The Digital Nomad Lifestyle: How to Make Money, Travel, and Live a Balanced Life
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Spend any amount of time on YouTube, listening to podcasts, or even reading articles from big business, you might think the digital nomad question is something every independent worker needs to contemplate. Like it's part of “the process.”
Remote work has become more widespread thanks to the advancement of tools and technology.
This has brought up a lot of questions about the best way to do things as a remote business owner or freelancer.
Should you set up a home office and cram in the hours? Choose to work by setting up a “home base” in a cheap inexpensive location (maybe even internationally) that has access to solid internet? Take advantage of your ability to work remotely to travel constantly while working?
If you're curious about what a digital nomad is, you're almost certainly wondering if that type of remote work life really is possible.
The simple answer is yes, it is, but it's a much different lifestyle than most people imagine.
Read on to learn the pros and cons of being a digital nomad, how digital nomads make money, and whether or not this work lifestyle might be right for you.
- What Is a Digital Nomad?
- The Explosion of the Digital Nomad Lifestyle Idea
- How the Digital Lifestyle Works
- What Do Digital Nomads Need? Work Visas?
- How to Make Money as Digital Nomad
- Pros of Being a Digital Nomad
- Cons of Being a Digital Nomad
- Top Digital Nomad Destinations
- The Digital Nomad Visa
What Is a Digital Nomad?
In fact, the term is used so often that it can feel like it's an industry standard words that has been around forever. A book published in 1997 appropriately titled Digital Nomad is one of the first places where this term is used.
Basically a digital nomad is a worker or business owner who uses digital technology. Skype, email, Instant Message, and other online programs allow work to be done at any location where the worker can get a good internet connection.
The rise of the internet and advancement in telecommunications technologies have made remote business much more viable than it used to be.
Because of this remote work positions have grown enormously. As has the number of people working as freelancers.
There are millions of freelance workers, but a much smaller percentage are actually what you would call digital nomads. Despite the 1997 book, the term itself really didn't grow its full legs until much later.
So what changed?
The Explosion of the Digital Nomad Lifestyle Idea
There were several major events that helped to create such a movement for an idea that had been around but really didn't sprout legs the previous decade.
One of the big ones was timing of a popular best-selling book, The 4 Hour Work Week by Tim Ferriss.
This book was published in 2007 and found millions of readers. The information on building a business, outsourcing it, traveling off passive income ideas, and maximizing lifestyle by living abroad was far less common at the time.
The book caught a lot of attention for good reason. Even if the term “digital nomad” wasn't specifically used, the information in that book coincides with the life. It talked about remote work. About living abroad.
In fact, many point to that book as what opened their eyes to the possibility of a digital nomad lifestyle.
The fact that the end of 2008 marked a massive worldwide recession definitely added to the openness of people looking to control their own income, survive tough times, or explore living in cheaper places while finding a way to make money online.
Mix in the wide array of ways to break into making money online that were available and there was just the perfect mix for an idea like becoming a digital nomad to take off.
So was this a one-time thing? Something that could only work back then but no longer applies to today's online world?
While things definitely have changed a lot since 2008, the digital nomad community is thriving more than ever.
The idea of being a modern group of nomads who can explore the world, move to better or cheaper places, and use technology to still build up a career while traveling the world isn't getting old. It's hard to imagine a pitch like that is ever going to lose its luster.
There are many ways to take advantage of skills like affiliate marketing, content writing, coding, or teaching English online to make a fantastic income regardless of where you live.
As long as this is the case, there will be plenty of people intrigued by the idea of being a modern day nomad.
How the Digital Lifestyle Works
There are several reasons that this idea of being a digital nomad can be a great idea for the right people.
Being a digital nomad focuses on a few important points:
- Taking advantage of much lower living expenses in cheaper locations
- Finding consistent work that can be done from a remote location
- Finding a location that is welcoming to digital nomads
- Planning re-location or travels around the ability to connect using online tools
Using all of these effectively is key to making the digital nomad lifestyle works. Living in an inexpensive part of the world means every dollar goes further.
