How to Become a Digital Nomad

---

• What are the Benefits of Becoming a Digital Nomad?
• How to Become a Digital Nomad and Travel the World
• Challenges of Becoming a Digital Nomad

---

Q: What is a digital nomad and how do you become one?
A: A digital nomad blends work with travel. Digital nomads work for themselves or in a remote job which enables them to move around and experience new destinations and cultures. Anyone with a good grasp of digital skills can become a digital nomad, check out our infographic to find out how.

---

---

---

What is a Digital Nomad?

Digital nomads blend work with travel.

They earn money online and are location independent, or nomadic, meaning they are not tied down to one particular place or location.

Digital nomads are also characterised by the type of work they do.

As the term suggests, their work is digital by nature and while many digital nomads are self-employed, they may also be a startup owner, or part of a remote team.

Although many believe that remote workers are the same as digital nomads, this is not strictly true.

Both can work from anywhere. The difference is that remote workers tend to work from home or local third places, while digital nomads are nomadic in nature; they move around from place to place.

Some industries and companies have embraced this new way of work and lead successful remote teams.

Professionals work remotely for a variety of reasons: more flexibility, better pay from a company that’s not in their hometown, family requirements, and travel.

Digital nomads often spend months each year traveling while working. This may be interspersed with time spent working from home or, depending on work schedules, periods of time spent purely traveling (funded by their digital work).

Where Did the Digital Nomad Trend Come From?

Technology has transformed the way people work, including where and when they work.

The ability to work from anywhere gained traction with the widespread and commercial adoption of wireless Internet connectivity and mobile devices.

Think WiFi, laptops, smartphones, and mobile data (3G and 4G).

---

Related: Remote Working Statistics

---

As more people began working remotely, it raised the question: why work from home when I can work from anywhere?

Digital Nomads and Coronavirus

While shutdown orders and closed borders meant workers had to stay close to home, the pandemic actually accelerated one of the driving trends behind digital nomadism: remote work.

The crisis threw the world into the biggest remote work experiment we have ever known, and the impact of this experience is continuing to unfold day by day.

According to Global Workplace Analytics, during the pandemic, 88% of employees worked from home on a regular basis. Before the pandemic, this figure was 31%.

Now, as the vaccine is being rolled out and borders are beginning to open up, the digital nomad lifestyle will once again take off.

Here’s the kicker:

More people than ever before have gotten a taste for remote work.

Those same people are long overdue for a vacation, and some are sitting on a pile of savings accrued from a year of doing, well, very little.

Post-Covid, we could actually see a surge in the number of people becoming digital nomads — perhaps more than ever.

The COVID-19 pandemic resulted in major changes in the make-up of digital nomads. The biggest shift is that traditional job holders have been unleashed from their offices and many, instead of staying in one place, are taking to the road. – MBO Partners, COVID-19 and the Rise of the Digital Nomad

---

What are the Benefits of Becoming a Digital Nomad?

The benefits of becoming a digital nomad often correlate with that of remote work.

Both work styles allow you to:

• Be your own boss
• Work flexibly
• Choose your own work schedule
• Enjoy a sense of freedom
• Work from wherever you feel most productive.

The benefits of digital nomadism go even further.

It allows you to:

• Explore new places
• Travel the world and go on neverending vacations
• Visit places with a low cost of living and enjoy a comfortable, even luxurious lifestyle

Another major benefit is your income.

The best digital nomads earn passive income, which means that they work very few hours each week while still earning a solid amount of money.

Of course that’s not a guaranteed part of the digital nomad lifestyle. But with the right skills and work ethic, it’s achievable.

Challenges of Becoming a Digital Nomad

The digital nomad lifestyle is not without its challenges.

Why Now is a Great Time to Become a Digital Nomad

Business leaders, employers, and workers all over the world are moving toward virtual ways of working.

Even in a post-Covid world, remote work is likely to remain a major part of our working lives.

BCG’s survey of 12,000 workers and business leaders suggests that 40% of companies expect their employees to follow a remote-working model in the future.

Many companies now recognize that the old ways of working are outdated; employees no longer need to be sat at a desk in an office to be productive.

In fact, many people are more productive when they’re away from the office.

The focus is now shifting to the people.

That opens the door for more flexibility and choice over where, when, and how employees work.

There are now tons of exciting new opportunities opening up as more companies virtualize their business models. Even brick and mortar companies are pivoting and adapting to digital business models.

Employers that were skeptical of flexible work in the past may now, finally, be more accepting of new — and more productive — ways of working.

If you’re thinking about becoming a digital nomad, your window of opportunity is here.

---

The Financial Side of Digital Nomadism

Before you book your trip, there are some things you need to take care of first.

To become a digital nomad, the first step is to determine how much income you need to support your digital nomad life.

