Happy New Year all you Greenbacks Magnets out there!

Hope the New Year is putting more money in your pocket than last year.

Let 2020, the year of perfect vision, be the year you see things more clearly and become more fiscally fit.

However, it was not long before news articles began to make me painfully aware of how income inequality affects our everyday lives.

Recently I read a frightening statistic.

The average American cannot afford to buy a home in 71% of the country. Average earners can’t buy property in 344 of 486 counties in America.

That just breaks my heart that so many people are locked out of the “American Dream.” I bought a home after the 2008-2009 financial crisis. There were homes popping up on discount all over the country. Now we are back up to gargantuan home prices again!

That means America is becoming a land of renters.

If necessary, you may have to do some geoarbitrage to afford to put a roof over your head without going broke paying rent.

What is geoarbitrage?

Geoarbitrage is an interesting concept, often closely related to the definition of lifestyle design.

Geography is location.

Arbitrage is different in that it is all about economics. In economics and finance, arbitrage is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices at which the unit is traded.

The two terms combined are a powerful combination.

They kind of remind me of Captain Planet.

For those of you who do not know or remember what that is, I will give you a short synopsis on Captain Planet: A cartoon about a group of kids that teach communities the importance of family (heart), recycling, and caring for the planet earth in all its splendor and recognizing its importance through its elements (earth, fire, wind, water). On the show when they combined their powers Captain Planet would be created and save the world from pollution.

Geoarbitrage combines the power of finances and location to optimize the two for extending the life of your money. It basically means relocating in order to take advantage of the lower costs of a city/country. There are different ways you can go about this.

However, the goal is to pay less than you can afford no matter where you decide to live. This way it ensures you are not spending more than you make.

Median home prices are $257,000 across the country. You would need to make $67,650 to afford to buy at that price point, but the median salary is around $57,000.

Renting isn’t much better. Come on San Francisco, $3,500 for rent is a mortgage payment!

Therefore, living in expensive places like Sydney, New York, Los Angeles, Singapore, London, Paris, Hong Kong, Osaka or Vancouver can break the housing budget big time.

We are about to go around the world today on the blog.

So watch out cause Greenbacks Magnet is going international! Let’s go!

First up, we are going to look at what it costs to be in the land Down Under: Australia.

You know the place. The place that gave us Crocodile Dundee and created one of the hands down most quoted scenes in movie history. “That’s not a knife. That’s a knife.”

🏘️ Australia's property market is heating up again after 2 years of decline. @SybillaGross explains

More @business: https://t.co/MRwKYvCwDx pic.twitter.com/TdmHlsWQgT

— Bloomberg Originals (@bbgoriginals) August 8, 2019

According to realestate.com.au a one bedroom executive apartment is going for over $800,000!

It’s mighty expensive to live in the land known for koalas, kangaroos, the outback and its sandy beaches.

When I did a search for homes that were for a maximum price of $500,000 or less, the website turned up no results! I got this message. We couldn’t find anything that quite matches your search. Son of a beach!

Now let’s do like Pauly Shore in the movie Encino Man and keep on cruising. Next stop, New York.

Manhattan is the prime real estate in the Empire State.

According to Zillow, this home on Central Park West is going for $1,250,000. That is with a price reduction! The estimated mortgage payment is $7,461; annually that would cost $89,532 USD.

That’s after-tax dollars folks. The concrete jungle is just as pricey as the outback! Check out these prices in Manhattan. Can of coffee: $6.14 Average rent: $3,783 Price of a home: $1.36 million T-bone steak: $12.78 Trip to the beauty parlor: $68 Dozen eggs: $2.89 Notice home prices are over five times the median home price of $257,000! Wow!

Next stop, Hollywood. We are now in Los Angeles California. Known for its year-round warm weather and beaches, it’s the place where many movie stars call home.

According to Zillow, if you want the standard two bed, two bath home, then prepare to open up your checkbook. Couldn’t find too many homes with decent square footage that were less than about half a million. This home was over $600,000!

