San Francisco is widely regarded as one of the most expensive places to live in the world. To afford that rising cost, the median salary for software engineers in San Francisco has soared to $100,000. Given that many of these engineers could in theory work from anywhere on the face of the earth, I started wondering: what are some of the most outrageous places some of these Silicon Valley employees could move to instead, for the same cost of being packed cheek-by-jowl in SF?
After running the basic numbers I found that once you overcome the hassles of the move, becoming a digital nomad will actually save you tons of money. For the sake of simplicity, we are assuming that the world traveler in question is single with no dependents and is not taxed on income earned outside of the country he/she wishes to reside in (an assumption which is valid for many of the immigrant engineers in the Bay Area).
Here is an example base case scenario for income, expenses, and savings for someone living in San Francisco:
Income: $100,000
Expenses: $75,179
Yearly Income Tax (federal and state): $32,639
Average yearly rent (1 bedroom in the city center): $31,680 ($2,640/month)
Remaining Cost of Goods: $10,860/year
Transportation (assuming no car): $1,800/year
-Monthly Metro Pass: $70/month
-Occasional Taxi: $80/month
Food: $6,240/year
-Eating out: $70/week
-Groceries: $50/week
Other: $2,820/year
-Gym: $70/month
-Entertainment (Movies, museums, clubs – once a week): $15/week
-Shopping (3-4 items): $200/month
Savings: $24,821
And here are some of the exotic locales which will actually allow you to save more money than SF. Wouldn't it be interesting to do six months in each of them?
1) Amsterdam, Netherlands
Income: $100,000
Expenses: $71,191
Yearly Income Tax: $42,898
Average Yearly Rent (1 bedroom in the city center): $17,280 ($1,440/month)
Remaining Cost of Goods (1.41% more expensive than SF): $11,013
Savings: $28,809
Savings over SF: $3,988
2) Athens, Greece
Income: $100,000
Expenses: $46,551
Yearly Income Tax: $33,000
Average Yearly Rent (1 bedroom in the city center): $4,320 ($360/month)
Remaining Cost of Goods (14.85% cheaper than SF): $9,231
Savings: $53,449
Savings over SF: $28,628
3) Cape Town, South Africa
Income: $100,000
Expenses: $46,040
Yearly Income Tax: $33,513
Average Yearly Rent (1 bedroom in the city center): $7,200 ($600/month)
Remaining Cost of Goods (50.95% cheaper than SF): $5,327
Savings: $53,960
Savings over SF: $29,139
4) Phuket, Thailand
Income: $100,000
Expenses: $36,885
Yearly Income Tax: $24,776
Average Yearly Rent (1 bedroom in the city center): $4,992 ($416/month)
Remaining Cost of Goods (34.83% cheaper than SF): $7,077
Savings: $63,115
Savings over SF: $38,294
5) Yangon, Burma
Income: $100,000
Expenses: $29,906
Yearly Income Tax: $15,710
Average Yearly Rent (1 bedroom in the city center): $12,432 ($1,036/month)
Remaining Cost of Goods (46.42% cheaper than SF): $5,819
Savings: $66,039
Savings over SF: $41,218
6) Macau, SAR
Income: $100,000
Expenses: $29,906
Yearly Income Tax: $9,109
Average Yearly Rent (1 bedroom in the city center): $12,084 ($1,007/month)
Remaining Cost of Goods (19.77% cheaper than SF): $8,713
Savings: $70,094
Savings over SF: $45,273
For less than the price of living in San Francisco, you could live
in Amsterdam (Netherlands), Athens (Greece), Cape Town (South Africa), Phuket
(Thailand), Yangon (Burma), or Macau (an SAR of China).
In a word: whenever you need to explain your crazy nomadic plans to anyone -- it's no longer just about the adventure. Becoming a digital nomad is increasingly the fiscally responsible decision. Technology isn't just on the precipice of making it possible to travel the world for free - it's making it possible to travel the world while saving money.
PS: If you're into lists now, here are some other places around the world the average Silicon Valley employee can afford.
