What is geo arbitrage?

Geo arbitrage is the practice of earning income at the wage level of a high-income country (typically remote work for US/EU clients) while living and spending in a lower-cost country.

Why it works

Salaries don't equalize globally. A senior engineer in New York earns $180-260K. The same engineer working remotely from Lisbon, Bangkok or Medellín earns the same — but their cost of living drops 40-70 %.

Worked example

US-based salary: $150,000/year (~$8,000/mo take-home after tax)

Cost of living comparison from /cities/:

Austin: $4,200/month → savings rate 47 %
Lisbon: $3,200/month → savings rate 60 %
Mexico City: $2,400/month → savings rate 70 %
Chiang Mai: $1,250/month → savings rate 84 %

The same income produces a 1.8× higher savings rate by changing location.

What kills the math

Tax residency: living somewhere doesn't automatically change tax obligations. US citizens owe US tax everywhere; most others trigger residency after 183 days.
Visa fees: amortized into the calculator's monthly burn.
Inflation in popular nomad cities: see /glossary/coffee-to-stay-ratio/ for the early-warning indicator.

Calculator note

Run any city in the calculator and divide the monthly burn by your post-tax monthly income → that's your savings rate. The lower your burn vs income, the higher your geo arbitrage advantage.

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