Five Things Geoarbitrage Can Do to Improve Your Life

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Anyone familiar with this blog knows I’m a big fan of geoarbitrage. Aside from marrying Mrs. Groovy, geoarbitrage is the primary reason I achieved financial independence well before I was eligible for Social Security benefits.

With that said, here are five reasons why those in a high-cost-of-living state should consider moving to a low-cost-of-living state.

Five Reasons to Consider Geoarbitrage

It Can Improve Your Finances

The math behind a successful geoarbitrage play is rather simple: If moving means your expenses will drop further than your income, geoarbitrage is worth considering. If it doesn’t, geoarbitrage probably isn’t for you.

In 2006, the year Mrs. Groovy and I relocated to Charlotte from Long Island, the geoarbitrage math proved to be especially favorable. Here are our income and expenses pre-geoarbitrage and post-geoarbitrage.

And here are the costs of several key expenses pre-geoarbitrage and post-geoarbitrage.

The math worked out spectacularly well for us for two main reasons. First, we made $250,000 on the sale of our Long Beach condo. This meant we could buy our Charlotte condo for cash. Goodbye mortgage. Second, Mrs. Groovy was able to keep her New York job and work remotely. This meant that only I had to take a hit on the income front (Charlotte wages are generally 30 to 40 percent lower than Long Island wages). Goodbye income woes. The end result is that our take-home pay went down a little, our expenses went down a lot, and our gap money (the difference between monthly take-home pay and monthly expenses) went up a lot—a textbook example of how geoarbitrage can change your financial fortunes for the better.

* Quick Aside: I got the Charlotte gas price with a little reverse engineering. I was able to find the price of gas for Long Island in 2006, but not Charlotte. I did, however, find the historic price difference between Long Island and Charlotte for gas, and that historic price difference has been around 20 cents. Check out the below price chart I found on GasBuddy. Since gas prices are historically 20 cents cheaper in Charlotte, I’m assuming that the price of gas in Charlotte in 2006 was $2.88.

It Can Improve Your Quality of Life

Maybe it’s just me. But the older I get, the less tolerance I have for noise, crowds, and frigid temperatures. This condition, if you will, is not something to be saddled with if you live in New York City or on Long Island. And to understand why this is so, consider the following:

• New Yorkers and Long Islanders have a penchant for horn honking. In fact, I would say New York City and Long Island motorists use their horns far more often than they use their directionals. It’s almost as if they see the horn as integral to driving as the steering wheel, gas pedal, and brake.
• There are a lot of New Yorkers and Long Islanders crammed into a small amount of space. There are, for instance, 72,918 residents per square mile in Manhattan. On business days, due to the influx of commuters, there are over 170,000 people per square mile in Manhattan. By contrast, there are less than 7 people per square mile in Montana.Because New York City and Long Island are so chock full of people, crowds are a constant feature of one’s existence. The supermarkets are crowded. The movie theaters are crowded. The parks are crowded. And, of course, the streets are crowded. And it doesn’t matter what time of the day it is. Crowds never sleep. I can’t tell you how many times I’ve found myself on the Long Island Expressway in non-accident- and non-construction-related bumper to bumper traffic at three o’clock in the morning.
• And, of course, New York City and Long Island get cold. They don’t have winters as fierce as Minnesota or Wisconsin, but they have winters fierce enough to rattle your teeth, torture your extremities, and make a mockery out of car ownership. If Dante were living on Long Island today, he surely would have added commuting during a snowstorm to his circles of hell.

Now contrast the above annoyances with their counterparts in my adopted state of North Carolina.

• Horn honking? Practically non-existent. I go months without hearing a single motorist lean on his or her horn.
• Crowds? Not an issue. I never feel the cloying swarm of unfettered humanity. Most of my neighbors here at Groovy Ranch have four legs rather than two. Rush hour, however, can be a little irksome. But that’s only during the immediate hour before 9 a.m. and after 5 p.m. And that’s only in the big cities (Charlotte and Raleigh). Avoid major arteries in and around Charlotte and Raleigh during rush hour and you’ll rarely if ever have to deal with non-accident- and non-construction-related bumper to bumper traffic.
• Cold and snow? Haha! I don’t even own a snow shovel. When we lived in Charlotte, we went years without seeing an inch of snow. And if mid-day temperatures dipped below 50 degrees on a winter day, we considered it an affront to common decency. Raleigh winters are a little rougher than Charlotte winters, but still quite wimpy compared to Long Island winters.

I greatly improved my quality of life by moving 700 miles south. I still do everything I want to do. I can travel, write, and watch the Housewives of Whatever here in Louisburg, North Carolina, just as easily as I could in Long Beach, New York. And I can do so without the annoyances that peck at my sangfroid the way buzzards peck at roadkill.

It Can Give You the Opportunity to Change Your Identity

Here are four rather pivotal identity traits I had while I lived on Long Island:

• Political Junkie
• Big Time Booze Hound
• Big Time Sports Fan
• Inveterate Fast-Food Eater

By the time I left Long Island in 2006, I had come to loathe these aspects of my identity. And as I stare at those four traits now, I marvel that I managed to have a social life at all. I mean, c’mon. How repulsive was Long Island Mr. Groovy? Let’s see…a Big Mac smelling drunk who spent most of his free time either staring at men in tights or arguing with people about political bullshit. Yeah, I was quite a lot of fun to be around.

