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coin-news-blog · 5 years

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Here’s How Europeans Can Deal With Negative Interest Rates

New Post has been published on https://coinmakers.tech/news/here-s-how-europeans-can-deal-with-negative-interest-rates

Here’s How Europeans Can Deal With Negative Interest Rates

Low and negative interest rates have been a burden for account holders across Europe for some time. And it’s only getting worse, as the European Central Bank just announced a new rate cut to a record low of -0.5%. Private and corporate customers in many countries on the continent don’t have a lot of options to preserve the value of their holdings, at least not in the fiat money world. However, cryptocurrencies which have seen a revival this year offer a real alternative – one that can bring income instead of losses.

Interest Rates Freezing Deeper

The European economy never fully recovered from the 2008 global meltdown. What started as a subprime mortgage crisis in the U.S. the previous year, eventually grew into a large-scale international banking crisis followed by a worldwide economic downturn. On the Old Continent, it sparked a debt crisis which hurt countries using the common currency, the euro. Governments and central banks embarked on massive bailouts of financial institutions and other policies — such as a never-ending cutting of interest rates — to prevent a collapse of the traditional financial system.

These monetary and fiscal measures did not help countries such as Italy, Spain and Greece to get out of the debt swamp. The Italian economy, the eighth-largest by nominal GDP, slowly caught up with the generally weak Eurozone growth indicators, but it continues to suffocate from its huge public debt accumulated through excessive government spending for decades. At least a third of Italians live in poverty or risk of social exclusion. Italy’s projected growth for 2019 is only 0.1%, according to the IMF, and the national institute of statistics, Istat, found the economy stagnating in the second quarter.

Economic growth has been slowing down across the rest of the Eurozone, largely due to the looming trade wars and the Brexit saga which hurt international commerce and economic prospects. Eurostat revealed that gross domestic product of the group’s 19 countries grew just 0.2% during the same three-month period, compared to Q1 of 2019 when the bloc’s economy expanded by 0.4%. The annual growth registered in the second quarter was 1.1%. Between April and June, the German economy, the largest in the monetary union and the EU, shrank by 0.1% quarter-on-quarter and slowed to 0.4% year-on-year.

ECB Announces More Quantitative Easing

On this backdrop, the European Central Bank (ECB) made good on its plans to implement new measures to stimulate Europe’s sluggish economy. Actually, these measures are nothing new, per se: a deeper deposit rate cut, by 10 basis points to an all-time low of -0.5%, and a fresh open-ended round of quantitative easing. In November, the bank will start purchasing 20 billion euros’ worth of bonds each month. That’s a commitment which will continue indefinitely, or at least until ECB decides to raise interest rates. The “new” in these moves obviously applies to the fact that the benchmark interest rate hasn’t been lowered in the past three years, and QE hasn’t been implemented since last December.

This decision came from an ECB conference in Frankfurt last week. Later, Eurozone’s central bank clarified that the interest rate, at which European banks deposit funds, will remain at the newly introduced level until inflation reaches the 2% target. The institution also said it’s planning to exclude some European banks from the subzero rates. Negative interest rates have already caused adverse reactions in European countries. A political initiative in Germany, for instance, aims to legally prohibit banks from imposing punitive interest on savings of up to 100,000 euros.

The new record low rate is being introduced as Mario Draghi is preparing to step down as the head of ECB. Draghi, who will soon vacate the post, has never raised the interest rate during his eight-year term. He will be replaced by Christine Lagarde, the Managing Director of the International Monetary Fund who will assume the new office on November 1 this year. Some predict a rough start to her term as analysts believe 2020 will be the year when the next big financial crisis may hit.

Cryptocurrencies Are a Safer Bet for Europeans

In the current situation, where residents of many countries in the Eurozone and its periphery are forced to accept the burden of negative interest rates, decentralized digital currencies are becoming a viable alternative for savers, spenders, and investors. That’ll be even more so if predictions of a new major crash in the fiat system come true. This year’s rebound of crypto markets is a proof of that, and the number of crypto proponents in the region is likely to grow.

Banking is important for both businesses and private individuals. And while cryptocurrencies were invented in part to avoid third parties in financial relations, demand for banking services in the crypto space has been growing in the past months and years. In most cases, traditional financial institutions have been unable or unwilling to provide them. Fortunately, a new generation of fintech companies have been filling the gap, offering competitive financial products for the cryptocurrency user.

