The Price Of Freedom: Everything I Earned And Spent In 2011

2011 was a year of transition for me. I quit my 9-to-5 job in November of 2010 and have since been trying to figure out this whole self-employment dealio. Not an easy task for a guy who’d never gone more than a month without a boss since the turn of the century.

I also adopted a nomadic lifestyle in 2011. I’d only ever been to five of the world’s countries before the start of the year, but somehow managed to visit ten before another January hit, spending a week or more in seven of them.

Regular visitors to Disrupting the Rabblement will know that I’ve been tracking all my income and expenditure through this transition, and posting detailed monthly reports to show how I’m making it work. If you caught my report for December, you’ll have seen that I’m finally earning enough to cover my expenses rather than eating further into my savings.

Below I’ll share with you a summary of all my income and expenses from 2011, plus a few lessons learned and my financial aims for 2012. Hopefully all this will help some of you fine folks going through a similar transition.

2011 Expenses

Travel€ 2,809$ 3,594
Business Expenses€ 2,752$ 3,521
Housing and Utilities€ 2,533$ 3,241
Groceries€ 2,372$ 3,035
Pubs, Coffee Shops, Restaurants, Take-aways€ 1,216$ 1,556
Clothing€ 368$ 471
Gifts and Donations€ 265$ 339
Miscellaneous€ 1,376$ 1,769
Total Expenses€ 13,691$ 17,517

2011 Income

Freelance web design€ 3,445$ 4,408
$50 Blogs€ 1,255$ 1,606
Gifts and Donations€ 892$ 1,141
A Course In Courage€ 641$ 820
Consulting, Training, Workshops€ 578$ 740
Affiliate Income€ 272$ 348
Google Adsense€ 245$ 313
Miscellaneous€ 522$ 668
Total Income€ 7,850$ 10,044

Other numbers of interest

Total cash and bank balances on January 1, 2011€ 9,781$ 12,514
Total cash and bank balances on December 31, 2011€ 3,868$ 4,949
Difference between those two numbers€ 5,854$ 7,565
Money spent per day in 2011€ 37.50$ 48.00
Money earned per day in 2011€ 21.50$ 27.50
Lowest earning month (January)€ 0$ 0
Highest earning month (February)€ 1,742$ 2,229
Most expensive month (February)€ 2,021$ 2,586
Least expensive month (July)€ 683$ 874

Lessons Learned

I learned quite a few things over the past year as regards finances. Such as…

1. Forget passive income (at least in the beginning)

I spent the first six months of 2011 working hard to create passive income streams. That didn’t turn out very well.

While I believe it’s entirely possible to generate passive income, and plan to have another few cracks at doing so myself in 2012, I understand now that I was getting waaaaaay ahead of myself. Before I learn how to generate passive income, I first need to learn how to generate non-passive income on a consistent basis.

I feel I’m getting to grips with the latter now, but I’d be several months further ahead if I hadn’t spent so much time messing around with niche sites and the like.

2. How to save thousands of dollars a year

Simple: Quit drinking.

Apart from a few quiet months in Spain, 2011 might have been the most social year of my life. Even though I’d given up alcohol, I still went to pubs frequently, especially while in Cork, Amsterdam and Budapest. If I’d continued my usual drinking habits, I expect I’d have close to €0 left in the bank right now.

Aside from all the money I saved by giving up the drink, I also became more productive thanks to the absence of hangovers, and I developed some real confidence as regards flirting and dancing, instead of relying on alcohol to make me less self-conscious.

A few other quick tips for saving money:

  1. Drink water. From the tap. It’s free and perfectly healthy in most of the Western world.
  2. Don’t buy souvenirs. Take photos instead.
  3. Travel for people rather than places. Stay with friends instead of paying for accommodation. (Just try not to take advantage.)
  4. Don’t settle for the asking price.
  5. Never buy when you can easily borrow.

3. It’s not enough to be good at what you do

If you’re self-employed, it’s not enough to be good at whatever it is you do. You also need to be good at things like networking, marketing and sales. Figure all that out and you’ll have clients knocking on your door instead of you having to pitch strangers all the time.

I was frustrated for several months trying to find web design gigs. I knew I had the skills to deliver a fast and quality service, but I didn’t know how to demonstrate such expertise to the right audience.

And I still have a lot to learn here. Listening to folks like Ashley Ambirge and Ramit Sethi helps.

4. Trust yourself

If you’re thinking of quitting 9-to-5 and starting to live life on your own terms, here’s the two-step plan of attack I recommend:

  1. Save up a year’s worth of expenses.
  2. Take the leap and trust that everything will be okay.

You learn fast and work hard once you give yourself no real choice but to succeed. I’m sure most folks would actually be okay taking that leap with less savings built up, but a year’s worth is good to aim for.

