Two years ago, while studying at university, I planned to have dinner with a close friend to celebrate her birthday. My friend chose the location, gave me directions, and met me at the restaurant, a gaudy and fancy seafood joint. Even before the calamari arrived, I felt sick to my stomach—there was no way that I, on a student’s salary (read: nothing), could afford to pay for my own dish, let alone both the birthday girl’s and mine. When the bill came, when I had to ask my friend to pay for half, I realized that I hadn’t felt so embarrassed in a long time.
I HATE not being able to pick up the check.
Fast-forward 18 months. I’m at one of the most expensive and posh steak restaurants in the city. I’m with three of my best friends. The check arrives, and I snatch it before anybody else even has a chance to look at it.Bife De Lomo – An Argentinan Specialty (http://www.flickr.com/photos/3336/
What changed? It wasn’t my salary—it was my location. Instead of the $40/plate dinner that I ate with my friend in San Francisco two years ago, I was dining on the best bife de lomo (sirloin steak) in Buenos Aires, Argentina. Total cost for the dinner, for four people? $45. And that included drinks (lots) and dessert.
This is the magic of geoarbitrage. What is geoarbitarge? According to The Four Hour Workweek, geoarbitrage is “to exploit global pricing and currency differences for profit or lifestyle purposes.”
Have you ever wanted to get rich overnight? It’s easy: just hop on a plane.
Why Another Country?
The prices of good and services vary wildly depending on your location; heck, just take a look at the difference in parking prices between San Francisco and Ann Arbor! Check out, this cost of living calculator from CNN, which tells you how far your salary will go in another city. You would need a pretty steep salary of $67,247 in San Francisco, for instance, to have the same quality of life as someone with a $35,000 salary in Oklahoma City.
Head outside of the U.S. and you can find an even larger distribution. While cities in Europe will destroy your savings (eight months of living there taught me a lot about frugality), cities in South America, Africa, and Asia can offer an amazing quality of life at a drastically lower price.
Note: I’m not recommending this move to another country forever. I’m talking about a short, 2-3 month jaunt into a different world. You’ll get to experience things you’ve never seen and increase your standard of living significantly, and you don’t need to cut off all ties with your old home.
“I Don’t Have Enough Money Saved”
It isn’t as expensive as you think. If you have rent to pay in the US, or a car lease, or any other recurring and inescapable expense, geoarbitrage will be a lot harder for you. However, if you’re like me—unleashed, low debt, a bit of money saved—you can easily head to another country, have a story of a lifetime, and SAVE money.
How much is enough? I’ll give you an example of how much I spent in a four-month jaunt to Buenos Aires.
According to Kayak.com, the price of a round trip flight to Buenos Aires is about $750 from New York. When I lived in Argentina, I lived like a king on just $275 a week ($1100/month). That is, I went out several nights a week, picked up the check for friends, lived in a shared apartment in the best area in town, and did anything I wanted. On less than the cost of a dirty, broken down studio in the Brooklyn.
Also, note that the dollar was weaker when I lived in Buenos Aires. Today, the currency conversion is even more favorable (although inflation does affect Buenos Aires).
So, if you wanted to plan a 6 week stint in Buenos Aires, your journey would cost
* $750 for the ticket
* $1650 for living expenses
For $2,400, you get to live in a new world. Note that this includes EVERYTHING: dining out, drinking, nightclubs, buses, fine wine, picking up the check, EVERYTHING. And I was paying more than I had too—my roommates lived on about 2/3 of what I spent!
If you’re paying for an apartment in the US, you’ll likely spend $2400 just on rent for 6-8 weeks. You’ll save tons of money, and live and drastically increase your quality of life, if you make the jump and try living abroad.The Lujan Zoo near Buenos Aires
Not Everyone Can Do It—Can you?
Geoarbitrage is definitely not for everyone. Can you do it? It really isn’t as impossible as you think.
- Do you have a little bit of money saved up? – Even though you will be quadrupling your wealth instantly, you still need some money to quadruple! You are going to need at least enough for a plane ticket and a few weeks/months worth of expenses.
