Retire Young and Travel the World

Live the Dream!

Live the Dream!

Break away from convention and live the dream

“Just what do you hope to accomplish by doing this?” our family and friends asked when we announced our decision to retire and travel the world well before the waning years of our lives. It was a simple question, but there were no easy answers. It was true that we had many more years of productive life ahead of us, and by convention, we should have stayed at our jobs, living our mainstream lives for another twenty years.

Surely, it was the expectation. Yet, what was once an idle meditation had become an obsession. We wanted to travel, to see the world, and to experience it now, while we were still young and healthy enough to enjoy it.

The desire to travel around the world without responsibilities or cares is a familiar one. Many people wish that they could leave their everyday routine behind and depart on a journey that never ends. Most envision this lifestyle after they retire from their jobs. They see a way of life that they would love to have today but for a whole host of reasons, they believe that this desire must wait. They argue that they cannot support themselves if they leave their jobs. They need to wait until a multitude of conditions are met. The family would object and they would feel shamed that they shunned “the American dream.” Finally, they are convinced that they cannot find a way to do it now. They read travel publications, stories about faraway places, watch travel shows on television and read the travel sections in newspapers. Taking their two or three week vacations, they try to imagine that these few weeks will last forever, feeling that they were just beginning to get comfortable in their surroundings when it was time to return home. The memory of their fantastic vacation begins to fade after only a few weeks back on the job. Waiting for some unknown, undefined future, they fantasize, and feel empty inside believing that they cannot realize their dream.

If you are able to imagine staying in budget accommodations and roaming from town to town on the “local’s bus,” traveling inexpensively over the long-term can be surprisingly possible and richly rewarding. The less “luxury” you require the sooner you can reach your goal of breaking free from your conventional life and the longer you can sustain your travels. Luxury travel can be isolative and homogenized. Although comfortable and predictable, it insulates you from the local culture. Those requiring five-star accommodation and first-class airline tickets limit themselves both financially and experientially. It is not likely that you can live extravagantly on the road for long without having a sizeable bank account. Most people simply do not have those sorts of resources. It is possible to pamper yourself on a modest budget and you will find that staying out of the resort enclaves will provide a much richer and varied experience.

The first step to making a traveling lifestyle possible is having the desire to do so. This desire must be an all-consuming one. Reading those travelogues and publications, watching the Discovery and Travel channels, reading National Geographic, and taking vacations whenever practical is a good way to begin to define interests and expectations, but it is not enough. When you find that you are thinking more about where you want to go than where you are it is a sign that you are getting in the proper frame of mind. Gradually, as you seriously consider the possibilities of long-term travel, you begin to separate mentally from your familiar way of life. You dream of selling all the “stuff” that was once so important. You take a vacation and find yourself in tears as you return to your home. Vacations, by definition, are trips that are limited in time and must end.

Once you commit to changing your life, you need to make a plan. Most importantly, set a date. Choose a time far enough in advance to be realistic and attainable, but not so far away as to feel impossibly distant. Depending on your financial health, the date could be anywhere from one to three years away. Do you dream of quitting your job on your ten year anniversary with the company? Perhaps making a commitment to retire on your fortieth birthday would be more of a milestone. It can be a New Year’s resolution. The date gives you the goal and the motivation to make the sacrifices needed to make it happen.

Working as much as possible, saving every penny and getting out of debt are sacrifices essential to retiring young. Make double payments or more on all loans and credit cards if you can. At the very least, apply some money to the principal of each debt every month. Set a realistic goal for being debt-free and use discipline in attaining it. It may help to have money automatically deducted from your paycheck and deposited into a savings account. It is less convenient to spend money that you never see. Once you have paid off your debts, continue making your monthly payments – into your own retirement fund!

Being a long-term traveler means living simply. Start practicing now. After the bills are paid and you are debt-free, continue to keep your daily expenses as low as you can and generate as much extra cash as possible. Repairing your old car instead of buying a new one saves thousands of dollars. Working overtime brings in extra income that can be deposited directly into savings. Shopping for second-hand clothes saves money. Use the heater and air conditioner less often, use less gas and take public transportation or walk when possible. Eat at home instead of restaurants, use coupons, buy less meat and more rice – it all adds up to lowered expenses and more money for your future freedom. Evaluate your purchases. Do they bring you closer to your goal of an early retirement? Will they help or hinder a traveling lifestyle? .