Some of them, like Cred which is a partner of Bitcoin.com, allow customers to earn interest on their crypto holdings. The rates are as high as 6% on bitcoin cash (BCH) and 10% on bitcoin core (BTC) invested with the Credearn product. Thus, keeping your digital assets with Cred will bring you much higher returns than converting the coins into fiat and depositing the money into a bank account. That wouldn’t be a smart decision in Europe because of the extremely low and negative interest rates on savings in central bank-issued currency.

No Need to Sell Your Crypto if You Want Some Fiat

If you need fiat liquidity but also want to keep your crypto investments intact, companies like Nexo extend loans backed by a number of major cryptocurrencies. Using digital coins as collateral, you can get an instant credit line in more than 45 fiat currencies, in over 200 jurisdictions. Clients can borrow from as little as $500 and up to $2 million. Nexo charges between 8% and a maximum of 16% per year. They also offer saving options and you can earn up to 6.5% interest on stablecoins such as USDC, TUSD, PAX, DAI, and USDT, with plans to add other cryptocurrencies in the future. A compounding interest of up to 6.5% is paid out on euro holdings as well. Just for comparison, a Swedish bank recently imposed a negative interest rate of -0.40% on euro accounts.

London-based Cashaa is a company that helps crypto businesses and users open a bank account for both traditional and digital money, still a challenge in many jurisdictions. They operate globally with a few exceptions like the United States and some sanctioned countries. The platform allows customers to accept payments in fiat currencies such as euro and British pound as well as in a number of cryptocurrencies.

The Cashaa U.K. current account comes with a Mastercard which lets you spend your coins while shopping and withdraw funds at ATMs around the world through crypto-to-fiat conversion. You can also make and receive local and international money transfers. Debit cards with crypto features can be ordered from two other platforms based in Britain as well — Wirex and Revolut.

Bitwala is another major European crypto banking and payment provider. The German company is now offering residents of the European Economic Area bank accounts with an integrated bitcoin wallet, a debit Mastercard, and a mobile app. You can use its services to conduct your daily banking activities in both crypto and fiat currency. Customers can also trade digital assets directly from their bank account with Bitwala’s regulated partner, Solarisbank.

Bankera stands out among fintech firms based in Eastern Europe as it has become a leading provider of services to crypto customers in the region in the past six years. The Lithuanian company is currently working to establish an online bank and offer loans backed with digital assets. Its ambition is to become a “one-stop store for all financial services, in the same way traditional brick and mortar banks are.” To achieve that, Bankera plans to use technology to limit counterparties and lower the cost of banking for the end user, while providing innovative solutions.

If you are new to the crypto space and you are looking for a safe and secure way to acquire your first digital coins, you can purchase bitcoin cash (BCH) among major cryptocurrencies at buy.Bitcoin.com using a credit card. You can also freely trade your crypto assets on our noncustodial, peer-to-peer marketplace local.Bitcoin.com, which already has thousands of users around the world. Also, try our newly launched premier trading platform, exchange.Bitcoin.com. Registered users can access it right now.

Source: news.bitcoin

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travelforfun99 · 7 years

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15 Things we learned from TRAVEL

In the last 12 months I learned a lot about long-term travel, what I need to be happy, and how to survive outside of the U.S. Many of these things can’t be learned at home or in a book, and while reading about them on the internet can only get you so far, a lot of people have asked me to explain how I’ve done it.

Well, here’s part of the answer.

“There’s no substitute for just going there.”

-Yvon Chouinard My trip hasn’t been about sightseeing (although I’ve done that) as much as just being somewhere. The simple challenges of daily routine can be overwhelming: trying to eat, drink and sleep in a place where nothing makes sense, you don’t speak the language, and where none of the basic comforts of home are available. It’s not easy, but if you want a fast-track to personal development, get on a plane.

When I was younger my dad often said, “The hardest part is just getting out the door.” And that may be the most important lesson of all: it’s too easy to get complacent at home and if you aren’t at least a little uncomfortable, you probably aren’t learning anything.

