If you’re here, it’s pretty safe to assume it’s because you feel like something needs to change in your life. Most likely, you hate your job. Very likely, you love to travel.
I feel for you. The last time I worked a desk job (2013), I was so unhappy that I was actually numb. That quote from Thoreau comes to mind: “Most men lead lives of quiet desperation.” No one knew how deeply miserable I truly was.
Six months into that job, I quit—which surprised everyone—with the vague goal of “starting my own business.” But what I really wanted was to travel the world.
Starting my own business at the age of 22 with no entrepreneurial background was as foolish as it sounds. I had no idea what I was doing. I went broke. I ate peanut butter out of the jar for dinner. It was awful. But, I was free.
It took about a year, but I finally set off for South America. I ended up staying nearly 5 months, working online as a freelance writer and marketer.
Since then, I’ve been working for myself and I haven’t looked back. I now make more money than I did at my desk job and work far fewer hours than I did back then—and I’m doing what I love!
The term “digital nomad” keeps popping up everywhere these days, and whether you love or hate the buzzword, it’s the best way to describe this growing crowd of people working remotely and traveling the world.
In this detailed blog post, I want to share with you how to become a digital nomad, based on my own experience and the experience of other successful remote workers out there.
What Is a Digital Nomad?
I’m not going to pretend that everyone is in agreement on the definition of a digital nomad, but here’s my definition:
A digital nomad uses technology to make money so they can be wherever they want. They change locations frequently.
At its core, becoming a digital nomad really only requires 2 things:
- The ability to make money remotely
- The ability to travel
Digital Nomad versus Location Independent
I’m not going to get into this longstanding debate, and I don’t think it really matters, but for most purists, a digital nomad is someone who works from their laptop, travels full-time, and doesn’t have a home. I’ve certainly lived that lifestyle when I moved out of my apartment in California and then wandered around South America in 2014 for nearly five months and then again in 2015 when I moved out of my apartment in California and took a backpack to France, living in Paris for five weeks.
These days, I consider myself more “location independent,” as some health issues have meant I need to stay in the U.S. and forgo some of my foreign travel plans.
Digital Nomad Salary: How Much Does a Digital Nomad Make?
The answer varies widely, but let’s take a look at the data collected by freelance platform AND CO.
AND CO: 57% of remote workers make less than $50K/year
In a May 2018 survey of 3,755 remote workers (of which 24% consider themselves digital nomads), AND CO found that 57% of remote workers make less than $50,000 a year. The top 1% earn $200K/year or more.
FlexJobs: 18% of digital nomads make six figures or more
In a 2018 survey of digital nomads, FlexJobs found that 18% reported making six figures annually or more, while 22% said they make between $50,000 and $99,999 a year.
The Digital Nomad Census: 50% of digital nomads earn at least $2,000/month
In 2016, by Peter Knudson and Katherine Conaway surveyed more than 150 digital nomads spanning 31 different nationalities. This “Digital Nomad Census” found that half of digital nomads make $2,000 a month or more.
All of these surveys were relatively small sample sizes, but they give you an idea of what’s possible when it comes to a digital nomad’s salary!
How Digital Nomads Make Money: 8 Job Ideas (With Real-Life Examples!)
To take care of the first part of becoming a digital nomad (making money remotely), every possible option falls under the larger umbrella of these two options:
- You’re either going to be an entrepreneur or…
- You’re going to be an employee.
You just have to be able to do either remotely.
Option #1: Becoming a Remote Employee
This is probably the most popular way to become a digital nomad. Most of us are remote employees who roam the world while they work.
Becoming a remote employee is perfect for digital nomads who:
- Don’t want the risk of entrepreneurship
- Enjoy the safety net of an employer
- Have no business skills
- Want something steady
- Already have a job they love and would like to make it remote
Real-Life Example: Pauline Chin, Support Engineer at Salsify
As she shares in this video, Pauline actually asked her employer if she could go remote—and it worked! Way to go, Pauline!
Option #2: Freelancing/Consulting (Selling Services)
This is where I got my start! And if you definitely do not want to be an employee but have no business experience, I strongly recommend you start here.
Freelancing is great for digital nomads who:
- Are brand new to entrepreneurship
- Have little to no money to start a business
- Have a skill that people will pay for
- Enjoy working with people
Ideas for services you could sell:
- Software engineering – This is a HUGE one in the nomad community, and you can get paid extremely well for this. In fact, a 2018 AND CO survey of remote workers found that engineers out-earned digital nomads in the creative, marketing, and PR fields—with 19% of engineers earning at least $100K/year.
