3 Tips To Kickstart Your Geoarbitrage Journey [TFC 116]

It’s 10am on a Tuesday morning. You wake up to the sounds of the gentle waves outside your villa. With a laptop in hand, you head to one of the lounge chairs at the beach… and start working?! This is not a work holiday but the reality of many who have gone on geoarbitrage – living & working in a place with a lower cost of living while enjoying the same level of income. Does this sound like the ultimate life for you? If so, listen to TFC 116 to find out how you can also embark on your geoarbitrage journey!

Geoarbitrage is commonly associated with remote working where you can work without going to the office. The current pandemic has literally pushed the world to embrace the idea of remote working in no time and with more companies looking into making remote working a permanent fixture, geoarbitrage is certainly a possibility for many.

Before you make the switch to geoarbitrage, there are some tips you can think about: building trust with your colleagues and management, selling your skill set at a discount (huh?) and living in a place with a strong agricultural ecosystem (double huh?) We expand more on these ideas in TFC 116!

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podcast Transcript

Reggie: Okay, Coconuts! We are back following the quit your job episode. I think a lot of people are exploring geoarbitrage or remote working job. Arbitrage… we can expand a little bit on that later. It’s a very simple concept and you can read up about it but I think remote working is the centre of discussion in the current world. Even Singapore is talking about it, the government’s talking about it and a lot of businesses are looking at that. 

A lot of these big businesses really led the world in trying to establish huge remote working team. Even for TFC, we have a remote team. We have different process in different places. All that is great. So going forward, I think a lot of people would do remote work and a lot of people would do this thing called geoarbitrage and I want to spend some time to share a little bit more today here. Of course, I’m testing this topic so if you love this topic, there’s a lot more to talk about this so join our Telegram group and let me know. If you let me know that you want to hear more about this, there’s actually a lot of tips and tricks around and yeah, I could give you more content. Take this as an introduction so welcome back!

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Good morning, everyone. I welcome you to another day with The Financial Coconut. In our podcast, we are debunking financial myths, discovering best financial practices and discussing financial strategies that fit our unique life. You get it, ultimately empowering us to create a life we love while managing our finances well so today, we’re going to spend some time to expand on this idea called geoarbitrage and talk a little bit more about remote working.

I noticed it’s the talk of the town. A lot of people are talking about it, especially amongst the millennials, the gen Z, the younger people where we don’t really have our roots down yet in Singapore or wherever you’re listening in from. If you have not bought a house, you have not set up a family, you’re still exploring and trying different career… you have not even decided that “okay, I’m going to do this as a career” then yeah, I think that is the beauty of remote working in itself as an idea because there’s so many optionalities, so many things that you can try and so many things you can do. It’s always nice to live in another country. Just be honest, right?

It’s always nice to try living elsewhere and just experience a different facet or a different way of life so then you can re-evaluate where you are and also finally decide where you want to set root. I think that is very important because I always tell people about the ramen theory. 

I’m sure you guys have already heard about it before. The ramen theory is this idea where if you only have one bowl of ramen, you will never know how well it tastes or how bad it tastes. It is just what it is, it is a bowl of ramen. But once you have all these better ramen shops that come into Singapore and then you taste and you will be like “oh my god”. 

With more and more options that come in, you try all these different things then you can start to compare. You have basis of comparison; it at least takes two to start to compare. Once you have tried living in multiple countries, you try living in different places, trying different jobs, you will have a basis to compare. “Is this the kind of place that I want to live?” “What do I actually appreciate about Singapore.” What do I actually appreciate about let’s say… Vietnam or what about Portugal?” What about these different places that ultimately make me decide “okay, I’m going to temporarily set my roots here or even permanently set my roots here.” 

I think that is the choice process and a comparison process that a lot of us will need to engage in and I think a lot of us are open to engaging it these days, right? It’s no longer just… study hard, work until you die and then just stay in Singapore. 

Times have changed so let’s get the first word of the discussion: geoarbitrage. Essentially, an arbitrage is when there’s a price difference and then you try to leverage on this price difference, so you buy low from one place and then you sell higher on the other place… about the same thing, essentially the stereotypical idea of arbitrage. 

