THIS IS REAL DEAL GEOARBITRAGE, BABY!

When I decided to relocate from the seething chaos of Southern California to a small rural hamlet in the Washington countryside, it was primarily for the reasons of being a bit more remote, surrounding myself amid nature’s scenic beauty, have a slower pace and to exploit psychological arbitrage. 

Certainly, I was also aware that such a move was also a form of geoarbitrage and that it would, by way of serendipity, save some coin as well.  Now that I’ve arrived, I can, indeed, confirm that I am enjoying us some real deal savings.

A RUNDOWN OF THE NUMBERS

I’ve seen more than a few articles that discuss the benefits of geoarbitrage, however, they have been more general in nature and have lacked specificity.  Perhaps this was purposeful or perhaps not.  In any event, I’ve decided to share our cost differences in key spending categories as, frankly, I was a trifle astonished by many of them.  Prior to the narrative, let’s take a quick peek at the category summary.

THE COIN

I don’t know about y’all, but my first reaction to seeing all of these in this format was particularly mind blowing.  Outside of food, which is pretty much the same (albeit the quality & selection on “essentials” such beer, cider & coffee are infinitely superior), all other major spending categories are substantively lower, like about 37% lower on a non dollar-weighted average.  In some cases, it’s more than half the cost.

Clearly, the biggest boon here is state income tax, particularly when going from the nation’s highest of 11.3% in CA to 0% in WA.  This alone represents a friggin’ elephantine savings.  I also save additional thousands on property tax and home insurance, despite the new place being far larger than our prior pad.  Similarly, the automobile category is nearly slashed in half among insurance, registration and dinosaur juice (which, to be fair, we will use more of due to our rural location).

In So. Cal. it was pretty evenly split between electric and natural gas to power the HVAC and general appliance needs, but here I’m all electric, however the cost is about a third less per kilowatt hour.  Nevertheless, I made (hopefully) prudent construction investments in open cell foam insulation, double-pane argon gas windows, & Energy Star certified appliances, including a state of the art heat pump.  So far, the electric bill for 1 month during Winter was slightly less than it was for the combined electric/gas bill in So. Cal. in December, so I see that as a good sign.

Sales tax is only about 2% less than So. Cal, so it’s effectively about the same.  The biggest savings of all?  My annual fishing license which is 82% cheaper – enough to fund my annual haul of basic tackle to outfit my season.

THE SPACE

I’ll certainly asseverate that saving oodles of greenbacks is a killer benefit of living where I do.  However, there are two other factors that I find far more consequential and, in all honesty, I’d forego the savings and, in fact, would actually pay more to have.  The first is the environment. 

Before writing this paragraph, I stepped outside for a few minutes.  It’s early afternoon and Winter’s last gasp in the form of a mild storm has just begun.  The snow is gently falling drifting about in a cool zephyr before hitting the ground and the only perceptible sound is that of the wind softly gusting through the trees.  It is a wonderful and new form of beauty for us.

Only two days ago while driving down the 15 miles of country road that leads to a highway, my car was strafed by not one, but two bald eagles.  They whipped from the adjacent field and flew less than 20 feet from the windshield.  It was beyond words – I’ve been all over the US and the planet for that matter, but never have I seen a bald eagle that close.  A few days prior to that encounter, I took a leisurely Sunday drive along the Columbia river that flows close to our hamlet.  In the over 50 miles of riverfront splendor, I did not see one boat on the water and only 5 cars. 

I will concede that this is certainly not a way of living that the majority of folks would hanker for.  It’s remote, off the beaten path, takes driving over 20 miles to get to the “big city” of 4700 people, the absence of mainline internet, and the lurking fear of a Sasquatch mauling prolly ain’t gonna fly for most.  That said, open sky, clean air, endless stands of trees, flowing rivers, abundant wildlife and acres and acres of personal space – this, I am learning is, truly, the ultimate luxury lifestyle.  At least for me.  The benefits of psychological arbitrage, I’ve found far exceed those of the geoarbitrage.

THE PEOPLE

I will admit, it was tough to leave behind friends in Southern California.  Of course, I’ll still see them as I already have booked travel to visit in a few months.  However, starting anew and in a strange place can be difficult.  Moreover, what would these non-city dwellers actually be like? Turns out, they’re pretty damn cool.  They’re certainly more down to earth and there’s not even a smidgen of the Hollywood superficiality or So. Cal. pretentiousness I had to previously suffer.  People are just authentic and genuine – and friendly.  I honestly believe that not living on top of one another, significantly mitigates stress and aggression and tends to bring out more of the best of people.  Or, maybe, it’s just me.

I believe that, approximately, 10% of the people on this planet are total, categorical assholes.  You can argue a few percentage points, but it’s true.  There are 24 million people living in So. Cal.,so there is a much, much greater number of assholes (about 2.4 million) as opposed to living in a large county of about 40,000 where you have only about 4,000 assholes.  Also given that, there are 17 people per square mile as opposed to 1500, your actual encounters with said assholes are reduced drastically. 

Even in the “Big Smoke” city 60 miles away, the 250K residents have all been awesome, welcoming and chatty.  Regular readers know that I am a huge outdoorsman and big on music, gaming, books and cats and have already made inroads to befriending many of the fishermen, kayaking & hiking nuts, rockers, bibliophiles, nerds and crazy cat folks. The scene for all my passions is more than thriving up here and my calendar is already in jeopardy of being overbooked.  So far, so great.

NO LOOKING BACK

While not the principal motivation, the impacts of our geoarbitrage are, unquestionably, saving tens of thousands of dollars.  As one can see, the positive financial aspects of moving somewhere with a lower cost of living are very real.  I also openly acknowledge that my personal example is intensified and otherwise exaggerated as a function of previously living in one of the highest costs states and areas in the U.S.  Nevertheless, there can exist a multitude of benefits, many of which can eclipse the financial, by taking a look at other places to live both nationally and internationally.  I wouldn’t argue necessarily that it’s even close to being compulsory for retirement, early or otherwise.  However, I would espouse the notion of taking the time to find where it is you really, truly want to live and use your heart to then find your home.  We’ve found ours and there’s no looking back.

HOW ABOUT YOU?

Being recently relocated, I’d love to hear from others who have moved (or plan to) for the purposes of geo or psychological arbitrage in retirement and what your thoughts are.  Please feel free to drop a line in the comments section.