How Much Can Geoarbitrage Help Your Finances? Read These 6 Powerful Examples 

Geoarbitrage is the act of moving to a place with a lower cost of living, all the while maintaining or increasing your current income. By lowering your expenses, geoarbitrage helps you save more money. That’s why it is considered one of the best routes to retire early and travel the world.

For example, imagine you live and work in New York City, making an NYC-type salary. But you work remotely. What if you could move to Costa Rica and work from there? Your monthly budget would undoubtedly benefit tremendously.

Thanks to the rise of remote work, geoarbitrage has become a real possibility for most people. It’s also one of the best ways to beat inflation and the rising costs of living in major cities.

We’ve covered geoarbitrage a good deal here at Frayed Passport (read our Ultimate Guide to Geoarbitrage here). In this article, we want to highlight the powerful potential of geoarbitrage to help your finances. We’ll include one example from each continent to show just how enticing it can be, no matter where you are in the world. For simplicity and consistency across examples, we’ll use a $80,000 yearly income for the examples.

Let’s get to it.

Example 1: Geoarbitrage for North America Destinations

While North America has many of the world’s most expensive cities, such as Los Angeles, New York, and San Francisco, there are plenty of nice locations where you can live affordably. If you’re looking for destinations on this continent, know you have ample options.

For instance, if you live in Boston and make $80K per year, but wish to move to Mexico City, your finances stand to benefit a lot.

• Cost of living in Boston for a single person is $3,279 per month, according to Livingcost, a crowdsourced database for calculating cost of living.
• Cost of living in Mexico City for a single person is $1,279 per month, according to NomadList.

By moving to Mexico City, you’ll spend $2,000 less per month to live, meaning you can save $2,000 more per month. Consider the financial potential:

• If you do save that money, that’s $24,000 more per year to save or invest.
• If you stay in Mexico City for 8 years and continually invest the extra savings, earning an average 10% return, you’ll end up with $293,000 more in your financial portfolio than you would have staying in Boston.

Quite incredible, isn’t it?

For more info on geoarbitrage destinations in North America, read our article: Best Geoarbitrage Cities & Towns in the USA

Example 2: Geoarbitrage for South America Destinations

South America offers bustling cities, incredible nature, and a wide range of cultures. If you’re looking for geoarbitrage destinations, the continent should be on your radar. Cities such as Medellin, Buenos Aires, and Santiago are especially popular with digital nomads.

For example, if you live in Washington D.C. and make $80K per year, but wish to move to Lima, Peru, your wallet will thank you.

• Cost of living in Washington D.C. for a single person is $3,227 per month, according to Livingcost.
• Cost of living in Lima for a single person is $800 per month, according to NomadList.

By moving to Lima, you’ll spend $2,427 less per month to live, meaning you can save $2,427 more per month. Consider the financial potential:

• If you do save that money, that’s $29,124 more per year to save or invest.
• If you stay in Lima for 8 years and continually invest the extra savings, earning an average 10% return, you’ll end up with $355,000 more in your financial portfolio than you would have staying in Washington D.C.

Think of how much faster you could retire or semi-retire with such a move. That’s the power of geoarbitrage.

Example 3: Geoarbitrage for Europe Destinations

With epic history, dazzling natural beauty, and amazing artistic and culinary diversity, Europe has it all. Although some countries in Europe are quite expensive, other destinations offer a high standard of living — without the high price tag.

So, let’s say you’re moving from Singapore to Split, Croatia. If you make $80K per year, your savings potential will skyrocket.

• Cost of living in Singapore for a single person is about $3,000 per month, according to Piloto Asia. This is a mid-range budget, which means you’d be living outside the most popular areas.
• Cost of living in Split for a single person is $1,040 per month, according to Livingcost.

By moving to Split, you’ll spend $1,960 less per month to live, meaning you can save $1,960 more per month. Consider the financial potential:

• If you do save that money, that’s $23,520 more per year to save or invest.
• If you stay in Split for 8 years and continually invest the extra savings, earning an average 10% return, you’ll end up with $287,000 more in your financial portfolio than you would have staying in Singapore.

Those numbers should have you thinking about a move to the magnificent Mediterranean city of Split.

