Is the end in sight?

Well, while you live a HTA lifestyle, you should learn to reduce your expenses. Being able to control your budget and to survive in cheaper countries is the most important skills for HTA. After knowing where you like to spend most time in, and the expenses you will incur by leading a full-time adventurer (FTA) lifestyle, then you can calculate how much you need in your nest egg to sustain your expenses (see explanation below on how much you need to retire). The cheaper your lifestyle, the earlier you can arrive at your goal. But do not have just enough in your nest egg. Make allowance. You need some allowance to absorb the unexpected risks such as a market failure or poor health. Add 10-30% to what is the logical minimum you need in your nest egg. And, after you have arrived at this level of savings, control your budget so that you don't overspend your way into forced de-retirement.

HTA's Financial Fortress: Where to Start First?

First things first, you need the foundation: skills and insurance. In today's knowledge economy, you need skills to earn a living. Skills can come in different forms. For example, they include educational qualifications, certifications (eg. CPA, CFA), trade skills and, of course, the soft skills such as EQ, networking with people and personal selling techniques. Once you have acquired the necessary skills, you can convert them into money by combining them with your passion, time, capital and effort.

Secondly, you need to start building your wealth by first safeguarding it. You should purchase sufficient insurance to ensure that even if you become sick or disabled, you can still achieve your savings goal. Your health is the most important, for without it no matter how skilled you are you can't translate it into wealth.

After these 2 foundation areas are reinforced, you can then accumulate your wealth by learning to be thrifty and to develop the habit of regular saving as young as you can. Invest the savings into stocks, bonds and properties according to your risk tolerance. Even better, you can invest in a business that you are familiar with, because by doing something you are most familiar with, you are more certain of the return on investment.

How much is enough?

There are a few things you should be concerned about:
1) How much you need for regular expenses: traveling costs, wear and tear of your possessions, accommodation, food, entertainment, insurance premium, phone, VoIP or internet charges, etc.

2) How much you need if you run into unexpected health problems (aging, sickness, disability)

3) How much you need if you run into unexpected problems associated with traveling.

I think these vary along. For eg, if you travel by backpacking, sleep in 10-bedded hostel bunks, and minimize entertainment, then you could survive on US$30/day in most parts of the world for Area 1. Area 2 also depends on where you will be seeking medication or nursing care. Area 3 is usually well-covered by travel insurers. So, the easiest way to deal with 2 and 3 is to purchase the relevant insurance in your preferred countries of seeking medication, nursing or travel insurance claims. You may want to buy a backpacker's travel insurance from a UK, and a medical or Long-Term Care insurance from Thailand or Malaysia, for example. Insurance is the most straightforward means to deal with Areas 2 and 3.

Area 1 is what most people are clueless about. To ensure that you have US$30/day or around US$11,000/year for daily expenses and another US$1,000 for items like computers, clothes, water filter and shoes, you need a few sources of income that generate US$12,000/year adjusted for inflation. Supposed you have a fully paid annuity or rental property that pays you exactly this amount, then you have more certainty. You can have another source of income as a back-up for your annuity or rental income in case your tenant vacates your property or your US$12,000 annuity income shrinks in purchasing power over time. You may have a fund consisting of bonds and stocks for this back up, plus one year's budget reserve in cash (US$12,000 cash). But supposed you buy the financial planner's story that stocks and bonds are better than property or annuity in terms of yield, and ask how much should you have in stocks and bonds to generate this US$12,000/y, then you should aim at around
(100/3.5 x Annual Budget).
3.5% is considered a sustainable rate of return. But if you are retiring much younger, you can lower this to 3.0-3.3 to be safer.
For example, if you annual budget is US$12,000, and you are assuming a Safe Withdrawal Rate of 3.5%, then you should have (100/3.5 x US$12,000=US$342,857 in a fund that is invested 60% in stocks and 40% in bonds). For more details about SWR and how to withdraw from this US$342857 fund, google on SWR. Supposed you want to play safe, and assume only 3.0% return, then your fund needs to be (100/3 x US$12,000= US$400,000). So you should have a fund between US$343,000 to US$400,000 in stocks and bonds if you need US$12,000/y. This is a rough guide to how to calculate the money you need to retire today. And, of course, the returns is net of charges. So, if you invest in a fund with some annual management fees, you should take that into consideration.

Flexible Working Hours: The Key to Starting Half-Time Adventuring Earlier

Not everyone can afford to travel for 2 weeks and work the other 2 in a month. Most jobs that require you to be physically present in an office from 9-5 every weekday do not allow you to be away for 2 weeks. As such, you should strategically plan your career in such a way that sometime in the future you can become a freelancer or business owner with more flexibility in working hours. An engineer can become a consultant. An accountant can become become a freelancer. A cook can become a restaurant owner. A real estate agent may use his knowledge in the property investment business to acquire good properties and become a profitable landlord. While it would be best to be able to carry your profession around and work from anywhere with an internet connection, this option isn't at the present feasible for most people. You may be earn some coffee money from your blogs, writing, or photography, but it's not easy to earn a lot from such portable businesses.

Transport & Savings Rate: 2 Important Variables

In order to realise half-time adventuring, you need to travel to the nearest or cheapest places first so that you can increase your savings rate in the early part of your adventure career. This allows you to invest more during the early part of your adventure career, giving you the advantage of compounding effects on investment. This means that, ideally, you should spend as little as possible on travel, and save as much as you could, during the earlier part of your global adventure. You should invest a large portion on a diversified portfolio of stocks fund (eg. mutual funds, unit trusts, exchange traded funds, index funds or pure stocks) ranging from 50-80% of the total size of your savings, and also a diversified portfolio of quality bonds ranging from 20-50% of it. Generally, stocks give you the best returns in the long run, but there are more down sides in the short term, something that you could cushion with the bonds.

In order to travel with minimal expenses, your half-time adventuring can start from your neighboring and regional cities or countries. Ideally, you should travel to all these destinations via bus or budget airlines. While you are covering these destinations, you give your savings sufficient time horizon to grow. After covering these cheaper destinations, you can proceed to further destinations later when these savings can pay for part or all of the
higher costs.

In summary, to optimize your ability to cover as many dream destinations as you can in this life, you should control the variables of transport costs and savings rates. When you are younge, you should reduce the transport costs as much as you could by traveling to nearer destinations, and increase the savings rate as far as you can by allocating as little on travel as you can.