Cheap places to live rich

The secrets of the GeoArb
Not everyone is cut out to be a Geographic Arbitrageur, of course. It takes buckets of moxie and self-motivation to work hours (or even time zones) away from the big-dollar centers. It takes a certain knowledge and sophistication about how the big-dollar centers operate.

I have seen some professionals play the GeoArb game without ever having lived in the economic powerhouses, but it's rare. It helps enormously to have lived on the metro coasts, put in a few years, met people in your field face-to-face and established a professional reputation and a contact list.

In this century of high metro real estate prices and flattening paychecks, GeoArb could become a way of life for millions of knowledge workers. Suppose you lost your high-paying white-collar job in a big city. What would you do? File for unemployment? Probably not. Show up a bogus "jobs retraining" program and be taught by a social worker who knows little about the way business really works? No. In all likelihood you'd set up a home office and try your hand as a consultant. That's what some 300,000 Americans have done since 2000.

Here's the catch. Surviving as a freelance knowledge worker — where you sell your time — is extremely tough in high-priced joints like New York, California or Washington, especially if you are the sole family breadwinner. It is cruelly difficult to generate enough income to make your $4,000 per month mortgage payments, keep the cars and professional wardrobes up, take clients to dinner, maybe send the kids to private schools and try to save money.

Most competent freelancers past the age of 30 with big-city connections in fields such as product design, public relations, software and sales and marketing can make $100,000 per year if they put their minds to it. Trust me, it's not that hard to do if you're a pro and you're pulling those bucks from California or New York. What's hard for any freelancer to do anywhere on the planet is earn the second $100,000. Yet that second $100,000 is what your household needs to swing a comfortable middle-class family lifestyle in the metro coastal areas.

But $100,000 per year, or even $75,000, buys a nice life in smaller communities. Presto: Geographic Arbitrage.

Go for it.

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