based on my feelings, I’d say that I’m not basing my future on this, at least not when I start.

I watched a lot of videos during my preparation. There are buzzwords and dreams flying everywhere. Getting up late, having coffee, walking on the beach, then sitting in front of the plane, strictly for an hour a day. Then announcing a number as an income that is NASA’s half-year budget…

I would ask all the individuals who announce such huge monthly incomes, if they have so much wealth, why are they still waiting for my little money. I don’t think it’s professional dedication…

What I meant to say is: be careful with these projected images! If this is the solution, please forgive me for my lack of faith!

Estimated expenses – how much do I need per month?

Here I am specifically thinking about the costs of my new life. Roughly along these lines:

• Basic expenses: accommodation, food, internet, insurance, transportation
• Plus expenses: education, travel, emergencies
• Where is it cheaper to live? – planned cost level of destination country(ies)

Here you can be a member of the emperor, the tourist and the modest digital nomad categories. You have to decide, because the possibilities are endless. Do you go to America and eat salty bread because you can afford it? Do you prefer to go to Asia and only eat there every other day in a rented reed hut? Do you choose Europe and strive for a normal life? Do you go to a new country every other week because you have enough money to travel? There are many options, only you know that.

The only good advice that I suddenly remember from all the videos is to be punctual and patient with yourself. Don’t try to imitate a vacation in your future life, because it will probably be expensive. You probably won’t go to a restaurant every day at home to have a champagne dinner. Why would you do that during your digital nomad life? Jet skiing on the sea every day is cool. Do it if you can afford it!

But be aware of how long you can afford this lifestyle! The old saying is always true: stretch until your blanket reaches you!

Financial safety net

Here are a few questions that came to mind that I asked myself. Without further ado, here are some questions that are worth taking seriously:

• Number of reserve months
• Currency breakdown (euro, forint, dollar?)
• Contingency scenarios: what if…? (project doesn’t come through, I get sick, etc.)
• At what point do I need to re-plan?

Months ago, I calculated how long I could finance my life abroad, unemployed, with the price of my car if nothing came of it. I also have an emergency scenario, although it’s not that strong for me.

At what point do I have to re-plan? Definitely not when my last iron is gone.

What if my friends can lend me money? Will I win a few more months? Then I’ll never give them the money back, because there’s nothing left? I’ll be the Hungarian Whiskys in Thailand.

Think carefully about what you’re doing in this area too. There will always be surprises, we all know that. If possible, don’t start on Tuesday with Wednesday as a surprise!

Let’s just say that some people can do this too. I’m not that type of person.

Tracking devices

No, I’m not suggesting you put an Airtag on the woman’s car! I’ve been keeping an Excel spreadsheet of my income and expenses for 31 years. For many, many years, it has a monthly budget spreadsheet, planned at the beginning of the year, with plan/actual columns. I haven’t really met anyone who can track their finances even in the short term. I’m not saying there aren’t any! I’ve just met a few of them. (On one of my January hikes, I ran into a woman who, when asked about it, admitted that she also keeps such a spreadsheet, but hers is only 27 years old.)

This advice is certainly problematic, but if you want to know how long you can finance your new life, then you’ve already gone beyond planning. In this situation, besides plans, there is a great lack of actual data. But for that, you need something to enter the numbers into. As I wrote earlier, I use my own Excel, so I can’t recommend an app or website. It’s up to you to find one. I think your bank already offers you such an option on your phone…

I planned my monthly food expenses for Thailand at 150 thousand HUF. It will be 4 weeks since I’ve been living here tomorrow, so I’ll prepare my first monthly evaluation for myself this weekend. I’m curious about the actual numbers, and this only took up 125 rows in the Excel table. Believe me, it won’t be difficult to analyze the facts, because I have the numbers.

A small digression: one of my friends asked me if I still keep this table the same way I have for the past 31 years? That is, can I tell you the total price of the bread I bought, or even how much I bought ear buds? I paid for my first ear buds on 1998.07.04. Yes, I used my parents’ until then… From then on, I spent 22,695 HUF on this over 27 years. Well, I can’t keep track of this in such detail anymore. There’s only one reason for this now: The shops sell a block with Thai inscriptions, so I can’t read what I bought and why at home. But I know it in its category, and that’s more than enough to compare the design with the facts.

The spiritual side of finances – courage or recklessness?

I left this topic for last. Here are two questions worth answering very seriously:

• Where is the line between “belief in myself” and “self-deception”?
• How do I deal with insecurity and how do I strengthen myself?

You need faith! I have no doubt about that. But it is very important that self-deception is a trap. Let that faith guide you (I will write about this in another post soon), but be realistic. When the time comes, admit that it is not going to work out this way. Then don’t give up, just change direction. But – I say it again – if possible, don’t do it at the last minute!

Money is not the goal, it is the means

I gave two basic ideas to the last paragraph:

• Financial security is not a fixed number, but a flexible strategy.
• I have a plan, I have reserves, I have flexibility, so I can go.

Consider how important the above ideas are to you and how much you have the tools listed here. It’s okay if you’re not flexible, it’s not necessarily that you need it. Don’t have any reserves? It’s not necessarily a problem, because you already have a suitable source of income. Don’t have a plan? I’ll even say that it’s okay, because you might have just won the Lottery and there’s a huge amount of money waiting in your bank account.

It can be a problem if you don’t have a plan, you don’t have savings, you’ve never had reserves and you’re not even flexible. If I were you, I would think about it…