I’m a Digital Nomad. That doesn’t mean I cross deserts chasing water holes and game. But as a writer in today’s digital age I can work almost anywhere. During the past 2 years, my wife and I have lived in Mexico, Singapore, Indonesia, Malaysia, Vietnam, Thailand and Europe.
We meet a lot of people who are enjoying their vacations. When they find out about our travels, they ask a lot of questions. Europeans, Canadians and Australians ask if we’re on an extended break from work. Americans, however, sometimes ask something different. They want to know if we’re retired.
I either look a lot older than my 46 years or Americans are getting used to seeing large wealth gaps, accepting the notion that lots of people retire young.
In a desperate attempt to find out which was true, I looked up the 2015 Allianz Global Wealth Report. It focuses on the distribution of individual wealth in different countries. They use a statistical tool called the Gini coefficient.. The higher the Gini coefficient, the larger the gap between the “haves” and the “have nots.”
The United States, it seems, has a massive wealth gap. No developed or emerging market country has a gap that’s as wide.
Gini Coefficient Of Wealth Inequality
The U.S. vs. Emerging Market Samples
|Source: ECB, National Central Banks and Statistics Office, UNI WIDER, World Bank, Allianz, SE|
The study also says that the gap is growing wider. Could Donald Trump or Hillary Clinton close that gap? I doubt it. And it may not matter because there is an alternative to accumulating wealth. It’s called the shared economy. With it, big business might make less. But you could grow richer.
Building wealth isn’t easy. We need to spend a lot less and invest a lot more. Sharing might help. That doesn’t mean you can’t buy nice things. You could pick them up for free. In 2010, Rachel Botsman wrote, What’s Mine Is Yours. She wrote about online platforms where people could trade something they want for something they have. You can access her Ted Talk here.
Plenty of middle class people increase their incomes by renting out their homes on Homeaway or rooms in their homes on Airbnb. Forty-one year old Kevin Elliot rents out a small apartment. “It used to be a difficult apartment to rent,” says the married father of three. “But on Airbnb, my apartment is pretty popular. I was able to save $4,500 from its rental income. It allowed me to put a down payment on another rental property.”
Mr. and Mrs. Jones could be taking from the Hiltons. I couldn’t find figures on how much money Americans are making on Airbnb. But the company’s co-founder Nathan Blecharczyk said that hosts in Europe earned a combined total of $3 billion in 2015.
Neil and Felice Dougherty want to take their two children on a dream trip to New Zealand in December. The American teachers know the airfare won’t be cheap. Accommodation costs are also high. That’s why they decided to book with Airbnb. “We’ll probably spend $3,000-$4,000 less than most people would during those 2.5 weeks. We’ll cook our own food instead of eating at a restaurant. It’s a much better deal than we would have with similar amenities and a similar room size at a regular hotel.”
Then there’s Uber, the independent taxi driving network. It could save money for riders and make more money for moonlighting drivers. In 2015, CNBC reported that Uber had more than a million active drivers in 300 worldwide cities. If companies like Uber continue to grow at a rapid pace, they could take revenue from larger transportation firms, putting a lot more money in middle class pockets.
Shared economy firms are popping up like crazy. Turo and Getaround allow people to borrow cars from neighbors. Taskrabbit and Zaarly make it easy for you to find someone local to help with chores at home.
Our new shared economy could bridge some wealth gaps. The Hiltons, the Trumps and the Waltons might not like it. But the middle class should.
Andrew Hallam is a Digital Nomad. He’s the author of the bestseller Millionaire Teacher and Millionaire Expat: How To Build Wealth Living Overseas