Hi Everyone,
I wanted to share some math and really weigh brand equity and high comp to floating on and leaving money on the table but embracing a lcol lifestyle and full remote.
The numbers aren't magic and pretty basic, I floated my resume to a few places, got referred to some more and I got back 3 offers. The market is still hiring for top roles, but I do agree the lower end of the spectrum of jobs does not seem to have movement nor great comp structures.
My work isn't particularly exciting but it pays well and is in Tech. This one place that gave me an offer has great brand equity at the cost of no remote, but 100% bonus and a great title to boot. Let's call it InvestmentBank#1 and the location, let's say Pacific North West. My age? Let's say I'm right in the middle of my 30's.
InvestmentBank#1 like all Investment Banks hands out lofty titles. Feels good, looks good, would be nice to have a business card with it. LinkedIn would be great. Let's say I'm near the top pay band at 250K, with possible 80% bonus paid out based on performance. Said IB plays many games with the bonus but generally the director is rewarded for handing out more bonuses because it shows they are hiring high performers/hitting right metrics. They pro-rate, so lets say if I were to join in June, 250K + 100k = 350K total comp.
That number sounds fantastic, and 20's me would've loved it. But some pocket math:
Ouch! While I'm sure I could file a schedule c and get some expenses deducted from an itemized return, that's a game I don't want to play so, my thinking projection was:
Monthly projected expenses:
Grand total: $42,000 , Ouch!
The car is a non-needed purchase, I have a unreasonable 2 seater convertible that is perfect to me in everyway, but is highly inconvinent half the year in the PNW, so a 4runner, would be nice and my excuse is safer then driving a small, rwd, convertible on snowy highways and hoping I won't roll backwards on steep hills. 9 years of doing that and no issue, but a new car would be nice.
Tax Sheltering on 250K:
So Cash Impact:
From $250,000. The end result becomes $138,000 and then from that to subtract $42,000 from the bare essentials above.
$96,000 true net.
The 401k 72k limit may be uncapped, but unsure, so ran the numbers above. capping it what the 401k plan may be.
And it's a bit depressing, It's great base pay, but the need to go to the office everyday to be at a hot desk where everyone else is located in different geographic offices seems like a joke. If the role was fully remote, it'd be different. And of course being with what the title says, probably 8-10 hour days.
Meanwhile, Remote. I have steady income and can do a similar W2 role if I so desire, from another offer that is open to being geographically remote/world wide because they have local offices.
Typical my offers for remote are $125,000-175,000, and depending on the type of work if it isn't w2, it can be c2c, it can be Part time as well. I have one with a retainer that I currently have (and would be keeping if I were to take the in office job) which is exciting, but granted I have not currently been maximizing my investments properly/exposed them to the market which means I am losing quite a bit. I could do another table for the above, but going 50% from the above numbers puts it at a base comp remote job of $125k which is average and accurate enough.
The biggest thing when doing geographic arbitrage is just true maximizing savings and lower cost of living. I personally believe the USA is an expensive place to be in.
For example:
That $2000 apartment, is abotu 500-600sq ft, location convinient, but then tack on $300 for utilities, power/water/internet. Nothing extravagent, then a parking spot, lets say $200. It becomes $2500 quick, or $30,000 annually.
My go to place has been Japan/Vietnam/Indonesia, it runs similar for Philippines, Thailand, Malayasia and China.
Average 600sq ft condo in those places run less than $1000, new luxury, and would be 600-800sq ft. Philippines and Bali, Indonesia would skew highest, while Vietnam would skew lowest, with HCMC D1/D3 being around $500/600 a month, Hanoi slightly cheaper. Houses are also possible, and better value and go from the same rate with 800-1500 sq ft normally in the right "expat" locations. Go outside the main city business districts, they can reduce by 25-60% easily. Thats just one exampl that rings true for most of South East Asia. For Japan/China, apartments and houses were for the longest time not considered investments but there is Tier 1 city pricing like Shanghai/Beijing and Tokyo vs tier 2 cities and so on - but a new apartment, 700-900 sq ft (in asia, 60sqm is the norm, 30sqm is considered micro apartment and no fun, so 60sqm = 650 square feet., families start living in around 90-120sqm.
What about taxation and such: Great question, there are digital nomad visas that escape taxation for Thailand, Malayasia and Indonesia. Japan is structured differently but if you enter on a visa waiver, you can work provided you don't make income in the country - this is a valid question that I'll write about in another thread if people are truly interested in tax harvesting/sheltering and avoiding liability while doing this.
