A week after graduating from college, I flew to London and spent the summer riding trains and sleeping in hostels around Europe.
Two things became clear that summer.
- I had no interest in more formal education, and
- I wanted to travel a lot more.
The fastest way to travel again was to find a decent-paying job so I could pay off some debts and starting saving for my next trip.
Many of my high school and college friends earned graduate degrees and started families in their 20’s. But less than three years into my first job, I quit to travel the world again.
What I find fascinating about visiting foreign countries is learning about money and commerce at the very bottom of the economic hierarchy.
As a cheap backpacker living on $15-$20 per day, everything I bought was from a local store, market, or restaurant, and I never paid tourist prices. I bargained at every turn to save money because each dollar I kept extended the length of my trip.
By age 34, I traveled to 45 countries in Asia, Europe, and South and Central America. The most vivid memories are the human acts of kindness I encountered. A close second is the stories about money.
Here are eight things I learned about money while traveling the world.
1. It’s OK to put your life on hold for an experience
American culture is so competitive that we forget to stop and enjoy ourselves — high school, then college, grad school, and the corporate ladder.
If you read enough personal finance articles, you also feel pressure to crush your student loan debt and max out retirement accounts from the moment you graduate.
But focus too much on school, career, and money, and you’ll be out of your 20’s before you know it.
My epic backpacking came to an end when I ran out of money. At that point, I was 27, unemployed, and living with my parents. But no amount of money or formal education could replace the experience I had exploring the world in my 20’s.
Don’t let artificial timelines or peer comparisons prevent you from pursuing your ideal adventure at any age.
2. Countries in economic despair make excellent tourist destinations
Argentina was one of my favorite places to visit. But not because I like to Tango. I was there in early 2002, not long after the government abandoned its fixed currency rate policy. It was a crazy time.
Bank customers had already made a run for the banks to the point customers were restricted from using the ATMs. Argentina was in economic turmoil. The people were struggling, and leadership was unable to stabilize the country.
Since my accounts had US dollars, I could withdraw as much as I wanted, but only in daylight near cameras and police.
Before the crisis began, the Argentine peso was pegged to the US dollar 1-to-1. Turns out after many poor decisions by the government, that didn’t work anymore. The currency became untied from the dollar and crashed.
When I got there, you could buy four pesos for one dollar! As luck would have it, the entire country was suddenly 75% off. Backpackers flooded in.
Inflation had only just started to kick in, so prices were low for a while. I remember buying 20-ounce imported beers for 50 cents and $2 all-you-can-eat lunch buffets ($3 for dinner).
Incredible food, dirt cheap. And I never paid more than $15 for a night’s stay, even in Buenos Aires.
It’s sad to see economies crumble, and the people suffer. But turnarounds have to start somewhere. Visiting countries in economic ruins can be a bargain for travelers, but tourism helps the recovery too.
If you have flexibility in your travel itinerary and the destination is safe, follow the crisis.
3. Be a penny smart, not a pound foolish
I took a road trip around the southern portion of Ireland in 2006 with a close friend. We woke up to a flat tire one morning in a town called Lisdoonvarna. No big deal, we had a full-size spare in the trunk.
A few days later, while driving around the Kerry peninsula, our tiny car hit a big stone in the middle of the road, severely puncturing our tire. We now had two flat tires and no spare.
So we grabbed our backpacks and one of the flat tires and hitchhiked a few miles to the nearest town. We saw a sign for a tire shop on the in (luck of the Irish!).
The owner and his apprentice greeted us with smiles and fixed our first flat for about $15. We told them about the other tire and asked if we should fix that one too, or return it to the rental place punctured.
The gray-haired owner warned that we should probably fix it and not risk repercussions from the rental car company. Plus, if we get another flat tire, we might not be so lucky finding a nearby shop.
A penny smart, a pound foolish, lads, he said as he drove away in his maroon Cadillac.
So we hitchhiked back to the car, put on the fixed tire, then drove back to the tire shop to have an inner tube inserted into the damaged tire.
