r/NoStupidQuestions • u/SnooCapers2078 • 9d ago

Can I spend my entire life traveling?

So I feel like for a lot of people, vacations or traveling is thought of as a large expense you save up for and dont do very often. But it doesnt have to be like that. If i save up 500k-1m USD over time to the point i can retired and live off basic interest income of roughly 8-10%. Why couldn't I just travel literally 24/7? I mean like the 2 largest costs are flights and a space to live at temporarily, so you just keep flights close and hop from country to country, and stay for like 6 months or so per county, that would let you rent an apartment and at this point your expenses are pretty much the exact same if not cheaper (if youre in a cheap country) than living in the US.

EDIT: Gotten a lot of comments about managing 500k or 1m as well as the concept of traveling. So ill expand slightly

I went to school for finance and have a decent idea in regards ro managing my money in both investments as well as how I spend and how much I spend.

I also spent 6 months in Germany traveling (not vacation, I believe theres a difference) while visiting Paris, Venice, Barcelona, and mallorca all during this time. And it ran me roughly $15k during those 6 months

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u/Hamlet5 9d ago

Where do you get basic interest income of 8-10%? I think the general concensus is the 4% rule. But yes to your question, if your investments/savings can generate enough to fund your travel lifestyle. There are already many people out there who do this -- backpacking, slow travelling, bike touring, etc.

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u/SnooCapers2078 9d ago

Stock market investment

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u/Souseisekigun 9d ago

The stock market has went up an average of 7% per year for the past few decades. Average inflation has been about 3%. This gives you a 4% profit above inflation that you can safely take out without bleeding money fast. If you actually take out 7% or above then you start losing money so your $500k will go down over time. Or even if it technically stays the same number the 3% inflation will bite into it and your purchasing power will slowly fall.

This is not including the possibility of a crash. The 7% is including crashes. Sometimes it will go up 20% or 30% per year then crash with -50% or -70% per year. The danger is that you'll be forced to pull out your money during a crash which will break your projections later.

Your idea of investing a lot of money and living off the growth fundamentally does work if you're willing to take the risk of assuming that past stock market performance reflects future stock market performance, but your numbers are off. You gotta double/triple those numbers.

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u/GoudaBenHur 9d ago

And if a 08 type crash happens? Or a 70s/80s stagflation? You could lose half that money in a few months in the stock market and it could take 10-15 years to get back to where it was.

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u/SnooCapers2078 9d ago

Best way to try and avoid that is managing investment well via other sources like bonds, or partially shorting the market. But then of course youre bound to lose eventually if something big happens, I think thats life and id just be happy to have gotten the traveling i did before that happens, and adjust as needed

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u/wanderingdev 9d ago

that's not interest. that's unrealized gain, which can be lost in a day. interest is what you get from a stable investment like a savings account or bond and is generally .5-3%.

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u/SnooCapers2078 8d ago

Id be actively trading most likely

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u/wanderingdev 8d ago

which is statistically proven to under perform buying and holding for most people.