Taking advantage of geoarbitrage

It's no secret that some places just are cheaper than others. You'll spend a lot more in New York than in Rome than in Bangkok.

Decades ago moving to a cheaper location would usually also mean fewer job / business opportunities.

And while that is still true for a large section of the population, it's not true for everyone. If you have the luck to earn your living remote, there is nothing stopping you from earning an HCOL (high cost of living) area salary while spending in a LCOL (low cost of living) area.

Online savvy people have been doing it since before the 2010s. They used to call it “geoarbitrage”. (I think some still do)

This was actually my dream when I was 18 and it's a big part of why I became a software engineer.

See, it's a lot easier nowadays to earn a living remote. COVID wasn't fun but it opened the eyes of a lot of people to the possibility that we can be just as productive, if not more, working from home.

You can go on one of the remote job boards like remoteok.com or weworkremotely.com to find a job like that. Hell even LinkedIn has many remote jobs now.

Yes, the competition may be higher for these. But if you land one you are unlocking ultimate location freedom.

And I'm not even proposing you move to a different country. Just moving from a big city in the USA to a smaller one can be a real lifestyle cost change.

Don't trust me?

You can use this free tool from Numbeo to compare cities in terms of their cost of living. I don't think you should take their “average cost of living” at face value, especially if you're used to living an upper class lifestyle, but it is directionally correct especially in comparisons.

If you spend $8k /mo in Rome and Numbeo says [insert city] is 50% more expensive, expect to spend $12k in [insert city] and so on.

For the sake of the example, say you live in New York and decide to move to Pittsburgh.

That's almost half. Imagine you save those ~$4,800 every month. That's ~$56k per year. Invested and compounded it can grow into a sizable nest egg over time.

You can try our free compound savings calculator to see, but we've ran the numbers here:

That's a whopping extra $3,584,140.

We love using ficalc.app when doing retirement simulations. Here are the results assuming you withdraw a fixed amount that you adjust to inflation every year. :

As you can see, just off this geoarbitrage opportunity you'd be able to retire at $130k per year (inflation adjusted) for the next 30 years without the slightest hiccup.

I think we've made a good case for geoarbitrage / moving from a HCOL area to an LCOL area as a very valid strategy to save more money.

We are biased, but we think that coupled with our personal finance app you'd be on your way to a lot of easy savings.