- Do you have free time or the ability to work anywhere? – Most of my friends are graduating college students this year. 80% of graduating seniors are unemployed this year, living at home and not doing anything. A lot of my other friends are being laid off. Now is the perfect time to travel. You are poor here—you have savings, no income, and nothing to do. See another land and multiply your wealth, especially since it will never be easier than today.
- Do you have an adventurous spirit? – Picking a new country is not for the faint of heart, especially in places where you might not speak the language. If you can’t handle new experiences, living alone or in a foreign place, this might not be for you.
Not everyone can just get up and leave. But I’ll tell you the market slice that can. If you are young, if you are willing to try something new and be a little crazy, if you have even just a little bit saved up, there is no journey more feasible and more amazing than a short jaunt to a developing nation.
“But I don’t know how!”
While it may sound difficult to just move to another country for several months, it’s not as hard as you think. We aren’t talking about moving away permanently—you are just going to experience a new life for a few months. You don’t need to have an apartment, tons of money, or a huge network of friends in the new city—-sometimes, you can just, well, go. Things tend to work out.
Here is the process for moving to a new country:
- Brainstorm Locations – Where have you always dreamed of going? Do you speak a second language that might function in a potential country? What sort of lifestyle are you looking for?
You have the entire world at your fingertips, so think hard about what you are looking for? Are you interested in a big city or a tranquil island? Decide what you are looking for, research online to see potential cities to visit, and decide on a location. Here are several articles about cool locations to live.
- Buy a ticket – This is important. Once you have a ticket, everything else will falls into place. Honestly, I recommend doing very little research before booking your ticket, because the longer you put it off, the less likely you will ever go. Check out this page for good tips on finding cheap airfare.
- Research the place – Check out HostelWorld and see how much it might cost to stay in a hostel. Look at the CouchSurfing group for your city, to see what other travelers are talking about (and to meet potential friends). Look at a guidebook and see what you might do in the city.
- Get packed and get going – Just do it.
It really is as easy as this. You have to be careful about visas and vaccinations, obviously, but it really isn’t hard to make the move. All it takes is a little bit of action.
What are some good cities?
The point of geoarbitrage is not only to save money, but also to seriously enjoy life. Sure, your money might go extremely far in Papua New Guinea, but you might not have the kind of experiences you are looking for. Why not choose an awesome (and cheap) place for your journey?
Here are a few amazing cities.
- Buenos Aires, Argentina – I lived here for four months in 2008-2009. This city is among the most popular for ex-patriots for one reason—it’s freaking amazing. This city has everything—culture, good food, amazing nightlife, nice people—-and it costs almost ¼ as much as the US. Check out this site for a breakdown of the cost of living in BsAs.
- Cape Town, South Africa – I’ll be in Cape Town for the World Cup in June 2009. This city is going through a renaissance right now, thanks to several big sporting events taking place.
If you only speak English, Cape Town is a perfect city (people primarily speak English). Cheap prices (see the prices), good infrastructure, and a beautiful city surround you. This isn’t the safest city, but I’ve never met a friend who didn’t tell me that it was amazing. My friend Kareem Mayan wrote an excellent article about Cape Town.
- Bangkok – Great food, incredibly cheap (you can find housing at $1/night), huge collection of travelers—Bangkok has it all. I’ll be living here in March, maybe. If you are interested in nature and religion, head outside of Bangkok. If you are looking for an intense and fun city, live in Bangkok. You’ll get your money’s worth. Check out the cost of living in Bangkok.
These are only a few of the places where you could live. Every country has a few gems, and it is worth checking online to find the city of your dreams. Some notable places to look into are Colombia, Costa Rica, India, Eastern Europe (Poland/Ukraine/Bulgaria), and Bolivia.
Whether you’ve traveled before or not, it isn’t as hard as you might think. All you need is the desire to go and a little bit of free time. There will never be a better day to travel than now.