- Web design
- Graphic design
- Freelance writing
Real-Life Example: Melissa Packham, Freelance Brand Strategist
In 2016, Melissa and her husband quit their jobs to start traveling, and she realized she could use her skills to make money while they were digital nomads.
Option #3: Dropshipping
Dropshipping is another popular route for digital nomads thanks to its low startup costs and its relatively small amount of work. The best definition of dropshipping I’ve found comes from Shopify:
Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.
Can you see now why so many digital nomads love this business model? It doesn’t require you to be in any certain place—you don’t have to buy or store inventory, you don’t have to package the items, and you don’t have to deal with returns. It’s very remote.
Dropshipping is great for digital nomads who:
- Have a little bit of experience with entrepreneurship
- Have a little bit of money to start a business
- Don’t like dealing with customers or clients
Real-Life Example: Johnny FD
Johnny FD is well-known in the digital nomad community, and I highly recommend you read his blog to learn what it’s like being a full-time location independent entrepreneur.
He’s big on dropshipping, and he once made $90,419.77 NET PROFIT in one year from it.
In recent years, Johnny actually sold his dropshipping stores. But in 2018, he dipped his toes back into the waters and made $11,354.49 dropshipping in 2018 (just one of his 11 or so income streams). In his best month in 2018, his dropshipping store brought in over $9K!
Option #4: Ecommerce
Ecommerce is similar to dropshipping, except in this case, you will own your product. BUT, instead of having to ship it yourself, you can hire fulfillment centers to do it for you (think Amazon FBA, where you send your product to Amazon warehouses, and when someone places an order, Amazon ships it for you).
Ecommerce is great for digital nomads who:
- Are intermediate-level entrepreneurs
- Have a bit more capital to invest in product
Real-Life Example: Doug Barber, Co-Founder of Minaal
- While I’m not sure if Doug considers himself a digital nomad, I stumbled upon this awesome interview by Jodi of Legal Nomads about his journey from corporate lawyer to the founder of popular backpack ecommerce store Minaal. He also travels a lot and can work remotely.
Option #5: Blogging for “Passive Income”
Blogging is great for digital nomads who:
- Have a LOT of patience
- Are doing something else to earn a full-time income while they build up their blog
- Want the most “passive” online income possible
- Don’t want to deal with customers or clients
Real-Life Example: Michelle Schroeder-Gardner of Making Sense of Cents
Michelle and her husband travel the U.S. in their RV while she makes money from her popular personal finance site, Making Sense of Cents. She does this through multiple income streams, including affiliate links, her online courses, sponsorships, and ads.
In November 2018 alone, Michelle pulled in $159,592.42 in gross revenue from her blog!
Option #6: SaaS
Software as a Service (SaaS) is convenient for digital nomads because there’s no physical product, meaning you’re not tied to a location to run this kind of business. It’s all digital. SaaS can also have a monthly recurring revenue model, where you automatically charge a subscription fee to customers who wish to continue accessing your service. And MRR is coveted among entrepreneurs for its stability and predictability (though, of course, people could always cancel).
For SaaS examples, think Google Drive, Slack, and Dropbox. These applications provide a technological service that you could pay for on a recurring monthly or yearly basis (there are free versions too). You don’t have to purchase a license and then install the software on your computer in order to use it, hence why it’s called software as a service.
Obviously, though, if you go the SaaS route, you’re either going to have to know how to code or hire someone to code for you.
Real-Life Example: Sarah and Andrew of Canny
Sarah and Andrew are coders who left their jobs and San Francisco to start a SaaS company (Canny)and travel the world—and as of this writing, they’re still at it! A few days ago, they were in Lisbon meeting up with the rest of their remote team.
Option #7: Mobile Apps
If you’ve got coding skills, you could create a mobile app, put it on iTunes or Google Play, and earn passive income from an app purchase fee, ads, or subscription fees.
Real-Life Example: Candy Crush Saga
This addictive gaming app rakes in an estimated $1.48 million a DAY according to Think Gaming. Granted, it was created by a game company with tons of employees. If you’re coding on your own, you probably can’t expect millions, but you could still earn enough to live comfortably in Thailand or Indonesia.