If you do not already have a good investment plan, this is the time to educate yourself. Your goal is to live a self-sustaining lifestyle. This requires a certain amount of dependable income. Chances are that a savings account with the local bank is not returning enough interest to produce a viable income. If you are not comfortable investing in stocks, talk with a broker about various fixed-income investments. Corporate bonds, preferred stocks and annuities are all low-risk investments that will produce income while leaving your principal intact. If you have managed to save $300,000,for example, and you can get that money to generate a very attainable income of 7%, you will have a budget of $21,000 per year. This is a reasonable amount that you could expect to earn by investing in various fixed-income vehicles. It can provide a sustainable, lifetime income that is adequate, or even more than adequate, to live on in many parts of the world. If you own a home, you may have this much money in equity alone. If so, you are that much closer to your early retirement. It does not make sense to maintain a house if you do not intend to return to it. Keeping a home means mortgages, insurance, taxes and utilities. Selling your home provides equity and debt-free living. The motivation for all of this is simple – you are not saving for something that is years away. Rather, within one or two years, you will have saved enough money to enjoy an early retirement.

It is true that by the standards of the western world, $300,000 is not nearly enough money to retire, especially if you are much younger than retirement age, in good health and looking forward to a long life. By choosing carefully where you want your travels to take you, however, you will learn that living on $21,000 per year can give you a very comfortable lifestyle. Spend time researching the cost of living in various countries. Europe, Scandinavia, Russia and North America are expensive areas. Most retirees in their 30’s and 40’s cannot afford to retire and live in these parts of the world. Much of the rest of the world, though, can be surprisingly affordable. Asia, Latin America, parts of Eastern Europe and Africa are all very reasonably priced. Depending on your level of commitment and willingness to travel without modern luxuries, almost any part of the world can be on your “list” of places to go. If you have an income of $21,000 per year, this provides you with a daily budget of $57.53. It costs much less to live in many parts of the world than this. Keeping track of your expenses and your budget is important. If you can live in Thailand, for example, for $40.00 per day for six months, then you can also visit Switzerland, enjoy a budget of $70.00 per day for six months, and still live within your means.

Assume that you have accumulated $500,000 in savings. Obviously, you will have much more flexibility that you would have at $300,000. If you earn 7% per year, you will generate an annual income of $35,000, or a daily budget of $95.89. You will find, however, that many countries have such a low cost of living that you do not need to spend this much in order to live well. Instead, if you can manage on a budget of 5% per year, or $25,000, you will increase your worth by 2% annually. This also allows a cushion in case of emergencies. You can actually give yourself a raise every year, as your net worth grows, while still staying within your budget. If you can manage your daily expenses well, try working with a budget of 4% per year. This way, your portfolio can increase by 3% per year, assuming a 7% annual return on your investments. By starting your retirement in an inexpensive country or area, it is quite possible to be able to travel and live a comfortable lifestyle, while still keeping your life savings intact and growing.

If you are retiring on a shoestring budget, picking the perfect location to begin your trip is important. It may not be possible to start your traveling in London or Tokyo, for example. If you plan to retire with $300,000 in the bank and a daily budget of $57.53, and you want to live well, you will need to go to a place where your currency is valuable. Generally, the closer to the equator that a country is, the lower the cost of living. As the price of the currency in your country fluctuates, the cost of living for you in other countries will also fluctuate. The stronger your currency is, the more buying power it will have elsewhere. It takes only a little research to find places with a low cost of living and a high quality of life.

How much of a budget is reasonable for global travel? It depends on where you are and how frugal you want to be. Buying food in grocery stores or markets usually costs less than restaurants. Street food, sold by vendors throughout much of the world, can be very inexpensive. In Vietnam, for example, a hearty bowl of pho (soup), suitable for a full meal, will cost slightly over one US dollar, when eaten in a restaurant frequented by locals. The same bowl of pho served in a restaurant catering to tourists will cost significantly more. A decent guesthouse in Vietnam should cost under $10 a night, even in the cities. A plate of delicious pad Thai, purchased from a street vendor in Thailand, will be less than $2.00. A full breakfast of eggs, meat, potatoes, toast and coffee can be found in Malaysia for about $2.75, and a full dinner of Indian food bought from a hawker will be under $2.00. A cross-country bus trip in Laos will only cost around $10.00 and adequate lodging can be found almost everywhere for that amount or less. A nice guesthouse in western China can be found for around $5.00 per night. A good dinner in a Mexican restaurant can easily be had for under $3.00. Using local transportation is very inexpensive there, as well. In most of the developing world, hostels and guesthouses will cost under $20.00 per night, leaving plenty of money left over for food, transportation and souvenirs. Realize that as a long-term traveler you will not be shopping as you did when you were on vacation. Almost everything that you buy will have to be carried with you or mailed somewhere, probably not to be seen again for months or years.