If you’ve already traveled extensively, you may get a kick out of this. If you haven’t, here are some reflections, tips, and advice about long-term travel on my one-year anniversary of life on the road:

#1) Most of the world’s people are friendly and decent. Except for the French*.

Some stereotypes really hold up, but on average, most of the people I’ve met around the world are extremely polite, friendly and helpful. They are generally interested in why I chose to visit their home. They are eager to assist if it’s obvious I’m lost or in trouble. They’ll go out of their way to try to make sure I have a good stay in their country. And, contrary to what most Americans tend to think (see #3 below), they often don’t know much about the United States (or necessarily care).

Don’t be convinced before leaving that “everyone there is _______”. Show a modicum of respect to people and their culture and you’ll be blown away by what you get back. Try picking up a little of the local language. Just learning how to say “thank you” can make a huge impact.

* Sorry, I couldn’t resist. To be fair, France is like everywhere else: most people are decent. It’s just that France has a particularly large proportion of bad apples that give the place a well-deserved reputation. I’ve met a lot of wonderful people in France, but also a disproportionate number of a**holes (not travelers generally, but residents of France). This isn’t based on a single trip nor is it restricted to Paris. Almost every non-French local in Europe agreed with me on this one.

#2) Most places are as safe (or safer) than home. I remember confessing to my mother recently that I had a big night out in Budapest and stumbled back to my apartment at dawn. Her reaction was: “But don’t you worry about being drunk in a foreign country?”

Ha ha, not at all mom! I’ve never felt so safe!

The only place I’ve been violently mugged was in my home city of San Francisco. Many of the people I know there have been robbed at gunpoint, and on more than one occasion there were shootings in my neighborhood.

In one incident just a block away from my apartment (Dolores Park), a man was shot five times and somehow escaped, only to collapse about 10 meters from our front door. You can still see the blood stains on the sidewalk.

Turns out we actually live in a pretty dangerous country.

In over 365 days on the road, staying mostly in dormitory-style hostels and traveling through several countries considered ‘high-risk,’ the only incident I had was an iPhone stolen out of my pocket on the metro in Medellin, Colombia. I didn’t even notice and deserved it for waiving the damn thing around in the wrong part of town. Most people think that in a place like Colombia you’ll still get kidnapped or knocked off by a motorcycle assassin, but that’s not true. According to the locals I talked to (who grew up there), things have been safer there for at least 10 years.

Caveat: This doesn’t give you a license to be stupid, and some places really warrant respect. Guatemala and Honduras, where there are major drug wars going on (and the Peace Corps recently pulled all of their volunteers), or Quito, Ecuador, where everyone I talked to had been robbed, are reasonably dangerous (I had no trouble in any of them).

In reality, based on the sort of mindless binge-drinking that happens in most travel hot spots, you’d expect travelers to get knocked off a lot more often. But if you pay attention and don’t do anything stupid, you’ll be fine.

#3) Most people don’t know (or care) what America is doing. I think the whole America vs. the rest of the world debate has been summed up perfectly in this post:

=> 10 Things Americans Don’t Know About America

I couldn’t have said it better:

Despite the occasional eye-rolling, and complete inability to understand why anyone would vote for George W. Bush, people from other countries don’t hate us either. In fact — and I know this is a really sobering realization for us — most people in the world don’t really think about us or care about us. I’ve met people that didn’t even know that San Francisco (or California even) had a coastline (now there’s a sobering conversation for you. So much for thinking that’s the center of the world eh?).

One thing is true: Americans are not well represented on the travel circuit. It just doesn’t seem to be culturally important to us, unlike say, the Australians, who never go home.

#4) You can travel long-term for the price of rent and a round of drinks back home My favorite question from friends at home has been: “how the hell are you still traveling?”

Well, for what you spent at lunch I can live on for a whole day in Indonesia. That’s all there is to it.

- Monthly rent for a shared apartment in San Francisco could be: $1,100 per person.

