Menu

geographic arbitrage

Home General/Welcome geographic arbitrage

  •  financemd815 
    Participant
    Status: Physician
    Posts: 2
    Joined: 01/13/2019

    Finishing fellowship and comparing job offers. I understand the positives of geographic arbitrage and one offer (in a more rural town) is 40k more than a suburb of a major city. I was trying to see which place would be more livable. I looked up facts about the area including crime statistics, poverty rates, and median household income. the more rural location definitely has significantly more crime and higher poverty rates. how do others deal with this when deciding on location despite the increased income, no kids yet but eventually yes and a little concerned about their future well being. interested in hearing how others factored this into their decisions

    #188950 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 2469
    Joined: 01/14/2017

    How familiar are you with both locations?  Have you done rotations there or lived there before?  If you are interested in starting a family where do you think is a better opportunity to make that happen?  Salary is only one factor in the equation of utility.

    #188956 Reply
    Vagabond MD Vagabond MD 
    Participant
    Status: Physician
    Posts: 2939
    Joined: 01/21/2016

    In my view, geo arbitrage is a second level decision, perhaps more of a side benefit than a decision point. First you have to like the job. If you are miserable at work, it does not matter if you are in Santa Barbara, CA or Naples, FL, or Manhattan or in the middle of a Great Plains state, 100’s of miles from an airport, a library, and a Costco or Whole Foods.

    Second, you have to like the location. Is it the kind of place where you would want to raise a family (if that is your goal)? Safe? Good schools? Reasonable cost of living? Attractive housing? Recreational opportunities? Like minded people to have as friends and neighbors? Proximity to family, if it’s important? If you cannot be happy with the location, does it really matter if it costs 25-50% less to live there?

    "Wealth is the slave of the wise man and the master of the fool.” -Seneca the Younger

     StarTrekDoc 
    Participant
    Status: Physician
    Posts: 1605
    Joined: 01/15/2017

    Geography related $$ bonus is just that –  tiebreaker bonus $$$.

    1.Happy family

    2.Happy work

    3. Financially feasible to maintain #1+2

    rest are all distant runners to that.

     

    #188997 Reply
    Liked by childay, Hank, Anne
     SValleyMD 
    Participant
    Status: Physician
    Posts: 355
    Joined: 05/12/2016

    Obviously it all depends on the individual. I’m as rural as you can get and it’s a different world. Honestly the biggest gripe I have is having bad youth sports for my kids.. Would I even have envisioned that as an issue before having kids, no, not really.. So its the unforeseen stuff that if you’re not use to where the rural life gets ya.  Oh.. and how much I miss an airport with direct flights.

    If you get a whale of a deal and you don’t have kids, ect, than I would do it… See how it goes. I would rent and I would use that flexibility to the MAX to leverage everything I  wanted out of that job and the set up. It would be awesome to hold the cards like that.

    Also remember the rural route often changes the dynamics with your career. Hospital likely not investing in the nice new toys, you’re looked down on as an idiot by the tertiary centers, you get mostly the bread and butter and ship the fun cases elsewhere. So it can be a career sacrifice to a certain extent..

    #189001 Reply
    Liked by Tim
     MSooner 
    Participant
    Status: Spouse
    Posts: 113
    Joined: 02/25/2016

    Is there anyone you can ask about family life there (schools, sports, where families tend to live?). If not, even Reddit & City-Data aren’t bad places to ask. If the answer is, “everyone with kids who wants good schools lives in this one area” that’s doable. If the answer is, “there isn’t any decent area” that might be a hard pass.

    #189004 Reply
     Anne 
    Participant
    Status: Physician
    Posts: 699
    Joined: 11/07/2017
    Splash Refinancing Bonus

    Rural with higher crime rate than city is concerning to me, and takes away almost all of the attributes of rural living, aside from the higher paycheck and lower cost of living.  It’s not difficult to blow through 40k/year on personal security measures and travel costs to get out of Dodge every chance you get because you don’t like it there, so that would not be a big enough pay differential for me to make it worth it (actually I don’t know that anything would be a big enough pay differential, my priorities have always been vocation first (i.e. a job I enjoy), location second, compensation last.) Despite this, able to reach FI pretty young, still have a job I like, and don’t have to move now to have the life I want.

    #189107 Reply
     ZZZ 
    Participant
    Status: Spouse
    Posts: 174
    Joined: 06/18/2018

    Too little info to say.
    – 40k means alot if your comp us 250. Ain’t much if your comp is 700k.
    – where are you from
    – family now or eventually
    – health of hospitals

    #189111 Reply
    Liked by CM, Kamban, childay
    childay childay 
    Participant
    Status: Physician
    Posts: 765
    Joined: 01/09/2016
    Rural with higher crime rate than city is concerning to me

    Click to expand…

    That also seemed suprising to me.  I believe usually it is the opposite.  I am sure crime statistics aren’t without their problems of course.

