It has been eleven months since I turned in my resignation at work and we left to travel the world continuously. So far so good! We have had some great experiences, seen a lot of things, and met some great people.
Beyond stating that we plan to travel the world slowly until, as Susan says, “We are too old and creaky to do so,” we haven’t expressed on this blog more precisely what that means. The most common reaction we get when we tell people we sold everything and retired early to travel full-time is surprise and curiosity. We are not unique in doing this, we have met with and have read blogs of people following a similar lifestyle, but I will admit, our lifestyle is not that common. Some people we have met have expressed that they would love to be able to do what we are doing some day and want to know how we have done it. The spoken and often unspoken question has been, “How exactly are you doing this and how much does it cost to live that type of lifestyle.”
What exactly are our plans?
In short, our plans are to travel the world slowly and live a lifestyle that aligns more closely with the lifestyle of the country we are living in rather than a typical USA or Canadian lifestyle. What we mean by that is that we will try and live in housing like local people rather than spending all our time in hotels or in USA style housing. We will eat the food that the locals eat, use transportation systems that the local people use.
A key aspect of our travels at this point is that we plan on staying in each country as long as possible under a tourist visa. Depending on the country, this means we will be able to stay in a country anywhere from 30 to 180 days. At some point in time, we may find a place that we decide we want to live in for longer than a tourist visa allows. We are not planning on that, but are open to that possibility. There are people that have a goal of retiring somewhere overseas and for them an important part is getting a residency visa that allows them to live in that country full-time and even may give them a path to permanent residency or citizenship. That is not us at this point.
Our plan for the first five years or so is to travel in low cost countries – Southeast Asia, Central and South America, etc. We would like to travel in Western Europe and other more expensive places but want to try out this lifestyle and get confirmation of the expenses to make sure our budget allows travel there.
Where do we stay?
So far, our goal is to stay in Airbnb or other furnished apartments at least a month at a time. Staying at least a month at a time is the most economical. We know that in places where we can spend at least three to six months, we may be able to find less expensive accommodation than an Airbnb, however, very few countries let you stay that long. We are not ready to settle in to a particular country for an extended period of time although we know that our daily cost of accommodation would be lower if we rented an apartment for six months to a year. The nice thing about an Airbnb is that it is that the costs are usually all inclusive. What I mean by that is water, electricity, Wi-Fi, etc. is included in the price of the Airbnb. The other upside of Airbnb is that it Airbnb is a large company and has guarantees and resources available if you run into challenges. For us so far, this has been worth the extra we may pay versus branching out on our own and trying to negotiate with a private individual or company and then trying to arrange utilities in an unfamiliar country.
Most of the time we look for a studio or one bedroom Airbnb. A kitchen, Wi-Fi and air-conditioning are must haves for us. We prefer to find places with a washer and at least an iron, but can’t always find something for the price point we want. We are travelling with a carry-on sized suitcase and a small back pack each, so we don’t need a place with tons of room.
We have stayed in hotels during the first 11 months of our journey. In the 12 months prior to our retirement I actively pursued accumulating hotel and airline points. I acquired a total of 1.6 million points by the time I retired. We have used most of the airline points for flights so far. We have also used about half of our points for hotel stays. Our entire 48-day trip to China was spent in hotels using points.
What about transportation?
Once we get to a city we walk or use public transportation most of the time. One of our main criteria when we decide on a place to stay is the access to public transportation and proximity to grocery stores, restaurants, etc. Walking not only helps us get to know a place better, it helps us keep in shape. With our time being our own, we don’t have the same schedule restraints that we had back in our life in the USA, so taking 20-40 minutes to walk somewhere rather than getting there in 10 minutes by car is not a big deal to us.
Our experience has been that public transportation outside the USA is much more developed and much less expensive than in the USA. Bus and subway fares range from $0.30 to $1.00 USD in many cities. Taxis and Uber can also be very economical. For example, during our time in the Dominican Republic I don’t think we ever paid more than $3.50 for a taxi or Uber ride (except to the airport).
Air travel from continent to continent can be expensive, but we have mostly used frequent flyer miles for this travel. Air travel within a region can be fairly inexpensive. For example, during our 48 days in China most of our flights between cities only lasted between one to two hours and cost between $100-150 USD per person.
