I personally think that geoarbitrage is talked about too little, and for me it completely gives a different view when it comes to the possibility of becoming financially free.
Not only does it make it easier to reach the capital required, but it also makes it a lot more fun – and it feels like the whole world opens up!
I’m going to go through my take on it and a few different ways you can use it…
What is geoarbitrage?
Geoarbitrage, also known as geographic arbitrage, is a strategy where one exploits differences in living costs between different geographic locations to improve one’s financial situation and lifestyle.
The typical dream is to escape the cold, gray Sweden during the winter and instead live in a sunnier and warmer place – such as Thailand, Bali or Spain.
Basically, geoarbitrage is about moving from an area with high living costs to an area with lower costs, while maintaining the same or higher income level.
Examples of geoarbitrage:
- You work remotely for a company in a high-wage country while living in a country with a lower cost of living.
- You start an online business that can be run from anywhere in the world.
- You move within the same country, from a more expensive city to a cheaper city.
- Moving from an expensive country to a cheaper one.
Or… you build up capital that you can survive on where you live today, but that provides a very rich life in the place you move to.There are several ways to think about this…
The goal of geoarbitrage
The goal of geoarbitrage is to reduce your expenses and improve your quality of life.
Geoarbitrage provides opportunities to retire earlier (FIRE), travel more, have more time for hobbies, live in a place more suited to one’s own interests, or simply live a more financially independent life.
Living in a place where you feel like you have everything you want, every day, I think has been important when it comes to geoarbitrage.
It’s super easy to find a cheaper place to live than the one you’re currently living in, but the goal is to have a better life, not just live cheaper. And in some cases, that may mean more expensive accommodation, but it enables a richer life overall.
How you can take advantage of geoarbitrage
Ok, let’s take an example – which can probably apply to many of you reading this.Say you live in Stockholm, but feel like you want more out of life than what you’re getting today. You may feel anonymous and lack the community that can be found in smaller towns. In addition, housing prices are brutally high and most of your capital is locked up in your home. This makes it extra difficult if you want to become financially free and live on that capital.You feel that much of life is about working, getting to work, sitting in traffic jams on the way home from work, and that you have far too little time left after work.
Time that you would have liked to have spent going for a run in the forest, I mean the real forest, without noise from roads and other things. Or skiing, I mean taking an hour or two on real ski slopes, every day.Maybe have time to spend time with the family, maybe even take a walk in the woods with the family, just like that on a weekday.
The solution could be:
- Remote work: You negotiate a remote work solution with your employer, with the option to keep your current salary.
- Move to a smaller town or abroad: Which has everything you want, close and accessible, you save a lot of time every day and avoid stress.
- Proximity to the life you want to live: By moving, you can have what you want, every day. Whether it’s walking in the forest, cross-country skiing, snowmobiling, lying on a beach in the winter, or just being able to have a cup of coffee at a café for half the price of what it costs in the city you live in now.
- Financial benefits: With a lower cost of living, you can spend more money on your hobbies and interests, travel, and your family. You can save more, or be able to live on the returns from a smaller capital than you would need if you stayed where you are today.
If the goal is to become financially free independent of a job to cover your expenses – geoarbitrage can significantly shorten the time it takes to reach that goal!
My life with geoarbitrage
Of course, geoarbitrage is something in my mind and how I want to do it.
Target is, I will live abroad into the future, but right now I am at a building stage, both life before FIRE and life after FIRE. So work in progress in both direction. I will walk you through it as time flies…
Busy And Useful 