Move Overseas to Save Money? Not So Fast...

And why you should pull the trigger either way...

April 03, 2024

1,029 Words | 4 Min 16 Sec Read

Welcome to another issue of Passionate Income.

Today we’ll be discussing one of the hottest opportunities in crypto.

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Over the years I've traveled to 53+ countries, including living in six on four different continents.

During that time, I've seen a lot of changes.

Places like Tulum went from being virtually unknown to international hotspots. Others, like Bali, became so crowded - and so commercial - they lost much of their appeal.

But of all the changes I've noticed, the one that sticks out the most is how the cost of living - even in developing and third-world countries - has skyrocketed.

From Costa Rica to Thailand, what were once low-cost lifestyle havens are now just as expensive as your average first-world town.

Sure, they're not as costly as New York, Paris or Sydney.

But once you get away from the international mega-cities, places like Santa Theresa, Costa Rica and Mexico City, Mexico (duh) are not much cheaper than most random towns in the West. Except for one thing:

In a first-world country, you get first-world amenities.

From 1-Day Amazon Prime shipping, to having 25 brands of peanut butter to choose from, it's rare to find modern creature comforts in developing (let alone third-world) countries. Which creates a dilemma:

If the price of living overseas isn't as cheap as it used to be, is moving to a foreign country to save money still worth it?

As is the case with most things: It depends.

As a diehard - but fair weather - surfer, I’m a huge fan of the tropics.

Despite growing up in Southern California - which has an incredible climate - it was always too cold for me. Especially the ocean temperatures from October to June (which is 9 out of 12 months per year).

On top of that, after traveling through Asia, Europe, Latin America and a tiny bit of the Middle East, I found I resonate with Latin culture much more than anywhere else (including my home country's Western culture).

I bring this up because my decision to live in Latin America was motivated by much more than cutting my costs. Instead, I factored in everything from weather and waves to dating options and cuisine.

On the flip side, I've seen people who've moved overseas purely because it's less expensive. And unfortunately, as prices rise worldwide, many of them are being forced to flee to cheaper countries (or return home to a 9-5).

What they fail to realize, however, is that chasing a lower cost of living - without also attempting to increase their income - is a fool's errand. Why?

Because if your approach to cost of living is to continually downgrade so you can maintain your current level of income (instead of earning more), you'll eventually run out of "cheaper" countries to move to.

At which point the only places you'd be able to afford would be true third-world countries (like Haiti, Bangladesh, etc.).

Second, you "could" move further away from the city centers (where your cost of living would be lower). The main problem with this approach is that the further you get away from the cities, the lower your quality of life will be.

While living 45 minutes outside of LA isn't that bad, living 45 minutes outside of Mexico City or Lisbon puts you in the middle of nowhere.

And unless you speak the language and desire that kind of lifestyle, odds are you're not going to be very happy there.

Last, while this isn't meant to be a macro-economics newsletter, you also have to take the strength of your home country's currency into consideration.

After peaking post-COVID, the US Dollar has declined relative to most Tier 2 countries' currencies (especially the Mexican peso). And while you might not earn in dollars, the same concept applies to pounds, euros, etc.

In short, if there's inflation in the country you're living in - and your home country's currency (the one you get paid in) is losing value - your living costs can skyrocket within 6-12 months.

I've experienced this before, and can tell you right now: It's no fun.

With that said, there's much more to life than optimizing your cost of living, tax savings, etc. In fact, given most of us want more money so we can live a higher-quality lifestyle, it's my opinion you should do everything you humanly can to afford your Happy Place.

From downgrading expenses to increasing your income, few things have a larger impact on your quality of life than where you choose to live.

And if your Happy Place just so happens to be in a foreign country, the fulfillment and satisfaction you'll feel from living there far outweigh whatever amount of money you could save by living somewhere less desirable.

💡 Takeaway: Ever since COVID, the cost of living in Tier 2 countries has gone up dramatically. But if your motivation to live overseas runs deeper than cutting costs, it's virtually guaranteed you'll be happier once you make the move. Even if you end up spending the same amount you spent back home.

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