You Might Be FI Already…If You Lived Somewhere Else (Geographic Arbitrage)

(the cover picture was taken in an old salt mine that was converted into an amusement park in Turda, Transylvania)

This year we decided to spend Christmas with my parents in Romania. For the past 6-7 years we always had some sort of excuse not to go there in the winter (like flying to a warmer continent, visiting Mrs W’s parents in Scotland, giving birth, etc). This year we decided it’s time for Christmas in Romania and do some geographic arbitrage*!

Since we’re both boss-free, we didn’t have to ask permission from anybody, didn’t have to work until the 23rd of December and then catch the last flight. We travelled on a Monday, at the beginning of December, avoiding those crazy plane ticket prices and all the travel chaos that goes on as the big day approaches.

Travelling with two kids and using virtually all possible means of transportation, we didn’t have an easy day but eventually we arrived safely at my parents’ house near Timisoara. If you could have seen our faces that evening at the dinner table…oh maaaan. What a relief! What a meal! And from that very moment on, the professional babysitters (aka grandparents) took over full control of the kids, meal planning and everything else. Basically everybody is happy! How amazing is that! FREEEDOOOM!

This year we already spent three months here over the spring/summer. We will do that every year while it’s still possible before we become slaves to the German school system. We love it here. We love to see how our kids and my parents make each other happy all day every day! It’s sooo good to be so much closer to family, nature, the garden, animals. It’s good to have this counterbalance to our life in the centre of a big city. And of course we love it! Grandparents are the greatest invention of mankind! 🙂

Should We Move to Romania?

My dad'd Wine and Pálinka production - only for family consumption

My Dad’s wine and pálinka (grappa) reserves – only for family consumption of course

This summer we talked about it a lot. On the one hand, it would make a lot of sense for a number of reasons:

  • We would be closer to my parents.
  • The kids love it here.
  • My parents would love it.
  • Our daughter loves the kindergarten here.
  • Even Mrs W loves it here.
  • When we work, we work from home anyway.
  • When I want to visit a customer, I can just fly there from here.
  • The internet (which is an essential requirement for life on Earth) is fantastically fast (200mbits/s, fibre optic!!!) – this sort of speed is basically unheard-of even in major western european cities. Over here: it’s standard. This company doesn’t even offer you anything slower than that. You can have 500mbits though if you want to be a bit special ans show off.
  • We’d be closer to nature.
  • We could learn/use proper life skills like maintaining a garden, repairing stuff round the house, killing some animals we want to eat, etc.
  • Our living expenses would drop significantly to probably somewhere around 10-15K a year.
  • If we decided to rent out our Stuttgart flat (furnished), that would be a massive dollop of icing on the cake!

Why NOT Move to Romania?

On the other hand, we’ve been living in Germany for 10 years now and leaving behind all the social contacts, German health insurance and standards wouldn’t be easy at all.

Mostly it’s the health insurance that really is a huge problem.

In Romania, when you go to the doctor you need to pay virtually everybody who has anything to do with your situation: from the lady who cleans your room to the doctors who treat you. You basically need to bribe them. In many cases (there are exceptions) they just don’t care about you if you don’t hand them an envelope.

It’s a weird undocumented system where there are no official prices for services and you need to ask around in the hospital to know how much bribe money you have to pay to whom. It doesn’t matter whether or not you paid health insurance. It has no value! Some of the best doctors only work in public hospitals so they can invite the patients to their private clinics.

It gets worse: the hospitals are so underequipped that (and this was the case recently, I don’t know if it’s still true in every hospital) they might send you to the next pharmacy to buy the syringes and other things they’re going to use on you.

Not all hospitals are the same. The one we have here in my home town is a good exception, but still you don’t want to spend a night there. Let’s not even talk about hygiene and food!

If you have a serious problem: cancer, brain tumour, etc, you want to be in a different country. And you want to be insured there.

One of my friends from university had to have brain surgery. She had to beg lots of people to raise €30,000 so she could have the operation in Germany. The health insurance was no help. Luckily her employer (a bank) helped her too and she got the money together. She had her operation and she’s ok. But do you want to be in this sort of situation? I don’t.

This might sound weird for US citizens, but in Germany this is not an issue. The system is still far from perfect but everybody has health insurance and everybody gets more or less the same benefits. And that’s how it should be.

So, you can see now that there’s something that holds us back from moving to Romania. It’s not a knockout criterion though. In the vast majority of possible medical cases, we could live with the system. Only if we had bigger issues and needed a complex operation or something, we might have to go to Hungary or somewhere else.