An enormous amount of work goes into making this lifestyle change and doing it successfully. Consider how you plan to access your money when you are traveling. If you plan to make this a lifestyle, then it is obviously not possible or desirable to be packing thousands of dollars into your security belt. Traveler’s checks can be useful for emergency cash but are impractical for long-term cash needs. It is difficult to find a place that will accept them in many parts of the world and even if they do, they will lose a lot of their value in fees and commissions. It is better to keep your money invested rather than carrying it around in your wallet earning no interest. Credit cards and debit cards are probably the best way to access cash. It is important to maintain your financial discipline and pay off the balance at least once a month to avoid incurring finance charges. Credit cards typically charge a small percentage for cash and ATM withdrawals. The amount charged, though, can differ considerably from one card to the next. Both MasterCard and Visa charge a minimum of 1% for cash withdrawals. The issuing bank then adds in their percentage, which can range from zero to 5%. Some banks charge a set amount for cash withdrawals and may assess additional foreign transaction fees. A thorough search on the internet can give information on the fee structure for hundreds of credit cards. Take the time to read the small print on each of your credit cards, and shop around for the best deal. Debit cards often bypass these extra charges. You still may be subject to the 1% charged by MasterCard or Visa, but you can avoid other charges with the right card. Debit cards offer an additional advantage as the money is automatically withdrawn from your account, so there is no need to remember to make a payment every month. Ideally, your debit card will be tied into the high interest money-market account that you keep with your brokerage. Fidelity and E-Trade both have mechanisms for this, as do many other full-service financial houses. It pays to take the time to shop around. It is a good idea to bring at least two cards with you. This way, if one card is lost or damaged, there is a spare to use in emergencies. Be sure to get a Personal Identification Number (PIN) for each card so that you can use it to access cash.

Depending on where in the world you want to start your trip, consider taking along $500 to $1000 in large, US bills. In any country, banks and moneychangers will happily accept US dollars. In many parts of the world, dollars are actually the de facto currency. Many countries in Southeast Asia, for example, use US dollars as their currency of choice (Laos, Burma and Cambodia, for example). It is also possible to replenish your supply of US dollars in many Southeast Asian banks. Be certain that the dollars that you bring with you are in excellent condition. Many countries will not accept dollars that are the least bit torn, stained, folded or marked. The best rate of exchange is for new bills in large denominations – 50’s and 100’s. It is best to order your money in advance and specify to the bank that you require crisp, new, mint condition bills. Then take the time to examine each bill for any sort of damage.

Consider assigning a durable power of attorney for finances to a trusted family member or friend. The durable power of attorney can make financial decisions for you in your absence. If you need to have money wired to you from your bank and that needs to be initiated from your home country, you will need a power of attorney. They can also deposit checks into your bank account. If IRS sends you a notice and you cannot respond by mail because you are in the deepest jungle in Africa, your power of attorney can handle your affairs. Having a durable power of attorney is something that you may never need, but if you do need it, it is almost impossible to do from abroad.

You will no longer need to maintain your expensive health insurance plan, but you should seriously consider travel insurance. The United States has the most expensive healthcare in the world, and if you plan to travel abroad for an extended period, it is best to find a policy that does not include US coverage. This exclusion can save hundreds of dollars on an annual premium. In many parts of the world, medical care can be very inexpensive. Often, the cost of the doctor’s visit and medications will not exceed the deductible on your insurance plan. After living in the United States, you may be surprised at the high quality of health care that is available abroad. For the most part, medical equipment is modern and doctors and dentists are well educated and knowledgeable. Additionally, most medications that require a prescription in the US can be purchased over-the-counter in the rest of the world at a fraction of the price that they would cost back home. Several countries are promoting what they call “medical tourism.” India, Thailand, Mexico and Singapore are leaders in this trend. Getting medical or dental care in these countries is not only inexpensive, but chances are, the doctor has received his education in either the US or Europe. However, any major illness or injury can be expensive no matter where you are and it is important to have coverage available. If you are traveling in an undeveloped country and do have a serious health issue, there may not be adequate medical care available. Having an insurance policy that includes emergency medical evacuation is very important. Being flown out of the country for emergency medical care can be prohibitively expensive.

