What Is Geoarbitrage? Learn to Work Smarter and Travel Longer.

What is geoarbitrage?

The simplest definition for the term geoarbitrage is simply taking advantage of the difference in living costs between different geographical localities. We all have practiced geoarbitrage - knowingly or not - when you decided to move house because the rent was cheaper or maybe like me, when I decided to attend a university in a certain city as opposed to face the high prices of London. I decided to relocate (change my geographical location) to take advantage (this is the arbitrage bit) of cheaper rentals and cost of living in another area.

Now, many years down the line, I have decided to expand this strategy as far as leveraging my earning potential by residing in countries with a similar lower cost of living. This all becomes possible due to my status as a digital nomad, utilizing the internet and the fact that online business presents opportunities for me to make money from anywhere in the world, with an internet connection that is.

Although Pound Sterling born and bred, the internet marketing currency tends to be the United States dollar of which I can easily earn a very strong salary online while living in Asia or similar places where my outgoings are much less than in the western world.

Strong western salary v’s Lower Eastern Cost of living = more beer for me!

The term geoarbitrage is also applied to businesses. I am sure you are aware of so many businesses in the UK or the US who have workers in or have relocated operations to Asia. This is a classic example of geoarbitrage and allows companies to take advantage of lower costs of production in overseas locations to increase their profitability by reducing their wage bill.

What makes geoarbitrage so attractive, and why is it relevant to you?

Fun things happen when you earn dollars, live on pesos, and compensate in rupees, but that’s just the beginning.

Of course, the motives are financial, but it also depends how you leverage those extra pennies.
Is there a part of you that just wants to quit the 9-5 mind-numbing JOB; that just doesn’t do it for you anymore, do you just dream of the freedom to choose your own hours and never having a boss to cozy up to? Geoarbitrage is a natural attraction because it can really make this freedom possible and your money could potentially go further than it currently is.
Travelers and business people alike are always intrigued in the location-independent lifestyle, so I ask: “Why don’t you go freelance?”, “Why don’t you start experimenting with new income revenues?” – the answer is always:

“I’ll never afford it.”

Well, Do you think you could afford it if your rent and living costs were halved?

That's Geoarbitrage!

Maybe now is that time to change your mindset from “what's the figure in my wage packet” to “what are my living expenses" - combine that with a new location, and its a magical thing!

A liger - bred for its skills and magic
something else a little magical, a Liger!

This is the reason so many new online workers or start-ups tend to move to Asia, while you are getting started on your new path, or investing unpaid hours into the next big thing, you can be keeping your overheads down.

If you just want to travel longer…
your income can comfortably be very little, why not Leverage Geoarbtitage and invest in your freedom and quality of life?

What do I need to consider for a destination?

Not all destinations are created equal; your dollars/pound/beer tolkens, will go further in some destinations than others. This has all to do with foreign currency exchange rates and costs of living in general. The factors to take into account when selecting a destination to move to are:

  1. Overall cost of living, the lower the better
  2. Safety and security – Political stability and low crime rate
  3. Pleasant climate, culture and warm people
  4. Good transport links to allow access to cities, beaches and country areas

What are the best destinations

I guess this article wouldn’t be complete if I didn’t provide a list of feasible destinations for those of you who are ready to take the plunge and make a move. Do any of these take your fancy?

  1. Indonesia
  2. Thailand – why not read Pau'ls article about living as a digital nomad in koh samui?
  3. Vietnam
  4. Bali
  5. Cambodia
  6. South Korea

As you can see, the majority - if not all - of these countries are in Asia and that must be saying something. The truth is though, and excitingly so, the list really is evolving, as other parts of the world develop, there will be more to explore. Paul and I just got back from an amazing trip to Burma and believe me, I'm expecting big things to come from such a friendly country, with a truly beautiful landscape.
At this time, Asia is a relatively cheap destination with lower cost of living, but as the economies pick up, things might change but then again, this also offers both business and investment opportunities. 🙂

GEO Arbitage and the business possibilities

In this post, I have touched upon GEOarbitage and its benefits for travel, how you can leave home that little bit sooner, or an aid to making your working travels last longer.
Geoarbitrage can also have monumental implications on your personal life and/or business and if used correctly, can be a blueprint to to freedom, skyrocketing ROI and profit. In future posts, I will intend on dissecting both these subjects and showing you how to directly apply them! Sign up to our mailing list so you don’t miss a trick!

I certainly hope this article has stirred some interest, and raised some possibilities for you to consider geoarbitrage at some point in the NEAR future, after all that’s what we are here for!

About the author

Virtually Nomadic

Virtually Nomadic is a Digital Nomad Travel Blog founded by Tim and Paul. Two online entrepreneurs on a mission to grow and excel in their online businesses while visiting the top 100 Wonders of the World.


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