The White Man Tax

white-man-tax-machu-picchu

Humans are basically bigots.  Or as Doctor Cox says, people are bastard coated bastards with bastard filling. We judge and categorize people all the time.  When you walk into a room, you’re immediately judged on your looks, dress, walk, appearance, indicated social/economic standing, etc.  And you do it to: that guy looks like a lawyer, that girl is attractive, that dude looks mean.

white-man-tax-machu-picchu
The price for the train to Machu Picchu has three prices: $6 for locals, $20 for Peruvians, $120 for foreigners. It’s robbery.

In the USA I’m part of the majority: white and English speaking. While traveling abroad, I’m typically a minority in either/both ethnicity or language. In those cases, the locals often upcharge me just based on the fact that I’m an obvious foreigner. I call this the “white man tax”.

First, a little background on the assumptions we all make every day.

Categorizing people saves a ton of time and it’s mostly useful. The issue is that it often crosses the line and is unfair, incorrect, and/or detrimental. When it happens that your assumptions were wrong, you have to reevaluate. That’s the step that true bigots miss. For example, I can tell that the guy across from me is a hipster. He’s wearing the thick rimmed glasses, skinny jeans, nice watch, and leather shoes. I can guarantee he has an iPhone, Mac Air, drives a Hybrid/Diesel, has a liberal arts degree, votes democratic, posts pictures of his meals on Instagram, and reads pretentious garbage like the Atlantic to appear smarter.

Why is categorizing him useful?

  • We’re in Ecuador, so I know he’s not a local.
  • Since he’s not a local, I’d try communicating with English before my terrible Spanish.
  • He’s also a traveler, so I could ask what he’s done here for price and quality comparisons.
  • His background is similar to mine, so I would tend to believe his recommendations would be good for me as well.

Why is categorizing him not useful?

  • When I hear him speak, it’s obvious he’s a European (from Italy. I didn’t even know they had hipsters there!). So everything I stated above about his background is likely wrong. If he was from the US, it would have been pretty darn close. But that little bit of information I was missing caused me to suddenly become way off in my estimation of who he was. I have to reevaluate from the ground up and ditch my previous categorization.

What does any of this have to do with the white man tax?

We get categorized as tourists instantly while traveling. At 6’1″ and pale a ghost, I tower over and blind people from other countries. Alicia’s blonde hair is a beacon in a crowd of dark hair. It’s hard to blend in. A vendor or tout can spot us from a mile away. And when they do, there are going to be some common assumptions they make, almost all of which are usually correct:

  • Here for a short time
  • Has money to spend
  • On vacation
  • Unfamiliar with surroundings
  • Doesn’t know the language
  • Doesn’t know the prices of various goods/services
  • Doesn’t know you personally nor could point you out to anyone else

Studies have shown that if humans can cheat the system with zero risk of getting caught, they will. So when a tout sees me, a tourist, this is what is going through his mind:

  • This guy is a tourist
  • This guy has money
  • He has no idea what things actually cost, so I can just name a number
  • He has no idea who I am, so it’s not like he can give me a bad reputation
  • He’ll be gone in a day or two

So the touts just make up a number in their head, and the tourist pays it. It turns out that the touts’ categorization of the tourist was completely correct. When you look at it from their perspective, it makes perfect sense. If some goofball wants to travel halfway around the world and doesn’t bother knowing anything about anything, why not just charge them whatever?

This business practice occurs in the US, but in differnet places. In other countries it’s common to barter more for common goods. In the US it’s more common to barter for specialty goods. For example, the best business lesson I’ve ever received was from an old boss and business owner on the phone with a client. The client asked how much the product costs. My old boss replied: “How much do you have?”. The client replied that he had $80,000 this quarter, so can you guess how much the product costs? That was a real eye opener for me. If someone doesn’t know how much something costs and they aren’t concerned with getting the best deal, why not just make up a number?

Does the white man tax ever go away?

I like to ask expats this all the time, and they all say that No, It Doesn’t Go Away. Even when the expats are fluent in the language and have lived there forever, they still get upcharged just based on their ethnicity.