Rail travel can be even less expensive than air, although not always. China and Europe have well developed high speed rail systems that we used on occasion. We have found that travelling 200-300 miles by train is almost always less expensive than flying, but surprisingly, longer train trips can be more expensive than flying.
Although we haven’t taken any trips by bus, these can be the least expensive of all. We paid around $100 USD return for flights from Bangkok to Chiang Mai Thailand – a one hour flight. We saw an advertisement yesterday for an air-conditioned bus with reclining seats, movies, etc. for about $30 USD return – an eight-hour ride. With our time being our own, the savings might be worth it for us.
For us, the key to minimizing travel costs is going to be travelling slowly and keeping the high cost flights from country to country at a minimum. The longer we can stay in a particular area, the longer we can “amortize” the cost of that trip over our daily living costs.
There is no way we would have been able to retire at 53 years of age and live in the USA primarily due to the very high cost of health care there. We are both in fairly good health. Each of us has one prescription that we take on a regular basis. I just filled mine the other day in Chiang Mai, Thailand at the cost of $14 for a 100-day supply. Mine is a generic maintenance drug that I can get in the USA for about $15 per month if I sign up for an annual Walgreens prescription discount card. Susan’s prescription costs about $20 for a month outside the USA. In the USA, without insurance, the same drug costs $280 per month.
Many people we have read about or follow their blogs self-insure themselves. Thailand has very good and very inexpensive health care. Doctor’s visits for check-ups or minor illnesses cost between $15-50 according to a few blogs and web sites I visited. Even major surgeries such as hip replacement, etc. can be a fraction of the cost of similar procedures in the USA.
We decided to get a global high deductible health-care policy that covers us around the world, except the USA. We plan to pay for prescriptions, annual check-ups, teeth cleaning, and minor illnesses ourselves but like having the global policy just in case we fall off a mountain and break a bunch of bones, get hit by a car, etc. For the time being, we like the peace of mind the global policy gives us as we travel from country to country. I have read a few blogs of people who have had similar policies and then dropped them in favor of self-insurance in later years. We will see as time goes on.
We love trying all different kinds of food and eating the local food, to us, is a big part of the experience. Staying primarily in Airbnb’s or furnished apartments with a kitchen allows us to keep food expenses low. Although we don’t cook large complicated meals at our apartment, it is nice to be able to cook some simple things, make our own coffee, etc. We try to keep a good selection of fresh fruit around and typically have only one large meal per day. The rest of the meals are small or just snacking.
We have found that it is very possible to eat like an American just about anywhere you go in the world. American fast food and other chains such as TGI Fridays, Sizzler, Chili’s, etc. can be found in just about any country. However, this comes at a relatively steep price. For example, a Big Mac Meal at McDonalds in Chiang Mai, Thailand will set you back about $5.25 USD. Not bad, right? About the same price as the USA. However, a big plate of Pad Thai at a street stall or in the mall will cost you $1.12 USD – less than a quarter of the cost. If you can’t live without American and European foods such as cheese, yogurt, processed meats like bacon, salami, etc. be prepared to pay 2-3 times as much as you would in the USA. I love bacon, cheese and Greek yogurt, but not enough to pay three times the cost as the USA.
We eat local foods as much as possible and probably spend less on food than we did in the USA even though we eat out much more often.
Communications – phone and internet
It is much easier to stay connected around the world today than ever before in history. One of the first things we do when we arrive in a country, often at the airport, is buy a SIM card for our phone. This gives us a local number and internet access. In Thailand, for $12 we get a month with 3.5GB of data plus some phone minutes – we rarely use the phone minutes. Between apps such as Messenger, WeChat, What’s App, Skype and Google Voice we can communicate with anyone around the world just as easily as we did in the USA.
Wi-Fi is available at most restaurants, shops, malls, etc. throughout the world. Often you need to ask for the password. Most Airbnbs and hotels offer free Wi-Fi as well, so it is difficult to use up all your data from the cell phone SIM card.
