Long Time Comin’

For more than nine months I’ve promised several readers an article covering the geoarbitrage potential behind Grumpus Familias’ pending move to New Zealand — which I’m calling “Kiwi Arbitrage” in honor of the beloved flightless bird native to New Zealand. Yet, for one reason or another, I kept putting-off that particular task. In other words, I procrastinated. That’s something of an Olympic sport in certain parts of my life.

That said, I had several good reasons for procrastinating this time around. The most legitimate was the lack of approved entry visas. I didn’t want to waste time writing an article on New Zealand only for some reason to appear that would prevent us from moving. If you don’t think that was a realistic possibility, then you obviously haven’t read about my lifetime of Charlie Brown-like luck.

Alas, I can procrastinate no longer. Grumpus Familias’ visas arrived several weeks ago and no major obstacles sprang out of the military retirement process. As a result, flights and movers are booked and Mrs. Grumpus and I are busy selling off or donating a large fraction of our worldly possessions that we can’t or don’t want to take with us. While we haven’t “burnt the boats” just yet, we are close — which means this move is on like the proverbial simian made famous by ColecoVision!

Is Kiwi Arbitrage Real?

Of course, that’s a bit of good news for you, especially if you have questions about Kiwi Arbitrage. This being a personal finance blog, it shouldn’t come as any surprise that the number one question I’m asked by readers when I mention the move is whether or not New Zealand is cheaper to live, work, and retire than the United States. In other words, is it a geoarbitrage destination for Financial Independence (FI) minded future pension earners?

I will attempt to answer part of that question in this post, based on what I’ve discovered so far. However, since my family and I are not living in New Zealand yet, there will inevitably need to be a part two some time in the future. That’s good because this post is long enough as it is! Speaking of which, if you’re not all that interested in the details of Kiwi Arbitrage or comparisons between New Zealand and California, but are more interested in the “Why are we moving to New Zealand?” question, then just skip straight down to the last section of this post entitled My Golden Albatross Laid a Golden Egg. This article is so long, I wouldn’t blame you if you did.

Context

Originally, I was going to start this post with a lot of historical, geographical, and societal information about New Zealand. Instead of insulting your intelligence with a Grumpus Maximus lead history and geography lesson though, let me send you to Wikipedia’s entry for New Zealand if you’re unfamiliar with the country. Doing so will save you time and save me space to talk about financial issues associated with a move there.

Secondly, it’s important to point out that New Zealand was not my family’s intended retirement location when I started this blog in 2017. At that point in my life and career I intended to serve 21 years, qualify to transfer the GI Bill to my kids, retire from the military in San Diego with my family, and never work a “real job” again. Thus, it’s important to note that “retirement” for Grumpus Familias was never going to be cheap in comparison with many other places in the U.S. … or even around the world. Although, having said that, I always considered retiring in San Diego as a value proposition. If our retirement budget could swing it, then of course, that’s where we would retire because it’s such a great place.

Picking a Point of Reference

The above point about San Diego is important because the whole “Is it cheaper?” question connected to the idea of Kiwi Arbitrage depends heavily on two things: the original location vs. the desired location. Obviously, if someone planned and budgeted for retirement in St. Joseph, Missouri but decides to retire to Auckland, New Zealand, then they aren’t geoarbitraging! They may have other perfectly good reasons for moving, but saving money isn’t one of them. Hopefully, they also have some new line of income to pay their Auckland based rent, because if not, they’ll go broke fairly quickly.

On the other hand, if a person originally planned and budgeted for retirement in San Francisco, but they switch their retirement destination to Nelson, New Zealand, then moving to New Zealand may look like a fiscal steal in comparison — which is the whole point of Kiwi Arbitrage. It’s also a long way of saying that you got to know what it would cost to live in your original destination! If you don’t know what your original price point would be, then you won’t know if a new price point is any better.

My Points of Reference

Since my projected retirement budget was built for San Diego, it should come as no surprise that I use San Diego, Southern California (SOCAL), and the state of California as the comparison points for my Kiwi Arbitrage analysis throughout this article. That may not help you much if your original retirement plan is for somewhere else, but you can still use all the comparison techniques and the New Zealand facts I provide to conduct your own analysis. That assumes you’re interested in Kiwi Arbitrage at all.

Next, you should bear in mind that a lot of life’s traditional expenses still lay ahead for Grumpus Familias because we have two young kids. The main expense to which I refer is college (i.e. university), and you’ll see I talk about it at length below. Also, as you start to read my comparison you’ll notice that I address a lot of military retiree and veteran-specific issues. I understand that those issues won’t matter to a lot of the readers of this blog since only a small percentage are military. So, feel free to skip over military-specific stuff. That said, I wasn’t going to ignore the military retiree issues because they make up a substantial part of the pros and cons of living in both locations for Grumpus Familias.

