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Travel the World on Bank Interest Payments

There are many different strategies for coming up with money while traveling: you can save up a lot of money and then not have to worry about working for a long time, you can pick up work here and there, you can start a location independent business, you can be a migrant vendor — though [...]

There are many different strategies for coming up with money while traveling: you can save up a lot of money and then not have to worry about working for a long time, you can pick up work here and there, you can start a location independent business, you can be a migrant vendor — though one of the most ingenious and best ways I have ever heard of comes from Bicycle Luke.

Luke wrote to me in an email:

When I came back from my last trip, I had run the bank account into the ground and have been saving madly for the last 12 months. My father is a bank manager and some of his wisdom must have finally rubbed off on me and I realised that if I take off again this December I would just end up back at home broke.

It occurred to me that if I continued working my current job for another 12-18 months I would have a sum of money that if placed in a high interest account would return a daily amount of roughly $20. Doing this would give me the freedom to take off on the bike for as long as I wished and then still have savings to return home to.

I have heard of travelers doing this before, but have never actually met anyone who makes their money this way. Apparently, all you need to do is save up a lot of bean money, work for a couple years saving, and then stash it all in a high interest bank account.

I asked Luke how to do this:

There is no special saving technique other than having very few expenses and banking 75% of my income. My goal is to have $100 000AUD which should be possible midway through 2012. Currently one of the best places to put this money is in a high interest account offered from most banks which gives an interest rate similar to a home loan rate while not requiring you to lock it away like a term deposit. Todays rate is 6.5%, but I am hoping by 2012 it should be back up around 8% (everyone else whinges about high interest rates, I am wishing for them!) and this would give me that $20/day.

If the startup money can be made, this is an excellent way to come up with the money to travel the world for as long as you want, this is a recipe for perpetual travel in and of itself. $20 a day is enough for anyone to travel the world on, and as Luke travels by bicycle and camps on the sly, twenty bucks a day allows for bouts of extravagance.

Many people begin traveling after receiving large severance packages from being laid of or retiring or some other way. I know that many people start traveling with tens of thousands of dollars. Most of these people blow all of this money in a year or two. Luke’s strategy is to live off of his earnings indefinitely, he has found the key to perpetual travel, to taking full control of the economic aspects of his travels. To travel perpetually, the question of where your funds come from most be answered. With a big investment placed into the right place, it is more than possible to live off of interest payments, to travel on a bank’s tab.

Traveling on bank interest is an optimal strategy for perpetual travel, as once the start up funds are collected you never need to make another dime to travel the world.

Filed under: Make Money to Travel | Save Money to Travel

Filed under: Budget Travel, Money, Perpetual Travel, Travel Preparation, Travel Tips

About the Author:

Wade Shepard is the founder and editor of Vagabond Journey. He has been traveling the world since 1999, through 88 countries. He is the author of the book, Ghost Cities of China, and contributes to The Guardian, Forbes, Bloomberg, The Diplomat, the South China Morning Post, and other publications. has written 3443 posts on Vagabond Journey. Contact the author.

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Wade Shepard is currently in: Prague, Czech Republic

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  • david July 5, 2010, 3:22 am

    Hmm – an optimal strategy here would account for inflation as well. You need to save some of your interest if you want to stay on top of this game. Or grow your account some other way. Luckily, high inflation generally means higher interest rates in order to curb spending, so works in this strategy’s favor.

    Here in SA i’m trying to do the same by buying lower cost properties and renting them out. Property and rental price generally moves with inflation, and I have the additional benefit that I can finance properties and have my tenants slowly grow my capital. But anyway – as long as you stay focussed, I guess you can do it any way you want.

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    • Wade | Vagabond Journey.com July 5, 2010, 3:32 pm

      Good point, but if you could bank 25 percent of the interest you could probably more than beat inflation while watching your bottom line continuously grow.

      This is not a strategy for everyone, you need a lot of money to get it going — but many people start off traveling with a lot of money.

      Not me, but maybe others could find it useful.

      I should probably look into other sorts of investments that don’t require a big wad of savings. Though this seems to be a big vortex, though one that I should probably look into soon.

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  • bicycle luke July 5, 2010, 3:33 am

    Yeah you are spot on david… long term just sitting your money in a high interest account will not keep you ahead of inflation. But for a couple of years its a good safe way to have a small income and maintain your lump in the bank.

    I do not intend for this interest to be a never ending source of income… just for the time being.

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    • Wade | Vagabond Journey.com July 5, 2010, 3:35 pm

      This is a great way to spend a few years traveling, find a good spot that you don’t want to leave, and then start up a business of some sort.

      This could be a really good move. Let me know if you ever need a worker haha.

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  • david July 6, 2010, 4:27 am

    I’m also available for doing whatever whereever!! 🙂

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  • Jasonk July 11, 2010, 7:23 am

    This has been my stratagey as well. I plan to return to the US to work occasional to keep my skills up in my trade (At least a few months a year) and that will help me account for inflation.

    GREAT POST!

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