Why Every Traveler Should Learn the Stock Market
Travelers, Digital Nomads and aspiring ones. Hear me out.
You’ve finally made the decision. You flipped the table and don’t want to spend your life in a cubicle anymore. You dislike waking up too early in the morning, spending almost your entire day in work and on the road because of the atrocious traffic jam in the metro and the useless public transpo. You hate your office and your dead end job.
You got skills. Mad skills. You know software and web development, graphic design and database management. You have the eye on photography and video editing. You maintain a blog, write your travels there and you got a youtube channel for your vlogs. You even take jobs as a virtual assistant on the side! You-are-cool! You’re earning money through these side jobs and that’s why you said to yourself – now is the time to be a full-time Digital Nomad! Sounds really nice… Being able to travel the world while working! That’s the life!
But there’s one little problem… You don’t know how to manage your money. I’m not just talking about saving, but how do you manage your money and make it grow through time. All your money is in your savings account that earns what – less than 1% per annum? You can’t beat inflation with that! The value of your money will be less in the future if you just saved it all in the bank!
A friend once told you that you should also earn passive income besides your active income (your digital nomad jobs). He/she suggested that you should invest some of your hard earned money in the stock market. You’re quite hesitant because you heard that you need to have a lot of capital to invest and only rich people are in the stock market. You heard sad stories of people losing lots of money and in the end, got poor. Well, the former is wrong and the latter is true to some. People indeed lost lots of money in the market even the veterans and the professionals but that should not scare you in investing in one of the most amazing investment vehicles man has ever created. If you learn the ropes and you are well prepared, you can earn and grow your money for present and future use!
Personally, I don’t aspire to be a digital nomad but I aim to retire early. That would also mean, that if I retire early, I can travel any time I want. I think the digital nomad and the ordinary employee can have the same goal of traveling freely in the future with less active income and more passive income! Just because you’re a digital nomad doesn’t mean you don’t have to prepare for the future and besides, you’re still doing work while traveling right? How about doing less work and earning more or the same of what you’re earning now? Sounds better?
Still not convinced? Here, I made a small list of reasons and tips why a digital nomad (or an aspiring one) should learn and invest in the Stock Market.
1) Retiring and traveling without money sucks
It sucks for you, for your family and for anybody who’s helping you live at least a decent life in your retirement age. Having enough money during your retirement would ease the financial burden of your daily expenses and even continue your lifestyle of travel and new experiences even during that age! Think about it, would you still like to code or do graphic design at the old age of 70?! Of course not. It’s either your passive and multiple streams of income is high enough to sustain your lifestyle and daily expenses or you have a profitable business that you’re handling or better yet, have both! It’s nice to have something to keep you busy while you’re enjoying your retirement years.
Related: Travel but don’t get broke
2) Stocks are liquid i.e. easy to dispose
As a digital nomad like you, I bet you don’t want much real properties like a House or a Condo unit because well, you’re a Nomad! You’re always on the go and you don’t want to be maintaining a property now and then because even when you have it rented or leased for income, you still have to check out your property from time to time for improvements or damages.
And this is the reason why Stocks are better for you. They are liquid, meaning they are easy to dispose, easy to convert to cash and be sold anytime you want as long as there is a buyer willing to buy at your intended price.
3) You earn while you eat, sleep, sit, travel, etc
Digital nomads have downtimes too… When you don’t work or travel and you’re just lazily lying on your hammock, you can instead be productive and research on stocks’ fundamentals, read/analyze the charts and plan your trades. You don’t have to be glued to your laptop everyday and read the ticker tape as those things are for day traders. Well, it depends on your trading style but day trading is something I wouldn’t suggest especially to new comers in the market. You buy stocks that has good fundamentals, increasing current, quarterly and annual earnings (and earnings per share) and is a market leader. But of course, you also have to monitor the performance of your stocks at least every week (if you’re too busy) and cut your losses aggressively if your stock declines to 7-8% from your buying price.
For more info on this, I suggest you buy and read the William O’Neil’s book ‘How to Make Money in Stocks’. You will learn how to pick the right stocks, when to buy and sell them. It’s not about day trading nor about getting rich quickly, but it will teach you how to prepare and be in the best position of a stock before it advances and when to sell it based on time-tested indicators.
4) Stocks can be a form of financial document
In some cases, if you’re applying for a VISA and you need to show supporting financial documents, you can actually submit a ‘Stock Certification’ document. This document certifies that you own certain stocks in your portfolio showing their current market value. Please note that this is different from a Stock Certificate of just one stock where you convert or uplift a stock into a stock certificate. Such stock when converted, can’t be traded through your online stock broker anymore.
This document can be a strong proof that you have money and you are able to fund your trip. Check with your online broker on how to request such certificate.
5) The Stock Market teaches you discipline
We all know that traveling entails expenses and if you’re not disciplined enough, you might lose a lot of your savings. If you are not saving and investing a chunk of your income even though you are earning big through all the jobs you do while traveling, you’d still end up with little cash because of the expenses eating up most of your budget. As they say, it’s not how big your income is, but how much you are keeping.
The Stock Market can teach you discipline and money management by controlling your emotions, sticking to your plan and religiously adding funds. Treat it like a small piggy bank but this piggy is growing big as time passes by. It should never stay small or worst, get butchered. Harness the power of compound interest.
If you don’t like to monitor the stock market, you can have someone do it for you. You can invest mutual funds that are directly investing a pool of funds into the stock market. These are professionally managed by financial institutions – just research and compare who among those companies are the best to manage your fund. This would also require discipline in your part by religiously adding funds to your investment at least once a month.
Also read: Productive things to do when not traveling
I’m telling you now, the Stock Market is a crazy place. It takes you on a roller-coaster ride where you go up and down… But despite this, you can still make money in the market as long as you have the discipline, do your due diligence and you apply your learning and plans correctly.
The stock market can be a good addition to your other streams of income. It is a great source of passive income where you earn while you sleep or travel. If you are still young, equities are perfect for you because you have lots of time left. The stock market indeed goes down a lot but through time, it still gives you more earnings than putting all your money in your local bank.
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- 10 Tips On Travelling While Building Your Future In Your 30s
- To Quit or Not to Quit your Job to Travel… That is the question
- Travel but don’t get broke
- Productive things to do when not traveling