Option #8: Membership/Subscription Service
This business model is great because it relies on recurring revenue—every entrepreneur’s dream because it’s relatively steady and reliable. The downside is you’ll have to worry about churn rate, which is the rate at which people cancel their subscription.
Example: Nomad List. This site is run by Pieter Levels, who’s pretty popular in the digital nomad community. Nomad List curates information on 1,200+ cities, ranking them based on factors that matter to digital nomads, such as free Wi-Fi, Internet speed, cost of living, and friendliness to foreigners.
According to the site, Nomad List makes money mostly from its membership fees and secondarily from its advertisements.
How to Become a Digital Nomad in 6 Steps
Step 1: Decide what kind of lifestyle you want.
Why do you want to become a digital nomad? What are you hoping to gain from it? Do you want to live off $1,000 a month in Southeast Asia, renting at cheap hostels, eating street food, and lounging on the beach in your free time? Or do you want to live the high life in Paris, renting your own apartment overlooking the Seine and eating at the fanciest restaurants? (For that, you’re gonna need way more than $1,000/month!)
Once you lay the groundwork of figuring out exactly what you want out of the digital nomad life, and exactly what kind of lifestyle you hope to lead, the next steps will become much easier.
Step 2: Check the cost of living in potential destinations and create a budget.
Okay, now that you know the lifestyle you want to live, you’ll need to figure out which destinations can support that. You’ll want to research the average cost of living in your target destinations and create a rough budget to know how much you’ll need to earn to live there.
Side note: In 2018, I started using You Need a Budget software to track my income and expenses both personally and for my business—and it has CHANGED everything. I can finally see my cashflow and understand what I can and cannot afford. I recommend you check it out! The first 34 days are free.
Step 3: Decide what kind of business you’d like to set up (alternatively, seek remote employment)
A business has to sell something. There are three things you can sell
- Physical products (T-shirts, furniture, food, etc.)
- Digital products (eBooks, software as a service, etc.)
- Services (design, web development, marketing, writing, etc.)
If you want to become a digital nomad, I highly recommend you start by selling freelance services first. After that, you can transition to physical products, once you’ve had the experience working with real people and solving their problems. Selling physical products (though totally possible!) is difficult because it requires you to store them in locations, package and ship them. You don’t want to do that if you’ll be traveling all over the place. It limits your freedom.
How I Did It: I drew upon my current job and skill sets
No need to reinvent the wheel! At the time, my desk job was on the marketing team of a startup. So what did I do? I left to do freelance marketing for startups! This allowed me to use my current skill sets and job as a selling point to startups. With my experience, I understood their culture and problems–and how to solve them. I also drew upon my previous experience as a journalist. I leveraged the skills I used as a reporter (problem-solving, meeting deadlines, writing) to become a better marketer.
Step 4: Find clients, customers, or an employer
Don’t wait for clients to come to you! When you’re new to freelancing, people don’t even know you yet. The best ways I’ve found quality, well-paying clients is through researching ideal clients I wanted to work with, contacting them directly, and pointing out exact things I’d like to help them with, and what my strategy was.
- AngelList has thousands of startups just getting funded. They need to start building their team. Often, these jobs they post are remote-friendly!
- Working Nomads
- Facebook groups
- Cold email your favorite businesses
- Friend and family
- Your employer or former employer
How I Did It: A mix of referrals, freelancing sites, and cold emails
At first, I relied completely on referrals and…Craigslist! I know, I know, you think this is crazy, but I promise you all the clients I got from Craigslist were high-quality and paid me when I invoiced them. In fact, my oldest client (and one of my favorites!) is a startup that found me on Craigslist.
I also made sure all my friends knew that I was doing freelance marketing and writing, so when a friend knew someone who needed marketing/writing help, they passed their info on to me. I got a couple of clients this way.
By far my best strategy for finding freelancing clients has been through cold emails. I basically research startups that I’d love to work with, follow them for a few weeks or months, and try to pinpoint ways they can improve their marketing and grow their revenue. Then I send an email directly to the founder and present my plan for helping them. It works!
If you already have a job and you’d like to keep it, find a way to make it remote
In this day and age, it’s quite common now for companies to allow their employees to work remotely. Some companies like Buffer and Automattic (parent company of WordPress) have completely remote companies!
