Can I Afford to Stop Being Location Independent?

Location Independent in CalgaryI have written previously about how my wife and I need routine in our lives. While it is great to live in new countries, constant travel is very time-consuming and stressful. We have been consider setting up roots again and having a more stable lifestyle.

The big problem with settling down is that it costs a lot of money. It actually costs a huge amount of money to have a normal western lifestyle.

Here is a rough breakdown of monthly expenses that we would expect to incur if we permanently relocated to my home city of Calgary.

  • Mortgage on an average starter home: $1800
  • Property taxes: $200
  • Utilities: $350
  • Telephone, Internet: $150
  • Cell Phones: $200
  • Car Payments: $300
  • Car Insurance: $100
  • Car Maintenance and Gas: $200
  • Furniture and Household Items: $500
  • Clothing: $200
  • Food: $500
  • Entertainment: $500

Total $5000

The North American Idea of a Normal Lifestyle

We don’t have to spend that much money of course, but it is hard not to when all of your peer group does. Expenses of $5,000 per month are normal for a professional couple in Calgary.  It doesn’t matter how independently minded you think you are, we are all influenced by society, peers and family. When your friends all have the latest iPad, LED TV or trendy automobile, you start finding pressure to buy too.

My wife and I could cut back on those expenditures if we rented an apartment downtown, reducing the need for a car and lowering our accommodation fees. We could also cut down on food and entertainment if we really scrimped, so cutting these costs down wouldn’t be impossible.

On the other hand, that mortgage payment is contingent on low interest rates. Payments will easily increase a few hundred dollars per month once interest rates start to rise. Also, in a sprawling city like Calgary it is common to have at least two vehicles per family, particularly if both parents work outside of the home. That could also add another $500 or $600 in expenses.

I have also left out health and life insurance which can get quite pricey, but it won’t change much regardless of where we live.

Despite all those caveats, I don’t think that $5000 per month is too out of line for a middle aged couple like my wife and I. In Canada, assuming a 40% tax rate, $5000 per month after taxes would require a salary of $100,000 per year. (60% of 100,000 = $60,000 or $5,000 per month.)

Factoring in commuting time, lunch hours and overtime, it is very likely the total hours dedicated to work would be 50 plus hours per week each. We would do all this with the reward of about 10 statutory holidays and a couple of weeks of vacation time per year.

What if You Only Had to Work 6 Months a Year?

There is a clear trade off between time and money. You can work 60 hour weeks and make a lot of money, but if you don’t have time to enjoy your life, what is the point? If you could cut your consumption in half, you could easily free up 6 months per year of time. What could you do with half a year of free time?

From living in Japan, and traveling across Europe and Asia, we know that we can have a pretty comfortable standard of living outside of Canada for about $2,000 per month. $3,000 per month would offer a great lifestyle with money to do almost anything we want. Even as visitors in Calgary, we only spend about $1,000 per month. (This is largely due to low accommodation costs because of an empty condo my mother owns.)

Not having a permanent residence eliminates so many costs. The fact that we are location independent means we can’t buy a car, furniture, household goods, clothes, tools, etc. We have no need for them and we have no place to keep them anyway.

There are benefits from being stationary like getting higher paid work, time spent time with family and friends, the opportunity to work with other people in person, more networking opportunities, etc. I don’t want to over simplify the choice, however after living a consumerist lifestyle in the past, my wife and I are not interested in setting up that life again. Less is much, much more.

Are you willing to control your spending in order to do the things you want in life?

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My name is John Bardos. My wife and I gave up our business, house and possessions in Japan to search for more meaning and fulfillment in our lives. We've discovered that a satisfying life is about rich experiences, quality relationships and meaningful contribution, NOT consumption.

18 Responses to Can I Afford to Stop Being Location Independent?

  1. Jannell says:

    Every side of the coin has pros and cons. It’s a trade off on many issues regardless of the choice you make. Nothing is forever. Having already taken the leap, you could always decide to give it all up again and continue your ‘slow travel’ pursuits. It all really boils down to what you need at this particular time of your life. And needs change.

    • John says:

      Thanks Jannell,

      I think we want more stability and routine, but at the same time we want to keep a very minimalism life style so that we don’t get caught up in the consumerism again. I hope we don’t ‘need’ to settle down again. 🙂

  2. Rich Polanco says:

    Excellent post John! It appears we’re on the same wavelength, as I wrote about a similar topic this week.

