In this article, we will explore some possible countries and cities for geo arbitrage. Let’s begin!
Is It Possible to Retire Early?
Would you like to retire decades before most people? It is possible to retire much earlier than most people think. You must be thoughtful about your lifestyle investments, and where you live. Geo arbitrage is a powerful strategy that could allow you to retire in your 30s.
What is Geo Arbitrage or Geographic Arbitrage?
Geo arbitrage is also referred to as Geographic Arbitrage. It is the concept of moving to a place with a much lower cost of living while keeping your current salary.
Why is Geographic Arbitrage a Great Way to Enhance Relative Income?
By having a lower cost of living, you are able to spend less, invest more, and thus be on your way towards financial independence — the Holy Grail of the F.I.R.E. movement.
Geo Arbitrage Allows for Early Financial Independence
Is geo arbitrage worth it? Financial independence and early retirement are both amazing and worth all the effort.
Achieving financial independence at a young age requires us to save and invest a lot of money. And even if we have a large chunk of assets producing decent passive income, life in places like the United States can be expensive.
This is why you want to seriously think about taking advantage of geo arbitrage. This is a strategy whereby you relocate to a cheaper but still nice country, where your purchasing power goes much further. Moving could shave decades off your timeline to retirement and it could add years to your life.
While $1500 a month doesn’t go terribly far in the United States it can positively buy an amazing lifestyle in many parts of the world.
3 Attractive Countries for Geo Arbitrage
Here are three countries in different parts of the world where $1500 a month can allow for a great lifestyle and very early retirement.
Benefits of Living in Thailand
The first country I’d like to tell you about is Thailand. Thailand, in my opinion, is the best bang for the buck in the whole world. You get modern development and amenities at a fraction of the price.
Where in the United States could you find a $400/month luxury, fully furnished one-bedroom apartment? Well, in Thailand, it is certainly possible. A similar apartment in numerous cities in the States would run at least three times more.
It’s cheap to live in Thailand but more importantly, the value for money is exceptional. You don’t want to just go somewhere that’s cheap. You want to live in a place where your money goes far, and you can live the lifestyle you like without spending too much money on it. It’s about value, not only price.
- English is widely spoken there.
- Medical care is excellent.
- The food is delicious.
- Warm weather is everywhere.
- The beaches are some of the best in the world.
- The people are really kind.
You can get the big-city excitement of Bangkok, or you can chill out on a small beach or mountain town. The purchasing power in Thailand is about three times higher than it is in the States. So, $1,500 a month buys a lifestyle similar to what forty-five hundred dollars a month would in the States. That’s the power of geo arbitrage for you!
Housing and food are usually your two biggest monthly costs. In Thailand, both housing and food are so cheap. You can eat a delicious lunch here for less than two dollars. Thailand’s ever-changing visa policies are difficult to navigate but if you have a reasonable visa option Thailand is very attractive.
Benefits of Living in Georgia (Tbilisi)
The second country of interest is Georgia, not the US State. I’m talking about the country Georgia in the Caucasus region of Eurasia. If you want that European vibe at a fraction of the European price Georgia might just fit the bill. The capital Tbilisi is super cheap.
Another neat thing about Tbilisi see is the fact that it has a relatively mild microclimate for its latitude. It gets seasons but they’re mild.
One of the best aspects of Georgia though is the visa and tax policies. Georgia offers a one-year visa to citizens from dozens of different countries, including the USA. So, that means you can waltz in and stay for a year no questions asked. No other country offers this of course.
The other great thing about Georgia is the fact that they have a territorial tax policy. Money brought into Georgia from income sources abroad isn’t taxed. This means that if you don’t earn an income locally you shouldn’t face a local tax from Georgia.
An easy visa, low taxes, cheap cost of living, and a Eurasian location should put Georgia on your radar. One issue with Georgia is that’s a small country. Your choices of cities are limited other than perhaps the seaside resort town of Batumi. It is really the only viable option.
Benefits of Living in Mexico
The third country I want to talk about is Mexico. If you’re retiring from the states and want to Mexico stay close to the US, Mexico is interesting. Mexico could allow you to experience the cheaper cost of living and greater purchasing power that geographic arbitrage offers without having to relocate somewhere very far away.
Mexico is close to the US and it’s a place that’s familiar enough to many people. So, the culture shock won’t be too extreme. The cuisine is obviously delicious. The climate in most cities is fantastic. The beaches are beautiful, the cost of living is low, and the atmosphere is generally laid-back and fun.
Once you get your choice of a giant city like Mexico City or say a smaller beach town like Puerto Vallarta, a visitors permit gives Americans six months in the country. It can be renewed by simply leaving and coming back.
Cons of Mexico
State crime can be an issue in certain Mexican cities. Mexico has a residence-based tax system. This could affect how your worldwide income is taxed. If you want to retire decades faster and still be close to the US Mexico might give you the best of both worlds.
Are there cities or cities that you know about that are better options for geo arbitrage? Feel free to chime in!