- My average monthly expenditure during the last year of travel: $1,200 / month*. That’s $40 / day, and includes some ridiculous and totally auxiliary expenses. For example:

10 days of Scuba diving in Utila, Honduras - $330 Kitesurfing gear rental in Mancora, Peru - $100 for two days Flight to Easter Island (50 percent subsidized by my dad) - $400 Acquisition of 4 Surfboards, + Repairs and Accessories over the year - $750 Purchasing a bunch of gear, like a new netbook ($380), wetsuit ($175), boardshorts ($55), camping gear ($100), a SteriPen water purifier ($125), summer sleeping bag ($55) Riding the NaviMag Ferry through the lake district of Chilean Patagonia from Coyaiquhe to Puerto Montt ($200). Taking a total of seven nearly cross-continental flights (like Brussels=>Greece) during my four months in Europe. And so on. I also went out, a lot, and spent way to much money on alcohol.

Before I left home, my original budget projection was $50 / day, which I would consider lavish in many parts of the world. In some places, I spent as little as $20 / day (including lodging, all meals and booze) while living in relative luxury right on the beach. Generally, I shot for $30 / day which gave me a buffer of $20 for travel and miscellaneous or one-time expenses.

Countries visited on this budget: Honduras, El Salvador, Guatemala, Nicaragua, Costa Rica, Panama, Colombia, Peru, Ecuador, Chile, Easter Island (Chile), Argentina, Uruguay, Santa Cruz (California), North Shore of Oahu, Belgium, France, Spain, Germany, Czech Republic, Poland, Hungary, Austria, Serbia, Bulgaria, and Turkey

Totals: Six months Central/S. America, two months U.S., two months Western Europe and two months Easter Europe).

Obviously, some places are cheaper than others, like Guatemala, where you can get a room for $4 per night. You have to be a lot more careful in Western Europe, where I got a little bit loose with my budget and spent $2,000 per month for two months. But I also spent less than $900 in the month that I biked (pushbike) through France.

You might be blown away by how cheap some “expensive” places can be. The second cheapest hostel I stayed in (after Guatemala) was in Berlin, Germany, at €6 / night (~$7.43 USD). Beer in Prague was as cheap or cheaper than any other country I’ve been to (it was $1.43 for 0.5L in ultra-touristy downtown Prague). You can rent a decent downtown apartment in Budapest for $200 / month.

Bottom line: If you’re careful, you can travel on $1,200 per month or less. Rolf Potts, the author ofVagabonding (highly, highly recommended whether or not you’re planning to travel) claims to have circled the globe for years on $1,000 per month. Budget $1,500 per month and you should be totally covered. You can do this even in Europe if you go slow, stay with friends or in cheaper hostels, fly on discount airlines (as opposed to taking the train), cook or eat street food, and don’t buy booze at the bar (which I did and somehow survived).

The best budget rule of thumb I’ve learned (can’t remember the source) is to take the price of your nightly accommodation and triple it. That will be about your daily minimum to survive, so $30 per day where a hostel runs you $10 per night.

*Note that my monthly total budget does not include transcontinental airfare (like U.S. to Europe) which was free (see How I flew around the world for $220). Since I typically travel overland and all flights are one-way tickets I haven’t flown as much as you’d expect.

#5) Saving for a big trip is not as hard as you think. Most people think I’m rich because I’ve been traveling for a year. What they don’t realize is that, although I didn’t leave at the time (this was five years ago), I was able to save enough money for this trip within a year and a half of graduating college.

My first salaried job paid $29,000 per year — not exactly ballin’ by U.S. college-grad standards. But by pretty ruthless budgeting , I was able to save $1,000 a month for the 15 months I worked there.

Guess what? That’s $15,000 or 12.5 months of travel at $1,200 per month.

Are there sacrifices to be made? Of course. But it’s worth it.

Btw, I am by no means the first person to discover or write about travel budgeting. This post is from 2009: Travel full-time for less than $14,000 per year. Don’t think it’s just us either, because all of thesepeople are writing about it.

I plan to write more about how to save money in the future

#6) In most places, moving around is incredibly easy. I rode buses from Honduras all the way to Uruguay. With a surfboard. And it was a cinch.

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Unlike the independent car culture of the U.S., people all over the world rely on some kind of bus service to get around.

In most places you can get from anywhere to just about anywhere else, and most of the time it doesn’t take more than a few minutes to figure out. Generally (outside the middle of peak tourist season in popular places) I haven’t bothered with reservations or pre-planning transportation routes. I just show up at the bus or train station and go.