Maybe calling it the white man tax isn’t appropriate, as it happens to every ethnicity

While biking in Thailand, we got to talking with our tour guide about the local culture. He was resentful of Thai’s because very few people would hire him. He’s Chinese. The bike company is run by an American expat. The guide explained how the pricing system worked around Chiang Mai in terms of whiskey at a local club. Alicia and I would get charged 1000 baht ($35) for a bottle, he’d get charged 300 ($10), and Thai people would pay 200 ($7).

I thought this was weird and mostly a Thai phenomenon. Nope. In Peru going to Machu Picchu, there were three prices on the sign. One for foreigners, another for Peruvians, and another for town residents. On a lunch menu!

Some cultures are just notoriously racist. In Japan, there are signs saying “Japanese only” on some establishments. You can’t even get upcharged!

(Since I’m white and English speaking, I can’t comment on how people are categorized in Europe/Australia/US as I blend in. Feel free to comment on your experiences)

Dealing with getting upcharged

WALK AWAY.  It’s the easiest and fastest way to cut through the bullshit.  I promise you that someone else is offering the exact same thing and is very willing to take your money.  Typically the person will lower their price the moment you start to physically turn.

Know beforehand roughly what things cost

Ask around on some forums about prices around the country. Some prices really are too low for them to accept, so get a good idea how much the basic things like food/drink/taxi/housing should roughly cost in each area. Recognize that different cities and even areas within cities can have price fluctuations.

Getting the absolute best deal isn’t always worth your time and energy

Haggling for 20 minutes over a price difference that will amount to a few dollars really isn’t worth it. While we were in Cusco, we were told that a cab from the airport to their place would be 10-15 pesos. The taxi drivers started us at 35, and we ended up paying 20 after a minute of holding firm. So instead of the cab ride costing $3-$4 USD, it cost $6 USD. Who cares? It was worth more to us to get to our destination and take a nap than go through 20 other cab drivers trying to save 2 stupid dollars.

And last, call them out on it. I’ve been upcharged when the sign above their head clearly states a lower price. Point to the sign, offer the amount it says, and they’ll relent.

Let’s call it the foreigner tax

If you travel to another country, it’s likely you’ll get charged the foreigner tax at some point. At the very least, you’ll get categorized in the locals’ minds. Don’t try to fight against it. It’ll just aggravate you. Instead, learn how to deal with it quickly and easily by walking away and/or ignoring it.  People are not going to stop being bastard coated bastards with bastard filling any time soon.

What is a Digital Nomad?

digital-nomad-life

I have never gotten more blank stares than when I tell people that I’m a digital nomad.  The questions answered in this FAQ-like article are made by me because people just can’t comprehend what it is we do.  If I included only questions I’ve gotten, this page would be blank.  Just like the stares.

What is a digital nomad and what are our lives like?  A digital nomad is someone who is location independent and makes their living over the internet.  Typically the name digital nomad implies that the person moved to another country, but this doesn’t have to be the case.  Anywhere there is an internet connection, there could be a digital nomad.  Even the south pole in Antarctica has internet!

digital-nomad-life
Chiang Mai, Thailand is a common digital nomad destination due to the cheap cost of living, great food, good internet, safety, and wonderful people.

So you sit on the beach all day and type?

No, but we could!  Though I’m not a huge fan of sunburn.  I’m delicate.

Our office looks a lot less glamorous than you might have imagined.  We sit in our hotel or airbnb room holding conference calls and typing.  The difference is that when we go out of the office for a walk, we go see miles of temples, Inca ruinsa movie set, or stay home and get a great bottle of wine.

waihake-island-nz
Just another day at the office. Waihake Island, New Zealand.

How much do digital nomads work?

This greatly depends on the digital nomad.  We’ve met some people who work 70-80 hour weeks, and some who work 10 hour weeks.

wine-glass-light
Work is dumb. “Let’s go to a winery and get drunk” doesn’t meet a lot of resistance most days.

Did you save up a lot of money?

This is a question we actually do get a lot when we tell people we are traveling for a year.  We have money saved for taxes and emergencies, but nothing we wouldn’t have had at home.

Some nomads do save up money, move to a very cheap location, and start building their business where their money goes a lot farther.

How much do digital nomads make?

All over the board.  Some people aim for the bare minimum and just want to live comfortably in cheap countries while others use the lower expenses of other countries to build their empires.