In The 4-Hour Work Week, author Tim Ferriss explains a really good strategy for working out a remote working deal with your current employer: He suggests starting small with trial periods. For example, ask your boss if you can work from home for a few days, or while you’re traveling. Then, knock it out of the ballpark! Be extremely productive so at the end of it, you can show your boss that you’ve proven you can be productive while working remotely. After you’ve shown the proof, work out a longer-term remote work deal with your company.
Step 5: Start downsizing your life.
While you could keep your house/apartment, car, furniture, pets, etc., while you travel the world, the truth is, if you plan on being gone for longer than a couple of months—that’s going to be expensive!
- Get rid of rent/mortgage. Instead of paying your mortgage or paying your rent while you’re gone, consider selling your house or renting it, or consider moving out of your apartment. You can always find short-term accommodation while you travel (I HIGHLY recommend Airbnb).
- Find your pets a good home. I’ve known nomads who had to give their pets away in order to travel the world for an extended period. This is a TOUGH decision to make. Try asking family members and friends if they can care for your pets while you’re gone; this can be temporary, and you can get them back when you return.
- Sell any belongings you can’t carry with you or put them in storage. I think most people opt to just sell their stuff because storing them racks up another monthly cost, and you don’t know how long you’ll be gone.
- Sell your car or put it in storage. When I was in South America, my car was being stored at my parents’ house.
- If you have car insurance and you want to store your car, be sure to get your insurance premium lower! Again, while I was in South America, I contacted my auto insurance company, and they were able to lower my insurance premium if the car would be stored while I was away and no one would be using it.
- Get good travel insurance. I usually use World Nomads.
Step 6: Road test your business
Transitions are difficult, especially when you’re going from the “typical life” to the digital nomad life. I recommend starting off with a shorter trip and having a fallback plan before you go full nomad.
For example, before you sell your house and belongings, get your remote income streams down pat. Then, go on a shorter trip, say, 3 weeks, and see how it goes.
That way, if you realize you hate traveling and working at the same time, you can always return to your house. If you love the road test though, you can go back home and make things final (i.e., sell your house and stuff).
How I Did It: I started with a 3-week visit to South America that turned into a nearly 5-month stay.
Start small. Traveling while working may sound glamorous, but I can tell you from experience it can be exhausting. For my first big trip as a digital nomad, I went to Peru and Argentina with my mom for a 3-week trip. Only after I felt comfortable in South America did my mom head back to the States, and I stayed to venture solo.
10 Best Digital Nomad Cities
It’s pretty safe to say that the region of the world most digital nomads flock to due to its warm weather and cheap cost of living is Southeast Asia.
Below, I’ve sourced data for the top 10 digital nomad cities from this awesome website called Nomad List. Definitely check out Nomad List for a full list of city rankings, along with pertinent info such as cost of living, Internet speed, and friendliness toward foreigners.
#1 Canggu, Bali, Indonesia
Cost of Living: $1,273/month
Internet Speed: 20mbps
#2 Chiang Mai, Thailand
Cost of Living: $1,121/month
Internet Speed: 20mbps
#3 Bangkok, Thailand
Cost of Living: $1,480/month
Internet Speed: 20mbps
#4 Medellín, Colombia
Cost of Living: $1,247/month
Internet Speed: 8mbps
#5 Mexico City, Mexico
Cost of Living: $1,530/month
Internet Speed: 15mbps
#6 Prague, Czech Republic
Cost of Living: $1,975/month
Internet Speed: 17mbps
#7 Buenos Aires, Argentina
Cost of Living: $1,317 / month
Internet Speed: 7mbps
#8 Lisbon, Portugal
Cost of Living: $1,998 / month
Internet Speed: 21mbps
#9 Seoul, South Korea
Cost of Living: $2,367/month
Internet Speed: 27mbps
#10 Barcelona, Spain
Cost of Living: $2,968/month
Internet Speed: 40mbps
Digital Nomad FAQs
How do digital nomads pay tax?
**Disclaimer** I am NOT an accountant or tax professional, so this is not tax advice. Seek your own professional counsel for this one.
Because the ability to work from anywhere in the world is fairly new relative to tax law, digital nomad taxes can be complicated. Here are some resources you can check out:
- I interviewed a U.S. tax attorney about digital nomad taxes
- Andrew of Nomad Capitalist works specifically with digital nomads to help them legally lessen their tax bill
American digital nomads may be able to qualify for something known as the Foreign Earned Income Exclusion (FEIE). Definitely speak with a qualified tax adviser and help them understand your unique situation.
