A few weeks ago I published an article called “Why The Digital Nomad Lifestyle Is Not Sustainable”. This little blog post caused quite a stir among fellow digital nomads and aspiring ones. Many people seemed to be confused with the terms digital nomad and location-independence, which is understandable because they are often used interchangeably. However, they are not exactly the same. Although, there seem to be a few different definitions out there, I want to give you one common way to look at the terms and the one that this blog is based on. At the end of the article you will know what both lifestyles are about and if you should go for a digital nomad or a location independent life.
Table of Contents
Before I give you my personal idea of the two different lifestyles and the definition that is most commonly used, I want to show you examples of how other people define these ways of living. Every once in a while I find them on blogs or in certain Facebook groups:
(1) A digital nomad is a young, 20-something person (often male) who works in programming. This lifestyle is more like a gap year. A location independent life on the other hand is considered to be more professional. It is something that mature people do on the long-run and they are very successful with it.
(2) Other people see the difference in the amount of income the person generates. They believe that digital nomads only live in cheap places because they don’t have enough money to travel to more expensive regions. Location independent professionals on the other hand generate enough income to live and travel wherever they want.
I have to admit that I do not agree with these definitions because I don’t believe that being a digital nomad is based upon factors like age, the level of professionalism or the generated income. But again, there are no exact and universal definitions out there. That is why the following article only explains the most common ideas.
Definition of a Digital Nomad Life
A digital nomad is a person who makes money online. He or she is not bound to any location or office and needs an internet connection and a laptop/smartphone to be able to work.
In addition to this, digital nomads like to travel around the world.
For one, because they simply enjoy seeing new places and meeting new people.
For two, they like to make use of the geoarbitrage concept. That means that they often travel to and live in cheaper regions of the world but earn their money in countries with higher average income rates. For instance, they live in Thailand and profit from low living expenses but work for clients in the USA, who are able and willing to pay higher wages.
Another benefit of this lifestyle is that people can significantly lower their income tax payments or can even get along without paying income tax at all. How? Many countries have the so called territorial tax system, which means that they won’t tax foreign source income. When you live there, but make your money in another country, you don’t have to pay income taxes.
A second alternative to avoid taxes legally is to avoid being considered as a resident for tax purposes. Some countries will, for example, only make you pay taxes if you stay there longer than 182 days a year. As a digital nomad you move places frequently and thus, can easily avoid this type of residency.
If you want more information about digital nomads and taxes, check out the linked article that discusses the concept of the Flag Theory.
In conclusion we can say that being a digital nomad includes two parts: working online (“digital”) and traveling (“nomad”).
Disadvantages of Being a Digital Nomad
I have already written in detail what kinds of disadvantages digital nomads have to face, so I will only give a few of the main points here.
- Every time a digital nomad changes locations, he has to make sure to get the right visa (and working permission if needed).
- Not having a permanent address also means they have to use alternative addresses for everything that requires an actual postal address, e.g. bank account statements or invoices for clients.
- Different time zones and internet qualities can make it hard to work with clients, employees or business partner.
- Although, there are many communities out there for digital nomads, it can be very hard to make and keep friends, due to the constant leaving.
- Some will also struggle with keeping up a decent level of productivity, caused by, for example, the lack of routines.
Definition of a Location Independent Life
A person who is living a location independent life is making money online, too. He is again not bound to any location and can work from wherever he wants to.
Many work-from-home professionals don’t have to go to an office and thus, are location independent. The same goes for employees who can work for their company on a remote basis.
These people can basically work from wherever they want. That can be their home, co-working places, their family’s house or any other location around the globe.
Often, people who live a location independent life prefer to have a home base and if they wish, go on extended holidays and only occasionally take their work with them.
So a location independent life is defined by having the freedom to live and work wherever you want to, which does not mean that you have to travel.
Disadvantages of Being Location Independent
- It always depends on what kind of work they do (freelancing, remote work in a permanent position or having their own business), location independent professionals can make their own schedule and find their own “office”. While this is seen as something positive by most, some struggle to stay productive and focused with so much flexibility.
- Some also miss having colleagues around and feel lonely if they are not surrounded by coworkers. However, this problem can be minimized by going to coworking spaces or planning regular online meetings with business partners and such.
- Another negative point could be the acceptance by others. Many people either envy such a lifestyle or they believe that these people don’t really work, since they can stay at home all day.
In general it is to say that the digital nomad and the location independent life share many common disadvantages.
Comparison Of The Lifestyles
As you can see, all digital nomads lead a location independent life.
But NOT all location independent professionals are digital nomads.
Often the difference only lies in their preferences of having a home base or choosing to be a perpetual traveler.
A digital nomad likes to use his ability to travel the world and often move places every couple of weeks or months without a home where he actually returns to after every trip. So he is bringing his entire life with him everywhere he goes.
