In the Personal Finance community, a term that gets tossed around sometimes is Geo-Arbitrage: the idea that you can relocate to places with lower costs of living to make your money stretch farther when paying for the things you need on a day-to-day basis. This comes from the finance term, Arbitrage, which is essentially taking advantage of the same investment being priced differently in two different places. Investors can quickly buy it at the low price and sell it at the high price and turn an instant profit. Now, in efficient markets, arbitrage opportunities are hard to come by and quickly disappear. However, in the real world you’ll notice them all over the place, once you open your eyes to it.
For example, think about the last time you had to fill your car up with gas…In the wealthy part of town, or maybe by a highway exit, the prices are always a bit higher, but in the middle of nowhere the same tank of gas could be significantly cheaper. When you up the distance to cross state or national borders, the price disparities for equivalent goods/services become even more obvious. This is where the geo-arbitrage crowd takes advantage. From food to housing to medical services, looking outside your home country can mean significant cost savings. Continue reading Grocery Arbitrage