If you live in a more expensive area like the United States, United Kingdom, or Canada moving will save you money. At least if you go to the many interesting places in the world less expensive than those three countries.
You will find many places across the world that are interesting, offer adventures to travelers, and where expenses of all types are much cheaper.
Money stretches much further in a city in Thailand or Mexico than cities like Chicago or London.
There are many great places where housing, food, and other major living expenses can cost half as much as where you live now.
Maybe even less.
Moving to less expensive areas in a foreign country allows digital nomads to get more out each dollar. Less money is needed for all the basic necessities. Not to mention the awesome new experiences from seeing a new place.
Even entertainment like eating out or the movies cost less. That means your lifestyle can often be better in locations where the cost of living is lower.
When you can afford to do more for less money you tend to live better.
Inexpensive places known for having good consistent internet access will naturally be attractive. This has the snowball effect of drawing in more digital workers because a community forms.
Good internet access plus a strong nomad community will tend to self-sustain itself eventually.
Being around like-minded workers who can give moral, social, and even business support is a part of the lifestyle that many people find absolutely crucial for any type of long-term success.
What Do Digital Nomads Need? Work Visas?
From an equipment standpoint the needs of a digital nomad are actually quite simple.
- A good laptop
- Online backups in case a new computer is needed during travel
- Online tools to keep you in touch with employers (if you're a remote worker instead of entreprenuer)
- Passport and visas
- Enough money to fund several months of travel or get an inexpensive apartment to base yourself out of.
Since the work is going to be digital, that means someone looking at the digital nomad lifestyle can (and should) build up their steady clients and revenue from remote work prior to traveling.
Getting to the point where you have a full-time income online makes taking off as a world traveler much easier.
An excellent question that comes up frequently about this lifestyle is: “Do digital nomads need work visas?”
This is a legal gray area where getting a straight answer isn't easy or necessarily even possible. There isn't a work visa for digital nomads available as of this article. The world hasn't quite caught up to just how many of these workers there are traveling internationally.
There are a few countries where a self-employment visa covers this type of work.
Portugal is one of these countries (and they are working on a new digital nomad visa). In many others the gray area goes with you being considered as doing business (or your home business) is based in the country you're from.
So you're taxed as if working in your home country even if you're half way across the globe.
Remote working has its downfalls. But most of these do have work arounds. Visiting a digital nomad hub to get advice from other successful modern nomads helps.
Then there are weird gray areas where a country encourages digital nomads to bring in the tourist dollars, but technically it's not legal to be working, and there's no mention in local laws of what online work counts as. This is an area where you should research based on where you're looking to travel.
Also consider reaching out to the established nomad community there for advice or guidance.
How to Make Money as Digital Nomad
One of the most important parts of being able to live that location independent lifestyle is being able to create a steady source of income.
It's definitely true that some parts of the world offer more value for each dollar you spend than others.
But you still need a minimal amount of revenue to make the situation work.
There are many ways to make money online while living this lifestyle. The key is finding one or more revenue streams that you can make work. Preferably before the first plane ticket.
This can come from an existing online business. Or from offering digital marketing services you can do as a location independent remote worker. Or even cobble together a bunch of freelance gigs.
You have options.
Freelance writing jobs for beginners is one of the most common options. This is an easy field to break into, there is a ton of work available, and good writers can work from anywhere while making some serious revenue.
Especially for inexpensive nomadic hubs like Canggu or Cebu City.
If you can make the jump from freelance writing to copywriting then that can generally be how to make even more money with your writing. This is because good copywriting is always in high demand.
Interesting in getting paid as a writer. Learn from a digital nomad writer right here.
Affiliate Marketing or Dropshipping
Affiliate marketing is not only a great way to make money but to create a solid passive income stream that can make it even easier to travel.
This is one of the most popular ways for people to set up a world nomad lifestyle and gives a certain safety net many people find appealing.
