The 3 Questions I Get Asked Every Day

Since we made it public that we are actually leaving for a one year trip around the world, I get asked the same questions over and over.  How much does it cost to travel around the world? Where do you get the money from? How can I quit my job, travel the world and be financially free?

My wife has to quit her job this year, I quit two jobs in the last 24 months and haven’t had a regular job since September 2010 and hopefully never will have to. So how can we afford to travel to 3 continents, 10 countries and countless cities? Who will pay for my 2 month Dive Master course in Koh Tao? Instead of answering each and every person individually, I decided to let you all know how I we are doing it and how you can do it, too.

How much does it cost to travel the world for an entire year?

In a previous article I already covered how to budget for a trip around the world. In our specific case, we plan to spend something around 2,000€ per month, not including the cost for health insurance (800€), RTW ticket (7,200€) and Dive Master course (1,500€). All in all that makes 33,500 € for the entire year or 2,800€ per month.

In addition to that, there is also fixed monthly cost back here in Germany, like insurances, mortgage payments and all the other monthly commitments you cannot get out of. Fortunately we managed to rent out our apartment and we cut down most of our monthly cost so that we only have to cover about 200€ per month.

All in all that brings us to a grand total of 3,000€ that we need for every month. Sounds expensive, right? At this point most people think that they could never afford that. This brings me to the next question I get asked.

Where do you get the money from? You must really be rich.

I am rich. Yes. Not in the traditional “I am a millionaire” way. Most likely, more than half of my readers have more money than me. Neither I nor my wife have ever inherited anything and both our families have always had just enough to get by.

So how can I say I am rich? I consider myself to be rich, because I am financially free. I work because I choose to, not because I have to (this is actually part of the morning declarations from the T. Harv Eker seminar).

“But you said that the trip costs 3000€ per month. Do you make 3000€ per month?”

No, I don’t. My business does, but I don’t.  After I pay all the company bills each month there is less than 3000€ left. So why can I still afford to take the trip?

Since my wife and I decided to take the trip, we took a close look at all our finances and cut down on our cost. We stopped spending on things that we didn’t necessarily need. We saved up all our money that was freed up to cover the cost that we can’t cover through online income. We were able to save about 1000€ each month.

Additionally we sold our car, cashed in two small savings bonds and sold all the clutter we don’t need on ebay. This brought in an additional 3500€.

All in all, the money we saved up enables us to travel the world and come back with exactly 98€ in our accounts, according to our budget.

How can I quit my job, travel the world and be financially free?

Interestingly enough, that is one question that nobody has asked me. Not one single person. Everyone wanted to know how I did it, but nobody wanted to know how they can do it and how long it would take them to get to this point.

I think that is pretty sad. I know that not everyone has different goals and not everyone wants to live a travelling lifestyle. However, I can’t imagine that anyone would not want to be financially free. So why didn’t anyone want to know how they can do it, too?

Just for the record, if anyone wants me to help them to become financially free, I would really love to help you. All you need to do is ask!

Picture by Flickr – milos milosevic

Budgeting for a trip around the world

Budgeting for a trip around the worldLast week someone emailed me, asking what our budget for our trip around the world is. Since this might be interesting to others, too, I decided to put that information in a blog post. So if you want to know what budget you need for a trip around the world, you should keep on reading.

First I will go through the different steps of setting up a budget before I go into our specific budget.

1. Step: Where do You want to go?

In order to get a good overview over the possible costs for a trip around the world you should have a pretty decent outline of where you want to go and how long you want to stay there. Staying in Southeast Asia cost you only 30% of what it would cost you to stay in North America or Switzerland (even more expensive with the Swiss franc at an all time high).

You don’t need to know the exact dates and how many days you want to stay in what city, but just knowing how many weeks you want to spend in a specific region helps with your budgeting.

2. Step: What Type of Traveler are You?

Make up your mind what your trip should be like. Consider things like (expensive vs. cheap): rental car vs. public transportation, eat in fine restaurants vs. local food or even cooking for yourself, see all touristy places vs. getting to know the people off the beaten tracks, 3-4 star hotels vs. low budget accommodation.

