What is Financial Independence and Why is it Easier to Reach as a Travel Therapist?

It’s been over a year now since I reached financial independence at the age of 30, and getting to that point at such a young age is due in large part to choosing to pursue a career in travel physical therapy as a new grad.

Originally when Whitney and I started traveling, I laid out a rough outline and projected it would take me about 5 years of working as a travel PT to reach financial independence. But, surprisingly, I was able to both make more and spend less than I anticipated, which sped things up significantly.

Even though my story and path to FIRE (financially independent retired early) is unique, it didn’t require anything particularly special to be done. I think my journey to financial independence can definitely be replicated by other travel therapists.

The keys to reaching financial independence as a travel therapist were:

    • living frugally
    • hustling to make as much money as possible
    • investing money intelligently

What is Financial Independence Retire Early (FIRE)?

Essentially reaching financial independence is getting to the point at which it’s possible to cover all of your living expenses with only investment returns (or other forms of passive income) indefinitely. At that point, work becomes optional since the income from work is no longer needed to sustain your financial life.

Once financial independence is reached and work becomes optional, many people choose to retire early. I personally have only worked 10 weeks as a physical therapist in the past two years, since I’d rather spend time traveling internationally and working on other interests than to work with patients at this point in my life. It’s not that I never plan on working as a therapist again, it’s just that I no longer have to; and I am choosing to do other things with life right now. I enjoy helping people in a physical therapy capacity, and will likely do some sort of part time work as a PT in the future, but any money earned from it is just icing on the cake at this point.

How do You Determine When You’re Financially Independent?

Most people have no idea how much money they need to reach financial independence and retire. This is a problem because many people, myself included, are motivated by setting and achieving goals. How do you set and strive to reach a goal of retiring when you have no idea how much money is needed?

This is where the 4% rule comes in. The 4% rule is a research-backed method for determining how much money is needed to reach financial independence. Basically, when your invested assets reach a level where you can cover a year’s worth of expenses while withdrawing only 4% of your investment portfolio, you’ve reached financial independence. Even though average equity returns (taking into account the history of the stock market) are in the 8-10% range, there are periods of time when returns can be significantly lower than that, so planning to withdraw 8-10% from your portfolio per year can easily lead to running out of money before you die. At a safer withdrawal rate of 4% per year though, running out of money is very unlikely, assuming that your money is invested wisely.

An easy way to determine how much you’ll need to retire is to use the inverse of the 4% rule, by taking your yearly expenses and multiplying by 25. This is exactly how I figured out what net worth number to shoot for to reach financial independence back in 2015 when I started working toward FIRE.

Traditional financial planning usually involves calculating your retirement number based on your yearly income rather than your yearly expenses. But this just doesn’t really make sense. The true number you need to focus on to figure out your retirement, or financial independence, number, is how much you actually spend each year, and therefore how much money you need to live on for a year. In order to figure this out, you’d need to track your expenses for a few months or a whole year to get a good estimate of how much you actually spend in a year.

Since your financial independence goal number is determined by expenses, reducing monthly/yearly expenses is the easiest way to reduce the amount of time to get there. This makes your savings rate vital!

Why Strive to Achieve Financial Independence?

Everyone has their own reasons for trying to reach financial independence. It could be to spend more time with family, to take long trips overseas, to spend more time working on hobbies, as well as a variety of other reasons. For me the biggest reason was to have as many options as possible. Reaching financial independence meant that I can now pursue whatever it is that piques my interest at any given time. I’ve found over time that my interests change often, and having as much time as I want to pursue new interests when they arise is huge for me.

Why is Reaching Financial Independence Easier as a Travel Therapist?

