FIRECracker is a world-travelling early retiree. She used to live in one of the most expensive cities in Canada, but instead of drowning in debt, she rejected home ownership. What resulted was a 7-figure portfolio, which has allowed her and her husband to retire at 31 and travel the world. Their story has been featured on CBC, the Huffington Post, CNBC, BNN, Business Insider, and Yahoo Finance. To date, it is the most shared story in CBC history and their viral video on CBC’s On the Money has garnered 4.5 Million views.
“Travel is the only thing you buy that makes you richer”. –anonymous
“But travelling is so expensive, I can’t afford to travel all the time.”
“I don’t know what I would do with myself if I travelled to one place and stayed there for a whole month!”
These are just some of the questions I got from people I met while attending the Travel Summit.
Having been out of the workforce for nearly 8 years now, it’s easy to forget what it was like to cherish those precious 3-4 weeks of vacation, then spend all year saving up for that lavish trip of a lifetime to get away from all the stress.
As it turns out, there are some big differences between vacation and travel that most people don’t understand. So, in this post, I’m going to try to clarify them and, as a result, hopefully help you understand why vacations are expensive but travelling isn’t.
Experience
Experience wise, vacations are an escape. It’s a way to unwind from the stress of a job. This is why vacations tend be at a resort or hotel, in one location, with unlimited drinks, food, and staff who wait on you, so you don’t need to worry or think. It’s about comfort and decompression. Vacations tend to be short and last a few weeks at most.
Travel, on the other hand, is a lifestyle. To quote my friend, Alan, “You’ve built a life that you don’t want to escape from” so instead of de-stressing, you’re discovering different cultures and expanding your mind. You travel to live life, not run away from it, and as a result you eat, drink, take public transportation, and otherwise just live like a local. Travel tends to last months if you’re semi-nomadic or years if you’re fully nomadic.
Now, I know that these are tendencies. Of course, they are retirees who also go to resorts and travellers who try to use it as an escape or as a way to “find themselves” (spoiler alert: your problems will continue to follow you no matter where you go). But the ones who travel as a lifestyle do it because they love it.
I also find it interesting that people who take vacations seem to be afraid of free time. They say things like “how will I ever cope with not doing anything for a whole month?!”
This confused me at first, but then I realized maybe they’re just traumatized by work. I get where they are coming from because I was in the same situation before. But I now know that there’s absolutely nothing wrong with just being happy, doing nothing, and enjoying life for a month. Life is meant to be lived, not fast-forwarded. After all, no one ever said on their deathbed “I wish I’d worked more”.
Cost
When we first quit our jobs to travel the world, I didn’t understand why travel would save us money because the only type of “travel” I’d experienced were lavish vacations I splashed out on to decompress from work.
Given that vacation packages cost $1000-$5000 per person per week, not including flights, naturally, I took that number and extrapolated it across the year, thinking it would cost us $104,000 – $520,000/year!
Of course, “travelling” seemed expensive! I paid at least $1000/person for round trip flights + $1000/person for the vacation package, and on top of that I was also paying my rent back home since I left it empty while I was gone.
I had no idea travel and vacation were completely different things.
Those who travel (digital nomads, retirees, people on sabbatical) have much more time and flexibility, so they can spread their costs over a long period of time. When you have the option to fly on a Monday or Wednesday, the cost is significantly lower than when you need to squeeze out time from work to catch a plane on a Friday, Saturday or Sunday with everyone else.
You also have the option of balancing out expensive places like Switzerland with inexpensive places like Thailand, so the average cost is a quarter of what you’d spend on a vacation package.