Many travel insurance companies offer insurance by the day or month only. Since you plan to be gone much longer than this, you will want to find a company that will offer annual policies, preferably with guaranteed renewals. Some travel policies will also cover loss or theft of personal belongings. If you plan to travel with an expensive camera or laptop computer, it may be worth spending a few extra dollars to have this provision in your policy. By shopping around, you should be able to find a good travel insurance policy that costs less than $500 per year. Travel policies usually will not cover non-emergency medical care, on-going prescription medication or routine dental check-ups.

Plan to visit the Center for Disease Control’s travel section on the web and make an appointment with your doctor or a travel clinic to get the recommended vaccinations against foreign diseases. Many widespread diseases, such as typhoid, yellow fever and certain types of encephalitis and hepatitis, can be prevented with immunization. The travel clinic will also make many recommendations on medications to take along and will probably try to prescribe them to you. If you are in the United States, these medications can be prohibitively expensive. If you have a prescription drug plan that will pay for these medications, then by all means, stock up on them. However, if you are not adequately covered, you can save a lot of money by taking good notes on what medications are recommended for the part of the world that you are visiting, and waiting until you arrive to purchase those medications. Make sure that you record the chemical or generic name of each medication. The exact same medication can have many different brand names depending on where you are in the world. Do bring an ample supply of any prescription medications that you must have – a 90-day supply is recommended. You should have no problems replenishing your supply but you probably do not want to take the chance of running out.

You may want to put together an inexpensive first aid kit before you leave. Some items, such as aspirin, can be surprisingly difficult to find in certain parts of the world. If you need to take along any narcotics, be sure that you have a note from your doctor authorizing you to possess these medications. Possessing unauthorized narcotics can result in incarceration or even the death penalty in some countries. Bringing along a small supply of Cipro or other broad-spectrum antibiotic is also advisable, although antibiotics are widely available in pharmacies globally. Take along some medication for diarrhea, as you will almost certainly be stricken with intestinal problems at some time during your travels. Better to have it on hand than to try to squeeze a visit to the pharmacy in between trips to the toilet. Some good mosquito repellent containing DEET is strongly recommended if you plan to go to any area where mosquito-borne disease is prevalent. Anti-malarial medications are widely available through most pharmacies in areas where malaria is prevalent and will cost much less than purchasing these medications in the United States. If you are making your own first aid kit, be sure to pack along a little providone iodine. Cuts and scrapes can become infected very quickly in tropical climates and this will save a trip to a doctor. Bring along a little moleskin for blisters – it can be impossible to find abroad.

Imagine life without mail! If you plan to travel for years, you will be saying goodbye to your mailbox. It will be a relief to be done with junk mail, but what about all the other things? Several months before you plan to retire, set up everything possible for on-line viewing and get in the practice of using it. Whenever you get mail, check to see if there is an on-line option. It is a time-consuming task, but starting early will help make your transition to “paperless” much easier. Almost all banks and credit card issuers are set up for paperless, on-line statements. Set up your bills so that you can pay them on-line and become familiar with the system. Some bills can be automatically paid through your bank account though you will want to check the bills for accuracy.

If you have any accounts with a brokerage, switch to paperless statements. You can also arrange to have annual reports and proxies sent to you by e-mail. Many magazines offer on-line editions, and this is a good time to stop renewing “hard copy” magazine subscriptions. Newspapers, as well, often have internet versions and accessing them is generally free. By the time you leave, your remaining mail should be almost all junk. Write to get your name removed from the junk-mail lists.

You will need to maintain some sort of mailing address. No matter how much you have prepared, there will still be the odd piece of mail that needs to find its way to you. Whether it is a newly issued credit card or a letter from the IRS, there has to be some way for people to reach you by mail. Often, a family member will be willing to act as your forwarding address. There are companies that will forward your mail to you, as well. It is advantageous to maintain a US address for another reason. Companies and institutions generally are not set up to deal with someone who does not have a permanent address. Government forms, visa applications, travel permits and the like often require that you furnish a “permanent address.” Security questions used to access your accounts invariably include address verification. Even on-line credit card transactions are keyed to your billing address. Having a consistent address that you can provide will save you a lot of time, hassle and explanations.

