The idea for this post came to me the other night when I was chatting with a friend of mine who relocated to Budapest from Israel. We were talking about what we pay for rent, where we go grocery shopping and what we spend our money on. I realized that what we were really talking about was the cost of our freedom.
I believe that freedom is far less elusive than we are generally lead to believe and much cheaper. You don’t need to spend a lifetime saving for retirement before you get to travel the world. I believe that there is a certain financial monthly benchmark of income that you need to meet to achieve freedom and it is a lot lower than we think.
But before I go any further, let me tell you what freedom is to me and list a few qualifiers. I’m not talking about retirement. I still work and plan to continue to do so in some shape or form for the rest of my life. When a man doesn’t work he goes crazy, it’s not a good scene. I’m not a workaholic but I start to get restless after a few days of doing nothing.
I should also mention that the kind of freedom I am about to describe is generally only applicable if you don’t have any dependents (pets or children). If you have a spouse or significant other, that will also complicate things. You’ll both have to be on the same page to make my kind of freedom work.
You’ll also need to embrace a minimalist lifestyle. If you want to drive a fancy car, have the biggest TV and be a big baller, high roller, then this post isn’t for you. If you’re happy living in a regular apartment and cooking most of your meals, then your path to freedom becomes much shorter. Finally, you’ll need to be able to embrace a nomadic lifestyle to take advantage of the world’s financial inequities, which isn’t for everybody.
My Definition of Freedom
The ability to be able to live alone, preferably in a one bedroom apartment, located in an attractive city, in any region of the world you desire, while enjoying an active social life, without stressing out about making ends meet on a monthly basis.
That’s pretty much it. Live in a place you like, at a cost you can afford, with some extra cash left over at the end of the month for you to save, invest or enjoy.
If you want to live my definition of freedom in cities like New York, Toronto, Paris, London, Moscow, Shanghai or Tokyo, it’s going to cost you. The cost of rent will be significant. You’ll be spending thousands of dollars on an apartment, before putting any food in your mouth, going out with friends or buying new clothes. However, if you’re willing to be flexible, then you can live in some great cities at a much cheaper rate. There are affordable cities in every region.
In North America, which is probably the most expensive region in the world, New York and Toronto might not work, but Montreal can. I’ve heard that Las Vegas, if you avoid the strip, can be very cheap. In Europe, you might not be able to enjoy Paris and London, but Budapest and Berlin provide similar quality at far cheaper prices. Most of Eastern Europe is very affordable and now that it’s been 25 years since the fall of communism, it’s also quite developed. In Asia, Shanghai and Tokyo are expensive cities, but Bangkok or Taipei‚ provide intriguing alternatives. Latin America also offers some high value destinations. Argentina’s recent currency devaluation has made the country much cheaper.
While a specific city may be out of reach, most regions and their associated lifestyles are attainable, provided you can be flexible. A great website for comparing the cost of cities around the world is Numbeo. I used it when planning my relocation to Budapest. It shows the average cost of everything from rent, transport, eating out and groceries. Highly recommended.
What’s the magic number?
I believe that If you can find a way to take home $1,500 USD per month from an online income, then you can live a full life in many exotic destinations around the world. An annual income of $18,000 USD, while considered meager in North America, will be sufficient for you to live comfortably around the world. You won’t be rich, but you’ll be happy and you’ll be free. Of course, we should all be working to increase our income. I’m not suggesting that you get to $1,500/month and then coast. The more money you have, the more freedom you have, so try to earn as much as you can.
I currently live in Budapest, the capital of Hungary, a beautiful city in the heart of Europe. Here is what my monthly expenses look like.
Rent: One bedroom apartment, fully furnished, in an affluent, fairly central neighbourhood, with electricity, hot water, internet and cable TV – $475 USD
Groceries: I eat a lot of chicken, fresh fruits and veggies and enjoy treats from the bakery: $200USD
Gym: $60 USD
Transit pass: $35 USD
Smartphone plan (prepaid): $20 USD
Social outings: $100 USD
Miscellaneous expenses (Clothes, toiletries, apartment stuff): $100 USD
Health insurance: $85 USD
That comes out to $1075 USD. These are approximations, but I tried to round up on some of them. I doubt I spend a full $100 USD going out each month. The point is, with $1,200 USD, I can cover everything. A monthly income of $1,500 USD would provide you with some breathing room to go towards savings or a weekend getaway. This amount of money is sufficient to live inside the European Union and enjoy a high standard of living. Countries closeby such as Romania and Poland offer similar lifestyles and costs. Serbia and Western Ukraine (Lviv) are even cheaper.
There are cheaper cities to be found in Asia. I read one blog post by Lauren Juliff in her blog Never Ending Footsteps, in which she mentioned that she could live in Chiang Mai, Thailand for $700 USD per month. Once again, $1500 USD would be more than sufficient to cover expenses and then some.
What To Do With This Information?
The stability of a full-time corporate job is something a lot of people need. Indeed, knowing that you have 40 steady hours coming each and every week, with the possibility of benefits and maybe even a promotion is comforting. The question to ask yourself is do the benefits of stability and a solid salary outweigh the drawbacks of limited vacation time and the high cost of living you’ll have to deal with in many North American cities?
You can guess on which side of this debate my opinion falls on. I would rather be able to enjoy location independence and have the freedom to live in a variety of interesting locations around the world than to be confined to one city, albeit with the a steady corporate job in place.
If I could have a chat with my early 20s self, I would urge him to find a way to build a location independent income stream as quickly as possible. Do whatever it takes to get to that $1,500 monthly threshold and then take off. With internet technology and social media, the tools are now there for you to make money without going into an office five days a week.
So there you have it. It’s possible to live a life of freedom, at a much cheaper cost than I would have thought as little as a year ago. With the amazing advances in technology, there are no more rules anymore and the 9-5 grind is no longer required. We live in a time in which freedom is within everyone’s grasp. All you need to do is find a way to grab it. You only live once. Make the most of it.