Finally, and for the record, my family and I are moving to Nelson, New Zealand. Click on that hotlink if you’re interested in learning about the city, but suffice it to say it’s as beautiful as San Diego, with only a fraction of the people, and the entirety of the Southern Alps as its back yard. I mention Nelson a lot throughout the remainder of this article since it acts as the foil to San Deigo, so you might as well get familiar with the place now. Don’t feel pressured though, numerous future articles on the virtues of Nelson are coming your way … if you choose to stick with me while on this adventure.

SOCAL: The Good

OK, let’s talk about San Diego for a moment. Even with the general expense associated with retiring in Southern California (SOCAL), San Diego has a lot of advantages working in its favor as a retirement location for military retirees and their families — aside from all the obvious advantages like surf, sun, great friends (for Grumpus Familias), and fun! Top on that list is free in-state college for the offspring of resident veterans with any disability rating — including a rating of 0%. That unique California veteran’s benefit includes access to both the University of California system schools like the University of California of San Diego (UCSD) and the California State system schools like San Diego State University (SDSU). Based on my mental and physical health issues, I will receive some sort of disability rating once my Veteran’s Administration (VA) disability claim is adjudicated, so my kids would qualify if we chose to live there.

Free military healthcare in San Diego is also easily accessible for military retirees and their families. I say that because San Diego has two major Military Treatment Facilities (MTFs), and several smaller ones, within county lines. There’s also a large VA hospital for vets who retired or transitioned with known medical issues. Of course, military retirees can also sign up for a TRICARE health insurance plan and gain access to an array of high-quality civilian health providers in San Diego. Since TRICARE plans are heavily subsidized by the U.S. government, it means they are cheap in comparison to private U.S health insurance for civilians.

Another advantage that works in San Diego’s favor as a destination for military retirees is easy to access military bases all over San Diego county with their tax-free commissaries, base exchanges, and gas stations. Access to cheaper gas in a high gas-tax state like California, alone, could save a family of four with young children a lot of money each year. All of these things taken as a whole mean several major (early) retirement budget busters are either heavily mitigated or completely eliminated just by retiring in San Diego as a military retiree. I included some of the key ones in my Kiwi Arbitrage analysis below.

SOCAL: The Bad and Ugly

On the opposite side of the coin, California has a lot of fairly well-known drawbacks that make a lot of military retirees balk at the idea of retiring there. First and foremost, California has high state income taxes and taxes military pensions as regular income. This shouldn’t come as a surprise since there’s no such thing as a free lunch — meaning the state government has to pay for that sweet college deal for the offspring of disabled vets somehow, now don’t they?

There’s also a high cost of entry into the property market in SOCAL for any military retiree who’s thinking about buying a home there when they retire. In part, that is due to low supply and high demand. Everyone wants to live in a sunny and beautiful place, but no one wants more houses or condos crammed into their neighborhood. That’s only part of the story though, because the high cost of entry into the property market is also due to California’s bizarre property tax law. This law was approved through a crazy direct to voter initiative known as Proposition 13.

Speaking of direct to voter initiatives, California has a well-deserved reputation as a poorly governed state because of them. When they pass, they handcuff the state legislators, governor, and most importantly, the state budget. While California’s reputation for ungovernability has eased in recent years (ironically due in part to the results of several direct to voter initiatives), the root problem itself has not gone away.

Finally, as if it wasn’t plainly apparent from the ever-larger number and size of wildfires in the state over the past few years, California in general, and Southern California specifically, are on the front line of impacts from man-made climate change. Couple this with massive, multi-year droughts, and a lack of water inside the state for all its citizens and agriculture, and you got an environmental time-bomb just waiting to go off. Anyone who sees their home as an investment would be wise to consider what could happen to that investment if all goes up in flames, or ends up having its water use rationed.

New Zealand On The Other Hand …

By contrast, New Zealand seems to offer a lot of what makes life in Southern California attractive without a lot of the drawbacks. It’s a country made for outdoor enthusiasts, with some of the world’s best skiing/snowboarding, surfing, mountain biking, hiking, camping, kayaking, hunting, and endless other outdoor activities. In fact, I challenge you to name an outdoor activity that New Zealand doesn’t have some of the world’s best spots to do it in. And, as if that wasn’t enough, New Zealand is stunningly beautiful. So much so, that the makers of The Lord of the Rings and Hobbit movies used it as the backdrop for the outdoor scenes (which is pretty much the entirety of those movies).

