In many an interview, I’ve extolled the virtues of making a leap of faith into the lifestyle of your dreams. I believe that in order to instil big life changes, you can’t possibly have all the answers before you get started; a general plan, an intuitive gut feeling, and a leap of faith is critical.

But where is the line between taking a leap of faith responsibly, and doing so in such a way that you are ruining possibilities for your future?

Because sometimes, we make bad decisions. What if your leap of faith is a bad one?

When a Leap of Faith is a Bad Idea

Any leap of faith – good, bad, or otherwise – involves fear. That’s what makes it the leap that it is….you know you need to take a step, but you can’t see the ground below where your feet are about to go. It’s the proverbial “Indiana Jones” moment, where you must trust that there will be something to catch you…as long as you take that step.

But.

I believe a leap of faith can be misdirected if you are unnecessarily burning bridges behind you. Although you need to put full confidence in the path ahead when you make a leap of faith, I also believe that having options is important.

When I took my leap of faith into the world of full-time travel, I left doors open.

• I invested the proceeds from selling my stuff so that I’d always have the cash to set up a home again whenever (and wherever) I chose.
• I made sure I had no debts.
• I even left the door open to step back into my financial planning career with relative ease (despite the fact that I was pretty sure I wouldn’t retrace my steps as such).

So even if things went totally awry in my travels, I knew I would not have irrevocably ruined my life or any part thereof.

Starting over is okay.

Digging yourself out of a hole that was avoidable is not.

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Last week, we discussed asset allocation, and how to invest various pots of money associated with different goals. (See here: Financial Travel Tip #27: Where to Invest Your Travel (and Other) Savings).

But for travel purposes, you’ll be most concentrated on your travel savings account; both while accumulating money for your eventual travels, and redeeming it while you’re enjoying your travel adventure.

Generally speaking, your travel savings (in both accumulation and redemption modes) should be invested very conservatively, since you’ll have a relatively short time frame to needing the money, and can’t afford to lose value in a market fluctuation. Online high-interest savings accounts are ideal for this purpose.

Accumulation: Make it Automatic

While you’re in accumulation mode, set up an automatic transfer of money from your bank account to your travel savings account. Set it up to coincide with your paycheques, so you can effectively “pay yourself first”. And if you’re really dedicated to saving for travel, you can take any surplus funds after your bills are paid and manually transfer that over to your travel savings account too.

Redemption: Give it a Few Days

One of the things I like about keeping my travel savings tucked away in an online account is that I can’t access it instantly. So if I end up in a sticky situation and my ATM card is compromised, my financial liability is limited to the minimum balance I keep in my bank account.

But the flip side is when I need money from my travel savings account, it takes a few days for it to transfer through to my bank account. Although I’ve never had any trouble with this, it does take a little forethought and preparation to ensure the funds are then when you need them.

And if you anticipate needing a regular stream of income from your travel savings account, you can set up an automatic redemption plan, just as you did while accumulating.

Most banks have money market accounts, or some kind of high-interest savings account you can use. I like using ING for my high-interest travel savings, and have had no complaints.

Special Deal for Professional Hobo Readers

ING wants to give you a bonus for opening your own savings account! When you open an account with a minimum $100 balance, they’ll give you a $25 bonus. It’s like an instantaneous 25% return on your money!

To take advantage of this offer, simply open an ING account and enter the following “Orange Key” when prompted:

15312741S1

…or click on the link below to get started.

Note: This may or may not work for readers of different countries (I’m not sure, but it’s possibly only a Canadian/North American discount code). But for a free 25% return, it’s worth a shot! 

House-sitting: my verandah...er, office....in the Caribbean

My travels have evolved significantly since I started traveling full-time in 2007.

Initially, I volunteered in trade for my accommodation as a way of staying somewhere for longer periods of time in addition to having a deeper local experience than I might if I were just passing through.

Over the first few years, I milked goats, painted murals, designed marketing and promotional plans, cooked meals for large groups of people, led eco-treks on llamas, landscaped, sailed, and yes, I even occasionally cleaned toilets. All in trade for free accommodation (and sometimes food).

These were all highly varied and incredibly enriching experiences. But as the years went by and my writing took off, I found that between my volunteer requirements and my online career, I often had difficulty with time management. And if I was actively on the road, travel fatigue would set in quicker and quicker.

This was when I discovered house-sitting as the perfect medium: it’s free accommodation, allows time for writing and relaxing, and gives you a chance to experience a slice of the local lifestyle.

As a full-time traveler, I’ve discovered that long-term house-sitting sets a pace of life that I can maintain over the long run and not get exhausted or fall prey to “motion sickness on the road”. I even get to to enjoy the comforts of home – somebody else’s home, that is!

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After 20+ years in big business, Sis. McCray “retired” (before conventional retirement age) in 1996 to be of service to others. She is now a “professional globetrotter”, with a distinct purpose to assist women and children in distress, mainly in Africa, the Near East, West Indies, and the Caribbean. Please enjoy this week-in-the-life of Sis. McCray from when it all started, on her first overseas trip to England where she lived for over a year.

