Escape the Rat Race: How Geo Arbitrage Can Change Your Life and Finances Forever

Steve Cummings

Updated on:

what is geo arbitrage

Have you ever wondered about saving money while living in a different country? Many countries around the world have cheaper living and the thought may have not crossed your mind yet. 

Have you wondered what your financial impact would be by living in a low cost of living place? These are things people start to think about, and wonder about geo arbitrage. 

What is Geo Arbitrage?

what is geo arbitrage
credit: depositphotos

Geo arbitrage is a unique thing. It is moving from a high-cost-of-living area to a lower-cost-of-living area. Often, we are in High Cost of Living (HCOL) areas that can stop some of our saving ability. If you are not making a high enough salary, it can cost you a lot to live in an HCOL. 

Moving to a low-cost-of-living area (LCOL) is one of the most incredible hacks. People that are getting close to retiring do it all the time. 

They may buy a property in Belize or even move to Portugal to enjoy excellent and cheap living. Mexico is another great place to move to lower the cost of living. 

You get two separate words if you break down the word geo arbitrage. 

Geo: meaning to geography

Arbitrage: involves taking advantage of price differences in different markets.

In other words, geographic arbitrage.

For Example:

You could be living in New York City and decide to move down to Greenville, SC. The food is much more expensive in NYC compared to Greenville, SC. The housing costs are much more. Transportation could be more if you own a car and have parking for it. 

Suppose you moved to a smaller place with a lower cost of living. 

Suddenly, your food prices go down, housing costs go down, and you can save more money.

Who doesn’t like to save more money? 

What About Moving to Another Country?

Have you ever thought about moving to another country to save money? If you look at many other countries worldwide, where would you want to live? There are many wonderful places that you could move to. 

Living abroad can be a great learning, saving, and adventure experience. It may be something you want to look at. Make sure that the place you choose fits what you want.

Australia seems like a beautiful, wonderful country to live in, but the cost of living is much higher. Living in Europe can be a much higher expense as well. However, parts of Europe can much more affordable to live in such as Spain or Portugal. 

I moved to Taiwan. Taiwan has many significant parts about it. It is a great place to live cheaply. I work as an English teacher, which gives me great middle-class pay, and I try to live below my means. Being able to live frugally in this LCOL country gives me the ability to save so much more money. 

You can do this too. The cool thing about geo arbitrage is that it brings massive savings to people. 

My friends from home asked me just how much am I making. Then they give that look of “oh, that amount is so little.” Then they ask how much I am saving. I tell them I save 55-60% of my monthly money. 

Their eyes open wide, and their mouths drop open. They are in awe that I am saving more money than they are while making much less. 

That is the beautiful thing about geo arbitrage. You can make much less money, but you may save a whole bunch more due to the cost of living.

Factors to Consider For Geoarbitrage:

When moving abroad or even to a place with a lower cost of living, you must consider different factors to make it worth it to you. 

First Your Income:

Income is a huge thing you need to consider. If you are retired, you will need to know if your current income can help you maintain the lifestyle you would like to live. Having the necessary amount of money to support a particular lifestyle can help in your transition. 

Consider possible job opportunities. For example, in Taiwan, many foreign expats work as English teachers. This gives them a high income to live an extraordinary life, plus they can save tons of money. There are many other opportunities in the tech industry in Taiwan as well. 

Looking for the best places to make an income is a great way to figure out where to go for geo arbitrage. You need to know if a good job market is available as you search for a place.

Being able to work from anywhere is a huge bonus. For example, many digital nomads can work from anywhere in the world. The biggest thing they need is a connection to the internet. They could stay in a country for 2-3 weeks or a couple of months and work from their computers. 

Having the freedom to work anywhere allows a sense of adventure and still make money.  

Cost of Living:

The cost of living is enormous when using geo arbitrage. That is the reason we want to use it. We want to move from an HCOL to an LCOL area. It is that easy. So it would be best to look at the cost of living in a specific area. Break down your living expenses by housing, food, healthcare, education, and even transportation. 

These are all vital things to help you to make a good decision on where to live. If everything has a reasonable price that allows you to save a good amount of money, that would be an excellent place to move. 

Remember these factors for your living expenses.

  • Housing
  • Jobs
  • Education
  • Healthcare
  • Transportation
  • Taxes


Lifestyle is an important factor when you are looking for a place to move to. However, it could be time to move again if you are working in a constantly stressful place and your life is deteriorating due to your poor lifestyle. 