And then there’s the corruption thing. You don’t have to deal with it in your day-to-day life…but corruption is eating up this country. I don’t really want to live in this environment.

Anyway…we decided not to move to Romania. Yet. That’s just us though, and our specific situation/mindset at this moment.

But what about other people?

Do You Want To Be Financially Independent Instantly? Maybe you are!

Ordinary people here take home about €300 a month. If you have a good job, let’s double that to €600. Let’s say that as a family you take home €1000 a month and you spend it all. That means your expenses are about €12,000 a year. This includes EVERYTHING. Even package holidays in Greece, Croatia or so if you like.

If you can imagine living in Romania – and really, it’s not such a bad place to be – let’s play with some thoughts:

Scenario 1: You’re a Freelancer

If you are a freelancer somewhere in Western Europe, you have an hourly rate of around €80-130. Let’s say €100. You need to work for 150 hours to cover all your family’s expenses in Romania for one year. Let’s double that so you have a massive buffer and you’re still at only 300 hours, which is 37.5 working days – a YEAR!

Ok, it’s not FI but it’s not a 9-to-5 job either.

Scenario 2: You Own a Nice Property in a German City

Let’s take our situation. We paid off our flat in Germany (wasn’t a back-breaking performance). If we rented our flat out now, fully furnished, we would get about €1200-1400 a month plus expenses. Pretty easily.

For that sort of income we would not even be taxed in Germany. In Romania we would, but not all that much.

And hey presto, that’s us financially independent!

Scenario 3: You Start a Website About Photography

If you love photography, why not start a website about it? Build your community, start some Facebook groups/pages, write some relevant content, look for good camera/lens deals and share them. In a year you have enough visitors to generate nice AdSense income and advertisers will start contacting you and paying you for leads or banners. All in all it is quite easy to generate €1000 of income a month.

If you then find ways to automate/outsource most of the work…you are floating…and can live happily in Romania for ever!


Geographic arbitrage*, or the idea of earning money in a rich country or online and living in a relatively cheap place is not new, but I don’t think people really consider it often enough.

Of course, if you have school-age kids moving to a new country is not easy to imagine – almost impossible even – but there are so many young people who are flexible enough to take that step (JUST DON’T FU**ING TAKE OUT ANY STUDENT LOANS PEOPLE! PLEASE!).

People are generally afraid of new languages, new countries, new cultures. These problems are easier to overcome than you would imagine if you just have the right motivation and mindset. And becoming (almost) completely FREE is hell of a motivating!

The question is: how quickly do you want to become free? If you continue living in an expensive country, the journey to FI could be significantly longer compared to a cheaper place. And you don’t necessarily have to give up any quality of life!

The cost of living can vary enormously even between EU countries. We all know that. But many people are scared of the thought of living any further east than Austria. If I think of, let’s say, Budapest, which is one of the most beautiful and vibrant cities on Earth, it’s still lot more affordable than its close neighbour Vienna.

It’s worth thinking about a move! What do you think? Can you imagine moving somewhere cheaper? If so, where?

Us frying home made sausages in the fireplace. Good stuff!

Us cooking home-made sausages in the fireplace. Good stuff!

* you can also check out the geographic arbitrage posts at MadFientist and  J.D. Roth’s post on his blog “Get Rich Slowly” about geographic arbitrage.

  • Ms. Canadian Expat

    Moving abroad (again) is something I think about a lot, although living in this region of Germany boasts a much lower cost of living than where I’m from (Toronto). So you could say I am doing geographic arbitrage now! Except I’m not FI yet. There are places in Germany where we could buy a house for 2K, which would make us FI now without having to give up the comforts of German residency. But we aren’t interested in that (mainly the husband is not!).

    Other places in Europe I’ve thought about moving to are Budapest (much better than Vienna!), Sofia, Skopje, Poland, Slovenia, and Slovakia. Romania sounds lovely too now that you’ve brought it to my attention. We aren’t interested in the health care systems as we don’t use their services, but in an emergency situation it is important.

    Is there a way you can split your time more evenly between Romania and Germany, or does it have to be one or the other? Like renting your Stuttgart home out short-term while you’re in Romania, perhaps de-registering and re-registering in Germany every time to avoid the school rules. Sounds like a lot of work and I know things are different when you have children to consider.

    • you brought up some advanced and exciting stuff here! 🙂 Thanks!
      1. FI in Germany: i am planning a post about that. The Steuerfreibetrag (personal allowance) combied with kids and rental realestate is an extremely interresting combination. You could basically earn more than you need for your expenses in a year and pay no income tax at all. So, that’s something it’s worth digging in to.