Set up an e-mail account with a web-based provider. It is good to do this early, as there will be a lot of preparation before you go. Put together a list of all your contacts and enter it into the on-line contact section of your e-mail account. This will be more than a list of friends and family and should include anyone that you can imagine needing to contact for any reason. Addresses and phone numbers for your bank, credit card issuers, doctor and dentist, your broker – all of these should be entered on-line. Be sure to include e-mail and website addresses. Additionally, consider making a list of all the passwords and any account information that you can imagine needing and put this into a document that you e-mail to yourself. This includes the overseas phone numbers for customer service for all the credit cards that you will be bringing along, all your login information, every account number, credit limit, PIN numbers, and so on. If you have recently paid off a bill, include that information as well, in case you need to refer to it at some point. For security, give this document and innocuous name like “Our dinner party” or “Pictures of my dog” and save it as text in case you want to make changes later. Using a scanner, e-mail yourself copies of your passport, driver’s license and any other important documents. Although this is a time-consuming task, the information will prove to be invaluable. Consider establishing a second e-mail account as a back up. This will reduce your chances of being cut off if your regular provider is having technical difficulties or if the country that you are in restricts internet for political reasons. In general, e-mail addresses ending in “.org”, “.net”, and “.edu” are blocked less frequently than those ending in “.com”.

Internet seems to be ubiquitous. From the smallest Tibetan township to remote backcountry settlements in Kenya, there will be internet cafes. As you travel, you will find that the internet becomes your most valuable link to the world “back home.” One internet resource that you will want to have is voice over internet protocol (VOIP). This allows you to make a telephone call from a computer and is among the least expensive ways of keeping in touch with friends and relatives. With the convenience of internet calling, you can avoid the expense of maintaining a cellular phone. For a few pennies per minute, you can make a phone call to the United States from any country in the world. Skype is one of the largest VOIP providers and the rates are very reasonable – free, actually, if you are calling someone computer-to-computer. Skype also has a voice mail option so that you can receive calls made from any landline when you are not at a computer. Yahoo also offers a similar service. Set this up before you plan to leave on your journey by signing up and putting a few dollars on account. It is helpful to pack along a headset with a microphone, as some internet cafes may have VOIP software on their computers but not have any microphones. They are inexpensive, compact and available in almost any computer supply store.

Start planning well in advance when deciding which possessions you want to save. When you are in this stage, remember that you are not taking a two-week vacation; rather, you intend to be gone for months or years. When going through your possessions, ask yourself how much you would miss the item if you no longer owned it. Would you miss it in twenty years? You may want to keep the things that your great-aunt left for you, but do you really need to save that old vase that you have never once used? Consider giving family members those sentimental objects that you do not use but cannot bring yourself to sell. If you do not plan to return home, do you really need to keep that old pair of skis? There is really no reason to store any food, and probably no reason to keep any furniture. That collection of cheap paperbacks can go. There is probably no reason for you to keep your automobile. They are easily replaceable. If you plan to be gone for years, you will not want to pay for the upkeep of owning a vehicle. Cars do not do well when they are stored. They need to be driven, and to drive them requires insurance and a current registration, For obvious reasons, selling your car should be one of the last things that you do before making your exit.

When you start going through your belongings, you will be surprised at how little you own really seems to matter. Getting rid of all but your most essential possessions is liberating. It is an affirmation that you are really going to leave your old way of life and move on to something much more satisfying and enriching. Donate your cellular phone to the local women’s shelter. Give books to the library. Leave your old clothes at the local hospice thrift store. Give food items to the homeless shelter. The yard sales you have will bring in extra money allowing you an occasional splurge when feel the urge for a little extra comfort. The few precious items that remain can go into storage, ideally at a stable friend or family member’s house. If you will be storing your belongings in a storage locker, keep in mind that the less you own, the less the locker will cost. There are reasonably priced self-storage warehouses in most areas. Many public storage places will give a better price for a full year’s rental in advance.

If you plan to live abroad and do a lot of traveling, it is essential to have good equipment. A backpack will become your new home. All of the possessions that you require to live your life for an extended period will be kept here. Your pack should be top-quality. It needs to be large enough to take everything that you will need. It needs to be compact enough to fit easily under a seat, in the top compartment of a train, or in the trunk of a tiny taxi. It needs to be light enough to carry for several miles in the tropical heat while you search for the bus station or guesthouse. It needs to fit comfortably on your frame. It should have several pockets to keep things organized and accessible. Preferably, it will have security features to frustrate casual thieves. It is a good idea to go to a sporting goods store that has a qualified pack fitter. This person will measure your torso, help you select a pack that fits comfortably, then fill it with weight so that you can get a sense of how it will feel when put to the test. Before leaving the sporting goods store with your new backpack, pick up a waterproof backpack cover. This will keep your belongings dry and will help to keep your pack clean on those long bus trips.

