Last Updated on August 27, 2022 by Ron
As a perpetual traveler earning income from the road, I get a lot of questions about how exactly digital nomads make money. Here are the most common:
- “So what exactly do you do?”
- “What kind of job allows you to work from anywhere?”
- “How do you fund your lifestyle?”
- “Can anyone work remotely?”
While the digital nomad lifestyle is certainly increasing in popularity, there’s still a lot of confusion about how digital nomads make money. The idea of remote work without a traditional corporate job is still foreign to many people.
After all, we’re conditioned from childhood to think that if it sounds too good to be true, it probably is.
Traveling the world while remaining financially independent? Well, let’s just say it tends to cut against the grain.
The reality is that digital nomads can earn as much money remotely as they put their minds to, with the flexibility to determine their income based on their preferred work-life balance.
The best perk?
You can develop a career that allows for location independence.
Successful digital nomads follow these key principles:
- Finding consistent and rewarding work that can be done remotely
- Going to a location where digital nomads feel welcomed and where they’re treated best
- Planning travel around the ability to connect to high-speed, reliable internet
- Strategically taking advantage of lower cost of living expenses in various regions
In other words, think of “digital nomad” as a lifestyle, rather than a job. This perspective will help you better understand how digital nomads make money.
While digital nomads have a shared vision of financial and location independence, the tactics to get there look different from person to person.
So what does that mean for you?
Let’s find out. Keep reading!
What Do Digital Nomads Do to Make Money?
Yes! You can travel the world and make money as a digital nomad, but it’s not all beaches and pina coladas. (Or even Hakuna Matatas.) Just like any other professional, digital nomads work hard and are passionate about what they do.
In general, there are four types of digital nomads:
- Remote employees. People who work remotely still work for a company or have a “traditional” job, but they still have the opportunity to enjoy the nomadic lifestyle. All they need is a laptop and access to the internet, then they’re good to go!
Software engineers are a great example. In many cases, as long as they’re able to complete their tasks on deadline, they don’t need to sit in an office. This gives them the freedom to work from anywhere they choose.
The same is true for digital marketers. The increased popularity of video conferencing and communications platforms like Slack keeps marketing teams interconnected and collaborative, even if they’re not physically in the same space.
A final example is educators at every level. An increasing number of college courses are being taught online, while demand increases for online tutors, teachers, and art instructors.
- Freelancers. Freelancing often begins as a side-hustle to supplement a full-time income. It’s not uncommon for people to leave their full-time jobs to pursue freelancing as they build their clientele and develop an impressive portfolio.
In recent years, businesses have been re-thinking the workforce, which has led to an increased demand for talented freelancers. In some cases, businesses prefer a freelance worker because they can outsource a project when needed without having to pay a full-time salary with benefits.
Freelancers come in all shapes and sizes. Some prefer short-term contracts in today’s gig economy, working a wide array of jobs that utilize a wide range of skill sets. Others focus on specific, marketable skills such as content writing, search engine optimization, or running paid ads campaigns for clients, potentially developing into long-term working relationships.
If there’s a need in the market, chances are that there’s a freelancer out there doing it!
- Digital business owner. The beauty of a digital business is that you don’t need a physical storefront to provide your goods and services. All you need is a website or online presence of some sort, internet access, and a laptop or tablet.
Some digital business owners choose to offer online courses. Popular niches for online courses include fitness/weight loss, coding, financial planning, and dating advice. If you’re an expert in a subject area, then you are qualified to create an online course and help people learn more!
Another trend that you may have heard about is eCommerce businesses. These digital business owners generally have their orders fulfilled and shipped from a 3PL (third-party logistics) company, though few may choose to handle it themselves. The primary responsibility of this kind of business owner is to attract traffic, then convert qualified leads into sales. As of now, eCommerce only accounts for 19.5% of all retail sales, so there is still plenty of market growth to be had.
- Investors. Many digital nomads travel the world and live off of their real estate, financial, or other types of investments. It’s not uncommon for these digital nomads to reinvest back home or even in foreign markets and investments. These digital nomads are sometimes called investor nomads, nomad capitalists, or nomad investors.