There are several reasons why I believe that reaching financial independence is easier as a travel therapist compared to therapists working permanent jobs. All of the factors below directly contributed to my success in reaching financial independence so quickly:

  1. Higher income:This is the most obvious reason and the reason why many therapists choose to travel in the first place. Most travel therapists can expect to earn between 1.5-2 times as much money after taxes compared to a therapist working a permanent job. The more money a therapist is able to make, the more they’re able to save to reach financial independence more quickly.
  2. Becoming a minimalist:As a travel therapist, getting used to living with less is important. Packing and moving is always difficult, but it gets more difficult the more stuff you take with you to each assignment. Whitney and I both progressively became more minimalist the more travel assignments we took in order to avoid having to pack and move as much stuff, and this seems to be an almost unanimous trait among other travelers as well. Learning to be a minimalist is important in reaching financial independence because the less you buy, the lower your expenses, and the faster your path to FIRE.
  3. Lower student loan payments:I’ve written numerous articles on student loans including all the various student loan forgiveness options over the years. As a travel therapist on an income driven repayment plan, it’s possible to reduce your student loan payment significantly and even to pay $0/month in some cases. Going on the REPAYE repayment plan and pursuing student loan forgiveness while saving and investing as much as possible has allowed me to have a significantly higher net worth even when factoring in my student loan balance gradually growing. This isn’t the solution for everyone but is definitely worth considering, especially as a travel therapist with lower taxable income.
    • For those therapists who would rather pay off their student loans as quickly as possible, point #1 about higher income can help you to aggressively pay off your student loans within just a couple years as a travel therapist, compared with stretching it out over 10+ years on a standard repayment.
  4. Cheaper health insurance:Currently under the Affordable Care Act, subsidies can make health insurance extremely affordable for those with a low taxable income. I’ve been able to take advantage of this for the past couple of years with, health insurance costing me less than $150/month while using the ACA marketplace plans between contracts. While on contract I’ve always chosen to use company sponsored plans which have always been very affordable. For most Americans, health insurance costs are a major concern, but as a travel therapist with a lower adjusted gross income (AGI), health insurance can be very affordable!

Using Travel Therapy to Gain Freedom

Financial independence is a goal that everyone should be striving for regardless if retiring early is appealing or not. Even if you love your job and plan to never quit working, having the peace of mind of knowing that work is optional is invaluable. Having more options in your life is always a wonderful thing!

Pursuing a career as a travel therapist, with all of the flexibility and benefits inherent in the job, is a perfect way to reach financial independence more quickly. Travel therapy was certainly vital for me in reaching my financial goals in such a short period of time!


If you’d like help getting started on your own path to financial independence and travel therapy journey, feel free to contact us with questions or ask us for recommendations for travel therapy companies/recruiters to help you get started!

Jared Casazza

Written by Jared Casazza, PT, DPT

What is a Typical Travel Physical Therapy Salary?

Travel PT Salary Explained

When it comes to travel physical therapy pay (travel PT pay), there is a lot of misinformation and deception out there. There are dozens of different ways that money can be moved around and presented differently in a travel PT pay package to try to make the compensation look better. Understanding a typical permanent physical therapist’s salary and benefits package can be difficult enough, but travel PT pay packages take that to a new level. The big reason for this is that travel physical therapy pay can’t be expressed in a a yearly salary amount due to the nature of the jobs being temporary, short term positions. One traveler may choose to work back to back contracts for the whole year, while others, like us, may choose to just work one or two contracts each year. This will obviously make a massive impact on the amount each travel physical therapists earns each year. Since discussing compensation in terms of travel physical therapist salary doesn’t work, our best solution is to discuss pay in terms of weekly pay.

Now to complicate matters even more, most travel PTs receive tax free stipends for housing, meals, and incidentals (assuming they maintain a tax home) in addition to their hourly taxable pay. That means that even discussing pay in terms of weekly gross or net amounts can be confusing, since part of the money we receive each week is taxed and part of it is not. The best solution for all of this is to discuss all travel PT pay in terms of a weekly “take home pay” amount. This is essentially the net pay amount that the traveler will receive in their bank account each week. To determine this amount, we take the regular hourly taxable amount, multiply by 40 hours (the typical work week), subtract out the estimated taxes on that amount, and then add the stipend (sometimes called per diem) amounts. Since the majority of travel physical therapists and travel therapy recruiters talk about pay in these terms when discussing various travel PT jobs, it’s vital to understand how this all works when first starting out. To see in much more depth how this is calculated and how to find what your tax rate may be on the taxable portion of your travel PT pay, check out this article breaking it all down.

