Geographic arbitrage

Woman on suitcase

We work our whole lives saving money for a comfortable retirement. Then shit happens and we don’t put away enough money. We realise in a panic at the age of 60 that we will fall short at 65. Not by much, but just enough that we will need to sacrifice some luxuries in retirement. One of these luxuries is usually travelling. Enter geographic arbitrage, the drastic solution to both being strapped for cash and never travelling.

Geographic arbitrage means moving to a different country, where the cost of living is lower and your money will go further. South Africa is already an extremely cheap place to live, so for us, it is exponentially harder to do this. Especially when compared to someone from Sweden, for instance, that has enormous spending power around the world.

The methodology

So to start off with, I found all the countries that have a cost of living that is lower or similar to that of South Africa. I included countries that have a similar (or sometimes slightly more expensive) cost of living since you will ultimately need to pick a cheap city in these countries to create geographic arbitrage.

For a measure of how well things are going in these countries, I used the Social Progress Index (SPI). The SPI looks at factors like basic human needs (housing, nutrition and healthcare), foundations of wellbeing (access to information, sustainability and life expectancy) and opportunity (education, inclusiveness and freedom of choice). South Africa presently lies at number 71 on the SPI.

The difference between the SPI and cost of living factors gave me a figure that I could use to rank the countries that are affordable to live in and have an excellent quality of life. So here are a few countries that stood out for me, separated by continent.



Poland is a country with a lot of history. Its capital city is Warsaw and it boasts a total of 16 world heritage sites which includes the biggest castle in the world. Krakow (one of its most popular cities to live in) was actually included in the very first list of world heritage sites. The country also has 328 km of beachfront with amazing views of the Baltic ocean. Presently, they are ranked number 33 on the SPI with an average living cost of 10% less than South Africa.

Czech Republic

If safety is of concern to you, the Czech Republic is an excellent option, ranking 10th on the Global Peace Index. They also have the highest beer consumption in the world, so no-one will judge you for your drinking habits.

There are more than 2000 castles in the Czech Republic and they are extremely well preserved since its capital Prague was the only major city in Europe that was not bombed during the second world war. A lot of inventions come from the Czech Republic, like contact lenses and plastic surgery. The Czech Republic ranks 24th on the SPI and the living costs are the same as in South Africa.


Boasting one of the worlds first wine regions, Hungary really is an incredible place to visit. It is the country with the most natural hot springs in the world and as a result, it has more than 1500 spas. Its capital, Budapest, is a result of merging the two cities Buda and Pest on opposite sides of the Danube river in 1873. Hungary has a living cost 5% below South Africa and offers an exceptional quality of life.


Portugal has a sunny climate with its capital receiving more than 2700 hours of sun per year. The people are extremely welcoming and life in Portugal is slow-paced. The beaches of Portugal are stunning and its island Madeira is basically Ibiza minus the drunk students.

The Portuguese produce and drink a lot of wine and the nightlife is vibrant. The country even has some of the best surfing spots, love playing golf and have bullfighting (where they do not kill the bull). The cost of living in Portugal is slightly more expensive than living in South Africa, but the quality of life is exceptional, ranking 18th in the world.

South America


Colombia gets its name from the explorer Christopher Colombus. It has incredible biodiversity since it has a rainforest (Amazon), grasslands, highlands (Andes), islands, a desert (Tatacoa) and an unbelievable coastline. So there is literally something for everyone.

Being close to the Equator, Colombia has great tropical weather. Combine this with great beaches and you have a recipe for success. This weather also makes for growing great coffee, an extra advantage of living in this interesting country. All this comes at an average living cost of 30% less than living in South Africa.


When we think about Mexico, we typically think massive wall and drugs. However, moving to the east of Mexico leaves you in a Carribean country with amazing beaches and people. You don’t need to search further than Cancun and Merida for idyllic cities to live in.

A lesser-known fact about Mexico is that it has the biggest pyramid ever built. Yes bigger than the great pyramid of Giza. Add to this the Day of the Dead festival and all the tequila you can drink and you are bound to have a great time. The living cost in Mexico is 22% below that of South Africa and some of the coastal Carribean cities offer even better value for money.


