How Soapy is Geoarbitraging in China

Chinese street food from Soapy.

You know what they say: there’s more than one way to skin a cat!

(No one says this. Who says this? Why is this a saying.)

It’s a gross way of saying there’s more than one way to reach your goal. So if you want to save money faster and you’re feeling like an adventurous, modern-day Viking you would be a good candidate to go aboard for some geoarbitrage.

What is this scary word?

In Lily terms, it’s the nuclear option. In personal finance terms, it means taking advantage of the higher living costs in one particular geographic region, skipping town on that noise, and moving to a different geographic locality where things like rent, food, transportation, utilities are less expensive.

That is what Soaps just did.

For those of you who are new here, this is a brief synopsis of my friend, Soap. I added this portion so no one is missing a piece of the puzzle:

Soaps is one of my best friends. She is a free-spirited, creative genius. She is also the daughter of a very affluent, multi-millionaire family. Her childhood was what one would call pure opulence.

Today, she is in her 30s with a drinking problem. She has terrible health and cannot hold down a stable job. At age 30, she started with $80,000 in refinanced consumer and medical debt and some unpaid taxes as well.

Her mom is her loan cosigner. Although her parents can easily wipe the debt away, they think it would be better for Soaps to learn how to manage her finances herself by learning to live frugally and focusing on her career and education. Both of Soap’s parents fall under what you call…FUMCPWCDJ&RPFs.

Soapy’s parents came to the United States from China in the 1970s, educated themselves, worked very hard, and became successful engineers + entrepreneurs within two decades. Now they want to pass on their successful trading business but to no heir.

Soap was the only heir of choice but she declined the offer to learn the family business repeatedly and her parents have stopped asking. To her, their life work and success was not meant to be her life. It’s not how she wants to live. She is like a Beat Generation character that I’ve only read in a raunchy adventure fiction.

Soap didn’t know how credit cards worked until she was over 17 years old. For 17 years, she didn’t know that credit cards cost real money.

“It was my mom’s card that we could buy anything with and the store gives it to you. I didn’t know it cost money money, I didn’t think about it. I thought the card told the store clerks what a good person you are and they give it to you because…you’re a nice person. Hence the name CREDIT – like good karma = good person = stores will give you stuff. No one told me you had to pay it back with money.”

This is why I am an absolute advocate for teaching personal finance in both home and school. That and learning to say “no” to children so they would never end up in an environmentally induced bubble. I started a basic personal finance series in hopes of spoonfeeding her frugal slices of life. My goal was for her to read and apply some of the traditional ideas inspired off Suze and Ol’ David Ramsey. I believe her upbringing was so “generous” (in comparison to mine) she ended up with bad self-control and money management skills.

Related: Top 5 Sorry Ass Financial Mistakes of My 20s

Read the previous posts in Soapy’s Odessey:

21 Frugal Pantry Staples List on a Limited Budget

Practical Budgets For People Bad With Money

How To Effectively Overcome Credit Card Addiction

3 Signs When Frugality Isn’t Worth It & What To Do

Why You Still Need An Emergency Fund While In Debt

Geoarbitrage for Debt

I am a fan of geoarbitraging. It seems like an underutilized money hack especially if you have short-term money problems. Fine print though, it’s for those without a geographic obligation such as work and family. If you are able to work location independently and want to save money, as fast as possible then a savvy move would be to take your first-world salary, go abroad, and live like a modest prince for cheap while stocking up enough in savings.

Most smaller cities in China will find first-world American salaries generous in comparison to the yuan salary (Chinese dollar).

The next thing you know you’re living in a pimped out mansion in a third-tier, small city in China!

No, no – it’s not that easy. China limits multi-entry tourist visas to 90 days and you would have to leave and can re-enter after a certain time.

Soap works as a seasonal freelancer and her work is greatly affected by seasonal changes. After business expenses, she is making a few dollars above Canadian minimum wage. I’ve minorly brushed up in the past that we have been in business together at one point, very briefly, that was not successful.

A month back, Soap was at life’s crossroads. She is about $80,000 in debt the last time I checked with her. Although her parents can pay it off easily, it was understood after her last bailout 3 years ago, it would be her last bail and they stand firm on that decision today.