One extra cost we have is a VPN service. There is restricted access to some USA based web sites when you are in another country. Video streaming services such as Netflix, Hulu and Amazon Video either give you limited or no access to the programming you get in the USA. Some financial information at banking and investment websites are limited when you log in to your USA account from another country. A VPN services allows you to appear to be logging in from the USA even if you are in another country. This runs us about $13 per month.
Museum entrance fees, concerts and shows make up the bulk of our entertainment costs. We rarely take organized tours but rather prefer to organize things on our own. However, we have found that a knowledgeable private guide can be well worth the price for extensive sights such as Machu Picchu in Peru or Angkor Wat in Cambodia.
This is one cost that snuck up on me. There are many countries in the world that do not require a USA citizen to have a visa to enter as a tourist, typically for anywhere from 30 to 90 days. As we began travelling, I knew that there were some countries that required a visa for US citizens, such as China. A 10-year multiple entry visa for China costs about $160, so, no big deal right? Sixteen dollars per year, hardly worth mentioning.
We plan on using Thailand as a home base for the next year or two spending two to three months at a time in Thailand with trips to surrounding countries for a month or so at a time. As a US citizen, you can enter Thailand for 30 days as a tourist on a visa exemption – no cost. For about $55 each you can get a one month extension allowing you to stay an additional 30 days. Alternatively, while outside Thailand, you can apply for a two month tourist visa for $30 and then extend for an additional 30 days while in Thailand for a total of 90 days.
So, to travel slowly as we plan, more than a month at a time in a country we will likely have visa extension costs and other fees.
Personal care and miscellaneous
We travel light, a carry-on size suitcase and a backpack each. We don’t acquire souvenirs but rather take pictures and make memories. However, we do need things like toiletries. Our clothes will eventually wear out and will need to be replaced.
I am sure we will find other miscellaneous expenses as we go along.
How much do we think it will cost to live this lifestyle?
There are numerous websites and organizations that talk about how much it costs to live abroad. Over the past 10-15 years I have subscribed to magazines or looked at websites, blogs, etc. that talk about how much it costs to live abroad, particularly as a retiree. International Living is a magazine that has been advocating retirement overseas since 1979. Their latest data claims that a couple can live for $1000 USD per month in places like Nicaragua, or the mountains of Panama and for $1500 per month in Ecuador, Thailand or Colombia. Live and Invest Overseas is a similar publication that makes similar claims.
However, every situation is different. It may be true that you can live for $1500 per month in Ecuador, but there are start-up costs that are not included in that monthly cost such as the cost of obtaining a long term retirement visa. The monthly $1500 cost would likely not include any trips back to the USA or Canada, or even outside of the area for that matter.
Our goal is to live on $2000 USD per month. This assumes that we maximize the amount of time we spend in each country, keeping accommodation costs low due to renting by the month and minimize the amount we spend on airfare or other travel going from country to country.
To date our travel has been a mixture of slow travel like we planned – about 2 months in the Dominican Republic, a month in Paraguay, two and a half months in Spain – and some atypical travel. For example, a spur of the moment 5-day trip to Cuba where airfare and hotel costs were very high by our standards due to the short notice, five days in Iceland on our way back to the USA and Canada – Iceland is beautiful but is not a low-cost country, 48 days in China spending an average of one week per city – our accommodation was mostly “free” using hotel points, but we spent over $1600 on 7 flights between cities. We plan to cut out the short, hotel stay trips altogether now that we are in South East Asia and plan to stay here for the next two to three years. So, we expect our travel habits to get into more of a typical rhythm.
Here is how we expect our monthly costs to break down.
- Housing – $800 – this will fluctuate depending on where we are and how long we stay. A month-long Airbnb stay will likely be in the $500 range while weekly stays or hotels will be more expensive
- Food – $450
- Transportation – $200 – this includes a short flight every few months on average
- Medical – $200 – right now our annual medical policy costs $1600. We may elect to self-insure when this expires
- Personal care – $130 – this includes toiletries, haircuts, clothing as it wears out, etc.
- Entertainment and other – $120 – includes phone and internet charges
- Visa costs – $100 – this will fluctuate month to month depending on where we go and how long we stay.
So there you have it! This is the lifestyle we plan to live on for $2000 USD per month. I will be keeping very good track of our expenses and will give a six month and one year update on how it is going.