My Sabbatical

Source: RussBowling at flickr

In my last post, See the World for $5,000, I outlined a 6 month trip to less travelled places in Asia that would run about $4,400 as an extremely cheap way to see the world.

I then realized I have enough air miles to fly for free.  So my budget actually works out to:

Lodging – $300
Food – $120
Travel – $75
Internet/Phone – $30
TOTAL – $525 per month reasonable budget

SUBTOTAL FOR SIX MONTHS – $3,150

Plus plan ticket to get there – $0

TOTAL FOR SIX MONTHS – $3,150

Now I realize not everyone has a lot of frequent flyer miles for a trip like this. But with a book such as Chris Guillebeau’s “Frequent Flyer Master“, you might be able to get plenty of miles just by applying for a few credit card offers.

This leaves a lot of leg room for more luxuries on the trip. Being $1,850 below the $5,000 target budget,indeed one can double the average nightly cost of lodging to $20 per night, and still be under $5,000 for six months. That seems like a sensible place to splurge, since for an extra few dollars one can get hot water, air conditioning, television, or WiFi Internet. Although these things often come at the lower priced places too.

Note: Purchasing Chris’ book through that link earns sabbatical.me a bit of revenue, to help fund my next sabbatical. Thank you in advance.

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Source: Marco Bellucci at flickr

There is a gentleman named Raam Dev who is currently managing to live 6 months, in 3 countries, for $3,000. Oh, and he’s counting the plane ticket to get there, so his all inclusive budget for seeing the world is $250 a month over a 6 month period, or $1500.

Of course, my gut instinct is to say, it can’t be done. To eat and sleep for a month requires more than $250 almost anywhere in the world. Well, anywhere I’d want to go I think.

Raam is oblivious, as he should be, to me calling this impossible, and is doing it successfully anyways.

That’s a mind blowing revelation to me. I am a guy who withdraws $200 from the cash machine once a week for lunches and dinners that week. And here’s Raam who will live an entire month on that including hotels. At the risk of sounding like an ass, $250 is such a small amount to me.

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Source: Giorgio Montersino at flickr

There is a confluence (big word) between being a world traveller and being financially independent that is hard to ignore. In some ways it’s the elephant in the room – you can’t dream about visiting every country on planet Earth, or living 6 months a year in a sunny warm country, or being a photojournalist in war-torn or naturally beautiful locations without thinking about how you’re going to pay for it all.

So how ARE you going to pay for it all?

I have a friend who spent 9 months in India and China one year. It was the trip of a lifetime. I asked him how he did it, and his answer was “once my wife and I decided we were going to do this, we became so focused on it that we were able to save the money in about a year.” So simply by having a goal and cutting their lifestyle in North America way back, they were able to save the money ($20,000?) to do this trip. So the first option has to be “save for it”.

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Source: jonrawlinson at flickr

Iceland’s economy was the first to fall. All three of the country’s banks collapsed, and the stock market fell 96% from it’s high in a matter of days.

Greece is grabbing headlines now for its financial problems, needing a record $150 billion bailout from other European governments and the IMF. Greece currently has an annual government deficit of 13% of GDP, meaning the government has to borrow one-eighth of the size of their entire economy this year. There’s a very interesting article on how it all started.

And those might only be the first two European countries to be in trouble. Ireland’s deficit is 14% of GDP, and economists are worried that it could be next. Spain has had troubles for years (mostly relating to its real estate collapse) and is running an 11% deficit. Portugal is also under the microscope with 9% deficit. Besides the level of government spending, these countries have high unemployment rates, increasing debt service obligations, and falling credit worthiness making it more difficult for their governments to borrow.

I don’t mean to make light of their problems, and the long term solutions to the world’s financial crisis aren’t clear. But the thought did occur to me…

I wonder if this is a good time to move to Greece? Or Spain?

The Euro is actually at a historic low against the Canadian dollar – and has fallen 15% in the past year. (The US to Euro exchange has been about break even in the past year although very volatile, given America’s deep financial crisis as well.) But against Canada, Australia, India, Indonesia, Sweden, and  other countries that have not had as deep an economic crisis, the Euro is 10% down from year ago levels.

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Source: Keith Roper at flickr

Perhaps the biggest thing stopping people who dream of taking a sabbatical is that they do not know how they are going to survive without an income for an extended period of time. That is why I spend a lot of time on this site talking about how to develop a location-independent income. Of course, you don’t have to have an income while you are away if you have sufficient savings to live off of, or an investment income of some sort.

If I asked you, “How much would it take to live in Spain for six months?”, what would the answer be?

You might run some numbers in your head based on your experience with European vacations. You might say, “My last trip for my wife and I cost us $5,000 for two weeks in Paris. So it seems logical that six months would probably run $50,000-$60,000. European hotels run about $200 a night even for basic accomodations, so that seems logical.”

And you’d be wrong.

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Source: viZZZual.com at flickr

It would be really interesting to me to see some type of study that compares the following two people from age 20 to 40:

- Person A, let’s call him Todd, who spends his entire paycheck every time he gets it, always having the newest computers, cell phones, cars, etc.

- Person B, let’s call her Sally, who never spends her entire paycheck and is happy to use older computers and may not even own a cell phone

Just based on those two descriptions alone, is there some way to predict the overall success of their respective lives? Or is it still completely 50/50 random chance until we know more about their habits?

First, let me define success: success in this instance is being free to do what you want, not bound by financial constraints. Failure in this case is being forced to do things because you need the money or stopped from doing things cause you don’t have enough money. Is that a fair definition of success? I think so.

Now it is certainly possible that Mr. “Spend First Ask Questions Later” will either meet a rich heiress while he’s away on some vacation and will go on to marry her and live a fabulous life of the rich and famous. Or perhaps he will luck into a lotto win, or his prolific spending and risk taking will propel him to start a new online business and make a billion dollars.

But it’s more likely that he’ll end up broker than broke 5 years later, with $100,000 in credit card debt and most of his income going to make the payments. He’ll then be in a situation where he will need to stay in a miserable high paying job, or not be able to take a once-in-a-lifetime backpacking trip through China that will make his heart sing.

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Source: Fosforix at flickr

OK, in Part One, I outlined a business idea I had to sell t-shirts online. This is part of my plan to create an income that will sustain me while I am spending 6 months a year in a warm locale.

In the part, I will decide which of several ways to create a web site for it, and how to sell it.

Step Three: Decide How to Sell Them

I have several options for running my t-shirt business

a) Have someone do all the work, and only get a few dollars of per-unit profit from each sale

b) Take on the retail sales job and let someone else produce the shirts, getting a bit more of the per-unit profits

c) Getting a company to produce the shirts for me in bulk, taking on the up front risk, for the most amount of per-unit profit

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