Compare to 2 years ago, personally, she definitely has become better at controlling her finances. I’m going to take 50% of the credit for that by the way!

But it’s not really enough.

Here’s the debt trap, it’s not enough if you dug yourself that deep. Take for example high-interest rates credit card debt or unshakeable student loan debt, yuck! Debt doesn’t have to give anyone second chances by the way. Now we’re back to basic personal finance, the two subjects that are so wholly simple and basic:

How do you get out of debt? 

1. Cut expenses.

2. Make more money.

Besides lucking out on an inheritance or robbing a bank, those are pretty much the two choices for 99% of people out here.

Naturally, if you can’t cut your expenses and you can’t make more money then the debt stays where it is or get even bigger and that is where Soapy’s problem comes in. That’s where a lot of people hit that familiar old problem.

For all the years that I’ve known her, Soapy has just been tangling between “almost barely bankrupted” and “barely bankrupted.” There could be progress made, then she gets sick out of nowhere and right back down the debt hole she goes. You can’t save up enough money to better your situation because it’s locked in keeping interest and debt collectors at bay. Not to mention there’s the tax bill that hits her as a freelancer. Trying to somehow increase an unstable, freelancer’s income, account for taxes, late bills, late rent, find food etc. by yourself with is tough.

When she did put the pedal to the metal and doubled up with a normal 9 to 5 job on top of freelance work, her commute extended, her health declined, and her freelance work quality declined as well. I felt bad for her, I was lucky if she had the time and energy to send me a text. And wouldn’t you know it, after the second week, she fell ill with a lung infection and had to call the temp job quits.

Rinse and repeat, year after year, the story repeats itself.

Related: 3 Signs When Frugality Isn’t Worth It (And What To Do)

Soapy’s Expenses

There are moments when Soap tells me her master schemes on how to hustle some money and I shake my head in horror. But this instance, I was fully on board with her idea of geoabritage. She didn’t know that fancy word. She just told me her grandparents invited her to vacation for 2 weeks in China but unbeknownst to them, she’s wasn’t going to be coming back with them!

There were a few bumps in the road I was worried about but it’s this nuclear option or keeping her on that miserable debt treadmill so I gave her my blessings.

ItemCosts in China (YMMV)Original Costs (Monthly)
Soap Total$565$3300
Housing$0-$200 per month$1,000
Transportation$2-$5 per taxi ride$300
Food$100-$300 per month$2,000
Health Care$100 per doctor tripUnspeakable
Internet + VPN$150 unlimited mobile data per month + $10 VPN$0
Electricity$10 per month (The only service she has.)$0 (with rent)
Mosquito RepellentPriceless

Cost of living in China, just like the U.S., fluctuates wildly depending on the specific location.

*Chinese first-tier metropolis cities like Bejing and Shanghai are the American equivalents to Washington, D.C. and San Francisco. These overcrowded Chinese cities are VERY expensive unless rent became free. Geoabritaging in larger metropolitan cities also come with health issues attributed to the air pollution.

*A large second-tier city is something along the lines of Guangzhou and Shenzhen.

*A third-tier Chinese city like Shenzi is the one Soap currently lives in. Shenzi most actively reflects the power of geoabritage in a small-sized city for those who are location independent.

Soap’s sleep and wake schedule are pretty backward now but I was able to get in contact with her with WeChat (Chinese messenger.) She gave me a quick rundown of her expenses in her a small “third tier” city in Shenzi, China.

Related: Top Reasons Why Some People Just Won’t Save Money


Soap lives rent-free in a semi-abandoned building belonging to her parents family. It has been sitting empty for 2-3 generations. Her apartment has no shower or kitchen. It might sound really weird to Americans to have an apartment without a shower and kitchen but that’s how old the property is. There isn’t really an “up to building code” standard in China. No one is going to fret about how many inches the handrail needs to be away from the wall (which was something incredibly stupid we had to deal with in Seattle…) but in another sense, no one will bat an eye if you have no running water or heat.

But it’s free!!

Her small room in a split house between 4 other roommates in Toronto costs about $1,000 a month so that’s a $1,000 in the pocket.

The Shenzi city rent costs (at the upper crust) only $200 USD per month. That $200 USD will get you a really fancy, furnished apartment with your own shower and kitchen.


