For some folks, our work requires us to travel, either by car or by plane, to other parts of the country, where we perform our job duties. This travel can be both a pain and an additional source of income. I wanted to discuss some of the financial advantages of corporate travel, and how someone seeking financial independence can benefit from it.
For the corporate world, travel is seen as a burden, something which has to be done, but which causes a hardship on the employee. Many folks have spouses or significant others, children, pets, etc. These have to be taken care of while the worker is “on the road,” which causes stress and problems for the worker. Because of this, companies are willing to pay extra for workers who are “willing to travel” and this can be quite lucrative.
I knew two engineers who graduated the same year, same school, and same degree. One got a job as an engineer locally, and was offered $50K/year + benefits. The other got a job with a consulting firm that required 90% travel – so they offered her $70K/year + benefits, and she got to take advantage of all the “travel hacking” that you have seen in the FIRE community. A 40% bonus just because, at 22, she got to enjoy all sorts of travel throughout the US.
Often you get the opportunity to gain extra income while traveling. This primarily is done by being offered a stipend for travel. Companies use stipends because it is easier to budget for travel that way. An example would be a food stipend, where, instead of you submitting receipts from restaurants, the company just gives you an amount of money each day to pay for your food – for example, $45/day. If you stay at a hotel that serves breakfast and eat/drink reasonably, you can pocket the remaining money as extra income.
I’ve seen companies pay for just the airline travel, and put in a stipend for the hotel, food, car, etc. Since a lot of travel is done by corporate execs, these stipends can be rather large, because the execs don’t want to stay at a Motel 6. You can take full advantage of this and make some dough.
Another form of extra income is the auto mileage. Most companies have a standard rate per mile that they will pay you for business travel, to cover fuel and maintenance of your car. This is based on an average mid-size car, with average gas mileage and maintenance costs. If you have a more fuel-efficient car (like most FIRE folks who judge purchases on things like that) or a car with less maintenance costs (maybe you do some of it yourself to save $) you can book some significant extra income from a company’s mileage reimbursement
This is the area where you can get real “bang” for your travels. By taking time to be somewhere else, somewhere that a company is paying you to be, you can significantly reduce your expenses – all money that goes tax free to your bottom line. Some examples:
- Home: If you travel extensively and are single, then there is no reason to get a large place to live, or buy expensive items for it – You won’t be there most of the time! Get a smaller place, furnish it sufficiently to take care of your needs, and pocket that money for the next several years. Keep the heat/AC turned down as well.
- Auto: Instead of having to pay for fuel, tolls and maintenance to commute to/from work, your car sits and doesn’t cost you this. Maybe you don’t even need a car at all, and can just get by with Uber/Lyft and a bike?
- Food: For periods of time, the food is on the company, so you can save on your food bill.
- Entertainment: Again, your company is paying for you to be at another place, so you aren’t spending money on a lot of entertainment options during the week
All of these are ways to drop money into your FIRE accounts and get there earlier than expected.
Negatives of business travel
The reason that companies pay more for folks who travel is because it does suck at times. Sitting in airports or driving long distances, being away from family, strange hotels, strange food, etc. This can all wear on a person over time and that is why many folks do it for short “spurts” of a few years, and then move to a job with less or no travel. This is especially prevalent when someone wants to start a family. I have a peer who consulted for 4 years, and did 95% travel. Woke up early Monday morning, kissed his wife, on the road Mon-Fri, and got back late Friday night. He joked that he was a “weekend husband.” He finally joined my company when they wanted to have kids, and now travels about 25% = 30%. They just had their second child and are much happier.
I always told my students when I was counselling them on a job search to put “willing to travel” on the bottom of their resume. If you are young and want to make some money fast, consider extensive travel. Even if it isn’t for you, take the opportunity to do some travel for your company and pocket some additional funds to help you on your way to financial independence.
Any good road stories out there?
Mr. 39 Months