You’re More FI Than You Think

With inflation taking a big chunk out of everyone’s paycheques, it seems like becoming financially independent is becoming increasingly hopeless.

But have you considered that you may already be FI, or be more FI than you think?

When people think of FIRE, they think of becoming financially independent in the current city they live and work in.

But here’s the thing. Once you become FI, you no longer need to work. Which means you no longer need to pay through the nose to live in a city with job opportunities. You no longer need to pay for crowds, stress, and be at the mercy of the real estate market.

Your FIRE number will be very different depending on where you decide to live. For example, your FI number in Vancouver might be $1.2 Million (based on the average monthly cost of living for an individual stated on Numbeo.com). But in Chiang Mai, your FI number suddenly drops to $500,000, without painful cuts to your lifestyle.

You might be frustrated that you’re decades away from FIRE in a high cost of living city in North America, but in reality are either already FI or close to FI in many places around the world.

New York FIRE and L.A FIRE very different from ChiangMai FIRE and Oaxaca FIRE.

Case in point. One of my friends, who earns an average salary in a major metropolitan city in Canada and has been working and saving for 20 years, discovered recently that instead of struggling to pay $2500/month in housing costs and going into the red every month when you add in everything else, she could quit her job, move to Chiang Mai, and already be FI with her $500K portfolio.

Why struggle when she can move and be immediately ahead?

And she doesn’t have to quit working either. Being ChiangMaiFIRE (or ChiangFI) means she can get a digital nomad visa and start an online business or teach English. Even making just $500/month will cover plenty of expenses in the Land of a Thousand Smiles, whereas it would barely make a dent in her rent in Canada.

This is the strategy that worked for many nomadic families after the 2008 Great Financial Crisis and how the WorldSchooling movement started. By selling their homes, moving their families abroad, and working online, these families didn’t just survive, they thrived and spent more quality time as a family.

This was done during a time where digital nomads were seen are fringe weirdos who were illegally living and working abroad. But now that the pandemic has created more remote opportunities than ever and there are 50+ digital nomad visas from countries all over the world, this is a mainstream option, and not just for singles but also families.

Every day I see more and more articles like these:

“Why Americans are Relocating to Mexico for a Better Life”

“How some young Canadians are saving money by embracing the digital nomad lifestyle”

“Digital nomads: rising number of people choose to work remotely” 

“They sold everything to become a digital nomad family. Here’s what happened next”

In fact, digital nomadism has exploded so much in popularity, according to CBC, 11% of the Canadian population are digital nomads living abroad and as high as 17.3 per cent of American workers are digital nomads—that’s a staggering 58 Million people!

So instead of looking at how inflation has set you back financially, think about which countries you might already be FI in.

How to find out if you’re already FI:

1. Make a list of low cost of living cities you might consider moving to (I recommend: Chiang Mai, Da Nang, Oaxaca, Merida, and Porto, just to name a few)
2. Go to numbeo.com and use the trusty “cost of living estimator” for those cities by filling in your family size, rent and food preferences, etc to get the monthly cost of living.
3. Multiple by 12 to get the yearly cost and then by 25 to get your geographic arbitrage FIRE number.

Here’s an example:

This means the monthly cost of living for my family size of 3 is:

$1851.03 USD/month or $22,212.36 USD/year. Which means our Chiang Mai FIRE number is $555,309 USD or $749,092 Canadian

Also, remember that becoming FI doesn’t mean you have to retire. It simply means you’ve made work optional, and in doing so, have achieved location independence. You’re free to switch careers, start an online business, or work part time. Making $1000/month online wouldn’t even cover your rent in high cost of living cities in US or Canada. But doing it in Thailand, Vietnam, Mexico, or Portugal? That’s rent + food.  And this is in addition to the capital gains, dividends, and interest generated by your portfolio.

As digital nomad Azra from the above CBC article said:

‘”If I could spend $2,200 on a one bedroom in Toronto or if I could spend $2,200 and that gives me flights, a place to live, groceries, fun things to do — why would I not choose the second one?”

What do you think? Would you move to get ahead? Are you already FI somewhere else in the world?

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