Money plans for your short journeys and long travels
What if you want to travel for a month, a year, or for the next 10 years? You will need money but first you will need to plan. Here's how to do it
Oktoberfest in Munich. Northern Lights in Norway. The annual great migration of Maasai Mara in Kenya. Ruin pubs in Budapest. Palace on Wheels in Rajasthan.
Do these images bring a broad smile to your face? Do you dream about experiences like these sitting in your office chair, staring at your computer while sipping coffee? At some point, all of us have wished to visit exotic destinations such as these. In fact, it is not surprising when data shows that Indians are travelling abroad more than ever before and for many it is an annual or bi-annual affair.
But what if you are looking for something more than an annual ritual? What if you are not satisfied with just one or two trips a year? Is it possible to travel full-time? If you are on social media platforms such as Instagram, you may come across people who take a sabbatical for a year or two just to travel, or even across those who may have turned into full-time long-term travellers.
Let’s take Shivya Nath (28), who has been travelling full-time for 4 years now. She quit her social media strategist job in Singapore in 2011. After that for 2 years she used Delhi as a base location and dabbled in freelance travel writing and social media consulting, and started travel blogging more seriously. “Then in 2013, I let go of my apartment, sold most of my belongings, stored some in the boot of a friend’s car, and embraced a nomadic life. That marked my transition into full-time long-term travel, without a home to go back to,” said Nath. Similarly, Lakshmi Sharath quit her full-time job as vice president-head of south operations, Big FM in 2007, to turn into a full-time traveller.
It is exciting to want to be a long-term traveller. But all the pub crawls in Hungary and visits to the Schönbrunn Palace or Salzburg in Austria require money. And full-time travel, or even a 2-year travel, will require more money and financial planning than an annual vacation. Mint Money tells you how to plan travelling for long periods.
Most of the salaried individuals who have travel as part of their overall financial plan would fall in this category. The number of trips and destinations depend on the budget you have in mind for travelling. “We see a growing interest from our clients who make sure that they travel every year,” said Bangalore-based Shyam Sunder, managing director, PeakAlpha Investment Services Pvt. Ltd. How do you save for such travel expenses? “We first arrive at a budget. Next we accumulate the money in liquid funds because this is better than a recurring deposit or leaving the money in savings account. Liquid funds works well for short-term needs,” said Sunder.
Some may have a longer duration travel plans in mind. “Recently my friend who is a lawyer quit his job as he wants to travel for 9 months,” said Surya Bhatia, managing director of Asset Managers. And he added that for these kind of travel plans, you need an aggressive portfolio.“First, you have to see if you can afford what you want to do. Next, you will have to be involved in the cost details. You should know what your monthly expense would be. You will also have to factor in the currency that you will be spending in, food bills, accommodation and emergencies,” said Nisreen Mamaji, certified financial planner and founder of Moneyworks Financial Advisors. Once you know the amount, start investing accordingly. “You will have to plan ahead for it. You can consider investing in multi-cap or balanced funds if the duration of your trip is over 1 year,” said Bhatia.
If you want to quit your job and travel full-time, that requires even more planning.
When Sachin Bhandary (34) quit his job to travel full-time, he approached a financial planner. “Three years before I quit my job, I met my financial planner Yogin Sabnis and shared my goal. There was a proper financial plan in terms of where and how to save and when the savings will mature and I will have access to them etcetera. It was a mix of SIPs, insurance and other savings and investment instruments. I was also told to limit on personal expenses per month. There was also an emergency fund. Generally, apart from all other savings, insurance and investments; people must have 3 months’ expenses available to them as an exigency fund. In my case, we were planning a 2-year exigency, so I could keep paying my home loan EMI and other monthly commitments,” said Bhandary, who is now a travel writer. But is full-time travel sustainable? Some say it is possible. “For nearly 3 years now, I’ve earned nearly 90% of the my living through travel blogging. I collaborate with tourism boards and travel companies,” said Nath, who has been travelling full-time for 4 years now.
It may sound interesting to try something new and there is no harm in trying it out. But do have a stable financial plan that will support your desire to travel. “These are immediate expenses. If you are in your 30s, remember that you will also need money for the next 50-60 years of your life,” said Sunder. Hence, do keep a separate long-term kitty aside for your old-age needs simultaneously, and don’t dip into it.
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First Published:29 Aug 2017, 05:08 PM IST
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