Where that income will come from?

What skills do you have?

Are those skills transferable to a work-anywhere culture?

You will also need to think about expat health insurance, taxes, travel insurance, banking and accounting, housing, language, and technology.

This last item is crucial to digital nomad success. Technology is, afterall, what enables remote workers to be successful from anywhere.

Let’s break it down and look at the key requirements in detail.

Choose Your Business Model

When researching how to be a digital nomad and work remotely, the first step is to choose what kind of business you want to start online.

Digital nomads can be freelancers, entrepreneurs, contract workers, or even full-time employees. There are various companies that have part or fully remote teams (Buffer, Automattic, InVision, Zapier, Gitlab, Trello, and us at Alliance Virtual Offices).

---

Related: How To Be A Digital Nomad While Running A Business

---

Given the availability of digital gig work, freelancing is the most obvious route. It typically provides regular work and a more stable income compared to web-based entrepreneurs.

But as a freelancer, you will typically work longer hours and earn less than a successful entrepreneur — particularly those entrepreneurs with an established remote team or passive income.

Starting a business online involves more risk and effort in the early stages.

You may be working long hours with no pay at the beginning. However, successful online businesses can essentially ‘run themselves’ while you work only a few hours per week.

There’s no right or wrong answer.

It depends on your skills and how easily you can transfer your experiences to an online business setting.

Being a full-time employee for a company provides more stability, as your income won’t vary from month to month. If you choose the freelancer, entrepreneur, or contractor route, you need to determine how much money you need each month and how you are going to earn it.

Many freelancers and remote workers use the 80/20 principle to better plan their income; 80% of their income comes from one long-term client and 20% of it comes from small, short projects or contracts.

Whether you choose to freelance, or co-found a business, or continue working for an employer remotely, the point is that you make enough money to be comfortable and cover your costs, while enjoying the digital nomad lifestyle.

Digital Nomad Jobs

Whether you decide to go freelance or set up a business, here are some of the most popular digital nomad jobs.

Digital Nomad Business Models

There are many other options besides these. When creating a business, try to think outside the box and identify a gap in the market or pick a niche that’s under-served.

How to Become a Digital Nomad with No Experience

Not sure where to start? Wondering how to be a digital nomad with no skills?

You’re not alone.

Yet that hasn’t stopped millions of people from pursuing the digital nomad lifestyle — and you can, too.

Start by choosing a freelance job that doesn’t require a lot of experience. For instance, blogging, freelance writing, transcribing and virtual assistant work can be started immediately, and you won’t necessarily need qualifications or extensive experience.

You can also start a business with no experience.

Speak with someone who has experience going freelance or starting a business — such as a startup advisor or even a friend or family member — and gain as much information as you can.

Having an idea is one thing, but you’ll need to know how to monetize it, and how quickly you will start to earn income, before quitting your day job and booking a plane ticket.

Failing that, you’ll need to live off savings or some other form of income until your business takes off.

Remember, you can always outsource your work and hire someone who does have the necessary experience.

---

How to Become a Digital Nomad and Travel the World

Ready to learn how to become a digital nomad & work from anywhere?

Once you have chosen your business model or freelancer job, you’re one step closer to achieving your dream.

Now it’s time to start reducing ties to your current physical location.

• Cancel gym memberships, magazine subscriptions, and any other recurring subscriptions that are tied to your address.
• Give notice to your landlord.
• Sell your car. Unless you’re traveling domestically, in which case you may want to keep it or trade it in.
• Put treasured items into storage.
• For anything else, get rid of them:
  • Raise money to fund your trip by selling items through online auctions, resale sites, local social media groups, or a garage sale (once Covid restrictions allow).
• Deal with debts. You don’t want to be tied down with debts and interest, so consider ways to reduce or eliminate your debt entirely:
  • Control your spending
  • Pay off the highest interest debt first
  • Consolidate multiple debts with a lender who charges a lower interest rate
  • This checklist from MoneySavingExpert offers useful advice.
• Get travel insurance:
  • Use a comparison site to weigh up the benefits and costs of different insurance providers
  • Don’t just settle for the cheapest insurer
  • Make sure it covers your needs, the places you are visiting, and the activities you’ll be doing there
  • Consider covering your work possessions for theft and/or damage — after all, your laptop and smartphone will become your livelihood.

Get a Virtual Address and Phone Number

Even though you don’t need a physical office, you will still need a business address and phone number for tax and registration purposes.

Your address becomes a primary point for receiving mail, which can be forwarded to your main location.

Or if your virtual office center has a digital mail system, you can have images of your mail scanned and sent to you through a secure platform.

In addition to receiving mail, you can use your business address for business setup, to open a bank account and to build financial credit.