Most backpackers don’t mind to do the absolute low budget thing. If you don’t like to share a room with strangers and really like your air conditioning then I have bad news for you. You might want to save up a little more money for your trip.

A great way to save money is by travelling with someone else. Most accommodations are charged per room, not per person. So you can save lots of cash by getting a double room and splitting the cost.

Don’t forget the cost of the different attractions you want to see. For example just going to the top of the Eiffel Tower cost 13€. Of course there are also really cheap attractions around, e.g. the Chiang Mai Zoo, which is awesome btw, which only charges you 100 Baht (around 2,50€).

If you like to party and drink lots of alcohol, then even more bad news for you. In some countries just drinking two cocktails can cost you more than your budget for the entire day!

3. Step: Check out Accommodation Prices Online

To get a good feeling for the prices in a specific region just got to the different hotel booking resources and check the prices for different types of location. My experience is that the prices you find online are usually cheaper than the prices you find when you are trying to get a room directly at the hostel or hotel.

You might have to search quite a bit to find cheap accommodation. Look in places like latestays.com (for hotels) or airbnb.com (for privately offered rooms and apartements) to find even lower prices.

4. Step: Search for Experience by Real Travelers

There are lots of travelers who already shared the cost of travelling in a specific country. Just do a search like “country cost of living” or “country backpacking cost”. Of course you need to search fot the specific country in instead of “country”.

If you search for a while you might even find a database with values for different kind of travelers.

5. Step: Put It All in a Spreadsheet

Create a list with one row for each week of your trip. In the first column you write region you want to be in in that week. Columns 2-5 are the planned costs for accomodation, food, transportion and sight seeing. Column 6 should be a for miscellaneous things you need along the trip e.g. products for personal hygiene, gifts, etc.

I recommend that there should be 7th column for shopping. Especially if you love shopping. You will find so many great places to shop – especially in South East Asia – that this should also be calculated.

If you’re like me and just love to scuba dive, you might want to put in another column for the diving cost.

When putting in your cost, you should also put a 30% buffer on EACH column! You never know what can go wrong. Maybe you forget to check and there is a national holiday so all cheap places are booked solid and you have to go to an expensive hotel for the night. Or maybe something gets stolen and you need to buy something to replace it.

There are so many things that could screw up your budget. Don’t go out into the world calculating with the absolute minimum.

Our Budget for the 12 Month Around the World Trip

The table below gives a short overview over our budget for the trip. I didn’t put the entire budget spreadsheet in here, but instead I tried to divide it in 3 regions (Asia, Austria and New Zealand, North America). Additionally we spend about 7,000€ for two RTW tickets from Star Alliance and I will do my DiveMaster in Koh Tao, which will cost me about 1500€.

The average total shows our weekly budget, the columns accomodation and food are per day. The cost for diving is the total for the entire 30 weeks in Asia and 10 weeks in Australia and New Zealand, except the DM in Koh Tao.

WeeksRegionAccomm.
(per night)
Food
(per day)
Trans-
portation
Sight
Seeing
Shopping
&
Misc
Average
total
Diving
total
30Asia15-20€15 €50-70€50-100€20-100€460 €500 €
10Australia, New Zealand50 €20 €150 €50-100€50 €750 €200 €
10North America0-90€25 €100-150€100-300€50-300€750 €0

If you are planning your own trip, please keep in mind that this is OUR weekly budget. It is fit to our needs. We do want to stay in nicer bungalows, but we don’t drink a lot of alcohol. We stay a long time in the same places instead of travelling around, which reduces transportation and accommodation cost. Additionally we won’t have to spend as much money in North America, because we are planning to visit friends and family, where we don’t have to pay for accommodation.

So please take the time to calculate your own budget so you know how much money you really need. It would be a shame if you would have to cut your trip short just because you are running out of money.

If you are wondering about the 300€ sightseeing and shopping in North America, here is the reason why. We will go to Nashville to see the Tennessee Titans. Since the tickets are quite pricy, we do have to calculate a bit more. Also I am planning to do quite a lot of shopping before we leave New York to come back home.