Embarking on a year of adventure does not mean that you should shirk adult responsibilities and long term financial goals in order to make adventure happen.
I meet plenty of adventurers who live paycheck to paycheck to make their adventure dreams a reality. They work an hourly job for six months or so to bank enough money so that they can fund their next adventure. They aren’t advancing their careers or building any wealth, they just cycle through work and adventure. They save enough money so that they can leave on their adventure, and then they come back when they have spent it all.
This may be the ideal lifestyle for some, but it’s not the lifestyle choice for me. Through the Adventure Possible life, we’re trying to find a balance between career, wealth building, and adventure. We have big ambitions for all three.
If you neglect your long term financial goals, you will most likely hinder your ability to build wealth, and so we prioritize the need to continue saving and investing while we travel.
Will sabbaticals prevent reaching financial goals?
In a similar way that many have wondered if a sabbatical will harm a career, many suspect periodic sabbaticals will negatively impact long-term financial success, as in wealth building. People wonder if the concept of pulling years away from retirement to use while young negatively impacts a person’s ability to build substantial wealth because the person misses out on income earning years, depletes savings in the bank, or neglects investing for the future.
In our experience, our long-term financial outlook has strengthened, not weakened, due to a willingness to plan for periodic years of adventure. As mentioned in the previous section, planning for adventures caused us to be more courageous in our careers, which has translated into higher earnings that could be saved and invested. Also, the awareness of a yearlong sabbatical (and the expected loss of W2 income from our jobs) causes us to intentionally focus on managing expenses, investing in assets, and developing income streams.
In pursuing the Adventure Possible life, we are not in a mode in which we save money for a period of time only to then blow through it on a year of adventure. To the contrary, we are hyper-aware of our current and future financial picture. We have a serious, long-term view on investing and wealth accumulation. We create expense budgets, and we invest in assets (especially real estate) that will provide cash flow and appreciation as we come in and out of the workforce. Furthermore, since we value adventure, we prioritize enabling adventure in financial planning and spending decisions. This prioritization of adventure helps us avoid material lifestyle creep as income rises, for any excess income is invested in assets that will fund our adventure lifestyle.
Everyone’s situation will be unique, though for us, intentional planning around a life of adventure and periods of unemployment have caused us to build wealth at a greater scale than we ever expected we would achieve.
Savings While You Are Working
To realize your adventure travel dreams while also realizing your wealth building goals, you will need to either strike it rich or have a high rate of savings.
Your adventures will cost money. They may not be expenses, as we’ve discussed in a previous step, but for sure some amount of money will need to be spent to keep you living and comfortable on your year of adventure.
During the seven years in which you are working, you will need to commit to a number of shorter and longer term savings plans.
The shorter term savings plans will focus on funding your adventure travel kitty, as covered in Step 7.
The longer term savings plan will involve saving and investing for things like retirement, real estate, and kids’ college tuition.
We have always aimed to ensure that we’re not sacrificing our future wealth and happiness for the near term gratification of adventure travel. For certain, we don’t raid 401k’s or rack up credit card debt to take on adventure.
On the contrary, we’re committed to continuing to build on a solid financial future, even while we travel. We’re continuing much of our saving and investing strategy established in the five to seven year working period before a sabbatical. However, we might modify the investing strategy if it makes sense to do so, and we’re also not able to save or invest at the same high rate of savings as when we worked full-time.
Save like mad ahead of your adventure
To ensure that we could continue our investments on a reduced income while we travel, we aggressively saved money in the year ahead of our adventure, giving us the cash to fund the adventure and to keep investments going while we traveled.
On top of this, we also reduced our monthly expenses while traveling, as detailed in our adventure travel budgeting articles.
We’re still not certain whether or not our lower income from various income streams will be covering our adventure travel burn rate, but we’re willing to deplete cash reserves to maintain much of our savings and investment strategy because we are focused on our long-term goals.
If you have the finances sorted out, time to Plan Your Exit from the Workforce.