Rohit is a graphic designer working 9 to 5 at an ad agency in Mumbai. His workplace is 40 kilometres away from his house. So, he travels through the metro daily. At the end of the month he earns a salary of ₹25k, out of which ₹5k goes into the rent, another ₹5k to all the bills and he runs the family of 3 members in the remaining ₹15k.
Then, there is Vedant. He is also a graphic designer but he works remotely from Guwahati and also takes freelance projects from foreign clients. He saves the transportation expenses and his overall cost of living is significantly lower than that of a metro city.
Did you notice something?
This is the concept of Geoarbitrage. The term was first coined by Tim Ferriss in his celebrated book The 4-hour work week where he stated that if you move to a place with lower cost of living, but your income level remains the same, then you can increase your disposable income.
After Covid-19 pandemic, more and more people across the globe are becoming remote workers. They move to the outskirts of their countries or shift to countries like Thailand, Vietnam, Mexico, Malaysia etc. Because the cost of living is very low plus a good climate, lower taxes, affordable healthcare and other benefits. People live in small towns while serving the global clients and earning in the strongest currencies like dollars and pounds.
According to a blog site, the cost of living in India is 66.7% lower than the US. In India we take the above example of Mumbai and Guwahati, consumer prices in Guwahati are 8.14% lower than in Mumbai. Rent prices alone in Guwahati are 76.72% lower than in Mumbai. You would need around ₹107,000 or probably even less in Guwahati to maintain the same standard of life that you can have with ₹160,000 in Mumbai.
If your job does not require you to go to a physical location and you want to spend less money for a great quality of life, geoarbitrage can change your life forever!
BTW, this book has many more such insights on work and finance. You can listen to its Hindi audio summary on KukuFM from this link (Don’t tell anyone that you got 50% off on your annual subscription of KukuFM using LLA50 code 🤫)
Podcasts of the week
Swadeshi: IITian Vs Local BCom
Article of the week
Our latest video
Quote of the week
“The future is here. It’s just not evenly distributed yet.” – William Gibson
Question of the week
What is the one financial advice you have received from someone that you follow with the greatest sincerity?
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