    If consumer spending continues to go down (and manufacturing data backs this up), there won’t be much of a “choice” for everyone but to adopt some sort of minimalism. It is up to each person to accept this either willingly, or unwillingly, as dictated by the circumstances.

    A mortgage was seen as a good thing, as an investment, and something that afforded one security. This depended on 3 things: The viability of the place where the house was located, the expectation that the investment would appreciate in value, and the assurance of income to meet mortgage payments. Not one of those things is even close to being guaranteed, and in fact, the opposite is the norm.

    Learning to live debt-free (I don’t care if my car is older… Unlike some of my friends I know that the bank won’t come take it away should I miss a payment) is an essential skill to learn to master right now. An indebted life (credit cards, house, car payments, etc) severely limits the ability to make choices. It’s a hamster wheel that it’s hard to get off of.

    I have more to say on this, but I’ll leave it at that 🙂

    Great post John.

    -Rich

    • John says:

      Thanks for the comment Rich.

      The scariest part is that if a minor 1% or 2% drop in GDP in richer countries wrecks havoc on the global economy, what happens if our consumption drops 10% or 25%?

      Our grandparents improved their lives through hardwork and thrift. The last 30 years was built on debt, cheap labour and environmental degradation. It is time to pay up.

      • Rich Polanco says:

        Absolutely John. Spot on.

        The magic word among economists is “growth”. Grow, grow, grow no matter the cost. Nothing grows forever when resources are limited.

        Sustainable growth (and living a sustainable lifestyle) is the answer. And even then, we’re only slowing down the use of finite resources, while encouraging the use of renewable resources.

        As much as possible, live life in harmony with those around you, and in harmony with the earth you live on.

        -Rich

  3. It’s an interesting question. I work on a cruise ship so I’m not quite location independent – more like locationless. Yes, it’s possible to enjoy life with much less money. But the biggest trade-off I feel is losing the connections with people at home.

  4. John says:

    Hi Roy,

    I agree. It is nice to build and keep deep and lasting relationships in one location. However, I also find that it is easy to get so caught up in our personal lives that we don’t put much effort into the human side of life.

    I find that I spend more time with friends and family when I live outside the country. Returning only for a few weeks means everyone makes much more effort to connect and spend time with each other. I have a cousin that visited my wife and I in Japan once. During that 10 day visit, I spent more time with him, than in the previous three decades combined.

  5. Roy says:

    Interesting post.

    So how long have you been traveling together, where have you been since you started, and why relocate back in Canada?

    It depends on whether you feel that you are ready to settle down, get a good job and become party of a team and the community.

    Remember that you can always ask for a vacation from work once in a while.

    I also think that its very important to find the right home to buy, try buying one that is cheap but in which its price will grow in the years to come.

    Maybe get a better mortgage loan?

    Have you tried looking for a job in the area? The type of work and its conditions and location are also important.

    There’s also the question of setting up a family and planning for the future. Where do you want to see yourself 5 years from now?

    Overall very good analysis of the situation. I think that your expenses are too high though, surely with all your experience you can find alternatives that will save you money.

    my first post 🙂
    Roy

    • John says:

      Hi Roy,

      Having routine in our lives is important, but I am not so sure if we want to permanently settle down. I definitely don’t want to ‘get a good job.’ Our life is pretty good, I don’t think I would ever get a traditional job.

      Buying a house in Canada is not so high on the priority list either. We have decided that we won’t have children either.

      Our life is great now so we will continue doing what we are doing. We don’t really have any long term plans.

      I lived outside of Canada for so many years that now I can see that I don’t want the lifestyle of my peers. My wife and I are very comfortable not having so many possessions or expenses.

  6. Roy says:

    Hey John, I need some advice please.

    I’m flying to Germany for about 20 days for a volunteering program next month and was wondering if I should get a travel credit card? I have a visa card from my country Israel. I still have not ordered the tickets but I think I will fly with Air Berlin.

    I don’t plan on flying much, nor with a single airline (maybe a star alliance? suggestions?)

    Anyway, should i get a travel card? And what travel insurance agency should i contact? I got a recommendation to world nomads, you know them?

    Thanks

    Roy

    • John says:

      Hi Roy,

      I would definitely recommend getting a credit car with air miles attached. The miles add up, especially if you start putting all of your purchases on it.
      In Europe, you will probably fly with the discount airlines because they are so much cheaper, but for longer flights I use the Star Alliance. I find their mileage redemption rules are much better than One World.

      Many people recommend World Nomads but I found them expensive for people not based out of the US. You might want to price out travel insurance in your own country. I think you will find it cheaper.

