The Runway Calculator: How to Travel for 6 Months and Come Back Richer

By Nat Eliason in Finance

Published or Updated on Mar 08, 2016

Recently, my friend Benji quit his life.

He left his job, packed two bags, and headed for Bali, where he’s now working on his startup.

That weekend, I was talking with another friend when she brought this up:

“I want to drop everything and start traveling. I could work remotely with freelance gigs, but I don’t know how the finances would work out.”

Many people fantasize about traveling the world and working on their book, starting a business, or doing freelance work… but there’s no good way to figure out how financially feasible it is.

Well, there wasn’t. Until I built one.

Introducing the Runway Calculator

The Runway Calculator answers the simple question:

“If I wanted to start a life of travel as a nomad, lifestyle entrepreneur, adventurer, etc. how do I make the finances work?”

In my experience, the #1 reason people resist going on long term travel is that they’re afraid of the cost, but they never do the math to validate that fear.

The Runway Calculator solves that. It takes your:

And it shows you how your total savings (your “runway”) would be affected by spending time in different popular cities around the world.

It also lets you update your passive income and regular income as you’re going, so you can figure things out like:

  • What do I need to do to spend a year in Thailand not doing any work?
  • How long do I need to work from Buenos Aires to afford to live in NYC for two years while I network for my book?
  • How much passive income do I need to do an around the world trip for 6 months without working?
  • Based on my current passive income, where could I live indefinitely?
  • How much would my savings increase if I worked from Spain for 3 months after my lease expires?

How to Set Up Your Runway Calculator

You’ll need to make a copy of my Runway Calculator and add your own data. Open up the Runway Calculator here, and then select “File -> Make a Copy” in the upper left.

Now in your copy, update these to reflect your situation:

  • Savings (liquid savings only, so no IRAs, REITs, etc.)
  • Passive Income (monthly)
  • Regular Income (monthly)
  • Tax Rate (unless it’s factored into your monthly income), and
  • Fixed Expenses

Note: Anything in grey shouldn’t be touched. Just the stuff in white.

One note on fixed expenses: Only include ones that are TRULY fixed and you absolutely couldn’t get rid of. Rent, for example, doesn’t count because you could sublease your apartment.

Next, go into the “Data” tab at the bottom. This is where the information on the cost to live in each city is stored, based on data from Nomad List.

Use CTRL + F to find the city called “Current”, and where I have 3,500 plug in what your (rough) monthly burn rate is:

Now it’s set up to work for you!

Using the Runway Calculator

The Runway Calculator answers the simple question of “how will my savings (runway) change based on living in different places for periods of time, working or not.”

I’ll show you some examples using a hypothetical person with:

  • $5,000 in savings
  • $0 in passive income
  • $4,500 a month in pre-tax income
  • 20% tax rate
  • 0 fixed expenses

To start, let’s say they continue their current lifestyle for another 6 months.

We plug in “Current” for their location, “Y” for working, and 6 for duration.

Then, the calculator auto-fills how much you can expect your monthly burn rate to be ($3,500 in this example), what your total income is (passive + regular – tax), what the net gain / loss will be to your savings, and what your savings will be at the end of it.

Now, we can start putting in hypothetical trips. What if, in the next six months at your current location, you increased your passive income to 1,000 a month, then wanted to go to Chiang Mai (Thailand) for 6 months and NOT work while you’re there?

We add the new passive and new income (though the “new income” is the same), then plug in the Chiang Mai trip.

As you can see, just by getting your passive income up to 1,000 a month, you made it so that when you spend 6 months in Chiang Mai without working, you actually only lose $996 in savings.

What if we didn’t get that passive income up first?

You don’t quite make it. You end up with -$196 in savings, so you’d need to work a little bit.

But from that, we can tell that even if you just build up a minimal amount of passive income, say $250 dollars…

You still lose money, but now you only lose $4,596 over 6 months. Not bad for a half year vacation.

You should have also noticed another possibility. What if you built your passive income up to $1,250? Now you can go to Chiang Mai for 6 months, not work… and leave with more money than you arrived with.

Building up a certain amount of passive income opens up dozens of cities that you can escape to while breaking even or making money, which you can see on the third worksheet, “Self-Sustaining Cities.”

Just put in a certain amount of passive income at the top of that page, and the list below it will populate with all the cities that you could be self-sustaining in!

Going back to the calculator, you can plan multi-year trips involving working and not working in different cities that you’re interested in, and see how it affects your total savings at the end of it all.

And what you’ll find as you play around with it is that living abroad and traveling for long periods isn’t expensive… it’s financially responsible.

If I were trying to save up for a down payment on a house, the fastest way would be to run off to somewhere like Colombia and work from there!

If you’ve been on the fence about trying a digital nomad life, or long term travel, hopefully, this gives you the push you need 🙂

Build your Runway Calculator now.

Have fun!


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