How Geoarbitrage can Translate to Financial Freedom

In 2018, we are so fortunate to live in such an accessible world. We have planes, jets, boats, cars, and dozens of other transportation options to carry us to destinations far and wide.

Just 200 years ago, traveling to Asia from America would have involved a month-long voyage. You’d be forced to weather the harsh seas and pray to avoid scurvy. Today, I can book a flight to Beijing and arrive within 24 hours!

Unfortunately, many people capture only a sliver of this accessibility phenomenon — a weekend here, a week there (if you’re lucky)… BUT WHY?

The answer is simple. A vast majority of people have location-dependent jobs. Basically, this means that you must physically show up for work in order to get the job done and receive a paycheck.

But what if I told you that there was another way? What if I told you that you don’t have appear in the flesh, but can still earn a sizable income? Interested? Welcome to the world of location independence.

How Location Independence is Changing Work

We’ve all seen them — the superstars on social media working from the beach, the mountains, or [insert beautiful place]. The truth is, you don’t have to be a superstar to achieve this lifestyle. You just need to have the right tools in your toolbox. Your #1 asset in this journey to location independence is a laptop.

Yes, that’s right… a laptop. This machine has completely revolutionized the way that we work, and it’s your deadliest weapon in the pursuit of location independence.

There are literally thousands of ways to earn money using your laptop, you just have to be willing to look hard enough. Let’s take a look at the three primary ways to enjoy location independence.

Remote Employment

This is probably the “safest” route, but every rose has its thorns. Remote employment means that you are employed (file a W2) by a certain company, but you are allowed to complete your work from wherever you want!

Pros: Consistent Paycheck, Low Probability of Job Loss

Cons: Deadlines, Answering to a Boss

Remote Contract Work

This is similar to remote employment, but with one key difference — you are not an employee of the companies you work for. Instead, you might have your own LLC and get hired via contract (file a 1099). Jobs could include consulting, freelancing, digital marketing, self-publishing and so much more!

what is geoarbitrage workingPros: Ability to Control your Income, Only Work on Desirable Projects

Cons: Inconsistent Pay, Forced to “Find Work”

The Ultimate Entrepreneur Can Go Anywhere

This is my favorite strategy of the three (hence the title). Although this path has the highest failure rate, it also provides the greatest opportunity for outsized success. A true entrepreneur is a creator. He or she owns, creates, and markets their own product/content. This could be in the form of a product site, starting a blog, podcast, online store, and more!

Pros: Unbound Creativity, Nearly Limitless Income Potential, No Boss

Cons: Highly Unpredictable Income, Delayed Gratification

Since I have the most experience with this last strategy, I’d be more than willing to share my secrets. You can follow my step-by-step guide to building your online business and then scale it and take your income to new heights!

What is Geoarbitrage

In order to be a complete master of the globe, you have to crush both the income and savings fronts. Since we already discussed income, let’s discover how geoarbitrage can drastically reduce your cost of living.

Geoarbitrage = Moving to a different location in order to reduce the cost of living.

Now, don’t think that you have to permanently move to a third-world country to employ this strategy. That’s not what I’m saying at all! You could literally move 10 miles away if it substantially reduces your expenses while maintaining a similar quality of life.

Similarly, this doesn’t have to be an all-year strategy! Maybe you spend several months in your home country and several months in a much cheaper country. No matter what you choose to do, any form of geoarbitrage will drastically improve your financial situation.

Just so you can understand the power of geoarbitrage, let’s take a look at some numbers. Suppose you have a location-independent job earning you $50,000 (post-tax) per year. You currently live in the U.S. and spend $40,000 — you save 20% of your income.

Now let’s suppose that you move to Thailand for a year. You maintain your $50,000 per-year job, but your cost of living has decreased to $12,000 (Source: Investopedia). Your savings rate just increased to 76%!!!

The power of georbitrage is truly incredible. You can supercharge your path to an early retirement and eventually, your investments will grow to a point where you can CHOOSE whether or not to work.

In this post, I’ve highlighted how powerful location independence and geoarbitrage are. If you want to get crazy and take it one step further, you can step into the world of travel rewards and explore the world for FREE!

No matter what you choose to do, I hope that this post opened your eyes to the many possibilities that this world offers. If you have any questions at all, please don’t hesitate to reach out.

Cody is the founder of Fly to FI and is chasing the dream of financial independence all over the world.

About the Author

+ posts