Author Topic: Sell everything and become a Permanent Traveler?  (Read 46474 times)

gerardc

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Re: Sell everything and become a Permanent Traveler?
« Reply #250 on: August 16, 2018, 08:47:03 PM »
I am not a tax accountant, but doesn't the foreign earned income exclusion apply to earned income only (by definition)? If you are retired, you have no earned income and don't have to worry about it in any case. Your investment/retirement/other passive income will be taxed the same (or not taxed depending on how much you make).

True, but arebelspy said they were saving ~7k on taxes due to FEIE, so they must have foreign earned income of some sort.

Padonak

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Re: Sell everything and become a Permanent Traveler?
« Reply #251 on: August 16, 2018, 09:07:47 PM »
I agree that it's a bad idea to retire and move overseas if you can't afford to go back to the US. However, I think the key here is having a reasonable amount of retirement income and savings to be able to come back if need be, not to protect yourself in any possible scenario including the end of ACA and having to spend well into 5 figures per year just on health insurance.

I was born overseas and have an option to live in another country where health care is free (though not as good as US healthcare). As a US citizen, I would prefer to have an option to go back to the States if I retire abroad, but if health care becomes crazy expensive, I'm not going to pay what would be enough to live on in many countries just for health insurance in the US.

Obviously not everybody has ties to other countries with cheap or free health care. However, even if I didn't have these ties, I wouldn't spend the remainder of my prime years working just to protect myself against every possible situation. Even if ACA goes away, there will likely be US states that will offer free or cheap alternatives for lower income residents. If not, there are other countries with cheaper health care options where you can stay until you are eligible for Medicare or Medicaid.

Just like with everything in life, the key here is balance: save enough to have options but don't worry about the worst case scenario. How much is enough depends on your circumstances (e.g. having children, other dependents, health conditions, etc).
« Last Edit: August 16, 2018, 09:14:25 PM by Padonak »

secondcor521

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Re: Sell everything and become a Permanent Traveler?
« Reply #252 on: August 16, 2018, 09:38:40 PM »
About ACA exemption: does a US citizen still have to have health insurance if they stay in the US or pay a certain % of income as a penalty? I thought this was no longer a requirement. In any case, if you don't stay in the US it is not required as far as I know.

Technically the penalty ("Individual Shared Responsibility Payment") still exists but it was changed as part of the TCJA (the tax law from the end of last year) from the larger of a percentage of income or a specified dollar amount to zero dollars.  So effectively there is no penalty for not having insurance.  This change takes effect January 1, 2019, so the penalty is in place basically through the end of this year.

Living abroad also exempts one from paying the penalty.

Unique User

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Re: Sell everything and become a Permanent Traveler?
« Reply #253 on: August 21, 2018, 10:27:57 AM »
PTF.  Our current plan is quit early 2020 then sell our house, a rental house and most our stuff the summer of 2020 and live out of a RV seeing the US for 12-30 months.  Selling most of our stuff should be easy since most came from Craigslist in the first place.  We'll be 50 and 50+ in 2020 with a comfortable FIRE amount and our teen will start her sophomore year of college fall 2020.  Slow travel (~30 days at a place) overseas was next on my list, I love the idea, but we may be tired of traveling the US before we even get to overseas or we may love it.  Whenever we talk about our plans, we also remind each other that we'll have lots of bumps with our plans, but as long as we're flexible and not set on how/what/why/when of a plan it should all be okay.   

letsdoit

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Re: Sell everything and become a Permanent Traveler?
« Reply #254 on: September 26, 2018, 09:27:09 AM »
The Plan:
Since I no longer need to work...
Live in hotels/rooms/room shares permanently.
Lighten up all possessions, sell house and car.
Rent a small storage unit for the few remaining possessions.
Stay out of the US for 330 days to avoid ACA penalty.
Self insure for medical in low cost countries.