And that is small potatoes to many others I saw.

No wonder people are renting more and rents are skyrocketing. It’s a landlord’s market! There is no cap on rent so it just keeps on going up.

Rent is averaging 1% to 3% increases annually. That is keeping pace with inflation and the cost of living.

Buying a home may be what many people want to put down roots, but renting often is more affordable.

Renters are at war with their checkbook.

Trying to balance budgets on shoestring wages. Can’t afford to buy, can’t afford to rent. Catch-22 as housing a necessity!

Now we are crossing the Atlantic. Hold onto your wallets. I mean buckle up. Next stop, Singapore.

The crown goes to Singapore, as it is the most expensive city in the world. Properties were going for $50,000,000 on Sotheby’s! That’s right $50 million. So this place for $578,000 should be considered a bargain!

Even Realtor.com International knows that space is a premium in Singapore. Check out the first line in the description. Size is not everything but it certainly plays a crucial part in this new development from Sim Lian. Well said and well played to get these places sold. Size is indeed not everything.

Next stop, London!

Now that Prince Harry and Duchess Meghan Markle and stepping away from royal duties to become *ahem* financially independent, I wonder if their UK estate, Frogmore Cottage, can go on the market as it recently underwent a $4.1 million renovation. It would be a shame to spend all that money and just let the house languish and sit unoccupied. But what do I know. Those are matters of the Crown and HRH Queen of England.

https://twitter.com/KarenCivil/status/1214985226155249664

Looking at homes in the London area of the UK, it seemed the ones with the most space started around $800,000 and went up into the millions!

Here is the home description: New to the market a stunning 4 bedroom semi detached family home. This property has been extended and modernised to a high specification. 29 ft main reception / leading to garden and 2 further reception rooms. Spacious modern kitchen and large utility. 4 double bedrooms all with en-suites and dressing room to master. South facing garden and of street parking for several cars.

Street parking for a home worth $1.27 million! Can I at least get a designated parking spot?!

Now we are going to take a trip to one of the fashion capitals of the world. Paris!

Yet again, I went with my standard 3 bedroom, 2 bathroom criteria and look what I found.

For this historic 199th century apartment, it will cost you USD $1,104,398 or EUR €995,000. Um, non, merci (no thank you).

Next stop, Hong Kong. If you are looking for a place in Hong Kong, China, it will cost you. A 300 sqft. home could cost you $900,000. Some people’s work cubicles or offices are bigger than this!

According to Christie’s international real estate, there are 556 Luxury Homes for Sale in Hong Kong. Place like park Rise, Bel Air on the Peak and Repulse Bay Road cost around $3,000,000.

Some of the pictures of the homes are magnificent, but out of range for average homebuyers.

Next up, Osaka. If you want to be where the action, expensive real estate, and big paychecks are in Japan, look no further than Osaka and Tokyo.

I found a beautiful apartment located in walking distance near a subway: Kitahama Station (1 min. walk) Osaka Municipal Subway Sakaisuji that cost ¥146,000,000 or $1,332,980 USD.

I’m starting to see a pattern here across the globe of home prices in major cities costing on average $1,000,000.

And last but certainly not least, Vancouver BC.

According to the Vancouver Courier, Vancouver was ranked the most expensive Canadian city in the annual Mercer Cost of Living survey. Vancouver has the highest cost of living in Canada for expats.

According to Remax, This newly listed home located at 502 1571 W 57Th Avenue Vancouver, BC, will set you back $848,000. It is a 1 bedroom, 1 bathroom and only has 748 sqft. Can’t even get a 1,000 sqft of living space without spending $1 million. Canada is super expensive.

Our neighbors to the north charges a premium to set up shop in this town.

I prefer to invest my money in stocks and let that money grow large enough to pay for my living expenses.

Build your wealth first, and then buy luxury. Get paid. Invest in stocks like the S&P 500 index or VTSAX. Rinse and repeat. Do this until you earn enough in dividends and interest to pay for your lifestyle.

Then you can quit the rat race sooner rather than later.