Here’s an example of how much I used to spend on vacation, versus being fully nomadic, versus being semi-nomadic:
Vacation (3 weeks)
| Item | Cost |
| Week 1: 7 day All inclusive resort in Cuba | $1000/person |
| Week 2: 7 day Caribbean cruise | $800/person 1-week Caribbean cruise + $150 each for tip + $150 each for booze = $1100/person |
| Week 3: 7 day all-inclusive Mediterranean Cruise | $1100/person for a 1-week all-inclusive Mediterranean Cruise + $150 each for tip + $150 each for booze = $1400/person |
| Flights: (high season, weekend departure only) | $800 round trip/person + $800 round trip/person + $1600 round trip/person = $3200/person |
| Total Vacation package daily cost per person, including flights | $1100 + $1400 + $3200 = $6700/person for 3 weeks = $318/person/day |
| Rent being paid back home + wifi | $1500/month/couple + $53/month/couple = $1553/month/couple = $777/month/person = $26/person/day |
| Total vacation cost | $318 + $26 = $344/person/day |
Here’s an example of a hotel I used to stay in on vacation:
Nomadic (1 year)
| Item | Cost |
| Thailand (3 months) | $1150/person/month |
| Portugal (3 months) | $1500/month/person |
| Toronto (1 month) | $1700/month/person |
| USA (1 month) | $2000/month/person |
| UK (1 month) | $2250/month/person |
| Sweden + Spain (1 month) | $2500/month/person |
| Malaysia (2 months) | $1200/person/month |
| Average cost of living per person per month (rent, food, entertainment, transportation included) | ($1150*2 + $1500 *3 + $1700 + $2000 +$2250 + $2500 + $1200*2)/12 = $1346/person/month = $45/person/day |
| Add expat health insurance of $100/person/month, and cheap flights bought with points and during off-peak season and weekdays costing $500/person/year | $5/person/day |
| Total cost of living | $50/person/day (there is no double rent because you have no home base) |
Here’s an apartment-style hotel I booked on Agoda.com (and no, that’s not a typo. The cost is literally $15.60 CAD/day or $11.47 USD/day, less than most couples spend on daily coffee in North America. And it comes with a rooftop pool!):
Semi-Nomadic (5 months) :
| Item | Cost |
| Rent back home: | $1500/couple/month + $53 Wi-Fi = $26/person/day |
| Home Exchange fee | $204/year |
| Additional accommodation costs | free (using Home Exchange where you can swap homes non-simultaneously using Guest Points) |
| Food, entertainment, transportation for 5 months | $900/month/person (less expensive than what you spend at home when you’re in South East Asia, Mexico, Eastern Europe, or the Balkans) |
| Travel insurance | $57/month/person |
| Flights | $1000/person bought with points and during off-peak season (slightly more expensive than fully nomadic because of the return flight back to your home-base) |
| Total cost of living | $26 + ($204 +$1000)/5/30 + ($57+$900)/30 = $66/person/day |
Here’s a Home Exchange we stayed in in Croatia:
As you can see, vacationing costs 5-7 times more than travelling!
Minimalism
Travel teaches you to value experiences over things. Vacations do not.
Once I started travelling, I became more minimalistic because there’s only so much you can carry on your back for a whole year. I also realized I didn’t need most of things I owned because I didn’t even remember what I packed away in my parents’ basement before I left. In fact, after I came back, it was easy to donate most of it since if I hadn’t use it in the past 8 years, I wasn’t going to ever need it.
I now treasure my memories from my adventures and time spent travelling with friends far more than any “stuff” that I only get a temporary high from. My memories continue bringing me happiness years after the experience is over.
Now, before you freak out about me telling you to donate all your stuff, know that there’s nothing wrong with owning things. I get that some people miss having more than a week of clothes and their sentimental items. What I realized is that it doesn’t have to be all or nothing. Once you become FI or can make your work location independent, you can choose the semi-nomadic lifestyle (like snowbirds) and travel for 50% of the year, which lets you enjoy endless summer, novel experiences, while still owning things the things that you love.
The key to living this lifestyle is Home Exchange (full disclosure: this is an affiliate link so I will get a small commission if you choose to complete your profile), which let’s you travel while avoiding double paying for accommodations. Plus, it’s nice to have trustworthy people take care of your place while you’re gone and helps you make friends all over the world. Just make sure you read your local rental or HOA laws to make sure you’re not violating any rules. Here’s a post I wrote about how to get started.
And if you don’t have a rental or own a home to exchange, don’t worry, you are saving even more money by being fully nomadic.
There’s nothing wrong with going on vacation, but “travelling is expensive” is not the same as “vacations are expensive”. Vacations and travel are completely different.
What do you think? Is travel different from vacations? Which do you prefer?