What to do with your Universal Basic Income

Space-Time coordinates: 12 Apr 2020, Tbilisi [Republic of Georgia]

The situation

There’s no question we’re living in uncertain times. As I write this, most of the world is in some form of lock-down. Businesses that rely on discretionary spending have seen their revenue fall off a cliff. With no income, they’re forced to cut spending. This means they fire their staff. This leaves people with less money which means they spend even less on discretionary expenses. The cycle spirals down; feeding on itself.

Western governments are responding to this massive decrease in monetary velocity (deflationary) by printing a lot of money (inflationary). They’re trying to keep their currencies stable. This will have massive effects on the price(s) of products. Necessities will become more expensive while everything else will remain the same or even become cheaper.

There are also huge effects on currency markets. Because so much global debt is denominated in US Dollars, there’s constant demand for them outside the US. Normally, these dollars get to the rest of the world via trade deficits (the US buys imports with USD). But since global trade has drastically slowed, fewer dollars are getting out to the rest of the world. This has led to the USD strengthening against other currencies. That makes it harder for people that make money in non-USD currencies to pay back debts they’ve incurred denominated in USD. Also, because most international trade is settled in USD, the price of imports in countries that aren’t the US are rising.

Many developed countries (1st world) are even printing money, and giving it directly to their citizens. This can come in the form of tax refunds, unemployment insurance, and various welfare programs. There’s even talk of sending people money on a monthly basis to help them get through these tough times; basically, a Universal Basic Income.

What to do

If you’re struggling right now, I’m afraid to say there isn’t much to be done. Try to reduce your expenses as much as possible, and maybe find a way to make some money (think side-hustle). I know that’s difficult since most people in the West live paycheck to paycheck and don’t have any savings.

In the future though…. The world won’t be locked down forever. Eventually, travel will be possible again. This will be the perfect time to take advantage of geoarbitrage: exploiting items costing differing amounts in different places. For example, the cost of living in Ukraine is far less than in Sweden.

Consider what holds most people in the geographic region in which they were born: income, assets (house, car, etc.), friends & family, familiarity.

If you’ve lost your job, income isn’t holding you in place. If you got a location independent side-hustle, you don’t need to stay in the West. If your government rains money down on you for simply being a citizen, that’s the ultimate form of geographic freedom.

I’ve been traveling for 2 years now, and have been documenting how much it’s cost me every week via my Financial Friday posts. As a single person just living my life and having fun, I almost always spend less than $1,000 per month. That’s well under the $1,200 April UBI installment. And if the US does implement a full UBI program, I imagine it’ll be $1,000 or more as well. Not to mention this will probably become even more favorable as exchange rates favor USD even more.

Many people have have houses, cars, and a bunch of random stuff laying around their homes. The good news is that all these assets can be sold. That will free you from that location, and might even free up some cash to help with a move.

If you have friends and family that are still stable at home, there isn’t much to be done about that. But new friends aren’t that hard to make. And if you become successful enough, you might even be able to move your family to wherever you end up. This is the most difficult part about moving, but it’s not impossible to overcome.

Adjusting to a different culture can certainly be a challenge. However, this is the easiest thing to adjust to. There are plenty of cheap countries where a large percentage of the population speak English. If you speak Spanish or Russian, this is even easier. And exploring new cultures is kind of fun; at least I enjoy it.

Summary

Traveling and/or moving to another country really isn’t has hard as most people think, and the barriers to doing it are melting away. Plus, you encounter opportunities to make money as you do it if you keep your eyes open. Hopefully, this post has at least given you something to consider, and maybe start planning for.

And if you do decide to try this and need some help, feel free to contact me. I’ve learned a few things hopping around the globe. Who knows, maybe we’ll even meet each other on the road. I love meeting new people!

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