I think it’s critical to move abroad if you want to maximize the potential of financial independence and early retirement.
The United States suffers from high general living costs, social divisiveness, political polarization, violence, urban ghettos, rampant homelessness, and a complex and expensive healthcare system, among other issues.
I’m extremely grateful that I was born and raised in the US (even if it was in a Detroit crack house). It’s a country of immense opportunity.
But being born and raised in a place does not make you beholden to it for the rest of your life. I see the US as a great place to make money. But it’s not necessarily a great place to spend money.
That naturally leads one to the idea of arbitraging this. I’m talking about geographic arbitrage.
That’s where you earn your passive income in a strong currency (say, USD), then spend it in a place where the local currency (like, say, the Thai baht) leads to more local purchasing power (after exchanging your native currency). It’s arbitraging the difference between earning power and spending power.
Moving abroad could dramatically speed up your timeline to early retirement and also offer some big lifestyle benefits, which is why I spent time discussing this in my best-selling book, 5 Steps To Retire In 5 Years.
There’s a fundamental truth at work here.
If you’re financially independent, you’re also geographically independent.
Once you’re able to earn an income that is not location dependent, you’re free to live almost anywhere and become a global citizen.
My FIRE Fund, which is my real-money dividend growth stock portfolio, generates its ~$14,500/year in passive dividend income no matter where I live. I don’t have to live in the USA to collect my dividend income.
A company that I’m a shareholder in will issue me my dividend, regardless of where I’m living. And so it’s obviously advantageous to collect and spend that dividend income in a place where the money goes much further.
I moved to Chiang Mai Thailand back in 2017 in order to take advantage of geographic arbitrage.
And it’s been a fantastic ride. I’ve had some of the best years of my life over here.
But Thailand isn’t perfect. No place is.
With increasingly restrictive visa policies and harsher regulations that target long-stay foreigners, Thailand has become a more difficult place to live in as an early retiree expat.
Fortunately, Thailand isn’t the only country in its region, let alone the world. Last I looked at a map, there are almost 200 countries out there.
If you want to live in Southeast Asia, but can’t or don’t want to live in Thailand, there are some other really strong choices in the region to consider.
But what if you don’t want to live in SE Asia? What if you’d prefer somewhere closer to Europe?
Well, I’ve got a location you may want to consider.
That location is Tbilisi, Georgia.
With approximately 1.5 million people, Tbilisi is one of the largest cities in the Caucasus region – an area that serves as a natural barrier between Eastern Europe and Asia.
Tbilisi flies way under the radar.
But I think it’s underrated as a city to live in for Western expats. Particularly expats who have retired early.
I’ll give you five reasons why this might be the best city in the world for retiring early as an expat.
Extremely Low Cost Of Living
Tbilisi is criminally cheap.
And this is coming from someone who lives in Chiang Mai, Thailand – one of the cheapest cities in the entire world, especially for the quality of life that can be had here.
Just take a look at some of the local prices in Tbilisi. It’s shocking.
Whenever I’m looking at a city, the most important cost I look at is the average going rate for a one-bedroom rental. Since I tend to spend most of my money on rent, and since I have to live somewhere (meaning this cost is recurring), rent tends to have a disproportionate effect on my spending.
Well, the average rent for a one-bedroom apartment in Tbilisi runs about $320/month.
That. Is. Insane.
Essential expenses (rent, food, transportation, etc.) average somewhere around $1,100 per month for me in Chiang Mai.
It’s very possible that I could end up spending even less in Tbilisi. And Chaing Mai is already astounding for its value proposition. To think that I could find a better deal than my $420/month apartment is crazy, but Tbilisi gives Chiang Mai a very good run for its money.
Even if we assume that Numbeo doesn’t have all of these numbers dead accurate, they rank Tbilisi’s COL as 338 out of 365 cities in the world. Normalizing for errors across the averages, Tbilisi would appear to be in the bottom 10% of all cities that Numbeo has data on.
Easiest Visa In The World
I’m calling it right now.
Georgia has the easiest visa policy in the entire world.
Check this out.
If you’re an American (or a passport holder of another approved country on Georgia’s list), you’re granted a one-year stay upon entry into Georgia.
Yes. You read that correctly.
You can waltz in and stay for a year!
No need to apply for a visa beforehand. No need to travel to a consulate or embassy somewhere and spend a bunch of time and money navigating a foreign country’s bureaucracy. It’s unbelievable.
This saves so much money and time. Not to mention headaches.
It cannot be understated how important this is. If you want to actually live somewhere abroad full time, you need to choose a place that has the accommodating visa policies to allow this.
There’s apparently no limit on the one-year stays. So one could theoretically live in Georgia forever as the policy currently exists. That’s not to say it won’t change at some point in the future. But it’s a pretty sweet deal right now.
I can say that this is a huge advantage that Georgia has over Thailand. Thailand’s visa system is a total nightmare. And it’s getting more horrific by the day.
