What is Geoarbitrage?

Take a moment and soak in where you are now. Look back at how far you have come. What a journey, huh? Now look ahead and imagine the possibilities. At this very moment, you may be at a tipping point, if you will, to become financially independent or work-optional. Can you picture more time to spend with family, pursuing travel, maybe just working part-time, diving in deeper to pursue your passions? Or perhaps focusing more energy on the simple concept of enjoying time and working on good physical and mental health? How may you ask? Geoarbitrage.

Simply put, geoarbitrage is making the income you earn or receive stretch farther in a lower cost of living location. Making work optional involves forward thinking, plenty of planning, and the deployment of various strategies to make it become reality.

A friend of mine and I were exchanging notes on how to become work optional and achieve the dream of not having to work if you choose not to. We did a deep dive into the consideration of him and his wife selling their bay area home and relocating out of state. Their plan was to cash out the equity from their home, pocket the cash tax free! (please consult your tax advisor regarding the rules around this), buy a home there for cash and officially stop working. They wanted to get off the hamster wheel, to improve their time together, and pursue what makes them happy. They took the plunge and have not looked back since.

The cost of living in the bay area is expensive. Housing, energy, entertainment, etc. all carry a hefty price tag. Has it crossed your mind to sell your home, cash out, and move somewhere else to achieve a work optional lifestyle or financial independence? Why not?!

This is a big decision to make and one to not take lightly. A lot of folks have their roots anchored here (children, grandchildren, obligations, etc.). Yet geoarbitrage may enhance the quality of life and bring you more time to appreciate the things you truly want to enjoy. Also, the gift of time can often bring the gift of good health. Imagine less mental and physical stress from work or daily commuting, opportunity to exercise, or simply peace of mind knowing your are free. The following considerations (among many) come to mind when thinking about geoarbitrage.

  • Are there tax advantages to moving elsewhere? Some states do not have any state income tax. You may even consider an overseas location?
  • What will your new spending plan look like? Most likely less. Otherwise, why make the move?
  • Climate.
  • Accessibility to move freely about the nation (i.e., airports & modern road systems).

Never go it alone when making a big decision such as this. Work carefully with your financial planner and retirement income professional to determine the most effective options to coordinate and monetize all your assets so you can achieve financial independence and be work optional. Again, now take a moment and imagine the possibilities looking forward. Are you there yet?

Any opinions are those of Vivian Investment Partners LLC and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. You should discuss tax or legal matters with the appropriate professional. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Vivian Investment Partners is not a registered broker/dealer and is independent of Raymond James Financial Services.