More importantly, in my mind at least, is that the people who inhabit New Zealand (affectionately called Kiwis the world over) are some of the nicest and most genuine people I’ve ever met. Both times I’ve visited, I’ve found the people so approachable, engaging, and attentive that it’s left me wondering why all people can’t be like that. I’m not the only one either. Living in Hawaii, as my family and I currently do, we run into a lot of people who have visited New Zealand because it’s only a nine-hour flight from Honolulu to Auckland. When we ask them what they thought of their time in New Zealand, without fail the two answers everyone gives us is 1) the country is strikingly beautiful, and 2) the people are soooooooooo nice.

How do New Zealand and SOCAL Compare in General Terms?

According to Wikipedia, New Zealand is one of the most sparsely populated countries in the world when counting people per square kilometer. While it’s roughly two third’s the size of California, it has a population of fewer than 5 million people. California, on the other hand, has a population of 39 million. What that means is outside of New Zealand’s three main cities (Auckland, Wellington, and Christchurch) and its top tourist destination (Queenstown) land and sheep are plentiful, but people and traffic jams are not.

This lack of people may be one of the main reasons why New Zealand consistently ranks in the top ten country lists for both happiness and governance by organizations that track those measures. The bottom line on this issue is that by emigrating to New Zealand a person can live in a country that’s just as outdoor-oriented, if not more, than the state California, with a lot less traffic, better government, and happier people.

Climate Change and Natural Disasters

If you’re interested in reading about the projected impacts of climate change on New Zealand, you can read a quick brief from New Zealand’s Ministry for the Environment here. From my perspective, after visiting New Zealand twice and living in San Diego three times, several things are apparent: 1) New Zealand has yet to see major impacts from climate change on a country-wide basis 2) California, on the other hand, has already felt impacts on a state-wide basis … which will continue to worsen 3) In a straight-up comparison, it appears that New Zealand will experience fewer impacts than California over the long run.

Of course, man-made climate change will impact New Zealand, but thanks to New Zealand’s lucky placement on the globe, those impacts will prove less threatening to quality of life than California. I think it’s also worth noting, especially since I’m writing this article in January 2020 (during a historic amount of Australian bush fires in both size and destruction), that New Zealand is already better off in the climate change category than its closest neighbor, Australia. Having said that, the smoke from the Australian fires has reached as far as New Zealand (1000 miles away), turning many Kiwis’ skies orange in the past few days.

Of course, the geological downside for New Zealand is that it sits on the Ring of Fire, which means it has numerous active fault lines and volcanoes. While the threat of major earthquakes is comparable to California, the threat from volcanoes is unique to New Zealand (when comparing the two places). So, obviously, that’s something worth keeping in mind when assessing safety from natural disasters and the security of your home as an investment.

How Does New Zealand Compare to San Diego For a Military Retiree?

At face value, comparisons on the personal finance issues that impact military retirees between New Zealand (generally) and San Diego, California (specifically) seem to break heavily in favor of San Diego. Unlike other foreign destinations such as Europe or Japan, New Zealand has no major permanent U.S. military presence. This means there are no facilities that retired U.S. military members living in New Zealand can avail themselves of for groceries, gas, or health care. There’s certainly no free university perk to take advantage of as a U.S. veteran with a disability rating like there is in California.

That said, peel back the onion on some of those issues and you’ll find that the favorability of San Diego is less overwhelming than it first appears. For instance, healthcare in New Zealand is heavily subsidized, and permanent residents can use it. Now, it may take a while to earn permanent residence status (that depends on the visa), but you could always purchase private health insurance in New Zealand while you wait. I priced it recently as a requirement for my student visa, and unlike the U.S. insurance market, it seemed reasonably priced and a lot more transparent.

Military retirees and their families can enroll in and use the TRICARE plan known as TRICARE Select Overseas while waiting, or even permanently if they like it that much. I’ve enrolled my family in that plan, but of course, we haven’t moved, so I don’t know how easy it is to use. Reality may not live up to the hype but for anyone who’s ever used TRICARE Prime Overseas Remote, this looks like a very similar program.

University

According to this article from The Insider, it’s half as expensive for Kiwis to attend university in New Zealand than it is for Americans in the U.S. If you’re a non-veteran living in California with kids who are destined for university, and you see that annual in-state tuition averaged $14,229 in 2018-2019, you might want to compare costs at New Zealand universities for permanent residents and citizens. Do not compare overseas student costs, because there is no comparison, it’s cheaper to stay in state for California. But, for permanent residents tuition is cheaper in New Zealand than California … by a lot.

Of course, cheaper doesn’t mean free, like the California program for the offspring of disability rated vets. There’s also the quality argument working in favor of California’s universities with schools like UC Berkley ranked at 13, UCLA ranked at 17, and UC San Diego ranked at 31 on the world’s best university list. New Zealand’s first entrant into that category is the University of Auckland at 179. Yet, I’m one of those people who believes that what a person studies at university is far more important to good life outcomes (i.e. not still sleeping on my couch at age 28) than where a person studies.

