Location independence and the digital nomad lifestyle is availing itself to more people, and oddly we might have COVID-19 to thank for it.
November 2, 2020
By: Bobby Casey, Managing Director GWP
In what seemed like an instant, virtually everything closed from borders to daycare. The panic took hold and, to this day, has its grip on the world.
No matter where you stand on the COVID-19 issue, there is no disputing its worldwide dramatic impact.
We can argue all day that the virus is not terribly destructive, or we can argue it is the 2nd coming of the bubonic plague. It doesn’t actually matter. What matters is how we move forward in this new era.
Of course there is a lot of talk about the “new normal”. And many people are fighting the idea that we won’t go back to how things were. I happen to find those arguments shallow and naïve.
We cannot unring this bell, however.
Consider this example already dramatically affecting how we live our daily lives: airlines.
Air traffic is down 70% over last year, up from the 90% decline we saw in the spring. This has, and will continue to have, a massive impact across the global marketplace as well as a ripple effect on many different industries.
Imagine being the CEO of Delta Airlines or Lufthansa. You need to make huge decisions that affect your business months or even years into the future. To do so confidently, you need projections to estimate future demand. You also have to take into account a massive amount of infrastructure maintenance just to keep your company at break even.
How can you make billion dollar decisions months or years in advance, when at any moment there could be massive coordinated efforts worldwide to close borders for the re-emergence of COVID-19, or the next virus governments deem worthy of a total shutdown?
This has already forced airlines to eliminate many common routes and dramatically cut back on remaining routes, because they cannot afford to fly half empty. They definitely cannot make growth plans for the future knowing they can be shut down at the stroke of a pen.
Working from home is the new, and still emerging, normal. This is an undeniable growing trend, and has been for 10+ years. COVID-19 was the catalyst to kick it into high gear.
This is another one of those “you cannot unring this bell” situations.
Workers realized overall, they are more productive at home without office distractions. Not to mention, with the kids schooling online (another trend) it’s nice to have lunch with them at home and spend more quality time together.
Many workers are also realizing they can get done in 4-5 hours at home what took them 8-9 hours at work. This either; 1. gives them more free time for family and personal goals, or; 2. gives them more time to explore their own business or freelancing for additional income. Either way, it is a net improvement on quality of life.
Companies are realizing they really don’t need all that office space when workers are happier at home, while Zoom and Slack actually make the company more efficient.
Workers aren’t commuting 1 hour to and from work everyday. Just by eliminating the commute, they also have more time. The unintended consequence of this is much better air quality from less pollution and much less traffic, at least during peak hours.
Automobile manufacturers are going to dramatically shrink. Remember the days when your car hit 100,000 miles, it was time to trade it in? We all do. But those days are long gone. Nowadays cars last 200, 300, 400, even 500,000 miles. It’s not uncommon to see a Toyota Camry for sale with 250,000 miles and it looks and drives great.
Newer cars are so much more durable and enduring.
Now consider that pre-COVID-19, the average person probably put 30,000 miles per year on their car. With a previous generation car, you would be looking to trade in 3-4 years.
But now that you work from home and your kids are doing online school, you no longer drive 20,000 miles per year. You “may” drive 10,000 miles.
The cool part is that your car no longer needs to be traded in after 100,000 miles, but it can easily go 200-300,000 miles without any major issue. You can easily drive the same car for 10, 15, even 20 years without worry in the “new normal”.
Of course many of you reading this will call BS here saying that people still want new cars and will trade them in earlier. Sure they will. Some people anyway.
But you cannot argue that the combination of driving less miles per year and cars lasting much longer won’t have a major impact on the automobile manufacturers future production.
De-urbanization is the new normal. At least in the US this will hold true. It seems like it could be a global phenomenon though.
With COVID-19 fear still strong in many, getting out of densely populated areas and into the countryside is a growing trend. With so many working from home, there is no penalty for the commute. Considering property prices are lower (at least for now) in the rural areas, many are selling their city condos and urban homes in favor of larger houses on larger lots in the countryside.
These are just observations of what will continue to be a growing trend. I’m even looking at country houses for the past couple of months to have a city escape.
Don’t believe me? Look at rental prices in major cities like New York, Chicago, London, or Paris. Every one of those cities has seen dramatic declines in housing costs since March.
Bandwidth and technology makes remote work possible. Twenty, or even ten years ago, internet
bandwidth was not fast enough to handle the additional network traffic from everyone working from home and connecting via Zoom. But now, we have the technology and the speed.
Part of this I credit to the creation of Skype. Back in 2003, a few really smart Estonians created
a program called Skype. At the time it was revolutionary. Little did any one know it was also the beginning of the location independent lifestyle.
I recall in 2004 I took a 3 week trip to Russia. When I came home my cell phone bill was about $3000. It was painful, but it was a one-time expense. Obviously it’s not reasonable to maintain that type of cell phone bill every month.
Shortly after that trip I was introduced to Skype. It opened up the world. No longer would I have huge phone bills while traveling, but it also enabled me to expand my client base globally without incurring additional expenses.
Since Skype, we’ve seen many new technologies that have exponentially improved and streamlined workflow like Zoom, Gsuite, WordPress, Slack, cloud based accounting programs like Quickbooks, Xero, Kashoo, Freshbooks. Likewise dramatic increases in mobile technology combined with a massive decrease in cost of mobile data and communication has made remote work both affordable and accessible for many more people.
The world is not going back to pre-COVID-19. And that’s a good thing! Sure, I’m sick of the lock-downs and restrictions and travel complications, just as many of you are.
But these are what’s temporary. What is not temporary is the way we live and the way we work.
We are experiencing a structural change in society. It is impacting how our kids are educated, how we work, how we travel, and how we live our daily lives.
These structural changes will have ripple effects into every facet of our economy. Make no mistake.
There will be winners and losers, but these changes will noticeably increase the numbers of digital nomads across the globe. Just make sure you are preparing for it.
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