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In this podcast we discuss domestic geographic arbitrage with Mr. Groovy from Freedom is Groovy.
In today’s Choose FI we cover:
- A conversation with Mr. Groovy from Freedom is Groovy to discuss domestic geographic arbitrage
- How Brad made a similar decision to Mr. Groovy to move from Long Island to a lower cost of living area
- How Mr. Groovy was a “financial moron” until he was in his 40s until Mrs. Groovy found Dave Ramsey
- What did their financial lives look like before finding Dave Ramsey and the concept of an emergency fund
- How creating a budget and putting it on paper was a game changer for them
- What changes did they make after creating a budget?
- Their debt situation: They had about $30,000 in consumer debt
- How they created a “transition fund” to help them move off of Long Island to a lower cost of living area
- They managed to pay off debt and save $80,000 in cash for this transition fund by 2008
- Their families were supportive of their move off of Long Island
- The peculiarities of living on Long Island and getting off the island
- How Mr. Groovy’s cost of living shaped up on Long Island and how the property tax burden is significant there
- What other costs are smaller when moving out of a high cost of living area besides mortgage and property taxes?
- How the Groovy family bought a $70,000 condo in Long Beach in 1997 and sold it for $340,000 in 2006
- They decided to move to North Carolina and happened upon Charlotte where they ultimately purchased
- They bought a condo for $88,000 in cash in Charlotte and banked nearly $250,000 from the sale of their home
- Their dollar cost averaging strategy to enter the stock market
- How Mr. Money Mustache’s article The Shockingly Simple Math Behind Early Retirement change their outlook on life
- In 2014 they were basically at the 25x expenses definition of Financial Independence
- Even though the housing situation helped them significantly, they still would have hit FI by moving to a lower cost of living area just because of lowered expenses
- Takeaways and advice from the geographic arbitrage decision
- How Mr. Groovy’s family wound up following him to Charlotte
- How Brad’s brother did both US and international geographic arbitrage
- Did Mr. Groovy and Brad have “freak out moments” after making the move?
- Hot Seat Questions
Links from the show:
- Freedom is Groovy
- Retirement Manifesto
- The Shockingly Simple Math Behind Early Retirement
- Montana Money Adventures
Books Mentioned in the Show: