Lifestyle Arbitrage, Balancing Ambition and Relationships, and What Gives Scott Hope

0:00Rinse takes your laundry and hand delivers it to your door. expertly cleaned and folded so you could take the time once spent folding and sorting and waiting to finally pursue a whole new version of you like tea time you or this tea time you or even this tea time you said you hear about Dave or even tea time tea time tea time you so update on Dave it's up to you we'll take the laundry rinse it's time to be great AI agents are getting pretty impressive You might not even realize you're listening to one right now. We work 24-7 to resolve customer inquiries. No hold music, no canned answers, no frustration.

0:42Visit sierra.ai to learn more. Not all journalism is the same. Take The Guardian. Our coverage has something unique. Fierce independence. Nobody owns us or tells us what we can and can't say. So we're free to report the whole picture. We connect what's happening in Washington to the rest of the globe. Expose corruption wherever we find it. And give fresh perspective on everything, from wellness and soccer to culture, the climate and more. Read, watch and listen to The Guardian for free at theguardian.com.

1:17Welcome to Office Hours with Prof G. This is the part of the show where we answer your questions about business, big tech, entrepreneurship and whatever else is on your mind. Today, we've got two great listener questions lined up. And then after the break, we've got the Reddit hotline where we pull questions straight from Reddit. If you'd like to submit a question for next time, you can send a voice recording to officehoursofprofgmedia.com. Or if you prefer to ask on Reddit, post your question on the Scott Gallery subreddit, and we just might feature it in our next episode. First question.

1:49Hi, Prof G. I'm a solopreneur in my late 30s running a modestly successful online business. My partner and I have deep ties in the U.S., but work independently and could live anywhere. As we consider having kids and the life we would want them to have, we also discuss moving abroad for three main reasons. Lifestyle arbitrage, a more supportive environment for children, and as a hedge against U.S. instability. Given your recent thoughts on diversifying your investments globally and your current residency in the U.K., do you think younger Americans should be diversifying their residency options when possible?

2:23If so, which countries would you look into that still offer some of the economic opportunities that the U.S. currently does? Thanks for all the great content and advice. I love this question. According to a Harris poll released in March, roughly 40 % of Americans have considered or are actively planning to move abroad. The number one reason, cost of living. More than half of Americans say they believe they'd have a higher quality of life abroad. Among those that planned on leaving their top choice destinations were Canada, the UK, and Australia. As for non-English speaking countries, Americans indicated they were eyeing moves to countries including France, Italy, Japan, Mexico, Spain, and Germany.

2:59countries ranked among the most receptive to digital nomads are Spain, the UAE, Montenegro, and the Bahamas. Okay, so in sum, I love a lifestyle arbitrage. And you want to lean into your strengths. And if your strengths are you have a career that is not location dependent or geographically dependent, then you want to do the lifestyle arbitrage. The key is to make a urban city-like salary without having urban city-like costs, unless you're in love with cities. And then, okay, some people, I know some people who are like, I am leaving New York feet first and I don't care what it costs. I don't care what sacrifices I have to make.

3:35Most people, by the time they have kids in New York, peace out because it just gets prohibitively expensive. And the lifestyle is just tough. I remember walking around with my boys in Manhattan and thinking I always had to have their hands for fear they'd run out into the middle of traffic. So a hundred percent, I would say really be thoughtful about the lifestyle arbitrage. My general assumption or general reductive analysis after having molested the earth for the last 30 years is that America is the best place to make money and Europe is the best place to spend it. So if you can make an American salary and live in Europe, that's a decent arbitrage.

4:05Also think about different places in the U.S. And that is there's a lot of cities in the South, quite frankly, that I think are just a great – so for me, arbitrage is – one, I think college towns are great arbitrages. whether it's Charlottesville or Ann Arbor or Chapel Hill. These cities typically, if you can call them cities or towns, typically bring this great peanut butter and chocolate combination of a bourbon sensibility with rural beauty and hopefully rural pricing. And you can have a great quality of life in a college town. I think there's a lot of cities in the South right now that offer what I think is a great lifestyle arbitrage, specifically the weather, that aren't as expensive as some of the blue cities in the North.

4:44In some, if you were to look at migration patterns in the U.S., stripped by two things, low taxes and sunshine. And I would also think about, you know, think about this a lot, but the tax arbitrage by moving to Florida from New York and you have to move, you can't fake it. You have to spend 183 days there and roll your kids. So you really can't fake it. You legitimately have to move the 13 % swing. I reinvested purposely that entire 13 % over 10 years and it helps have a bull market. But basically, you know, my cars, my housing, my kids' school were paid for in that tax swing because I make really good money, but a lot of it was current income.

