Boomer On Fire #330 - Your Ultimate Adventure?
Boomers - Living Our Best Lives
Welcome to Boomer on Fire, the newsletter that inspires and motivates baby boomers to live their best lives.
Does the thought of future expenses keep you up at night? Does retirement seem like a “pipe dream?” I have something that you might find interesting.
Geoarbitrage is Awesome!
This Might be Your Ultimate Adventure
Imagine saving a large portion of your income simply by moving to a different state or even a different country. That’s geoarbitrage in a nutshell. More specifically, geoarbitrage involves taking advantage of the cost-of-living differences between two geographic locations to maximize your financial potential.
For those who are retired, or can work remotely, or have a flexible career, geoarbitrage offers attractive opportunities. Lower living expenses without compromising on quality of life can mean more money for savings, travel, or investments.
The advantages of geoarbitrage aren’t limited to just financial gains. Living in a new culture, experiencing different lifestyles, and broadening your horizons are also valuable benefits. Those who have tried geoarbitrage often find their quality of life improved in many ways, not just financially.
Perks of Geoarbitrage
Geoarbitrage offers significant advantages such as reducing living expenses and enhancing quality of life.
Cost of Living Benefits
Geoarbitrage can drastically reduce living costs. Moving from a high-cost city to a lower-cost area allows for the same or even enhanced quality of life at a fraction of the price.
Expenses like housing, groceries, and utilities can be up to 50% cheaper. This helps individuals save more or invest in other opportunities. Looking at the popular expat city of Valencia, Spain vs. Charlotte, NC reveals an intriguing financial picture. Cost of Living including rent in Valencia is 42.3% lower than in Charlotte. Restaurant prices in Valencia are 31.4% lower than in Charlotte. Grocery prices in Valencia are 46.7% lower than in Charlotte, NC. With very few exceptions, prices generally hold to this trend.
Lower cost of living translates to more financial freedom and less financial stress.
Lifestyle Enhancement
Besides saving money, geoarbitrage is about upgrading lifestyle possibilities. Relocating to another country or city often provides access to better healthcare, cleaner environments, and more leisure activities.
Enjoying a beach lifestyle, frequent outdoor activities, and local cuisines enhances daily living. Access to affordable, high-quality services, such as housekeeping or gourmet dining, adds comfort and luxury beyond what you can afford “back home”.
These lifestyle improvements contribute to improved overall happiness and balanced work-life harmony.
Living in different cultural and geographical settings gives you exposure to new languages, traditions, and communities, broadening your horizons.
Participating in local festivals, making international friends, and learning new customs make life more interesting and fulfilling.
There Will be Naysayers
Many people are opposed to or fearful of making such a radical move. You will hear many arguments against a move, especially internationally. Arguments that claim it isn’t safe. Or that the healthcare is subpar. Or that the banking isn’t reliable and taxes are high. Many people are afraid to try new, exotic foods.
These arguments are mostly made out of concern but show a lack of knowledge or understanding of the world. I don’t intend to bash the U.S. here, but these arguments can be very misguided.
Of course, there are countries where it would be very unwise to relocate. But many countries have far less crime and violence than the U.S.
The U.S. healthcare ranking is lower than most of the countries in Europe, including the “poor” countries. Colombia, in South America, has a higher ranking on the world’s healthcare index. A couple who retired in 2023 can expect to spend $315,000 in healthcare costs during their remaining years. Many countries have far less expensive or even free healthcare. Our lifespan has decreased in the past few years while many other countries’ lifespan is increasing.
During the 2008–2009 banking crisis, 165 U.S. banks failed. This is higher than any other country. Many countries have tax treaties with the U.S. that protect against increased taxes.
One last financial argument in favor of geoarbitrage is that the U.S. Social Security system is severely underfunded. It is not outside the realm of possibility that cuts will occur. It might be wise to live where your money goes farther.
Problems With Geoarbitrage
There are a few issues with geoarbitrage for some people. In many countries, there could be a language barrier. The bureaucracy in many parts of the world is hair-raisingly complex. Some countries have a moderately high financial threshold to obtain residence or retirement visas. In most candidate countries, the healthcare in larger cities is excellent. However, if you are in a small, distant town, modern healthcare might be far away.
Probably the greatest obstacle to geoarbitrage is family and friends who remain in the U.S.
So while geoarbitrage might not be for everyone, it is an intriguing strategy that I would recommend that everyone take some time to consider.
Autumn is approaching fast. While it might be hard to say goodbye to Summer, fall can be beautiful in much of the U.S. and northern Europe. Those in the U.S. will find this Peak Foliage Prediction map quite helpful.
Many of us have tried fitness regimens to stay healthy and active. But the same old workouts - especially over the years - have become boooooring. Maybe it’s time for something offbeat. Like these fitness activities.
Thanks for reading. Go out and live your best life!
Kevin
I like it!