Geo-Arbitrage has become a popular term in the post Covid world. In its simplest form it is living in a low cost of living area while having the benefit of a higher cost of living job. With the rise of remote work this generally means remote work. However, I have been benefiting from geo-arbitrage in another way for almost ten years.
I have a federal position in a low cost of living area. Federal positions pay slight more locality pay to be in a HCOL area, but I don’t believe it is worth it. As a GS-11 step 1 you can expect to make $69,106 in 2023 in any LCOL area in the U.S. In the highest cost of living area as a federal employee you make $78,591. In my small town in rural America the median house costs $175k, while in Washington D.C. the average house is $630k. That extra $9000 doesn’t come close to filling the gap when comparing housing costs. Other needs will likely be higher in a HCOL due to everyone needing a higher salary for the same standard of living elsewhere.
If you are the type of person who needs to live in a giant city, then know that unless you have an extremely high wage it will be very hard to save any money much less become financially independent or retire early.
Remember it doesn’t matter how much you make, but how much you keep when saving money. Finding a unicorn job where you have a better than average salary and pay very little in housing is one of the best ways to do it.
Millionaire Librarian 