Challenges of the Location-Independent Lifestyle & Saving for Retirement

I’m so utterly sick of this shit! I’m angry and confused. Pissed off and befuddled. Yep…that’s how I’m starting today’s post. Financial institutions need to find ways to accommodate us and by US I mean digital nomads. We shouldn’t have to lie to do so. As much as I don’t want to (because I don’t understand it), it seems crypto is the way to go if you have no legal residence. I’ll touch more on this in a bit.

When I first started researching ways to save money as a digital nomad, it occurred to me it’s more convoluted than you think. There are so many issues especially if you lead a location-independent lifestyle. This means you have no permanent home to go back to. Your permanent home is your legal residence according to financial instutions like Interactive Brokers, TD Ameritrade, Robinhood, Vanguard, & Charles Schwab.

What if you DON’T have a legal residence? Not all of us can use a relative’s address back in our home country. I could be in Turkey for one month and then Namibia the next. A hostel for a few nights and then four months in an apartment. Does this mean I must update my address each time I move to a different country???

According to Interactive Brokers & Charles Schwab’s international division…yes…once I’ve been in the country for at least 183 days. That’s when you become a tax resident of that country and then you should have a legal residence.

Here’s the 183 day rule in a nutshell: The so-called 183-day rule serves as a ruler and is the most simple guideline for determining tax residency. It basically states, that if a person spends more than half of the year (183 days) in a single country, then this person will become a tax resident of that country.

Are you confused yet? I’m not even making this crap up.

A CPA, who specializes in expat taxes, actually suggested using your USA-based forwarding address as your legal residence if you’ve been in a country for less than 183 days.

Is it truly necessary to go back to the USA to establish residency? I could also buy a property in the USA, rent it out, and use that as my legal residence while living abroad. Hmmm….

OR….buy a mailing address (actual street address), in a state with no state tax, from a business like Anytime Mailbox, but here’s the issue. If you’re claiming the FEIE ((foreign earned income exclusion) because you’ve been outside the USA for a full 330 days then how can you live at the mailing address you bought? It sounds like a possible audit to me or you run the risk of the financial institution finding out and closing your account. Robinhood closed my account when they found out I was living in Bali, Indonesia.

So…I’ll leave you with this and it’s really something we need to address now…

Is it legally possible to save money if you have no legal residency? How do you save money if your home is….earth? Damn.

The Nomad Summit is coming to Tbilisi, Georgia in August 2022. This is something that needs to be addressed for U.S. digital nomads. The financial speakers can talk all day and night about how it’s possible to save hundreds of thousands of dollars through Vanguard accounts, but they don’t touch on the legality of opening such investment accounts when you’re country hopping and have NO PERMANENT ADDRESS. What about the possibility of being audited? Ugh. Can this summit finally address the elephant in the room???? I’m dying here!

DISCLAIMER: I’m not a financial advisor of any kind. It is your responsibility to check all financial information. I’m sharing the struggles a lot of American digital nomads are experiencing.

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