How to Afford Travel for 10 Months Each Year

Could you handle this for 10 months?

“People don’t want to ‘be’ millionaires–they want to experience what they believe millions can buy.” – Tim Ferriss

Meet Reed*. He travels every year for 10 months and has been doing it for the past 8 years. “That’s right,” he proudly stated after I had to make sure I had heard correctly. “I call it personal fiscal drift,” he added.  After some friendly Q&A with the Aussie over a cup of joe, here’s the financial breakdown of how he does it:

***All figures reflected in Australian Dollars.  The exchange rate as of this writing is $1.06 USD = $1.00 AUS**

Those Damn Taxes. No way to avoid them as we all know. Reed is smart about it though to the nth degree, understands his tax laws and goes completely by the book.  When planning, he is certain of four things:

  1. He needs $16,000 saved to travel for 10 months.
  2. He needs $4,000 to get re-acclimatized once back in Oz.
  3. He needs to keep monthly expenses low while in Australia, where the cost of living is on par with the USA, especially since driving is the norm as well and gasoline prices are roughly $6.50/gallon.
  4. The tax structure in Oz, a progressive, tiered structure similar to the USA, is such that you pay 15% taxes up to $37,000 and 0% on your first $6,000 earned.

Saving 20K.  Two months of work to make $20,000?  Not the easiest thing to do, but also not completely impossible, especially with two jobs. Plus, if worse comes to worse and it takes another month to hit the goal, you’d still be traveling for 9 months; Not too shabby.  Reed divides and conquers.  $10,000 per month divided by 30 days is $333 per day. “Find a job that pays a high hourly wage,” is his sage advice. Easier said than done however, Australia is the home of $15/hour minimum wage.

By day, Reed teaches Aboriginals literacy, an above average paying and high-demand job due to having to live in the
bushies, far away from any metropolis. By night, he repairs computers with his own side business, mainly for the elderly at a plush $80/hour.  This is predominately paid in cash, which as we all know, can really boost tax-free savings.  He purchased a company van (complete with banners of advertisements on the side) since he makes house calls and because it’s his own business, he gets to deduct the car payments, gasoline, and maintenance costs from his “on-the-books” income.

Business Write-Off or Home Sweet Home?

Cutting Costs.  Here’s where it gets interesting and where his bottom-line is most affected.  What his customers don’t know, is his business van doubles as his bedroom.  The old van down by the river skit in true form, only this van is a top-of-the-line travel rig. With a gym membership at the local high-end fitness center, he stays fit by swimming in the morning and rarely misses a day lest he also misses a shower.  The gym also handles his laundry and he has a dedicated locker.  For food, he takes the simplest and cheapest options available, preferring to save up to splurge while traveling.

Between the two jobs, working 6-7 days per week for two months, he has rarely missed his goal. With his day job, he maximizes the amount of tax he pays and once he hits $4,000, the refund he calls “in the bank,” he switches gears and minimizes the tax he pays. When he gets home from his travels, the refund check is sitting in his PO Box.  His night job is money in the bank and aids him in massive tax savings.

While this may be extreme for some, it’s a good example of the creative lengths that travelers will go in order to realize their dreams.  It’s nothing more than societal pressure that prevents us from mimicking Reed, but at what cost?  The idea that you need to be some mega-rich movie star to globe trot has proven time and time again to be nothing more than a myth.  Setting goals and making sacrifices to achieve them is the only tried-and-true method.

*Name changed for requested privacy

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