It cost us another $25, but we avoided any trouble with the rental company and didn’t have to worry about a third flat.
Sometimes it’s worth taking the time and paying extra money today to avoid a problem later on.
4. People go to extraordinary lengths for money
Tourists in foreign places are sometimes at risk of being targeted by locals with bad intentions. Incidents are infrequent as long as you practice common sense and stay alert.
But even the most experienced travelers can let their guards down and become victims.
Unfortunately, I let my guard down in Guatemala and ended up on my knees with a machete held against my neck. Here’s the whole story.
The assault was a consequence of me making an unwise decision to go somewhere I was warned to avoid. Someone I met told me to skip the scenic hike from San Pedro around Lake Atitlan because of reported robberies. I ignored the warning.
An hour into my hike, four young men ambushed me and demanded my bag. Mochila mochila mochila! When I hesitated and acted like I didn’t understand the language, they shoved me to the ground and threatened my life.
In a country where many people live on less than a few dollars a day, the temptation to steal from wayward gringos is powerful.
I only lost a nice day pack, a few small bills, a film camera (soon to be obsolete!), my zip-off shorts bottoms, and notes I had taken over the past year. My instincts were good enough to leave my passport and bank cards at the hotel that day.
But the miscreants put their young lives on the line, committing a serious crime all for a few days worth of meals.
People die over petty money-related squabbles every day. Don’t be one of them. If someone even pretends to be willing to kill or injure over money, let them have it. Don’t hesitate.
5. Green is not always so green
I hurried through Costa Rica the first time I visited in 2002 because my budget could stretch further in Nicaragua. I stuck to cheap coastal towns such as Puerto Viejo and Montezuma before crossing over to San Juan Del Sur.
So I skipped the legendary cloud forests of Monteverde, often considered to be the global birthplace of eco-tourism.
Nearly a decade later, when I returned to Costa Rica with Mrs. RBD, the cloud forests of Monteverde were my top priority.
We did some zip-lining and stayed at a beautiful finca, but the rest was mostly disappointing. Costa Rica was even more expensive than before, thanks to their strong property laws and the influx of American retirees.
But what bothered me the most was an incident at one of the restaurants.
I was no longer a dirty backpacker, and Mrs. RBD has a more refined palate than I, so we decided to splurge and eat at one of the ‘nicer’ tourist restaurants in town.
I ordered a beer and water. The waitress returned with an $8 bottle of Voss, an imported Norwegian water brand in a distinct bottle. I asked for tap water or a regular local bottle, but she refused.
So here I was in the birthplace of eco-tourism, being asked to pay $8 for a bottle of water flown in from Norway. WTF?
Unfortunately, I missed Montezuma in its prime tourism years.
Travel is about discovery. You don’t need to follow the best travel destinations of the year listed in the prominent newspapers or blogs. Find your own adventure. Visit the next great destination instead of the ones that were great 20 years ago. Avoid the fancy restaurants.
6. Tipping is universal and rarely rejected
One of the biggest ripoffs in all international travel is the cost to ride a gondola boat in Venice. The current price looks to be about $88 US per person for a 25-minute ride — a minimum of four people per boat. It’s $130 at night time.
Maybe the price gouging is part of Venice’s campaign for sustainable “detourism”. Or perhaps it’s supply and demand.
I rode the gondola in 1993 during my high school Latin field trip. I remember paying $20-$25 and thinking that was ridiculous.
The ride was beautiful and unforgettable.
When we got off the boat, we prepared to give a small tip. The man who leg-paddled us through the canals said to us, no tip. Or so we thought.
So we kept walking through the exit and didn’t tip. As we walked away, the gondolier and his partner went berserk, cursing and yelling at us %&#^* Americani!
We definitely heard him wrong, but couldn’t reenter through the exit, and we were probably afraid to go back anyways.
As 17-year-olds in our first foreign country, we had no idea about proper tipping etiquette other then what’s expected in restaurants. But this one should have been obvious. Nobody says please, no tip! Per favore nessun suggerimento!
If there’s ever a question about tipping, tip. They can always say no (rarely do).