Most people walk and bike, which is a cost-effective way to get around. There are city buses that will set you back a few quarters. A private taxi service (similar to Uber) takes you anywhere in the city for $5 USD. That’s considered expensive in China because petrol gas costs are high; however, from a tourist perspective, a private taxi in China is about the same price as a round trip bus ticket back home and it’s much cleaner and faster.


chinese mcdonalds bubble tea
Bubble tea and McChicken in China.

Soaps food expenses are usually ridiculously high for just her. She met with recent success in bringing her overall food costs down. Unfortunately, not long after she implemented my grocery hacks, she got sick again and slid back down…again. Typically, she spends about $1500 on food and eating out alone – just herself. If you include her favorite Jack Daniel’s and Red Bull, then kick it up to $2,000 a month.

In China, she lives mostly on street food. The street markets in China are super inexpensive. You can get street skewers for a few pence. For $2 to $3, you can eat from any street vendor until you’re stuffed. Her food bill is on the higher end of the local spectrum because her free apartment has no kitchen or sink to clean up. A hot pot buffet in China runs about $10 USD (there’s no tipping in Asia in general.) Her dining out bill comes out to be about $200 USD a month compare to her $2,000 bill in Canada. But western food, even bad western food in China is expensive. A Westernized McDonald meal in China will run about $6 USD for a Big Mac meal (with bubble tea instead of soda).

Personal Care

So I mentioned before, her apartment building is old and there’s no kitchen or shower…which means that she needs to find public bathhouses for personal hygiene. Although it is not a lot of money for her to go to a public bathhouse, bathhouse costs do add up. Back in the states, Soapy bathes 3 times a day, that’s her habit but she can’t do that anymore.

The Chinese bathhouses don’t match exactly the definition of bathhouses in the states. It’s view more as leisure recreation activity like a spa with a pool etc. Public bathhouses also serve food for 3 meals a day. For entry to a bathhouse, its around $10-20 USD and that includes 3 full meals and a bath.

Health Care

The one huge downside of arbitraging in China is if you have a weak immune system. Her exposure to street food cleanliness and allergies certainly don’t help.

Within a day of landing, Soap was hit with a cold and the stomach flu. She spent two days vomiting and the rest of the week with a bad cold. As she got better, she was hit with an ear infection. That took another week to recover…and then she was hit with a mild cold after that. Finally, her immune system stabilized but she missed over 2 weeks of “family vacation” waiting for her immune system to adjust. Apparently getting sick like this happens to every time she re-enters China.

During that time, she refamiliarized herself with the cost of a typical doctors trip. The good news is if you want to see a doctor for anything, it will cost no more than $100 USD per visit. That includes everything too – the doctor appointment, medicine, shots. It’s manageable on her arbitraged first world salary.


Soap would make a great vloger!

Good internet where she is is expensive. She pays $150 USD a month for unlimited on the go internet, we were able to video chat without disruptions. She needs a VPN for work thanks to China’s great firewall and that’s an additional $10 USD per month. Again, depending on how you frame it…if a fancy apartment cost $200 USD per month that means Internet might be a costly luxury for some.


Electricity is Soap’s only utility since she’s living without a kitchen and shower. It’s cheap ($10 USD/month) but it’s a bit scary to use. Nothing is guaranteed to be “to code” especially in a semi-abandoned family house so it pays to be extra careful.

The outlet wattages are also higher in China compare to the states so if you get zapped, it’s not going to be a tickle – it might just knock you dead.


Those numbers are pretty much her main expenses in China. I don’t know about you but after learning anyone could get a fancy penthouse for $200 per month, I’m drooling. Even if you’re only allowed in for 90 days, that’s some frugal lodging! Needless to say, she will be saving close to $3,000 to $5,000 a month if she chooses to geoarbitrage in China on her first-world salary. If she stays there, the chances of her knocking out her loans are very good.

If she was back here, she wouldn’t be able to get that jump start going because her debt would simply keep her running in place. And I think that’s the most important thing people forget about those who carry debt. No judgments here. I know that if I was in her position I would absolutely geoarbitrage a hundred times over. I would grit my teeth for 5 years and come back with some savings and a career plan so I can move on with my life.