5:19So 13 % of that, then you invest it. If you make$300 ,000, you're not saving$39 ,000. You're saving, you have$39 ,000 in capital that should grow to 78 or 100, 150, 10 years on. And you do that every year, you wake up and you might have seven figures in additional wealth that you didn't have had you not moved. So I love a lifestyle arbitrage. Some cities that I think offer incredible lifestyle arbitrages at the moment. By the way, it used to be Florida. When I moved to Delray Beach, our first home that we rented there was on the water, on the intracoastal, and cost us$4 ,500 a month. It no longer costs$4 ,500 a month.

5:55Word is out about Florida that lifestyle arbitrage has been starched out, as they usually are starched out, some cities I would consider. If you were single and male, I would think about Cape Town. I think The crime there is a factor, but if you can make a Western salary in Cape Town, you're just going to have an extraordinary quality of life. I love Cape Town. I've been there several times now, and I can't get over how good the food is, how deep the culture is, and how inexpensive everything is. Now, crime is an issue. So I wonder if it's a place for a family. I'm sure other people will weigh in.

6:31But I think in terms of just pure raw beauty colliding with an incredible city and incredible food, incredible culture at an incredibly low cost, that is really hard to beat. Madrid or somewhere in Spain. I just think the Spanish get it in terms of being able to get a great bottle of wine for eight bucks, walking around fairly safe, incredible culture, history, proximity to other great cities in Europe. I think Spain offers an incredible lifestyle arbitrage and pretty good weather. The other city I would consider is Mexico City. And I'm assuming it kind of likes cities. Maybe you just want to do a rural arbitrage.

7:05By the way, move everywhere but Connecticut or some suburb or Tiburon where it's beautiful, but it's the same. I've never understood anyone that lives in the Northeast and doesn't live in Manhattan. I just don't get it. It's like all the cold, all the bullshit, and all the taxes and expenses. If you're going to live in the forest somewhere, move to a place with low taxes and low rent and low housing costs and good schools. Anyway, it's not easy to find. But I think Mexico City right now is an incredible lifestyle arbitrage. It's safer than people think. The food's amazing, great art scene, and I would say kind of 30 to 60 percent of the price of, say, Los Angeles.

7:38I think it's a fantastic strategy, a lifestyle arbitrage strategy. Jesus Christ, Floripa. I think Sao Paulo is incredible right now. I think there's just a ton of really interesting cities that are coming up and offer somebody with nomad or digital nomad skills the ability to arbitrage. Even a place like Tokyo with the yen as weak as it is right now, if you like that culture, Tokyo is the most different yet the most sane place. And that is it's capitalist, it's democratic, incredibly safe, incredibly. The thing that struck me also, though, it's so similar in terms of their systems and democracy, their rights, their focus on capitalism growth.

8:15But it's also the place that's most similar while being the most different. I went to what is their Times Square and it's entirely quiet. Everyone's just so respectful and so quiet, and no one jaywalks, and the food's incredible, and the relentless pursuit of perfection is a tagline for Lexus, but it should be a tagline for Japan, because everything they do, they take such pride in the symmetry and the design and the beauty of everything. So if you really wanted something a bit off the beaten path, another great city in Asia, Bangkok. Oh my God, what a cosmopolitan city with great food, great people.

8:46And again, I would bet about a third of the cost of living in an LA or New York. So that's not the question. The question is, where do you not move? I would look at time zones as it relates to your work, where you think you can find human capital to scale your business, where your partner is excited about moving, if you're planning on having kids, where you can find a decent education, proximity to the people you love in terms of direct flights, and where you want to kind of explore and adventure. Some people are more cut out for Europe, some people are more cut out for Asia, some people like to be more adventurous, a place like Latin America or South Africa.

9:18But my brother, this is what you call a good problem. A good problem. Email us and let us know what you decide. Thanks so much for the question. Question number two. Hey, Scott. I've been struggling with your perspective on work-life balance or the lack thereof in your 20s and 30s. You often frame those years as a time for relentless ambition, even at the cost of relationships, health, and personal well-being. I'm particularly curious about how you discuss your first marriage. You emphasize that meaningful relationships are the key to happiness, yet also seem to suggest that sacrificing them is necessary for success.

9:58That feels like a contradiction, no? If you could go back, would you do anything differently to preserve those relationships? For context, I'm 28, putting everything into a new business, and dating an incredible woman I hope to spend my life with. Should I expect to lose my partner, and friends to succeed? Or is there a better way? Thanks for your time and for the impact you have on young men like me. Thanks for the question. You sound awfully serious. So first off, I can't blame the dissolution of my first marriage on my ambition or my career. I say that my relentless focus on work took a toll on me physically and my relationships, and it did.

