How We Fund a Life of Travel

 

How We Fund a Life of Travel

The question we're asked most often is "How do you fund your travels?" Every time someone asks, I want to reply with a story about how we made a fortune trading pork futures or timed the late 90’s dot-com bubble perfectly to cash-in on stamps.com. In truth, our story isn’t sexy. But what it lacks in sex appeal, it makes up for in effectiveness. A simple, reliable, proven strategy that worked.

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"Live Life with One Eye on the Present & One on the Future"

When we graduated from university, we were 22 years old and we had no idea exactly where the road ahead might lead. But that’s what inspired us. In our early 20’s, Sheri and I were brimming with wanderlust. We viewed the road ahead as a blank slate — an opportunity for an unscripted life.

At graduation, we had grand dreams. We dreamed of traveling the world... Of skiing and hiking and living in mountain towns – in Colorado, France, and Switzerland...Of exploring new places. But realizing dreams costs money, and our bank accounts were running on empty.

The obvious answer was to get jobs, hunker down, and start building careers and saving for the future. This advice seemed prudent. But sometime in our early 20’s, we developed a mantra that was already guiding our lives: ‘Live life with one eye on the present and one on the future.’

It was a simple idea. In life, we didn’t want to get so caught up in planning for tomorrow that we deferred our lives away. Living in the now was important to us. We wanted to live for today just as much as we knew we needed to start planning our tomorrow.

The solution to both our today and tomorrow came neatly packaged in the form of airline careers. Our airline careers were a last-minute turn of fate. Having both studied business, Sheri was already headed for a position with a healthcare company, and I was about to accept a job with a textile manufacturer when I received an unexpected voicemail. It was an airline recruiter about an analyst position in something called Inventory Management.

To be honest, I almost didn’t call back. I can still recall listening to the message as I imagined working at a desk in some giant airplane hangar filled with barf bags and Sky Mall catalogs.

But as luck would have it, I received a call from my dad that same afternoon. While catching up, I told him about the voicemail, and he let me in on a little secret. Something I hadn’t considered. “You know,” he said, “if you work for an airline, you fly for free.”

My dad was right. Working for an airline solved for both our desire to travel today and build for our tomorrow through an attractive combination of corporate salary and travel-enabling benefits that included free flights and travel industry rates on cars, hotels, Antarctic cruises, and more.

Plus, as it turned out, Inventory Management had nothing to do with Sky Malls or barf bags. Although I’ll confess, it does have a lot to do with how much passengers pay for airline tickets (please don’t hold that against me).

And so began my airline career, and soon after, Sheri found an airline job as well. It was the beginning of a 16-year love affair with the travel industry where, between us, we worked for three major airlines and an international hotel, as I built a career in loyalty marketing and Sheri built hers in e-commerce, marketing, and sales.

Our travel industry careers were a fundamental building block in the travel life we live today. It was our means of traveling the world on the cheap — an opportunity we took full advantage of as we logged more than 900 flights to 7 continents.

 

Creating Financial Independence

But our airline jobs were about more than just living our 'now'. They were about building towards something bigger. We needed to fund dreams that went far beyond weekend excursions to Paris and three-week trips to New Zealand.

From the moment we began our careers, we were planning and saving. Our goal was simple: we wanted financial independence. As we saw it, financial independence was the key to unlocking something bigger. By the time we turned 40, we wanted Freedom of Choice. Freedom of Choice was our holy grail. An opportunity to govern how we use our time. To live where we choose, work inspiring jobs, and take travel sabbaticals without sacrificing our retirement.

But, fresh out of college, with a net worth somewhere alarmingly close to $0.00, we were at the base of a financial Everest. Taking that first step was hard. The first deposits into our savings account a drop in the ocean.

As motivation, we set 4 primary goals for ourselves:

1) Build a big enough safety net to never feel shackled to our jobs. From the outset, we knew that a key to living a low-stress life was minimizing financial stresses and one of the main pressures we wanted to avoid was that feeling of having to show up every day for a job we didn’t like. We wanted the power to say ‘I quit.’

2) We wanted the financial resources to capitalize on unforeseen opportunities. In our early 20’s, we couldn’t anticipate our future. All we knew was that opportunities would arise and when they did, we wanted to make sure money wasn’t the thing holding us back.

