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You can utilize the principles of Geoarbitrage to become a NomadonFIRE by combining the teachings of the FIRE movement with the Digital Nomad Lifestyle.
This is a guest post by Eric from NomadonFIRE. Eric followed the principles of FIRE to allow him to quit his job in his late 20’s to begin living the digital nomad lifestyle and taking advantage of geo arbitrage.
So what is the power of geoarbitrage you ask?
What is geoarbitrage and why is this a great option for those pursuing or who have achieved financial independence?
Geo arbitrage is a concept popularized by Tim Ferriss in his classic book “The 4-Hour Workweek”. It combines “arbitrage”, taking advantage of pricing differences between markets with “geographic” relocation.
Earn in dollars, spend in pesos.
By taking advantage of this principle you can move abroad somewhere and have the same or better quality of life (QOL) while drastically reducing your cost of living (COL), effectively doubling or tripling the power of your money.
Geoarbitrage has been popular in the FIRE community for a while now. For a great summary check out Kyle Kowalski’s post here.
Jason Fieber AKA Mr. Free at 33 has some fantastic articles on Geoarbitrage where he gives his exact spending while living in Chiang Mai, Thailand.
Geoarbitrage normally focuses on moving abroad but the same principles can also be applied domestically. Check out this article by Chris from Can I Retire Yet.
I’ve been taking advantage of Geoarbitrage and living the digital nomad lifestyle for 3 months now and am loving it so far! I have no plans of stopping anytime soon.
The past three months I’ve traveled around Latin America visiting Santiago, Chile, Lima, Peru then Medellin, Columbia and am currently in Mexico City, Mexico. I plan to spend December with my family back in the States and then am off to SE Asia at the beginning of 2020.
For Latin America, I’m traveling on a program called Remote Year (RY).
I would definitely recommend RY for anyone interested in testing out this lifestyle as they take care of all the logistics for you, and you get to travel with an awesome group of like-minded people and have many fun events and professional development activities going on.
Geoarbitrage Firsthand Benefits
In the past few months, I’ve experienced tremendous benefits in utilizing the principles of geographic arbitrage.
Two I’ll focus on here are experiences and cost savings.
Back when I was working my W2 job, most weeks blurred together. Wake up, commute to work, be there all day long, drive home, eat dinner, watch TV then go to sleep and repeat the next day.
Since starting to live the digital nomad lifestyle, I’ve gotten a chance to try so many new foods, practice learning a new language, see many new places and get to experience different cultures firsthand.
One of my favorite things about Geoarbitrage is the adventure in it. This lifestyle is so much different in the best way possible than my day-to-day when I was working full-time!
A few pictures of my adventures these past few months:
I’ll use Mexico City my current location as an example of the power of Geoarbitrage. The value of my money is effectively doubled or tripled while living here. Imagine taking your current monthly expenses and cutting them in half!
Check out a few firsthand examples below:
Airbnb- you can find monthly apartment rentals on Airbnb in one of the nicest areas of town (La Condesa) for between $500-800 USD. This area is extremely walkable with many nice parks and cafes within a short distance.
Uber- $3-5 for an Uber downtown
Food- the other day I had a delicious lunch and a plate of 5 tacos was only $45 pesos. That’s only $2.33 USD at current exchange rates!
Geoarbitrage With A Family
Is this possible with a family?…. YES!
Check out these examples below:
While I don’t have kids or a family myself I hope to in the future. This type of lifestyle is something I would consider continuing with a family. Most likely, not on a permanent basis. Extended summer trips would be something I would be very interested in for many benefits.
Family bonding experiences, child development, and cost savings are all high on my list as potential benefits to living this lifestyle with a family.
One of the main concerns many might have is on child development and education. “Worldschooling” is a huge movement around this topic. For more information check out this post by World Travel Family.
Closing Thoughts on The Power of Geoarbitrage
Although you may be concerned about costs, by utilizing the power of travel hacking and staying in Airbnbs or house-sitting you can save significantly in terms of travel costs even with a family.
Geoarbitrage is definitely something to think about in terms of lifestyle design. Whether internationally or domestically, with a family or without, these principles can be implemented with other FIRE principles such as travel hacking and minimalism to shorten your time to achieving financial independence.
To follow along with Eric’s journey and see even more details of the digital nomad and geo arbitrage lifestyle, check out nomadonfire.com