Geoarbitrage with a Family of 5 (Moving from HCOL to LCOL)

In the name of financial independence, our family of 5 decided to geoarbitrage from Washington to Texas. In total, this move was about 2,000 miles and 30-hours worth of driving. We moved for many reasons including job opportunity, cost-of-living, and to increase our ability to build wealth.

Geoarbitrage is moving from a high cost-of-living location to a lower cost-of-living location while retaining the higher household income. The first image that typically comes to mind is a software programmer sitting on a warm sandy beach in a foreign country. That’s not the common scenario.

In fact, relocating to a lower cost-of-living location is a great way to build additional wealth, meet new people, have new experiences, and further grow as an individual and family unit.

This is our geoarbitrage story.

Why we Geoarbitraged

Moving from a high cost of living location to a low cost of living location is something a family can leverage and it’s one of the benefits to relocating our family. Luckily, we operate our household in a way that allowed us to make a drastic move across the country in a relatively short time.

Prior to COVID-19, I was given the green light to work remotely. The process of us moving to a new state halfway across the country started just before the pandemic got its foothold in the United States.

We moved from a fairly high cost-of-living city (relative to the opportunities and activities available) to a fairly low cost-of-living city. Where we live now is about 10% cheaper (if you average all major budget categories) and has much more to offer when it comes to job opportunities, entertainment and quality of life.

Our Hometown

Our hometown has a population of about 250,000 people and is at least 3-hours from any metropolitan area. There are few if any jobs in the software as a service (SaaS) industry in which I work. This was a big driver for us.

If for some reason my job opportunity was diminished I would have nowhere else to go. I would have to work remotely and in that case, we would have explored moving anyways.

Job Opportunity

My wife is an elementary school teacher and can perform that work in any state. Once we got serious about moving, I put her to the task of landing a teaching job near our desired city. Within weeks, she accepted a job offer.

I work as an Account Manager for a software company. There’s next to no opportunities in our hometown unless we move 4-hours West to Seattle. Seattle is not a place for us to raise a family or build wealth.

We now live in between San Antonio and Austin, Texas. within a 1-hour radius, there are nearly 3-million people. There are numerous jobs in my industry within a reasonable commute. Not that I’m looking for a new job, but should something happen, there are a plethora of opportunities to continue growing within my career.

Why Texas?

Kayla and I are future planners. It’s what we do. Several years ago we asked each other where we would move if we could geoarbitrage the family anywhere in the United States.

We chose the suburbs of San Antonio. Specifically, New Braunfels.

Here’s why:

  • Opportunity for our kids

  • Warmer weather year-round

  • Proximity to a warm ocean (3 hours)

  • Cost of living

  • Population growth (home appreciation)

  • Larger, nicer homes for less

  • Stronger job market

  • No state income tax

  • More family activities

  • Outdoor activities

  • Centrally located for travel

In short, our money will go further, less worry about job loss and our family has a heck of a lot more adventures to experience.

Opportunity for our Kids

Pretty much everything we do is for the betterment of our kids and their future. Our hometown has very little diversity, job opportunity and is conducive to creating a small-world mindset.

Moving our kids to this new location offers them much more exposure to different people, cultures, ideas and allows us to do more as a family while spending less.

The schools are more highly rated, it’s a fairly conservative town, is nearby military bases and many large educational institutions. The opportunities are large and the drawbacks small.

Cost of Living Comparison

San Antonio, Texas is about 9% lower when it comes to the total cost of living. From utilities and groceries to gas and entertainment. You have to look at all aspects.

You can use a cost of living comparison tool to get a good picture of the difference between two cities.

Here’s our cost of living comparison:

Cost of living comparison between West Richland, Washington and San antonio, Texas. 100 is national average.

Cost of living comparison between West Richland, Washington and San antonio, Texas. 100 is national average.

Household Income

For being under 30-years old, I earn a respectable wage (thanks to commission sales). My income plus Kayla’s income is on track for about $150,000 in 2020.

The median household income in our hometown is $94,233. It’s $64,208 in New Braunfels, Texas.

My income will remain unchanged due to my retaining my job and Kayla accepting a teaching job with comparable pay. This is what makes geoarbitrage so powerful.

Most of our expenses are reducing, allowing us to purchase a nicer home in a quality neighborhood that will appreciate greatly over the next 20-years. We’re also able to save and invest a higher percentage of our income.

Housing Markets

Our hometown housing market has been on fire for over a decade. We purchased our current home for $242,000 in 2018 and we sold it for $290,000 within 20-hours of listing it.

Our previous interest rate was 4.5% and our new interest rate is 3.25%. Utilizing the VA loan, we were able to save a ton of money on closing costs. In fact, closing costs were less for this $450,000 house than it was for our $242,000 house in 2018.

New Braunfels was listed in the top 10 “boom town” cities in America and has been the second fastest-growing county in the United States for several years. From what I understand, San Antonio and Austin are no longer sprawling outward, but rather sprawling together. Closing the gap between the two cities at a rapid pace.

We love the idea of having access to two major cities in under an hour’s drive while retaining the rural feel and family pace of our hometown.

Breaking the News to Family

Informing families about our move was not easy. Even though we have been outspoken about doing this the past several years it still came as a shock to friends and family.

Without going into detail, some family was understanding, others not so much. This was indeed the hardest part of the process, but the thought of spending the next 20+ years in the same town I grew up in sounds like a worse experience.

Our proximity to the family has been in flux since I graduated high-school. My parents moved across the state multiple times, I joined the Air Force and moved to Texas, Kansas, and then back to Washington.

It’s been 6-years since we’ve been back in town and in that time my parents moved 2.5 hours away and Kayla’s parents divorced.

We waited until we were job committed to moving and there was no going back. This gave us confidence in our communication and kept our family from riding an emotional roller coaster. We didn’t want any short term negativity to impact our decision making because this decision is what's best for OUR family unit. Nobody else.

Kayla and I have a different perspective of the world and travel. Maybe it’s because we moved away so young and had an opportunity to travel the world. To us, it’s no big deal to jump on a plan and fly to visit family. Especially when our parents have the financial means and time to do so.

Summary

We moved 2,000 miles across the country with our 3 boys. For many reasons, but mostly for job opportunities, a new adventure and to accelerate our path to financial independence.

This was an easy decision until we had to tell our friends and family. On paper, it’s smart for all the reasons outlined above. In reality, it’s much more difficult to follow through on.

At the end of the day, it’s our life and we both would regret it if we spent our entire life in the same small town. We can always move back someday if we want.

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