Digital nomads are people whose means of making a living comes from the internet and isn’t connected to living in any particular location. They are the “new rich” Tim Ferriss wrote about in his book, The 4-Hour Workweek. There’s a spectrum of digital nomad work that ranges from “almost a normal job” to “working four hours a week from the beach while sipping coconut water”. I’ll go over some of the strategies I’ve seen below.
The rise of the digital nomad
I first started hearing the term digital nomad in early 2013 amongst a few acquaintances in the tech scene in 2013. It’s only in 2015 that the movement has really been gaining steam. Many, many people who have read the The 4-Hour Workweek have since moved to cities such as Chiang Mai, Prague, Saigon or Cartagena and set about making the dream a reality. In fact, when I was in Chiang Mai a couple of months ago, it felt very much like everybody inspired by Tim Ferriss’s work had crowded into the city. The weekly Nomads and Coffee meetup organized by Johnny FD rapidly ballooned from a couple of dozen people to too many to fit in the coffee house!
The spectrum of digital nomad work
- Almost a normal job
- Setting your own schedule
- Repeated income from previous work
Almost a normal job
The most conservative way to become a digital nomad is to just do the same work you were before but work remotely. Depending on your job you may or may not need to stay in a roughly compatible time zone as you were in. While you won’t exactly exactly have a 4HWW-style life, you can move someplace that’s much cheaper, save more, have new experiences, learn a foreign language and maybe even take advantage in the arbitrage of local economies to invest in yourself. Piano lessons are cheaper in Prague than in New York!
It can be hard to find a job that will hire remotely (and pay first world rates) but if that’s your goal, then a good place to start would be weworkremotely.com. Some famous companies that work mostly remotely are Automattic (the maker of WordPress, which powers this site) and Github. There are others, too.
An easier option is just work for your existing or previous employer remotely. A lot of people I know have been able to do that, including myself! After developing a good working relationship and proving your ability to generate meaningful business results, it’s usually not too hard to work out. In larger companies this can be difficult, but there’s often some leeway. For an American programmer, for example, health care costs are far higher in the US than they would be working remotely from a developed Asian country. This means it’s possible for the worker to retain the same level of income and benefits while saving money for the employer.
Setting your own schedule
The next level of freedom is to do some kind of work where you don’t have to work the same hours every week. It’s very likely you don’t need “full-time” employment to sustain yourself as a digital nomad. This is even true if you’re teaching English in Taiwan, China, Korea or elsewhere. If your employer makes you work 40 hours a week, it destroys some of the benefit of living in a cheaper country.
The solution is to start doing project-based freelance work. Ideal types of work for this kind of set-up are copywriting, blogging, design, translation and editing. Project-based gigs are also doable for software people, but quite a bit of work goes into finding high quality sources of work.
Repeated income from previous work
While it’s great to be able to set one’s own schedule, what really makes it possible to break into the ranks of the “New Rich” described in the 4-hour workweek is repeated income from previous work. This usually means either building your own marketing machine or building a product to plug into somebody else’s marketing machine.
Since it’s such an appealing prospect the rest of this article is devoted to how to decouple your earning powers from your working hours. The main options are:
- Affiliate marketing
- web publishing
- writing ebooks
- video publishing
- creating courses
- creating applications to sell
- creating software as a service
- selling physical products
Affiliate marketing just means getting paid to help sell products or services others have created. Many creators use 3rd party services such as Clickbank or ShareASale to connect with affiliate marketers, but many others have created their own internal programs. If you trust the merchant to be running their program ethically, the payout is always better if you cut out the 3rd party service in the middle.
In order to sell someone else’s product, you need to have an audience to sell it to. This could be your personal blog. For example, if you click one of the links to 4-hour workweek in this post and buy it, Amazon will pay me a fraction of a dollar for helping them sell a copy (your price won’t be affected). Other common audiences are Twitter followers (very difficult), Facebook pages, or email lists (generally more effective). For obvious reasons, it helps you quite a bit if your audience knows, likes and trusts you at least on the topics you’re writing about. I wrote for nearly 10 years about language learning, language teaching and my personal experiences on this site and have a great deal of trust built up with my readers on these topics. It isn’t difficult at all to get people to try language learning products I recommend. Of course, the trust will only remain as long as I’m giving good suggestions!
My advice for the would-be affiliate marketer has two parts. First of all, find something you’re genuinely interested in, can write about and can give reasonably good advice about. Write about that on your blog and be absolutely as helpful as you possibly can to people. Collect email addresses. Review related products and don’t push them based on their affiliate commission structures. Try to be what Johnny calls an “Earnest Affiliate“, focusing on actually providing value to your readers. The more you do that, the more people will want to read your future pieces and the more they’ll share what you’ve already written with others.
The second piece of advice is to learn about how online marketing works. There are a ton of great resources. My personal favorite is Neil Patel. He writes at http://neilpatel.com/blog and has also written and compiled an impressive array of resources at Quicksprout. He offers very pricey personal coaching, but there’s more than enough free content on both those sites to become one of the top 10% of online marketers.