What is Normal for a Travel Physical Therapy Salary?

Now that we understand how travel physical therapy pay works, let’s discuss what you can actually expect to make in those weekly take home pay terms. If you ask a few travel therapists and recruiters what average pay should be for a travel contract, you can almost guarantee you’ll get conflicting answers. The reason for this is that is depends on a number of different factors. These factors include:

  • The location of the travel PT job
  • The setting in which the travel therapist will be working
  • The company and recruiter that the traveler chooses to work through
  • The urgency with which the facility needs to fill the position
  • The reimbursements included in the pay package that are separate from the weekly pay amount

Depending on these factors, over the past several years we’ve seen travel physical therapist pay offers range from $1,300-$2,500/week after taxes! That is a truly massive range, which leads to a lot of confusion for new travelers! You may talk to a current travel PT that tells you that you should never accept a job making less than $2,000/week take home, while another tells you they usually make around $1,500/week take home. To understand why this is, let’s discuss each of the factors mentioned above in more detail and explain exactly how they affect travel PT salary.

Travel PT Job Location

In general, the location of the potential travel PT job usually has the biggest impact on the pay that is offered. Travel jobs in higher cost of living areas tend to pay higher than jobs in lower cost of living areas. Also jobs on the west coast tend to pay higher than jobs on the east coast or in the midwest. In addition, rural jobs (read: less desirable locations) usually pay higher than jobs in cities where more physical therapists want to go. What this all means is that you’re much more likely to see a very high paying travel PT job in California in a high cost of living area or a very rural area than you are in a city on the east coast or in the midwest. As I mentioned earlier, every travel PT jobs is unique, so this isn’t always true but in the majority of cases it holds true.

  Travel PT Job Setting

Just like in the permanent physical therapy world where physical therapy salary is significantly affected by setting, so is the case with travel PT jobs. Interestingly enough, the settings that would typically pay well for a permanent PT aren’t always the ones that pay travel physical therapists well. Whereas for permanent therapists, skilled nursing facilities (SNF) often offer comparatively high pay, for travel therapists SNFs are usually the lowest paying setting. This can leave new travel PTs frustrated when they’re offered low pay for a SNF job that may not even be much higher than it would be for a permanent therapist taking a job in that facility. For travel physical therapists, typically home health pays the highest followed by outpatient and acute care, with SNFs and schools bringing up the rear.

Travel PT Company and Recruiter

There are well over 200 travel therapy companies in existence, so it should be no surprise that some of them pay better than others. In addition, over the years we’ve learned that some recruiters will pay more or less than others even at the same company for a given travel job. This means that when picking a company and recruiter you need to choose wisely! Generally (although not always) smaller companies with lower overhead are able to pay higher than bigger companies that have more buildings to maintain and employees to pay. The flip side though is that the bigger companies almost always have more jobs and better benefits. This makes the choice between big companies and small companies difficult. After all, high pay is wonderful but not if it means getting placed in a job that is a bad fit for you due to the company not having as many options.

***For help finding companies and recruiters that will fit you well, fill out this short questionnaire and we’ll help you out! 

Urgency of the Need of the Travel Job Facility

Every travel job is unique, which means that each job will differ with regards to why a travel PT is needed and how urgently they need the physical therapist. For example, a small outpatient facility that just had their only physical therapist leave will need someone to fill in much more urgently than a large company that just lost one out of their twelve PTs on staff. In the first situation, the facility will likely be willing to pay more to get a PT in there as quickly as possible (our specialty as travelers) so that they can get new evaluations in, whereas the second facility might be fine spreading the caseload out among the other therapists for a few weeks. Some jobs pay higher in a given location and setting just because the need is more urgent.

