An interesting concept I have come across in my readings, especially noted in 4-hour work week written by Tim Ferriss is something called geoarbitrage. It sounds like a complex word but all it really means is relocating to take advantage of lower costs and taxes in a different city or country. Using this to your advantage, you can get the most out of your money while stocking money away for retirement and savings or even for investments. Over time, the difference in reduced prices and taxes will allow you to retire earlier.
I have looked into this concept and have come up with 3 major benefits from buying into this lifestyle change.
- Reduced Housing Price- It’s definitely no secret that places such as California has one of the highest costs of living out of anywhere in the world. Instead of your money wasting away in your mortgage payment or rent, move to a place where the cost of living is much cheaper and you pocket the difference.
- Magnify Your Earnings- It is very well known that different careers have different salaries depending on where you are working. To magnify your earnings, it is smart to consider relocating to an area that’s in high demand on your career and also pays more. Over time the additional pay will help you retire earlier.
- Reducing Taxes- Wouldn’t it be great if you didn’t have to pay income tax! Most Americans don’t know that they work from January-May entirely for the government. It is only after May that workers can actually start to bring in income for themselves. States that have low income taxes are great for employees who are taxed the most. It is also important to know the sales tax and property tax if looking to build or buy a house.
Finance Your Travels 