Building the mountain.
ASTORIA, NYC- Passive income saved me over the past year. This is not ideal — living off of passive income shouldn’t be by design until you’re old enough to throw in the towel — but it works.
Last year, I pulled in $25,000 from VagabondJourney.com. My earnings from everything else? $12,000.
This is a dramatic drop from previous years, where my active to passive income ratio is a little closer to 2:1. I’d make $25,000 from writing articles, working on film projects, and giving talks and a cool ten grand from VBJ. But now it’s swung two-to-one in the opposite direction.
The reason for this? I spent much of last year working on a book and some personal film endeavors — projects that demand a lot of time for no pay. There were also reasons related to my domestic setup: the first half of the year I was based in Prague, where I was taking care of my kids while my wife went to school, then we moved to NYC where a full two months were wiped out while finding an apartment and settling in. When the dust settled, I only had three months where I could freely travel and do my work …
My active income for last year was shot. $12,000. $1,000 per month. I was once able to travel on $12,000 a year — I would work for three months and travel free the rest of the time — but now things have changed. I’m more focused on the P/L of travel: How much money can each trip make? How profitable is each project? The act of moving around the world has become a business model of sorts. This is a very different way of viewing travel.
I was able to remain financially solvent last year because of passive income — work that I performed in the past that continues paying me today. In simpler terms, my kid project saved the day.
That’s humbling in a way.
In another way it shows me the value of passive income — the value of doing work or making investments that will pay you in perpetuity.
This differs from active income, which is work or an investment that’s one and done: you put in the labor or lay down the cash, get paid, and get out.
The ideal travel finance strategy should be 50/50 active and passive income. You work and make money wherever you can to pay for living expense … and any extra you invest into passive income streams.
Ideally, I wouldn’t touch my passive income — I would just keep re-investing it and watch it compound. In this way it becomes kind of a game: each day you add a little more to it and watch it grow. You hand right back whatever it gives you. Each blog post, each dividend stock, each book adds a little more to what will ultimately become a mountain … that you can one day sit upon and not have to do anything all day.
About the Author: VBJ
I am the founder and editor of Vagabond Journey. I’ve been traveling the world since 1999, through 90 countries. I am the author of the book, Ghost Cities of China and have written for The Guardian, Forbes, Bloomberg, The Diplomat, the South China Morning Post, and other publications. VBJ has written 3679 posts on Vagabond Journey. Contact the author.
VBJ is currently in: Papa Bay, Hawaii
September 22, 2020, 8:04 pm
The travel writing is at a halt. So hard to come up with new or interesting things. Such a disproportionate amount of articles on money. Travel writing seems dead. Its been a long time since I read something engaging on your blog. Paradoxically the one blog I used to find uninteresting that of Tony Wheeler seems to keep up with exciting snippets now and then. And Dark Tourism blog that’s probably the only major travel blog that still holds the spark and excitement of discovery, valuable insights and information not available elsewhere, which brought me to travel blogs and travel in the first place. I know its not easy to produce relevant content and youve done more than most already going back to this blog origins.
September 23, 2020, 9:10 am
Thanks for this article, I find it very interesting how travelers support themselves. You provided amounts, I have friends who adhere to the FI/RE principles and travel perpetually maintaining a similar life style.
September 23, 2020, 12:54 pm
“Each blog post, each dividend stock, each book adds a little more to what will ultimately become a mountain … that you can one day sit upon and not have to do anything all day.”
When you get to that point maybe you can spend your time sitting in different bars in interesting places talking to people and listening to their stories!
Humor aside, your viewpoint, writing ability and unsold opinions are a huge thing in my world today! Very hard to find….
September 24, 2020, 11:46 am
I’m going to disagree because that is what I do. 🙂
Your VJ income isn’t passive. It’s active income. You still work on it regularly and you have the hosting to pay for, but it’s more than that. Every article you wrote on this site and every thing you have done in the past to promote this site was active work. It’s just work you weren’t paid for at the time…you are getting the payment now.
Back when I first starting making sites that could actually make money, I needed to motivate myself. I knew that that work I was doing today isn’t something I would be paid for today. I knew it would take months or years to see the total payout. I knew that articles I wrote would be found through search engines for years to come. I tried to come up with a reasonable expectation of how much each article I wrote would make and then decide if I would write for myself or write for someone else or both.
Of course the benefit of writing for someone else is that my income for the work is received today(or the next payday). The downside is that what I receive is what I receive and there is nothing more. If I put it on my own sites then I’d make no money today and when the income started coming in, it would be pennies or nickels or dimes a day, but that change would add up over time.
It’s all in the numbers and what I did to justify the work I was doing. I don’t think I could have done all I did if I didn’t have a number on what I was going to earn for writing up an article or doing some web development work.
And you can call your income passive or call it active income….it’s income you were making when you were living in the cheapest places you could find just to be able to continue traveling and writing your stories. You just didn’t have access to the income you were making then until more recently.