Advantages
See new countries on a constant basis.
Able to do Roth conversions to fill up 15% bracket without having to worry about loss of ACA subsidies.
No state income tax since no longer resident.
No property tax or home maintanence.
Taking pension/Social Security early is now possible since loss of ACA subsidies no longer a concern.
Money from house/condo sale can be invested and earn a return.
Save on medical insurance.
Few possessions means one can be nimble for travel.
If not a US citizen you may never owe tax since you are never residing in any country long enough to be liable for tax.  US citizens must still pay tax no matter where they are.

Disadvantages
Must always be moving
Travel can be stressful
Airfare/hotels expensive
Homesickness
Being locked out if real estate rises and you want to come back home and can't afford it when returning.

Any thoughts on this plan?

do you keep insurance for the times you go back to the US, or buy travelers insurance for those trips ?

letsdoit

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Re: Sell everything and become a Permanent Traveler?
« Reply #255 on: September 26, 2018, 09:33:16 AM »
A few brief answers for you on what we did.

I added numbering in to your quote for ease of reference.

Everytime I start daydreaming about long-term international travel, I end up worrying about logistics: 1 health care, 2 banking, 3 investments, 4 visas or immigration, 5 phone, 6 addresses, 7 taxes, 8 possessions/storage, 9 car, etc.

1. Sign up for an international health insurance plan.  Pay most stuff out of pocket in silly cheap medical tourism style.

2. Schwab checking account reimburses you all ATM fees worldwide (not only doesn't charge any, but also pays you back what their ATM charges you!).  Just show up, hit any ATM, and withdraw money in local currency.

3. Yup, they keep accumulating, no matter where in the world you are.

4. If you have a US passport, most places are no visa required or visa on arrival.  Only a few places are a hassle where you have to apply at their embassy somewhere ahead of time.  I keep the following bookmarked in my travel folder: Visa Requirements fro US Citizens

5. Google Fi.

6. http://www.TravelingMailbox.com

7. IRS still wants you to pay them.  If you're outside the US >330 days/yr, you can exclude foreign earned income

8. Dump em.  Keep a backpack of what you need.  If necessary, save a box of stuff in a friends/relative's garage (my wife's mom, for example, has our box of stuff w/ wedding album, birth certs, etc.).  The rest is in backpacks on our backs on travel days, or unpacked in our AirBnBs.

9. Sell it.

It's really a lot less of a big deal than you'd think.  The big thing is getting rid of everything.  You'll end up taking so much stuff to Goodwill, because you don't want the hassle of selling.  Besides that, the logistics are surprisingly minimal.

this is a great list , and hats off to the guy who has $1000 of stuff in his studio.  something to aspire to


letsdoit

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Re: Sell everything and become a Permanent Traveler?
« Reply #256 on: September 26, 2018, 09:36:50 AM »
i would be curious if people spend 6 months in the schengen and then go to asia or south america.  it sounds like fun, but LT travel can make you crazy too, and break up marriages
there is the 'yeah, it's another waterfall' syndrome that occurs after about 3 motnhs of straight travel, IMO

jim555

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Re: Sell everything and become a Permanent Traveler?
« Reply #257 on: September 26, 2018, 10:30:33 AM »
i would be curious if people spend 6 months in the schengen and then go to asia or south america.  it sounds like fun, but LT travel can make you crazy too, and break up marriages
there is the 'yeah, it's another waterfall' syndrome that occurs after about 3 motnhs of straight travel, IMO
You can only spend 90 days in Schengan, not 6 months.
"The Schengen visa allows the holder to a total stay of up to 90 days within a period of 6 months for tourist or business purposes."

letsdoit

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Re: Sell everything and become a Permanent Traveler?
« Reply #258 on: September 26, 2018, 11:32:05 AM »
thank you, corrected.  90 out of 180. 

once you leave you can reset and get another 90 out of 180, for eternity, right? 

EndlessJourney

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Re: Sell everything and become a Permanent Traveler?
« Reply #259 on: September 26, 2018, 01:28:17 PM »
i would be curious if people spend 6 months in the schengen and then go to asia or south america.