Overall the real estate cost, lets say $9,600 annually which is a very generous cost that is above most local population affordability but you are getting the new of the new and prime convience spots in all of those countries. It hits the average GDP per capita which is also another interesting thing to note: That you can find cheaper if you really want too.
The other costs, really, become more inconsequential, food you can practically eat out for that budget or spend half on groceries for fresh produce/farm, etc.
The car of course also goes out of the picture, while cool, not really needed - hired cars/taxis are more affordable, 25% of the car budget is whats needed for true convience and eliminating the capex/opex projected for the in office job. But, no cool 4runner.
But then comes in the true cost: Is being remote and always known as an Remote Engineer in tech and, sadly more replacable worth the temporary freedom vs a few years in a higher comp role with good brand/equity/alumni network and a title that can potentially have more upward mobility if so wanted to be in a corporate life?
The facetime I do think pays a difference, but also I don't have an endgame decided yet:
I don't think theres a true victory to be a company man, I've never had a promotion, I've always left a role for one with better title and salary or been cut/laid off/fired, lol and writing your own exit by maximizing savings rate, and not being depedent on a company is much better, but I do hear stories of people who did commit and get a substanial package.
But, I also do feel I'm lazy - not in the sense of learning, interpreting and trying to find the best path but corporate jobs really seem hollow and empty. It's been over 8 years since I've actually had to go to an office job on a daily basis and even then I was able to fanangle doing a few days a month in office and remote.
And living abroad in Asia is just night and day difference to living in the USA. It does get old/exhausting after a bit but I've found so much opportunity there and my network of friends is there that really, ironically, rejecting a 250K base pay offer seem reasonable.
I wanted to share some math and really weigh brand equity and high comp to floating on and leaving money on the table but embracing a lcol lifestyle and full remote.
The numbers aren't magic and pretty basic, I floated my resume to a few places, got referred to some more and I got back 3 offers. The market is still hiring for top roles, but I do agree the lower end of the spectrum of jobs does not seem to have movement nor great comp structures.
My work isn't particularly exciting but it pays well and is in Tech. This one place that gave me an offer has great brand equity at the cost of no remote, but 100% bonus and a great title to boot. Let's call it InvestmentBank#1 and the location, let's say Pacific North West. My age? Let's say I'm right in the middle of my 30's.
InvestmentBank#1 like all Investment Banks hands out lofty titles. Feels good, looks good, would be nice to have a business card with it. LinkedIn would be great. Let's say I'm near the top pay band at 250K, with possible 80% bonus paid out based on performance. Said IB plays many games with the bonus but generally the director is rewarded for handing out more bonuses because it shows they are hiring high performers/hitting right metrics. They pro-rate, so lets say if I were to join in June, 250K + 100k = 350K total comp.
That number sounds fantastic, and 20's me would've loved it. But some pocket math:
| Gross W2 | Federal Income Tax | SS/Medicare | Total Tax | Tax Rate | Net |
| 250,000 | $51,000 | $17,600 | $68,600 | 27.4% | $181,400 |
| 350,000 | $85,000 | $22,900 | $107,900 | 30.8% | $242,100 |
Ouch! While I'm sure I could file a schedule c and get some expenses deducted from an itemized return, that's a game I don't want to play so, my thinking projection was:
Monthly projected expenses:
| Item | Monthly | Yearly |
| Rent | $2,000 | $24,000 (Floor cost, can go higher, easily.) |
| Car, NEW 4runner | $1000 | $12,000 (includes gas,parking,monthly, car note, etc.) |
| Groceries/Utilities | $500 | $6000 |
Grand total: $42,000 , Ouch!
The car is a non-needed purchase, I have a unreasonable 2 seater convertible that is perfect to me in everyway, but is highly inconvinent half the year in the PNW, so a 4runner, would be nice and my excuse is safer then driving a small, rwd, convertible on snowy highways and hoping I won't roll backwards on steep hills. 9 years of doing that and no issue, but a new car would be nice.
Tax Sheltering on 250K:
| Bucket/Type | Amount |
| 401(k) | $24,500 |
| HSA | $4,400 |
| Backdoor Roth IRA (After tax?) | $7,500 |
| Roth IRA | $7,500 |
So Cash Impact:
| Item | Annually |
| Net after taxes, no shelters | $181,000 |
| Less 401k+HSA | -$28,900 |
| Tax savings from 401k+HSA | +$8,000 |
| Less from Tax Mega backdoor | -$15,000 |
| Less Backdoor Roth IRA | -$7,500 |
| Net net Cash | $138,000 |
From $250,000. The end result becomes $138,000 and then from that to subtract $42,000 from the bare essentials above.