Digital nomads can fit neatly into just one of these categories, but they can also be a mix of any or all of the above.
Again, the emphasis of this lifestyle is to maintain autonomy and control of your life through financial and location independence. Because of that, there is no one-size-fits-all path to a nomadic lifestyle.
So, Exactly How Much Money Can You Earn As A Digital Nomad?
Once people learn how to travel and make money, the next question tends to be, “How much can you earn?”
The answer is simple:
As little or as much as you want.
This aspect can be both nerve-wracking and exhilarating.
Sure, it can be a little nerve-wracking to live without a guaranteed hourly wage or salary, but once you realize the multitude of business opportunities out there, it truly puts the power in your hands.
Let’s get specific.
One in five digital nomads makes over $100,000 a year. This number comes from a study conducted by FlexJobs that surveyed over 500 digital nomads.
$100,000. Not too shabby.
For comparison, let’s take a look at how that compares to the average American household. Keep in mind that “household,” according to the United States Census Bureau, includes all workers, and many households have two working partners.
The average U.S. household income stands at $87,864, which sounds awfully close to $100,000 until you realize that the average is heavily skewed by outliers like Mark Zuckerberg, Jeff Bezos, and Bill Gates.
Instead, we need to look at the median income, which stands at $61,937. Again, many of these households have incomes from not one, but two workers.
If one in five digital nomads is making over $100,000 a year, how do the rest fare?
According to the survey an additional 22% make between $50,000 and $99,000 annually. This means that nearly half make $50,000 or more a year. That’s not too bad for an unconventional career path, especially when you consider that many digital nomads are living in foreign countries with favorable monetary conversion rates!
But… it’s not all about the money.
While digital nomads know how to travel and earn money, they also know how to find the work-life balance that works for them.
If money and financial security is your primary motivator, then there’s no shame in working 40, 60, or 80 hours a week to achieve your goal. As the old adage goes:
Find something you love to do, and you’ll never work a day in your life.– Harvey Mackay
Similarly, if you want to prioritize work-life balance so you can experience different cultures and places, that’s your prerogative.
The choice is really yours and YOU get to choose your quality of life (As opposed to settling for whatever randomness lands on you from your traditional career path.)
If you’re wondering how to make money online for beginners, then we need to talk about the next step: preparation.
How Do You Prepare for Digital Nomad Life?
Preparation is key to succeeding at anything in life. It’s cliche, but like my grandfather always said: “failing to plan is planning to fail,” especially when it comes to how to make money as a digital nomad while traveling.
The good news is that you’re reading this article. You’ve already begun the first step —and that first step is research. Researching what is required to be a digital nomad, researching your destination, and learning about all the different jobs for nomads will help you prepare for this life.
Of course, you must be prepared to improvise. No plan ever goes exactly as planned, but it at least gives you guidance on your journey.
As you prepare, here are a few questions to ask yourself:
- Am I professionally ready to become a digital nomad? Do you have a remote job that would allow you to take the leap immediately? Or are you looking to grow your freelance business before making the move? One of the best ways to prepare is to visualize what your life will look like. Visualize and ask yourself: Where will you live, what will you eat, what will you do for fun, and most importantly, how will you pay to do all of those things? Answering those questions will help you identify any potential obstacles you’ll need to overcome.
- Do I know my legal responsibilities? As much as I wish we could all just simply hop on a plane and travel anywhere in the world, that just isn’t the case. There are considerations like passports, work visas, business licenses, banking solutions, emergency funds, and even figuring out your doctor’s notes and prescriptions. In my post explaining what a digital nomad is, I provide a brief overview on these topics that every potential digital nomad should consider.
- What is my “why”? The difference between successful digital nomads and everyone else is that the successful ones know their “why.” For most, the answer is as simple as the freedom and flexibility to work from anywhere in the world. While that may seem obvious, the reason I bring this up is because it’s easy to lose sight of location independence. It’s tempting to focus on the low cost of living in other places and then become location dependent on those places, rather than truly being location independent. With so many decisions to make along your journey, knowing your why will help make it easier to discern your path forward.
