- How Owning Individual Stocks Can Destroy Your Portfolio - July 27, 2020
- Reader Case: Real Estate Regret - July 17, 2020
- How The Hell Are We Going To Pay For All This Stimulus? - July 13, 2020
This week we’re going to take a break from the Investment Workshop since our bi-weekly buy schedule has drifted a bit from our target of the 15th of each month, so we’re going to wait to do our regularly scheduled buy next week.
And because of the recent interest in the nitty-gritty details in how we plan our nomadic life, FIRECracker has asked me to talk about how we plan our flights.
When it comes to our traveling, we divvy up the planning responsibilities roughly in half. FIRECracker’s job is to figure out where we stay, what attractions we go see, and the day-to-day budgeting of what gets spent at each location. My job is to plan all the actual moving parts: the flights, the buses, figuring out the local subways. Basically, all the stuff that gets us from one home base to the next home base is my area of expertise.
And over the 2+ years of near-constant travelling, I’ve learned a few things that allow us to get from one corner of the world to the other for surprisingly little money. And I’d like to now share some of those lessons with you.
Unlike trains or buses, airlines don’t charge you based on the distance between the two cities you’re travelling to. This is because unlike bus routes which tend to be arranged in a “net” pattern with routes between every city and every other city, airlines are arranged as a hub-and-spoke system, in which certain major airports act as hubs where lots of planes fly into/out of, and then from each hub regional airlines service passengers in smaller, short-haul flights.
This is why if you were to attempt to fly between Buffalo, NY and Rochester, NY, you would invariably bounce off of NYC despite the fact that flying to NYC from Buffalo actually overshoots Rochester. NYC is the hub for the region, so all flights go to/from there.
This is mainly for economical reasons. Airlines HATE flying planes with a handful of people on them since the fixed cost of getting a plane into the air and (safely) onto the ground is so high. So they want to make sure every flight they fly is as full as possible. Lots of people need to get to/from Buffalo and NYC. Lots of people need to get to/from Rochester and NYC. Not many people need to get from Buffalo to Rochester. That’s how the hub-and-spoke system got created.
So understanding the hub-and-spoke system is the first lesson I learned travelling the world. And here Google Flights is your best friend.
What I did when I started travelling was just to spend an entire afternoon playing around on Google Flights. I would start putting in random cities into the search fields and see what flights it would spit out. Then I would check the stop-overs. After a while, I’d start recognizing the same cities and the same airport codes over and over. On the eastern seaboard, it’d be BOS (Boston), ORD (Chicago), IAD (Washington DC), JFK, LGA, EWR (New York City). On the west coast, I’d keep seeing LAX (Los Angeles), SFO (San Francisco), and IAH (Houston).
Eventually, I’d get so used to the same airport codes coming up again and again that I’d start referring to cities by their airport rather than their actual city name. “Hey, do you want to go to O’Hare?” “What’s O’Hare?” “Oops. I mean Chicago.”
Stay Near the Hubs
Now, when you’re working and stationary, understanding the hub-and-spoke system gives you very little advantage. You live in Rochester, and you know the nearest hub is NYC. So what? How does that help? As long as you’re forced to live near your workplace, every flight path has to start and end in your home town.
But once you become nomadic, that’s where the magic lies.
Because once you learn where the airport hubs are, you quickly realize there’s a pattern to be exploited:
- Hub-to-Spoke flights are expensive
- Hub-to-Hub flights are cheap
For example, as of the time of this writing a one-way flight from Tulsa, OK to Miami, FL is $130 USD. But a flight from Dallas, TX to Miami is about half of that, despite it being approximately the same distance flown. Why? Tulsa is not a hub, while Dallas is (specifically, DFW, or Dallas Fort Worth).
So as we planned our world trip (which then became our permanent nomadism), we naturally got drawn to spending time near the major transport hub cities.
Note that I said NEAR. The tradeoff of staying in a major city is obviously the higher cost of living. NYC is a great example of that, and attempting to retire in NYC would bankrupt even Mr. Money Mustache. So the compromise we came up with is staying NEAR that major transportation hub, preferably in a city that nobody’s heard of.
Let me give you an example.
I recently alluded to this on the ChooseFI podcast, but we found a hack to staying in London but not with London prices. It should surprise nobody that London is a major transport hub to and from Europe, but staying in London proper will screw up anyone’s budget. So instead, we stayed in a suburb of London called East Croydon.
