Pivoting as nomads & living on $20K a year in a time of crisis

First and foremost, we hope that everyone is staying safe, well and calm during these unusual times. Due to the pandemic, we decided to focus our content on information related to dealing with this uncertainty. To make this content easy to discover and access, make sure to bookmark our coronavirus page.

With the current COVID-19 pandemic unfolding we are seeing major economies entering in recession territory (with significant financial market declines, unemployment rising (US unemployment data) + many small and medium-size businesses forced to close), international borders closing to foreigners (airport border data) and everyone going back to basics (by staying at home + practicing social distancing to “flatten the curve”).

No one saw this coming for 2020 and like many others, we had to throw our plans for the year out the window. Everyone is going through their unique challenges during this time. For us, as nomads, it’s dealing with the challenge of where to live and keeping our expenses low. Although it feels uneasy to not have a proper place to call home during this time, we do have flexibility working in our favor so we can explore a few options. We will review both our nomadic and financial plans and share how our nomadic lifestyle still gives us options even in such unprecedented times.

Our nomadic plan

Before COVID-19

Our original nomadic plan for 2020 was to stay in Asia until end of April, then visit Mrs. NN’s family in California for 2 months before spending the Summer in Europe and closing the year in Southeast Asia. It’s hard to believe in this new reality that we had so much travel planned! And as of 3 weeks ago, we thought we would be moving forward with most of this plan. Oh how things have changed.

Jan to Mar(3 months)	Apr(1 month)	May to Jun(2 months)	Jul to Oct(4 months)	Nov to Dec(2 months)
Southeast Asia	Japan	USA (California)	Europe (Italy, Poland, France, Georgia)	Southeast Asia (Thailand)

Once COVID-19 became a pandemic, we left Indonesia and decided to wait things out in Taiwan (Check out how we managed to exit Bali during the pandemic and what it’s like to go through a mandatory home quarantine in Taipei for more details). Upon arrival at the airport, we received a 3 months visa right before the country closed its border to foreigners and we feel very grateful to be able to stay in a country that is currently managing this pandemic very well. Since the country is not issuing any more visas, the government has granted all foreigners a 30 days extension which gives us the ability to legally stay here until mid-July. 

“All travelers who entered Taiwan on or before March 21, 2020 on a visitor visa or landing visa or through a visa-waiver program will be granted an automatic 30-day extension, with the exception of overstayers”

Source: the Bureau of Consular Affairs (BOCA)

As we are witnessing the situation developing in both Europe and the USA, for the foreseeable future, Taiwan is where we will be staying. 

 When we look out the window of our building, it shows business as usual. Since our home quarantining has been going pretty well, hopefully, we can finally go outside soon. We can’t wait!

Of course, we will follow the local practices to keep the virus away and focus on enjoying the simple things in life we took for granted (like breathing fresh air, walking in the park and even going on a hike in nature). 

It’s extremely difficult to plan very far in advance and so we are mostly taking things week by week. We used to have plans booked out 3-5 months in advance but we only feel comfortable booking 1 month in advance at this point. However, we did discuss some scenarios so that we are prepared with some options. Here are the two major scenarios:

Scenario A: Taiwan until mid-July, USA until end of year

In this scenario, the situation doesn’t improve and most countries are still in lockdown. In this situation, we would stay in Taiwan until our visa runs out. We would then go back to the US to be with Mrs. NN’s family. Also practically speaking, it would be the only country that both of us would be able to stay without limitations.

After catching up with Mrs. NN’s family, we would then use domestic geo-arbitrage to find a pleasant place to live for the rest of the year. As much as we like our former hometown of San Francisco, it financially does not make sense for us to live there due to the high cost of living.

This scenario would look like this:

Jan/Mid-Mar (2.5 mo)	Mid-Mar/Jun (3.5 mo)	Jul to end of COVID (up to 6 mo)	After COVID
Southeast Asia	Taiwan	USA	France

Scenario B: Taiwan until end of May, USA for June to August, France for September-October, TBD Nov-Dec

In this fairly optimistic scenario, we are expecting the travel ban to be lifted for much of the world by the end of July. We would remain cautious for the remainder of the year and prioritize spending time with family and limit our actual travel. After Taiwan, we would spend 3 months back in California with Mrs. NN’s family and 2 months with my family in France. At that point, we will have to decide where we want to go from there but would be very happy if we get that opportunity to spend that much family time.

This optimistic scenario would look like this:

Jan/Mid-Mar	Mid-Mar/May	June/Aug	Sep/Oct	Nov/Dec
Southeast Asia	Taiwan	California	France	TBD

Now that we discussed our nomadic plan, let’s look at our financial plan.

Our financial plan

If you’ve been following us for a while, you know that we managed to slow travel the world on $30K / year. As we planned 2020 back in January we decided to allocate the same budget of 30K for our yearly living expense, so our financial projection for 2020 was looking like this:

Since we fund our living expenses from passive income sources (financial market + real estate) that are likely to be affected in the short term by the pandemic, we decided to be very conservative by reducing our living expenses to $20K.

Our updated financial plan for 2020 looks like this:  

Going from $30K to $20K in living expenses is a 33% reduction of our lifestyle. Knowing that most of the year is likely to be spent in two higher cost of living countries (USA + Taiwan) how will we be able to pull this off? 

First, we would like to remind you how our living expenses have been split during our first year of nomadic travel (which was from 7/1/2018 until 6/31/2019). 

We can see that Accomodation & Groceries accounted for half (50% / $9K) of our spending. One fifth (20% / 5.5K) of our spending went to Dining out + Entertainment. 

