They come in all shapes and sizes: digital nomads.
Employees who have been given permission to work remotely. Coders who take their laptops and headphones everywhere. The genius entrepreneurs who spend all day chilling by the pool. And how about the cryptoboys who can’t stop talking about blockchain technology and the sluts who sell their nude photos on OnlyFans.
Roughly speaking — which is one of my favorite things to do, as you can tell — there are three types of digital nomads. These types could be placed on a spectrum of independence to security, and depends on the type of contract or business you have. Someone can have a remote job, work as a freelancer or be an entrepreneur.
In this third part of the digital nomad series, we dig deeper into these three different forms of work and discuss the pros and cons.
What is a digital nomad?
Being a digital nomad means two things. One, that you can work online. And two, that you can choose where to work.
In other words, digital nomads are remote workers who travel and work in different countries. They often live a nomadic lifestyle and use technology to complete their work responsibilities.
Some move from hostel to hostel in Southeast Asia, others alternate between London, Lisbon and Budapest, and then there are the adventurers who buy an RV and cruise across the United States. During their travel escapades, they fulfill their work obligations in coffee shops, public libraries, or the comfort of their home.
The Three Types of Digital Nomads
In a remote job, your employer allows you to work from home or elsewhere, whilst remaining an employee of the company. You pretty much perform the same tasks you would normally do in the office, but now from a distance.
This is the least risky option for becoming a digital nomad and provides the most security. You can still count on having a steady income, and enjoy benefits such as pension accrual, year-end bonuses, free health care, etc. Also, you will still have colleagues, albeit they are countless miles away.
Depending on the arrangements with your employer, but usually you make the same working hours as you would in the office. So if you would normally work 9 to 5, they will generally expect you to work from 9 to 5 wherever you are. If you have to deal with clients or colleagues, this might cause some inconvenience when living in different time zones.
Due to the COVID pandemic, many businesses were forced to let their employees work from home. They had to drastically adapt their processes to facilitate working remotely. As a result, this form of remote work has seen tremendous evolution. Even as most restrictions on office work have been lifted, a large number of desks remain empty. Some offices have been transformed into flex-offices, with some employers even encouraging remote work as a way to cut down overhead costs. People have gotten a taste of what it’s like to work from home, and more than half (56%) of employees say they want to work remotely two days a week or more post-pandemic. Remote work is here to stay.
If you are currently unemployed or your boss doesn’t let you work remotely, you can search for remote jobs on RemoteOK.com
The second type of digital nomad is the freelancer. Being a freelancer means that you are not affiliated with one single company, but work on the basis of project or gigs.
This form of work provides more freedom, at the cost of security. Your amount of hours and pay will fluctuate and you won’t get any of the employee benefits. But in return, you get the freedom to work on the projects and for the clients you like, and you can choose when you take time off.
I would say that this is the easiest way to start as an independent worker. The initial costs are negligible and you can start almost immediately. Perhaps you gained some connections during your previous job and already established a small network of clients in this way.
However, there usually lies the biggest challenge for freelancers: finding new customers. There are online platforms to help you find freelance projects and list your services, like Fiverr and Upwork. They will help you with exposure and take care of all the payment processes, for quite a hefty cut in your earning. And since you’re competing with other freelancers around the world, the pay on these platforms is generally very low. If you’re from a western country and expect a high pay, there’s probably someone in India who is willing to do the work for less.
Lastly is the entrepreneur, someone who owns a completely independent business. Starting this business will involve more costs, as it involves more than simply being a freelancer. Plus it takes some time to build everything and your business going. You will have to pick a name, register your company, pay some legal fees, build a website, get brand recognition, etc.
As a business owner, your earnings also variable, so there’s also a degree of uncertainty. But companies are more likely to pay more for somebody who has a business than just a freelancer. But you have the opportunity to expand your business, by hiring employees, franchising, automation, brand building, and attracting investments.
Running the business remotely will help you to keep operating costs down. No need to pay for an fully furnished office space, and this cost savings carries over to every employee you hire. Moreover, in a country with a lower cost of living, you need less to make a living from your own business. This is why some start-ups choose to build their online business in a country like Indonesia or Mexico, so they can reach breakeven more quickly.
Starting your own business can be tough, but once you get things rolling, there’s basically no upper limit to your earnings. As an employee, your monthly salary is pre-determined by a contract. Every contract renewal or promotion, you try to renegotiate your deal, but your income will always be on a scale. In contrast, as an entrepreneur, the more effort you put in and the more sales you get, the more you will earn. So your profits can grow exponentially. Ultimately, the end goal for many entrepreneurs is to turn the company into a passive income, so you can earn money while you sleep.
Which Form Should I Pick?
Which form of working as a digital nomad is the right one, is up to you. There is something to be said for each form, and it often comes down to a tradeoff between security and independence.
Moreover, you can think of blended forms. You could work remotely part-time for a company in the United States and, on the side, build your own business. Even half a salary should be enough to survive in a country with lower expenses. If you have an employer, sit down with your boss to discuss the idea of remote work. Who knows, maybe there’s more possible than you think.
Set a realistic plan for yourself. Leaving for Southeast Asia without savings, a job or a profitable business is not something I’d recommend. Make sure you have a few months of runway and a plan B.
Becoming a digital nomad has become extremely popular. In this first part of the series, we explain why the interest in digital nomadism has skyrocketed.