Your shoes need to be top quality. Purchase them before you leave. Buying high-quality new shoes in a foreign country where you do not speak the language can present challenges that are best avoided. Be sure to break your shoes in well before starting on your trip. They should be flexible and durable, preferably waterproof or at least water-resistant. You should be able to walk in them comfortably for several miles on rocky trails or city streets. Since you may be wearing other footwear at least part of the time, try to keep weight in mind when buying shoes. When living out of a backpack, every ounce matters. Bring along a high-quality pair of sandals. They are not only cool in hot climates, but also a necessity if you plan to visit religious shrines where footwear is not permitted. Sandals slip on and off easily and are very practical for this type of trip. Choose a pair that you can wade in so your feet are protected when you disembark from the water taxi or want to explore that deserted coral beach.

A good camera is essential, and again, it should be purchased before you leave. Unless you are going with a battery charger and universal plug adaptors, it is best to select a camera using commonly found batteries. Basic batteries (AAA, AA, etc) are widely available. Lithium batteries may be difficult to find. It is also a good idea to have a weather-resistant camera. Tropical climates tend to be very humid and you will want to have a camera that can withstand temperature and humidity variances. Unless you are very serious about photography, avoid the single lens reflex cameras. They are heavy, bulky, and prime targets for thieves. They also instantly mark you as a tourist. You will find that a small lightweight camera that you can slip into your shirt pocket will be more discreet and easier to handle.

It is a very good idea to bring along a stack of passport photos. You will need them for obtaining new visas at border crossings and you will be surprised at how many other times they come in handy. Consider bringing along some business cards. In many parts of the world, it is a common and expected courtesy to exchange business cards. Your card may only have your name and e-mail address on it, but it is important to have something to exchange. Wherever you travel, people will be naturally curious about your country. Pack along a few picture postcards. They will be well received.

Bring along a reliable travel alarm clock. Buses and trains often leave at odd hours and only run once a day or once every few days. You will find a compass, a small and versatile pocketknife and a thermometer useful. A small, hand-held calculator can be a surprisingly valuable device. The most obvious reason for having a calculator is to convert the local currency into your home currency. It takes a little time in a new country before you will start thinking in terms of the local currency. A calculator is a wonderful tool to take to the market to bargain with vendors. When you do not have a common language, a calculator can make bargaining fun and easy. It is also a good way to confirm a price. For instance, you negotiate a fare with a taxi driver. He says that it will cost you “fifty.” You hear “fifteen.” A calculator takes the guesswork out of the transaction and saves face for everyone. Finally, a calculator can be a good tool for getting the time. You need to know when the bus is scheduled to leave, but no one speaks English. You can point to your watch, put in the time on the calculator display and shrug your shoulders questioningly. Alphabets can vary from language to language, but it seems that almost all languages share the same figures for numbers.

Chances are, if you plan to start your trip in an inexpensive country, clothes will cost much less there than in your hometown. The clothes that you will want to bring should be those that you will be using in the country in which you arrive. If you try to bring clothes along for every climate, you will be burdened with a very heavy backpack. If you plan to start your adventure in Thailand, for example, you will not need to take more than one light sweater. You will want to have enough clothes to last you for several days though probably not over one week. Laundry services are widely available so a few changes of clothes should be adequate. Bring lightweight clothes that can be washed in a sink and dried overnight. That way, you can bring along fewer clothes and carry less weight. Many of the least expensive countries to visit are located in the warmest climates. Pack shorts and half-length pants and shirts that are lightweight but modest. You will want to bring a swimsuit. Not all hostels and guesthouses will supply towels, so pack along a lightweight one just in case. Remember to bring along a hat. A stuff sack has many uses and is recommended for dirty clothes.

Although it is tempting to bring along a shelf of books, it is just not practical. Books in English are available throughout the world, so just take one or two good novels. Most places where travelers congregate have book exchanges, where you can trade in your old books for new ones. Sometimes, it is an even exchange, but more commonly, you give two books in order to receive one. Many hostels will have books to exchange, and most cities will have several used bookstores. You will find that you may be reading books that you would never have imagined reading in the past, but that can be a good thing! Used bookstores are useful for finding guidebooks, as well. When you are just starting out on your global retirement trip, you will probably want to take a guidebook along with you. If you plan to visit multiple countries, you may be inclined to bring along a guidebook for each country. Keep in mind that guidebooks are widely available. It is much more practical to bring along one good guidebook for the country you are in and one for the country you plan to go to next. Plan to trade these in as you go along. In some countries, the guidebooks that you find may be bootleg copies of the originals. If you are tempted to buy one of these inexpensive guidebooks, be sure to check the pages to make sure that the print is legible and that there are no missing pages. It is also a good idea to take a phrasebook if you are going to a non-English speaking country. In many countries, it seems that almost everyone speaks English, though people will always appreciate it if you attempt to talk to them in their native language. In other countries, such as China, very few people know the English language, and a phrasebook is an essential item. If you plan to be traveling with a laptop or handheld computer, you may wish to investigate e-books. There are numerous outlets on the internet with large inventories of e-books, and of course, the weight advantages are obvious.

