Relocation Tool for FI: Compare Salaries & Cost of Living Globally
Screenshot of Relocation for Financial Independence Tool (at the moment available for PC only).
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Disclaimer: I am not a financial adviser, and this content is for informational and educational purposes only. Please consult a qualified financial adviser for personalized advice tailored to your situation.
How the Relocation Tool Helps You Identify the Best Countries for FI
(**The objective of this post is to lay out the methodology of the “Relocation for Financial Independence” Tool, to answer common FAQs, and to disclose the limitations of following this approach. Please keep in mind that the tool works only for PC at the moment.)
In previous posts, we explored the best countries in Europe and the best countries globally to pursue financial independence. We presented a data-driven approach to help identify and evaluate how different European and global countries rank for achieving financial independence during the accumulation phase. Given that the savings rate is such a critical factor in how quickly you can reach FI, this methodology considers, as a first step, average net salary and cost of living (COL). The output of this exercise should be seen as a first step that helps the user identify and shortlist potential candidate countries. It does not replace the need for serious due diligence on a whole set of other factors that are important when deciding where to relocate to (see Table 1).
In today’s post, we will lay out the methodology underlying the tool, answer FAQs based on feedback received during the last days on social media platforms, and disclose any data and methodology limitations the user should be aware of.
Methodology: How We Compare Salaries & Cost of Living for FI
Maximizing Savings: The Key to Early Financial Independence
First, it is important to emphasize why we use after tax net income and COL data for this approach. We do so because your savings rate–defined as the percentage of your net take-home pay that you consistently save and invest–is the single most important factor for achieving financial independence. Using a financial independence calculator, you can estimate your retirement timeline based on savings rate and lifestyle, helping you make data-driven relocation decisions (for instance, this one or this one). The key takeaway, though, as illustrated in Figure 1 below, is that your savings rate has a non-linear effect on the timeline to financial independence and retirement. Reducing expenses increases your monthly savings rate and decreases the total amount needed for financial freedom, helping you retire sooner. This dual effect is what creates the non-linear relationship.
Figure 1: Non-linear relationship between your savings rate (X axis) and your timeline to reaching financial independence (Y axis). Play around with your own data here.
Data and Methodology of the relocation for financial independence tool
To maximize your savings rate and fast-track your path to financial independence, consider relocating to countries with a strong salary-to-cost-of-living ratio. Factors such as your net take-home pay and the local cost of living clearly play a significant role in how much you can save and in how quickly you achieve FI. Moving to a country with higher after-tax salaries and a lower cost of living can significantly accelerate your journey to early retirement and financial independence.
We use cost of living and average net (after-tax) salary data sourced from Numbeo (2025). Our tool considers 106 countries across 5 different continents. To explore differences across countries,
The user selects their current country residence and the tool calculates how other countries perform in terms of net average salary and COL in relation to their reference country. For example, if you select Italy as the reference (which then appears at the intersection of the x and y axes in dashed white), we can observe that neighbouring Spain has an 11% higher average salary and a 7.4% lower cost of living. Pursuing FI in Spain is likely to be easier, on average, than in Italy.
The red dashed line in the tool acts as a benchmark in relation to the reference country. It highlights countries with financial independence potential that are similar to the reference country. For example, if we select Germany as our reference country, we observe that Sweden lies on the red line. While its net average salary is 7% lower than Germany’s, its cost of living is also 7% lower. This suggests that the financial independence journey in Sweden would be roughly comparable to that in Germany. In general, countries falling above the red line would be considered more advantageous in terms of pursuing financial independence than in the reference country, due to a better salary-to cost of living ratio. If you wish to relocate back to your home country, it is best to identify countries that are both above the red line benchmark, but also have higher salaries than in the reference country.
frequently asked questions
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It’s a fair question. Relocating to a different country to pursue better economic opportunities needs to consider a wide range of factors. Please see a summary of these important factors in Table 1 here. This tool does not replace the need for serious due diligence from the user before relocating. Instead, the aim of the tool is to facilitate narrowing down on a smaller set of countries that can be assessed in more depth. Moving abroad can be overwhealming when we consider the amount of countries one can choose from.
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Put simply, this is the data provided by Numbeo, an expat-oriented data platform. Ideally, we would prefer to use median salary data, but this is not available. It is important to consider the potential downsides of using average data:
National averages don’t reflect differences within countries, especially between those found between cities and rural areas. However, this phenomena is likely to exist in most countries, so, while averages may not perfectly capture individual circumstances, they provide a useful relative comparison across countries.
These averages as well do not account for potentially large differences existing across sectors. On a city level, consider that unusually high salaries in the finance sector in London may increase the average for the city, but not reflect perfectly the reality for most people living there that are working in other sectors. Again, median salary data would be better for this, but we don’t have access to it.
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Indeed, for a small set of countries there are wealth taxes (or similar), where potfolios are taxed on a yearly basis on unrealized gains (e.g., Netherlands). This undoubtably affects your timeline to reaching financial independence. Consider up-to-date information on capital gains tax (e.g., here), and whether it affects or not the accumulation phase of pursuing FIRE.
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As mentioned, average country data does not reflect differences across cities. For this reason, I am building a similar approach that applies this methodology on a city level. At the moment, it the tool is available for US and Canadian cities.
Photo by Tron Le on Unsplash.
