Everyone dreams of a free life where you have the opportunity to travel more and work a little less. Unfortunately, few people organize their lives financially to achieve this goal. With a good structure you too can probably free up much more time and money to eventually travel more.
In this article I, Wouter van successmetgeld.nl, you explain everything about how you can arrange it financially so that you have the money and time to travel more.
Table of contents
Travel and freedom are your ultimate dream
The first step is to realize for yourself that travel and freedom are your ultimate dreams. If you don't do this, you are not willing to adjust your life accordingly. You will have to make sacrifices to realize your ultimate dream.
It is good to realize that you cannot have a both-and-and mentality. Of course it's nice if you can constantly buy new clothes, eat out every week, live in a big house and travel a lot. But all this also costs money and let this directly be the obstacle.
It is for very few people to be able to do everything in life. You should set priorities and yours are travel and freedom.
You sell your time for money
I myself no longer see earning money as euros that I receive monthly in my account. In fact, I hated the idea of working 9 to 5 from a young age. Because let's be honest there is a big difference what everyone does in this time. Yet people in the same position often receive the same pay. Even if you do much more than a colleague.
This is because we live in a world where we sell our time for money. Crazy when you think about it, but in most cases, that's still the case. Of course you have to make money and chances are that you have to sell your time for that, but be aware of the value of this.
Time is one of your most precious possessions. As a human being you have a limited time and you want to do a lot in it. You want to explore the world and for that you need time and money. Make sure to balance these two as best you can.
Start with a passive income
With passive income you can finally put an end to selling time for money. Passive income is independent of the time you put into it at the moment. For example, think of the return on an investment, rental income, money you earn from advertisements or selling your own e-book.
For a passive income you often have to do work in the beginning, but over time this generates money without you having to put in any time. With the result that you earn money without having to be at work. So you immediately have more time to travel.
You probably also have opportunities to build passive income. Think carefully about what you could do to make this happen. In the beginning you absolutely have to invest time and money, but over time it will pay off. Just think of your own blog, YouTube channel, real estate or photos that you can sell. Bet that you can also come up with something that can generate money in the long run without having to put money into it right away?
Decoupling Expenses and Income
One of the biggest problems why you probably don't have enough money to travel more is that you let your expenses grow with your income. This phenomenon is perfectly normal and is also socially stimulated.
It is perfectly normal to put your salary increase in an even bigger house, new car or more luxurious life. It is something we are taught from childhood. You save for something and then buy whatever you want.
But do you still feel that way now that you know you're selling your time for money? I think it makes perfect sense to put this money to better use or see if I can work less if necessary.
The most important question you should ask yourself with a next salary increase is, "will I be happier to spend this monthly?". You will see that this is not the case and that you would normally spend this money only through habits.
Because believe me you can spend your money much better!
Start with FIRE
Becoming FIRE fits in perfectly with your dreams in which travel and freedom play an important role. With FIRE you ensure that you are financially independent and can retire early.
You don't do this by living the way you do now! You say goodbye to the idea that your expenses grow with your income and, on the other hand, you start to increase this difference. In short, you are going to increase your income and minimize your expenses.
You will make the difference pay off by, for example, starting to invest. Many people who do FIRE invest in global ETFs. These are investments in which you invest directly in hundreds or sometimes thousands of companies simultaneously. This gives you a good spread from your first euro and you can minimize risks.
If you had invested in an ETF of the 20 largest companies in America over the past 500 years, you would have had a 10% annual return. If you had invested €100 per month during this time, you would now have a capital of more than €75.000 while you had only invested €24.000.
If you want to become FIRE, you do need a larger capacity than this. If you want to know how much you need, you can use the following rule. Your annual expenses * 25 is the amount you need to get together.
You can then live each year on the return on this capital. This is what makes FIRE so much fun! You can hopefully do what you want in this long time, because you have all the time and the necessary money.
Having an make a financial plan is really a must if you want to become FIRE. This gives you much more structure in your finances and increases the chance of actually achieving the ultimate goal.
Also read: Debt, the FIRE movement & passive income
Work less and travel more
FIRE is of course the ultimate dream, but often still far away. It is good to delve into it and see what the possibilities are. Another good option is to work less and travel more.
Before I became a full-time entrepreneur, I worked 40 hours for a long time, but I had a contract for 36 hours. I built up these 4 hours a week as free hours, so that I had more vacation days. This meant that on an annual basis I had 5 extra weeks of vacation.
For this to work, it is very important to minimize monthly costs. Make sure that your salary increase is not going to be spent on fixed monthly expenses, but make sure that you set this aside for travel, for example.
The digital piggy bank is ideal for this. You can automatically save monthly with this piggy bank. The secret of this is that you will see this monthly amount that you put in these piggy banks as monthly payments. It is something that is standard every month, just like your energy costs, rent and subscription costs. I make this automatic deposit on a fixed day of the month after my salary has arrived. This again happens completely automatically without me having to do anything.