Readers, has anyone relocated themselves overseas to save more money? What was your experience? Would you hack living in a small city in China to turbocharge your savings? Is not having a shower or kitchen a deal breaker?

44 thoughts on “How Soapy is Geoarbitraging in China”

  • The difference in the costs of living definitely sounds great! Mr. FAF and I have talked about possibly moving to China when we retire to use USD in an inexpensive city. However, the pollution really worries me. I might be able to enjoy more things for a better price, but I might also die 10 years earlier because of the polluted air. Nothing is more precious than good health, especially when you’re old. That said, we might change our minds depending how China looks in 25-30 years 😉
    Ms. Frugal Asian Finance recently posted…5 Things I Regret Buying

    • I wouldn’t live in China with the pollution. It’s not worth the early death to save the money to me either!! Hopefully it gets better there 🙂

  • I love the idea of geo-arbitrage, the cost savings are impressive. I certainly plan to slow travel though some cheaper countries and take full advantage of it in the future.

    I could live without a kitchen, but only for short time periods……but no shower? In a hot climate that would not be fun.
    Ms ZiYou recently posted…I’ve fallen in love with Riga

    • Sad about Soaps but glad she seems to be turning things around! It really is never too late to get your shit together. I agree with Freddy, there are so many places in the US that can be geoarbitraged, but I am definitely already in a lower COLA (Atlanta) and can still see some serious savings and an incredible life without transportation costs (tuk tuks for 50 cents!) a mere 3 1/2 hours away by plane. I’m seriously thinking of doubling down on that for a while and moving to Guatemala and doing that slow travel dream I’ve been dreaming. I’ve been to Guate five times now, once living there for 2 months. I’ve done it without a kitchen and HOT water – or even warm water, truth be told. It sucks to take cold showers because it really is never that hot there – ever. I’d absolutely have to have access to a hot shower a few times a week at a minimum so I’m thinking a maybe on her particular situation – not sure till I actually saw a bath house. No matter where you geoarbitrage, there’s gonna be some hella sacrifice involved. In Guate – not being able to drink the tap water is hard. Brushing teeth, cooking….it’s all more complicated. I love to cook and find the need to cook goes down substantially when cheap street food is involved. The rice and beans, 5 avocados and the best watermelon ever for a buck is inducement enough to eat at farmer’s markets, comedores and off the street at every meal. Even sit down dinners at 3-5 bucks suits me just fine.

      There are people who are thru hiking the AT (appalachian trail running from Georgia to Maine) who probably bathe less than 10 times in 6 months. I hear it’s a pretty stinky proposition – I am not all that sure I could do it but I haven’t ruled that out yet either.
      BucketBabe recently posted…The Death Spiral – Stepping Back from Certain Death

      • Oh my goodness that doesn’t sound pleasant. To each their own I think!

        I do like geoarbitraging in the states. Plenty of great places here. But soap’s issue is also her health, healthcare in the US would bankrupt her but not so much in China.

  • This is an awesome series. I’m looking forward to more.
    Here is a question – Why not just declare bankruptcy and then go live in China for a couple of years?
    That will wipe out the debt and she can have a clean start. Not sure how long bankruptcy follows you around, though.
    I lived with no shower before. We had a big clay water tank and you just shower there.
    Good luck to Soapy! Keep at it. Hopefully, her immune system kicks it up to a higher gear soon.
    Joe @ Retire by 40 recently posted…March 2018 Goals and Financial Update

    • Really, really good question as always Joe!!! I think her mom didn’t allow it. Technically her parents can easily wipe it out for her but it doesn’t send a good message. Bankruptcy is probably worst for her lifestyle down the road. That’s my theory, I’ll ask her tonight.

  • I had to find out right away who the heck SOAP was…ping, pong’d again (I know so much! <~ in little boy voice from the movie the 6th sense) but I found my way back!

    No shower would be a deal breaker for me. Must have access to hot running water. I’m a horrible person to go camping with…

    We moved to a higher cost of living area for my new job, but have found a lot of things (happiness!) that justified this move.

