Geographical Arbitrage - No More Fairytales

Geographical arbitrage is the practice of earning income in a strong currency or high-cost area while spending or operating in a lower cost area, thereby swiftly accumulating wealth or achieving a higher quality of life at a lower cost. For example, Singaporeans earning the strong Singapore Dollar like to go to Johor Bahru, Malaysia for spending. Or Hong Kongers spending in Shenzhen, China. Or the French working in Switzerland and make the daily commute across the border back to France. The list goes on.

But the above examples still restricts one to a geographical location. The full potential of geographical arbitrage is not yet unlocked until one can be fully mobile. And today, we look at what it means.

I am currently on a one-month vacation in Bangkok, Thailand where I also need to resolve certain issues regarding my condominium here. Some of my readers would probably have already known this, but Bangkok is a place with many foreigners staying for varying lengths of time. Some stay as short as a few days (tourists), some for a few months (like nomads moving around) and the others staying longer for more than a year. Everywhere you go, you see people from all over the world. Many of them look like they are not working nor earning money, but in fact they are. All they need is an internet connection, a laptop and a smartphone and they can get to work. I have known this way of living for nearly 15 years, and had wanted this kind of lifestyle. 15 years on, technology has improved and people are more mobile, hence opportunities to live like this has opened up further for many. Today, we look at what we can do to fully unlock the advantages and opportunities of geographical arbitrage.

Language

For readers reading this article in English, you can skip this segment.

The most important skill to have, in my opinion, is fluency in the English language. It does not matter which culture or country you are from, neither does it matter if your country is getting stronger and more powerful by the day. English is the language of the world, whether we like it or not. Everywhere, people are choosing English as their default second language if it is not already their first. Even people who can mainly speak one language would have known just a few English words instead of other languages like Chinese, French, Japanese etc. When communicating with foreigners, people’s default language is English.

True, there is Google Translate and ChatGPT now. But that can only get you so far. The ability to communicate in English opens up more opportunities for you. You do not need to be as fluent as a native, but you should be proficient enough to communicate and get your idea across without too much difficulty.

Work on your command of the English language if you need to do so.

geographical arbitrage play the hand we are dealt with

Earning Income In A Strong Currency Or High-Cost Area

Earning income in a strong currency simply means higher efficiency in earning money. For example, a teacher in Singapore can earn 5000 SGD a month, while another teacher in China probably earns 5000 RMB a month. However, the current exchange rate is 1 SGD = 5.45 RMB. This just means the teacher in Singapore has an efficiency 5.45x compared to the teacher in China. Yes, Singapore has a higher cost of living, but since we are on geographical arbitrage, we can just ignore this aspect.

Places with a higher cost of living tend to also have higher salaries to support their basic living in the area. We will skip poorly managed countries with high cost of living but also high unemployment rate. Singapore and Hong Kong are very good examples of countries with high cost of living, and consequently, the salaries are higher. Earning money from such places will net you a good chance of getting a high salary, which again is more efficient as compared to certain places.

While certain undeveloped countries do have a few sectors or jobs paying good money, but since our time and energy is limited in hunting for opportunities, we will skip such countries.

Learn A Relevant Skill

By relevant skill, I mean a skill which allows you to work anywhere on Earth while earning the currency of another place. In the past, that is near impossible. But with technology, there are many jobs which one can work on as long as you have an internet connection, a laptop and a smartphone.

Traditionally, such jobs are primarily in the IT sector. But when Covid struck and people were forced to work remotely, people realised that there are many other jobs which can actually be done online. So we ask ourselves, what jobs can we do that fit into such a category?

For me, I teach tuition online. It is a job which I believe many can do as long as you have a basic level of education. However, online tuition is only one of my side gigs. I also run an online business part-time. Around the world, there are also many jobs one can do. One only needs to go to Upwork or Freelancer to see the whole range of jobs available. From translation to web design, from copywriting to marketing, there is bound to be a skill which suits you. Do note that while I mention Upwork or Freelancer, I do not go over there to look for jobs because the prices are too depressed.

But one thing which is common for the above: Almost all requires the use of English language, even if both parties are not native English speakers. English is simply the language of the world.

Learn or make use of your relevant skill, and be good at it.

地理套利是指在高匯率或高生活成本的地方賺錢，然後在低汇率或低生活成本的地方花銷，從而迅速累積財富或在較低成本下提高生活質量。新加坡人拿著高匯率的新幣到馬來西亞新山花銷，或香港人到中國深圳消費，住在邊境的法國人每天跨境到瑞士上班是幾個典型的例子。

但以上的例子還是把人局限在一個地理位置。除非能實現完全的自由流動，不然解鎖不了地理套利的全部潛力。

我現在在泰國曼谷一个月，休假兼處理我房子的事務。有些讀者或許已知，曼谷是一個很多外國人居住的地方，短則幾天(旅遊)，稍微長點的則像遊民一樣住幾個月就走，長則一年以上都是很常見的事。這些人表面看起來都不在工作，實則他們只要有網絡，一個筆記本電腦和一個智能手機，就能隨時隨地的工作。這現象早在15年前我已知曉，也憧憬這樣的生活方式。15年後的今天，科技更發達了，類似的機會也多了許多，讓更多人都能有這樣的機會。今天我們探討如何解鎖地理套利的全部潛力。

語言

個人認為，最重要的技術就是掌握著流利的英語能力。這和你的國家多強大，你認為有沒有必要學英語都沒關係。英語就是國際通用語言。全世界要嘛第一語言是英語，要嘛第二語言就選英語。在國外，即便人們只會一個語言，遇到外國人的時候他們的默認模式就是硬擠出幾個英文字，而不是用華語，法語，日語等等。現在確實有翻譯軟件和ChatGPT，但是這也都有限制。真正能以英語溝通，才能擴展更多機會。你不需要說著一口流利的英語，但至少得能合理的溝通和傳達你的想法。

有必要的話，就去練練英語。

在高匯率或高成本的地方賺錢

在高匯率的地方賺錢 = 更高效的賺錢。今天的匯率是1新幣 = 5.45人民幣。一個在新加坡賺5000新幣的老師和一個在中國賺5000人民幣的老師，效率就差個5.45倍。先不說新加坡生活成本高，如果要做地理套利，那新加坡的生活成本可忽略。

只要不是國家治理不當，高生活成本的地方通常也代表了高薪資，不然百姓活不了。新加坡和香港就是很好的例子。高薪資，高消費。在這些地方賺錢，拿到較高薪資的機會就是比別處高。

當然，在某些不發達的國家，也確實有高薪資的工作。但是因為概率較低，所以我們不花費寶貴的精力和時間在這些國家找工作。

學習一個相關技術

這相關技術指的是能讓你在地球的任何一個地方賺取另一個國家的貨幣。從前，這種想法是幾乎不可能實現的。但是有了科技，只要有網絡，筆記本電腦和智能手機，就能有很多我們都能做的工作。

就以往來說，這些工作主要被局限在IT行業內。但在疫情期間，大家都被迫居家辦公。人們此時意識到其實很多工作都能網絡操作。那麼我們問問自己，有什麼工作能讓我那麼幹呢？

我自己是網絡教書的。這是一個只要有一些基礎教育，大多人都能幹的事。當然，網絡補習不過是我的其中一個兼職。我自己也有一個線上生意。放眼全球，也有很多類似的工作。只要去自由業者招聘網，就能看到所有能線上做的工。從翻譯到網頁設計，從寫作到營銷，一定有個適合你的工作。但我是不會在這些自由業者招聘網接活的，因為薪水被卷得太低了。