Nomad Capitalist Chapter 3: The Location Independent Lifestyle Is Not What You Think

“Come to Cuenca, where flowers bloom from your toilet water!”

That joke comes from Henderson’s mastermind group over breakfast in Medellin, Colombia. They were laughing about retirement newsletters that overhype cheap countries with ridiculous copywriting. You know the type. “Live on a tropical beach for $623 a month!” Meanwhile Costa Rica, Belize, and Panama have already been burned through by the newsletter crowd. Ecuador was next.

This chapter is about what location independence actually looks like in real life. Not the Instagram version. Not the “laptop on the beach” fantasy. The real thing, with real trade-offs and multiple strategies to choose from.

The Herd Mentality Problem

Henderson starts with an observation that I think is spot on. Most digital nomads follow the herd. Everyone goes to Chiang Mai. Everyone goes to Bali. Everyone goes to Barcelona or Berlin or Bangkok. And that is fine for socializing. But it makes people think those are their only options.

There are two types of people reading this book, Henderson says. Type one: successful business owner stuck in their home country, feeling like there must be something more. Type two: already living as a nomad somewhere but still overpaying taxes and dealing with bureaucratic nonsense from a country they do not even live in anymore.

Both types need the same thing. A plan that goes beyond just “work from a cool city.” Henderson calls his approach Digital Nomad 2.0. The first version of digital nomadism was about making money online while traveling. That is great when you are making $1,000 a month eating noodles in Cambodia. But once you have a real income, you need to think about taxes, citizenship, where your money lives, and how to protect it.

Henderson himself ran a location independent business for years without taking advantage of it. He was in AM radio, connecting infomercial producers with radio stations. The whole thing could be done from a phone anywhere in the world. At 21, he thought “I could do this from anywhere” but never actually did it. Fear of the unknown kept him in Phoenix, Arizona.

I relate to this more than I want to admit. When I started working in IT, remote work was possible for years before most people actually tried it. We all had the tools. We just did not make the move. Then one day you do it and you wonder why you waited so long.

Four Strategies for Living Abroad

This is the meat of the chapter. Henderson lays out four different approaches. Not everyone needs to be a full-time traveler. In fact, most people probably should not be.

The Expat Strategy

The simplest one. Pick a city in another country. Move there. That is it.

You can still travel from your new home the same way you travel now. The difference is you chose where you live instead of just staying where you were born. Countries like Panama will let you live there full-time and only tax your local income. So if your business makes money online from international clients, you could pay zero tax.

Henderson says many of his high-net-worth clients actually prefer this. They want routine. They want stability. Moving around constantly would distract them from building their business. So they pick one place, settle in, and focus.

The catch? Tax residency. If you pick a country like Ireland to get their passport, you also get their tax bill. Five years of living there for citizenship means five years of tax returns. So choose carefully.

This makes sense to me. Not everyone wants adventure. Some people just want to live somewhere nicer, warmer, cheaper, and keep more of their money. Nothing wrong with that.

The Trifecta Strategy

This is Henderson’s personal strategy. Set up three or more bases around the world. Split your time between them so you never stay long enough in any one place to become a tax resident.

Henderson had bases in Malaysia, Georgia, Serbia, Colombia, and Montenegro at various times. From Kuala Lumpur he could reach anywhere in Asia cheaply. From Tbilisi he could explore Eastern Europe and emerging markets like Ukraine and Azerbaijan. His Montenegro beach house was a summer escape that also generated rental income when he was not there.

The idea is lifestyle buffet. Big city here, beach there, mountain town somewhere else. You rotate based on season, mood, or business needs.

I like this concept because it treats the world like a menu, not a prison sentence. But let us be honest. Most people cannot afford homes in three countries. Henderson acknowledges this is for people with serious income. If you are just starting out, this is more of a goal than a starting point.

The practical insight I took from this: even if you cannot afford three homes, you can rent in three cities. The principle still works. You do not need to own property to split your time internationally.

The Base City + Travel Strategy

This one is a mix of the expat life and perpetual travel. You have one main base, a real home. Then you have “focus cities” that you visit often enough to feel comfortable there.