    We did have friends that up and moved across the states to a remote location of Montana. They wanted to be closer to family there after a close family member had died and they weren’t there for it. They moved without having any jobs or housing lined up. Basically sold their house and moved ASAP! They aren’t regretting the move, but have a new found stress – limited jobs and the emergency fund running low. They’ve been there about 3 years and are now starting to turn their situation around. The cost of living is minimal – they paid cash for their lil double wide trailer. And an acre or two of land. I think the house was 30k?! Not sure on land. But I think they wish they would have planned out the exact area and looked at it from a standpoint if they can really save any money off of the lack of employment opportunities. Plus – I think they are now tooooo close to some family which was another slight oversight. Oops.

    • Sometimes people over-romanticize the high cost of living and low of living area too much. It’s nice being close to work and being near the restaurants (me and food…). I think there are definitely cases that justify moving somewhere more expensive. I think having diversity to me was important.

  • I don’t have anyone that would geoarbitrage to another country but I tried to get my employer to let me move to a city an hour and a half away (working remotely). …didn’t go over too well. I’ll be staying put for the time being. The city we are looking at would save us huge on a mortgage and overall cost of living. Plus it is where we went to college so we know we love living there.

    I can’t wait to hear more. I’m a little worried she hasn’t changed her habits enough to make this worth it but you would know better.
    Budget On a Stick recently posted…My Money Map 2: This Time It’s Personal (Finance)

    • Did you write a post about it? I want to read, that sounds interesting. I wonder why they didn’t approve, it’s just 1.5 hours away…

      I think Soapy is trying and that’s a start, it’s good for her to learn these things. I almost agree with the parents even if it seems bit cruel.

  • I’m just curious, does she have running water at all? Does she have a toilet? Would it be expensive to get a very basic and simple bathtub and sink installed? I think I could do it, but I would need access to running water, I would be able to cobble a kitchenette together and a makeshift way to bathe.

    • She buys her water in bottle and use them. Not sure about the toilet, I don’t want to ask haha!!! She’s leaving in 90 days so I don’t think it’s worth the cost. It’s probably very expensive even in Chinese standards.

  • Dear Lily, I know so many “Soapies” in Asia (mainly Greater China) myself, having no more bailouts available usually helps. Offspring of wealthy families usually gets protected from “real-life”, especially in Asia (most don’t even remember having seen their parents cook food) and on top of that, it seems almost impossible to “beat their benchmark” (which is naturally their own hyper-successful parents) in life. The first thing that has to happen is to “cut the cord” – mentally and physically – and start to grow their own life. Detaching herself from her parents physically is a great step! Small steps into the right direction are good. Once Soapy will succeed conquering first goals/ hurdles on her own, life will start to improve and become more fun/ enjoyable for herself.

    We (family of four) are also geo-arbitraging all the time between Switzerland (close to France and Germany – great tri-national shopping opportunities), Singapore and Taiwan – for longer visits and stays. Even in high-cost of living places such as Singapore you can find cheap options (e.g. hawker food or nightmarket food for Taiwan) and get more excitement. Geo-arbitraging is probably the most ignored opportunity on this planet. Every country is different in terms of income, purchasing power, saving potential, taxation, cost of food, housing, renting, investing and so forth. Wonderful field to get lost and geeky about.

    Got to catch-up on your elder posts about Soapy, love the series!
    Matt | Financial Imagineer recently posted…Who Wouldn’t Want to Be a Millionaire: 6 Life-Winning-Lessons From a “Who Wants to Be A Millionaire” Contestant

    • “It seems almost impossible to “beat their benchmark” (which is naturally their own hyper-successful parents) in life.”
      Oh my god, yes that’s very true! Soap does seem to do that. Geez I never thought of it like that before!!! I didn’t think Soap would be across seas in less than 2 months of starting the series. She is a firecracker for sure!

  • Hi Lily,

    First off, I applaud you for the courage to post your experiences for your Time interview. It is a pity the article is so skimp on many details.

    Secondly, do not let the detractors and their toxic comments on FI/RE detract you from your goals. Views that do not conform to their “ideal” are lamblasted and ridiculed. Posters there do not seem to realise that Personal Finance is PERSONAL. It applies to you and your circumstances only. Your lifestyle and investment methods may not gel with the majority but in the end, as long as you reach your end game and achieve what you set out to do, I call that a monumental success.