So for geoarbitrage or geography arbitrage, essentially what it’s trying to say is you’re trying to make money in the richer places. Let’s say for Singaporeans, you want to make Sing dollar but you… maybe live in Vietnam, something like that. That is the arbitrage. You make top dollar from some of the biggest cities and then you go and live in the suburban areas or smaller cities where cost of living is much lower and you can get a higher quality of life and you’ll be surprised, you may even end up saving more money. 

That is the central idea of geoarbitrage and a lot of people are thinking about it which is why it’s centred around this remote working concept where you no longer need to be physically at one place and you can take a job from a Singaporean company and be paid like a Singaporean but live somewhere else. I think that is the beauty of remote working and that’s essentially the Goldilocks situation. Everyone wants to be like that: making the top dollar, but living in the more suburban part of town. 

There are many things to understand when you’re trying to do this, whether is it from taxation or was it insurance or whether… how do you know which city to choose? What kind of job prospects are more hot in the gig economy and all that? We can talk all about that in time to come. Let me know in particular what do you want to talk about? 

But today, I’m going to just give you three big pointers as the over arc of remote working and geoarbitrage and this whole Goldilocks situation where you want to keep your Singaporean job but work elsewhere and live elsewhere. I think that is the Goldilocks that we are aiming for. 

Based on that, I think there are three things that we really need to do. The first thing is of course to build trust with your team and your management. What does that mean? I know a lot of people say build trust… I think the focus in Singapore is that we are transiting from a situation where it was input-focused: where people come to the office, stay until very late. They learn the Japanese style and also whatever style they come from where you stay in very late, cannot leave earlier. They are your boss and all that jazz… 

Come on, those are passé already. I remember in the early days of remote working at home, work from home… I remember the early days of work from home, there were companies that were releasing softwares to track whether the employees were working or not. “Is my employee napping?” That is very indicative… I’m not here to say whether is it good or bad. It’s very indicative of the psyche of management and the style of corporate management still in Singapore, still very prevalent. 

I know the younger companies… a lot of my friends when they run companies it’s like… yeah, you want to take off, you take off. You want to heal, you heal. You want to go and do that self admin time, you go and do self admin time, whatever you have… but that is still the minority. For most of the companies, they are slowly getting to them, slowly recognizing that it is about output. 

So when I say building trust with your team and management, it’s to be very clear about output. You want to shift their psyche away from “oh, you need to turn up for work, you need to send text message”… all that input-focused kind of things and focus on the output. Have you completed your work? Is your work high quality? Have you closed more sales? Have you opened more leads? Have you completed tasks on hand? Have you improved certain things which is your focus?

You want people that is more output-focused and you want to build that trust with your team and management so that they know you are output-focused. You will just do the output stuff and this is a little bit of boundary drawing because like I said, a lot of older management, they still have this old idea of “you need to come to office, you need to work. You need to clock into hours” and all that. They believe that you just sit down front of a computer, ideas will come out… does not work their way. If you’ve got no idea, just go for a run, go to the gym, go for spa, go for swim, whatever… Go do something else that will relieve your brains and you will get more creative. This is my core belief. 

But all that being said, it is hard to build that trust with the management, to draw boundaries and to make sure that they are focused on your output so it will not be an easy discussion to say… you just go in and say “from now on, you guys just need to be focused on output so don’t track my input time”, but eventually you need to be able to do that. 

I think one of the lower hanging fruits that you can do is to make sure that your company does not send you text messages to your private number. I think this is extremely important. I hate it when people send me work stuff on my WhatsApp or my private channel because those are my social channels. I only keep that for my friends and family and people that want to talk to me and I hate it when I get messaged and oh, it’s work stuff… it hurts your work life. 

I think it hurts both work and life because now random WhatsApp messages could be work and then now you be like “erm, should I reply or not?” because it’s like my own time so I think there’s the first thing that you can do. The first thing that you should try to negotiate… not you should try… first thing, you should negotiate with your management and also with a form of boundary drawing so that you test whether they can and you also try to usher and push them towards that direction.

