Invest while traveling
Part of the worry surrounding an unconventional lifestyle, is that you’ll face negative repercussions in the future. While others are being responsible, (building careers, etc.), you’re out camping and spending all of your money on travel. But because most people early in life aren’t financially savvy anyway, you can actually get way ahead by starting to invest a small percentage of your income as you travel.
Just look at the numbers:
– sally starts investing from 25 and continues until 35 when she has a baby. during this time she contributes 65k.
– john is late to the party and starts at 35 when sally quits. he continues through age 65, a period of 30 years (3x as long as sally) at which he’s contributed nearly 3x as much.
sally. because she benefits from 10 extra years of compounding even though john contributed for 20 more years
As it turns out, the average american never amasses a net worth in excess of $500,000 . A number that can seem daunting, until you consider that roughly half is tied up in home equity. And that $200 a month over 40 years (7%) is $497,100.
The point is, that the fear and uncertainty and judgement, can be largely mitigated by making sound financial decisions as you pursue your interests.
Ideally, putting this into place will bring you an association with money that both feels good now, in the lifestyle you enjoy, and feels good later, when you’re more reliant on cash reserves. So focus on low cost, high reward adventures, and invest the rest for later.
“There are many things money can buy, but the most valuable of all is freedom. Freedom to do what you want and work for whom you respect.” – jlcollinsnh
*The average purchase price of a new car in May of 2016 (according to Kelly Blue Book) was $33,666. Most new vehicles lose 50% of their value within 4 years. Which equates to $4,200 a year in losses. Or 12.5%. If you save up $33,666 for a car, and then 4 year later it’s worth $17,000, you’ve lost half your investment. The US Median average income is $51,939, you’d have to work roughly 1 month a year to recoup this depreciation. Not to mention, the 2 months a year needed for federal taxes (25% bracket).
**If you’d like to calculate your net worth, use the free tool at personal capital. It’s like mint.com but for investing.
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