Monthly Archives: March 2011

Nomadic Travel

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Flying harms the environment. In fact, a round-trip international flight can burn around one ton of gasoline (1). So to lessen our environmental impact, we ought to reduce the number of miles we fly each year. The best choice is to not fly at all. And for the most part, I’ve stopped flying in order to practice conservation. But when I need to visit family overseas, I’ve decided to practice nomadic travel. The basic idea is to carry all your belongings with you when you travel, so that there’s never a need to return home.

By not having a home base, I won’t be in a rush to leave. I can stay longer each trip, reducing the total number of flights each year. As a nomadic traveler, I intentionally avoid owning a house, a car, or extra possessions at home. I also take my work online, which gives me greater time and flexibility while traveling. I hope to spend months (even years) in the same country, and when possible, I try to get around using slower forms of transit (rail and bus instead of flying). By staying longer and flying less frequently, I can help conserve fuel, which lessens the impact of travel.

But nomadic travel does more than just protect the environment. By flying less frequently and staying longer, I immediately save thousands on plane tickets alone. Less flying also means less time spent in uncomfortable plane seats, and more time to experience the country first-hand. I can learn the native language, meet new people, and see more sites. Vacation is more relaxing when done slowly since there’s no need to see the entire country in a single weekend. Instead of staying in expensive hotels, I can rent an apartment. These slower experiences will be far cheaper, more meaningful and more authentic.

To become a nomad, you need to adjust your traveling mindset. An average tourist is limited by all the possessions he has back at home–his house, job, and car. As a result, he’s bound by a tightly fixed schedule, which limits his flexibility to travel slowly. For a nomad, however, home base is wherever he’s currently staying. There’s never a rush to “return” when you travel with everything you own.

Giving up a permanent dwelling isn’t as painful as it sounds. Permanent assets can feel like deadweight. There’s the cost of paying for space you’re not using, and the emotional burden of caring for your possessions. Without a fixed dwelling, the cost of traveling can actually be cheaper than the cost of living back home. This is because of you’ll likely rent a cheaper apartment and own fewer possessions.

The major difficulty with the nomadic lifestyle is finding work on the go. In the past, being a traditional nomad meant you were confined to a life of tending sheep and raising cattle. But today, it’s possible to start an online business or find telecommuting work. Programming and design jobs are probably the easiest to find, but you can probably find online work in marketing, accounting, and engineering. Freelance Switch has compiled a monster job board you should check out, and FlexJobs looks promising as well.

Once you make the leap to become a nomadic traveler, you’ll find traveling to be a lot less stressful and expensive. You can travel once and stay put for months (years) at a time. And if you can get to your destination by bus or train, then you’ll literally save a ton of fuel.

Of course, if you can avoid it, don’t travel at all. That’s always the greenest (and cheapest) option available. When that’s impractical, try to take the train or bus instead, since both options get far better mileage than flying. But when you must fly, consider becoming a nomadic traveler. You don’t need to become the yak-herding shepherd type, either.

  • According to Michael Bluejay, a plane averages around 43.0 pmpg (passenger miles per gallon). The one-way distance between Los Angeles and Taipei is 6800 miles, so the round-trip distance is 13,600 miles. This in turn gives 13600 ÷ 43.0 = 316.3 gallons of gasoline burned per round-trip. Gasoline is about 6.073lbs/gal, and there are 2000lbs./ton, so you’ll end up wasting 0.96 tons of gasoline per passenger per round-trip flight.

Expensive Versus Valuable

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In everyday language, we consider these two words to be interchangeable. I could describe a Rolex watch as expensive or I could describe it as valuable; either way, you’d interpret the two statements to mean the exact same thing. But in fact, these two concepts–expense and value–are actually completely unrelated. The subtle difference between the two often runs counter to our expectations.

Whether or not something is expensive is determined entirely by its price tag. Expensiveness is based on cost, which is a fixed, objective measurement. Whether or not something is valuable, however, is a subjective matter. Value changes all the time, from person to person, depending on the circumstances. A Rolex watch will always be expensive, but it might not always be valuable. What it is truly worth depends on whether you already own a watch. If you own a cellphone with a built-in clock, you probably don’t need a Rolex, aside from the social status a luxury watch would confer.

