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 in Australia, or someone taking early retirement and living in a cheaper place by 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 in Australia qualifies me as a geoarbitrager, I discovered others like retirees, expats, online remote workers and full-time travellers doing the big lap of Australia are also geoarbitragers. Thanks to the rise of remote work and the popularity of travelling Australia in a van or car camping, geoarbitrage is popular in Australia. It is a way to unlock financial freedom. 

How to Geoarbitrage in Australia

If you want to start geoarbitraging in Australia you can do it a couple of ways.

• go to a cheaper place in Australia to live. For instance I currently live in Melbourne but if I moved to a country town say, Bendigo, I can reduce my living costs as accommodation would be cheaper then the money saved on accommodation could be spent elsewhere such as being able to afford other things making life better.
• sell up and live in your car or van while travelling Australia. This is a great way to geoarbitrage in Australia, particularly if you sell up to fund your travels around Australia.

What are the Benefits  and Disadvantages of Geoarbitrage?

Like digital nomads, remote workers and full-time travellers, 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, high cost of living expenses 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 in a cheaper area or travel 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. 

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. I suggest you sit down, crunch the numbers and weigh up the pros and cons before moving to another place. Though travelling full-time is appealing, it isn’t for everyone. If you believe life will be better and it makes financial sense then go for it.