Web publishing is similar to affiliate marketing, but rather than spend a significant amount of time on marketing and selling-related activities, the primary focus is publishing content and building traffic. About 10 years ago, it wasn’t uncommon for people to make great earnings from Google Adsense. Believe it or not, it still happens. I saw it happen personally with a friend a couple of years ago, actually. He went from a few hundred dollars per month in Adsense, to a thousand to a few thousand, to twenty thousand and then to using higher-end advertising solutions such as Google’s DFP instead of Adsense. He went full-on digital nomad pretty quickly and as a result of all his travel I didn’t keep up with all the developments after that, but he definitely scaled up to five digits in monthly earnings without doing much with email, social media marketing or selling.
The secret? Get obscene amounts of traffic. Top out in Google search engine results for popular searches. Then do some optimizations around ad placement.
In order to be an effective ad publisher, you need to both pick one of the most popular niches on the internet—e.g. health, dating or career—and develop formidable SEO skills. This means, learning how to use google’s keyword tools to figure out what readers of your content are looking for, it means learning how to update your content to make it more useful and it means knowing what topics you have a reasonable shot at. Neil Patel (linked in the previous section) is also an excellent resource for this kind of information.
Writing ebooks is a surprisingly effective way to make good earnings. Ebooks can also be part of a larger marketing strategy, but here I’ll just cover the business of books themselves.
Amazon Kindle Store
If you have no audience and no distribution, then Amazon is a great way to get it. A 50 page book with the right title and cover in the right niche can bring in readers almost right away, especially if you can get a few positive reviews early on. Keeping your ranking is up to the quality of your work, of course.
It’s generally best to either write a bunch of books in the same general non-fiction category or to write a series or serial in a popular fiction category. Right now, the best selling categories are romance, suspense, survivalist prepper fiction, and sci-fi, swords & sorcery fantasy, vampire fiction and military fiction are also doing reasonably well.
If you price your book for $0.99 to $2.98 or more than $9.99, Amazon gives you a 30% commission. If you price between $2.99 and $9.99, then they pay 70%.
Selling ebooks through one’s own platform
If you do have an audience and you prefer not to have Amazon’s downward pricing pressure, then selling on your own is the way to go. You can do this with some kind of shopping cart system such as Member Mouse, by manually putting Paypal buttons on your site or by using a minimal system like Gumroad. I’ve used Paypal buttons before and I use Gumroad now (check out the guides link in my site navigation). I’m not really a fan of shopping carts. I find them clunky and annoying as a user.
Selling directly on your own site is also a great way to offer tiered products for which an email book is only one part. For example, you could sell your new cookbook with Korean recipes for $39, or the book plus videos for $99. For a great example, see Edmond Lau’s book, The Effective Engineer, which has tiers going all the way up to $699. Most authors I’ve spoken with have told me they’ve made the vast majority of their sales at the cheapest tier and still made more money from the most expensive one. It’s a great way to reach a level of income that sustains you without excluding the majority of people who just want the book.
I bought a mid-level tier and found it a great value as a software engineer in San Francisco. If I had been a software engineer working in Bangalore, the price tag might have just been too high to make sense, but the book only option still would have been a great value. If the lower tier didn’t exist, people with less money simply couldn’t get the product. If the higher tier didn’t exist, the author would miss out on a lot of revenue. Multiple tiers are a great way to get the best of both worlds.
Video publishing breaks down into the same general categories of “high traffic + ads” and “moderate traffic + sales” that text-based publishing does. In order to make it from ads alone on youtube you need hundreds of thousands or more likely millions of subscribers. If you’re doing product placements for something such as cosmetics, clothes, etc, you can make it much, much sooner. A lot of vine users went this route. Obviously it helps video if you’re young, attractive and/or famous.
The other massive source of people supporting themselves off of video is Twitch.tv. For those not familiar with it, Twitch is a where you can live-stream yourself playing (or even analyzing) video games. If you’re a top-level commentator of League of Legends, Starcraft 2 or other popular game you probably already have a Twitch account and paying monthly subscribers and don’t need to read this. If you’re not, but you are deeply obsessed with a particular video game or enjoy reviewing games, it’s probably worth trying live-streaming regularly for a few months and see if you can build a following. I wish that option had existed when I myself was a Starcraft-obsessed teenager!
Udemy is great for getting traffic. Assuming you’re proficient with recording video or screencasts, you can get your first course built within a week or so and be earning something, perhaps $100 in your first month. This will get more difficult over time, but now it’s still pretty open. On the downside, Udemy isn’t a great way to earn a lot. They aggressively offer discounts on their courses and after a while their users, myself included, start to assume that for any given $500 course, there’s a discount coupon that will let me buy it for $10. And if not, then within a month or so, Udemy will probably have a site-wide promotion letting me get it that cheaply. That said, one of my acquaintances doing software courses who has already eclipsed six figure Udemy earnings this year.