The minimum would be to make ~$1K per month, but we’ve also met others who make well into six figures.  Personally, we do well for ourselves as we keep only higher value clients.  The minimum of $1K necessary could be lower, but we are assuming a good lifestyle in a country like Thailand with room to cover emergency spending.

What lifestyle do digital nomads lead?

napping-on-top-of-the-world
Work is stressful. Take the edge off by napping on top of the world. With Michelle atop a mountain in Chile.

This depends on the country where the nomad lives.  Generally, digital nomads move to cheaper countries so you can live better than back home and/or save money.

For example, a digital nomad can make New York City money while living a cheap life in Bangkok.  You’d have to really try to spend more than $1K/person per month in Chiang Mai with $2 meals and $20/night hotel rooms.  A $100K salary doesn’t go very far in NYC, but you wouldn’t know what to do with all your money in Thailand.

We’ve lived on the beach or on islands for $20-$30 per night ($600-$900 per month).  That’s cheaper than living in the frozen tundra of Minneapolis!  Most digital nomads hop around until they find somewhere particularly attractive.  When that place stops being attractive, they move on.

reality
I suppose we have to work sometime. I guess. This is what it looks like.  Alicia is holding a conference call.  Lima, Peru.

What type of jobs do Digital Nomads do?

Any job that doesn’t require physical presence can be a job done remotely.  Think about it: did you really need to be at that meeting, or would a conference call have worked just fine?  I shake hands at meetings just to justify why I drove across town for something that could have taken a phone call.

Here is a list of some of the more common digital nomad jobs:

  • Online marketer: SEO, SEM, Affiliate, Social marketing, blogger
  • Content creator: digital creative, writer
  • Entrepreneur: building businesses in low cost of living countries to reduce risk
  • Poker player
  • Programmer
  • IT administrator

There are others, but these are the most common.  I’ll point out what might not be obvious: these are the black sheep jobs of the modern world.

Online marketing is very new.  You can’t get a degree for PPC or Facebook advertising.  As such, these professions have a reputation of being filled with scam artists and people with questionable qualifications.

Content creators are usually seen as “artistic”.  The connotation with that is usually unreliable and/or out of touch with reality.

Entrepreneurs are those people who are deliberately outside of society.  I hate the term, but to use a silly word that is en vogue: they are “disruptors”.  They are trying to create a shift in the status quo and thus will be doing things that look odd to the rest of society.

Poker players naturally operate in a weird space.  The average person believes it’s not possible to win money at all in online poker, and the thought of doing it for a living has baffled everyone I met when I told them I did it for a living (once upon a time).

Programmers and IT administrators might not seem like black sheep in the corporate world, but tech people are… different.  For example, once place that I loved to work had our department stashed in the back of the office where we could close all the doors and windows and turn the lights off while we worked listening to death metal.  So great.

What does this have to do with being a digital nomad?  You’re going to be an outsider.  You will be weird.  Your job will be weird.  Just roll with it.

How did the Digital Nomad life get started?

Slowly!  Despite being able to communicate across the world for a few decades now, the technology still wasn’t there until the mid-2000’s for companies to reliably allow remote working.  Or the internet infrastructure hadn’t improved enough in developing countries.

Tim Ferriss popularized the “lifestyle design” movement in his opus, the 4-Hour Work Week.  It describes how to create internet-based income, use digital tools to drastically lower your time spent working, and prioritize your life for maximum results.  It’s a great book and we highly recommend it for learning time management techniques if nothing else.

Digital nomadism is becoming more mainstream.  Over our trip, we meet people who are actively putting these lifestyle design choices into action.  We’ve met bloggers, IT admins, photographers, entrepreneurs, and more, all working remotely.

Is it easy to get a Digital Nomad job?

No.  It’s still very new, and new things are always met with resistance.  And it’s absurd how people will fight you all the way.

One client I have I hadn’t seen in person for a year and a half even though I was only 40 minutes away.  Over that time I did large upgrades and transitions and everything was just dandy.  But the second I mention we’ll be leaving the country, they pooped themselves.

But just because it isn’t easy doesn’t mean it’s impossible.  It’s only hard because there’s no true instruction manual.  If you want to do it and work consistently at it, I believe most people could achieve it.  As the world becomes even more digital, I only expect it to get easier as well.

