Andrea Azzola

Technology, Personal Development and Financial Independence

A Lever Called Geo-Arbitrage

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Geo-Arbitrage

The geo-arbitrage (geographic arbitration) is the practice of economic-financial speculation based on disparity between geographic locations and different markets. The term was devised by the author Tim Ferris in the bestseller book The 4-Hour Workweek. In the following two paragraphs I'll analyze ways in which an individual could benefit from geo-arbitrage.

Digital Nomadism

The number of job offerings with a decent salary and the option of telework is increasing. The digital nomadism exploits this combination by moving to countries with a low cost of living and therefore maximize purchasing power.

Let's say a Swiss software programmer that earns 60000 EUR/year moves to Bulgaria. In Bulgaria, with the cost of living at a third of the Switzerland (source), the same employee would gain with a purchasing power exceeding 180,000 EUR.

Outsourcing

When hear the word "outsourcing", we often think of a western megacompany, that contracts manufacturing and services to emerging countries, obtaining advantageous prices thanks to the lower cost of living and lower labor costs.

But outsourcing can be a precious resource also for freelances or private people: e.g. the same software developer could rely on a language translator to export its own App abroad; or a couple of professionals in career could hire a party planner for the son's birthday.

In general, you delegate activities deemed "secondary" to focus better on what for you is more productive.