The nomads guide to money management

As we sat in the lounge in the Melbourne airport, enjoying ample food and drink and waiting to board a long flight halfway across the world, I opened the Charles Schwab app on my phone to view the balance of checking account. It had dipped below $1,000, so with a few taps I scheduled a transfer from our main US bank checking account, closed the app and forgot about it. I went back to my wine and snacks and made use of the facilities, always a significant upgrade from public airport restrooms. When we landed in Buenos Aires many hours later, my wife proceeded to the ATM while I waited at baggage claim. Using our Schwab debit card, she withdrew a few hundred US dollars, accepting the ATM fee out of habit. We picked up our bags, hopped into a taxi and were off to our new home for the next month, easily able to pay the driver in Argentine pesos.

For US citizens traveling internationally more than once or twice per year, its a good time to be alive. Flights are more abundant and cheaper than ever. Internet accessibility and speeds have all but erased professional barriers for many destinations. The proliferation of the English language throughout the world has made it easier than ever to communicate (the jury is out on whether or not this is actually a good thing). There are financial tools that make living or operating outside your home country fairly painless.

When we decided to go nomadic, I did quite a bit of research on what tools and accounts were recommended and made the most sense for us. First and foremost was selecting a credit card. We didn’t actually need it to be a “credit” card as I have always paid every monthly credit card balance I have ever had, but that is a subject for a different post. Many credit cards and charge cards offer accelerated points for travel-related expenses, which is obviously something we wanted to take advantage of. For anyone willing to fork out an annual fee of a few hundred dollars, the decision ultimately comes down to comparing the Chase Sapphire Preferred card vs the American Express Platinum card. Both have a host of travel-related benefits which you can find in the links above, from reimbursements of annual fees to airport lounge access (a surprisingly nice perk) to multiplied rewards for travel categories. As a long-time AMEX card holder, my allegiance was with them due to years of positive interactions and an unexplained brand affinity that I have to this day. Ultimately,  though, we decided on the Chase card and haven’t looked back. We use it almost daily and I can’t recommend it more highly.

Access to local currency is obviously key, especially in less-advanced countries across Africa, Asia and South America. Most US financial institutions charge international transaction fees and some even charge additional forex fees. Charles Schwab has a checking account that not only waives these fees but also reimburses all ATM fees worldwide. This is truly a beautiful thing. There is no fee to open an account but you must be physically present to do so. There is also a Schwab brokerage account attached by default, but you are not required to fund or use it at all. I am all for reducing the number of accounts one has, but this is worth maintaining for anyone who travels out of the US even a few times per year.

We use TD Bank as our main checking account, solely because we have a business relationship there and it is simpler to have personal and business with one firm. As their reputation might suggest, they are not a top tier institution and I have had plenty of negative experiences, especially with regard to online banking, their apps and their technology in general. I reference TD only to point out that everyone should have a US based checking account with a strong online banking interface. Recently, many firms have begun to allow check deposits under a certain amount to be made via their mobile app, which is another game changer. If you are able to receive scanned copies of your mail (more on this in a minute), you will be able to print, sign and scan checks that you receive back home rather than asking a friend or family member to forge your signature and make the deposit on your behalf.

I am lucky to have a recently-retired father who happens to be nearly as organized as I am. Our “home address” matches my parents, which means he is able to receive our mail. He will discard the junk (which comprises 90%+ of all paper mail) and scan and send important items - like checks - to us. Because my parents live in Texas, this also gives us the benefit of residing in a tax-free state. If you don't have the luxury of retired (or bored) parents, there are many “virtual mailbox” options, from EarthClassMail to iPostal1 and others.

Most people know what Venmo is, but if you don’t you should probably download it. It is a simple app that allows you to link your bank account and easily transfer money to and from friends, family and (in theory) strangers. A beneficiary of the network effects typified by companies like LinkedIn and PayPal, it is worth having simply because so many other people have it. If you are at dinner and decide to pick up the check for the sake of simplicity, your companions can transfer what they owe to you via Venmo.

One final tip for couples or anyone traveling with close friends. It is a good idea for someone to leave money, credit cards and possibly even IDs behind when venturing out. This is especially true at night and in locations known to have a higher risk of street crime. This way, should something happen, you will have a backup source of funds. We have had to get new credit cards delivered to us while on the road and it was not an easy thing by any definition.

Not directly related to travel but a hugely important piece of our own financial picture is what happens with funds that do not need to be used for day-to-day expenses. Because we do not have a home, car or the other typical recurring expenses, whatever we don't spend on airlines, housing, food and a few other categories is demarcated for investing. A few years ago, after stumbling upon some materials written by Peter Mallouk, who founded and runs the investment firm Creative Planning, I decided to move all of my investable assets to their firm. I did this because I felt like the only time I would hear from Merrill Lynch (from which I switched) was when they had a new product to sell me. With Creative Planning, they are not only Registered Investment Advisors which must - by law - act in my best interest, I also get a version of a “family office” in which they will assist with tax preparation, risk assessment, insurance and a host of other things. I have been very happy with them and would recommend them to anyone looking for a money management firm. I would suggest reading or watching a few of the things Peter Mallouk has to say and if it resonates with you, reach out to them. From what I’ve seen, they actually live the ethos that he preaches. It goes without saying that you must have investable assets in the first place in order for this to be worthwhile and I plan to post some thoughts about that in the coming months, but there is no day like today to start saving.

For transparency, I receive no credit or income whatsoever by recommending the aforementioned products and services. They are simply things that work for us and I feel comfortable recommending.