27 March 2023


It may sound technical, complicated and dull but the foundational idea behind geoarbitrage is simple: move to a place with a lower cost of living whilst maintaining the same level of income. This is one of the key principles and benefits of a nomadic lifestyle and financially has the biggest impact. By using geoarbitrage you’re able to live in countries and regions of your choosing which you love, treat you best whilst being much more affordable.

Earn in pounds, live on Dong” – Me.

Be paid in a strong currency and spend in a weak one

(Dong is the currency in Vietnam for those of you either getting worried or excited).

Arbitrage is essentially taking advantage of different prices for the same goods and is achieved by using different markets. Geoarbitrage is therefore using geography to achieve the above. Two simple examples of arbitrage are:

  • A rough pub, a fancy rooftop cocktail bar and an airport lounge may all sell the same beer but the price they charge will differ
  • A premium butcher and a discount supermarket will both sell a rib-eye steak but you can expect to have to hand over more cash at the butcher

This arbitrage is likely something that we all personally take advantage of when we are able (nobody fills their car at a motorway service station unless they need to) and being flexible geographically amplifies and magnifies this benefit. There are two types of geoarbitrage that we will cover in this post:

Domestic Geoarbitrage

In a country the size of the US cost of living can differ dramatically

Within a country the cost of living will vary greatly depending on a number of factors and some of the most common are:

  • House rental costs
  • House prices
  • Transportation costs
  • Local taxes (council tax etc.). In the US different states have different income taxes.
  • Relative wages (a plumber in London will charge more than a plumber in Newcastle as he/she needs more to survive.)

Generally house/rental prices have the biggest affect on a persons cost of living and therefore we can all take advantage of arbitrage to lower our expenses. Housing costs are affected by:

  • The city/town
  • The neighborhood you are within (parks, crime, restaurants etc.)
  • Local services/facilities (near a direct trainline to a nearby city etc.)
  • Local school – Housing in catchment areas for poor schools are worth less
  • Holiday/vacation area
  • Suburbs or city centre

The list above can go on but hopefully I have covered the main points and this will give you a good understanding of why house prices vary so greatly. An example of somebody taking advantage of domestic geoarbitrage is my brother who due to the corona virus pandemic (now working remotely) decided to leave his rented accommodation in London and move in with his little brother in our hometown. His rent costs immediately went from roughly £1000 to less than a third of that (would have been half if I wasn’t so kind) and this has had a huge affect on his ability to save and invest.

When choosing an area to live within make sure that you are only paying a premium for benefits that you actually care about. Below you can see how rental prices compare to earnings. Data in this picture is slightly old (3 years).

International Geoarbitrage

Now this is where geoarbitrage starts to become extremely enthralling for those of us who are willing and prepared to be flexible with our location. International Geoarbitrage means that other countries outside that of our home become an option for us to live within and therefore we can choose to move to those with a much lower cost of living. This can be permanently, intermittently or for a one off break (see https://thenomadwallet.com/mini-retirements-why-you-should-be-taking-one/)

As with many things the information can be interpreted most easily visually and the picture shown below was created by http://www.movehub.com in 2020. For more information about the cost of living throughout the world see https://www.movehub.com/blog/cost-of-living-worldwide/.

The scale is ranked by the number of countries data is available for

I spend some time reviewing the above information and the key takeaways really are:

  • Western Europe is hella expensive
  • North America (excluding Mexico) is only a little better
  • Australia and New Zealand are as pricey as anywhere
  • Everywhere else is generally a lot cheaper apart from a few anomalies (E.g. Japan, UAE, Singapore etc.)

Essentially if the country in which you earn money is pink or pinkey orange then good news – you’re likely to get the biggest benefits from geoarbitrage. If not then your pickings will be slimmer but unless you’re from rural Pakistan (lower cost of living country with data) you will likely still have opportunities you can uncover.

Personally I have a number of countries that I would like to spend time living within once I finally achieve nomadic status and the majority of these have a cheaper cost of living than my home in the South of England. The below table will compare the cost of living from the UK/US to some of the places I would consider moving.

  • Cost of living will be relative to the UK/US
  • Costs of living for the UK/US is 100 (UK is technically 100.7 but we will ignore that)
  • A country with a cost of living of 120 is 20% more expensive than the UK/US
  • A country with a cost of living of 80 is 20% cheaper than the UK/US
  • A country with a cost of living of 30 is 70% cheaper than the UK/US

As we can see the cost of living varies drastically depending on where in the world you are living. Geoarbitrage allows you to use this to your advantage and maximise either your income or your savings. Pay at least £5 for a beer in London or… 79p in Ho Chi Minh City (Vietnam). Or maybe more importantly rent of £1200 vs £280.

One point to note is that certain countries (usually large and varied) will have a big variance in the cost of living depending on where you choose to live. E.g. Expect New York to be more expensive than rural Alabama. This is not covered in this table and if you wish to live in a particular country you should ensure you research this factor.