Henderson uses Hong Kong as an example. He loves it but could never live there full-time. It is like Las Vegas, he says. Exciting for three days. By Sunday you have had too many crab legs and you are yelling at waitresses. But as a place to visit for business every few months? Perfect.

The key to focus cities is familiarity. You know the restaurants. You know how to get around. You know people there. You are not a tourist anymore, but you also do not live there. It is a sweet spot.

Henderson’s list of focus cities includes Dublin, Warsaw, Brussels, Riga, Tbilisi, Istanbul, Panama City, Kuala Lumpur, Hong Kong, Singapore, and Phnom Penh. That took him almost a decade to build.

This strategy feels the most realistic to me for someone with a family. You have a home base where kids go to school. But a few times a year you visit places where you have connections, business interests, or investments.

The Perpetual Traveler Strategy

This is the hardcore version. No permanent address. No permanent home. Life out of a suitcase.

Henderson did this for a while. Thirty countries in one year was his record. He would spend a month in each country, scope out business opportunities, and move on. Vietnam to Cambodia to Thailand to Laos to Malaysia to Indonesia to the Philippines. Then Eastern Europe from the Baltics down to the Balkans.

The appeal is obvious. Maximum freedom. You go wherever you want, whenever you want. If a place is boring, leave after a week. If it is amazing, stay for three months.

But Henderson is honest about the downsides. It gets lonely. Hard to maintain relationships. Hard to open bank accounts without a permanent address. And for non-US citizens from countries with residence-based taxation, it can create tax headaches because you need to prove you actually live somewhere else before your home country stops taxing you.

Henderson eventually moved away from this strategy to the Trifecta. Even he got tired of living out of a suitcase. The novelty wears off, he says, and you start wanting a place where your stuff is set up the way you like it.

I appreciate this honesty. A lot of nomad content makes perpetual travel sound like paradise. Henderson tried it, enjoyed it, and then chose something different. That is useful information.

The Piecemeal Strategy

This is for people who are scared to commit. Henderson calls it “piecemealing.” You promise yourself a short trip, say six months or a year. You try different countries. One month each. If you hate it, you go home. No pressure.

The beauty is that for US citizens, spending most of the year outside the country qualifies you for tax benefits. Henderson frames it as “getting paid by your government to travel.” You save on taxes while figuring out where you might want to live.

He gives a fun example. If you love beaches in Los Angeles but want to leave, you could do twelve months in twelve beach countries. Nicaragua, Costa Rica, Panama in the fall. Chile, Argentina, Brazil in the winter. Indonesia, Thailand, Cambodia in the spring. Montenegro, Croatia, Greece in the summer. After a year, you have seen a lot of options and saved a lot on taxes.

This is the strategy I would recommend to anyone thinking about this for the first time. Low risk. High learning. And if it does not work out, you go back to where you were. No harm done.

Do Not Escape the Rat Race Just to Join Another Herd

Henderson ends the chapter with advice that I think applies way beyond nomad life. Do not let the herd decide what your lifestyle looks like. Just because other nomads fly first class does not mean you should. Henderson flies business class and invests the difference in rental properties.

He says the richest people often flaunt their money the least. They spend on things that make them genuinely happy, not things that impress strangers on the internet.

Be honest with yourself about what you actually want. Maybe that is three homes on three continents. Maybe that is one apartment in Lisbon. Maybe that is a year of backpacking to figure it out. There is no right answer. The point is that you get to choose.

Key Takeaway

Location independence is not one thing. It is a menu of strategies, and you pick what fits your life. The expat, the trifecta, the base plus travel, the perpetual traveler, the piecemeal approach. Each has trade-offs.

The biggest insight from this chapter is that you do not have to go all-in immediately. Start with piecemealing. Try different places. See what pace suits you. Then build toward whatever strategy makes the most sense for your situation. The worst thing you can do is nothing because you are overwhelmed by choices.

And please, do not move to Cuenca just because a newsletter told you flowers bloom from the toilet water.

Book: Nomad Capitalist by Andrew Henderson | ISBN: 9798461831486

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Part of the Nomad Capitalist series