Terra Incognita: World and Household Economies of Digital Nomads

The word "digital nomad" isn't really new; some writers coined the term way back in the '90s. Mainstream publishing picked it up and even called it another name—location independence.

Digital nomads are in no way things of the past. On the contrary, they are the future of work, and, by extension, the future of the labor economy.

Digital nomads are typically young pros who hate the four corners of an office and love to be in different places.

They quit the rat race and choose to walk the world of unknown futures. Constantly traversing terra incognita, these people are backpackers who have no permanent address but have dreams of making it big while doing something they love.

Digital nomads have no single, permanent employers. They can change from bosses to bosses as much as they hop from one place to another. And if that sounds like a lot of work and effort, it’s because it is.

First, digital nomads have different ways to earn money while they traverse the world. They can be travel bloggers or photographers. They can be bloggers who write articles about what they experience.

They can be consultants that offer their expertise to local companies. They can do any jobs that don’t need them to be stuck in an office somewhere.

And they get paid for that.

It’s not all glitz and glam, though. One travel blogger quit the digital nomad life because, he says, it’s exhausting, lonely, and unproductive.

He explains that even though it has been a romantic feeling to travel while earning, it wasn’t something one wants to do permanently.

Now, a person not familiar with how a digital nomad works may be asking questions about work and money.

After all, it’s not easy to not have a permanent roof above one’s head. It’s not easy to not have a steady stream of income. It’s perfectly understandable to be doubtful about this venture.

But the economics is simple: you need to have more “gigs” than expenses.

Connectivity and Gadgets

Digital nomads are technology-dependent workers. A digital nomad needs a computer, smartphone, and a pocket WIFI. After all, the word “digital” is there for good reasons.

The nomad needs to be connected to the internet almost all the time to communicate with clients, friends, colleagues, and families. He or she also needs the right gadget to accomplish his or her projects.

Insurance and Currency

Perhaps the most direct way that a digital nomad can affect the broader economy is when he or she travels and exchanges money.

Taxes and Other Legalities

Reality will hit a digital nomad hard if he or she fails to consider the tax implications of his or her gig. Some countries have crafted regulations for freelancers and digital nomads.

Nomads typically don’t have to pay taxes in their home country, and they may even be free from taxes in the host countries.

Meanwhile, for businesses, digital nomads are taking up more significant and more prominent roles in company functions. The flexibility isn’t exclusive to the nomad; the employer, too, enjoys some perks.

Generally, hiring a freelance worker cuts costs and lets the business access more services. At the same time, bosses can quickly solve the problem of skill gaps.

As digital nomadism becomes more and more popular among professionals, it’s not hard to imagine that more companies are going to hire them.

And this will change the features of the business landscape.

Let’s take the discussion one step higher here. As we have mentioned, digital nomads are in no way new to the world. They’ve been flocking around since the late 90s or even earlier.

What that tells us is that many of them have already established careers and are professionals among professionals.

They are earning six-figure paychecks. And therefore, they spend more.

Luxury digital nomads have higher compensations, meaning they have the freedom to travel and work without budget constraints.

Most of the time, they have clients all over the world, and they maintain the digital nomad lifestyle for both business and pleasure.

All over the world, businesses are setting up policies and regulations for when they hire these digital nomads.

So, can we expect businesses and economies changing the mold to accommodate these workers?

Indeed, we can.

Yes, you can be a digital nomad, but only if you’re ready to take on the risks and downsides of the lifestyle.

At the same time, never believe claims that all you have to do is take a leap of faith and do it. Seriously, living the digital nomad lifestyle takes a lot of planning.

The most important takeaway here is that apart from the romanticized lifestyle, the economics and the way you do business will be critical considerations before you take the plunge.

Are you ready to take the roads less (but are becoming more) traveled? Do you have the guts to traverse terra incognita?