Loading the player...

DEFINITION of 'Digital Nomad'

Digital nomads are people who are location independent and use technology to perform their job. Digital nomads work remotely, telecommuting rather than being physically present at a company's headquarters or office. The digital nomad lifestyle was made possible through a number of innovations, including cheap internet access, smartphones and voice over internet protocol (VoIP) to keep in contact with clients and employers.

Digital nomads tend to be young people and can be found working in most industries in the knowledge economy: marketing, design, IT, writing, media, tutoring and consulting, among others. They may either be remote employees or knowledge process outsourcing employees. Although most telecommuters and freelancers are technically digital nomads, the term is most often used to describe people who are living or traveling abroad while working. Some digital nomads have a wide range of clients and make a living through the combination of jobs, while others have formal or semi-formal agreements with clients guaranteeing a certain amount of work or billable hours. 

BREAKING DOWN 'Digital Nomad'

Digital nomads can be found working all over the world. This includes cafés in France, libraries in Argentina, beach huts in Thailand, net cafes in Tokyo and office shares in Australia. While being a digital nomad sounds appealing, there are downsides. Although the location may be majestic, the work that is available may not always use your skills to the fullest or pay all that well. So, to maintain the lifestyle of a digital nomad, you may actually end up working harder for less pay when compared to a traditional office job.

There are, however, a few ways to make the digital nomad lifestyle easier. Of course, one is to focus in on the highest value jobs for your time and secure those contracts to increase your income. Another is to keep your costs modest and look for innovative ways to save through accommodation sharing, homestays and so on. However, the best way to make being a digital nomad a reality is to have a stream of passive income to supplement the contract work you'll be picking up on your travels. This removes some of the financial pressure so that you don't spend your entire time abroad staring at your screen. 

When Digital Nomads Settle Down

Many digital nomads eventually end up rooted to their home offices. When the wandering is over, the client portfolio a digital nomad has often sets up the transition to being a full-time freelancer from whatever local they choose. If a digital nomad is strategic about the location, they can leverage currency and cost of living differences to find a locale where the dollars they earn go much further, reducing the amount they need to work. Even in higher cost, developed nations, digital nomads of the freelancer variety can usually get better tax treatment than an employee, allowing them to hold on to more of their earnings. 

 

RELATED TERMS
  1. Alternative Investment Market - ...

    The Alternative Investment Market (AIM) is the London Stock Exchange's ...
  2. Digital Currency

    Digital Currency offers quicker and low cost transaction processing ...
  3. Home Office

    A home office is an area in a person's residence reserved for ...
  4. Freelancer

    A freelancer is an individual who earns money on a per-job or ...
  5. Virtual Currency

    Virtual currency is a form of digital currency that represents ...
  6. Secure Electronic Transaction (SET)

    Secure electronic transactions are early e-commerce protocols ...
Related Articles
  1. Small Business

    Digital Nomads in the Modern Economy

    Digital nomads compose a growing portion of the modern economy.
  2. Investing

    Ackman's Latest Successful Bet? Fish Sticks

    Thanks to an insightful investment in Nomad Foods, hedge funder Bill Ackman has seen a much-needed success.
  3. Retirement

    Does Your Estate Plan Include a Digital Fiduciary?

    What will happen to your social media and email accounts when you die?
  4. Tech

    Question: Why Should Anyone Invest in Crypto?

    Digital currencies have garnered an impressive amount of hype, but are they worth it?
  5. Retirement

    Best Freelancing Jobs for Retirees

    Retired from your job but still want to work? Here's how to turn your skills and know-how into a new freelancing career.
  6. Small Business

    5 Big Surprises When You Set Up A Freelance Business

    Smart tips to help you start a freelance business more easily.
  7. Small Business

    How Entrepreneurs Around the World Use Geo-arbitrage to Their Advantage

    Individuals are taking advantage of the new, mobile entrepreneurial opportunities created by technology.
  8. Personal Finance

    20 Flexible Jobs with High Growth Potential for 2017

    A strong employment outlook for 2017 makes flexible jobs more appealing than others, especially for people who need wiggle room in their work schedules.
  9. Tech

    Advisors Evenly Split on Robo-Advisors' Relevance

    A new study finds that advisors are split on the impact of robo-advisors.
  10. Managing Wealth

    Millennials Guide: Freelancer vs. Employee

    How to decide if joining the gig economy is right for you.
Hot Definitions
  1. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  2. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  3. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  4. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  5. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  6. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
Trading Center