Standard of Living Arbitrage: How to Live Like a Millionaire (On a Budget)
Why live in an expense city in a small apartment if you can live in a villa somewhere cheaper and warmer?
If you can work remotely, spending some (or all) of your time in a place that offers you a better lifestyle at a lower cost is a no brainer.
Standard of living arbitrage, also known as geographic arbitrage, refers to taking advantage of a lower cost of living in other parts of the country (or the world) to increase your quality of life while spending less.
Since embarking on my digital nomad journey in late 2015, standard of living arbitrage has become a common theme in my life.
In the last five years, I have spent time living (and working remotely) in South East Asia, South Asia, Southern Europe, and East Africa.
Sometimes only for a week or two, sometimes for a few months. First alone, and then with my young family.
I cannot recommend it enough!
Who Can Practice Standard of Living Arbitrage?
Anyone who can work remotely can engage in standard of living arbitrage.
If you are able to work remotely, you have the freedom to leave the city and spend a few months in a low-cost rural part of the country you’ve always wanted to explore.
If you are more adventurous and have sufficient income, you could also hop on a plane and spend time living and working on another continent.
From exploring the beautiful cities of Europe to living in a bungalow on a beach in Thailand, as long as you have your laptop, a stable internet connection, and the discipline to keep up with your work, the world truly becomes your oyster.
And frankly, the maths adds up too!
Let’s Look at the Numbers
So, let’s look at what money can get you in Ubud, Bali, one of the world’s most popular hub for remote workers and digital nomads.
Ubud, Bali Prices
According to data compiled by Numbeo, here’s how much things cost in Ubud:
Apartment (1 bedroom) Outside of Centre: $231
Apartment (3 bedrooms) Outside of Centre: $1,065
Meal, Inexpensive Restaurant: $2.13
Cappuccino (regular): $2.13
Domestic Beer (0.5 liter draught): $2.49
Scooter rental (for one month): $80
Co-working space: $150
Other Expenses: $250-$500
Total: Between $1,000 to $2,500 (depending on your lifestyle needs)
If you are by yourself, you can easily live off around $1,000 per month in Bali.
Including flights (and visa runs), it will amount to more, of course.
But you get the idea.
Instead of living in a big city and spending $3,000 to $5,000+ to maintain your standard of living, you can live like a king or queen in other parts of the country, or the world, for a lot loss than that.
I highly recommend that you give it a try.
Peace, love & anarchy,
Alex Lielacher