Now, I will be the first person to point out that the economic data behind my belief is nuanced. The latest studies show that what university you attend is important if you are a person of color, a woman, or from a family with no college graduates. Thus, based on my amazing powers of deduction, I have determined that for white males from a family with college graduates, university name and reputation don’t matter. I happen to have two young white males living in my house with parents who are college graduates. As a result, I can send them (guilt-free!) to the much cheaper New Zealand universities.

That, of course, may not be your situation. If it isn’t, then I’m sorry that institutionalized sexism, classism, and racism in America is going to force you to pay for an Ivy League education just so your son or daughter can have a level playing field to compete on. I strongly urge you to talk to your senator or congressman. If they blow you off, vote their asses out of their seat. If that doesn’t work, you could just vote with your feet and move with me to New Zealand. I won’t judge you or your kids for being anything else other than awesomely adventurous.

In the meantime, no matter where your kid ends up studying, tell him or her to study for a STEM degree. Your couch will thank you when it doesn’t have a 28-year old Ivy League graduate sleeping on it.

Retirement Budget

OK, I’ve got to keep this article rolling, or I’ll never finish it. Obviously, I could run a point by point comparison between New Zealand and California on every socio-economic issue out there, but I think you get the point. One country or the other comes out ahead, depending on what the issue is. Some of those issues matter a lot to me based on life circumstances, while others are important to me on a personal level. Mine may not be the same as yours, so I encourage you to research the ones that are important to you, and see how New Zealand compares in contrast.

In the meantime, let’s talk about something everyone (reading a personal finance blog at least) should consider when contemplating a geoarbitrage move — and that’s how much it costs to live in a place. Much like I said before, to analyze the potentials of a geoarbitrage move, you got to have an original destination and a new destination that now interests you. Thus, it should come as no surprise that the same rule applies to budgets. You got to know how much it would cost to live in your original location, to compare it to your new location.

Now, in my situation, I already knew what it would cost Grumpus Familias to live in San Diego. I knew because I had lived in San Diego on three separate occasions, two in which I was married, and one in which we had a child. More importantly, I kept all my spending data from those periods in San Diego in my money tracking program of choice, Quicken.

So, by the time my wife and I started to seriously consider a Kiwi Arbitrage move, I had already drafted and revised our retirement budget for San Diego several times. This means that all I really needed to do was research the cost of living for our intended New Zealand destination (once we determined what it would be) and see if it was more or less than San Diego. If it was more, then I would need to build a completely new retirement plan. On the other hand, if it was less, then I felt fairly certain our “retirement” budget could handle it since it met the definition of geoarbitrage.

If you’re interested in how to build and test a retirement plan, or just curious as to why I have such a high level of confidence in my San Deigo retirement plan, then check out the other posts in my Planning section.

There’s an App for That 

Of course, you may not be a big money tracking nerd like me (your loss). You may not have years of spending data just waiting to be analyzed and visualized in support of your geoarbitraging dreams (again, your loss). In fact, you may not have a budget at all, let alone one for retirement. Well, fortunately for you there’s an app that makes the cost of living comparisons between two cities. Actually, there’s a website, not an app. Multiple websites in fact … OK fine, there is no actual app, I just wanted to use it as a section header.

Back to my point! If you Google “cost of living comparison tools,” you’ll get plenty of returns for tools on websites like CNN Money and Nerd Wallet. That said, take these websites’ results with a grain of salt — a very large grain of salt. Comparisons on these websites are only as good as the data they rely on, which oftentimes is incomplete, or from a small sample size. For instance, a Numbeo cost of living comparison between Nelson, NZ, and San Diego, CA shows that consumer prices excluding rent are only 2.5% cheaper in Nelson than San Diego. Throw rent into the mix and Nelson is 26% cheaper than San Diego.

That’s not the whole story, though. Dig into the details at the bottom of the comparison page, and you’ll see the sample size for San Diego was only 311 people over the last 18 months. Furthermore, the Nelson data was compiled from a data set of only 23 people over the last 18 months! Make the comparison between San Diego and Napier, NZ (another New Zealand city of similar size to Nelson) and the data sample is so small (12 people), and incomplete, that the website can’t even make a full comparison.

Due to issues like these, I didn’t rely solely on the results these websites provided for my budget analysis. I used them as a guide, and then I checked New Zealand real estate, automotive, and even restaurant web sites in the places we were thinking about living. In doing so, I got a feel for the accuracy of the cost of living results. I was also able to use my spending data from the two multi-week trips my wife and I made to New Zealand. Because of this, I gained a lot of insight into just how much I thought it would cost us to live and raise two kids in New Zealand.

