Is your world trip hurting your financial future?

In my last article “To World Trip or Not to World Trip? That is the question!” I talked about some of my fears about going on a world trip. This article received a lot of good comments and brought up a new concern. While most people agreed that a world trip is worth it, many were unable to explain how they finance their world trip and still plan for retirement.

On social media and in the comments of the last post, many travelers hinted or said outright that they are not saving for their retirement. This is a big concern! While traveling is important and can teach us about ourselves and the world, it is not sustainable for most travelers. Unless you are Nomadic Matt or Gary Arndt, the chances of you creating a successful travel blog that supports your travel lifestyle is pretty slim. So the question becomes “Is your world trip hurting your financial future?”

According to different sources there are over 300 million blogs and according to Zac from Blogging.org, only 8% earn enough money to support their family. That means that only about 24 million of the 300 million bloggers make enough money, in fact, according to the infographic 81% of bloggers never make over $100. When we look at these stats and compare them to what is being said by many travel bloggers, it becomes clear that one party is lying.

Almost every travel blog I read talks about press trips and comped rooms. They are living the life! Traveling the world on advertisers’ dollar or on their own product sales. But, how can this be true? Yvonne has been blogging for over 3 years on her Dutch language travel blog and makes around €1,000 per year through sponsored posts. This is far from living the life. I have a popular marketing blog and I have made $109 from Google in 2 years. Again, I am not supporting myself on this time consuming endeavor.

This brings us back to the point of this article, “How are travelers financing their world trip and still planning for retirement?” and “Is your world trip hurting your financial future?” While some bloggers talk about scrubbing toilets, most are painting a fairy tale story about life on the road, but the only person they are fooling is themselves. This delusion might be ‘grand’ now, but what happens in 5-10 years when the fairy tale ends and they have not planned for life after traveling?

The truth is if you are scrubbing toilets or lying to yourself, you are not saving for your retirement. According to the 2014 Retirement Confidence Survey, “68 percent with household income of less than $35,000 a year have savings of less than $1,000. Of those who have saved for retirement, only 38 percent report savings of less than $25,000.” This means that even if you make $35,000 a year while traveling, which is highly unlikely, you will still have less than $1,000 in savings. Not to mention a retirement plan or IRA.

The report also states, “Cost of living and day-to-day expenses head the list of reasons why workers do not save (or save more) for retirement, with 53 percent of workers citing this factor.” If you have ever traveled for a longer period of time, you will know that the cost of living and day-to-day expenses can be just as much or even more than living in your home country. Although many things are cheaper in developing nations, the cost of transport and accommodation can put you on par with the cost of living back home.

Articles like “THE ULTIMATE GUIDE TO TRAVELING WHEN YOU HAVE NO MONEY” by Matt are great and inspirational, but are often misguided. In that article he states that “you don’t need to be rich to travel,” but unfortunately you do need to be rich to retire ‘comfortably’. According to the Census ACS survey, the median household income for the United States was $52,250 in 2013, the latest data available. This means the average world traveler that wishes to retire in the U.S. will need to save $400-650 per month for retirement or 10-15% of their annual income.

Every month or year you are not saving for your retirement is forcing you to earn more money later or alter your retirement plans. Here in lies the problem, the more experience you have the higher pay you receive allowing you to save more money. Traveling for one, two, or ten years is time spent not gaining more experience, which leads to higher pay later in life. But the more years you travel and do not save for retirement, the more money you need to make later in life, which you can’t make because you do not have enough experience. Experience equals more money. Traveling does not equal more experience.

All these data and research leads me to believe that your world trip is hurting your financial future. So, that leaves travelers with a few conclusions:

• One: you shouldn’t travel for extended periods of time because you will end up paying for it later in life.
• Two: YOLO – you only live once and you could die tomorrow, so, f**k worrying about retirement and you will cross that bridge when you get there. Look at the data, 68 percent with households are not saving enough money, so, why not travel? Can’t save money if you go and can’t save money if you stay! So, you should enjoy life now.
• Three: compromise, find seasonal work that allows you to make 80% of your money in 6 months and travel for the other 6 months each year, while working odd jobs to make the remaining 20%.
• Four: Find another form of internet income besides blogging and become location independent (easier said than done).

What are your thoughts or feelings about retirement and traveling? Is your world trip hurting your financial future? How do you save enough money to cover your expenses and still save for retirement? Leave a comment and tell me how you balance these two contradicting ideas. I always love good feedback.