This does take some time to ramp up, especially for true beginners. That being said, following the guidance of courses like Authority Site System or Making Sense of Affiliate Marketing can speed up the process to building up that traveling safety net.
Dropshipping requires a little more monthly work and attention. This is an area that tends to be a bit more detail-oriented.
The extra research, attention, and up-front money means it's not truly passive but the potential for serious earnings while traveling internationally is really high. The Instant Ecommmerce course is a really good guide for if you decide this is the path for you.
Teaching English is another great way to survive while joining the digital nomad lifestyle. If you're going to teach English in person while staying at an overseas location, you will need the proper work visa.
If you're taking advantage of websites like VIPkid.com, LetsTEFL.com, or Teachaway.com which specialize in matching online English tutors with students.
While having a degree or certificate helps, that's not necessary. If you have a mastery of the English language and are willing to teach, this is a route that is open to you.Try Teaching English and Traveling Here
Classic Remote or Freelance Work
Finally, there's classic freelance work. Any job that can be done remotely can generally fit into the digital nomad lifestyle. Coding, building niche websites, SEO work, online marketing, and graphic design are just a few examples.
For individuals who already have a true remote work position, making the jump can be a bit easier than expected.
This is how I often visited old friends in Alaska, Florida, or even took week-long trips to Vegas while I had a job in Austin, TX. This wasn't full digital nomad. But as long as the work was done the boss didn't care where I was.
If you find yourself in that situation, there's no reason you can't be elsewhere in the world as long as the work gets consistently finished and you know you're not getting called into the office.
The top couple of placed to find freelance work are Upwork and Fiverr. Read our Fiverr vs. Upwork article.
Pros of Being a Digital Nomad
So should you be a digital nomad? The answer depends a lot on the individual. For some people this actually doesn't sound that appealing.
If they were born and raised in a place they love and are surrounded by family, there's nothing wrong with conventional working from home.
There are plenty of freelancers who make really good money.
Digital nomad pros:
- Lots of travel and opportunity for adventure
- Living a better lifestyle value for the money spent
- Learning strong self-motivation and independence skills
- Connecting with the strong digital nomad community out there
- Ability to be more creative and adaptable
- Many people find themselves more productive
- Amazing memories and stories to tell
- Build skills you can always use as a side hustle if you go back to a regular job or lifestyle
Cons of Being a Digital Nomad
While there are a lot of amazing benefits to going with the digital worker lifestyle, it's not all turquoise waters and fruity beach drinks. There are plenty of challenges with being a traveling nomad and honestly these probably don't get talked about as much as they should.
The first negative is the level of hard work. While there are those who have built up the type of affiliate income that they can do anything they want, most of us aren't in that boat.
Talk to any freelancer or small business owner. They will tell you they work more than anyone with an office job.
You may be working near a beautiful beach or within view of some amazing ancient ruins, but you will be working.
Working independently is hard, and you need to put in a lot of productive hours to make it work.
As long as you understand that, you're starting in the right mindset to succeed in the digital nomad movement. Once the money comes in, make sure to take some time for work life balance.
Otherwise what's the point of that long term travel?
Working for yourself means you have all the negatives that come with self-employment. No employer provided health insurance. No paid holidays or sick days. You finish work, you get paid.
But you don't get paid until you do. There's also no built-in social life.
The cons of being a digital nomad:
- Can be very lonely, including hard to date/have relationships
- You're 100% responsible for managing time, motivation, and productivity
- Easy to become workaholic and not enjoy the full benefits of being a digital lifestyle
- You miss all the “regular life” special moments & milestones
- Very little understanding of your lifestyle from friends and families
- You may find yourself yearning for stability or a consistent home
There's an excellent article on the dark side of the digital nomad life by Mark Manson, a best-selling author and fairly big name in the location-free lifestyle world.
It's worth a read for a more in-depth look at this particular topic.
Top Digital Nomad Destinations
There's no question that certain locations around the world are just much more friendly to the digital nomad lifestyle. The key here is a combination of being inexpensive, welcoming to foreigners/outsiders, and having a really good internet infrastructure.
