måndag 23 juni 2008

Geo arbitrage

Geo arbitrage has become a little bit of a new hype word. What Geo arbitrage means is: currency difference in living standard between different countries. More or less.

This means that, if you live in Sweden like me, for every 1 SEK you can recieve 10 times more in purchasing power in Kenya. That means you don't even have to amass one million SEK (or approximately 60,000-70,000 USD) in order to be regarded as a millionaire in Kenya. In Kenya you are considered a millionaire with only 100,000 SEK (or approximately 6000-7000 USD). At least if you use the SEK/Kenya shilling comparison. You have to look at the difference between your currency and the Kenyan shilling in order to see what you can gain yourself.

So why do I bring this up? What is the great thing I want to display here? Simple:

If you make 1000 SEK in Sweden and then spend in Kenya as a resident you will have the purchasing power of 10,000 SEK. That means, you don't have to work hard at all anymore. You can cut hours from your mobile job (if you have any such job that is) and just relax more than you do now (or do something more meaningful if you do hate your current job). But, of course this hinders you to one specific country of course: Kenya.That is the bad part.

As they say: There is good things, but even good things has it's particular dark side. Yin and Yang you might say. For every bad part there needs to be an equally good side to balance the situation.

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