Digital Nomads: Misconceptions
The Big Picture 6/8: What you may have heard and what to make of it.
There is a lot of information out there about Digital Nomads on the web. Unfortunately, with that comes many misunderstandings, false assumptions, and half-truths. In this article, we’ll have a look at some common misconceptions.
The Big Picture
- Part 1: Definition & Popularity
- Part 2: Trends
- Part 3: Demography
- Part 4: The Bright Side
- Part 5: The Dark Side
- Part 6: Misconceptions (this article)
- Part 7: The Future
- Part 8: Summary
They work on the beach
Let’s make this short:
- In the sun, you can barely see anything on your laptop screen.
- There’s rarely good Wi-Fi available.
- It’s difficult to sit comfortably over a long period.
- There’s plenty of distraction.
- One unexpected wave, and you’ve lost a lot of money.
- Sand and salty mist can get in your laptop and ruin it.
It’s photogenic for social media and OK to do occasionally, but that’s about it. However, working from a coworking space or a good café that is located at the beach is totally fine.
They’re all are freelancers
Probably the most common source of misunderstanding.
While it is true that many Digital Nomads are self-employed, it is by no means a prerequisite.
Many companies employ a partial or even a fully remote workforce. They leave it up to their employees to decide where they work from as long as they get their work done.
They’re all software engineers
A considerable amount of Digital Nomads indeed works in software engineering. But there are also many other kinds of remote-friendly work that Digital Nomads pursue like design, marketing, e-commerce, finance, writing, consulting, coaching, teaching, photography, and videography.
There are good sources on the web to find remote-friendly professions and jobs, including remote job boards like Working Nomads and Remote OK. Lists of remote-friendly companies found on Remote Only and Established Remote are helpful too.
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Their jobs must be fully digital
Digital startups may also have to build physical products, for example, a credit card reader. They design products using CAD (computer-aided design) software. They 3D print physical prototypes in makerspaces around the world. They send their designs to the “Silicon Valley of Hardware,” Shenzhen in China. There, manufacturers assemble these products on demand and can also ship them directly to the startup’s customers.
Although parts of the process are not digital, it can still be done remotely. New technologies make it possible to perform some physical work location independent too.
They only work four hours a week
The 4-Hour Workweek by Tim Ferris did its share to help more people stumble upon Digital Nomadism. Unfortunately, the book’s title made people believe that working only four hours a week is the ultimate goal.
What the book looks to achieve is breaking the prevalent 9 to 5 mindset.
It explains the idea of location independence and lays out possible paths toward it. It also presents means that help to get more work done in less time, for example through automation and outsourcing.
They only care about passive income
The 4-Hour Workweek also introduces the concept of passive income. It means that after some initial effort, money flows in for a long time with little to no maintenance.
It’s a good idea to think about ways of generating more value with less effort, but it’s not as easy as it sounds.
While there are plenty of resources on passive income, ultimately, the majority of people won’t make much money. It has become a get-rich-quick scheme that became popular with Digital Nomad beginners. Once reality hits, however, they’re in the same struggle as many other self-employed people.
They don’t have to pay taxes
This one is a bit dangerous. Tax laws are very complex and intentionally diffuse to give countries room for interpretation. Violating tax law can result in big back pay, hefty fines, and worse. The tax situation is unique to every person, so general advice isn’t possible anyway.
It starts with getting rid of the tax liability in your “home country.” That’s easier said than done, and just leaving the country is not enough.
Then there are all the countries that you’ll live in, each having different tax laws. Add double-tax treaties, and it’ll no longer be just about each country but the combination of multiple countries you’ve been.
Often overlooked by freelancers and small business owners is that they and their companies are two distinct tax entities. A business owner can be tax liable in one country and their company in another one. And the company can be tax liable in a country different from where it is incorporated.
There is no easy way out of taxes, like never staying in a country for more than 183 days a year. Under certain circumstances, it’s a gray area at best, and even then, there are plenty of pitfalls lurking.
They’re on a never-ending vacation
On vacation, you usually leave your work and worries behind for a few weeks to relax. As a Digital Nomad, you’ll bring everything with you.
You’ll not just be sitting by the beach sipping cocktails. You’ll have to work and earn your money. You’ll have to take care of all of the responsibilities other people do back home.
Working while traveling is easy
Just walk to the next café, open your laptop, and you’re productive? Nope.
Your life as a Digital Nomad will be full of distractions, and productivity can be affected. It’ll take a while to become productive in a new place, and you’ll have to start over once you move on.