Maybe I’m belaboring the obvious. But keep in mind that most financial decisions aren’t based on logic. We are irrational people, and we shop out of our emotions. We often judge an item’s worth based solely on its price: Because a Rolex watch is expensive, it must be good. Following a similar logic, a $200 pair of tennis shoes must be valuable. That high price reflects higher quality, better design, and greater comfort. It must certainly be better than a pair of sneakers priced at $19.95.

Once our brains start to associate price with value, we become easy to manipulate. If a pair of shoes costs $200, it must be worth $200, whether we need it or not. So when a special sale comes around — say 50% off for a limited time only — we assume we’re getting a bargain. Same value, but lower price: what a steal.

Perhaps this is why we love bargains so much. We go extraordinary lengths to clip coupons, browse yard sales, and attend liquidation events. We’ll camp out all week for Black Friday if we have to. These are all opportunities to buy valuable stuff at lower prices. Some of us enjoy bragging about all the money we save.

Of course, most of what we buy is just deadweight. That antique lamp from the yard sale is on sale precisely because its former owner has no use for it.

How can we get a real estimate of an item’s value? I like to ask myself, If this item disappeared, how much would I pay to get it back?

Sometimes I wouldn’t even notice its absence. I’ve had closets filled with junk I didn’t even realize existed. I was reminded that most of what I had purchase had absolutely no value. It didn’t matter how great of a bargain I got–if it was of no value to me, it wasn’t worth purchasing.

In many ways, price tags are unreliable indicators of value. An item’s price reflects what others are willing to pay, not necessarily what it’s worth to you. It may be hard to separate the two, but it makes all the difference between a valuable lesson and an expensive mistake.

Why Rent?

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Buying a house is one of the biggest financial decisions of life. So it’s odd that we usually approach this weighty issue, not with sound financial logic, but with human emotion and pride. All too often, home ownership has less to do with our need for shelter than it does with our need to keep up with the Joneses. Houses become status symbols of stability, success, and prestige.

Of course, we’d rather not admit that we are such petty people. So instead, we justify ourselves with excuses:

It’s the prudent thing to do. Renting would be throwing money away. I’m building equity. I need a larger house. I deserve it.

For a short while, we indulge. It’s only later that we find ourselves suffocating under our financial burdens.

Most of us would be better off renting. It hurts to throw away money on rent, but giving your money to bankers isn’t much better. Since the average homeowner can’t afford to purchase a house outright with cash, he’ll take out a mortgage loan instead. The bank will expect the principal to be repaid with interest each month for the next 15 to 30 years. This sounds awful similar to renting.

One key difference between mortgage and rent is that mortgage payments are more expensive. While houses might be cheaper than apartments per square foot, houses are also far larger. The net result is that mortgage payments can be double the price of rent. So you never save money with a mortgage; you’ll only get more space per dollar. What’s worse, all those empty rooms might tempt you to fill your house with clutter.

An often-touted benefit of home ownership is that it locks in your cost of living. Whereas rent payments increase over time, mortgage payments remain fixed. Yet this fixed, permanent nature of a mortgage is also its greatest drawback. It’ll be hard to start a new career, launch your own business, or travel when you have 30-years worth of payments to take care of.

Finances could become a nightmare. You’ll be forced to stick with your job, like it or not, because of your house. Suddenly, the threat of losing your job during an economic recession can make you panic. Getting laid off could send you into depression. By renting, it’s possible to move in with relatives until you find new work. It’s a humiliating prospect, but the alternative—foreclosing your home and declaring bankruptcy—is a lot worse.

The average homeowner would be better off investing outside of real estate. Without previous experience, you probably won’t be getting great returns on your house. Instead, you can take the downpayment on an expensive house and invest in what you already know. Rather than depending on the advice of a self-interested agent, you could use your actual skills and talents to build wealth.

So before you start searching for a potential house, consider if you need one at all. Not buying it at all might be the most prudent decision you could make.