Location Independent – My Digital Nomad Journey Pt 2

Following on from my article a few weeks ago when I declared that I’m giving up my flat and living the life of world travelling nomad, I have now finished most of my research into how actually to become location independent and am finally ready to go.

Even if you’re not jumping on the digital nomad bandwagon, I hope this research will still be useful. I reckon that provided you go on holiday abroad at least once a year then you should find this useful.

So without further ado, let’s dive into it.

Location Independent Banking

As I will still be earning in pound sterling it makes sense to keep my accounts in that currency. My current bank accounts are already pretty location independent: I never need to go into a branch and they can easily be accessed online.  The UK also has some pretty good consumer protection so all things considered it makes sense to keep them as they are.

But as the majority of my spending will be in other currencies I needed to make sure I’m not being ripped off in exchange fees.

The first thing I did was to look into how much it will cost to continue using my current cards.

I discovered that most cards use the exchange rate of the card provider: those set by Visa, Mastercard or American Express. Mastercard is the best, then Visa, then American Express. But there isn’t really much in it.

Those exchange rates are almost always better than what you get at a currency exchange bureau, at the post office or at the airport.

Next I found that on top of the exchange rate, the bank you’re with will add a bunch of charges on top. I analysed what that means for my current cards:

Spending on a card

  • Capital One Credit Card: 2.75% ‘Non-Sterling Transaction Fee’.
  • Lloyds Debit Card: £1 + 2.99% ‘Non-Sterling Transaction Fee’

Withdrawing cash

  • Capital One Credit Card: 2.75% ‘Non-Sterling Transaction Fee’ + 3% (min £3) ‘ATM Withdrawal Fee’ + 2.5% ‘Interest Paid Off In One Month’
  • Lloyds Debit Card: £1 + 2.99% ‘Non-Sterling Transaction Fee’ + 1.5% (min £2, max £4.5) ‘ATM Withdrawal Fee’

So the credit card is cheaper for spending in shops and the debit card is cheaper for cash withdrawals.

If in one typical month I spent £1,000 in shops and withdrew another £500 in cash in £100s at a time. That would cost me an extra £27.5 + £29.95 = £57.45. Over a year that’s £689.4.

My solution: The Halifax Clarity Mastercard Credit Card.

It’s a Mastercard so I will be getting the best exchange rate, here’s how it looks when actually using it.

  • Spending on a card: No fees.
  • Withdrawing cash: Just interest on the cash. Roughly £1.5 per £100 withdraw and paid off with the automatic direct debit.

So in the same example above. £1,000 spent on the card and £500 withdrawn in cash, that’s only £7.5 in fees. Or £90 over the year. A saving of almost £600. Ka-ching.

Signing up to the card took about 10 minutes and it arrived within a week. Even though I’m self-employed they didn’t ask for any proof of income. They gave me a £4,000 credit limit and I made sure to set it up so the balance was paid off monthly via direct debit. I recommend getting one of these cards for anyone who ever spends in foreign currency country. Even if you only use it once a year, it’s free and ridiculously easy to sign up.

Note: My capital one card is a cashback card. I get 1.25% on all expenditure back as cash at the end of the year. Even so it is still much cheaper to use the Halifax Clarity card.

Travel Insurance

I generally dislike insurance. I don’t trust the insurer not to try and screw me over if something happens and I’m generally too chilled out to fight and force a payout. But the consequences of getting sick abroad and not being able to pay for it are just too great so I’ve reluctantly decided to get some travel insurance.

After plenty of research, I decided on LV. It is fairly cheap, provides all the cover I need and they have a very good reputation for paying out in unusual circumstances. I was quoted £93. That provides me with a year of cover where I can take unlimited trips provided each one lasts no more than 90 days. So provided I return to the UK every three months, it will completely cover me.

It also includes repatriation – they’ll pay to put my sick body on a plane home.

Location Independent Phone Contracts

My Main Phone

I have moved my phone contract to a sim-only deal on Three. I get unlimited texts, unlimited 4G data and 200 minutes – all for £20 a month.

It is also free to use abroad in 18 different countries including Australia, USA, France and a bunch of other places. That is a great deal as I will probably be spending quite a lot of time in those countries.

Before moving to Three, I got my iPhone through Vodafone. To move my phone and number over to the new contract I had to get it unlocked and get a PUC code. Both were free as I was outside my initial contract period and just involved phoning them up.

