Geoarbitrage Tip: 50% Rent = Luxury in Philippines on $2500-3000 Monthly Budget
Introduction
Hey everyone, welcome back to the channel! I'm Joe Gilbert, a US expat who's been living in the Philippines for over three years. Since moving to the Philippines, I've travelled over 20,000 km exploring the small towns, mountains and beaches on my motorcycle. I’ve dined everywhere from Wolfgangs, to Mortons, to food stands in the middle of nowhere.
Based on my budget experience, I believe 3,000 USD is the where you hit the sweet spot for living an upscale life in the Philippines.
Disclaimer:
This is not financial advice. Your’e all big boys and girls so do your own research and form your own conclusions.
Geoarbitrage
Whether your’e familiar with geoarbitrage or have never hear of it, it’s the key to my budget theory. A theory that flys in the face of everything you’ve probably been told abut rent vs income while living in the west. If your’e earning in strong currencies and wondering what your lifestyle would be like low cost countries, like the Philippines, or Vietnam, watch the video and checkout the links below.
Ignore Western budget Advice
Today, we're exploring why the traditional advice of spending no more than 30% of your net income on rent doesn’t really apply here…. That is, once you reach that 3,000 USD monthly sweet-spot. I believe at that point you can safely spend 40 % of your income on rent and still save and have an active social life. Read on, we’ll look at some numbers.
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The 30% rule comes from high-cost of living in the USA, yet many arrive in the Philippines and apply the same rules believing they are doing the responsible thing. There is noting wrong with being budget minded, but the economy here is totally different. The overall costs are substantially lower here, so you don’t have to miss-out on living in a better location or in a larger condo or house.
Sticking to the 30% rule as an expat could mean settling for basic housing without amenities like pools or security, and reducing your lifestyle for no need. Addressing this now lets you maximize geoarbitrage for more enjoyment while still allowing for savings and discretionary spending.
You’ve no doubt heard people saying you can live comfortably in the Philippines for 1500 USD per month. Let’s look at what we can do if we bump up the 30% to 40% and how I push it to almost 50%. All of this assumes you have zero debt..
Real numbers
At the 3000 USD sweet-spot
at 40% you can spend $ 1200 USD for rent and utilities
and have $1800 USD per month for everything else.
1800 usd is a lot of Money here..
An example of how far money goes even in BGC. There’s a popular Mexican place in uptown BGC (Agave Restaurant). I eat there once or twice a month with a buddy.
For way too much food and a couple cans of coke, it costs me aless than 21 USD
My buddy eats and has bottomless margaritas. his bill is always less than 16 USD
On the other side of the spectrum
I had lunch last week outside city hall and the total for the 2 of us was less than $4.00 USD..
My Actual Budget in BGC
Here are my actual costs: (I push the limit here)
My personal budget is 2,500 USD not including major purchases like cameras, watches or other occasional splurges. I spend 48 % of my budget on rent and utilities, and have plenty of money left over for fun and savings. For a real one bedroom with very nice furniture and a balcony in arguably the best place in BGC, this is what I spend:
Rent is 1050
Internet 30
Electricity about 110 on average.
Total living rent and utilities $1180 USD
Health ins 150
Grand Total is $1340 USD / month.
That leaves me 1160 USD per month. Out of that I still put 250 a month into savings, leaving me just over 910 a month for food and spending money. Now admittedly, I don’t eat out a lot and I don’t often drink, so you may not want to spend as much on rent.
Again, Mine is probably an extreme example, but it works because I have enough money socked away to handle any emergency and the occasional splurge. If you don’t have a substantial safety net, I would not play it this close..
To wrap up positively, imagine spending $1,500 on a spacious penthouse-style condo with ocean views, then having another $1,500 for meals out, weekend trips, and savings. Compared to US costs where that rent might barely cover a basic apartment, this is achievable here through geoarbitrage – turning your expat life into something rewarding and sustainable.
Remember, better thinking does equal a better life,
Joe out!
Citations
Numbeo shows single-person costs excluding rent at ~$528-604 in Manila:
https://www.numbeo.com/cost-of-living/in/Manila
Lamudi Average 1BR city-center rent is ~$529, but luxury options in BGC/Makati go $800-1,500:
Rentpad: Upscale 1BRs average ₱50,000-88,000 PHP (~$840-1,480 USD).
Expatistan notes Manila is 77% cheaper than New York City overall, with housing 81% cheaper
Nomad Capitalist promotes geoarbitrage for affording a high-end life in Asia on moderate US incomes: