Picturesque view of Zurich, Switzerland's vibrant cityscape with historic architecture and waterfront, highlighting its high salaries and quality of life, ideal for financial independence — Photo by Ricardo Gomez Angel on Unsplash.

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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.

Unlocking Global Opportunities for Financial Independence

In a previous post, we explored the best countries in Europe to pursue financial independence. We created a data-driven methodology to evaluate how European countries rank for achieving financial independence and early retirement. We did so by focusing on the net average salary and relative cost of living found across 37 European countries and 94 cities. We acknowledged that there were many other factors to consider when moving to a different country, but argued that this may still be a reasonable starting point.

In today’s post, we will expand this assessment to identify the suitability of 43 different countries on a global scale for pursuing financial independence. Specifically, we will benchmark salaries and cost of living across countries to identify the most financially advantageous locations for financial independence. To illustrate, in a previous post, we found that the cost of living in a major European city like Madrid or Rome was 11.9% and 13.9% lower than Berlin, respectively, yet the net average salary in the German capital was almost 40% and 75% higher than in the two cities. Clearly, Berlin offers a financial edge for those pursuing financial independence compared to major cities in southern Europe, such as Madrid and Rome. But how does this interplay between salary and cost of living look like across other countries on a global scale? Keep scrolling down and let’s find out!

Data-Driven Insights for Achieving Financial Freedom Worldwide

Maximizing Savings: The Key to Early Financial Independence

In our earlier posts, we emphasized that 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. You can use a variety of financial independence calculators online to estimate your timeline to early retirement based on your savings rate and lifestyle (for instance, this one or this one). The key takeaway, as illustrated in Figure 1 below, is that your savings rate has a non-linear effect on the timeline to financial independence and retirement. Cutting expenses not only boosts your monthly savings but also lowers the total nest egg required, significantly accelerating your path to financial independence. This dual effect is what creates the non-linear relationship.

Bar chart showing the non-linear relationship between savings rate and years to retirement. Demonstrates how a 64% savings rate enables financial independence in 10.9 years. Visualizes how higher savings rates drastically reduce time to retirement — 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.

Finding the Best Countries for Financial Independence (Methodology)

To optimize your savings rate and accelerate your journey to financial independence, focus on reducing living expenses or boosting your income. Factors such as your net take-home pay and the local cost of living clearly play a significant role in how quickly you achieve FI. Relocating to countries with higher salaries and lower living costs can be a game-changer for achieving financial independence and retiring early.

For this global analysis, we use cost of living and average net (after-tax) salary data sourced from Numbeo. Our assessment spans 43 countries*. To explore differences across countries, we employed a comparative methodology using Germany as the reference point (where I am based). In Figure 2, the X-axis represents the cost of living in each country as a percentage of Germany’s, while the Y-axis shows the net average salary relative to Germany. For example, the United States’ cost of living is 28.6% higher than Germany’s, while Norway offers salaries that are 10.0% higher on average. Conversely, Italy has salaries that are 42.7% lower.

The red line in the chart acts as a benchmark, highlighting countries with financial independence potential similar to Germany's. For instance, 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. Otherwise, countries falling above the red line would be considered more advantageous in terms of pursuing financial independence than Germany, due to a better salary-to cost of living ratio.

We have developed the figure below into an interactive tool, where the user can select their current country of residence, and a similar chart is generated to gauge which countries would be best placed for relocation in relation to that specific country. Please find the tool in the following link (it may take a moment to load, and, although I hope to change this, at the moment it works only for PC).

* The original dataset contained 84 countries, but considering all of them in a single graph makes it difficult to visualize. Therefore, we took the median net salary as the cutoff point, and decided to only present the top 50% of countries of the dataset in terms of salary.

Graph comparing salaries and cost of living across countries, showcasing global opportunities for achieving financial independence, with Germany as a benchmark — Figure 2: Identifying suitable countries to pursue financial independence from the perspective of someone living in Germany (0,0 in the graph). The X axis depicts the cost of living difference (%) in relation to Germany’s cost of living. They Y axis presents the net average salary difference (%) in relation to Germany’s salary. In general, countries situated above the red line are–in theory–better performers than Germany for these two variables. Check out our interactive tool, where you can select your current country of residence , and a similar chart will be generated to gauge which countries would be best placed for relocation in relation to your specific country. The tool may take a moment to load, and, although I hope to change this, at the moment it works only for PC.