I wanted to show you what life in Peru is like, but I just could not resist this picture. Few people need any more motivation to visit Peru than Machu Picchu. However, the attractions in Peru are not limited to Machu Picchu, you can sandboard in Huacachina, cruise on the Amazon river or hike the rainbow mountain. The cost of living in Peru is 11% lower than in South Africa and definitely offers an interesting alternative.


A country that rose from the ashes of socialism, Chile is one of the best countries to live in today. Because of its long narrow shape, it has one of the longest coastlines in the world. The Atacama Desert in the North is the driest place in the world and to the South, you will find massive amounts of ice with large penguin populations.

You can also do hikes up one of the 104 volcanoes in Chile (a lot of which are still active) or you can swim in the biggest swimming pool in the world. The living costs in Chile is about 10% more than in South Africa, but because of their free-market policies, the economy is doing extremely well. The Gross Domestic Product (GDP) growth is 4% and unemployment is less than 7%.



Malaysia offers incredible cuisine, comprising a mixture of Malay, Indian and Chinese food. Street food is almost affordable enough to eat out most of the time. Malaysia is also close to the equator and this means that the temperature rarely fluctuates and you can almost go to the beach year-round. This is great since you are close to so many vacation destinations like Bali and Thailand.

You will be able to get by only speaking English in most of Malaysia and healthcare is extremely affordable. The best thing about Malaysia is that living costs are low and you will be able to get by on 10% less than you would spend in South Africa.


Turkey balloons

Turkey is an interesting country, situated in both Europe and Asia. Istanbul is the only city in the world situated on two different continents. What makes this so interesting is that it has western and eastern cultures all mixed into one city. One of the few places you will find ancient cathedrals and mosques in one city.

Turkey also has the remains of Troy, an underwater city and a city carved from volcanic ash. What more could you want in a country? Granted they are involved in unrest at this stage, so I’d maybe give it a few years for the war to blow over. The cost of living in Turkey is 18% lower than living in South Africa, so your money will really go far.

If you did not see anything you liked on this list you can also check out Argentina (12% less), Slovakia (2% more), Tunisia (42% less), Ecuador (4% less), Romania (18% less) and Belarus (25% less). All of these countries offer exceptional opportunities for geographic arbitrage. So keep these in mind when you want to relocate after your financial independence.

Be safe out there,

Hendrik Brand

Cape Talk interview

I did an interview about Geographic Arbitrage that can be found in the Cape Talk podcast section.

Quote of the week

โ€œIf you think adventure is dangerous try routine, itโ€™s lethal.โ€ – Paulo Coelho Click To Tweet


Thank you for reading to the end. Apparently, the average person spends 8 seconds on a page, so you are special. If you have any suggestions, feel free to drop me a mail on the contact page. If I missed anything or you have questions, don’t hesitate to comment below. I might even notice it and respond. If you enjoyed this article and really want to throw me a bone, please share it.

Lastly, if you want to be bombarded with emails known as the newsletter I send out once a month (if I remember), please subscribe on the right. There are also links to my Twitter and Facebook pages on the right (or at the bottom if you are browsing with a phone). All information is based on my opinion and you can read more about this in the legal disclaimer.


    1. Post
  1. Ms Jane Angus

    Great read – and super interesting info Hendrick – thanks for doing the research for us. I think I may spend a year in each country (when I retire) for fun and the affordable experience :-)))

    1. Post
  2. Shane Perrier

    Great Post!
    we are seriously considering doing a arbitrage stay in Asia, Bali is great!
    Also, on my FIRE journey ๐Ÿ™‚

    1. Post
      Hendrik Brand

      Thant’s great, Bali is an excellent option. When I reach FIRE, I’ll definitely be on the lookout for similar opportunities.

  3. Gail

    Hi thanks for this very interesting, you should quote the cappuccino index on these countries. But what about moving there after retirement, surely there must be many restrictions, and is it even possible? Have you researched this? Regards Gail

    1. Post
      Hendrik Brand

      Hi Gail,

      Yes or even the Big Mac index. I’ll look into it.

      I didn’t research it as part of the article. Are there any countries that jump out to you that are extremely difficult to move to? I know for instance you can buy residency by investment in a lot of countries and for countries like Mexico, a temporary visit visa for 6 months is only $25.

  4. Pingback: Financial Independence - September 2019 - Tigers on a Golden Leash

Leave a Reply

Your email address will not be published. Required fields are marked *