Probably the largest expense in traveling the world is getting there. Airplane tickets are expensive and there are few ways of getting around this cost, especially if your travel plans take you across an ocean. If you can, use the frequent flyer miles that have accumulated on your credit cards. If you are planning to leave in two or three years, this is the time to shop around for the card with the best frequent flyer program. Then, use that card for every purchase you make, paying off the balance in full every month so that your free ticket, when it comes, is truly free. Most frequent flyer programs are available at no cost to the consumer. It is sometimes possible to call the customer service center and negotiate a better redemption rate. If you can find a card, for example, that will give you one point for every dollar you charge, you can call them and see if they would consider giving you two points per dollar.

If a frequent flyer program is not an option, there are still ways of getting relatively inexpensive plane tickets. Some companies will offer cheap tickets in exchange for being a courier. Overnight flights are cheaper than flights during peak times. Airline ticket consolidators will often have tickets costing far less than retail. You can contact the airline directly to see if they have any special rates or a “companion fare” promotion, where two people can fly for the price of one. Travel websites, such as Expedia or Orbitz, operate on commissions and rarely give the best price, but you can learn which airlines they use and then contact the airline directly for their best fare. Finally, a travel agent may be able to find a lower fare than you can find despite exhaustive research and internet searching.

When you fly, you miss seeing sights and learning about culture. Traveling by train costs less than flying and can be almost as fast when you take into consideration the amount of time spent in ticketing, security procedures and baggage claim. You can see the countryside, walk around, and meet other travelers. It is even possible to get a good night’s sleep on a train. Usually, the least expensive way to travel is by bus. Most areas have several classes of bus service available, and depending on your budget, you can ride either the inexpensive local bus or a premium tourist bus. If you are able to sleep well on a bus or do not mind missing a night of sleep, long-distance bus trips can be very affordable. Of course, the least expensive way to get around locally is to walk. It is also the best way to be in touch with the local culture, and to take in the sights, smells, and sounds of the area.

Hostels tend to have the least expensive rooms available and can be a great value. Hostels are no longer limited to young people and students and have become the lodging of choice for many budget travelers. Actually, most hostels are little different from budget hotels. The majority will offer dormitory lodging, which may be perfect for single travelers or people on a very tight budget. They may also have private rooms, often with private bathrooms. The rooms can be as nice, or even nicer, than budget hotels. There is often a sitting area or lobby where travelers can meet and compare notes or just watch a movie. Hostels are also good sources for book exchanges. Not all hostels provide sheets and towels, though most will have linens available for a small additional charge. Many will include breakfast in their room rate or provide breakfast for a very reasonable rate. Often hostels will have at least one computer available with internet access for its guests. Some hostels have kitchens for guests to use. This can be a good way of keeping costs down and a nice alternative to café and restaurant meals. Even expensive countries can be relatively affordable if one seeks the hostels.

Guesthouses are also a good choice for low cost lodging. A guesthouse can range from a full-service hotel to a modest bed-and-breakfast to a room indistinguishable from a typical room in a hostel. They are usually family-operated and proprietors tend to be friendly and excellent sources of information. Many guesthouses will offer a range of rooms – with or without a bathroom, with or without air-conditioning, and so on. When traveling in Latin America look for pensiones. They will offer many of the same amenities as guesthouses and hostels at an economical price. As with securing any lodging, it is best to look at the room before committing to it.

Many websites provide reservations for hotels. Other than a few notable exceptions, most of these websites will have listings for places in the three-star and higher category. Their selections tend to be limited for rural areas and small towns and rarely offer complete listings for lodgings. Making advance reservations commits you to being there at a pre-determined date. If, after a long trip, you want to be assured of a good night’s sleep, then use a service like this to reserve a room. As a rule, though, budget travelers and young retirees often do better by just showing up at whatever place looks good. Use the maps in your guidebook to learn where the lodging is concentrated in the town you wish to visit and start there. Unless there is a major holiday or event, or you are arriving at a major tourist destination, most cities and towns will have plenty of vacant rooms. If you are traveling slowly and taking the time to get to know an area well before leaving, this allows you to set your own pace.