Once you do have a following (built through Udemy or elsewhere), the way to charge market rate for your courses is to sell them yourself. Once again, shopping cart plugins are a way to do it, but I’d strongly recommend keeping it simple and using something like Gumroad. They’ve actually added some tools that make it possible to release portions of a course one week at a time with new emails to customers and they’ve been adding new features at a furious pace. I’m a happy user of Gumroad, but other than that have no financial incentive to keep singing their praises here. To the best of my knowledge they don’t even have their own affiliate program. (If I’m wrong please tell me in the comments!)
Creating applications to sell
Creating software applications is a lot of work. The rewards for successful applications are sometimes enormous, but due to the real possibility of putting months of effort into something that earns nothing, I don’t recommend it for a first product.
Probably the most popular platform is Apple’s App Store. It’s still the most profitable store I know of, but competition is intense. Choose carefully and bring your A game if this is your plan.The same general advice would go for Android apps, with the one difference that you’re likely to have a harder time making sales of paid apps and that you can probably get better distribution of in app advertising.
Steam has become pretty indie-friendly, but a lot of people are making games and the competition is intense. Fortune favors the unique here. Kongregate.com and other flash game sites are amazingly still trucking along in 2015, but if you don’t already have flash development skills, 2015 is a bit late to be investing in them.
Probably the less risky option I see for people making apps on someone else’s platform would be to make a WordPress plugin for professional users. WordPress now powers 15% of all the sites on the web and an awful lot of those sites are serving some sort of business purpose.
Selling apps directly
You actually don’t need to sell an app through a platform. You can just write the code, put it behind some kind of paywall and then share a link to it. Like I did with Zhuyin King (a Mandarin phonics trainer) right now. I could have put the app on Apple’s Mac Store. But I didn’t have any idea how much interest there was for it. I didn’t want to pay $100 to join Apple’s developer program just for an experiment. Also, it’s a lot easier for me to send people updates this way. I just wrote a very very rough prototype of the software and threw it up on Gumroad for $1.25. A few people bought it and made suggestions. I improved the UI and raised the price to $1.75. New customers had to pay that much but people who already bought got the updates for free. Then I added more content and raised the price to $2.49 for new customers. This is great. It means I can sell software still under development, price it appropriately and then regularly improve it based on feedback. People who buy early on get a great deal, I have no obligation to continue development and yet if I choose to I can easily keep improving the product without having to wait for Apple, Google or someone else to say okay.
That said, from an economic perspective, most people who don’t already have huge followings are probably better off plugging into someone else’s platform.
Selling software as a service
Selling software as a service is the holy grail for many, regardless of whether they plan to write it themselves or hire others to write it for them. Once you have a product people are willing to pay a monthly or yearly fee to use, your income becomes very predictable and your life choices expand greatly. It actually doesn’t even have to be software. It could also be something like a podcast or a blog that you sell a subscription to, but those choices generally come with the obligation to keep making new content.
The types of software that can be sold as a service are almost unlimited, but here are a few ideas: BufferApp (schedules your social media postings), Baremetrics (Stripe analytics for your business), Bingo Card Creator (makes bingo cards for teachers). It’s important to note that only the last of these businesses was run as a single developer for long. SaSS is brutally tough to go alone. If that’s what you’re doing, I suggest aiming for the simplest thing you possibly can.
Selling physical products
Amazon FBA is huge right now. It’s a pretty wide-open opportunity for people with enough savings to get by to ramp up their sales and cover some risk (~$300) of not being able to sell a product.
The way it works is you sell the product and Amazon ships it. A very common way to sell physical products is to buy in bulk from a Chinese factory (via Alibaba), have the product shipped to Amazon and then sell the product on Amazon. I’m far from an expert, but what my friend in SF did was basically this:
- Find a product on Amazon with a relatively high sales ranking where the top listing had a rating of less than 4 stars.
- Read all the three and four star reviews
- Repeat for other products high up in the listing
- Identify one or two ways to improve the product based on the reviews
- Go on Alibaba and find a manufacturer to make the improved product for you
- Test the samples yourself and revise and necessary
- Sell it on Amazon
- Market it as if Amazon wasn’t even helping sell it
- Do anything and everything within the rules to get good reviews
For an example of an insanely successful Amazon product launch see this video from Zen Active Yoga.
Risky is the new safe
It’s amazing to me how much easier it is to build a business online now than it used to be. Even when I was running a brick and mortar English teaching school with a couple of partners in Taiwan 7 years ago, I sometimes thought about how great it would be to be doing something that scaled more easily and something that didn’t tie me down to 60+ hours of work per week year in and year out.
When I went back to the US in 2012, I met some people with great jobs. But I also met people who were really struggling and who had basically done the “safe thing” all along, getting good grades, getting a degree from a renowned school and then joining “safer” career tracks. I still think that path is reasonably safe for those at the very top. But when there’s a big shift in the market and people have to retrain and compete with much younger people for a different role, the “dangerous path” taken by authors, freelance marketers and various small entrepreneurs starts to look pretty safe by comparison. What do you think?