Sarcasm aside, it does actually get better.
Georgia has a territorial tax system.
Money brought into Georgia from income sources abroad isn’t taxed. This means that as long as you don’t earn income locally, you shouldn’t face a local tax from Georgia.
This is especially powerful for people who work online and earn income from sources outside Georgia.
If you work online, you generally want to avoid countries that have a residence-based tax system. That’s because living there for a certain period of time per year can trigger tax residency and potentially require you to pay income tax to that country.
Americans could take advantage of this by using the FEIE to exempt earned income (up to a limit) from US Federal income taxes, while simultaneously avoiding local income tax liability from Georgia.
There are cheaper places to live in the world than Georgia.
I’m sure one can scrape by for pennies in certain places throughout Sub-Saharan Africa.
But it’s not just about living cheaply. It’s about maximizing your quality of life while simultaneously minimizing your cost of living. The aim should be to live in a place that gets the most QOL for the lowest COL. You want to live at that intersection.
A big problem with a lot of cheap places in the world is that they can be really dangerous.
I don’t much care about cheap rent if I constantly have to watch my back. After growing up in Detroit, I have no desire to ever again live in a dangerous environment.
Well, Georgia is incredibly safe.
For perspective, their homicide rate per 100,000 is 0.99.
That’s lower than Denmark, Finland, and France.
The USA is at 5.30.
Georgia crushes the United States here.
That means the US is simultaneously much more expensive and much more dangerous than Georgia. Yikes.
Plenty Of Amenities
So Georgia is criminally cheap and super safe. It has a very favorable tax system. And the visa policy makes living there full time a cakewalk.
What more could you want?!
Alright. I get it.
Some amenities would be nice.
Well, Tbilisi has you covered.
It’s a beautiful river city with restaurants, movie theaters, gyms, coffee shops, public transportation (including local tax apps), nightlife, good internet access, and museums. The city recently added Galleria Tbilisi – a massive and modern mall that has almost anything you could think of. And there’s Fabrika, which is a large co-working, hostel, and event space on the east side of town.
Seriously. There’s more than enough here to keep one busy.
Sure, it might not be the most exciting city in the world. But it arguably gives you the best bang for your buck out of anywhere else.
There’s a lot to like about Tbilisi.
But I do see some drawbacks.
The climate is not warm year round. The winters aren’t the frozen wasteland I grew up with in the Upper Midwest, but Tbilisi does get quite cool from December through March. Of course, this could be a good opportunity to hit up Asia or somewhere else during the winter. With the one-year entries, traveling in and out is a breeze.
Also, I’ve heard through firsthand reports that English is not as common as one might desire. The language barrier could be an issue depending on where you go in the city. But hanging out around the main areas (Shota Rustaveli Ave, Vake, Davit Aghmashenebeli Ave., etc.) is generally fine.
It seems that dating is more conventional and conservative. I wouldn’t go there expecting the SE Asian scene. As such, a single Western male might have a more difficult time with meeting local women, relative to somewhere like Thailand or the Philippines.
And the local cuisine is limited. There are only really a few local dishes of note, such as Khinkali and Khachapuri. However, international restaurants proliferate the city. Nobody’s gonna starve here.
Overall, I see Tbilisi as a hidden gem.
I’m not aware of any other city in the world that offers this unique combination of cost, safety, visas, taxes, and amenities.
Tbilisi might just be the best city in the entire world for early retiree expats.
If you’re earning $1,000/month or more in passive income, there’s no reason why you couldn’t live a fairly robust lifestyle in Tbilisi.
That kind of money would be enough to afford a nice, centrally-located apartment, eat out for every meal, have a gym membership, spend time at cafes, and even partake in some nightlife.
No, I don’t see Tbilisi as some kind of place where you go balling out at nightclubs. I’ve personally never had an interest in that. If you just want to party, I don’t think Tbilisi is gonna cut it.
But if you’re looking to enjoy an easy lifestyle and not have to sell your soul to an employer to afford life’s basics, Tbilisi could seriously stretch out even modest passive income and allow you to make your early retirement dreams come true years – or even decades – earlier than you otherwise thought possible.
Finally, I’ll note that it’s very possible that I end up making Tbilisi my home base in 2020. I’d just have to leave those winters for the warm embrace of SE Asia from December through March.
I’ll almost certainly need to leave Thailand sooner rather than later. And I’m intrigued enough to potentially check out Tbilisi for myself. If Oh wanted to come along with me on an adventure like this, Thai passport holders are also allowed one-year stays upon entry. Very interesting, indeed. Maybe an early retiree American and a Thai woman on sabbatical give it a shot!
What do you think? Does Tbilisi, Georgia sound like the best city in the world for early retiree expats?
Thanks for reading.
P.S. If you’re interested in becoming financially independent and geographically independent, check out some fantastic resources that I personally used on my way to becoming financially free at 33!