Life is about something other than working 40+ hours a day to me. You should be able to enjoy nature and enjoy living life to its fullest. Being able to travel, adventure, and explore while also seeking financial independence. What a wonderful life that could be. 

3 Steps to Find the Perfect Place:

Now it is time to take some steps and goals to find this perfect place. You can start with these three steps:

Step 1: Look at Locations

Now it is time to list locations where you would like to go. This can be domestic or even international. This needs to fit your needs and wants. Look at the cost of living, income, and lifestyle. We are looking at saving money while living a great life. 

Step 2: Time for Math

It is time to pull out your calculator and do some math. When I look at finances, I want the math to work out. You don’t just go into anything without calculating the risks, rewards, and opportunities. The math needs to check out. 

Let’s look at if we can save a good bit of money. But first, make sure that the income part will last a long time to make enough income to support your life.

Step 3: Visit this Place

This is the time to visit the place you want to move to. Most people are less adventurous, but many families or just expats go and visit to see where is the best fit. Finding a good fit is necessary for your new life. If you randomly pick up and move, you could be in for a disappointment, or the thrill of a new adventure could be awaiting you.

It can be stressful for some people and bring about many different types of shock with the various food, environment, and people.

How Can Geo Arbitrage Boost Your Investments?

Many people will use geo arbitrage to help with their investments. For example, Jeremy, from, talks about how he uses the 4% rule; he and his wife would travel to LCOL countries to live for less than 4% for a while. This could help them grow their net worth even more since they were spending less money than anticipated. 

You could also use geo arbitrage if you are seeking financial independence. Using the ability to live and work from anywhere with remote jobs can help supercharge your investments. If you are getting paid a higher salary but choose to live in a lower place, you can save and invest more. 

Geo Arbitrage is Not For Everyone

Only some people want to move from a high-cost-of-living place to a low-cost-of-living area. On the other hand, some people enjoy living in a big city or a place they grew up. 

Not all places or adventures are for everyone. Personal finance is personal, so people can make their own choices. We can make decisions to help enhance our financial situations with these choices. 

Some Final Thoughts

Geo arbitrage is a great way to enhance our finances. It gives us opportunities to live a better life at a lower cost. 

We need to consider many things when looking to relocate. Our income, cost of living, and lifestyle are factors we should consider when looking for a place to live. If you can save more, get paid a similar wage, and enjoy your new lifestyle, then it is a great choice to make for yourself. 

Would you live life using geo arbitrage?

8 thoughts on “Escape the Rat Race: How Geo Arbitrage Can Change Your Life and Finances Forever”

  1. This is such a great concept! Saving money on big expenses such as housing (and the associated costs of HCOL places) is the quickest way to move the needle on retirement.
    Currently, we live somewhere that has a very HCOL and rent is super expensive. If we moved somewhere cheaper, we would be able to save so much more money.

    • I live in an LCOL country in an HCOL city. If my wife and I were to move to a smaller city, we could live in a bigger apartment for the same price or less. The food would be cheaper as well. Geo Arbitrage can really help you to save some money and make a difference in your lifestyle.

  2. The lifestyle point is key, so many people won’t consider relocation due to current levels of comfort but generally you will live a better AND cheaper life if you do the right research!

    • People often do feel comfortable where they live. It is hard to get out of that comfort zone to see what could be. If you are living a better life does come with living a cheaper life. You just need to research, do the math, take an adventure, and make some decisions.

  3. I love hearing about your adventures living in another country, and how it can actually be a financial boost. If you life situation allows you to, this is definitely something to consider!

  4. Very well put Steve! Geoarbitrage is a very interesting concept.
    Unfortunately, most people are afraid of change. Especially when it is a big change such as relocating to a new city, state, or country.
    My wife was like that. It took me a while to convince her to take a leap of faith and move to GTMO for that job opportunity I had. The good thing is that taking that first step is usually the hardest, and subsequent moves were much easier for her.
    Now it is easier than ever to find full-time remote jobs, and so geoarbitrage should be something that everyone should at least consider and do some research on.

  5. I can’t wait to take advantage of Geoarbitrage!
    Lucky for us we will be able to do what we currently do anywhere in the world – so we will still be able to get our Aussie wage even when living somewhere cheap like SE Asia.
    Great explanation of Geoarbitrage Steve!

    • That would be awesome to live the digital nomad life. Plus earning an Aussie wage is a huge plus. Living in SE Asia is so cheap. It will be a great way to increase that savings rate.


Leave a Comment