Someone who lives a location independent life on the other hand, is free to go wherever he wants to, too, but he chooses to have a base where he lives. His life revolves around that home base, which also means that he is free to travel wherever he wants to.
Additional Term: You might have also heard of the term Slowmad. This is short for Slow Nomad and basically refers to nomads who don’t change their location too fast, but take their time and stay at a certain place longer than most would do. However, there is no strict border that says how long you need to stay in one place to be considered as a Slowmad.
Real Life Example (To Confuse You Even More)
A few days ago I sat next to a Brazilian guy on the flight from Bangkok to Saigon. He told me that he lives in Chiang Mai (the unofficial digital nomad capital of the world), works online and he only flies to Vietnam to do a visa run.
“Oh, so you are digital nomad!” was the first thing that came to my mind. Much to my surprise he answered “No, I’m not.” How comes? This guy lives in Chiang Mai for a couple of years now. He considers it as his home base and is working as a programmer with allows him to make money online.
As much as his lifestyle sounds like the one of a digital nomad, he doesn’t travel at all (except for his visa runs) and thus, is “only” location independent.
My Personal Lifestyle Choice
I have traveled the world extensively for the past ten years – mainly as a backpacker during or after my studies. I have been to over 60 countries before I quit my office job for good and became a full-time digital nomad a few years ago.
That’s why I didn’t feel the urge to travel that much anymore. Today I take my time with exploring new countries and like to settle for 3 to 12 months in a new place and go on shorter trips while living in that temporary home.
At the moment I thoroughly enjoy this lifestyle. But I also have to admit that on the long-run I will very likely choose one single home base, which I aim to live in for at least a couple of years.
I definitely want to continue living a location independent life. I cannot imagine ever being bound to a location again, let alone to an office. And I will also keep on traveling for definite periods. No doubt about that.
But I think after so many years of living out of my backpack, I will enjoy a steady and long term home base again, where I can leave all of my belongings and be part of a community for more than just a few months. A few years ago I would have never thought I will ever get to this point! Funny, how things change.
Popular Digital Nomads Who Settled Down
I am not the only one who moves from being a digital nomad to living a location independent life with a home base. See which other expert nomads chose to change from one lifestyle to the other:
Matt Karsten, who runs one of the biggest travel blogs out there, Expert Vagabond, only recently published an article announcing that after 7 years of being a digital nomad, he settles again in the USA.
Matt Kepnes, the face behind the famous travel blog Nomadic Matt, already wrote a few years ago that his full-time nomadic life has come to an end and why he is looking forward to the next chapter.
So did Conni Biesalski, who created Germany’s most popular travel and personal development blog, Planet Backpack. In her YouTube video she explains why she prefers a home base over a digital nomad life:
Is Becoming A Digital Nomad A Bad Idea?
Just in case you got the impression: I’m NOT saying being a digital nomad is not a good idea and that you shouldn’t become one. Absolutely not! This lifestyle has so many advantages. The experiences you make and the way your mindset will change are incredibly valuable in so many ways. I wouldn’t want to miss a single moment of my past couple of years as a digital nomad.
If this is the lifestyle you want to do, then go for it! This blog is dedicated to help aspiring digital nomads start their new life. Of course, I think it’s a great way of living :)
I only wanted to show you that a location independent life does not necessarily has to be the life of a digital nomad. Not more and not less.
What To Do First?
There is no universal answer to this question. Many people, including myself, quit their normal 9-5 job and went straight to being a digital nomad. It might take you a while in the beginning to gain ground but it is definitely not impossible.
However, the safer choice would be to become location independent first. Means, try to set up your remote job while you still have a home base and maybe while you are still working in your current job. This will give you a head start. Once you have your income source figured out, you have more energy (and resources) to focus on the traveling part.
As just explained, there is a significant number of digital nomads who cut down on the traveling part after 5, 10 or whatever years, settle somewhere and continue living a location independent life. But that isn’t obligatory for everyone. If you can manage to live the digital nomad life happily and successfully until you die, awesome! That’s a fantastic lifestyle choice!
Which Lifestyle Should You Choose
As you can see being a digital nomad and living a location independent life is not exactly the same. While all digital nomads are location independent, not all location independent professionals are digital nomads. You can also work from home and still be location independent.
There also is no universal answer to the question which lifestyle is better. You have to find out for yourself what works best for you. Nobody tells you have to become a digital nomad and travel the world only because you have a remote job. If you feel more comfortable working from home and only travel every once in a while (or even never at all!), then do so!
It’s not all or nothing. Although, this text was full of definitions, they are mainly just to clarify the terms a bit more. Don’t use them as strict guidelines. Pick the best pieces for you from every lifestyle and create your own.
What is your personal opinion and experience? How do you define both lifestyles and which do you prefer?