They all travel fast and to many countries
Inexperienced Digital Nomads are often carried away by enthusiasm. They want to explore many amazing places all over the world and are certain that they can do their work on the side, if they plan for enough time. As productivity and exhaustion become a key problems, they start slowing down their pace to find the right balance between travel, life, and work.
Some Digital Nomads make their living with travel-related social media content. That often requires them to travel a lot to keep their audience engaged. Some are successful in doing so, but many who try to follow suit fail and move on to something else.
Most Digital Nomads travel slowly, especially once they’ve found several places that they love. Check out Conni’s video to get the idea.
Being a Digital Nomad is easy/hard
There are a lot of challenges to being a Digital Nomad. Packing your backpack and getting a one way ticket is merely the start of your journey, and even that needs proper planning.
It’s not too hard, either, but simply a different lifestyle and mindset.
Like all big changes in life, it takes a while to get used to it and to gain the skills and experience that make it easier.
Being a Digital Nomad is cheap/expensive
When thinking of it as tourism, it would certainly be quite expensive — especially accommodation and flights.
As a Digital Nomad you’ll rarely stay at expensive hotels and other places that cater to tourists. You’ll look affordable accommodations like coliving spaces and local rentals. It also depends a lot on where you’ll live. Most parts of Asia are certainly cheaper than cities like Berlin and Los Angeles.
You’ll also be more flexible in time and destination when booking flights and will learn how to get around cheaper.
But the lifestyle won’t be that cheap either, especially in the beginning. Booking accommodations and flights on short-notice can be expensive. Not knowing where to get cheap accommodation, food, and groceries in a new place can be expensive. Traveling fast can be expensive.
It’ll be a new lifestyle for you, and it takes time and experience to understand all factors that influence the cost and to optimize it.
Being a Digital Nomad is just a phase
It depends on the individual. Some may try it but realize that they prefer staying in the same place, have a steady local job, buy a home, and raise a family. And that’s totally fine.
But there are more than enough individuals who can’t even think of stopping anytime soon even after years of moving around. And why would they? It’s not that you have to plan your entire life in advance.
Living as a Digital Nomad is getting easier every day as is settling down again.
After all, everything is just a phase — until you die.
They disconnect from family & friends
Living in close proximity to your family and friends doesn’t necessarily mean that you’re well-connected with them. Living far away doesn’t necessarily mean that you’re disconnected either.
If you care about someone, then there will always be a way to stay in touch and to meet whenever possible.
They don’t contribute to their local environment
Some criticize that Digital Nomads have no interest in improving their local environment. I think that’s an oversimplification:
- Generalization isn’t helpful. Every person is different, whether a Digital Nomad or not. Some people will make positive contributions to their environment and some negative. That’s not new and not unique to Digital Nomads.
- Digital Nomads indeed stay in most places only for a limited time. But that’s still different from tourists because Digital Nomads live in these places. They do have an interest in improvement, especially when staying for longer in a location that they love.
- Digital Nomads don’t pay some local taxes like income but still pay other like VAT and hospitality. But then again, some do pay local income tax. It depends on their situation. Also, taxes are not the only way to contribute locally.
- Taxes are not the only way to contribute locally.
- Digital Nomads bring money and new business opportunities to less developed regions, just like tourism. Part of that money will go into public infrastructure, for example.
- Digital Nomads can experience problems in foreign regions first-hand and get a deeper understanding of them. They can contribute money, time, and experience closer to where it’s needed, for example, in their favorite destination Bali.
- Digital Nomads can bring knowledge and skills to foreign regions. That helps locals tackle local problems. It can also help them to take part in the global digital marketplace.
Does that mean that every Digital Nomad contributes to their local environment? No. And that’s not the point anyway. But there are incentives and unique opportunities for Digital Nomads to contribute.
Do they contribute more or less than others? It depends.
Can digital nomads make meaningful contributions to local communities?
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Digital Nomadism is often confused either with location independent Digital Nomadism is often confused either with location independent freelancing or with vacations that involve a little amount of work.
You’ll often come across these and other misconceptions, so don’t believe everything you read and hear. Do some research and ask questions!
Digital Nomads are freelancers with very easy lives who earn tax-free passive income by building websites for four hours a week on beaches around the world in a never-ending vacation.
— Eight misconceptions about Digital Nomads
That was a lot about Digital Nomads so far. Now it’s time to think about how this lifestyle trend can evolve.
Continue reading in Part 7: The Future.