Imagine that you can upgrade your lifestyle while saving money in a matter of days. You can rent a nice apartment, eat out daily, work out in a premium gym, hire a personal trainer and take a cab whenever you want. What sounds to be too good to be true is accessible to everyone in the Western world. The only caveat is that you must be willing to move to another country.
Tim Ferriss popularized the term geoarbitrage with his book The 4-Hour Workweek. Geoarbitrage means moving to a cheap location with a high quality of life while still earning your income in a strong currency like Dollar or Euro. This way you kill two birds with one stone. Your expenses are substantially lower and your income goes much farther. The idea is as brilliant as it is simple. The internet and technological progress have made this decoupling of location and income possible in recent years. However, the majority of people can’t take advantage of this opportunity because they have a 9-5 job, which requires them to work in a gray cubicle for 40 hours a week. You should consider this loss of locational (and time) freedom before taking a new job.
Extending your runway
Saving money is especially important for entrepreneurs in the early phase of their business. You want to invest every penny in your business and reduce your personal expenses to the minimum. Reducing your living costs can prolong the runway of your business significantly. It makes a huge difference if you can stretch your budget from 6 months of runway to 12 months of runway. This extra six months can make or break a business.
You should only consider cities with a large entrepreneurial scene. Connecting with other entrepreneurs increases your chances of success because it keeps you motivated and accelerates your learning process.
Digital Nomad Hubs
Chiang Mai and Ubud are classic examples of geoarbitrage. Both cities are dirt cheap and offer a high quality of life. This attractive combination makes them the most popular hubs for digital nomads in South East Asia. What sets them apart from similar cities is their strong entrepreneurial scene, which reinforces their status as top destinations.
Medellín is the biggest hub in Latin America for digital nomads, but it’s not as cheap as Chiang Mai and Ubud. It’s still less expensive than the States and Europe, but the affordability is not its main selling point. Digital nomads mainly come to Medellín because of its proximity to the States, Latin culture, warm weather and overall high quality of life.
Medellín isn’t a cheap city for Latin American standards, but it offers excellent value for money. I spent only $180 on rent instead of $540 like I did in Cologne. I was also able to upgrade my lifestyle in many ways while saving money. I never take taxis in Germany, and I took dozens of them in Medellín because it’s so cheap. For example, the ride from Laureles to Poblado costs $3-4. I also ate out every day for a healthy lunch, which set me back a measly $4-6. Here are some pointers on how to bootstrap in Medellín:
My first piece of advice is to live in Laureles instead of Poblado. Rents are cheaper and it’s less touristy. I have written a comparison between Poblado and Laureles on Quora. Other neighborhoods like Bélen and Sabaneta are still cheaper, but they lack an entrepreneurial scene.
Finding a room in a shared flat on CompartoApto is the cheapest option. You can also find rooms and apartments in all price ranges on Airbnb. Airbnb affords you more flexibility with your dates, but you have to pay a little premium for this convenience. I recommend finding an apartment as close as possible to your coworking space to save time.
You can save money for a coworking membership by working from home and in cafés, but I recommend saving money elsewhere. Medellín has an excellent community of entrepreneurs and you should take full advantage of this opportunity. People who invest in a coworking membership also tend to be more serious about their work than their café counterparts in my experience.
A coworking space provides structure and easy access to likeminded people, who can hold you accountable and give you valuable advice. Not to mention working among other creative people is more fun than toiling away on your own. I worked for four months in La Casa Redonda and I loved every minute of it. They offer a monthly plan for $140 (COL$433.000) and an 8-day-ticket for $60 (COL$185.000).
La Casa Redonda closes early on Saturdays and is closed on Sundays, so I was forced to work in Cafés on the weekend. I can recommend Café Naturalia, Café Volcánico, De Los Andes Café, Café Revolución 2 and Starbucks for work. The Starbucks in Laureles is almost always packed though.
A viable alternative is coliving where you share a flat with like-minded entrepreneurs. This option is well suited for people who are already connected in Medellín and know capable entrepreneurs.
You can choose between taxis and ubers. Both are ridiculously cheap and I prefer taxis because I don’t like dynamic pricing. I used the EasyTaxi app because the review system keeps the drivers honest and the few bad experiences I had were limited to taxis hailed from the street.
During the rush hour, the streets are clogged and the 15-minute-ride between Laureles and Poblado can take up to an hour and therefore taking the metro is faster. You don’t need a Civica metro card if you use the metro occasionally. You can buy a ticket for multiple rides (e.g., five rides) at the metro counter.
Sample a bunch of restaurants with a menu del día and rotate between your favorites. When I was working at La Casa Redonda, I normally ended up at the cozy Café Zepellín. Their menu del día costs almost 5$ (COL$14.000) and includes an espresso afterward. My second go-to restaurant was Uno más Uno near Calle 70. You get a fresh and healthy meal (picture above) for $4 (COL$12.500).
Colombia has three big networks: Claro, Tigo, and Movistar. Their offering is similar in terms of price and data, so it doesn’t matter which one you end up choosing. Everyone in Colombia uses WhatsApp, so a data plan is sufficient for most people. You have to register a new sim card in one of the few selected shops. The catch is that you need a Colombian ID or a Cedula Extranjera (no tourist visa) to register a sim card. If you buy a sim card and don’t register it in time, then the sim card gets deactivated after two weeks, and your cell phone gets blacklisted. The solution is to ask a Colombian friend or a friend with a Cedula Extranjera to come along to a selected Claro/Tigo/Movistar shop and buy and register a sim card for you.
The cheapest supermarket chain in Medellín is D1 (picture above). The selection is limited so you can stock up on basics at D1 and buy the rest at a bigger supermarket like Exito. The cost savings weren’t significant enough for me to justify buying at two places so I bought everything at Exito except for fruits and meat. I recommend buying fruits and vegetables at your neighborhood tienda and meat at Colanta.
You can’t work nonstop. Sometimes you need a little break to recharge your batteries and return to work energized. Medellín offers something for every taste. Learning salsa or Spanish with a private teacher is a great way to unwind from work. I like to get out into nature to relax. Inexpensive tour companies like Kinkaju Hikes & Adventures offer tours in the surroundings of Medellín. Paragliding is another great way to relax and it costs only $50 (COL$160.000). The most popular day-trip from Medellín is Guatape with its Piedra del Peñol. If you want to get away to Bogotá or Cartagena for a couple of days, you can use the low-cost airline Viva Air.
Calle 70 has an abundance of bars and clubs and is the undisputed center of the nightlife in Laureles. I didn’t go out much, so I can’t recommend any clubs. One way to save money is by throwing house parties instead of going out. My general advice for entrepreneurs is to party less and work more. That doesn’t sound sexy, but the loss of productivity due to hangovers adds up over time.
You can easily bootstrap in Medellín. The only thing you need is a little bit of planning and financial discipline. I didn’t save a lot of money during my four months stay in Medellín because I spent extra money on luxuries like traveling, private salsa classes and a week-long meditation retreat. Without this additional spending I would have saved a significant amount of money. My personal and professional growth during these four months was immense and worth every peso. Now you know everything you need to know about bootstrapping in Medellín.
The rest is up to you,