Three covers 18 countries, but what about the other 175 countries in the world?

Well, to begin with I can still use my iPhone free of charge wherever there is wireless. Something new I discovered is that I can also continue to use google maps while offline. The GPS service is free anywhere in the world and I can download the maps ahead of time so they can be used offline. That covers a lot of situations.

offline google maps digital nomad

But there will be times when I want to make or receive calls and texts. Especially as I plan to be settling in to wherever I find myself. Therefore, I’m going to go a step further and get myself a second phone. A cheap travel phone.

My Second, Travel Phone

From my research here are my top two phone choices:

Nokia 105 – £16.81

nokia 105 travel phone

A typical Nokia brick. Almost indestructible and has incredible battery life that will last for ages.

Advantages: Long battery life. Very cheap.

Disadvantages: No 3g. No GPS. No Whatsapp.

DOOGEE X5 – £47.99

Doogee x5 travel phone

A very cheap, fully functioning smartphone.

Advantages: 3G. Google Maps. Whatsapp. Dual Sims so you can have your UK sim and travel sim in at the same time.

Disadvantages: You’ll need to charge it just like any smartphone.

Perhaps unsurprisingly I am going for Doogee. Once I land in whatever country I go to, if it isn’t on Three’s list of free roaming countries then I will pick up a prepaid local sim.

I have also purchased aPerixx sim card carrying case for £7.99. When I am done with a country but expect to go back at some point I can just store the sim in there.

Dealing With International Phone Calls

At some point, I’m going to need to receive phone calls. Hopefully it won’t be very often, but it will happen. The problem is that there is a huge cost to receiving calls or checking your normal voicemail when abroad. According to the Three roaming page, there is a charge of £2 a minute to check voicemail, and £1.25 to receive calls.

Ok, that is out of the question.

My solution is instead to get a Skype online phone number. It costs $60 for every 12 months. You can choose a UK phone number and whenever anyone calls you it will go to your Skype account. So I can connect to Skype on my phone via wifi or local data and receive calls. There is also a voicemail service so if I am not online the caller can leave a message.

On my Three voicemail, I will simply change my message to one saying that I am not checking that voicemail but to call on my Skype number. As the Skype number has a central London area code, any caller will assume I’m sitting in an office in London when I am actually sunning myself on a beach in Brazil.

Location Independent Computing – Moving Everything Online

Technology is great, almost by definition ‘the cloud’ is designed for you to be location independent. When people talk about the cloud they are normally referring to having parts of your computing online. Instead of your files being stored on any one computer or phone, they can be stored somewhere on the internet and accessed from anywhere in the world.

Computer Files

google drive digital nomad2

I have used Google Drive on my computers for quite a few years now and highly recommend it. It creates a folder on your computer that you can use as normal. But every file you put in it is backed up online. You can access them from any other computer you set up with Google Drive, via their website or through an iPhone app.

It is free for the first 15GB which is more than enough for my needs as most important files are just word or excel documents..

Now if I lose my laptop while traveling, I simply:

  1. Change the password on Google Drive and Chrome.
  2. Buy a new laptop.
  3. Install and log into drive.
  4. Done.

In my Google Drive folder, I created a sub-folder called Travel. In it I am storing all my travel related information:

  • Flight tickets.
  • Hotel confirmations.
  • Photographs of my key documents:  passport, driver’s license, visas.
  • Important information and contact details for the country I am in. Emergency services numbers, British embassy number, etc.
  • Travel insurance details.

Basically, everything that I could possibly need in an emergency. The great thing about this folder is that even if I lose everything I can still access it from any computer or phone that has internet access.

Phone Files

Similarly with my phone, I can also move everything to cloud.

To protect my iPhone:

  • I will back up to my laptop regularly.
  • Use Apple cloud to store all the important stuff – contacts, calendar, notes.
  • Put a pass-code on the phone.
  • Put a pass-code on the sim card so that someone can’t just put it in another phone.
  • Set up ‘Find My iPhone‘ so if I lose it, the phone can be remotely disabled.

Location Independent Taxes

I wish! The world isn’t really set up for people who have no permanent residence. I had this idea when I started researching that I could disappear off every countries’ radar and not have to pay any taxes. But even if you never spend more than a few months in any one country, you need an official ‘country of residence’ or else life gets really complicated.