Example 4: Geoarbitrage for Africa Destinations

There’s nowhere like Africa. From the pyramids of Egypt to Victoria Falls, Africa is rich in history, culture, natural beauty, and spirit. The diversity of choices for expats means there’s a destination for anyone.

For example, if you’re sitting at a desk in New York City, making $80K per year, you may think a move to Nairobi, Kenya could change things for the better. It certainly could be for your pocketbook.

• Cost of living in New York for a single person is about $4,030 per month, according to Livingcost.
• Cost of living in Nairobi for a single person is $1,010 per month, according to Expatistan.

By moving to Nairobi, you’ll spend $3,020 less per month to live, meaning you can save $3,020 more per month. Consider the financial potential:

• If you do save that money, that’s $36,240 more per year to save or invest.
• If you stay in Nairobi for 8 years and continually invest the extra savings, earning an average 10% return, you’ll end up with $442,000 more in your financial portfolio than you would have staying in Nairobi.

With such a move to Kenya, you could save nearly a half million more in just 8 years. That’s getting ahead with your finances.

Example 5: Geoarbitrage for Oceania Destinations

If you love island life and the beach, Oceania just may be the continent for you. Oceania is home to expensive cities in countries such as Australia and New Zealand. The U.S. state of Hawaii is also a part of Oceania, and is known for its high cost of living. With that said, plenty of countries offer a good quality of life and affordable cost of living.

For instance, if you’re making $80K per year living in Sydney, Australia, Fiji may be calling your name.

• Cost of living in Sydney for a single person is about $2,623 per month, according to Livingcost.
• Cost of living in Suva, Fiji for a single person is $1,400 per month, according to Expatistan.

By moving to Suva, you’ll spend $1,223 less per month to live, meaning you can save $1,223 more per month. Consider the financial potential:

• If you do save that money, that’s $36,240 more per year to save or invest.
• If you stay in Fiji for 8 years and continually invest the extra savings, earning an average 10% return, you’ll end up with $180,000 more in your financial portfolio than you would have staying in Sydney.

So, what’s stopping you from switching your internal clock to ‘Fiji’ time and making the move?

Example 6: Geoarbitrage for Asia Destinations

From the grasslands of Kazakhstan to the bustling streets of Tokyo, Asia invites you to have the adventure of a lifetime. If you’re looking for a geoarbitrage destination, the world’s most populous continent might just be your place.

Let’s say you’re making $80K per year living in San Francisco. Have you thought about a move to Kuala Lumpur, Malaysia?

• Cost of living in San Francisco for a single person is about $3,840 per month, according to Livingcost.
• Cost of living in Kuala Lumpur for a single person is $1,080 per month, according to Expatistan.

By moving to Kuala Lumpur, you’ll spend $2,760 less per month to live, meaning you can save $2,760 more per month. Now, consider the financial potential:

• If you do save that money, that’s $33,120 more per year to save or invest.
• If you stay in Malaysia for 8 years and continually invest the extra savings, earning an average 10% return, you’ll end up with $404,000 more in your financial portfolio than you would have staying in Sydney.

That’s simply eye-opening. Geoarbitrage can help you be $400,000 richer in just 8 years with a move from California to Malaysia.

Unlock the Financial Power of Geoarbitrage Today!

We hope these 6 examples have shown you the power of geoarbitrage. By moving to a place with a lower cost of living, you can relieve financial stress, save more money, and ultimately retire earlier. No wonder geoarbitrage is being embraced by the FIRE crowd.

So, are you ready to pack your bags and make the move? If so, check out some of our other resources for guidance:

• Ultimate Guide to Geoarbitrage
• Best Digital Nomad Cities
• Digital Nomad Tax Guide
• Guide to Remote Work Visas

Finally, if you need help or advice in planning the move, join the Frayed Passport community. We’re ready to talk with you about how to make the most of geoarbitrage!

About the Author

Nick Callos has always had a passion for reading, writing, and discovering the new and unknown. Originally from Cincinnati, Ohio, Nick holds a Bachelor’s Degree in English from Boston College. He currently splits his time between his hometown, Chengdu, China, and the open road. A full-time travel writer, Nick hopes his work can inspire others to explore the world more deeply and enjoy the digital nomad lifestyle.

Featured image by Daniel Kandie on Unsplash