What the Heck is a Digital Nomad?
You may have noticed that we repeatedly use a few terms which you may not be familiar with. Below is a glossary of sorts which will surely grow as time goes by.
Location independence — The quality of not being tied to a specific place in terms of work and lifestyle. Any individual whose work and lifestyle is not tied to a specific place can be called location independent. They are often writers, photographers, affiliate marketers, graphic designers, web designers, web developers, software developers, journalists, and other types of knowledge workers.
Digital nomad — An individual who uses technology to perform their work duties, enabling them to pursue a location independent lifestyle (see ‘location independence’ above). Digital nomads are a small, but growing, subset of the location independent crowd. Thanks mainly to the rise of the internet and related technologies, digital nomads are able to live as travelers, moving as often as they wish while still being able to perform income-producing work.
Geoarbitrage — This is a fairly complicated concept, but can be summed up with a basic idea. For our purposes, geoarbitrage involves earning money in a strong economy with high relative wages (in our case, the US economy and US dollar) and spending in markets where GDP per capita and purchasing power parity are lower. In economies with lower incomes, goods and services are less expensive, sometimes drastically so. The bottom line varies in different countries, but for most of Central America, for example, you can expect your money to go 2-4 times as far as it would in the US or another high-income nation.