The Best of a Bad Lot

With all of that said, Numbeo seems to be the best of the cost of living websites … if you’re moving internationally. I say that because: 1) it actually includes destinations outside the U.S. for comparison (many other cost of living web sites do not), and 2) it tries to gather data on smaller cities and towns (which many others also do not). If you’re moving from one major international city to another, you could also try Expatistan’s tool. It doesn’t go down to the size of a city like Nelson, NZ, but does have Auckland, Christchurch, etc.

Not to turn this post into an advertisement for Numbeo, but their format points out which side comes out ahead on the foreign exchange issue through the Local Purchasing Power category. That’s important for me because my military pension and Social Security will always payout in U.S. Dollars (USD). And, since the USD is traditionally stronger than the New Zealand Dollar (NZD), it means my USD pension should (theoretically at least) stretch further in New Zealand.

What About Taxes?

According to the Numbeo website, their cost of living comparison “… assumes net earnings (after income tax).” This means they are ignoring taxes, which doesn’t surprise me in the least. Based on everything I’ve learned on the New Zealand-U.S. tax front over the past year, I can honestly attest that it’s a super complicated topic. So much so, that it deserves it’s own post, which I hope to get to at some point early in 2020. Given that, I’ll just hit the wave tops for now.

The most important thing to note (for Americans interested in moving to New Zealand) is that the U.S. and New Zealand have a tax treaty. That’s good since the U.S. taxes its citizens on worldwide income. This means that if you work in a country without a tax treaty with the U.S. government, both the U.S. and the country in which you work could tax your income. Theoretically, the U.S.-New Zealand tax treaty should prevent double taxation.

Now, obviously, since I haven’t moved to New Zealand, I can’t factually state that the treaty does what it’s supposed to. Yet, anecdotal evidence from some Americans I know that live and work in New Zealand suggests that preventing double taxation is a lot easier said than done. In response to that, I contracted a New Zealand based accountant that specializes in international tax issues to craft a four-year money strategy for me and my family.

You Get What You Pay For

That strategy did not come cheap, nor is it completely straightforward. Some of that is due to personal circumstances like my pending book release and (hopefully) the royalties it will generate. Other parts of the strategy apply to any American that moves to New Zealand who has a U.S. government pension. In that case, the pension remains under U.S. Federal tax jurisdiction as long as the pensioner doesn’t change nationalities. In my mind, that’s a massive incentive to keep my U.S. citizenship since New Zealand only has four marginal tax brackets, the top of which is 33%, and the threshold for which is a relatively low amount in USDs.

One other good news story is that New Zealand offers new emigres a four-year grace period under which they remain subject to their previous (or home) country’s tax laws for things like investments, long-term capital gains, and pensions. That does not apply to any New Zealand based income an emigre might generate after arrival. It only applies to what they receive from, or generate in, their previous/home country. In other words, it only applies to foreign currency denominated accounts held outside of New Zealand. This four-year grace period is specifically designed to give an emigre time to sort out which accounts they will transfer over to New Zealand, and which accounts they’ll leave in other countries.

That last point, about keeping accounts offshore or moving onshore to New Zealand, is important. The New Zealand tax code has some fairly complicated and not so straightforward tax rules about foreign-denominated investments. I won’t get into them here, but in case your interested, Google “Foreign Income Fund rules New Zealand” and see what pops up. Have fun with that rabbit hole and good luck deciphering the rules! It’s one of the reasons I hired a CPA.

The Other Side of the New Zealand Dollar Coin

Since I just addressed taxes, let’s discuss some other less desirable costs associated with a New Zealand move. Some of them are truly unique to Kiwi Arbitrage, while others apply to any international/geoarbitrage move. The first is the tyranny of distance. No joke, New Zealand is far from just about everywhere else in the world — other than maybe Hawaii, certain parts of Australia, and the Antarctic research bases. Check out this travel site link if you’re from the U.S. and don’t believe me.

You shouldn’t expect travel to/from New Zealand to be cheap, easy, or fun. Depending on which part of the globe you are coming from, flights may span a series of days and require multiple layovers. And, because of that, if you move to New Zealand then you probably shouldn’t expect too many visitors — no matter which part of the world you move from.

Consider this, I recently priced travel from Hawaii to New Zealand for my family of four as part of our move preparations. I felt lucky to find one-way airline tickets through Auckland to Nelson that totaled a little less than $2000 USDs for all of us. At best, that means round trip tickets from mainland U.S. for a family of four probably cost around $4000 USDs. That’s before they even get to lodging and food expenses.