- Do I need coaching? We hire financial advisors to help with our finances. We hire fitness coaches to assist in personal endeavors (marathons, triathlons, or simply to get into shape). And the idea of career and leadership consultants is quite common in the corporate world. So why not consider a coach to help obtain the digital nomad lifestyle? Successful coaches will have the breadth of experience to share the insight necessary to help you achieve the lifestyle you want. They’ll have the answers to questions that you might not even realize you need to be asking!
With so many benefits to being location independent, why isn’t everyone a digital nomad? After all, who wouldn’t be interested in how to make money traveling?
What Stops People from Being a Digital Nomad?
At the end of the day, being a digital nomad requires you to be your own boss. Even if you’re a remote employee with a manager above you, you still need to enforce self-discipline. Without a boss or manager looking over your shoulder, are you still able to get work done and be productive?
This doesn’t mean that you shouldn’t become a digital nomad if self-discipline isn’t your strength. It simply means that you need to begin training and strengthening that professional muscle before jumping in.
Perhaps the biggest factor that prevents people from becoming a digital nomad is risk.
While it’s impossible to predict the future, the element of the unknown is especially daunting in nomadism. Sometimes it feels like you’re jumping off a cliff without a parachute and hoping you can fly.
That’s why the aspect of preparation discussed above is so important. Having an emergency fund, for example, can help eliminate some of the financial stress, since you’ll know you’re covered if business revenue doesn’t come in as quickly as expected or there are hiccups along the way. Risk will always be there, but you can take proactive steps to mitigate it.
However, this can cause some unexpected pitfalls.
Precautionary measures can be a slippery slope towards analysis paralysis. Instead of focusing on the ability to problem-solve, some people try to figure out every single thing that can go wrong. They create endless contingency plans, but in the process, they unintentionally hold themselves back and never take the jump into becoming a digital nomad. Confidence is needed to overcome those internal struggles.
But it’s not just internal factors like risk tolerance, self-confidence, or analysis paralysis.
Sometimes it can be difficult to fight off those external voices. Perhaps your family is doubtful about digital nomadism or your friends are less supportive than you’d like. People are going to have their opinions, and unfortunately, they’re often not afraid to share them.
Even if you’re employed and a remote worker for a company, digital nomadism still isn’t a mainstream lifestyle choice. People tend to be judgmental and skeptical of the unknown.
Of course, none of this is to say that you shouldn’t consider this lifestyle or at least research how to become a digital nomad if you’re interested!
Anyone can do it if they want to and apply themselves. Truth is, as long as you have a source of remote income and location independence, you can do it!
Like I stated above, there’s no one-size-fits-all when it comes to being a digital nomad. But it’s certainly much easier if you have realistic expectations and are aware of the emotional pitfalls along the way.
People transitioning towards a nomadic lifestyle will often hire a coach who can help them make the jump as seamless as possible. With so many things to keep track of (the legal requirements for traveling, generating your own income, and achieving your desired work-life balance), it’s easier to follow the path of those who have been there before you and can show you the way.
For many people, it can even help eliminate that overwhelming sense of risk and mitigate the pitfalls of analysis paralysis. Instead, you’ll begin approaching the journey with a problem-solving and growth mindset.
How Much Money Do Digital Nomads Need to Survive?
Once you understand how to make money on the road and how to make a living online, the next question usually is, “How much money do you need to survive?”
Similar to the different types of nomadic jobs, the wide range of income earned in this community, and the various destinations around the world, there truly is no universal answer.
In reality, it’s not too dissimilar from traditional career paths. At the end of the day, the financial equation remains the same: you want to live within your means and spend less than you take in. Albeit, there are still some factors unique to digital nomadism, including:
- Your location. While many digital nomads go to destinations with cheaper costs of living, that’s not always the case. European cities like Berlin, Paris, Prague, and Barcelona will cost more than living in Thailand. If you’re just starting your digital nomad journey, it might make sense to go to a place with a cheaper cost of living until you find your footing. However, don’t become location dependent on that low cost. Remember, the purpose of this lifestyle is to be location independent!