Holiday vs Living Costs

How ‘expensive’ a place seems to be is often relative to the price tourists will pay to visit and stay in a particular area or city. This struck me when I noticed Singapore was rated as 31st in the list whilst being notoriously expensive. I think this is generally down to three reasons:

  • Neighboring countries (Thailand, Vietnam etc.) are extremely cheap by comparison
  • It has very high end districts and hotels which are generally frequented by tourists
  • Many people visit on business and therefore some lists can be skewed by unusual spending habits

The above three points push up the idea that it is one of the most of expensive cities/countries in the world but it seems for those living there this is not the case. A study completed at the National University of Singapore (NUS) found that for expats, Singapore was the 4th most expensive city in the world but for ‘ordinary residents’ it was 48th. Things to therefore keep in mind are:

  • An expensive place to visit and holiday may not be so expensive to live
  • Expect to overpay if you move to a very cheap country and are not a local (and especially if you don’t speak the language).

For a cost of living estimator of your chosen city go to https://www.numbeo.com/cost-of-living/estimator_main

Don’t confuse holiday prices with the real cost of living

Quality of life Comparison

At the moment your takeaway from this post could be that geoarbitrage is so simple that all you need to do is choose a place on the map cheaper than where you live now and move there. Although this is the fundamental basis, unsurprisingly the reality isn’t so simple.

Before you decide to up sticks and leave to start saving some of that sweet £££ you need to consider the following:

Cheap is great but living where you love is better
  • Does the country/region provide what you value (experiences, culture etc.)?
  • Are the locals likely to be welcoming and amenable?
  • Do you enjoy the culture?
  • Is it suitable for your children (if you have them)?
  • Is it easy to access/leave (you may want to travel home or have visitors regularly)?
  • Does the climate suit you?
  • Does the country/landscape match what you want (beaches, mountains etc.)?
  • Is the potential location developed enough for you?
  • Does it have the required services (internet, phone etc.)?
  • What are the tax obligations for the country (if you are affected by this)?
  • Are people here happy?

Before making any large decisions that will drastically affect your life you need to complete at least one mini experiment and experience living in the potential country/region for a period of time. Ideally you should do this for a number of your top choices as it will be a irritating, fruitless and expensive lesson if you return home quickly with your tail between your legs. To help with this I have added a ‘quality of life’ column to the above table. The ‘quality of life’ is ranked by 151 countries.

I believe there are a couple of key takeaways from this data:

  • Sometimes you get what you pay for – Those at the top of the list have a high cost of living
  • In a poor country you will likely be able to afford to live a different life to locals if you earn in a strong currency
  • Congo and Central Africa have a safety score of 4/100… may not be worth the cheap cost of living.

FIRE requirements if you retire to X

One of the most common reasons to move aboard is to enjoy retirement in a warm and sunny climate with cheaper prices. Therefore those of us who are within the FIRE community can drastically cut down our retirement age by basing our cost of living on reduced values if we plan to use geoarbitrage. I know that 25 times my expenses in the UK is a lot more than 25 times my expenses in Mexico. As the cost of living in Mexico is roughly half that of the UK it makes sense that I would only need to save half as much to live to the same standard.

If I needed £40,000 a year to live in the UK then for the 4% rule to apply (https://thenomadwallet.com/the-4-rule/) I require:

£1,000,000 saved if i live in the UK

£500,000 saved if i chose to live in Mexico

I think some common caveats that I need to consider here are:

  • Will retiring in Mexico cause me to live the same type of life with the equivalent expenses?
  • Will I spend a lot more on travel home to see friends and family?
  • Would I pay to send my children to private schools (when I have them)?

Each person will have their own considerations but these are some of the biggest for me. Come up with your own list and then take a mini experiment if you are serious about moving.

Jobs/Income to consider

Don’t expect to find an equivalent job in a poorer country

In order for geoarbitrage to work you need to have an income which can be earned remotely as otherwise moving to a place with a lower cost of living will almost certainly mean receiving an equally lower income. It doesn’t matter how you earn this income it just matters that you can do it from anywhere.

For those taking advantage of geoarbitrage some of the most common ways to earn money are:

  • Landlord – You can rent out property you own and use the proceeds to live somewhere cheap
  • Investments – take a percentage each year from your investment accounts – See https://thenomadwallet.com/should-i-invest-in-the-stock-market/
  • Blogger – Maybe one day ill make a penny from this website
  • Graphic Designer
  • Programmer
  • Social Media Manager
  • Translator
  • Any career you can manage to complete with remote work

One of the biggest benefits of the pandemic to future digital nomads is the fact that so many companies and employers have become comfortable with ‘working at home’ arrangements. They have realised the benefits of this and it is a simple and short hop from here to complete digital nomadism if you so choose.

Alternatively it could be that you are choosing to move to a country with a higher cost of living because of the increase in your future salary. This certainly could be extremely beneficial but isn’t really covered in the remit of this post.


Hopefully what you’ve learnt from this post is that geoarbitrage can be an extremely powerful tool to those of us willing and able to take advantage of it. By earning in one country and spending in another new standards of living will become available for you to enjoy and revel within. One key misconception is that geoarbitrage can be seen as taking advantage of the less fortunate but as long as you integrate into the culture and spend your money on local businesses you are in fact doing the opposite.

I can’t wait to build myself a business and a revenue stream that will allow me to work from anywhere and enjoy the standard of living that I relish.


A 28 year old project engineer with a passion for travelling, financial literacy and learning new skills. I'm hoping that by running this blog I can track my path from corporate worker to backpacking adventurer.

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