It’s hard to believe this is happening! Strangers only a few hours ago, Bob & Barbara have invited me to stay in their home for a month! In addition to that good fortune, Bob reminds me of my loving grandfather, who died many years ago.

In the queue, waiting to board the Airbus in Los Angeles (LAX), Bob & Barbara look intently at me. They ask in unison, “What country are you from?” I could see they were not planning to ask in unison. Grinning, we stare at each other. Thus begins our conversation.

The flight, at least 16 hours in the air and over the ocean, replaces my new excitement with apprehension. Short flights have always been fine, but 16 hours! I cannot swim if this plane dives in the Pacific Ocean!

As tension grips me, a man sitting across the aisle adjacent to me exclaims, “You do not have anything to worry about. This is my 20th flight to London, and as you can see I’m still here.” Together we chuckle; his smile helps make my fear disappear.

Day One

Tuesday, 21 September, 1999

Arrival in London: 10am

After descending, my stomach stops clenching, and the plane touches the ground with a slight skip.

Clouding my mind are questions about my heavy suitcases, and seven boxes waiting for me at baggage collection. Do I utilize the Baggage Attendants to assist me? How much will it cost?

Although my brain is still in dreamland, my biological clock is saying “It is time to sleep.” Looking for a phone to call, and realizing I do not have a single British pound in my pocket, one stranger sees my dilemma. “Ay lovey, not to worry, ‘ere’s some schillings.” Sounds like a Scottish accent to me.

To my surprise, Barbara tells me, “You disembarked at the wrong airport. You are an eight hour bus trip away, and the only bus for the day will leave in half an hour.” That means more traveling, another dilemma, and a strain on my very limited budget. My mind is saying, “Oh no!”

One passenger from the plane asks, “Is all this stuff yours lady?” As my head nods yes, he appears perturbed. He looks around and points to several men saying, “You, you, you, and you get over here and help this lady get her bags to…wait, where are you going with so many bags lady?”

“Believe it or not, I am going across the street to take the bus to Manchester. They take off in a parade across the street with my things. What a blessing!

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Where do you invest your travel savings when you’re accumulating money for a big trip? How do you invest and draw down on it while you’re on the road? And what about other savings, like retirement, or the proceeds of the sale of your house?

Welcome to the wonderful world of asset allocation.

There is no template answer to these questions. Your personal asset allocation plan depends on your age, time frame, goals, income needs, and stomach for volatility. And depending on your goals (you can have multiple investment goals, independent of one another), you might have different asset allocation plans for different investments.

Here is my asset allocation plan:

Travel Savings: “Cash”

This is a high-interest guaranteed savings account that I draw on when needed, or add to if my income exceeds my expenses, as it often does. (We’ll talk more about this kind of account next week).

Household Sale Proceeds: Moderate Conservative

I initially invested the proceeds from selling everything I owned in a Conservative account, so that I’d have the money available to me whenever I wanted to set up a place again. But a few years into my full-time travels, I realized I wouldn’t likely be “settling down” any time soon, so I increased the risk profile of the account to Moderate Conservative to take advantage of some potentially higher growth.

Retirement Savings: Aggressive

All of my working life before I started traveling full-time, I saved a percentage of my pay for retirement. Although I joke that I “retired” at the age of 30 to pursue my full-time travel dreams, this money remains tucked away for a time when I’m unable (or unwilling) to work or earn an income.

I have some registered (called RRSPs in Canada) and non-registered money invested under the retirement umbrella, but since I anticipate my golden years are a few decades away yet, I’ve invested it aggressively to take advantage of long-term average returns (despite short-term fluctuations).

If you’re not sure what constitutes various investment profiles like “aggressive” or “moderate conservative”, check out the link below for a comprehensive introduction to Asset Allocation, along with some profile examples so you can figure out where you fit into the mix.

Asset Allocation for All Markets

Now that I’ve been in Grenada for a while, I’m relaxing even more into the pace of life here. I’m generally a bit of a high-strung sort of gal who is always on the move, so in exploring my ability to “just be”, I’m realizing I can go way deeper!

You don’t have to be DOING anything to justify sitting by a fruit stand at the side of the road, listening to the warm breeze rustling the palms and mango trees, while watching the world go by and having idle chit chat with fellow “limers”.

I think we miss a lot of the world and possible human connections in our busy agenda-driven lives. The languid pace of life in Grenada is even evidenced in peoples’ gait: a slow walking pace, leaning back on your heels instead of racing forward on your toes.

So I’ve been very hard at work practicing the art of Liming, and as you can see from the picture above, I’m starting to get the hang of it. It’s a tough life.

And if this whole Liming thing has you intrigued, why not make more time for it in your life? Check out the link below for a primer on Dollar Cost Averaging, so you can automate your investments with peace of mind and focus more of your energy on the things that refresh, inspire, and rejuvenate you.

