geographic abritrage
Personal Finance

Home Is Where The Paycheck Is With Geographic Arbitrage

What is your idea of home? If you’ve lived in the same place your whole life, your answer might be simple geography. Home is where it’s always been. But if you’ve ever moved away, the idea of home becomes a bit more conceptual. If you’ve moved for a new job or career opportunity, the reality is simply that home is where the paycheck is. But whether the goal is geographic arbitrage or simply a fresh start, the best way to make your paycheck home feel more like home is to get involved and start making memories.

Can you ever get home again?

I always think back to a quote Kurt Vonnegut gave to the Globe and Mail in a 2005 interview:

“Where is home? I’ve wondered where home is, and I realized, it’s not Mars or someplace like that, it’s Indianapolis when I was nine years old. I had a brother and a sister, a cat and a dog, and a mother and a father and uncles and aunts. And there’s no way I can get there again.”

Vonnegut describes his paycheck pursuits in his last novel, Timequake: “I had decided where we were going next, to Chicago, to Schenectady, to Cape Cod. It was my work that determined what we did next.” When you move from place to place for gainful employment, home tends to become more of a feeling than it is a location. It’s a sense of belonging, or at least the memory of it. And you might never get there again, either. But you can try.

The question is, if and when a job determines your residence, how do you make your Paycheck Home feel more like Vonnegut’s Indianapolis?

Geographic arbitrage your way to retirement

A big wrench thrown at the traditional concept of home is a popular FIRE tactic known as geographic arbitrage, which is the idea of moving to an area with a lower cost of living in an effort to get more bang for your buck and increase your savings rate. The most extreme examples involve moving to uber-cheap locations around the globe, such as Southeast Asia, and carrying on with higher-paying remote work or simply living off of assets already accumulated for an early retirement.

Every situation is different, but if you can find a way to finagle a high-cost-of-living salary in a low-cost-of-living area that you enjoy, you’ve found the ultimate cheat code. Most companies will likely push to reduce your base compensation to align with your new location, but for freelancers or early retirees especially, geographic arbitrage might be an outside-the-box (and/or country) strategy worth enacting.

Get busy living

For those considering a move for their education or career, it’s important to weigh the benefits of adventure and personal growth against the cost of losing your built-in network. A faraway college experience, for example, is often easier to navigate given the built-in opportunities for meeting new people. Whereas taking a job offer in a new location may make it more difficult to establish a social footing outside of the office. You’ll likely have to work a little harder to establish adult relationships without the ability to rely on cheap beer and a crappy intramural flag football team.

While there may be no intramural sports or weekend keggers (at least none that you’re invited to), there are plenty of opportunities to ease yourself into your new community. As Andy Dufresne will tell you: get busy living. Get outside. Walk around the neighborhood. Explore the surrounding area. Ask coworkers out for a coffee or a beer. It takes tremendous courage to move outside of your comfort zone, literally and figuratively, and it’ll require just a little more to start making new contacts and settling into a new environment.

In the meantime, don’t abandon your roots. Keep in touch–as best you can–with old friends. There’s no need to further isolate yourself by cutting off all ties to your previous locale. Maintaining those relationships will remind you of all the benefits of friendships, and the fact that it’s still worth pursuing new ones.

Employ the ultimate housing hack

For the more adventurous, you can expedite this process right from the confines of your own home by making use of the ultimate housing hack: roommates. In addition to cutting down on the monthly rent check, roommates can offer companionship and serve as a pipeline to meeting new people in your area. If you’re willing to live with strangers, you increase your odds of meeting even more strangers.

That is, of course, unless you lose the game of Roommate Roulette and your fellow abode dwellers serve as nothing but a daily reminder of all the things you hate about your new situation. You certainly run that risk, but it’s an upside play. If you get it right, roommates can help to significantly fast track the adjustment period. And again, can save you a boatload of money.

Does remote work change the equation?

While home is where the paycheck is for most, a pandemic-fueled uptick in remote working opportunities has created an alternate path. Certain jobs will always necessitate in-person interaction, but many white-collar careers now allow for more flexible scheduling. This might mean reducing the number of days you need to commute, which might in turn allow you to live further away from your office. For some, remote work might mean never moving at all, even if a new employer is in a different zip code. Employees may soon find that home can simply be anywhere the wifi works.

At the same time, employers seem eager to get back to physical mailing addresses in a post-pandemic world. There is value to in-person gatherings, both socially and professionally. Thus, we should all be mentally prepared for an eventual expectation that our butts are back in cubicle farms at some point in the near future.

Remote work won’t save us all from trudging to our 9-5s. As a writer, Vonnegut had one of the few remote working gigs of his time, and he still ended up moving around the country to supplement his income, finding new paychecks–and subsequent homes–along the way.

Home is where the next paycheck is with geographic arbitrage

No matter where life takes you–be it for a job, a relationship, a fresh start, or just plain fun–one truth remains for any transplant. Just when you start to feel as though you’re truly home, when you can’t imagine yourself living anywhere else and you’re exactly where you’re meant to be, that’s when you’ll get the call. A job offer in a new city.

So it goes.

2 thoughts on “Home Is Where The Paycheck Is With Geographic Arbitrage

  1. i feel thankful i’ve never relocated because of a job. i have chosen a place to live and found a way to make it work. but, with that being said i’m sure it cost me in my career. in fact, instead of a career i’ve just had a series of jobs and probably left promotions and money on the table.

    i’m ok with that.

    1. Sounds like you made the right choice! It is no small trade-off, especially if you’re deeply entrenched in your current location. Moving away from all that can be a huge blow to quality of life. If you’re young and adventurous, I say go for it. But the longer you live somewhere, the harder it gets.

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