How to Baseline Expenses: Then, Now, and in the Future

My US$145 a month jungle home in Florianópolis, Brazil --- just a 15 bike ride to the beach!

My US$145 a month home in Florianópolis, Brazil — just a 15 minute bike ride to the beach!

The Money vs. Time Paradox

Modern man’s dilemma is a frivolous one:

To forgo leisure to pursue wealth?
Or to forgo wealth to pursue leisure?

The medical doctor is a classic example.

The doctor spends most his youth attaining a title, then most his adulthood carrying out its duties. He is financially rewarded for his efforts, probably owns a luxury car, a sizable house, and vacations once or twice a year in style. He provides his family—which he may not see often—with a comfortable living standard. He has won the respect of his peers and community.

The anti-thesis is the starving artist.

The artist may or may not hold a title. Self-taught or trained means little compared to his actual artistic output. He has no work schedule, and thus his income tends to be erratic. His material possessions are few by default, by necessity. He may forgo a family also out of necessity, or perhaps to not complicate his craft with distraction. His societal position, like his savings account, is generally low.

Money and respect.

Free time and awkward family reunions.

These were your two options until….

The Entrepreneurial Renaissance

My Argentinian roommates and I in Buenos Aires

My Argentinian roommates and I in Buenos Aires

Location independence adds a new element to modern man’s dilemma of money vs. time (vs. location)

Technology not only allows the daring to profit from art and vacation in style — but to do so simultaneously, from anywhere in the world. This is not automation (though it can be), nor is it outsourcing (also a possibility), it is the individual replacing expensive organizations, the P2P and P2B economies flexing their efficiency, showing and proving that most offices are obsolete, unprofitable.

The fact that offices are boring is irrelevant.

These people—and others in other industries—have learned to leverage the internet to become self-employed, earn respectable incomes, and regain their time. I salute them.

But this new entrepreneurship is still governed by economic principles. Unless you take to your art with an all-consuming doctor-like dedication—which would cancel out the benefits of the location independent lifestyle—, it’s unlikely you’ll be able to afford both that sizable home and those mini-retirements.

Sacrifices need to be made, especially when starting up….

Baselining is for Beginners

Ok, you want money and time and location independence. But how?

First, start an internet-based business.

Until my own business(es) bear fruit I won’t rant amateurishly on this subject. More experienced entrepreneurs can guide you better than I — see the bulleted link love above.

Or go straight to the source: The Lifestyle Business Podcast.

Second, baseline your expenses in severe and unnatural ways.

Ah, self-imposed austerity! On this topic I can talk your ear off.

Ruthlessly cut unnecessary expenses and pay down debts so you can live off your business’ small but scalable income when it arrives. Overnight start-up success stories only happen in Hollywood. (And to those with actual tech skills). Your profits will likely come slow and tediously while you work out the kinks. Debt and expense reduction must be your religion to survive this purgatory.

My US$60 a month apartment in the trendy South Congress neighborhood in Austin, Texas

My US$60 a month apartment in Austin, Texas

Here are a few personal examples of how I’ve baselined major expenses:

  • Worked on sailboat with food and housing provided
  • Couchsurfed on business trips to pocket company’s daily per diem
  • Shared room with friend and subleased second bedroom at 80% of rent
  • Lived rent-free while bike touring South American continent
  • Split jungle beachhouse in Brazil with 4 others
  • Split home in Buenos Aires with 3 Argentinians
  • Subleased my apartment via AirBnB during a two-week vacation
  • Decorated apartment with Craigslist furniture then resold it all at profit
  • Applied for 25+ credit cards to use their mile bonuses for free flights
  • Work in North Dakota man camp with food and housing provided

Extreme? Perhaps. But my priority was to see a bit of the world — which I have.

The 80/20 Rule and Your Expenses

Debt payments and rent are the 20% of your expenses that eat up 80% of your income, am I right?

(If that’s not your situation, quit buying stuff, eating out, and trying to drink yourself happy).

Besides the above examples, here are a few more baselining ideas:

  • Have someone pay off debt lump sum then repay them at a lower interest rate
  • Pay minimum on lowest interest debt until highest interest debt is paid
  • Automate 10% of each paycheck to pay down highest interest debt
  • Move in with your parents until your debts are under control
  • Rent an entire house, then sublease it at profit
  • Find yourself a reliable roommate (or four)
  • Work on a private yacht or sailboat
  • Work on a cruise ship
  • Tutor internationally
  • Housesit
  • Nanny


  • Pay off debt
  • Reduce expenses
  • Start an internet-based business
  • Win back your time/life

The ultimate baselining hack is geoarbitrage: earning income from a developed country while living in the developing world. On this blog you can expect reports from Asia and Latin America in the future.

How have you baselined your expenses?
Let us know in the commment section below.

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