10:41But the bottom line is, without violating privacy, is the end of my first marriage was a function of my immaturity. And the fact that I was working around the clock probably didn't help in terms of stressors, but I can't just lay it at the feet of my career. I want to be clear, my way was to do nothing but pretty much work from the age of 22 to kind of my late 40s, early 50s. That was my way, but I'm not sure it's the right way. And I I have some proximity bias, and that is the people I am close to are mostly other very ambitious, economically ambitious people that want to be successful and live in places like L.A.

11:18and New York where you have to make a shit ton of money to have the lifestyle we want. And also MBA students. And when I survey my MBA students, about 70, 80 percent of them expect to be in the top 1 percent income earning households by the time they are 35. And what I suggest is that if you are that ambitious economically or from an influence or relevant standpoint, you just have an honest conversation around the tradeoffs and the sacrifices. You might decide that you want the tradeoff on the other end of the spectrum, that you're going to move to St. Louis and have a nice life and work, but you're going to work to live, not to live to work.

11:52And there's absolutely nothing wrong with that. And you can maintain healthy relationships. You know, coach Little League, work a reasonable amount of hours, you know, have your church or country club or whatever it is that gives you spiritual or relationship reward and have a wonderful relationship with your partner and your kids. I don't, I think that's possible. Unfortunately, I think it's less possible. What we've seen is than it used to be. What we've seen is the majority of cities have brought up their prices because of inflation. So I think in a capitalist society, the cruel truth is you need a certain level of economic security.

12:25But if you've decided you don't want to work 40 hours a week, not 60, and that you're going to prioritize your relationships and your health and your fitness and the pursuit of other outside interests, more power to you. I don't, I get it. I get it. But you also have to recognize that means you probably aren't going to make a million, two million bucks a year and live in LA or Manhattan. You're just not going to get there doing, you know, an ordinary amount of sacrifice around your career. So what I would say is it's a spectrum. And that is you have to decide and get alignment with your partner around where on that spectrum you want to be.

12:59And I've always assumed that the majority of people I come in contact with, and maybe that's incorrect, but actually it's not. The majority of the young people I meet, where they fall flat is they get used to these Instagram life and the algorithms that they're going to be on a jet and vacationing at the Almond in Utah, Harding and St. Barts or Saint-Tropez, and that they're gonna get there at a very young age and just, you know, they'll find a job that'll carry them there, or they'll find the right cryptocurrency they'll carry them there. No, that involves a lot of luck and working your ass off, which comes at a sacrifice.

13:37So I think that's where the, what I'll call the dissonance is, is that people, a lot of people don't recognize the sacrifice. A lot of people on the other end say, well, you can make that sacrifice and still not get there, which is also true because luck plays a big role. So why would I make that trade when I can just be a good citizen, work relatively hard, find a good partner and just enjoy life? I also want to acknowledge that I'm more, I wouldn't say I'm more, not as materialistic, but I'm very economically driven because I didn't have money growing up and it was very stressful for me. So I've always been focused on it.

14:11So I probably over-focus on it. And also the fact that I'm around people who are all very ambitious. But the thing I can't stand is very successful people when they give me this bullshit that when they're in front of a crowd, I never thought much about money. Yeah, fuck you. You think about money every minute. And I think if you want to be financially very successful, you need to be somewhat financially literate and really know your budget, know how much you're making, know taxes, really understand this stuff. I don't think you can be great at tennis or anything without thinking about it a lot and talking about it a lot.

14:44And one of those conversations is to get alignment with your partner and say, where do we expect to be economically? What is the lifestyle we want to have and what are the trade-offs we're willing to make and where on that spectrum are we comfortable? And getting alignment with your partner, because I think what creates a lot of tension in relationships is that sometimes one, it's not that they're not making a lot of money, it's just that they don't have alignment. One person would rather they work less hard and spend more time with each other and their kids and not be a member of the Tony country club or have the fancy car.

15:17And the other does not want that, wants to work really hard and have the accoutrements of wealth and relevance. So I think the key is getting just alignment with your partner and then making sure your expectations foot to the reality of the situation in terms of where you live, your lifestyle, your spending patterns. But my brother, I'm not suggesting my way is the only way. Everyone's got to find their own route here. Thanks for the question. We have one quick break. And when we're back, we're diving into the depths of the ocean of Reddit.