I’ve ridden buses for hours into the middle of the Costa Rican jungle as well as through BFE in the Northern Chilean Andes. There’s almost always a group of locals who needs to get to where you’re going too. And if there’s no bus you can always hitchhike (this only happened once or twice on my entire trip).

It’s an eye-opener to see how some of the poorest countries on earth can still provide better public transportation than San Francisco.

In places like Europe and South East Asia you also have the opportunity to take advantage of discount airlines like RyanAir and EasyJet. I flew across Europe seven times in two months for less than $120 that way.

#7) Every pound over 20 makes life worse. There is virtually no reason to carry more than 20lbs (~9kg) of gear unless you’re going on a major trek or you have some serious sporting event in mind (like multi-day backpacking or cold weather sports). If you’re traveling in the summer you can get by on even less.

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Here’s the first key: Try only to do one thing on your trip. If you are hiking, just hike. If you are surfing, just surf. If you’re party backpacking and staying in hostels, just do that. Packing for every possibility is suicidal. You just can’t carry street clothes and backpacking gear in the same pack and expect to not have a million tons of crap.

I’ve traveled the last year with a carry-on sized 30L day-pack made for climbing (this means it’s made to properly handle weight). Right now, it’s only 2/3 full and loaded with exactly 20lbs of gear (which in my opinion is still too heavy). But I have some serious accessories in there including 3lbs of surfing equipment (for Indonesia), a 3lb laptop, as well as a GoPro video camera (0.5lb).

When most people pack for a trip, they make a list of things to pack and then try to figure out how to fit it all in. But the best way to choose a backpack is to find the bag you want to carry and then see what you can fit inside. Make sure the pack doesn’t weigh more than 3lbs by itself.

If you can get to less than 15lbs (~7kg) it will change your life. Imagine getting to a location and being able to walk around and site-see with all your gear. Incredible.

This is the other key: pack the 20 percent of gear and clothing that will cover 80 percent of possible travel scenarios (yet another manifestation of the 80/20 rule). If you end up saying “I might do _____” then get rid of it. Don’t take anything you won’t use with relative frequency unless it’s really expensive or hard to find on the road.

Get rid of everything you possibly can before you set out, and don’t be afraid to donate things or send them home along the way. Oh, and the easiest way to figure out your pack weight? Buy a cheap fish scale from Amazon.com.

A small pack also allows you to have a carry-on bag, even on super small planes. I can’t understate the importance of this.

Bottom line: Trust me, the longer you travel the less you want to carry.

Bonus: Here is my 2013 Round the World Trip pack list.

#8) Long-term travel is not a vacation (it’s a full-time job). After my first six months of traveling I went home for a break. To the surprise of my friends, I was completely spent, exhausted, and didn’t want to do much of anything.

“But you’ve been on vacation, you should feel great!”

Right. I guess you missed the 22 hour bus-ride where we took turns puking in the back because of altitude sickness and pisco-induced hangovers. Or maybe you didn’t make it to the last 15 hostels where sleeping before being black-out drunk is just not an option. (Sounds glamorous, doesn’t it!)

Planning and logistics also take an incredible amount of time and effort. Most downtime spent in a place when not sight-seeing is typically sucked up in researching the next destination, making reservations, planning logistics, and going through the dreaded ‘time budgeting’ process where you decide what you can reasonably see in the time available (and what you have to cut out).

Overall, it’s exhausting, and a great reason to consider traveling slowly (more on that later).

If you move quickly, don’t have any illusions about all the things you’re going to “get done” in your down-time. Take a good book and just travel, that’s it.

#9) ‘Travelers’ and ‘Tourists’ are different. You know what I mean.

Tourists exchange money for pre-packaged experiences. They consume experiences and move on without engaging with the local culture.

Travelers are there to see things, not buy them.

Travelers tend to be more involved. They may stay with locals, hang out with locals, try to learn the language, or just plain move slowly enough to really live and be where they are.

Sometimes I play “tourist” but that doesn’t mean I see myself as one.

#10) Don’t worry about traveling alone (it’s better). Although I’m a solo traveler I haven’t spent much more than a handful of days on the road alone. That’s because you meet people everywhere: in hostels, on buses, trains, planes, restaurants, trail-heads, monuments, etc. If you’re doing a standard travel circuit you’ll see the same people over and over again (most people don’t leave the Lonely Planet itinerary), and it isn’t uncommon to fall in with a large group of people who are all going the same way.

