One of the things you will probably want to do in early retirement is travel around the world.
Unlike ‘savings’ which last for just a while, your investments are paying you to travel forever!
There’s no other way to travel for that length of time without work, unless you’ve a sabbatical.
However, there are a few things to keep in mind if you are considering travelling indefinitely:
Before you travel, pay off your mortgage or rent out your house – doing so frees up money.
During your travels, mix expensive locations with cheaper places to balance your expenses.
Use credit cards to avail of cheap flights and make sure you invest in travel insurance.
In this post, I talk about paying off your mortgage or renting out your house before travelling.
I also talk about travelling in cheaper places, getting cheap flights and buying travel insurance.
Finally, I talk about how to use travel to retire early and where to find more info on this topic.
Paying Off your Mortgage or Renting Out your House
Once you start your travels, you will need to be paying for accommodation at these locations.
The last thing you want is to pay for accommodation and still pay off your mortgage at home.
If you are renting – happy days; simply tell your landlord that you’re leaving and away you go.
The problem only arises when you are still tied to a mortgage. Thankfully, you have 2 options:
Your first option is to pay off your mortgage and only pay for accommodation while travelling.
While this is the ideal situation, it is not the easiest; paying your mortgage takes a long time.
Option 2 is to rent out your house during your travels – have someone else pay your mortgage.
You can do this as traditional renting or as serviced accommodation – Airbnb or Booking.com.
The money you can be making from renting can pay your mortgage and give you extra income.
Ideally, you’ll want to have paid off your mortgage and rent out your house while travelling!
Travelling doesn’t have to be Expensive
You’re probably thinking – travelling is expensive? How can I afford to travel for a whole year?
After all, travelling to locations like North America, Europe, and Japan are significantly pricey.
It’s true, if you’re planning to spend a long time in these locations, it can get quite expensive.
That’s why you need to balance expensive locations with less expensive ones on your travels.
While planning your travels, add South America, Africa, and Southeast Asia to your itinerary.
By adding less expensive destinations to the mix, you can afford to travel for much longer.
Not only that, but you can live like a king/queen at these places – for a fraction of the cost.
After living for a while in Thailand being treated like a royal, you won’t want to come back!
So if you’re planning a world trip and find it hard to manage your budget, add Asia to the trip.
You may find that after a year of travelling, you’ve managed to spend less than you thought.
Cheap Flights
It’s no secret that if you travel enough on airlines, you are rewarded with frequent flyer miles.
If you build up enough frequent flyer miles, you can use them for cheaper flights and hotels.
Usually this luxury is reserved for entrepreneurs and businesspeople who tend to travel a lot.
However, there’s a way to get the same perks even if you’ve never stepped foot on a plane.
Apply for credit cards that have big bonuses, spend the required amount, then cancel them.
After cancelling them, wait for around 3 to 6 months, then repeat the whole process again.
For example, American Express give you 30000 points if you spend £4000 in the first 3 months.
That is worth over £750 of free travel – which is the equivalent of travelling to Asia for free!
These cards also offer benefits such as no foreign transaction fees or access to airport lounges.
By making the most of these credit cards, you can save so much money on flights and hotels.
Travel Insurance
While you’re on holidays, the last thing you want to think about is what can possibly go wrong.
However when you’re travelling for an extended period of time, things can and will go wrong.
When you have to go to the hospital or fly home suddenly, you don’t want the financial stress.
This is why it is so important to buy travel insurance before you take off on your world tour.
Travel insurance covers medical emergencies, trip cancellations, and even trip interruptions.
It also covers travelling home and hotel cancellations in the event of some family emergency.
Travel insurance came in handy for me when I had to have an emergency surgery in the USA.
Had I not had travel insurance, I would have had a very expensive American medical bill.
You may even find that some credit cards offer international travel insurance – if so then great.
Nothing can alter your early retirement plans quite like an unexpected medical emergency.
Using Travel to Retire Earlier
If you’re trying to retire early and live in the UK, you’ll have to invest a lot for early retirement.
However, if you’re planning to retire and live in Mexico, you’ll find that you need much less.
Introducing Geographic Arbitrage – where you earn in one currency and spend in another.
For example, getting paid in pounds/dollars and living in South America and spending pesos.
If you can work remotely, go work for a UK company that allows you to live in Thailand or Bali.
You would save such money while living well, and accelerate your path to early retirement.
To find out more about early retirement travelling, check out the book Quit like a Millionaire.
The authors talk about their path to early retirement and what early retirement is really like.
Are you on the path to early retirement? How is it going? Please share in the comments below.
If you want me to cover anything in more detail, please let me know in the comments below.
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