If you ask me, travel costs like that equal a lot of planning and saving for a family … if they choose to vacation responsibly (i.e. without racking up major credit card debt). So, as one of four siblings spread over the entirety of the United States (all with spouses/partners and kids), I know I won’t see a lot of my siblings, nieces, or nephews in person after we move. Nor will I hold it against them if they chose to spend their vacation dollars in other ways.

Considering these travel issues, it’s probably safe to assume that Grumpus Familias will need to travel if we want to see our relatives on any sort of routine basis. I’m already preparing (mentally and fiscally) for major trips once or twice a year. In my mind, the best we could hope for is meeting our relatives somewhere half-way like Hawaii (for my family) or Singapore (for Mrs. Grumpus’ parents coming from Europe).

Moving Internationally Is Expensive

Stepping away from the topic of moving to New Zealand specifically, it’s important to point out that if you elect to move to internationally on your own (i.e. not through work), it comes with a financial cost. In fact, if it’s a move from the U.S. to an international destination and it includes a home’s worth of household goods, then it’s probably going to cost you several thousand dollars alone just to move your stuff. To be completely transparent, it’s one of the reasons that Mrs.Grumpus and I are making the move to New Zealand now. As part of my military retirement, the Department of Defense (DOD) owes us one last move, and we are using it to defray the costs of moving all of our stuff to New Zealand.

Of course, you don’t have to move an entire house full of goods. You could use the excuse of an international move as an opportunity to slim down to the bare essentials of worldly possessions by selling or donating them. Then, upon arrival, you could always look to reacquire any items you need by hitting second-hand stores or clearance sales. That would be the Financial Independence (FI) way of doing things for sure, and it’s an exercise Mrs. G and I are currently in the middle of completing.

Along those lines, if you’re moving overseas from the U.S. you’ll need to get rid of a lot of your electronic appliances. Most countries run on different power standards than the U.S., which means many appliances and power tools won’t work overseas. Modern personal electronics like computers, mobile phones, and tablets operate along the entire range of international voltage standards, so you’re safe in that regard as long as you have a plug adapter. That’s not the case for simpler electronic appliances and tools like those in your kitchen or on your workbench. They don’t typically operate along a range of voltages. TVs may have to go too, especially if you’re moving to a country that runs on the PAL standard vice NTSC.

What About Cars?

I’d be remiss if I didn’t mention selling or shipping automobiles. In many countries it’s OK to drive American manufactured cars/trucks on their roads, assuming they can pass the safety inspections and emissions testing. So, shipping a car is an option. In fact, oftentimes it’s not nearly as expensive as buying a new car upon arrival. However, what many people find is that it costs a lot to drive American manufactured cars in countries that tax fuel more heavily than America. U.S. military members escape that fate by purchasing gas on base, but even then, gas is rationed to prevent black markets from springing up.

Still, many people do ship, especially those of us in the military since the DOD will ship one car for free. In fact, Mrs. Grumpus and I shipped one car to Europe when we got stationed there, bought a second car on an American base when Grumpus Minmi #2 was born, and then shipped both cars to Hawaii when we transferred. We paid to ship the second (lighter) vehicle. Yet, what we paid to ship was far less than what it would have cost us to buy a used car of similar make, model, year, and mileage once we moved from Europe to Hawaii.

Not in New Zealand

The story for shipping vehicles is different for our move to New Zealand. They drive on the left-hand side of the road with right-handed steering wheel vehicles. And, unlike the United Kingdom (another country that drives on the left-hand side of the road), New Zealand makes almost no exceptions for cars with left-handed (American and European) steering columns. We could pay to have the steering columns converted once we got over there, but that would end up costing us more than our cars are probably worth. Since it makes no financial sense to ship our U.S. manufactured cars, we will sell both of them before we leave Hawaii and buy used cars when we arrive.

In fact, I recently sold one of the two vehicles we own. I’m planning to sell the second one about a week before we leave (knock on wood). After that, we’ll rent a car for our final days in Hawaii, and then turn around and rent for a few days in New Zealand, before buying a used car.

The only reason I’m telling you all of this is to remind you that, once again, there are costs involved in all of these actions. In this instance, we are selling cars that otherwise would have lasted us many years more. Fortunately, as I already pointed out, the USD is strong compared to the NZD. I’ve been perusing New Zealand used car web sites recently, and I think we can find similar makes and models (used) in New Zealand for the equivalent of what we sold our cars for in the U.S. In fact, we may even get a small upgrade.

Immigration Expenses

Aside from selling and reacquiring worldly possessions, an international move may also hit your wallet in more direct ways. For one, the immigration system in that country may have fees associated with certain applications and mandatory paperwork like visas. New Zealand certainly does. This includes fees for applications, as well as health screenings by Immigration New Zealand (INZ) approved doctors in the U.S. — which aren’t in a lot of places.