A solid community of fellow digital nomads is also a big plus. Not just for business advice or mentoring support, but also social and personal support.
The digital nomad life can be lonely if you're going solo. Having others who understand your lifestyle and share in those challenges makes a huge difference.
So what are the most popular destinations for digital nomads?
Chiang Mai, Thailand
While Thailand in general is incredibly popular with digital nomads, Chiang Mai in particular is considered one of the most popular spots for digital nomads in the world.
In fact the city has held that title for a several years. They have an amazing array of coffee shops, internet cafes, and open workspaces inviting digital workers in.
The city features a very low cost of living. You get a lot of bang for your lifestyle buck here.
The city is out of the way of tourist trap cities. The city thrives as one of those rare spots where digital nomads can blend in with local life, with an expat community, or have the best of both worlds at the same time.
There's the expensive resort side of Bali, but then there's also the cheap but comfortable side of living. Canguu is an area that offers beautiful nature, cheap prices (outside of resort areas), and heavy investment into internet access and shared workspaces.
This is an area that has invested strongly in attracting digital workers.
This freelance friendly setup is also perfect for the digital nomad looking for the perfect workspace.
Buenos Aires, Argentina
A gem of a South American city, Buenos Aires is very popular with digital nomads. There are hundreds of co-working spaces, Wi-Fi friendly cafes, and a very friendly population.
The city is truly beautiful, has fantastic internet, and although not the cheapest is still quite affordable.
Playa De Carmen, Mexico
There are multiple places in Mexico that a great place for people embracing the digital work lifestyle, but Playa De Carmen might be the best of them all. Beautiful beaches providing Instagram-worthy photos, great food, and surprisingly affordable housing compared to many U.S. cities.
The overall internet quality isn't great. The best internet quality is often in shared workspaces or internet cafes.
On the plus side, this makes it easy to meet and connect with other modern nomads.
Lisbon's growing popularity has resulted in rising prices for things like apartments.
That being said, Lisbon is still surprisingly affordable for Europe while offering all the modern amenities. Excellent internet capabilities, healthcare, public transportation, and community make Lisbon a great spot.
Though you will have to have a higher steady income than many of the others on this list.
Although far cheaper than Paris or London, Lisbon is also far more expensive than many cities in non-European locations. It's not a San Francisco level of expensive or anything. It is one of the more “expensive” popular options among location independence enthusiasts.
Honorable Mentions: Koh Lanta Thailand, Cebu City Philippines, Belgrade Serbia, Tenerife Canary Islands, Medellin Colombia, Mexico City Mexico, Krakow Poland.
There may be shifts in which locations deserve to be “top five” or “top ten” for digital nomad locations based on shifts over the years. That shouldn't be discouraging. There's a reason the same city names tend to come up over the years. When a city makes a serious effort to invite in online workers that's going to stay a hotspot.
The Digital Nomad Visa
It's worth noting that the movement to see digital nomadism as a legitimate way of doing business has spread. Many countries have realized that when someone makes their money online and then spends it at their location, the entire area prospers.
Because of this multiple countries are working to make the digital nomad visa a thing. Especially those countries that already have a digital nomad community. Or have seen neighboring countries benefit from it.
This goes beyond creating good coworking space options at a plethora of coffee shops. It means developing areas with low rent, good amenities, and exceptional Internet.
This is something anyone interested in the new nomadic life should keep an eye on.
Even if you're a remote worker or focusing on passive income building, a digital nomad visa could open up your options.
The nomadic lifestyle isn't going to appeal to everyone but for the right type of remote worker the gig economy offers new opportunities. Opportunities for travel around the world. Opportunities for meeting new people while visiting new places.
You can live in a modern nomad community. Or enjoy local culture while finding connecting with other nomads in shared work spaces or love coffee shops.
If you've ever felt the travel itch, then the career path of a digital nomad is at least worth considering. Want to learn more about traveling and making money? Consider reading our guide on how to travel and make money.
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