What the hell is geoarbitrage’ I said to a colleague when they said to me ’so you are geoarbitraging?’. I still think WTF! To me, it is one of those words I cannot remember without seeing it written, nor spell! But lately, it has come to the forefront of my mind because it turns out I have been geoarbitraging for quite a while. Go figure hey! And I bet many of you reading this have been a geoarbitrager too without knowing! So what the hell is geoarbitrage? Can geoabitrage help me live a better life? Let me explain.

What is Geoarbitrage?

On doing research on what geoarbitrage or geographic arbitrage is, I discovered it is a strategic financial approach to life. Wow! It is where individuals, like you and me, earning income either from an employer, being self-employed or other method like investing, relocate to a different geographic location to take advantage of lower living costs to maximise their income. The more income you have after paying for living essentials to live, the more of a better lifestyle you can afford for yourself and your family.

Having lower living costs means I can stretch my income further and achieve a higher standard of living for the same amount of income. So basically, being a digital nomad who lives and works abroad or someone taking early retirement in countries with lower living costs while earning a decent income, I have been geoarbitraging for many years – without knowing.

Who are Geoarbitragers?

Having learnt that being a digital nomad qualifies me as a geoarbitrager, I discovered others like retirees, expats, online remote workers and full-time travellers are also geoarbitragers. Thanks to the rise of remote work, geoarbitrage is popular. It is a way to unlock financial freedom in ways that were impossible pre the rise of online work. So moving to live in countries that have a lower cost of living and offer them a better life. 

How to Geoarbitrage

If you want to start geoarbitraging you can either go to a cheaper place in your home country or a country overseas. Many can live and work abroad on a digital nomad visa and/or a working holiday visa.

And when you think about it, you don’t necessarily need to move to another country. You could move to a cheaper town within your own country. For instance, I could move from expensive Melbourne, Australia to a country town such as Bendigo in the Victorian countryside. By doing this, I would save on the cost of housing, either purchasing or renting. The money saved from cheaper accommodation could then be saved or spent elsewhere.

What are the Benefits  and Disadvantages of Geoarbitrage?

Like digital nomads and remote workers, being a geoarbitrager has benefits and disadvantages. Here’s what I think they are:

Pros of Geoarbitrage

• Reduces living expenses. Having lower costs for housing, food, transportation and other necessities frees up economic resources that can help improve your lifestyle – and definitely the extra money can pay for a better lifestyle.
• Increases your purchasing power. Lower your outgoings to live, means your income will go further and thus you can purchase more to gain the lifestyle you want.
• Improves your quality of life. Yep, lower outgoings, spending more on lifestyle leads to a more fulfilled and relaxed lifestyle – who could ask for more!

Cons of Geoarbitrage

• Adapting to new cultures: adapting to life in another country can be overwhelming for some. And even though your money may be going further, you may not enjoy the new cultures.
• Visa and immigration requirements: not everyone has the opportunity to live and work in another country. Only some gain sponsorship from an overseas employer while other look into visa such as working holiday visa or digital nomad visa. 

Why is Geoarbitrage Popular?

For people who are grappling with high rent, mortgages out of control, student loans and the unpredictable job market, geoarbitrage is an appealing alternative. Instead of continuing to live in stressful financial situation, just scraping by, choosing to live in a place where your dollars stretch further, if very appealing. And why wouldn’t it be! Particularly when you could live by a beach in Bali or other cheap country locations and have a better quality of life.

Where are the Best Places to Geoarbitrage?

The best places for geoarbitraging are in certain countries in Asia, Europe and Latin America. They are the best because their cost of living is lower than other countries. 

Top Destinations for Georbitrage by Region

Every region offers a unique advantage to remote workers and digital nomads seeking geoarbitrage opportunities. It is up to you to decide what attracts you most. Are you drawn to beaches in Asia and South America, historic cities in Eastern Europe or jungles.

Asia – Taiwan, Thailand (Bangkok, Chiang Mai), Indonesia (Bali), Turkiye (Istanbul), Georgia (Tbilisi), India (Goa, Jaipur), Vietnam (Ho Chi Minh City, Da Nang), Malaysia (Kuala Lumpur, Penang), Philippines (Cebu)

Europe – Czechia, Hungary (Budapest), Bulgaria (Sofia, Plovdiv), Romania (Bucharest)

South America – Mexico (Mexico City, Cancun, Merida, Oaxaca), Colombia (Medellin), Costa Rica (San Jose)

Africa – South Africa (Cape Town), Morocco (Marrakech), Egypt (Cairo), Kenya (Nairobi)

So, Are You Ready to Pack Your bags and Move?

Geoarbitrage isn’t for everyone. Some people are happy with their current life and already live in places where the cost of living is cheaper than other countries. I suggest you sit down, crunch the numbers and weigh up the pros and cons before moving to another place or country. If you believe life will be better and it makes financial sense then go for it.