This show is for 20-somethings who want to expedite their journey to financial independence. Have you ever asked yourself, “If money wasn’t an issue, what would I do with my life?” If not, think about it because you’ll need an answer sooner than you think, but my guess is, you have. You’ve thought about an alternative career path, starting your own business, or spending more time developing your hobbies but the major factor holding you back is money. I want to solve that problem for you. On the show, we’ll answer questions like: *What are the best investment strategies for early retirement? *How much money do I need to retire early? *How do I negotiate a higher salary or raise at my current job? *What are some profitable side hustle ideas I can start today? *What are the best strategies for budgeting and managing my money? *What frugal life hacks can make everyday purchases more affordable? *How can I withdraw funds from retirement accounts penalty-free before the traditional retirement age? *What are some long-term strategies for building wealth and financial security?
https://www.podpage.com/the-struggle-is-real-with-justin-peters/
episode 131: Using Geo Arbitrage to Save a Ton of Money and Reach FI/RE Sooner | E131 Rachel Covert
It’s hard living a frugal life. I’m constantly questioning myself whenever I do things like taking leftovers from a free corporate lunch or doing date night at 4pm so we can get happy hour pricing.
Although these frugal practices are simply a journey all 20-somethings need to live through, it’s not what I want to be doing forever. But what if I told you you could live it up now while also accomplishing your financial goals like paying off student loans or heavily investing to reach financial independence early? This could be a reality with a strategy called geo-arbitrage.
Ignore the fancy words, the concept is simple. Have a steady income in a strong currency, then spend money in a cheaper country.
Imagine this, you live in New York City, making $70,000 a year and your monthly costs are $5,100. You work from home and can easily pack up and leave so then you move to Mexico City where your monthly costs are $1,900. That’s a difference of $3,200 or over $38,000 a year. A decision like this magnifies your savings rate and allows you to make some serious progress on your financial goals in just a few short years without sacrificing your comforts like a spacious apartment or trying new restaurants a couple of times a week.
If you are open to an idea like this but don’t have a portable job or you are not ready to move, the same strategy could be applied to reduce your final FI target number. Instead of needing $1.5M dollars maybe you only need $700,000 to retire to a more affordable city.
This is what today’s guest did. Rachel Covert retired early at the age of 36 from her high-stress job in fashion and decided to move away from expensive NYC. She’s been fairly nomadic the last few years but currently resides in Portugal.
In this episode, we dive deep into geo-arbitrage. Rachel will share examples of low-cost-of-living cities you could move to, prices you can expect to pay, how to prepare for a change like this, and more. Once again, if you are adventurous and have career flexibility this could be a really powerful strategy you could employ.
Let’s learn some more about it. I hope you enjoy my conversation with the early retiree and world traveler…Rachel Covert.
Key Takeaways:
- What is geo-arbitrage and is it right for me?
- Best low-cost-of-living cities to consider
- The power of the American passport
- The impact of time freedom
- How to escape golden handcuffs
- Staying focused on your financial goals and avoiding social pressures
- How to apply geo-arbitrage domestically
Mentions:
Compare the cost of living: https://www.expatistan.com/cost-of-living/oaxaca?currency=USD
More of Rachel:
Get the Free Lifestyle Spotlight Spreadsheet: https://www.electrifiwealth.com/optin1654273482604
Instagram: @rachel_talksmoney
More of The Struggle is Real:
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