It will help you to create a marketable presence in the city of your choice, and you can also put it on your website, email footer and business cards.

Importantly, it puts customers’ minds at rest to see a recognized address attached to a business, rather than a home address.

And then there’s the prestige of a fancy address.

You might be working poolside in Taipei or sipping the best arabica coffee in Tamarindo, but a virtual address gives your business a base anywhere you want — New York City, London, Paris, Sydney, or countless other destinations.

You’ll find hundreds of virtual office locations worldwide with Alliance Virtual Offices.

Get a virtual address with mail processing, mail forwarding, and onsite meeting rooms or hot desks from just $49 per month.

A number gives your business an identity. It’s no longer a one-person-show running off a cell phone, it’s a thriving entity that’s professional, trustworthy, and legitimate.

Business numbers aren’t expensive, and you can easily route calls to your cell.

But you should consider getting a VoIP system to ensure calls are handled efficiently at all times of the day (and night, if you’re in a different time zone to your clients).

Through Alliance, you can get a dedicated business number with a local area code that matches your virtual business address.

It includes a VoIP phone system for just $30 per month with unlimited calling minutes, phone extensions, custom call greetings, auto attendant, voicemail by email, options for routing calls, and much more.

And since it runs off the Internet, it fits easily with the digital nomad lifestyle.

Choose Your (First) Destination

Now the fun starts!

Once you have made these preparations, it’s time to choose your destination.

You may already have a place in mind. Some people start with a destination they’re familiar with or a country that speaks the same language.

One thing’s for sure, there are many amazing destinations out there and something to suit all tastes: mountains, lakes, beaches, cities, snowy pistes and open plains.

Most digital nomads favor nations with low costs of living, particularly if they’re starting a new business with limited income.

It’s worth joining a digital nomad forum or online community, as digital nomads are constantly discussing the best places to go.

Also check out Nomad List for information about cost of living, Internet reliability, safety, and other must-know details.

That being said, there are a number of locations that frequently appear on lists of ‘digital nomad hotspots’. Take a closer look at these destinations for inspiration:

• Czech Republic (Prague)
• Thailand
• Mexico
• Taiwan (Taipei)
• Spain
• Serbia (Belgrade)
• Portugal (Lisbon)
• Columbia
• Estonia

Figuring Out Taxes

You’ll still need to pay taxes when becoming a digital nomad.

If you are a US citizen, you’ll need to pay taxes on your worldwide income. Luckily there are some exclusions available.

As a digital nomad, you’ll likely qualify for the Foreign Earned Income Exclusion (FEIE), which lets you earn $100,000 per year without paying any US income tax.

According to Nomad Gate, if you are paying income taxes in the country where you’re actually resident (on income that’s not covered by your FEIE), you can also credit these against any additional US tax liability.

---

Related: US Tax Guide – Nomad Gate 2021

---

In order to benefit from the Foreign Earned Income Exclusion, you’ll need to meet one of the following two criteria:

• Live and work outside of the US for at least 330 of any 365 day period – known as the Physical Presence Test (PPT)
• Live and work in a foreign country for an entire calendar year – known as the Bona Fide Residence Test (BF)

---

Related: US Tax Guide for Digital Nomads – Taxes for Expats

---

If you move abroad while working for your current employer, speak to their HR representative for advice on paying taxes.

If you have previously worked as an employee and decide to switch to self-employment or entrepreneurship, you will need to make a few adjustments.

You may want to create an LLC, especially if you are starting a business rather than working as a freelancer.

For financial and tax advice, we always advise consulting an accountant. They will provide the most accurate advice and can save you tons of money in the long run.

Plus they’ll take a lot of time and stress out of filing your taxes.

Becoming a More Successful Digital Nomad

Becoming a digital nomad is a huge life change. It’s equal parts exciting and daunting.

You will learn by your mistakes and pick up new tips and tricks along the way.

---

Conclusion

Remote work is on the rise and with it, digital nomadism is set to skyrocket in 2021.

Yes, there are challenges.

This lifestyle is not for everyone. You may get homesick, burned out, or you may find that your business venture doesn’t take off.

Some people dip their toe in the world of work/travel and realise that they can still enjoy all of the freedom and independence of entrepreneurship by simply working from home.

There are times when life on the road can feel like all work, no play.

But isn’t that the same in every work situation?

Maybe you’ll become one of the millions of people who are successfully experiencing life as a digital nomad.

You won’t know unless you try it.

Once you’ve made the decision to break away from the 9-5 life, you’re already part way there. It’s an opportunity to do the work you love, when and where you want.

Now it’s up to you to make it happen.

---

Further Reading

• SaaS Startup: How to Launch a Software as a Service Business
• How to Start a Subscription Box Business
• Remote Work Toolkit