The following examples are based on the United States and include data pulled from the U.S. Census Bureau, the Department of Labor, USA Today, CNN Money and beyond. To grasp the intended breadth and width of this post, it is recommended you read all of the links. You should probably have a pot of coffee ready.
Median household income (two breadwinners): $52,000 per year.
Median cost of living (family of four; two parents, two children): $60,000 per year. (The average is around $2,200 per adult, per month, so around $4,400 for two adults, and you can figure and extra $500 to $600 per month for two children in groceries, medical expenses and other sundries; this number will increase as they get older).
Mortgage on a three bedroom house: $221,000
Loans on two cars (one for each spouse): $60,000 and up (based on an article from USA Today in 2005 when the average was around $28,000 for a car; the rates have only risen since then).
College tuition for two kids – $8,000 to $10,000 per year at a public four year school, or $28,000 to $30,000 per year for a private four year school. $80,000 on the low end (for two children) to $240,000 on the high end. This does not take into account graduate programs, which are considered mandatory if you want to get a job in the 21st century.
Now, before we get any further, let’s just take a look at the top two items on the list. The average, median household income with two breadwinners is $52,000 per year. Now, let’s assume for a moment that those two working adults don’t have children. Based upon an average of $4,400 per month of expenses we are left with just under $53,000 in expenses. Using that math, without any children or college tuition expenses to take into account…the average, ordinary American is breaking even with their salary compared to cost of living. Add children into the mix and you start seeing how the average American is actually spending more per month than they make in salary…which leads to the reality most Americans face: living on credit.
Living in debt. Living beyond their means. Living in fear of losing their job. Living on borrowed money.
That’s the thing most outsiders from other countries don’t understand about the United States: most Americans don’t actually own their house or their cars or many of the items in their homes. Everything is purchased on credit, and in order to keep up appearances, in order to live the life of plenty and consumption, in order to keep the credit hounds at bay, the hamsters must keep jumping on that wheel 8 hours a day, 40 hours a week, 50 weeks per year. From the outside it might look like people in the United States are living a life of plenty, but the reality is considerably darker, polished to a sheen to hide the flaws.
The car? On credit. House? Credit. College education? Credit (most students go on a combination of students loans and scholarships). And here’s another interesting fact: the average American doesn’t even pay off their home until they are between the ages of 60 and 65, with most home loans averaging around 30 years in length, meaning the homeowners started their mortgage around the time they were 30. (In comparison, the average mortgage in Mexico is for 15 years, and while the interest is higher the cost of a house in Cancun, for example, is around $35,000. More on this later on in this particular post.)
So, as you can see…the average American is just breaking even on the monthly bills…and they are working 8 hours a day (minimum), 40 hours a week (minimum), 50 weeks per year, with a mere 2 weeks off for vacation (average). There’s very little extra income put into the savings for a rainy day, for accidents or emergencies, much less extras that the kids need (assuming you have children).
This is the American Dream…or as more and more expats and foreigners are finding out, the American Nightmare. An endless grind of 40 years in the work force, caught in the hamster wheel of never-ending debt and never-ending spending to keep up with the never-ending need to consume, consume, consume. No time to breathe, no time to sleep, there is only time to work, work, work, work, work, work, work, work.
December, 2011. A record number of Americans are either looking forward to or already leaving the United States to find work and live in other countries, and immigrants are no longer looking towards the United States as their dream destination. Most of them cite the economy, lack of job security, cost of living and sheer feeling of hopelessness as their reasons for leaving the once Promised Land behind. But where are they going and what are they doing?
They are making the transition into the location independent lifestyle as digital nomads. Millions more per year are waking up from the dream, unplugging from the Matrix and realizing what myself and others have been saying for years: you can have absolute freedom to live life on your own terms and do whatever you want, whenever you want simply by changing your location and deciding that you no longer want to be the hamster on the wheel.
Forget barely breaking even with your average salary of $25,000 per year (take-home salary after taxes on the median income of $36,000) against a cost of living that is the same. Digital nomads are traveling the world and taking advantage of places like Costa Rica, the Canary Islands, Thailand, Italy, Bulgaria, Greece, Colombia, Mexico, Uruguay, Argentina, Chile and beyond, places where their average take-home salary of $25,000 per year is paired up against an average cost of living that is around $8,000 to $10,000 per year.
Where does that extra $15,000+ per year go?
Straight into their pocket where it belongs. It’s your hard work that earned that money. It’s you who should be able to spend it and enjoy it how you see fit. On living life, rather than on the cost of living.
These are just the very basics of what the location independent lifestyle is about, and what Marginal Boundaries (and so many other websites like ours) is on a mission to spread the truth regarding. When you can go to a country that has all the same amenities as what you had back in a place like the United States – high definition cable television, first class healthcare (which, ironically, doesn’t cost a dime or is mere pennies in comparison because it’s included in your taxes as a resident of a country that has a universal healthcare system), high speed Internet, reliable public transportation systems, first class education systems (which cost around 50 to 75% less in most countries outside of the United States and United Kingdom) and beyond – where your average cost of living is around $8,000 to $10,000 per year (for a single individual; it’s around $15,000 per year for a couple), you are putting all that money back in your pocket.
No more watching the Discovery Channel and dreaming about one day taking a vacation to those destinations you’ve always wanted to see. Pack up, move out and take your life to where the action is. No matter if you are a pensioner or a freelancer, so long as you have some form of income coming on a monthly basis via wire transfers or PayPal you can live anywhere in the world you want.
Want to know how much the average three bedroom house costs in Cancun, Mexico? Around $35,000 USD (I’ve actually found three bedroom places for as little as $25,000, but they need a few thousand of fixing up). Villas in Tuscany with a garden, land and outbuildings are around $50,000. You can pick up a small vineyard in Bulgaria for around $30,000 USD. A four bedroom apartment in downtown Bogota for $60,000 (my landlord there picked up his for around $60,000 and remodeled it into a five bedroom, 3 bathroom place). These are things you can pay off in just a few short years of working abroad as a digital nomad versus the 30+ years you are expected to slave away to pay off your mortgage in the United States.
This isn’t a dream. This is the reality of a location independent traveler. Once you look to the horizons you will see what myself and so many other digital nomads have come to realize is the true reality: you can live life on your own terms so long as you are willing to unplug yourself from The Great Machine and start building your own future, one where you are the only person behind the wheel. Stop relying on the way things have been done for generations and start looking towards the way of tomorrow. We are a Global People, and the entire planet is our home.
In the words of the late Steve Jobs, “Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”