15:54Avoiding your unfinished home projects because you're not sure where to start? Thumbtack knows homes, so you don't have to. Don't know the difference between matte paint finish and satin? or what that clunking sound from your dryer is? With Thumbtack, you don't have to be a home pro. You just have to hire one. You can hire top-rated pros, see price estimates, and read reviews all on the app. Download today. From Pushkin Industries, I'm Jonathan Goldstein, and Heavyweight is back. The new season is bigger than ever. Bigger hopes? I keep waiting for this moment. When he says, Mom, I get it. I'm sorry.

16:34Bigger dreams. Tom Hanks wants to meet with you. This is a real chance. And bigger heartbreaks. I thought it would be my movie moment. And maybe he would even whisper in my ear, I've always been in love with you. Check out new episodes of Heavyweight on Apple Podcasts.

16:58Adobe Acrobat Studio. So brand new. Show me all the things PDFs can do. Do your work with ease and speed. PDF spaces is all you need. Do hours of research in an instant. With key insights from an AI assistant. Take a template with a click. Now your Prezo looks super slick. Close that deal. Yeah, you won. Do that, doing that, did that, done. Now you can do that, do that with Acrobat. Now you can do that, do that with the all new Acrobat. It's time to do your best work with the all new Adobe Acrobat Studio. Welcome back. Let's bust right into it.

17:36Our question today comes from Captain Athens. They ask, Prop G, what gives you hope? Huh. Okay. I just interviewed the historian Timothy Snyder, and he's really inspired by some of these protests or marches in the United States. I like that. You see hundreds of thousands of people protesting. That makes me feel hopeful. There's this wonderful graph showing that not in the U.S., but globally, people are spending more time volunteering time to help people they will never meet. So more people are planting trees the shade of which they will never sit under. That's very hopeful. I'm hopeful that the EU binds together to push back on Ukraine.

18:15I think we're starting to pay more attention to the struggles of young men, mostly led by the concerns and recognition of these struggles by their mothers. I love that we're beating back Putin. I love, you know, there's a lot of things I'm excited about, a certain amount of drug discovery. I'm, you know, I am fairly hopeful. It sounds very passe. My boys give me hope. I just think they're funny and nice and interesting and, you know, and beautiful. Everyone thinks their boys are the most beautiful thing in the world. And I like seeing life through the lens of what they see. My youngest son is starting to get into fashion.

18:55I just think it's hilarious what he finds fashionable and he wants me to buy him a chain. And then we were looking at chains together and just what he finds interesting and cool. And I used to do a college tour with my oldest and we got to this one university, we did eight universities in six days. And then we got to this one university and it was like a dog off a leash running ahead of me. And I'm just trying to figure out what is it about this university or this environment that all of a sudden he's decided this is the college he wants to go to. So kids give me hope. But I think there's a lot to be hopeful around.

19:26So also dogs, dogs give me hope. Anyways, hope that's enough. Thanks for the question.

19:39This episode was produced by Jennifer Sanchez. Our intern is Dan Chalon. Drew Burroughs is our technical director. Thank you for listening to the Prop G pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn. And please follow our Prop G Markets pod wherever you get your pods for new episodes every Monday and Thursday.

20:03Mercury knows that to an entrepreneur, every financial move means more. An international wire means working with the best contractors on any continent. A credit card on day one means creating an ad campaign on day two. And a business loan means loading up on inventory for Black Friday. That's why Mercury offers banking that does more, all in one place, so that doing just about anything with your money feels effortless. Visit mercury.com to learn more. Mercury is a financial technology company, not a bank. Banking services provided through Choice Financial Group, Column N.A., and Evolve Bank and Trust members FDIC.

20:42Support for this show comes from Airbus. It took 100 years for electric vehicles to catch on. Modern solar panels? Half a century. Lithium batteries? Decades to go from their debut to daily use. It's a pattern. Energy tech breaks through, stalls, and then something tips the scales. But for every success, there are even more almosts. So what if there was a breakthrough sitting at this crossroads right now? SAF, or sustainable aviation fuel, could forever change the future of flight. Learn more about how Airbus is contributing to accelerate this journey at fly.airbus.com slash theflightpath. What do walking 10 ,000 steps every day, eating five servings of fruits and veggies, and getting eight hours of sleep have in common?

21:35They're all healthy choices. But do all healthier choices really pay off? With prescription plans from CVS Caremark, they do. Their plan designs give your members more choice, which gives your members more ways to get on, stay on, and manage their meds. And that helps your business control your costs, because healthier members are better for business. Go to cmk.co.access to learn more about helping your members stay adherent. That's cmk.co.access