By default I am still officially a resident of the UK, and as long as that continues nothing changes with regards to my tax. I will still be paying the same taxes as if I was using all the public services.

Which begs the question, is it worth officially becoming a resident of another country to try and pay less tax?

Probably not, at least for the moment.

My companies are still UK based so I would need to go to the hassle of moving everything abroad. I just don’t think it’s worth it for my level of income. Besides, I don’t mind paying some tax. If everything fails and I end up quitting this location independent lifestyle I can always come back and be looked after by the state…

Location Independent Accommodation

As I mentioned in my last post, I will be mainly using AirBnb (if you sign-up through this link we’ll both get £14 free credit! Woop!), Couchsurfing and HostelWorld. Between the three of them, I should be able to find somewhere to live on short notice wherever I end up.

The best part about AirBnb is that you can filter by “hot tub”.

location independent seashell house airbnb

Location Independent Clothing & Packing

It is still a month to go before I leave so I am still working out what exactly I am going to take and what I will leave behind. When I do I will show you exactly what I’ve pack. Make sure to subscribe to email list to be sure to see that post.

Is there anything I’ve overlooked that I need to sort out before truly being able to call myself location independent? Please leave a comment and let me know (ideally before I leave!).

  • Avril F

    Sam Be Welcome accommodation came out of couchsurfing and worth checking out. It is truly community run whereas couchsurfinhmg I believe is now a business.
    ???? Keep the info coming. Avrilxx

  • Joe

    You might want to look at an app like prey which can track your laptops and other devices if they get lost.

    Could you fill out a P85 forum so you don’t have to pay tax in the UK while you are away? Or does it not work with companies?

    Joe

    • Hi Joe,

      So the P85 form can only be used if you don’t have any UK sources of income, which as I get company dividends and property rent counts me out…

      I’ve been doing a bit more research since then and it looks like there is some possibility for tax savings if I am able to be declared a non-UK resident. But to get that it involves spending 16 days or less in the UK in one year, or getting a full-time job abroad. Basically I’d pay no tax on the UK dividends.

      Plus I’d need to register as a resident in another country and pay tax there. And I would lose any UK benefits (not entirely sure what they are… state pension and NHS perhaps?).

      Currently it doesn’t feel worth the hassle!

      (if anyone knows any more about non-resident tax, please jump in! It’s all pretty confusing)

      Cheers, I’ll check out prey.
      Thanks
      Sam

  • gc

    Worth also picking up a prepaid debit card. Some give decent exchange rates for ATM withdrawals. And are another backup for if your main cards get blocked for any reason.

  • Iman Ahsan

    Hi Sam,

    Firstly, great website. I am just in the stages of building a website similar to this and you’ve given me plenty of ideas.

    With regards to the Halifax Clarity Credit Card, you will get charged interest from the day you withdraw any cash abroad. A way to avoid the interest is to pay back the full amount through internet banking by midnight GMT the same day. Just a handy tip in case one day you have to make a big withdrawal.

    Otherwise, it may be handy to get a back-up card such as the Norwich & Peterborough Building Society Gold Classic current account that has ZERO charges for cash withdrawals or purchases abroad. Granted it will be a Visa card so best use for only withdrawals.

    Additionally, a Metro bank account also doesn’t charge you on withdrawals/spending in EUROPE only.

    All the best!

    • Hi Iman,

      Thanks for the tips. That’s a good idea on paying off the balance before midnight. Let me know when your website is up and running, I’d love to have a look around.

      Thanks!
      Sam

  • Joe

    Did everything go according to plan? Would you do anything differently a year on?

    Joe

    • Hey Joe!

      Things mostly went to plan.

      LV turned out to be great insurance. Emma (my fiance) had her phone stolen in Argentina and they paid out more than it was worth without any hassle.

      The Skype number turned out to be useful. My phone didn’t receive texts in south america so it made internet banking almost impossible. I was able to replace my mobile number to the skype number which worked anywhere with internet.

      Spare phone was useful when Emma had her phone stolen. We still take a spare with us when travelling.

      The Halifax card has worked perfectly everywhere. Hasn’t been blocked once.

      The main thing that has changed is the accommodation. It is pretty difficult to find medium term accommodation. AirBnb can be really expensive and availability for somewhere a month straight can be hard to find.

      • Joe

        That’s good to know re the insurance!