I think the script is “oh by the way guys, I am trying this whole work-life balance situation and I want to be able to have some sort of segregation between my work and my life so that I can do better in life and also expand that into work. With that, I hope in the future, you guys do not text me for work stuff. Everything… we can talk through email or we can talk through our work platform”, let’s say Slack… not sponsored, but yeah. I think this is the script to start with. 

Of course, over time, we can learn how to do this better and I’ll try to get more guests come on to talk about how to negotiate with management, negotiate with HR and all that but this is the lowest hanging fruit. If your boss cannot even handle that “we’ve got to separate work and life communication” then yeah, maybe you need to change company to fulfill your remote working dream. But I think this is the base: you try to draw the boundaries and divert attention towards output.

Only when you can divert attention towards output can your company become more comfortable with you living elsewhere and be on your own because you will get the work done and everyone will change the communication pattern. It is not an individual effort but I would say that if you want to keep your work and go into a remote working geoarbitrage situation then you have to focus on output and build that trust with the team.

The basis of trust… just let me just add a little bit, the basis on trust is repetition. If every time someone do something, it’s the same standard then you know that you can trust this person. If every time, someone does something and they get angry, you also can trust that this person will be angry at the same thing.

So this is the whole idea of trust, not some arbitrary, “feel feel” kind of thing. It’s about repetition: how consistent is it? If every time, someone says something and zhun zhun (precisely), it’s accurate, then you know this person is pretty accurate with what they do. You can trust their word. Yes, repetition is the basis of trust. You want to always be on time, always send in high quality work, always meet deadlines. 

After a while, you become that guy, very trustworthy. Whatever you do, you also can so when you’re in such a situation, you have a lot of negotiating power about working remotely because people don’t need to micromanage you. It becomes stupid for them to micromanage you… because weird, becomes awkward. 

What I always do these days… let me just give you guys a little bit of tip and trick. It’s when someone tries to chase me for work… because I always get chased for work. Okay, honestly sometimes I feel bad that people keep chasing me for work, but there are some boundaries that i draw. That’s a story for another day but when people chase me for work, I actually thank them. My reply is “thank you for being on top of this task” or “thank you and I appreciate that you’re putting your bandwidth on overseeing this task.” Where am I now?

Firstly, you deescalate the situation. You no longer make it like they trying to fight you, you’re trying to fight them. Everybody’s on the same team. Actually, everybody just want the work done but when people come here and check on you. I know sometimes the tension gets a little bit high. People don’t really like it, but I have come to take it as a… quick good, they are using their bandwidth to keep me accountable so why not? If my sponsor’s listening… I know a lot of you guys listen, don’t mind me, okay? Because to me, this is… I really see it this way although I now tell you how I see it. 

When I thank them, they are using their bandwidth to keep me accountable. At the same time, we deescalate the situation and everybody becomes like “oh yeah, we are on the same team. We’re just trying to get this thing going.” This builds that trust, builds that comfort, builds that kind of synergy with work also. To me, that is all part of building trust with your team and your management and this is a great basis to try to negotiate for a remote working arrangement… output-focused. 

Which brings me to point number two. Point number two is that you should sell your skill set at a discount to a bunch of buyers. This is something that we definitely can expand on and I’m going to talk a little bit more about this after a word from our sponsor.

Okay, so yes. I think in Singapore, a lot of people have the salary man situation where you’re working for one company and you just do it… all the perks and the salary. Everything is based on this one company. Of course, I am checking my privilege here. I know that not all jobs can be remote and not all jobs can just like… just go only, just do something else. 

If let’s say you’re a chef, how to remote chef? Weird, right? If you are a mechanic, you are a technician, you’re doing very skilled labour, how do you remote work? Anyway, just saying… in Australia, they pay very high for chefs and they are also paying very high for all your professional work… carpentry, laying bricks and a lot of those things. 

Actually, a lot of other countries, they are paying a premium for skilled labour like that. It’s also a way to go about remote working, not in a sense that you work digitally but in the sense that you can shift your work elsewhere and try a different way of life. Okay… maybe not remote working, more like work overseas. I have a good friend that works overseas like that and she’s been doing great. She’s grown so much. So yeah, maybe for all you people listening in and you’re in technical work then it’s definitely something to explore. 