How do I get a Digital Nomad job?

  1. Turn your current job into a remote working job
  2. Create passive income that will allow you to manage it remotely
  3. Get a digital job that allows working remotely

#1 is vastly underrated and I think is the best option for most people in a typical professional job.  The 4-Hour Work Week describes how to do this.  The reason I think this is the best option is because #2 and #3 are basically career changes into something so different that most people would get discouraged.

Creating passive income doesn’t have to be as daunting as it sounds.  Saving and buying a profitable online property is one option, as is investing in real estate or dividend-paying stocks over a period of 5-10 years.  While that might sound like a long time, being a digital nomad is a lifestyle: we are doing this for the long term.  The average person has 40+ years in their career, why not spend 25% of it to create a dream scenario for the remaining years?

Most digital nomads are freelancers and/or entrepreneurs.  This is not a life that everyone will enjoy.  Creating value and managing all the risk takes a lot of getting used to.  For example, once upon a time Alicia was very freaked out about taxes.  Tax time for entrepreneurs and freelancers is very stressful as the government demands silly amounts of money.  Did you know your income tax rate could go from 20% to 50% in a single year?  We found that out when the tax man said we owed infinity billion dollars on year.

And lastly, getting a digital job that allows remote work is last on the list for a reason: high competition for very few spots.  Since it’s a remote job, the people in competition for that job explodes.

Would you go back to a typical 9-5 job?

Oh sweet Jesus, no!  No! NO!  NOOOoOOOOoOoOOoOOoOOOOO!

Don’t you miss some things about being back home?

Yes.

We mostly miss the people.  In hindsight, leaving for a year straight wasn’t well thought out.  Why couldn’t it have been two separate 6 month trips?  We’ll be back more in the future.

We’ve actually started to eat Western food once a week or so as the body starts to crave it.  This is more difficult than you think.  When we got to Istanbul, we devoured one thing that was on both our plates: carrots.  Simple carrots.  But coming from a month in Japan, they didn’t have a lot of vegetables with their dishes.  It was mostly meat, rice, and bean sprouts.  Cheese is also rare in South East Asia, so after several months living there Greece better keep an eye on their feta supply.  Because we are hungry.

Routine is also something we miss.  Figuring out a new location is exciting but draining.  We’d be able to accomplish more if we stayed in a single location longer.  Our future travels will have us lingering back home in Minnesota for a time punctuated with travels abroad for several months at a time.

Hair cuts.  Think of how women can have their day ruined by their hairdresser they’ve gone to for years.  Now picture what could happen when getting your hair cut by someone that doesn’t speak your language, doesn’t cut your type of hair, and isn’t familiar with your styles.  Alicia’s hair is getting mighty long!

Western bathrooms.  I’m not surprised the world doesn’t poop and shower exactly like the US does, but I am surprised at how terrible some countries’ bathrooms are.  Squat toilets and wet bathrooms are just gross and really need to be eradicated.

If you have any questions about digital nomads and/or our lifestyle, leave them in the comments and we’ll answer them

But right now, I need to go take a tour of the Bosporus straight.  Who knows when we’ll be back to Istanbul?

Pai, Thailand: the latest town to be ruined by backpackers

pai-thailand-sucks

Sitting in Pai, Thailand, I have a sense shame as a traveler by being associated with backpackers.  On the one hand, traveling breeds business opportunities and distributes money to places where there’s very little of either.  Backpackers have flocked to this town since Chiang Mai is more “touristy” nowadays, making Pai a busy little place.  On the other hand, the locals will start providing the things that sell to the tourists even if these things aren’t good for the people.  This can lead to situations like Pai where there’s weird perversions of culture.  It’s not the perversion of culture that has lead to the sex trade found more in Bangkok and Phuket, but Pai has been turned into a non-Thai town.  Backpackers complain about locations getting too westernized, so I was eager to see firsthand what all the fuss was about.

We’ve experienced this phenomenon in other cities as well such as Cusco, Peru and Cairns, Australia.

Locals are outnumbered by tourists

filled-bars-pai
The town is basically bar after bar filled with backpackers

White people, white people everywhere.