It’s so easy to meet people that I’m often stuck with the opposite problem: trying to get away from everyone. While I love all my new friends I need some downtime every so often.

Most travelers are uncommonly interested in meeting new people. That’s one of the big reasons they’re on the road. A simple “where are you headed” has often turned into a new travel partner for weeks. And when it stops working you simply set off on your own again.

Afraid to go it alone? Don’t be. Go the the first big city in your destination country and hang out in the hostel lobby for a few days. I promise you’ll make new friends. This is why you should also stay in hostels. Don’t be afraid of sharing a room. It’s a small trade-off for the amazing people you’ll meet.

#11) Movement can be addictive (and this is not necessarily a good thing). The “traveler’s rush” that hits you upon arrival to a new place is like a drug. And like a drug, the more you expose yourself to it the more you want.

This can mean moving too fast or skipping out on places just to experience the ecstasy of arrival again. The results are obvious: less time in places you thought you wanted to see and ultimately, burnout. The tendency to try to cram more places into an overpacked schedule is often hard to control.

One trick I’ve found to deal with this is to have a minimum stay: Three nights in every destination. This is enough time to see the place, relax, and get sorted before the next stop. It also means you’ll have to cut out some places if you’re tight on time. While I’ve had great one-night stops before (I’m looking at you, Belgrade) it isn’t sustainable or desirable to do too much of this.

Of course, some places aren’t what you expected either. If that’s the case, get the hell out of there and spend more time in a place you want to be.

#12) Don’t bank on paradise. 2013-10-08-Image4.jpg

Keep your expectations in check.

This isn’t easy, since you really want that place you’ve been dreaming about to be paradise. But like anything else, high expectations are a recipe for disappointment.

I spent five years in office jobs dreaming about getting back to Utila, the magical Scuba party-island off the coast of Honduras. When I finally got there, I was ready to leave after a week.

Turns out I didn’t really care about Scuba-diving as much as I thought, and there’s only so much you can do on a tropical island before you go nuts. At that time I also had new aspirations and a new skill: surfing. I ended up heading to El Salvador to surf some of the best waves of my life.

Expectations can also make or break a place. Most of the places I knew nothing about before arriving blew my mind. Most of the places I had high expectations for utterly failed to impress me (except for Chicama, the world’s longest wave, and Rome).

The other thing is that as you go through life the rules are always changing. By the time I arrived here in Bali — which has been a dream and one of the pinnacles of the trip — I had a small but growing online business that had become my number one priority. Instead of rushing off to some deserted beach hut and surfing all day I’m obsessed with trying to find a place to live where I can get to fast internet at least a few times a week. Say what you will, but my priorities have totally changed (at least for the moment).

It also turns out that a lot of Bali is a tourist nightmare from hell. Or maybe it’s just getting harder for me to be as impressed by anything.

Also: Take recommendations with a grain of salt. Another person’s paradise might be your personal hell, and vice-versa. A close friend of mine thinks tropical beaches are the reason for existence. Well, unless there is wind or waves on them I’ll crack up after three days. Getting stuck on a deserted tropical island is my definition of hell-on-earth.

#13) Traveling doesn’t get ‘traveling’ out of your system. If you’ve got this bug, it’s not going away (sorry), but the obvious question is: why are we trying to get traveling out of our system, anyway?

Rolf Potts did a great job in Vagabonding of justifying not just travel as a lifestyle, but also a lifestyle that makes travel a non-negotiable ingredient. Whether that means saving for a big trip or just taking a few weeks a year the important thing is to make room in your life to keep traveling.

I was actually told on this trip (if you’re reading this) that I needed to stop screwing around and: grow up.” I think in our culture that means going back to the “real world” of office jobs, succumbing to general complacency, and trying to enjoy two weeks off a year.

If that’s the case you can count me out.

The world is just too big and interesting to not be exploring.

#14) Eventually, you will need something real to do. Most people think that I’ve spent the last year sipping Mai-Tais on the beach somewhere. Well, I tried that and after four days I started to lose it.