$96,000 true net.
The 401k 72k limit may be uncapped, but unsure, so ran the numbers above. capping it what the 401k plan may be.
And it's a bit depressing, It's great base pay, but the need to go to the office everyday to be at a hot desk where everyone else is located in different geographic offices seems like a joke. If the role was fully remote, it'd be different. And of course being with what the title says, probably 8-10 hour days.
Meanwhile, Remote. I have steady income and can do a similar W2 role if I so desire, from another offer that is open to being geographically remote/world wide because they have local offices.
Typical my offers for remote are $125,000-175,000, and depending on the type of work if it isn't w2, it can be c2c, it can be Part time as well. I have one with a retainer that I currently have (and would be keeping if I were to take the in office job) which is exciting, but granted I have not currently been maximizing my investments properly/exposed them to the market which means I am losing quite a bit. I could do another table for the above, but going 50% from the above numbers puts it at a base comp remote job of $125k which is average and accurate enough.
The biggest thing when doing geographic arbitrage is just true maximizing savings and lower cost of living. I personally believe the USA is an expensive place to be in.
For example:
That $2000 apartment, is abotu 500-600sq ft, location convinient, but then tack on $300 for utilities, power/water/internet. Nothing extravagent, then a parking spot, lets say $200. It becomes $2500 quick, or $30,000 annually.
My go to place has been Japan/Vietnam/Indonesia, it runs similar for Philippines, Thailand, Malayasia and China.
Average 600sq ft condo in those places run less than $1000, new luxury, and would be 600-800sq ft. Philippines and Bali, Indonesia would skew highest, while Vietnam would skew lowest, with HCMC D1/D3 being around $500/600 a month, Hanoi slightly cheaper. Houses are also possible, and better value and go from the same rate with 800-1500 sq ft normally in the right "expat" locations. Go outside the main city business districts, they can reduce by 25-60% easily. Thats just one exampl that rings true for most of South East Asia. For Japan/China, apartments and houses were for the longest time not considered investments but there is Tier 1 city pricing like Shanghai/Beijing and Tokyo vs tier 2 cities and so on - but a new apartment, 700-900 sq ft (in asia, 60sqm is the norm, 30sqm is considered micro apartment and no fun, so 60sqm = 650 square feet., families start living in around 90-120sqm.
What about taxation and such: Great question, there are digital nomad visas that escape taxation for Thailand, Malayasia and Indonesia. Japan is structured differently but if you enter on a visa waiver, you can work provided you don't make income in the country - this is a valid question that I'll write about in another thread if people are truly interested in tax harvesting/sheltering and avoiding liability while doing this.
Overall the real estate cost, lets say $9,600 annually which is a very generous cost that is above most local population affordability but you are getting the new of the new and prime convience spots in all of those countries. It hits the average GDP per capita which is also another interesting thing to note: That you can find cheaper if you really want too.
The other costs, really, become more inconsequential, food you can practically eat out for that budget or spend half on groceries for fresh produce/farm, etc.
The car of course also goes out of the picture, while cool, not really needed - hired cars/taxis are more affordable, 25% of the car budget is whats needed for true convience and eliminating the capex/opex projected for the in office job. But, no cool 4runner.
But then comes in the true cost: Is being remote and always known as an Remote Engineer in tech and, sadly more replacable worth the temporary freedom vs a few years in a higher comp role with good brand/equity/alumni network and a title that can potentially have more upward mobility if so wanted to be in a corporate life?
The facetime I do think pays a difference, but also I don't have an endgame decided yet:
I don't think theres a true victory to be a company man, I've never had a promotion, I've always left a role for one with better title and salary or been cut/laid off/fired, lol and writing your own exit by maximizing savings rate, and not being depedent on a company is much better, but I do hear stories of people who did commit and get a substanial package.
But, I also do feel I'm lazy - not in the sense of learning, interpreting and trying to find the best path but corporate jobs really seem hollow and empty. It's been over 8 years since I've actually had to go to an office job on a daily basis and even then I was able to fanangle doing a few days a month in office and remote.
And living abroad in Asia is just night and day difference to living in the USA. It does get old/exhausting after a bit but I've found so much opportunity there and my network of friends is there that really, ironically, rejecting a 250K base pay offer seem reasonable.