      2. Emergencies in Romania: literally last night, my mum got very ill and we had to call the ambulance. They were here in 10 minutes and took care of her. She’s fine now btw. It was a german made ambulance, fully equipped, the people were helpful and nice. This is not third world anymore! So I am not worried about emergencies here. Only about more complicated stuff. There was a lot of positive change in the last 10 years or so here.

      3. Splitting time between DE and RO: I didn’t think about that very much yet. It can get complex. The EU and it’s rules are f**ked up. But that’s exactly the stuff I enjoy researching. Talking hours with the Finanzamt, Krankenkasse is always a pleasure. (no joke). I love confusing them with my, what I think, logical questions. 🙂 It is definatelly something to look into and I’m looking forward to thses type of discussions!
      Mr W

      • Ms. Canadian Expat

        Glad all is fine with your Mom. Dealing with medical emergencies is never pleasant.

        Am looking forward to your FI in Germany post! Things in Germany can be so confusing, so it’s refreshing that you are willing to share your knowledge and experience. For me, I am still fumbling through it all and trying to blog about it without sounding complain-y and stressed!

        • well…your case seem to be a lot more complicated than mine was. Once is up and running you at least have a nice story to remember and tell your grandchildren 🙂 Mr.W

  • Romanian solution: book a private medical assurance. For all
    your family it is around 100-150 euro.

    To rent a house in Romania, in that area it is around 300 euros.

    For school, book a american umbrella school and do homeschooling, and book
    local classes for some skills.

    And bring back some homemade palinke from Romania 🙂 – all the foreigners will appreciate it 😉

    • Welcoem to our blog arakelian!
      Do you know where to look for a private health insurance? Do all the docs accept it? Or..does that pay the bills from ALL doctors? Any experience in that?

      • I left Romania 5 years ago but there I had a package at a private clinic ( Medicover) ,payment around 20 euros monthly for me = adult, 60 euro for the new born and 40 after the child is 1 year old, all paid monthly. That covered the annual/regular check, the blood tests, ambulance and hotline non stop, doctor at home for critical interventions, private hospital, the new born baby had checks at home and nurse at my phone + home disposition first months of baby life, any investigation with prescription was free etc. ( and these are what I remember to use, 5 years it is a lot, you know 😀 ).

        For critical issues (as brain intervention, you mentioned 🙂 ) there are medical/life assurance, but I didn’t have so no recommendations from my part. My previous colleague had one.

    • cupboars is always filled with nice hungarian/romanian pálinka. And yes, it#s good stuff that everybody apreciates!

  • Ok. I’m not sure if i love or hate your for this article. 😀 Scenario 3 Really?

    But that article exactly what i was thinking about in the last month. If i give up some things. I can get a lot more in future. For some points i’m really at the point where i can do it.

    My hardest part is really my home. I know i don’t need it. At the moment i could live without any borders. I could work and travel a whole year. But i’m not sure yet.

    I know that’s not exactly the topic of the article.

    With 1500 € i could live a good life for a year in some areas of the world.

    • Scenario 3: well, while ther’s a lot of competition among photographers there are some things to consider: there are not many good photographers. How many of them start a blog? How many of them are good at blogging? How many of them can monetize the blog? I think not so many. In the last few years I’ve learned so much about communities and monetizing. I made so much money on things I would have never ever expected, so I am pretty confident about that scenario.
      Also, I had the chance to have insights in the money some photographers make with selling photos on stock photography websites. If you understand what people want to buy, you can make lots of money. Especially German companies are buying regularly photos from these portals. Copyright is a serious issue in this country and they don’t just download photoes from google. They are happy to pay a few bucks for a licenced photo.

      Moving to a different country just to save expenses is not the right choice for sure. But if doing that step means having more fun and increasing your quality of life and happiness…you should consider it! If I were alone, I would go on a round-the-world trip tomorrow!

      Nobody can make the decisions for you. I’m sure you’ll find the right way! Good luck with it!

      • Yes. There are not many of them outthere. If you find the right place it’s really good possible.

        Community. 100% Percent. That’s what i learned in the last year. If you attract enough people you can make money out of anything. That’s crazy. Building a strong community is really the basement of success.

        And about the moving. That’s right. There are some really cheap land in south of asia or africa. But would i really want to live there? I think no. The combination is the key in my eyes.

        Yes. Nobody can decide it. I’m the only one to fight against at this topics.