Realize that the more actual traveling you do, the more money you will be spending. Since the whole point of retiring young is to be able to relax and see the world with no time constraints, one of your biggest challenges will be getting out of the time-limited “vacation mode.” Rushing through a country to cram in as much sightseeing as possible is unnecessary and undesirable. It makes much more sense to pace yourself and get to know each location well before moving onto the next adventure. Seeing the high points of an area is only one aspect of living a life of global travel. That takes only a few hours. Beginning to understand a culture takes much longer. Take the time to talk to local people, eat where they eat, relax and soak up the environment and character of a place. Now that you have made this lifestyle choice, it needs to be sustainable and enjoyable. A few months sightseeing at breakneck speed will burn out even the most committed traveler. After you eat at the same café for a few days, you may begin to build a rapport with the regulars. You may find yourself being invited to a festival or wedding. You will hear about interesting areas to visit that are not in your guidebook. Soon, you will discover that what has really made the area memorable is not the ruins, the lake or the mountain that you came to visit, but the people themselves.

Retiring young and seeing the world is richly rewarding. Regardless of your budget, there will be a certain amount of sacrifice that is unavoidable. Wherever you go, you will be taking all your possessions with you. There will be nights spent in rooms that you will try hard to forget. You will eat food that you hope that you never again have to eat. You will go to public restrooms that will give you nightmares afterwards. You will face frustrations with language and puzzlement with cultural differences. You may see someone doing something that back home would be unthinkable. Your friends will e-mail you about their jobs or the parties they have had and it will feel foreign to you. However, you will be introduced to people who are intensely curious about you and want to get to know you better. You may be somebody’s “first foreigner.” Children will call out to you with waves and smiles. You will see mountains, trees, plants and insects unlike anything you have ever seen before. You will have experiences that you have only read about in National Geographic. As you travel, you will begin to integrate new customs and new ways of thought. Your viewpoint will widen and you will become less judgmental. You will feel younger and more alive than you ever imagined possible. Most importantly, you will start seeing the world with a sense of wonder and excitement. When your friends tell you with envy that they wish that they could do what you are doing, you will tell them that they can – if only they commit to making it happen.

Useful Links and Resources

Banking and Finance:

Credit cards with frequent flyer programs

Lodging Links

Country Info (check out the Thorntree!) (cost of living index)

Airline booking companies

Currency Converters

VOIP Internet calling

Travel Insurance


Web-based E-mail Providers

Remove Yourself From Mailing Lists

Equipment suppliers

Selling Your Stuff

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  1. John Bardos March 10, 2009 at 1:17 am

    That is a great and thorough article about living abroad!

    I would love to have an opportunity to interview Wendy and David for my site, if they are interested. Please contact me at:


  2. jb April 22, 2009 at 11:28 am

    A wonderfully thorough article! well done!

  3. tomo May 28, 2009 at 2:16 pm

    Hi Wendy and David , everything what you wrote is correct !
    I just cam back to Toronto from one long trip ,and I am planing to go again ASAP!

  4. rtv May 5, 2010 at 4:46 pm

    ” 7% This is a reasonable amount that you could expect to earn by investing in various fixed-income vehicles.”


  5. Lincoln August 8, 2010 at 9:32 am

    I have been an expat for the past 7 years, living in Asia. There is no way I would ever go back to working-to-live in a “first world” country… My standard of living is higher than ever, and even my health care makes me laugh at most Americans, as it is so much cheaper, and so much better… you can never really know unless you take a chance and go, just to explore at first, then, once you find “your place”, you will know there is no turning back!

    • Kamil July 23, 2011 at 6:49 pm

      Hello Lincoln,

      it all makes a perfect sense, congratulations on your decision.
      Just out of the curiosity – which Asian country you have made “your place”?



  6. Jeanne @soultravelers3 July 5, 2012 at 8:04 pm

    Great article! We retired early 7 years ago and have been traveling the world ever since with our young school age child ( 44 countries on 5 continents on just $23/day per person).

    I do have to disagree with you about Europe though, as we’ve spent many years traveling Europe ( and even expensive places like Bora Bora and Sydney) and stayed on our tight budget. There are always ways to live luxuriously on little ANY where…living like a local and more country side living helps. We bought a small RV in Europe in 2005 which makes a great long term home/vehicle/storage unit and we never use hostels there which are way too expensive.

    We’ve grown our nest egg as we’ve roamed and our daughter has become fluent as a native in Mandarin and Spanish ( we are monolingual parents) and we have all had a ball.

    Best decision EVER and much easier than most people realize.

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