- Your emergency savings fund. Ideally, everyone should have an emergency savings fund, but this fund is especially important for digital nomads. When it comes to freelancing or starting your own online business, it can take months or even years before you build a steady client base and enjoy stability. Most financial experts recommend having an emergency fund that can cover anywhere between three to six months of living expenses.
Since the cost of living overseas can be much less than living in the west, your emergency fund probably won’t be as large as it would be if you were living in the States. For example, I would usually be prepping for $5K in monthly expenses in the U.S. compared to the $2,000 to $2,500 required overseas. That’s a fifty percent reduction in preparing for nomadic life!
As a remote worker, I also recommend having money in case of an unexpected laptop repair or replacement. After all, you need a way to be able to work online! If you’re living overseas, take unexpected flights for emergency situations into consideration as well.
- Your lifestyle choices. First things first, how long are you expecting to live in one place? In general, the longer you stay somewhere, the cheaper the cost of living becomes. For example, renting an apartment or getting a gym membership for a year is typically cheaper than a term for just 3 months. Relocation itself as well as associated set-up costs can cost money.
Other factors to include are your hobbies and interests. If you enjoy traveling, chances are that you will want to sightsee and enjoy local cuisine wherever you live. In other words, when it comes to budgeting, don’t forget about your personal interests as well! It’s easy to put on blinders and think about your business, but your personal life is just as important!
The best part about being a digital nomad is that you are not limited by an hourly wage or prescribed yearly salary. If you need to earn more money to meet your standard of living, there are always more clients or customers out there to acquire!
This leads to the next question: “Do digital nomads really work just four hours a week?”
How Many Hours Does the Average Digital Nomad Work Per Week?
Tim Ferris popularized the notion of light workweeks with his bestselling self-help book The 4-Hour Workweek.
Ferris has been called “the godfather of digital nomads” and is known for his advice in regards to entrepreneurship, investing, and lifestyle.
Now, the reason 4-hour workweeks are often associated with digital nomadism is because Ferris helped introduce people to the idea of working online. He explained the strategy of creating an online business that’s heavily automated, which allows the business owner to work just 4 hours a week.
Yes, many people still believe that the ideas discussed in The 4-Hour Workweek are both possible and relevant.
However, those people are normally the exception, not the rule.
According to FlexJobs, 30% of digital nomads work more than 40 hours per week. The other 70% work 40 hours per week or fewer. While it is extremely rare to find someone that truly works just 4 hours a week, it’s clear that digital nomads enjoy a far greater work-life balance compared to the rest of the general population.
Though 30% of digital nomads work over 40 hours per week, that number skyrockets to 86% of men and 67% of women with “normal” jobs. The disparity in work-life balance couldn’t be any clearer.
While the 4-hour workweek might seem more like a myth than an acquirable reality to most people, we can still learn several lessons from Tim Ferris’ book.
The first lesson is that if you’re working online, it is possible to automate many of your processes. Automation increases efficiency, which means that you’ll either work less or accomplish more in the same amount of time.
The process of automating workflows will naturally lead you to find ways to be more efficient with your work. Large corporations are known for endless paper trails and bureaucracy, whereas freelancers and digital workers are known to be more nimble and effective in their approach.
How Many Digital Nomads Are There in the World?
If you’re thinking about becoming a digital nomad, it can be a scary jump to take. While the idea seems popular now, the ability to even make money from your laptop is brand new in the grand scheme of things. Unconventional career paths are never easy.
Fortunately, the more a path is traveled, the easier it is to take.
The latest estimate comes from MBO Partners, which finds that there are 10.9 million independent workers in the United States alone. On top of that digital workforce, there are 17 million more people who aspire to become digital nomads.
To put into perspective how quickly this lifestyle is growing, there were just a little over 4.2 million nomads in the U.S. in 2018. That means in fewer than 5 years, digital nomadism doubled in size.