    Never let anyone tell you otherwise.

    You have a great, loving, supportive and wonderful family and your ability to save money is an achievement very few can ever hope to achieve.

    Keep on going!

  • Yes I geoarbitraged twice
    1. Relocated to Asia for a year during Great Recession and north America was on a hirig freeze when I just graduated with no work experience.

    2. work sent me to a remote city for a few years. Housing was cheaper than coastal cities and I found a roommate and an apartment walking distance to work. I saved a big portion of my paycheck.
    Financial Orchid recently posted…March Madness Expense: $2686.53

    • Yeah her parents are giving her a lot of tough love. It’s different from how she was raised but maybe tough love works? She is a hilarious and good person. It’s hard to not love her. It won’t knock out her debt but it’ll help get some balls rolling.

  • Very interesting numbers and I’m not very surprised. That’s awesome Soupy is able to use this to cut down her expenses and help her with her finances. China is still a relatively cheap country to live in.

  • The idea of geo-arbitraging is great, you can save a lot and pay off any debt you have. It’s only a matter of if you want to move to a city where it isn’t as glamorous as first class cities. A U.S. example is like moving from SF to Cheyenne, Wyoming.
    We have considered moving out of SF to other cities like Sacramento or Portland, OR but Mother with Cents isn’t too fond of moving out of SF or the Bay Area.
    Kris recently posted…Making the Most of the Library

    • I wanted to write a post about how low-cost places are romantic in the mind but it might not be worth it but I need some assistance on it because it can get controversial.

  • If she stay consistent, it seems like she can pay everything off in less than 2 years. That’s an incredible rate considering it’s 80k worth of debt.

    Since there is a 90 day tourist restriction, has she considered a plan b of finding a cheap location in the US? There are definitely some small towns which are incredibly affordable – not China cheap though. She might not be able to save as much, but most definitely will have a higher standard of living (being able to shower and not dying from electrical shocks).
    Cal @ FI Me Outta Here recently posted…(Save Money) Be Your Own Auto Mechanic For Basic Repairs!

    • She has to leave the country in 90 days and it’s the airfare that’s currently killing her right now. There are other places to go but she won’t be getting free rent like now. She also underestimated her flight cost by about $900 USD which means…she might not be saving as much as she thought. I thought her $300 flight ticket quote back to Canada sounded a bit low.

  • Thanks for explaining Geoarbitrage Lily! I heard it once mention on a podcast but never knew exactly what it is until now. Nothing against China but when I visited 8 years ago, it was way too crowded and polluted. My dad always preached health is most important because if you don’t have it, then you would enjoy life as much. So is it worth it?

    I live in Southern California currently. Many times have I thought to move to a lower cost of living place in the US. Would that still be consider Geoarbitrage?
    Mr. MFC @ Morning Fresh Cent recently posted…Stop Feeling Guilty for Missing Your Child’s Event

    • It is still crowded and polluted! Of course it would be! Mr. Groovy ( talks about it all the time. It’s pretty smart if you’re retiring or can work location independent.

  • Good luck to Soapy. We lived in a number of cities in China for about 10yrs (well my wife lived there forever!) and geoarbitraging is a thing. But like you said, you have to pick your city. We still go back and it is just as easy to spend money in Shanghai as it is in NYC or London. Even after living there for so many years, the hardest thing is smaller cities was the cultural gap. Even if you can speak and understand the culture, there are many days when you are just longing for a group of people that understand where you come from. In the smaller cities, that can be hard to find. I was spending time in my wife’s hometown one time (and usually I was the only foreigner there) when I saw another westerner on the street. We both stopped and looked at each other like, “what are YOU doing here?!) Turns out we were both dating a local 🙂 But I digress, if Soapy can stick it out, it is a great way to save and even pick up some frugal habits along the way!

  • Great post and real-life examples of how geoarbitrage can really change personal finances. It’s a total underutilized resource in my opinion. When you don’t have to worry as much about paying the bills it frees up time to focus on investing in ourselves through education, side hustles, or just having fun. I journaled a bit about using geoarbitrage as a key tool for enabling taking a mini-retirement: I hope Soapy has this opportunity in the future too!

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