Reimbursements in the Pay Package

You have to look at each pay package as one big pie. You can cut the pie into two huge pieces or eight small pieces, but in the end it’s still the same amount of pie. For any travel job, there is a total amount that the travel company is able to pay you, and it’s up to you and them how that pay is divided. New travelers not understanding this is why some travel companies will use things like tuition reimbursement, vacation days, and money for CEUs to entice travelers to work with them, but ultimately that money all comes from the same pie. In practical terms, that means that the more reimbursements and perks that you receive in your contract, the lower your weekly take home pay amount will be. Let’s look at an example of this:

  • Contract 1: $1,600/week take home pay x 13 weeks
    • $400 license reimbursement for the cost of getting this new state license
    • $350 beginning and $350 ending travel reimbursement for getting to and from the travel assignment location
    • $300 CEU reimbursement during the contract
  • Contract 2: $1,700/week take home pay x 13 weeks
    • No reimbursements offered for licensing, travel costs, or CEUs

In this example, Contract 2 pays $100/week higher than Contract 1, but when we break all of those reimbursements down into a weekly amount ($400 + $350 + $350 + $300 = $1,400 / 13 weeks = $107/week) the traveler would actually make less in total with Contract 2.

This is the difficulty with discussing only weekly pay and not looking at the whole picture. It’s completely possible (and we’ve seen it often) that the traveler that takes Contract 2 could brag about making $1,700/week after taxes, and the traveler that takes Contract 1 could feel like they are being taken advantage of by their company since they’re only making $1,600/week after taxes, when in reality the total compensation with Contract 1 is better than Contract 2! This is the danger of comparing weekly pay to other travelers sometimes. In addition, one of these contracts could have some intangible benefits that don’t necessarily show up in the weekly pay or reimbursements that the other one doesn’t!

What Does This All Mean for Average Travel PT Salary?

Determining a normal travel physical therapist salary is impossible since, unlike permanent PT positions, travelers may choose to work any number of weeks per year with the time off between contracts being unpaid. This means the best way to compare pay in the travel PT world is in terms of weekly take home pay amounts. When determining what is a normal weekly take home amount, we have to take in to account a variety of factors that have a significant impact on the pay amount. The location, setting, urgency, reimbursement amounts, and the travel company that a particular travel job is through all have a big impact on weekly pay.

It’s very difficult to make an apples to apples comparison in pay between travel PT jobs and with other travelers since every travel company and contract is unique. Don’t be fooled by travel companies offering high weekly pay but no reimbursements and poor benefits because when you consider the total compensation package you may actually make more with a recruiter offering less pay weekly. Take the whole pay package and the company benefits into account each time!

If after reading all of this, you still want a general range as to what you can expect to earn as a travel physical therapist (I hear you, I searched far and wide before we started traveling 4.5 years ago), here’s a general guideline I can give you:

  • East Coast and Midwest: $1,500-$1,900/week after taxes
  • West Coast: $1,700-$2,100/week after taxes

Where you can expect to fall within that range will depend on the factors above, but the majority of jobs are going to be within these amounts. Any job offers paying less than this are probably not worth considering. You can certainly make more than this sometimes as well in certain circumstances!

Travel therapy can be confusing and intimidating when first starting out. We’re doing our best to help travelers become as knowledgeable as possible to avoid being taken advantage of by marketing gimmicks and smooth talking recruiters. If you would like help finding a few recruiters and companies that we like and trust then, feel free to reach out and we can help you. If you have any questions or suggestions, then contact us!

 

Written by Jared Casazza, PT, DPT

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Jared has been a traveling physical therapist since 2015 and is co-founder of Travel Therapy Mentor. He travels with his girlfriend, fellow physical therapist, and Travel Therapy Mentor partner, Whitney.