3) We wanted to be in a position to retire at age 40. To clarify, it’s not that we were interested in retiring in the traditional sense. We just figured that building the financial freedom to retire would solve for the financial independence required for Freedom of Choice.

4) We wanted to have enough (wealth). Somehow our 20-something selves knew money was only part of life’s equation and time was the commodity in shortest supply. We wanted to know when to say when. We wanted ‘enough’ wealth for financial freedom without going overboard. No trading a precious chunk of our finite lives for more wealth than we need and more stuff than we require. Accumulating more simply to have more wasn't an acceptable return on the time sacrificed to acquire it. As the saying goes, you can always make more money, but you can't add more years to your life.

These early goals were important to us. They were motivating. They were our marching orders at a time when we needed inspiring goals to help us climb the financial mountain ahead.

 

Invest Early. Invest Often. Invest as Much as Possible.

In the beginning, our understanding of personal finance and investing was limited. But while we didn’t know much, we did understand the time value of money and power of investing in stocks.

It’s a lesson my finance professor shared in college with a simple example. I still remember his lecture all these years later. It went something like this:

“Let’s say all you do to save for retirement is max out your IRA each year (at the time the max was $2,000). If you start at age 22 and invest $2,000 each year in a Vanguard index fund with an average annual return of 10%, then you’ll have over $1.4 million when you retire at age 65.”

Perhaps it goes without saying, but this tip was one of the more useful pieces of information I picked up in college. I still remember watching my professor scribble the example on a whiteboard as I thought to myself, “Hmm, if such a simple investing strategy can yield those results, I don't see any reason why we can't achieve whatever financial goals we set for ourselves and retire early. We just need to set aggressive saving and investing targets at graduation and get to it."

The message Sheri and I took away was simple. Our age was an asset, which could be leveraged to reach our long-term financial goals. If we invested as early in life as possible, as often as possible, as much as possible, then we had a simple path to achieving financial freedom.

This insight was appealing. It was a not-so-sexy approach to getting up that mountain, which wouldn’t demand a lot of our time and attention; a solution which proved a perfect match with our desire to spend as much of our free time traveling as possible.

At a time when our financial acumen was limited, this advice gave us a road map. Maximize our income, save as much of it as possible, invest in a diversified portfolio of stocks and bonds. It was our foundation — a starting point, which we built upon to achieve financial independence.

Along the way, we capitalized on opportunities to create a tailwind. For example, we bought a house and rode the surge in the D.C. housing market and invested aggressively in the post-2008 financial recovery.

But more than anything else, we stayed true to our path. We followed time-proven financial best practices:

• We educated ourselves with books like the Wall Street Journal’s Guide to Personal Finance and Investing (a similarly helpful book available today is "The Wall Street Journal Guide to Starting Your Financial Life")
• We avoided unproductive debt
• We set annual budgets built around aggressive savings and expense targets
• We closely tracked our spending with financial management software (currently using Quicken)
• We capitalized on tax-advantaged retirement accounts
• We maintained a balanced investment portfolio

It was a simple, reliable, time-proven approach that worked. We achieved the goals we set out to achieve. In our 20’s, we built a financial safety net to fund our "I quit" ripcord. In our early 30’s, we seized upon our first major ‘unforeseen’ opportunity – quitting our jobs to travel overland for three years across Europe, Africa, and North America, our first taste of long term travel. And now in our 40’s, we've reached our goal of financial independence and Freedom of Choice.

Since achieving Freedom of Choice, we’ve been on an extended travel sabbatical that’s now approaching five years. This sabbatical has been an opportunity to live in new places like Florence, Italy, and Buenos Aires, Argentina and try new modes of travel including motorcycles and bicycles. It's been a wild ride that continues as I write this post.

So what's the moral of the story? I suppose it's that there's nothing extraordinary about our story. We didn't win the lottery, inherit a trust fund, or make-it big during the .COM boom. We simply planned, saved, and invested our way to financial freedom.

If you'd like to learn more about the steps we took to build the lifestyle we live today, checkout our post Lifestyle Design: 3 Steps to a Life of Freedom.

Have any questions? We're happy to answer them! You can either contact us via our Contact page or ask in the comments section below.