      Safe travels!

      • Roy says:

        Regarding the previous post, looks looks you know what you’re doing and whats good for you. From the fact that you even created this website, it shows that you are special and not like others. I hope you and your partner find the best way to live your lives both now and in the future. I won’t ask why you’re not for it, but I think that having children would be an amazing experience, even adoption. Perhaps you could always keep it in mind as a possibility.

        Thanks for your help. I will check with insurance companies here.

        I’m flying to Germany from August 26 to September 29. 20 days with the volunteer program, and 2 more weeks with a family that I have yet to find (i registered to work away website)

        Waiting to read your next post.

        Roy

  7. Hey John,

    Great post! Really puts everything into perspective (or at least opens the eyes of so many people that choose live life in the fast lane!). I can’t say that I have lived your lifestyle the last 5 years or so, but I can honestly say that I aspire to the “Location Independent” lifestyle.

    There are definitely pros & cons to both lifestyles……but I totally agree that you learn to appreciate your family & friends more when you are away (and visit periodically throughout the year). I can’t even tell you how many friends I have in Calgary whose families live within the city limits, yet they only see them 2 – 3 times per year.

    Do what makes you happy…..not what is expected of you in our “western” society! We’ll meet up on that beach soon….I have no doubt! 🙂

    • John says:

      Greetings Trevor,

      We will definitely have to meet up again soon.

      Those “western” expectations have huge control over our lives. In my case, I had to live abroad in order to see how much I was influenced. Only now that I see the western lifestyle as an outsider, can I choose to ignore it.

  8. Audrey says:

    From time to time I add up what it would cost to live back to the United States (when I really want to scare myself, I look at San Francisco costs). It really is amazing how the costs add up when you consider car (costs, insurance, gas), insurance, cell phone plans, etc. There are so many fixed costs that everyone takes as “normal” that we are able to avoid with our lifestyle.

    We’re in Berlin for the summer and it’s so nice to be able to rent a furnished flat, ride bicycles, use Schengen health insurance from Czech Republic (something like $250/year), use a prepaid mobile phone plan (€10/month) and buy food at fresh markets. I know our costs would go up if we chose to live here full time, but it still seems like a simpler alternative to the States.

    • John says:

      Thanks Audrey!

      It is insane what a ‘normal’ lifestyle has become. It seems that most people spend all their free time either shopping or behind a computer or TV screen. That doesn’t seem so normal to me.

  9. Ana says:

    There is no way you need $5,000 a month to live a stationary life. I have never in my life had that much, and I got by for a long time. Why do you need to buy a house right away — especially since you’re not planning children??? Move into a simple one-bedroom or large studio, of if you can get a really good deal on a condo, that’d be great. Forget about what your friends say or think. Make new friends if you feel uncomfortable with them having so much more than you.

    Health insurance in Canada isn’t nearly as expensive as in the U.S. Yes, auto insurance costs, so move to the city! As long as you have credit, you can rent a car whenever you go outside of the city and need one. You do not need brand-new furniture. In your position, I’d go for used furniture anyway since you may decide the settled life isn’t for you after all.

    I’d live in the city anyway. You want to meet people who are like you, who are “international” in focus and vantage point, and you may not meet so many of those in some suburb. I wish I lived in the city here, but I can’t afford to since I rent a room in someone’s house, and my work (a low-paying factory job but it was all that was available in this economy) is in a suburb. I’m not entirely sure I will ever get out of this.

    Yes, stay out of debt — forever! Debt put me where I am now, and I may be stuck here for life because of it. So you are on the right track there! Most of all, give yourselves the option of getting out again if you can, and good luck!

    • John says:

      Thanks for the comment Ana.

      I guess it depends on what city you live in and how much you little you need to live. $5,000 per month is pretty average for a couple in Calgary now because the cost of living has become so high here. It is difficult to get rent, utilities and internet for less than $1500 even in an old, small apartment. (A standard dental cleaning is $300 here now.)

      My wife and I live on much less than $5000 now, but we don’t have cars, have free rent and keep our expenses insanely low. I would say that $3000 is a minimum income for any quality of life. With that budget, there is little left for concerts, travel or sports.

      In Calgary, it is also quite difficult to get around without a vehicle. I love to cycle so I often ride a bike, but that will get much harder in the winter. Also, with the mountains so near, it would be nice to have a car to get out of the city more often.

      Financially we are okay, because we don’t have debt and have a comfortable amount of savings, but it definitely makes sense to base ourselves out of a cheaper country.

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