And by “a year’s worth of expenses”, I mean no more than €10k, regardless of where you live in the world. If you’re serious, you can get by comfortably on that without earning anything extra throughout the year.

Outlook for 2012

I feel confident now that I can earn €1k or more consistently each month, so I’m not overly concerned about income going forward. My main goal at the moment is to reduce the amount of hours I’m spending in front of the computer each week so I can get out and about more to enjoy my travels and meet with cool people. I’ve recently raised my freelance rates, so hopefully that will help.

As for expenses, I expect those to be lower for me this year since I’ll be spending several months living in relatively cheap places like India and Southeast Asia.

One thing I aim to make more of a priority this year is giving. In 2011, just a shade over 1% of my total expenditure went towards gifts and donations. I’m not at all satisfied with that number. I’d like it to be closer to 10% in 2012, and more like 20% in the long term.

Raam Dev gave me a lot to think about in this respect with his essay on Income Ethics. I especially like that he’s defined his enough ($15k per year) and aims to donate any earnings beyond that to charity.

Just imagine a world where everyone did that.

You and money

How did you fare financially in 2011? What are you going to do differently in 2012?

And have you ever considered tracking all your income and expenses like I do? Gotta say, it makes you a lot more conscious of your money. Especially if you commit to posting the numbers for the whole world to see 😉

22 Comments

  1. María

    Right timing post, man! 😀

    Ahhh, number 3 is so true that I want to cry since I am pretty clueless in this networking, marketing and sales thing. Even though I’m lucky there are people out there willing to spend their time in showing me few things about this, I need to learn so much more…

    Good I didn’t spend any minute looking for a passive income, mainly because I have no idea that even existed before I meet you! 😀

    Anyway, you are doing great, I’m extremely happy for you and thankful you’re sharing your knowledge with clueless people like me. Thanks a lot, mister! 😀

    Reply
    • Niall Doherty

      Muchas gracias, María!

      I’m still pretty clueless at #3, but slowly getting better 🙂

      Reply
  2. Jana

    This is so inspirational! You really are making it. =D Seeing your progress laid out in such a concrete way is sure to inspire others to take the leap as well.

    Reply
  3. Tali

    Hey there Niall,
    A big thanks for this one. A lot of “woa”s were coming out of my mouth as I was reading!
    People tend to be so secretive about money, salaries, rent, expenses. It’s like we are all walking around with personal mysteries. I wish people had the courage to be more transparent like you. A lot of societal walls would break down and I think we would all be happier!
    I’m in NYC so it’s all about the dollar but I think I’ve got the basic conversion thing down for your numbers.
    I know I spent less money in 2011 than any previous year but I don’t have specifics. My goal for 2012 is to be more specific and really track my spending and earning, make more considered decisions and cancel things like cable, memberships…etc that don’t really add much to my life.
    Thanks again Niall,
    Tali

    Reply
    • Niall Doherty

      Thanks for the comment, Tali! I just went and added dollar conversions for everything to make it a bit more relevant to zee Americans 🙂

      Reply
  4. Tom

    Hello Niall,

    Apologies for a (slightly) off-topic question, but I’ve noticed in these reports that you often stay in hostels while on the road. As a web designer considering going nomadic this year, I’m wondering how you ensure you’re able to work productively in that sort of environment 8-12 hours a day with all the people/noise etc? Or do you usually work in libraries/coffee shops?

    Reply
    • Niall Doherty

      Great question, Tom.

      I try not to stay in hostels because they can be more distracting. When I do plan to stay at one, I read the online reviews carefully to ensure they have fast Internet. I’ve found that as long as I have that, there’s really no excuse not to get work done.

      My office for the past week has been the couch in the common room here a hostel in Budapest. A few times I’ve even worked some hours from my bunk. I never thought I could work productively without at least a desk and some peace and quiet, but it turns out those things aren’t all that important. A solid pair of headphones work wonders.

      I do libraries and coffee shops sometimes, too. But libraries usually don’t have great wifi for working (lots of people on the same connection), and coffee shops can get expensive.

      Hope that helps!

      Reply
  5. Jeanie

    Hey Niall! One other thing Raam did was inspire me to travel more & take a leap into the unknown world of internet income by posting how he managed it. 🙂

    I’m glad you’re doing the same thing–makes “more travel, more income” seem more real for me in 2012.

    I seem to be doing great in terms of networking & can copywrite for friends…but I don’t have the dev/design skills you guys have. So internet income is …shall we say, more difficult? 😉

    These kinds of posts are fascinating, especially when you know the people in real life and can vouch for their honesty.

