In my 7 Strategies to Getting MAD Wealth we’ll see how traveling is becoming a big road block in your quest to being an international investment guru. So let’s get to my third strategy on the list!
We would all love to backpack in Europe, eat fresh sushi in Tokyo, or take the hike to Machu Picchu. In fact many of us do every year to these destinations and more. Really who doesn’t like taking a break from the grind, and take advantage of reaching our destination in perfect comfort on a plane, train, or automobile? The ability to travel the globe is one of the last 100 years greatest feats, and it’s absolutely spectacular.
But what if your love for sightseeing, or the stress relieving weekend getaways is actually a roadblock in your quest to invest? It seems innocent when you’re perusing top online booking sites, and devouring all the beautiful pictures you find online. You might even say to yourself, “After meeting that huge deadline last month I’ve earned this trip!” That very well may be true, but delaying that instant gratification could be saving you years unnecessary work, and road blocking you from getting very wealthy.
Let’s say you take 3 trips a year. A lovely 6 night/7 day trip to a beach location, and 2 weekend getaways(Fri-Sun). You already have 10 nights you’ll need to pay for a hotel, approximately 36 meals you’ll be buying, possibly a rental car or two, and plenty of other costs that can creep in. For our scenario let’s get some of the basic numbers for your time out of town.
Hotel – 10 nights at $150/nt not including taxes = $1500
Airfare – Round trip ticket from paradise = $500.
Rental Car – We’ll assume you only need it for one destination reached by plane. One week rental of $300.
Meals – 3 meals per day X 12 days = 36. Average meal cost $15: 36X15 = $540.
Miscellaneous – Let’s assume $50/day is spent on impulse buys, souvenirs, & sightseeing for a total of $600.
The grand total for just these expenses comes to a quick $3,440. Not to bad overall and a very accurate estimate in my opinion. I’m sure some of my readers will be able to find ways to spend even less, and others will spend way more. Not sure what you spend on travel each year? Use MAD Wealth’s free budgeting tool that’s easy to setup and use. But you don’t make trips like this just every few years. For many people this is a yearly occurrence. Now let me explain that traveling is not bad. I personally do it plenty of times each year. It’s given me tons of great memories, and in my earlier years it cost me a great deal of money so learn from my mistakes!
If you take vacations like this each year for the last five years you’re pocket is feeling $17,200 lighter. WOW! That added up real quick. You could have taken that money and invested in the stock market or used it as a down payment for your own vacation property in paradise which you could rent out when you are not there. Let’s see what the power of compounding would have done. If you had taken that $17,200 and invested it for 15 years with a historical 8%* return you would have $56,879 in your account for a 230% total return. In other words you would have doubled your money more than twice in 15 years – Very Awesome!!!
OK we all get it that travel is expensive now, and many of us will always enjoy doing it. So how do you get away from spending that amount of money? There are lots of ways and I won’t hit every single idea.
- Rewards Cards – If you are able to pay your credit card off each month then you need a rewards credit card. Every hotel chain, airline, and bank offers credit cards that give you points towards travel. You not only can get bonus points when you sign up, but many times avoid the yearly fee during promotional offers. This is one of my personal favorite ways to save on travel. I’ve racked up plenty of free nights and airfare to make many of my trips significantly less expensive, or even free in some cases. Make sure you also sign up for the company’s rewards program too. Rewards members frequently get access to special discount offers not available to the general public. So pick an airline or hotel that you love, and stay loyal!
- Go to off beat locations and travel at off beat times – Everyone wants to hit up Miami or the Virgin Islands, but honestly its just another sandy beach with water full of jelly fish. Finding less traveled cheaper destinations can be rewarding as you never know what hidden gems you find. Europe is expensive in the summer, but not nearly as much in the winter. Check out traveling to your destination in the “off peak” time of year, and you could possibly save hundreds of dollars.
- Stay with family or friends – Have an aunt that’s been asking you to come visit, or a friend that moved to another locale??? If they have the room inquire how they feel about you spending a couple days. This action alone could easily save you hundreds of dollars. And if your host is a good cook, some really awesome homemade meals. DOUBLE BONUS!
- Try different forms of travel. This can mean taking a train instead of flying, or hitting up a campground(highly recommend) instead of the 5 star. There are plenty of ways to reach your destination and relax. Many times you can do all of this in the most sought after tourist spots, and spend a lot less money.
- Plan your extra-curricular’s & extra meals – Check into buying ticket packages if you will visit museums, and if they offer free days. More importantly check out all the free things/events to do in each destination. Some of my most memorable experiences have come from completely free attractions. Stock up a cooler and bring some of your own(better/healthier) homemade food and refreshments. If your hotel room has a mini fridge load it up! This way when you feel like having a cold one, meal, or snack you’re not out $10+ for a simple treat.
Have any other money saving travel tips? Post them to the comments section!
*8% return compounded monthly