And, yet, while I lived on Long Island, I couldn’t shake this identity. Because that’s who my friends and co-workers thought I was. When they talked to me, they brought up sports or politics. When they wanted to socialize with me, they suggested we meet at a bar. And if they happened to be in my company around lunch time and were hungry, their first instinct was to scour the landscape for the best possible fast-food experience. “Oh, my god, look! It’s McRib season at McDonald’s. Ba da ba ba bah.”

Once I moved to Charlotte, however, I easily dropped this identity. I became someone who traveled, and who liked HGTV, SQL, and saving money. And you know how my new friends and new co-workers treated me? They treated me like someone who liked to travel, do home improvements, write ingenious SQL queries, and invest in mutual funds. When they talked to me, the conversation would invariably gravitate to these four topics. And when we socialized, it rarely involved pounding beers in a bar or shoveling more money into the pockets of millionaire athletes. It usually involved something innocuous like a movie or card night. In the nearly ten years of my encore career in Charlotte, I don’t think the subject of politics came up a dozen times. And whenever it was brought up, it wasn’t brought up by me.

Geoabitrage is a great way to change your identity.

It Can Fulfill Your Need for Variety

I’ll never forget the “bull incident” Mrs. Groovy and I had the first week we relocated to Charlotte. Our condo was on the south side of Charlotte, and we decided, after a long day of furniture shopping and busying ourselves with other relocating necessities, to decompress with a light dinner and a movie.

Now mind you, this was back in 2006. We didn’t have cell phones and our Garmin wasn’t completely dependable. Charlotte was growing so fast with new subdivisions and roads it rendered Garmin’s road database somewhat dated. So Garmin led us astray on our trek to the nearby mall. By the time we realized Garmin had erred, we were probably about a half-mile outside of Charlotte proper and in farm country. (Yes, it doesn’t take long to reach farm country when you leave Charlotte.) Anyway, I had to turn around, and in the process of executing my three-point turn, our car pointed directly at a fence, and seemingly out of nowhere, this massive bull came right up to the fence and stared us down. He was going to defend his territory with everything he had.

You don’t see many angry bulls in Manhattan or on Long Island.

It Can Fulfill Your Need for Adventure

Mrs. Groovy and I like to explore. And that’s what made living on Long Island so frustrating. There were so many fascinating places within a hundred miles or so of our condo. Hyde Park, the summer home of Roosevelts, Rockefellers, and Vanderbilts, was 105 miles away. New Haven, the home of Yale, was 89 miles away. Philadelphia, the home of the cheesesteak and the Liberty Bell, was 117 miles away. Montauk, the home of Frank Mundus, was 105 miles away. And I won’t even get into the treasure trove of history and culture on our doorstep in New York City. Our condo was a mere 31 miles from Times Square, for heaven’s sake!

And, yet, despite all this adventure being so close, we rarely took advantage of it. Why? Because while the geography of New York was favorable the roads and train tracks of New York weren’t. Simply put, getting around New York was a giant pain in the arse—especially on the weekend, when seemingly everyone else in New York City and Long Island was looking for adventure.

Case in point. Mrs. Groovy and I did make a day trip to Hyde Park one particular Saturday. And we had a splendid time once we got there. But it was four hours coming and going. The Whitestone Bridge and the Cross Island Expressway were hell both ways. Never again.

I was once driving by JFK Airport at three o’clock in the morning when the traffic came to a complete stop on the Nassau Expressway. Two rival street racing gangs stopped traffic so they could have a drag race. And no motorist dared lean on his or her horn in protest. We all just had to sit there and wait.

And don’t get me started on the Long Island Railroad. That is the mother of all exasperations and indignities. Just jump on the LIRR an hour or so before a New York Ranger game at Madison Square Garden. Nothing can ruin a day faster than being trapped with a bunch of liquored-up freaks who are festooned in Mark Messier jerseys and spasmodically howl “Let’s go Rangers” every five minutes.

Now contrast Long Island adventure with North Carolina adventure. Here are the cities Mrs. Groovy and I visited by car while we lived in Charlotte. And not once did we have to suffer the indignity of a non-accident- or non-construction-related traffic jam. Nor did we have to pay a single toll. We just experienced leisurely uneventful drives to these intriguing destinations.

• Asheville, NC
• Athens, GA
• Atlanta, GA
• Biloxi, MS
• Birmingham, AL
• Charleston, SC
• Chattanooga, TN
• Cincinnati, OH
• Columbia, SC
• Greenville, SC
• Huntsville, AL
• Knoxville, TN
• Lexington, KY
• Little Rock, AK
• Louisville, KY
• Memphis, TN
• Mobile, AL
• Montgomery, AL
• Nashville, TN
• New Orleans, LA
• Raleigh, NC
• Richmond, VA
• Wilmington, NC

Quick Aside: In case you might be interested, I decided to list my fondest memories of these cities. Mrs. Groovy and I had a blast in each and every one of them, and if you’re an adventure seeker, you’d be crazy not to put these American treasures on your to-visit list.

Final Thoughts

Okay, groovy freedomist, that’s all I got. What say you? Did I just unequivocally prove that geoarbitrage is a great way to improve your life, or what? Let me know what you think when you get a chance. Peace.