Currency Arbitrage - Feeling Rich by Traveling Abroad

"Many people in supposed rich countries are struggling to pay the bills, but something budget travelers discover really quickly is that it’s financially easier to actually travel around the world. Thanks to currency arbitrage, lower healthcare costs, and other factors, you will spend less money being on the road for a year—counting airfare—than you will spend just staying home and existing. 

Currency arbitrage has amazing leverage. If you leave a place where the average rent in your city is $2,400 and you go to a place where the average hotel or Airbnb price is $40, then you’ve just dropped your rent price in half not even counting utilities. Thirty nights at $40 each comes out to $1,200. If you rent a place for a month, you’ll likely spend far less.

Let’s go up a notch and look at meals for two in a restaurant. If you go traveling around Southeast Asian countries of Thailand, Malaysia, Laos, and Vietnam, you can almost always get a good local meal for a few bucks. You’ll have to go pretty upscale to spend more than five dollars per person on lunch. On the other hand, you can easily pay five dollars on one apple in Japan and you’ll be hard-pressed to even find a bowl of instant ramen noodles for that price at a Tokyo lunch counter. For what it costs to get a sub sandwich and a soda in the U.S., you can get a three-course lunch for two served to you in most of Latin America.

When it comes to hotels, prices between different countries can easily vary by a factor or two or three. For $40, about the price of the very cheapest Motel 6 in the USA, you’ll be lucky to get a private room of any kind in Western Europe, even at a hostel. In much of Latin America, that will get you a nice big hotel room with character, right in the historic center. In the lesser-known areas of Southeast Asia and the Indian subcontinent, it will get you the best room in town, complete with gracious room service, a bellhop to carry your bags, and a nice pool.

You can use currency arbitrage to extend your runway when you’re starting a business. You can use it to get out from under the high cost of living in the USA or UK and have money left over each month instead of blowing through your earnings just paying bills. Or you can obtain a much higher standard of living on the same amount of money by earning in dollars and spending in baht, pesos, or dong.

After all, if you commit to the road for months or more, you’ll actually feel richer than you did in a financial prison of your own making. If your monthly bills are getting you down and you have a remote job or business, why are you still hanging around in an expensive country? Get out and about and you’ll be feeling rich by traveling abroad. Settle down for a few months elsewhere and your costs will go down even more."

All of this written by Tim Leffel from Cheapest Destinations Blog says a lot about the opportunities that are open right now due to currency arbitrage... Take Advantage!