The remaining 30% are divided between local/international Transportation (12% / $4K), Travel gear (10% / $3K), Living expenses (2% / $600), Health care (2% / $550), Gifts (2% / $500), Snacks (1% / $350) and Health Insurance premiums (<1% / $8).

Note: We only paid $8 in health care premium during our first year of nomadic travel. This represented only 4 months of coverage that we received through purchasing a Bronze Plan. Because we qualified for a $733 monthly premium tax credit ($733 / month), our total out of pocket was $2 / month (this is a $9K in health care premium savings over an entire year).

Scenario A (worst case scenario)

Jan/Mid-Mar (3.5 mo)	Mid-Mar/Jun (2.5 mo)	Jul to end of COVID (up to 6 mo)	After COVID
Southeast Asia	Taiwan	USA	France

In this case here is how much we expect to spend in each spending category for 2020:

• Accommodation
  We already spent $750 / month for the first four-month of 2020 and we are looking to stay under a $1,000 / monthly accommodation budget in both Taiwan and in the USA. We also expect to get at least one month of “free” rent by staying with Mrs. NN’s parents. Project total: ~$10K.
• Groceries
  We spent $150 / month for the first two months of 2020, expect to spend $300 / month in Taiwan and about $500 / month once back in the USA. Projected total: ~4.5K.
• Dining out + Entertainment
  We will likely cut our entertainment budget and spend about $200 / month on dining out. Projected total: ~$2.5K.
• Transportation
  We spent $50 / month for the first three months of 2020 on local transportation and based on projection we expect to spend $300 / month once in the USA (this would assume that we can still borrow a car from our family). We will keep using travel rewards to purchase our international flights to get us from Taiwan to California. Projected total: ~$2K. 
• Living expense
  This would mostly be to cover our Google FI plan. Projected total: $0.5K.
• Health Insurance premiums
  We will stick to our ACA / Bronze plan in California and not renew our world expat insurance with IMG (that expires in June 2020). Projected total: $24.
• Health care
  Expecting the same amount. Projected total: $0.5K.
• We also don’t expect to spend anything significant in the following categories for the rest of 2020: Travel gear, Gifts.

Projected 2020 budget: $20K

How are we keeping our accommodation budget to only $1,000 a month in the USA? Since we don’t need to or particularly want to stay in major cities, we will be able to stay in lower-cost cities. Also, AirBnB’s around the country are reducing their price significantly (usually by at least 50%) in an effort to lower their high vacancy rates as much as possible. While the pandemic is still around (which is Plan A), we expect to be able to find lower rental prices. (This is actually what our nomadic friends Kristy & Bryce plan on doing as they are stuck back home in expensive Toronto).

Check out our ultimate guide to AirBnB.

Scenario B (best case scenario)

Jan/Mid-Mar (3.5 mo)	Mid-Mar /May (2.5 mo)	June/Aug (3 mo)	Sep/Oct (2 mo)	No/Dec (2 mo)
Southeast Asia	Taiwan	California	France	TBD

In this case, here is how much we expect to spend in each spending category for 2020:

• Accommodation
  We already spent $750 / month for the first four months of 2020 and we are looking to stay under a $1,000 / monthly accommodation budget in Taiwan. Our intention is to spend a lot of time with family and we would fortunately also have places to stay in both California and France. We would then expect to spend about $750 / month for the remaining 2 months of the year depending on where we go. Project total: ~$7.5K.
• Groceries
  We spent $150 / month for the first two months of 2020, expect to spend $300 / month in Taiwan and about $500 / month in the USA, $350 / month in Europe and $200 / month TBD . Projected total: ~3.5K
• Dining out + Entertainment
  We will likely cut our entertainment budget and spend about $200 / month on dining out. Projected total: ~$2.5K
• Transportation
  We spent $50 / month for the first three months of 2020 on local transportation and based on projection we expect to spend $300 / month once in the USA (this would assume that we can still borrow a car from our family). We will keep using travel rewards to purchase our international flights to get us from Taiwan to California. Projected total: ~$2K. 
• Living expense
  This would mostly be to cover our Google FI plan. Projected total: $0.5K
• Health Insurance premiums
  We will keep to our ACA / Bronze plan in California (12x$2=$24) but also renew our world expat insurance in June (~$3K) for another year. Projected total: $3K
• Health care
  Expecting the same amount. Projected total: $0.5K.
• We also don’t expect to spend anything significant in the following categories for the rest of 2020: Travel gear, Gifts.

Projected 2020 budget: $19.5

Where to live on 20K a year in normal times? 

In normal times, reducing our budget from $30K to $20K would have been much easier thanks to geo-arbitrage.

We’ve been tracking our spending and providing detailed cost of living reports of all the places we’ve visited since July 2018. In summer 2019, we created a free online travel tool where you can access this information as well as track your own nomadic expenses.

In a world where we can freely travel to every country, here would have been the place where we could have easily stayed under our $20K budget.

While we wouldn’t be able to stay 12 months in a row in any of these given cities due to visa restrictions, it would have been fine to go from one to another or do a visa run to extend our visa for an extended period of time. 

Our Bottom line

While no one knows how long this situation will last, we are keeping a positive attitude and focusing on what we can control. By projecting our expenses and identifying homebase options for the likely scenarios, we feel comfortable we will be able to reduce our living expenses and be able to wait things out – which we recognize is a privilege.

We are fortunate to have a visa that allows us to stay in Taiwan for 4 months, which will give us plenty of time to assess where we should go once our visa is up. We hope to be able to visit our respective families once the situation back home will become safer for us to do so. Once we all get through this, we are looking forward to resuming our nomadic travel although we will approach it differently as many people will likely approach life in general differently. 

What about you? What major changes did you have to make for the rest of the year? Are you optimistic about what is ahead of us in the year to come?