    When I get myself figured out, I’ll happily hire you for more work & promote you into the bargain. 🙂

    Reply
    • Niall Doherty

      Hey Jeanie! Thanks for the comment.

      I agree that it’s an advantage to have the type of skills that Raam and I have. They lend themselves well to working online.

      Looking forward to seeing your continued progress 🙂

      Reply
  6. Michael Pettet

    I think your doing just great with your income. The idea of figuring out what you need to live on each week and donating the rest has never occurred to me before. That sounds like a good thing.

    As a side note: could you highlight the links in your blog a bit better. My eyes are not as young as yours :p

    Luv ya,

    michael

    Reply
    • Niall Doherty

      Hey Michael. Thanks for reading.

      I just made the dotted underline on the links a bit darker, hopefully that helps with visibility. I had the link text show up as green before, but I found they stood out too much that way and made it harder to get into a good reading flow.

      Reply
  7. Gary

    Good post Niall.

    I have spent less in 2011 than I did in 2010 that’s for sure but I would like to go further.

    As I have mentioned to you before I would like to start my own Blog and I thought of putting my current financial situation on there for all to see. Total income, total debt, everything.

    It would mean everyone I know seeing exactly how much I am worth and how much I earn, which is a lot of personnel information, but I feel that it would be a great way to increase my chances of success of reducing my debt and increasing my income.

    I would like to show people through my own efforts that even in hard economic times you can still improve your financial situation and that lack money shouldn’t be a excuse in making a success of your life.

    But that’s I what my Blog to be about, experimenting in my day to day life and posting it on-line for the world to see, showing that anyone can do what I am doing. That would require total transparency on my part.

    I am sure I have said it before, but it bears repeating, if you go public with something you greatly improve your chances of success.

    Anyway until next time.

    Gary.

    Reply
    • Niall Doherty

      Agreed, Gary. Such transparency has definitely helped me, and I expect it could help many other folks too.

      Reply
  8. Saygin

    I sent you a looong mail just a min ago,
    and I wanted to add that I’m keeping all my income & outcome as well for last 5 months.

    And yeah, it helps =)

    Reply
  9. ron in WI

    If you’re having to spend 40 hours per week working to make ends meet (while having no retirement savings, health benefits) than are you really achieving what you set out to? Sure you may get to spend time sleeping on a “friend’s” (I use that term loosely) couch in Turkey or sleep on a twin sized bunk bed in a hostel somewhere (swanky!) but truthfully you’re still a slave to work just like the rest of us. In fact when you add up all the hours you spent TRYING to earn passive income its an unequivocal failure.

    Sorry but somebody needs to call you on you merry sunshine bullshit.

    Reply
    • Niall Doherty

      Thanks for the comment, Ron. I don’t consider myself to have “made it” yet, not by a long shot. I thought I’d been pretty clear about that.

      My aim with these reports is to show people what the transition is like. It’s hard and often ugly. But I feel my destiny is in my own hands these days, and I’m happy with the progress I’m making towards my ideal, which is more like 30 hours per week and earning enough each month to build up some savings and make significant contributions to charitable causes.

      Reply
    • Will - My Spanish Adventure

      I’d say Niall is fucking kicking ass mate. He’s doing exactly what he set out to do: travelling the world, meeting loads of new people and not working too damn hard that he dies old and miserable and unable to do all this shit when he’s later.

      Why would he want to be all lonely in a 5-star hotel anyway when he can chill with friends, get a clearer picture of a new place and what it’s actually like to live there.

      Sounds like someones either a) overly turned on by materialism and status or b) got a serious case of sour grapes.

      The fact you wasted your time reading Niall’s blog suggests the former.

      Reply
  10. ebele

    Hi Niall,

    I don’t think I’ve ever commented on your blog, but I wanted to say I love what you’re doing with your life. You’re grabbing it by the tee-hees and living it. 🙂

    Keep on.

    Reply
    • Niall Doherty

      Thanks, Ebele!

      You made me smile 🙂

      Reply
  11. Pau Ruŀlan Ferragut

    I stopped tracking all my expenses a couple of years ago only to find out that,
    instead of helping me, it was a backfiring because I was rationalizing my
    expenses.

    Nowadays I only do it very highly in such as «I know a visit to Florence will
    cost 60€ so this month I cannot go to Siena» (I am in Italy, not very far from
    it).

    One thing I notice is that since adopting a healthier eating style my food
    expenses have almost doubled (around 350€ per month) but I feel just great.

    So thanks for the post 😉

    Reply
    • Niall Doherty

      Thanks for the comment, Pau! I noticed the same when I started eating healthier. But,as I’m sure you’ll agree, there aren’t many better things to spend your money on than good fuel for your body.

      Reply

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