Do I have to sell my belongings?
No. You can store them instead or keep them in your house/apartment (if you hold onto that too), but this is going to incur a LOT of extra expenses that you’re not even going to be using. It just depends on your funds.
How will I find places to live if I’m moving so much?
This is, admittedly, a VERY stressful part of nomad life. Because we digital nomads don’t sign the typical 12-month lease or own a house (usually), we’re constantly scrambling for a place to sleep at night.
The number one way I live nomadically is by using Airbnb. It’s flexible because you can stay for as short as one night up to one month or more. And you can book last-minute (like, the day before).
What will I do for healthcare? Is there such thing as digital nomad insurance?
This is another tricky part of being a digital nomad. For me, since I don’t stay abroad for more than about four months at a time, I keep my American health insurance and save medical visits for when I return to the U.S. While I’m abroad, though, I DO purchase travel insurance that covers emergency medical visits while I’m traveling. For this, I use World Nomads.
Digital Nomad Resources I Think You’ll Love
- The Earth Awaits Dubbing itself as “the world’s most flexible cost of living calculator,” this site plays matchmaker between you and various cities based on your budget, lifestyle, and other criteria.
- Nomad List – Part database of digital-nomad-friendly cities, part community of digital nomads.
- Nomad Capitalist – Andrew helps nomads legally lower their tax bill.
- Stewart Patton, U.S. tax attorney – Stewart works with expats and brings all his knowledge as a U.S. tax attorney.
- Workfrom – If you like to work from coffee shops, this website is a MUST-use! It allows users to upload info about how friendly certain coffee shops are toward remote workers.
- Travel Like a Boss – Hosted by Johnny FD, these podcast episodes are chock full of real-life examples and actionable advice. It’s fun and laidback too; you’ll feel like he’s a good friend just chatting with you.
- Nomad + Spice – A podcast dedicated to helping women digital nomads! Hosted by two long-term nomads.
Books & Courses
- The 4-Hour Workweek
- I have to say that I don’t fully agree with many of the practices Tim Ferriss recommends in this book. However, this book is what inspired me to quit my job in 2013! It opened my eyes to this beautiful world of remote entrepreneurship. When I read this book, that’s when I started planning to turn in my two weeks’ notice.
A great read for anyone thinking of traveling long-term. Lots of information, both practical and inspirational.
- Udemy – Literally thousands of courses on every topic imaginable for as low as $10.99. You can learn almost anything online these days and then start charging for your skills as a freelancer/consultant
- Airbnb – My go-to app for accommodation. For the past few years, I’ve practically lived out of Airbnbs.
- Booking.com – On the rare occasion that I choose to stay at a hotel, I use Booking.com. I usually find good deals here, and I love that most of the bookings allow you to cancel free of charge up to a certain time before check-in.
- Kayak – All my flight searches start with Kayak because it’s an aggregator. From there, I might check some other travel search engines.
- Skyscanner – This one’s fun if you don’t have a set place in mind. You can search by price instead. You can even select “Everywhere” and just see where the cheapest place to fly is for a given timeframe!
- Timbuk2 Aviator Backpack (30 Liters) This is my FAVORITE backpack to travel with, but for many, it may be “too small.” I managed to pack for 5 weeks in Paris with a Timbuk2 Aviator.
- MacBook Air 13″ – Seemingly the laptop of choice for digital nomads! Probably for its light weight and packability. That said, it IS pricey. This is what I travel with. Sometimes, though, I’ll leave the MacBook behind and bring a cheap Lenovo laptop/tablet.
- NordVPN – Since you will be working from many public places, such as coffee shops and coworking spaces, I cannot stress to you enough how essential it is to have a VPN. It protects anyone from seeing what you’re doing online while connected to public Wi-Fi. I use VyprVPN, but NordVPN looks good too and has good ratings.
- World Nomads – This is the insurance I use when I travel. It’s especially useful for nomads because they allow you to begin insurance coverage AFTER your trip begins (very hard to find!). So if you decide to extend your stay in Bali and need to extend your travel insurance, World Nomads lets you do that.
- Safetywing – I’ve never used this company, but they position themselves as travel medical insurance for digital nomads.
Other Posts That Might Interest You
- Your Digital Nomad Tax Questions Answered by a U.S. Tax Attorney
- Living the Dream or Living a Nightmare? Working Online While Traveling Isn’t Paradise