Digital Nomads: Macro and Microeconomic Trends

"The ability to travel while still earning a living is my favorite thing about being a digital nomad.”


The number of ‘digital nomads’ has increased since Covid as the change in working patterns has allowed them to thrive and its appeal has expanded. While this may seem a fairly new buzz word, the reality is that many people have been traveling away from home to work for decades. The Internet started this craze making it easier for us to communicate and work all over the world and Covid has only accelerated this trend and created this digital nomad work concept.


Originally, digital nomads were generally young and mostly involved in the ‘tech world’ or ‘start up businesses”. But in today’s view, digital nomads come in different shapes and sizes depending on what they want to achieve. There is also a significant increase in more mature workers choosing to spend either months or weeks away from their usual office environment to improve their quality of life and rid themselves of the daily commute. More and more people are choosing this lifestyle including families as the incidence of ‘online learning’ for kids has become more common, allowing them to spend more time traveling.


It seems bizarre that while governments become more nationalistic and insular, people across the world still have a strong desire to travel and see different cultures. As more and more countries try to attract this group of people and companies allow their employees to do this, it is likely that this market will grow considerably. Countries will compete against each other to lure digital nomads making the choice and ease of doing this even better in the future.


Governments have already encouraged this trend with many countries specifically appealing to this segment of the market with a view to boosting their economies. Specific examples of this are places like Dubai, Indonesia, various parts of the Caribbean and even Europe and other parts of Asia including the Philippines.


Companies are tending to embrace this trend as they have seen that despite people not working from the office, productivity has not declined. Clearly, this does not apply to everyone but Covid has demonstrated that a significant percentage of the workforce does not need to go into the office every day.


Short term digital nomads do this for a break from their usual routine, the ability to spend more time traveling and exploring plus a better quality of life. They will still be tax payers in their home country but it is likely they will also have health cover in their home country should anything go wrong.


Longer-term digital nomads intending to travel and be away for a year or more would require significantly more planning. On the plus side, it may save tax in your home country and in certain countries where you move, your income may not be taxed. You also get more time to immerse yourself in a new culture and try new experiences. The most popular destinations for digital nomads will have a warm climate especially for people who have various health conditions associated with cold and damp climates.


On the downside, long-term digital nomad will likely need a special visa to live in their new country plus also health insurance. They will most likely need a ‘local’ bank account and need to either rent or buy a property to save the cost of short-term rentals. Long-term digital nomads will also need to consider their personal finances to make sure there are not gaps in their long-term financial plans due to large periods spent outside their home country.


The experience of shifting into this kind of working style, can also create a greater awareness and education for these travelers who are likely to become more ‘investment aware’. They are likely to want to consider investing in property in the country or countries they spend time in and be more open to investing in different markets.


As the world becomes riskier and more polarized, the digital nomad is more likely to understand these issues and be more prepared to invest outside of their home country and create a more diversified ‘investment portfolio’. Being a digital nomad also provides a form of insurance by providing you the flexibility, knowledge, and experience to work in different locations.


The past decade or more has caused many people to relocate due to persecution, lack of economic opportunity, and war. And these events only seem to be increasing which will only lead to an increase in ‘digital nomads’ and those forced to work abroad. Deciding to work abroad as a ‘digital nomad’ for the long term requires careful planning and an understanding of the different choices.


Astra has been assisting clients who are considering these options for decades and have experience and can help in Europe, Asia, and the Middle East.


Now, various countries are offering ‘digital nomad visa’. We can also consider ‘retirement visas’ to attract the reasonably affluent over 50’s market. These retirement visas offer similar benefits and, in some instances, greater benefits and are better value than the ‘digital nomad visa’.


These retirement visas originated mostly in Asia and the most popular can be found in Dubai, Philippines, Indonesia, Thailand, and other parts of Asia.


The majority of the Astra staff are also ‘global nomads’ and have been working away from their home country for many decades. This gives us a unique insight into different markets and the considerations that need to be discussed before making any decision.


If you are already a digital nomad for years and is experiencing challenges in navigating the digital nomad life or if you are planning to become one, a good starting point is to call or ask help from a company such as Astra so you could keep up and prepare well for this.


 

The author of this article has been a ‘global nomad’ for nearly 4 decades and has experience of working in countries all over the world. To arrange a free 15-minute interview with James, please click on the button below or send a message on LinkedIn.






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