As if those numbers aren’t impressive enough, the global number of digital nomads is expected to rise to 1 billion by 2035. Assuming the population projections hold, that will mean that 1 in every 9 people will live a nomadic lifestyle.
The average age of a digital nomad is 32 years old. In fact, an estimated 42% of all nomads are between the ages of 25 and 40 years old.
Another neat insight is that women are leading the way in this trend.
While it’s impossible to identify a definitive answer, most experts believe that the biggest challenge for professional women is to close the wage gap, especially when motherhood comes into play. Becoming a digital nomad changes this paradigm. Released from the constraints of an office, many women have the ability to shape and create not only their personal lives but their professional lives as well.
Consider this: nearly 30% of digital companies have women CEOs or founders. Compare that to just 5.2% of women CEOs in traditional workplaces. There’s still work to be done, but these numbers are certainly refreshing!
Though we know 10.9 million Americans consider themselves digital nomads, the global numbers are a little murkier.
However, we do know that as of 2021, there are 21 countries that offer digital nomad visas.
These countries are:
- Antigua and Barbuda
- Cayman Islands
- Costa Rica
- Czech Republic
- UAE (Dubai)
Also, 28 countries offer visas that are good for 6 months or more and are digital nomad friendly.
While this doesn’t tell us exactly how many digital nomads there are around the world, it does tell us that it’s a global trend, not just an American trend. As more people learn about this lifestyle and pursue it, you can expect more countries to join this list!
Why Become a Digital Nomad? Is It Right for Me?
The nomadic lifestyle isn’t going to appeal to everyone, and that’s ok! If it does appeal to you, then you’re probably wondering, “Is digital nomadism right for me?”
Just like any other lifestyle or professional goal, there are pros and cons.
Before weighing out the pros and cons, it’s important to go back to your “why.”
Do you want financial independence? Do you also want location independence?
If you answered “yes” to both of those questions, then it is certainly worth considering the nomadic lifestyle.
This independence allows you to work on your own terms, enjoy greater freedom and autonomy, experience incredible self-growth, determine your own work-life balance, and have the opportunity to get more bang for your buck.
Now, to determine whether this lifestyle is right for you, consider the traits of successful digital nomads:
- They have an open mind
- They embrace a risk-taking attitude
- Their skills include planning and decision-making
- They have the ability to improvise when things don’t go as planned
- They are generally tech savvy
If these descriptors accurately describe you, then the nomadic lifestyle is definitely one to consider!
Is it Possible to Become a Digital Nomad or Location-Independent Entrepreneur Without Any Skills?
Making money while traveling may seem like a dream, but it’s possible!
Even if you don’t feel like you have any skills, odds are that there are digital nomad jobs that you can do. Remember, being an “expert” is not a requirement of digital nomadism. As long as you have the ability to access the internet, there are plenty of entry-level opportunities that you can partake in.
And there are some skills that you might not even realize are skills.
For example, if you are a native English speaker who has been speaking English all your life, why not become an online English teacher? In most cases, you’ll need a TEFL certification (Teaching English as a Foreign Language), but it is possible to find jobs that don’t require a degree or certification. In fact, you might even look into finding your own students and tutoring them rather than becoming a full-time English teacher.
Are you an active user of Facebook, Instagram, and TikTok? Then chances are that you already understand these platforms inherently. With some research and practice, you can learn how to use these platforms from a business perspective and help small businesses manage their social media presence.
In short, there are digital nomad jobs in different industries that account for different skill sets.
Perhaps more important than one specific “skill” is a growth mindset.
With a growth mindset, you’ll realize that there’s always more to learn and know — and as you learn more, you earn more skills, which in turn creates more services for you to provide to your customers or clients.
Are you considering becoming a digital nomad?
Are you unsure about what to do next or whether or not this is even right for you?
I was once in your shoes and have helped countless people discover the next steps in their journey.
If you’d like to learn more about becoming a digital nomad and get help on your journey, click here to get your FREE Lifestyle Transformation Game Plan!
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