    Also your definitions may be different than ours.  A “suburb of a major city” may be a very rich enclave of some sort with low violent crime.  And a “more rural town” could mean almost anything..

    #189124 Reply
     FIREshrink 
    Participant
    Status: Physician
    Posts: 771
    Joined: 01/11/2017
    Disability Insurance

    Commute?

    #189127 Reply
     SValleyMD 
    Participant
    Status: Physician
    Posts: 355
    Joined: 05/12/2016

    Poor + meth = crime

    The per populace rate drives it so doesn’t surprise me that the stats could be worse than cities which dilute out the crime with more good people

    #189136 Reply
    Liked by NaOH, Zaphod, pulmdoc, Anne
    MPMD MPMD 
    Participant
    Status: Physician
    Posts: 1886
    Joined: 05/01/2017

    Rural with higher crime rate than city is concerning to me, and takes away almost all of the attributes of rural living, aside from the higher paycheck and lower cost of living.  It’s not difficult to blow through 40k/year on personal security measures and travel costs to get out of Dodge every chance you get because you don’t like it there, so that would not be a big enough pay differential for me to make it worth it (actually I don’t know that anything would be a big enough pay differential, my priorities have always been vocation first (i.e. a job I enjoy), location second, compensation last.) Despite this, able to reach FI pretty young, still have a job I like, and don’t have to move now to have the life I want.

    Click to expand…

    Crime stats are tough to interpret.

    I live in a “good” area of a major city that to me is shockingly high crime. Admittedly it’s mostly petty stuff but the heat maps are a bit red for my taste.

    We’ve had a break in to our place with some petty theft but in 14 years of living in Chicago I have never been menaced on the street or anything like that.

    Unless you are really moving someplace with major issues I think it’s best not to try to agonize over crime stats.

    If I were to go really rural I would be very nervous about the opiate thing. It seems to have hit rural areas really hard. My mom did some peds work out in Real America and found that at least that part of Real America was basically running on Oxy.

    #189137 Reply
    Liked by Doc Spouse
     Hawkeye225 
    Participant
    Posts: 100
    Joined: 09/05/2016

    Rural with higher crime rate than city is concerning to me, and takes away almost all of the attributes of rural living, aside from the higher paycheck and lower cost of living.  It’s not difficult to blow through 40k/year on personal security measures and travel costs to get out of Dodge every chance you get because you don’t like it there, so that would not be a big enough pay differential for me to make it worth it (actually I don’t know that anything would be a big enough pay differential, my priorities have always been vocation first (i.e. a job I enjoy), location second, compensation last.) Despite this, able to reach FI pretty young, still have a job I like, and don’t have to move now to have the life I want.

    Click to expand…

    Agree with a lot of this.  I turned down a huge paying job years ago where I did my fellowship.  It was a prestigious position, they made a ton of money but there was one real problem…My wife and I did not identify with that area of the country; it was just simply not who we are and we didn’t want to raise our children there with the decent chance of them marrying someone from the area and settling there.  Since our family is close to each other, we would not want to leave the children and subsequent grandchildren.  Most of the partners had second homes pretty much to get out of there and we didn’t want to fool with that.

    #189138 Reply
     GoBlueMD 
    Participant
    Status: Physician
    Posts: 44
    Joined: 05/27/2017

    More rural to me would be population <25,000, >60 minutes from an airport, >90 minutes from major city, no nearby major universities. Add the crimes and low probabilty of good public schools. Would need much more than 40k extra to sign that deal personally. If single, that job should probably not be considered.

    #189146 Reply
    Liked by Hank, Zaphod
     AR 
    Participant
    Status: Physician
    Posts: 606
    Joined: 03/10/2016

    I just want to take this opportunity to renew my long-standing objection to calling working in an LCOL area, “geographic arbitrage”.  If you are living and working in the same place it is not arbitrage in any actual sense of the word.

    Lots of non-medical financial bloggers talk about geographic arbitrage, but they generally use the term correctly.  Normally they are describing people that work remotely for a American company from a LCOL area (that is normally overseas).  In this case, they are being paid an American salary while living an inexpensive life in Asia (for example).  So there is an actual arbitrage of sorts taking place.

    That’s not what is going on when a doc decides to both live and practice in a LCOL area.

    Anyway, I realize I’m fighting a losing battle here, so carry on.

     

     

    #189155 Reply

Reply To: geographic arbitrage

In case of a glitch or error, please save your text elsewhere, clear browser cache, close browser, open browser and refresh the page.

you're currently offline

Notifications Mark all as read  |  Clear