As for everyone else that is more on the management level where you can actually manage remotely or whether you are in the whole digital economy where you can be out there and you have that luxury to really explore remote, I think one of the main things that we need to move away from is that one salary idea where you only take money from one salary. 

I know a lot of people will be like “I start a side hustle, I start a side business, a side e-commerce” kind of thing. I’m like… it’s very hard. Those things are hard. I’m not saying it’s impossible, but really how many people can start a successful side hustle? It’s not that easy. There’s a lot more bandwidth with a whole different skill set to go about it. 

But the easy low-hanging fruit is to repurpose your skill set and sell it to another person, sell it to another buyer, essentially. You have this one main company that buys your skill set but at the same time, you can sell the same skill set to many other companies. I think this is the value in it and I know a lot of creatives, they actually do that… so all your designers, your producers, a lot of them actually have that in their contract to allow them space. Contractual agreements says that I can actually do side gigs. I can do gigs out of the full-time work and I think going forward more and more of such work will happen. I think for a lot of you that are… early days exploring remote work, you should do that. It’s actually a much safer financial situation where you have multiple buyers. 

One thing to note is I did say that you’re going to sell it at a discount, right? Why? I’m speaking to Singaporeans here and I have to tell you guys, honestly, we are paid a premium. Okay, I am not saying because our productivity or blah, blah, blah… none of those rubbish. I’m just on the basis that when as a company, when I hire people or my friends hire people, we all know that Singaporeans are more expensive than other people, but in a full-time job setting, a lot of things are packaged together. When it’s packaged together and all that jazz, it’s fine. 

There is some sort of reason why we do certain things which is why when you put yourself out in the skills marketplace when you are just doing a small little part or let’s say you’re only doing video editing, sound editing or you’re only doing some sort of research paper and all that… okay, research paper, the market rate is quite good. We did a discussion with Ravenry so you can check out under Chills: Ravenry. Ricky Willianto, he came on the show to talk a little bit about that. 

The idea here is if you start to commoditize your skill set, that means you go on the big web of digital remote gig work, a lot of people are only buying a small thing. They only want you to edit something. They want you to do some sort of writing or some sort of transcribing or some sort of translation, some small little job. It’s very hard to charge a premium because the market has a certain rates so let’s be realistic when we go to this kind of platform but it’s definitely great to have multiple sources of income that way and it gives you optionality. That is my view. 

Multiple sources of income… I still got a lot of things to say but another time. Which brings me to point number three and to me, probably the most important point is that… try to live in a place with strong agricultural ecosystem. Why? Important. 

I know a lot of people… in geoarbitrage of course, you need to choose where to stay. First two points, we talk a little bit about work and now I want to talk a little bit about stay. Of course, there are many other factors you should look at whether is it the tax or whether is it the visa friendliness and whether you can do visa runs. I know a lot of these words may be a little bit more foreign and I will do another episode about this, deciding where to stay in a remote working situation, some of the factors to look at.

But on a very high level, I personally like to stay in places with a strong agricultural ecosystem which means the country grows its own stuff and grows it very well. Like Vietnam… it’s a great place. Malaysia has a lot of good produce also. 

Of course, where I am now in Georgia, they have a lot of great produce also. One kilo of grapes here… okay. Guys, let me just give you some context. One kg of grapes here in Tbilisi, Georgia, in the heart of the city centre is S$1. One kg of peaches is S$1 also. I think apples is maybe S$0.80? If you live in areas where they grow their own things, it tends to be very cheap, tends to be very affordable, whatever that they grow. 

But of course, if the currency is low when they import, import becomes very expensive. One can of luncheon meat here in Tbilisi is $10. $10 luncheon meat… luckily, I did bring some but the idea is there. I personally like to choose places with a strong agriculture so then you got very nice produce for very cheap price.