There are some European countries that are not in the Schengen that you're able to "duck" into for a short while.

United Kingdom, Ireland, Croatia, Bulgaria, Cyprus and Romania do not fall within the Schengen Zone and are all in close enough proximity that you can wait out portions of the "cooling off' period, to re-enter the Schengen again when you're re-eligible.

My wife and I are EU citizens so it didn't matter to us, but we've escaped to SE Asia for a couple of winters to escape the cold weather. Flights are cheap and the cost of living even cheaper.

it sounds like fun, but LT travel can make you crazy too, and break up marriages

Depends. We've been on the road full-time for over 6.5 years now and our relationship is stronger than when we started.

I have a theory that long-term, close-quarters travel doesn't make or break a relationship, it just accelerates the direction it was originally headed in.

In a normal relationship, you see each other for only the few hours before work and after work. A large chunk of the day is either in the office, commuting or asleep in bed. You really spend quality time together on the weekends, two days out of seven.

When you're together 24/7, your relationship develops in fast-forward. What could have taken years or decades to discover about the other person (good things and bad things) happens much faster. Separation and divorce might always have been an inevitability, just that you were too much of a stranger to each other to realize it in the beginning.

there is the 'yeah, it's another waterfall' syndrome that occurs after about 3 motnhs of straight travel, IMO

That's probably the biggest misconception about long-term full-time travel - that you're constantly sightseeing all the time, the same as you would if you were to take a two-week vacation. Obviously that intensity is impossible to maintain over months, let alone years.

It is true that you do get burned out from moving and sightseeing and experiencing new things all the time. But when you're living on the road, you do just that: Live. You settle in a place for a few weeks, maybe even a few months. You develop a routine.

What do you normally do when you're not traveling? Is it possible to do it somewhere else?

We settled in Cape Town for three months. I like playing music, so I found some musicians nearby where we lived and joined a band. We got together every couple of weeks to jam. The Internet has made it so easy to connect with like-minded people the minute you drop into a new place.

My wife likes to do yoga. Every time we settle somewhere for a short (or long) while, she finds a local yoga studio to practice.

You meet people doing the activities you like doing. Then you get invited to dinners and get togethers. Being a full-time traveler makes you very popular at social gatherings.

And you don't have to fill your time with social or productive pursuits. You can watch movies, TV, read, etc. just like you would if you had a house.

Outside of hanging with dear old friends and family, and doing activities that require you to have expensive equipment (racing cars) and be in a certain geography and climate (skiing, etc), there's no reason why you can't have as close to a normal life as you would at home when you're on the road.

jim555

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Re: Sell everything and become a Permanent Traveler?
« Reply #260 on: September 27, 2018, 11:35:59 AM »
PTF again. Sold my house about a year ago and got rid of everything to do the van travel thing full time but found it too difficult and restrictive with my older dog. So just rented a furnished place and have been doing it part time a month or two at a time with sister watching the dog. Sadly pup will be gone soon and I will go full time travel bum after that but with longer term rentals in various places rather than constant travel. Have a US and UK passport so will have more longer term options in EU countries. Although I'm not sure how or when to use them in tandem.
Past March 2019 the UK passport may be useless in the EU.  No one knows what will happen.

letsdoit

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Re: Sell everything and become a Permanent Traveler?
« Reply #261 on: September 27, 2018, 03:10:46 PM »
PTF again. Sold my house about a year ago and got rid of everything to do the van travel thing full time but found it too difficult and restrictive with my older dog. So just rented a furnished place and have been doing it part time a month or two at a time with sister watching the dog. Sadly pup will be gone soon and I will go full time travel bum after that but with longer term rentals in various places rather than constant travel. Have a US and UK passport so will have more longer term options in EU countries. Although I'm not sure how or when to use them in tandem.

do you sleep in the van ? if so, which type of van, is it decked out for sleeping ?