Secondly, if you’re choosing a less conventional visa to immigrate on, you may need the help of an immigration specialist for that country to navigate the bureaucracy. That’s the situation my wife and I found ourselves in when we started to seriously consider New Zealand. The New Zealand immigration system is not designed for emigrating early retirees such as myself — even those with a permanent pension. Its primary function is to solve the long term skilled labor shortage for the New Zealand economy. As such, it’s a points-based system that takes work history and education into account.

If a person tallies over a certain amount of points, then they can apply for a work visa with a high likelihood for approval, even if they don’t have a job offer. Or, if a person is lucky enough to land a job offer before applying, they may not even need to worry about the points, as long as the New Zealand company hiring them can prove they searched internally to the New Zealand workforce first. However, the absolute easiest pathway into the country is via New Zealand’s Long Term Skill Shortage List (LTSSL). If a person’s profession and qualifications appear on the list, their application is moved to the front of the queue, regardless of points.

I’ve placed several links in this section to Immigration New Zealand (INZ), the official government agency in charge of the New Zealand immigration system. Please note that what you read on their page is the official answer. If anything I said contradicts what’s on that website, then go with the INZ answer! I’m not an immigration specialist, just a guy who’s gone through the process.

Professional Help

Neither my wife’s nor my career mapped well enough to the LTSSL to earn head of the line privileges. That assumes I’d be willing to return to full-time work, which I’m not. Even if I were willing though, it wasn’t clear that I would have tallied enough points to submit a work visa application without some serious resume inflation. It’s the same story for my wife, except she is willing to return to full-time work, which is why she applied for several jobs while still overseas.

Unfortunately, landing a job offer in New Zealand from overseas in Mrs. Grumpus’ industry (tourism) proved impossible. That was kind of a shock to me because tourism makes up a large chunk of the New Zealand economy. This lack of success is why we started to look at other visa options, and when we did, we quickly realized we needed professional assistance. We specifically needed someone who could answer all of our “what if” questions. We also needed someone who could help us strategize about our best visa pathway given our unique situation (i.e. Financially Independent (FI) but in search of a job that would allow us to apply for permanent residency).

So, we hired a New Zealand based immigration attorney. He helped us work through and eliminate all the options until we found the correct initial visa for us, which sounds way more straightforward than it proved in real life. It also didn’t come cheap, even though I felt it was money well spent.

The Lilypad Strategy

Our immigration attorney specifically helped us craft a lilypad strategy for gaining a permanent residence visa by convincing us to initially apply for a student visa. If you’ve read my GI(bill)arbitrage article, then you may remember I was already leaning in the student visa direction as early as January 2019. I was intent on using the GI Bill and had discovered that it could be used overseas. But, as I pointed out in that article, I didn’t think a student visa would allow Mrs. G to work, or the Grumpus Minimi to go to state (public) schools without paying a substantial fee. So, I wasn’t convinced that a student visa was the way forward.

I was mistaken though. I misinterpreted the rules for some student visas and thought it applied to all student visas. Yes, you read that correctly, I actually admitted that I made a (non-financial) mistake. Mark your calendars, because this doesn’t happen very often!

Where was I? Oh yes … it was our immigration attorney that pointed out that Masters and Ph.D. student visas allow a spouse to work legally, and children to attend public (state) schools without paying a fee. He also explained that after we entered the country on a Masters or Ph.D. student visa, and my wife found a full-time job, then we could apply to convert to a permanent residence visa based on her job.

Flexibility and Sacrifice

Of course, that meant that I had to be willing to return to university and obtain either another Master’s or a Ph.D. That was a distinctly different retirement plan than the one I had crafted for myself before that news. My plan was to use the GI Bill and study horticulture as a vocation, which is an area I have no educational background but love as a hobby. It’s also something I knew I could study in New Zealand since they have a big horticulture industry and strong vocational training tracts.

What I didn’t necessarily want to do was return to university as a grad student (again), and actually have to study hard as a full-time student (again) in a subject I no longer cared very much about (history, if it was going to be a Ph.D.). My wife had similar feelings about returning to full-time work. She was more interested in working part-time in an area she truly enjoyed, especially since we don’t “need” the money from a full-time job. However, it was clear to both of us that if we wanted this New Zealand dream to come true, then both of us needed to make sacrifices.

Sooooo, during our second trip to New Zealand we started to look for a Masters or Ph.D. program that I was eligible for, in a location that we both liked, with job prospects in my wife’s industry, and state schools we wanted to send our kids too. The other, albeit minor, requirement was to find a Masters or Ph.D. program that the VA would approve for the GI Bill. Of course, I say that it’s a “minor” issue in hindsight because I now know that most universities in New Zealand have already hosted GI Bill students of one form or another. That means obtaining approval from the VA for a specific program at one of those universities isn’t that hard.

Make Your Own Luck

Getting the stars to align with all of the above conditions was easier than I thought it would be, but only because my wife and I made our own luck. While we were visiting Nelson on our second trip to New Zealand (which was a scouting trip for universities and places to live), we fell in love with the place. Yet, Mrs. G had to convince me to visit the local university (Nelson Marlborough Institute of Technology (NMIT)) while we were in town. Based on my earlier research into horticulture vocational pathways, I thought NMIT didn’t offer anything higher than a Bachelor’s degree, so I didn’t really see the point. I went to make her happy though.

Well, I’m glad she convinced me because NMIT had just started their first Master’s degree producing course only two months before our visit. More importantly, it was in a subject that I was eligible for based on my work experience. It was also in a subject area that I had some interest in, which was even better.

So, to make an already too long story just a wee bit shorter: I applied, was accepted, and then worked with the international student coordinators at NMIT to get the course approved by the VA. After that, my wife and I worked with our immigration attorney to meet all the administrative and medical requirements required for a Master’s Student Visa for me, a work visa for her (eligible because of my Master’s program), and primary/secondary school student visas with for the kids with domestic student privileges (i.e. no big tuition payments).

You Can Probably Guess How This Ends

As you know from my overly long introduction (assuming you can remember that long ago) the visas were eventually approved, and we are now in the final throws of our move preparations with a departure date that’s only weeks away. Mrs. G’s busy selling or donating everything we can’t take with us. She’s also busy canceling all the U.S. based services we won’t need or can’t take with us.

The kids … well, they’re doing kid stuff. Grumpus Minimi #1 (the older one) is starting to show the normal signs that military kids show when moves are imminent — anger, sadness, and confusion over the need to move and the imminent loss of his friends — which Mrs. G and I are talking openly and honestly with him about. GM#2, on the other hand, is just excited that we’re flying on an airplane in a few weeks. For once, he’s the child that’s easier to please!

As for me, even though I’m retired, it sure doesn’t seem like I’m any less busy. I continue to check off all the administrative requirements for the military-sponsored move, as well as the requirements for starting school and emigrating legally. Then there’s all the work that publishing a book requires … which is an entire post unto itself. Finally, in the few spare hours I find a week, I reflect and write overly long blog posts like this. Based on those reflections, let me drop one more pearl of knowledge before I go that resonates along the original theme for this blog, the dreaded Golden Albatross.

My Golden Albatross Laid a Golden Egg

In all honesty, I don’t know if this move to New Zealand actually qualifies as a geoarbitrage move. For one, there are a lot of costs we’ve yet to uncover. Until my family and I are settled in Nelson, renting a house filled with our own stuff, and going about our daily lives, I won’t have the data to say whether or not Kiwi Arbitrage is in effect. Will it prove affordable? Undoubtedly, and regardless of whether or not it ends up being cheaper than San Diego.

How do I know? Well, for one, my wife and I have a proven track record of living within our means. I also built our retirement budget on financially conservative assumptions — worst-case assumptions as a matter of fact. The money I’ll bring in from the GI Bill and that Mrs. G will earn from full-time work will mean those worst-case assumptions are not relevant. That extra money will see us through any sequence of return risks that could have otherwise sunk our retirement “nest egg” investment portfolio. Between my pension, the GI Bill money, and her work income; I’d be surprised if we even tap into the retirement savings at all before graduating from my Master’s course. As a result, let’s set aside the issue of cost comparisons and Kiwi Arbitrage and have a frank discussion about post-retirement life, or life two-point-oh (2.0), for me and my family.

You may have noticed that my wife and I have chosen to do something different for my “retirement.” Because of this, I’m not actually approaching this move as geoarbitrage. Instead, I view it as a downpayment on an epic future. Ironically, my pension and the other earned benefits connected to it are funding that downpayment. It’s ironic because I mentally and physically slogged through the final years of my military career to earn those benefits, and in the deepest and darkest moments of those years, I wasn’t sure I was going to make it.

Of course, that’s the irony of the Golden Albatross metaphor in a nutshell. Do you stay at that pensionable job, even if it’s not in the best interest of your physical or mental health just so you can earn that pension? Or, do you jump ship and forgo the future financial stability that a pension can provide?

I’ve pointed out numerous times on this blog that I stayed at my pensionable job much to the detriment of my mental and physical health. That was my choice, and I’ll have to live with those consequences for the rest of my life. Yet, I’m determined to make my Golden Albatross sacrifice count for something more than just riding off into the sunset and golfing (or surfing) my days away. This move to New Zealand is a major step in that direction, not only for myself or my wife, but our kids as well. I’m excited to see how it all plays out, and I hope you are as well because this (as they say) is just the beginning …