Of course, some people say “what about Japan?” Japan is very expensive. Japan has a nationalized or somewhat nationalized agriculture ecosystem where we can talk about it another time which is why their produce are very expensive but in many other parts of the world, whether is it, Vietnam, Malaysia… which I think Singaporeans should try. Vietnam, Malaysia, my two top picks in Southeast Asia that you should try to do remote work and live in. In Tbilisi or is it in portugal, some of these other places in the European regions, they all have very strong agricultural ecosystem so food prices will be much lower.

Of course, rent is always relative to where you want to live. If you live in the heart of the city, honestly, it’s pretty much the same. I will say it’s cheaper for sure if you compare country to country. You cannot compare New York to Kuala Lumpur, right? (It) does not work that way but the closer you are to the city centre, prices tend to be very high and in a remote working situation, you don’t really need to be in the city center which is why I said that I will give you more factors next time when we talk a little bit more about this. 

But yes, food. I always think food is very important and ingredients are always great. So yeah, try to live in a place with a strong agricultural ecosystem. Life will be great, food be cheap and all these produce are so fresh, the grapes so nice, peaches so nice and yeah. Honestly, Singaporean ingredients are not the best, really. I have to give it to you guys. We have a very strict agricultural policy so a lot of the imports are very standard. We have a few standard suppliers and that’s why a lot of things start to taste the same. We can talk about this another time, but that is something that I will push for everybody. 

If you are exploring, working remotely, you try to go to a country with very serious agricultural ecosystem and there’ll be a lot of great produce. Of course, it will be seasonal but it will be awesome and fun and all that jazz.

With that, I think these are three big arc points that you should think about when you’re starting to explore geoarbitrage and remote working. How do you keep your job? How do you make sure that your finances are okay and where to look for? These are three very high level points and number one will be to make sure you build your trust with your current management and your team so that they can be more output-focused. Learn to draw boundaries so then you can really work remote. Help them be comfortable with you and also they need to be comfortable with this idea so then you can be anywhere. 

Number two is that you got to try to sell your skill set at a discount to multiple people. Of course, I’m not saying everybody should do it. If you have very strong finances, you don’t. But for a lot of people that are a bit younger, you still want to accumulate your wealth… hey, why not? Sell your skill set to more people, gives you more choices and a wider income source. That will be great. 

But of course, when on the big wide web of skills or the gig economy, you usually have to sell at a discount relative to what Singaporeans are comfortable with. You need recognize that. When I hire a Singaporean to do full time, there’s a lot of extra things that are packaged in it. When I just need a skill in particular, then I’m commoditizing the particular thing, let’s say editing photo, editing videos. This is a commodity so you’re competing with everybody else that can also edit photo, edit video, edits sound. Once something becomes commoditized, you have to be price competitive. This is something that is inevitable and we can talk about it the next time. 

Number three is I personally love to live in a place where they have a strong agriculture ecosystem because you get great produce at a very cheap price. I’ve named some of them and I think these major three points would be great for you to start entertaining the idea of remote working and if you want more, come to our Telegram group. Let me know and then yeah, we can talk more about it. I hope you learnt something useful today. See ya!

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Okay. So yeah… today, clearly you can tell I’m trying a new topic. It is a fast growing new topic in a sense that more and more people are entertaining it so I believe a lot of us are thinking about it and I want to talk about it because I think we cannot lie to ourselves that Singapore is pretty pricey relative to many other parts of the world and while a lot of us stay here so that we can get good pay and all that jazz, which is not bad, really, there are many other factors that people are entertaining these days about work and life and that’s why people want to do remote. There are a lot of good factors about it but also other things that you need to consider.

These are just three points to kickstart the conversation and as we go along, I will build more episodes around the idea of remote working and how to choose which city to stay, what are some things to look out for and all that jazz going forward for you guys. 

Next week, I’m going to talk a little bit more about escaping the rat race. Escaping the rat race is very sexy as an idea but I’m going to share with you the phases that you will go through as you go through this process of “escaping the rat race”. There are many things to entertain in this thing and I just want to throw all my thoughts in the fire… in a bonfire of randomness thoughts about escaping the rat race. I’m going to share with you a little bit more about the three phases that you will go through escaping the rat race. Take care!

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