Ever heard of East Croydon? Didn’t think so. And that’s exactly why we were able to find AirBNBs there for a third of what a hotel would cost in London proper. It’s a small little blue-collar industrial city halfway between Gatwick airport and London. Absolutely not a tourist attraction. But it also sits directly on the National Rail line between Gatwick and London, so despite the fact I’m paying a third of the price for accommodations, I can get to both London Victoria station and Gatwick for £4. When I checked into my AirBNB, the host gave me a knowing glance and said “So you figured out the secret, eh?”
To which I responded: “Yes. Yes we did.”
Sweep the Dates
Once you’ve figured out the hubs and the cheap hub-to-hub flights you can get between them, you can then select a hub-to-hub flight in Google Flights and then open the calendar to see how the price of those flights fluctuate over time. You’ll be surprised by how much they do.
In fact, one of the biggest limitations of working is that when you do fly, it typically has to be on a Friday or a Monday. Airline companies know this and will charge you a premium for the privilege. But when you’re retired and nomadic, you can travel at ANY time. And this is where the really surprising deals can show up.
Check this out. As I write this, it’s mid-October. So going into the holiday travelling season, I’m not expecting a lot of deals to be had. But when I pulled up a fairly typical hub-to-hub flight we would take (London to Berlin) and swept the dates, I was able to find one-way flights for $17 USD about six weeks out!
$17 USD! I could take that flight with the cash I have in my pocket RIGHT NOW. How are they able to do this?
Nobody ever flies on Wednesdays.
It’s just that simple. They’re running empty planes on Wednesdays because nobody ever takes that flight. They’d rather have someone taking up that seat with pocket change than nobody. But if you’re retired and nomadic, the day of the week means nothing to you. And you, yes YOU, can be that person taking up that seat with pocket change.
And that’s how I flew to Chautauqua UK from Berlin for less money than you probably have in your change jar.
Look Out For Wormholes
I’d like to take a moment to talk about something near and dear to me: Wormholes.
No, not the ones that farmers talk about. I’m talking about these:
Yeah. Those bad-asses. Like the ones in Star Trek: DS9, except I can’t use any of those images or Gene Roddenberry will come back from the dead and sue my ass.
For all the non-Star Trek: DS9 fans out there (also known as FIRECracker, who still can’t figure out the difference between Star Trek and Star Wars), a wormhole is a kind of instant portal from one excessively-far place to another excessively-far place.
And despite the fact that these mostly exist in science fiction, in the flight maps these occasionally show up as well. And by that I mean surprisingly low-cost ways to go an insane amount of distance.
You will occasionally find these by accident by playing with Google Flights, but I found them by subscribing to various airlines’ newsletters. Some are trying to follow the RyanAir model and opening up low-cost routes to distant locales and hoping to use the resulting popularity to fly 100% fully-loaded flights. They make money, we save, everybody wins! Free market bitches!
These routes are not obvious, and not easy to find, but once you do find them you can use them forever since they’re permanent rather than temporary glitches. Here are a few I’ve discovered:
- YYZ (Toronto) to LGW (Gatwick). One way for $230 CAD (or $184 USD).
- LIS (Lisbon) to YYZ (Toronto). One way for $250 CAD (or $200 USD).
- EWR (Newark) to KEF (Reykjavik). One way for $213 CAD (or $170 USD).
- ATH (Athens) to SIN (Singapore). One way for $250 CAD (or $200 USD).
For the record, these are approximately the same one-way ticket price of those Buffalo-to-Rochester flights I mentioned earlier.
And all this with cold, hard cash. Not a single travel-hacking trick to be seen. Which will of course be the target of a future article.
So yeah. Again, just scratching the surface of one aspect of how we pull off this awesome nomadic life we lead. If there’s something you’d like to hear more about, let us know in the comments below and we will write accordingly.
Hi there. Thanks for stopping by. We use affiliate links to keep this site free, so if you believe in what we're trying to do here, consider supporting us by clicking! Thx ;)
Build a Portfolio Like Ours: Check out our FREE Investment Workshop!
Earn a 1.7%* everyday interest rate. No Everyday Banking Fees.: Open up an EQ Bank Savings Plus Account! (Canada only, excluding Quebec)
LIMITED TIME OFFER: Earn up to 4% cash-back (Canada): With Tangerine's Money-Back Mastercard!
Travel the World: We save $18K a year by using AirBnb. Click here to get $40 off your first booking!
Don't Pay FX fees: We used the Scotiabank Passport Visa Infinite card to eliminate foreign exchange fees around the world! Plus, we got 35k points in the first year, and free airport lounge access too! Click here to sign up!
*Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice.