Misconceptions about digital nomads
None of this is legal advice! I am not your lawyer!
When I talk to people about the digital nomad lifestyle they sometimes jump to conclusions. In this post I'll dispel a few of the most common ones.
Digital nomads are always on the move
I'll admit that at first, I went from place to place quickly, and was spending far too many weekends at the airport or train station, and far too few actually exploring. But I quickly learned that I was missing out living that way, and started to stay put as long as possible in a given place. These days I plan on a month, minimum, wherever I stay.
Digital nomads are wealthy
I have met some trustafarians and their ilk while traveling, but digital nomads are like any other group of people, with widely varying wealth and income. Some work just enough to get by, others work full-time at a demanding job, some are starting a business.
The truth is that being a nomad can cost as much or as little as you want to spend, given your constraints on time zones, and what your employer/clients allow. Through geo-arbitrage you can have a very high quality of life for low cost, or you can live in the trendiest part of an expensive city. You don't have to be wealthy to get started, and in fact it can be a great way to grow wealth if you can earn the salary of a Bay Area worker while living somewhere far less expensive.
Digital nomads are poor
There are a lot of lifestyles available to us humans, and being a vagabond who just scrapes by and wanders the globe is one of them. I don't pass judgement on living this way, but the "digital" part of nomad for most digital nomads involves the tech industry and a nice middle class existence.
Digital nomads lose their citizenship
You don't lose your citizenship by living abroad, or spending a lot of time outside the borders of your home country. Some countries, like the United States, allow their citizens to renounce their citizenship, but you are not likely to do so on accident, it's an ordeal.
Every country has an embassy and consulates in most every other country to help you if you lose your passport or have a similar problem and need help from your government.
Digital nomads don't have to pay taxes
This one is pretty complicated, but in short, there are ways for most people legally reduce their tax burden by carefully structuring their travels and stays. The basic idea is to avoid becoming a "tax resident" of any country, which is usually done by staying there for less than half a year in a given year. You will need to deal with the countries you are a citizen of as well.
But you will probably end up paying some taxes. And if you are American, you have to file a tax return reporting all of your worldwide income every year, even if you don't owe any tax.
The digital nomad concept is not enshrined in many tax codes so this is a source of problems and confusion for many nomads.
A lot of people are enamored of the concept of setting up foreign tax shelters in the Caribbean or Panama and shuffling money around the globe. As a rule of thumb you should have annual income above $500,000 for this to start to be worth the effort.
Digital nomads are lucky
This one is true! But in part we make our own luck. If you want to be a digital nomad but aren't sure how to overcome some obstacle in your path, tweet at me and let's try to work it out! I've met all kinds of folks living this way, and while some of them are incredibly talented, most of them are just ordinary people who had the courage to make the leap.
And if you give a try and it doesn't work out, just fly back home, rent a place and get some furniture. You have a soft landing waiting for you.