Interactive Tool

Top Global Destinations for Financial Freedom in 2024

As observed in Figure 2 above, Germany is a fairly good location for pursuing financial independence. From the perspective of someone living in Germany, there are 8 countries were it may be, on average, easier to pursue financial independence: Luxembourg, Switzerland, Qatar, and the US stand out as clear examples that substantially outperform in these two metrics, with average net salaries that are 89%, 122%, 34%, and 48% higher than in Germany, respectively. In contrast, the cost of living in Luxembourg, Switzerland and the US is 18%, 70%, and 28% higher than in Germany. Qatar is an interesting case, because, despite its higher average salary, it has the same cost of living as Germany. The remaining high performing countries in the dataset–in relation to Germany–are Kuwait (similar salary, but substantially lower cost of living), Denmark, the Netherlands, and UAE. Sweden and Japan fall on the red line, meaning they are comparable to Germany in terms of these two metrics. The results of this exercise align well with our general perception of pursuing financial independence in Germany, which we covered in detail in a previous post.

This same analysis can also be performed at a city level, as we’ve done already for cities in Europe and for cities in the US and Canada. By understanding better net average salaries across cities and their cost of living, you will be in a better situation to make more informed choices. Figure 3 presents an example of what the cost of living data looks like on a global scale. If we remove some outliers (e.g., the US and Switzerland), we get a better overview of the cost of living variability across the remaining countries.

Global map illustrating cost of living differences across major cities, highlighting countries offering financial independence opportunities based on salary and living expenses — Figure 3: cost of living (including rent) across 218 major cities. Source: Numbeo (2024).

Beyond Salaries and Costs: Key Factors to Consider Before Relocating

There are many important factors to take into account when choosing a country to pursue financial independence. This post presented an approach for identifying a preliminary set of countries where it may be easier to achieve financial independence. However, when considering relocating to a different country please remember that there are many other factors at play that should be assessed, summarized in Table 1.

Table 1: Example of variables to consider when deciding to move to another country in search of better economic opportunities.

Category	Variables

Economic Variables	- Job opportunities and industry relevance - Currency stability and exchange rates - Inflation rates and economic stability

Legal and Political Environment	- Political stability and freedom - Ease of obtaining work or residency visas - Legal protections for expats and workers - Property rights and investment opportunities

Quality of Life	- Healthcare quality and affordability - Education system - Safety and crime rates - Air and water quality

Cultural and Social Factors	- Language barrier and availability of resources for non-native speakers - Cultural compatibility and social norms - Community and networking opportunities for expats - Food and cuisine variety

Infrastructure and Accessibility	- Transportation systems and connectivity - Availability of technology and internet - Proximity to other countries for travel

Personal and Family Considerations	- Access to healthcare for family members - Availability of recreational activities and lifestyle preferences - Work-life balance culture - Climate and weather preferences

Financial System and Opportunities	- Banking systems and ease of transferring money - Investment opportunities and regulations - Access to affordable housing and utilities - Social security or retirement benefits for residents

Cultural Tolerance and Diversity	- Acceptance of diverse cultures, religions, and lifestyles - Religious freedom and tolerance

Taxation and Residency Benefits	- Double taxation treaties with your home country - Retirement benefits or tax incentives for expats

Future Considerations	- Long-term prospects for citizenship or permanent residency - Stability of political policies and leadership - Opportunities for personal and professional growth

Conclusion: Empower Your Path to Financial Independence

We outlined a straightforward yet effective approach to identifying ideal countries for accelerating progress toward financial independence. Using publicly available data from Numbeo, we compared the cost of living and average net salaries across 43 countries globally. Our goal was to provide readers with insights to support making informed decisions about relocation during the accumulation phase of their financial independence journey. This analysis can be replicated for your own country or region by substituting Numbeo data and adapting it to your unique situation. Alternatively, use the graphs above to roughly gauge how other countries compare to your own. Let us know in the comments: where does your country stand in terms of financial independence suitability, and would you consider relocating to find better opportunities?

Enjoyed this post? Check out out interactive tool where you can select your current country of residence , and a similar chart to Figure 2 will be generated to gauge which countries would be best placed for relocation in relation to your specific country. The tool may take a moment to load, and at the moment keep in mind that it works mainly for PC.

Interactive Tool

Idyllic Swiss alpine village with lush green hills and snowy mountains, representing the balance of scenic living and economic opportunities for financial freedom — Photo by Tron Le on Unsplash.

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