Definitions for the labels in new fields such as digital nomad vs freelancer, or remote jobs, online work, and other things like that are still up in the air and open to interpretation, but there are clear differences between the two. Actually, this can get even more confusing.
Since this question kept coming up when I mention what I do and how I’m able to travel, I decided to make a simple chart that can help you understand the difference between several common terms in the gig-economy. In this post, I explore the differences between digital nomad vs freelancer vs expat vs location independent.
|Digital Nomad||Freelancer||Location Independent||Expat|
|Has a Business||Sometimes||Yes||Sometimes||No|
A digital nomad works online, travels and lives in other countries, and may have a business or work with an employer to fund their travels.
A freelancer is someone who works independently without an employer, provides his or her own tools, and finds clients on their own or through agencies and brokers.
Being location independent means that you may or may not work online, you can live where ever you choose because you don’t need to be in a single place, and you may or may not have a business. If you’re living from return on investments, residual income or passive income (through royalties, interest, bonds, etc.), you may not be leading an active business but are still earning a return.
An expat is someone who lives abroad and has chosen to relocate for a long period of time (a year or more) to resettle in a different country.
Exceptions and Common Misconceptions
Expats are basically only people that have left their home country to live somewhere else, and though can start their own businesses in those countries and contribute to the economy, they may not necessarily travel around anymore, but rather consider that country to be their retirement place. Most of the expats I’ve met are from an older generation that prefers the culture of a different country and permanently relocates.
Some of the comments I’ve received about the above chart is that location independent is better than being a digital nomad, and though that statement in and of itself is up for debate, if you work online or are living from an investment, you may already be location independent and simply choose to work from home and not travel around.
Digital nomads do own businesses, but by the nature of the definition itself, a digital nomad is still a nomad and will move from country to country without settling anywhere while working online, from hostels and coffee shops. They may own an apartment, apply for different visas, etc, but they stop being digital nomads once they decide to settle and stop living a nomadic lifestyle.