7. Adults exploit children for money
In developing countries, desperate families ask their children to help earn money whatever way they can. The most common abuses we hear about are child sweatshops, where children work in factories to produce low-cost goods. But child labor is even more prevalent in agriculture and services.
I never came across any organized mass child labor abuses, but I saw individual exploitation all the time.
Tourist attractions in some countries often crawl with “licensed” kids who go around selling cheap high-margin items like gum and candy to tourists. They have official-looking badges and are incredibly persistent. So persistent, that tourists buy something to make them go away. Then comes the up-sell!
But behind every kid is a lurking adult orchestrating the scheme.
My friend and I were stuck in Sighisoara, Romania, on a Sunday morning waiting for the bank to open to get cash for a train ticket out of town.
While killing time, a Romanian boy and his brother “befriended” us. They started asking us for money, over and over again. When that didn’t work, they offered to buy us a game of snooker to get us into a nearby pool hall where older siblings and adults were eager to hustle us.
Two kids in Vietnam “befriended” me and offered a guided neighborhood wat tour if I bought them a drink afterward. It wasn’t much of a tour, just a walk around the block (wats are everywhere). When the “tour” ended, they insisted on a drink from their Mom’s store, and they only wanted a $2.50 can of Red Bull.
They never opened the can.
Worst of all, child prostitution is real. I learned of a 28-year-old man who lived with a Cambodian family for two weeks so he could get to know their 14-year-old daughter. The family actually sold their daughter for money, and this sicko western asshole actually paid. This kind of abuse is still a problem.
Impromptu encounters with children can be some of the most genuine and charming experiences while overseas. But if the kids are too pushy from the start, they might be marionettes.
8. A dollar is sacred
Currencies can be unstable. Therefore, people in developing countries like to own hard currencies such as the US dollar, euro, or the yen to avoid inflation and instability. Hard currencies can be an excellent investment in an inflationary environment.
I rented a bike for the day from a vendor in Mandalay, Myanmar. Before riding off, he helped me exchange $20 on the black market. The government-set exchange rate of the Burmese kyat was about 6 per 1 US dollar at the time. But on the black market, the rate was closer to 700 to 1.
The black market rate was due to the government’s attempts to manipulate the currency. For tourists, the government created a second currency called the FEC (foreign exchange certificate) pegged 1 to 1 to the dollar that allowed them to confiscate any dollars that crossed the border.
It was messed up, here’s the whole story.
To exchange my $20, he took the crisp bill, ran down the street, and into a market. He came back 10 minutes later with about 14,000 Burmese Kyat.
When I returned from my daylong bike ride, the rental guy asked if he could show me something. He disappeared for a few minutes, then returned with a friend carrying a sacred-looking old book. His friend opened the book to reveal a single US dollar bill. The bill was faded and flimsy like it was laundered a few dozen times — ripped and stapled back together — and severely tattered and inked.
It was the ugliest dollar bill I had ever seen. The man wanted to exchange his worthless bill for a crisp one from me. I was amazed at the value this man placed on one dollar. He took so much care to preserve the bill so that one day, he could trade up for a newer one if he ever found a taker.
We agreed on the exchange. A month later, I spent the dollar on 7-11 nachos back in the States.
In the US, a dollar doesn’t buy much. Inflation makes it worth less every year. But in other parts of the world, many people still live on the equivalent of a few dollars a day.
When I was traveling, each dollar was essential to me because the less I spent, the longer I could continue my journey.
Sometimes I think about my savings from the viewpoint of those Burmese guys instead of a well-paid American. It reminds me that I’m lucky to live in a wealthy country and that we should work not just to earn money, but to retain and grow it.
Hard work is universal. But the ability to invest and grow the earnings derived from hard work is not possible for most people in the world.
Photo by RBD
Craig is a former IT professional who left his 20-year career to be a full-time finance writer. A DIY investor since 1995, he started Retire Before Dad in 2013 as a creative outlet to share his investment portfolios. Craig studied Finance at Michigan State University and lives in Northern Virginia with his wife and three children. Read more.
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