Care One

Take the (Guess) Work out of Investing with Dollar Cost Averaging

With dollar cost averaging, you take the guess work – and the grunt work – out of investing, safe in the knowledge that you are getting the best average returns for the least effort expended. Here’s how.

Profiles & Shout-Outs

Picturing the Americas has a guest series similar to my week-in-the-life series, called Mondays Around the World. I recently featured an average Monday in my life of house-sitting in Grenada.

Mondays Around the World – Grenada

In Grenada the unofficial national pastime is “Liming”. It has nothing to do with the citrus fruit, and it’s less of an actual definable activity and more of a state of being.

Lime also happens to be the name of one of the two major phone providers in Grenada, so it’s a household name. But make no mistake; the phone carrier got its name from the pastime, which is a deep-seated part of Grenadian culture.

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In the last few weeks we’ve addressed financial travel tips like how to carry your cash safely and securely, including tricks like carrying a decoy wallet.

But all this assumes that you have cash to begin with for travel!

Let’s take a step back. Maybe you’re still in the throes of planning your travels. Or maybe you’re on the road but running out of money well before you’re willing to stop traveling. It’s time to “create” some money!

Although it’s not as easy as snapping your fingers or wiggling your nose for boatloads of money to appear, you can actually play a game that often results in money (or financial opportunities) coming to you in unexpected ways.

It’s called the Prosperity Game.

I played this game with a good dose of skepticism about eight years ago, and was amazed at the results. My business took a few lucrative turns, cheques (somewhat randomly) arrived in the mail, and I even found cash (lots of it) in the streets!

The Prosperity Game is fun to play, and dares you to dream about how some extra cash could enrich your life. You’ve got nothing to lose (except about five minutes per day), and an unlimited potential to tap into.

Curious? Check out this article which explains how to “create” money with the Prosperity Game!

Finding Money (Literally) with the Prosperity Game

During a backpacking trip from Nicaragua through Guatemala to Mexico, Inge discovered her love for independent travel. You could always find her in small hostels, with guest families, and couchsurfing to connect with locals. She worked, lived, hiked, scuba dived, volunteered, and surfed through Central America. In 2008 she moved from Germany to New York City to explore big city life and North-America. Whenever there is a chance though she hops on a plane to her beloved Latin America. Here’s a week-in-the-life of Inge as she volunteers in a Costa Rican Zoo.

Day 1: Monday

After two days of travelling from NYC to Costa Rica I woke up in Hostel Cristal in Ciudad Quesada on a rainy Monday morning.

Got a baby blue teddy umbrella from one of the tiendas (shops) nearby and jumped into a cab. ‘Al Terminal – To the bus terminal’, I said, the driver nodded. After a couple of minutes driving, he asked where I would go today. ‘A La Marina – the Zoo’. We talked about the weather – mucha lluvia – sí sí.

The ride took quite long, and at some point it dawned on me that he had no intention to bring me to the Bus station but instead to the Marina. Back and forth discussion: Bus just going every 30 min…almost there anyway…would cost more to turn around and to catch a bus than to go to the Zoo directly. Darn. 3800 Colones was his special price.

Arrived at the Zoo just in time on Monday morning to start the volunteer job. Walked into lunch room and surprised Sam and A.J., volunteers from USA, who were putting on their rubber boots. The five zoo keepers were Ticos (that’s how the Costa Rican people call themselves) and spoke spanish.

They showed me where to put my stuff, and where to find rubber boots.

First job was cleaning the lion cages with one of the zoo keepers. Tired lions in the outdoor area were barely looking up as we scrubbed the floor and rinsed lion poop out of their shelter.

Rosa, my host mum for this week, saved me from starving through the day with her quick delivery of rice, beans and plátano frito (fried plantain). Pura vida! Pure life! That’s what the Ticos say.

Re-energized I worked through my afternoon task of picking good bananas from a huge banana pile and storing them in large bags, watching out for snakes that use the banana mountain to hide in. Follow-on job was to cut bananas including peel into slices, two buckets were needed for hungry tapirs and monkeys.

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Last week we discussed cash-carrying tips and tricks, including a tip to not make your wallet easily accessible or visible.

Another way to fend off potential losses in the form of theft is to carry a decoy wallet. By having a wallet with a little bit of cash (this could be your spending cash for the day) plus a few cards that you don’t mind losing or which are duds (like video rental memberships and inactivated credit cards), you have something expendable should you be involuntarily parted with your wallet.

Your perpetrator won’t know the cards are useless until they’ve made their getaway, and you won’t have lost all your cash by handing over a “real” wallet with everything in it.

Just don’t look too enthusiastic or smug when giving it up!

Here are some more tips about how to design and carry a decoy wallet, plus some stories of those who have “been there done that” in the decoy wallet and theft department.

Travel & Money: Decoy Wallets