More Americans are travelling abroad than ever before, with the National Travel and Tourism Office stating that in 2016 alone, there was an 8% year-on-year rise in traveler numbers. Mexico is the most popular destination, followed by Canada, and then Europe, followed in turn by the Caribbean and Asia. A typical trip to a country like Paris or Spain can set you back around $4,000 or more for a two-week stay – an amount which can seem almost impossible for large families and young Americans (including students). If you have your sights set on an overseas destination, with the right savings strategy, you can make the trip of your dreams come true in one or two years.
Increasing Your Passive Income
Passive income – which arrives on a regular basis and requires little effort – is the ideal way to go when it comes to saving for extras such as travel. Dividends from stocks are method that doesn’t require too much work. However, Jim Cramer from CNBC’s Mad Money recommends setting aside one hour per week to study whether or not to buy or sell your stocks. He recommends diversifying your investment among between five and 10 stocks to reduce risk. Lance Cothern of Business Insider, meanwhile, sees real estate rentals as having the greatest potential because they require little to no personal time/management.
Opting for Wealth Management
Unless you are comfortable with the world of stocks and bonds, as soon as your assets hit the value of around $100,000, you should consider consulting professionals in investment and wealth management. Not only will a good, trusted investor steer you in the right course in terms of earning more from your investments, they will also inform you on tax breaks and help you out with financial and retirement plans. Sometimes, what stops you from spending on leisure and travel is a simple insecurity about the effect on your savings. Professional advice will enable you to elicit exactly how much you can spend on extraneous items without affecting your future.
Set Aside 14% of Your Gross Income
New York Times best-selling author and co-founder of AE Wealth Management, David Bach, notes that average Americans are becoming millionaires by the time they hit 59 with one easy method: “You need to be saving 14 percent of your gross income. That’s the formula.” Bach notes that this may sound like a lot, but it isn’t; it amounts to just one hour of your working day. Considering the big effect that one million dollars can make when it comes to your security as well as your opportunities to travel, making that small sacrifice weekly or monthly makes full sense.
Studying while Traveling
If you are a student and you don’t want to have to wait until you are a full-time worker to travel, part-time work is one obvious solution. However, with the average students graduating with debt of over $37,000, it is probably wiser to try to aim to reduce debt before spending. One ideal way to learn as you travel is through a travel grant. There are many organizations that promote travel and cultural exchange; volunteering vacations are another way to kill two birds with one stone.
Saving can be difficult in itself and for many families, travel seems appealing but can also potentially put a dent in long-term financial plans. Seeking out passive wealth opportunities, managing savings and wealth under the guiding hand of a professional, and setting aside just 14% of your income can make a big difference in terms of living ‘the good life’ – one that for many Americans, means traveling to new and far-off lands.