The sad and somewhat surprising truth about the myth of the deserted tropical island paradise is this: there is nothing to do on a deserted tropical island. As Harrison Ford drunkenly slurred once in that terrible but entertaining movie, ‘Honey... it’s an island. If you don’t bring it you ain’t gonna find it here.”

Despite popular belief, most people can’t just sit around doing nothing for an extended period of time. Especially Type-A American folks who I’ve been told are “goal-oriented”and always trying to “get things done.” It might be a cultural thing, but it’s more likely just human nature to want to be involved in something larger than yourself. (This also, by the way, is the death knell for the whole concept of retirement, as articulated so well in Tim Ferris’ 4-Hour WorkWeek).

The point of quitting a job to travel around the world is also not to do nothing; it’s to do something else. As Tim Ferris points out, “idle time is poisonous,” and believe me, when you’ve cut your ties with conventional society you’re going to have a few moments of serious self-flagellation. The endless ‘what I’m doing’ and ‘why am I doing this’ loop.

It’s true that the feeling of wanting to build/create/be a part of something can be deferred since traveling itself is a full-time job, and that simple fact can keep you satisfied for a long time. But after six months of moving around I was astonished to discover I was actually bored. I mean, really bored. There are only so many days that you can walk around looking at things, go to the beach, and party all night without starting to think that something’s missing.

For more on working on the road, see the 22 things I’ve learned as a digital nomad.

What it boils down to is that eventually you’ll need need a project. Whether that means studying, concentrating on a sport, volunteering, working somewhere, starting an online business, or whatever, eventually you’ll have to find a creative or intellectual outlet to keep yourself sane. Which brings up the next point:

#15) Long-term happiness is a pretty complicated emergent property that has little to do with money. I will probably kick myself later for publishing this, but what the hell, here goes:

If you studied any chemistry in school you may remember the concept of emergent properties: the difference between the dining-room table and this computer screen is simply the right mix of a bunch of elements. Put together the right pieces and the product spontaneously emerges from the matter it’s composed of.

Similarly, in my experience happiness is not derived from a single point source (although it can be temporarily) like a sudden infusion of cash or arriving at your dream destination. Instead, it takes a lot of things working in concert to keep me happy: it’s really the emergent property of a network of variables..

Unfortunately, most people seem to forget the network effect and focus on a single variable, like money. Sure, money can allow you to do things, but once basic needs are satisfied the correlation between money and happiness seems to drop off a cliff.

A lot of people defer things they might otherwise pursue for the big payout dream. The “if I only win the lottery” or “when I sell my company for $10 million” routine. The problem with the fantasy, besides the obvious deferral of really having to come to terms with what you want to do in life, is that while a big payout would certainly increase the options available to you, but that is not necessarily a good thing. I won’t elaborate on this too much further here, but having more options has actually made me less happy in the past, as was so well articulated in The Paradox of Choice.

And here’s another punchline: most people whose luck or life-stage has allowed them to not be required to work seem to choose to anyway. I know a guy who retired at 26. What does he do now? Runs a firm for fun.

Think $10 million in the bank is going to make you happy? Well, good luck with that.

While I can’t speak for everyone, I’ve learned that I need the nearly perfect concert of three to four major variables before I can say that I’m “really happy.”

These have very little to do with money:

Health: Not just injury or disease-free but fit and functional for everything I want to do. That could mean anything from just feeling good in the morning to being able to easily run five miles. Wealth: I’m not talking about money, but the reinterpretation of wealth as the free time and means to do what you want to do. In my experience, control of my time is the key, and as long as I have enough money to cover basic expenses I’m happy. Relationships: In major cross-cultural studies published by the WorldWatch Institute, happiness has often been primarily attributed to breadth and depth of social connections.’Nuf said. Productive/Creative Outlet: As discussed above, I need something to learn, to do, or to build. If this sounds cliche or too simple, try sitting on a beach somewhere and wonder why you’re not happy for a few weeks. It’s easy to forget the most basic things in life.

(The funny thing about having four simultaneous requirements is the violation of Sun Tzu’s Art of War: Never fight a battle on multiple fronts. Maybe you’ve figured it out already, in which case I’d love to talk to you about it, but whenever I get two things in order the third one drops out of the sky.)

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