For locations that are supposedly off the beaten path, why are these backpacker towns so damn full of tourists?  Cusco was shocking in this way too, where the entire town could have been in middle America I probably wouldn’t have known any different.  So far, the most authentic places we’ve been on this round the world trip have been to the large cities.  In Lima, Bangkok, Buenos Aires, and Santiago it’s very easy to find local culture just by walking a few blocks away from any tourist attraction (you know you’re there when no one speaks English).  In Pai, even the street vendors understand English just fine, and many of the locals are fluent.

It’s hard to take backpackers seriously as people that get deep into the culture when this is the easiest town to travel yet.  If a local here doesn’t understand English, just ask one of the infinite tourists where or what something is.  Why did they come all this way if they just wanted to be with other westerners?

The food in this tiny Thai town isn’t Thai

Metal bar in Thailand
Because why wouldn’t there be a metal bar for Euros in a tiny Thai town? Obviously.

Breakfast in other countries tends to suck pretty bad.  In Pai, American breakfast is everywhere and often served all day.  The only place we could even find breakfast served in Bangkok was at McDonald’s, and that was to break up the monotony of eating hard boiled eggs every morning.  So I can understand that breakfast places would become popular in areas with a lot of western tourists.  I’ll give the backpackers a pass on supporting breakfast.  For the rest of it, no free pass.

European style cafes are everywhere.  There’s a reggae bar, a metal bar, and a dance bar all within a block or two of each other.  The popular restaurants are burger joints and Italian places.  There are even smoothie stands and street vendors selling pizza.  Oh, and there’s a god damn steak place here.  The entire country might have 100 cows total, and there’s a steak place in a small town in north Thailand.  The reviews for the steak restaurant are all terrible.  It’s not hard to know why: this isn’t their culture, and they don’t even have the beef to make good steak possible.

Basically there’s very little Thai food being served here, and that’s for an obvious reason: the backpackers don’t eat it.  These people travel halfway around the world just to eat food that’s available and better made back home.  You can’t make up something this stupid.

The WiFi is amazing here

Everywhere we go in Pai, the WiFi has been excellent and free.  And I mean excellent as in “excellent by US standards”.  By Thai standards we are in internet heaven.  Again, this didn’t just happen by accident.  We’ve been to several countries where the WiFi has been atrocious.  Good WiFi cropped up in Pai because people support places with good WiFi.  I’m not going to look down my nose at someone for wanting constant internet access.  I think it’s the greatest invention since the printing press and it should be considered a basic right for everyone, after things like clean drinking water/safe roads/police/etc.  But it’s really hard to believe that backpackers are striving for authentic experiences when this is yet another indicator they don’t engage with the culture itself.

tourists-renting-cycles
God I love seeing tourists rent bikes they’ve never driven in places they’ve never been. There’s a good amount of tourists limping and heavily bandaged in Pai from cycle accidents. Darwin award material.

Backpackers just want their own culture for bargain prices, and are using 3rd world labor to accomplish that

That’s probably the most cynical view of the situation and certainly not true for some backpackers, but it’s really hard to argue with when you see these backpacker towns.  Hostels are just dorms where backpackers can mingle with their own kind for next to nothing per night.  Sure they are meeting other travelers, but these places are overwhelmingly frequented by other westerners who look and act the same.  Same styles of bags, same tattoos/piercings, same hair styles, same clothes, go to the same places… for people who claim to be so counter-culture or anti-establishment, it looks like they have a prescribed uniform and rulebook that they follow to the letter.

Maybe I just gave backpackers too much credit

pai-thailand-sunset
The town had some charm to it now and then

My view of a backpacker was someone that blazed trails into unknown cultures that the rest of us could follow.  Someone that abandoned corporate culture back home to do something more meaningful than chase promotions.  Maybe some backpackers are like this.  It’s possible.

What I overwhelmingly see is a group of people who are failures back home who just want to get drunk every night and not actually experience the culture they’ve traveled so far to be surrounded by.  And when we get here and the locals think that all we want from them are burgers, beer, a room, and sex (all for incredibly cheap prices)… that makes me ashamed to be a traveler.  I came to Pai to experience small town Thai culture, only to find that the backpackers stomped it out and set up burger joints.