BiggerPockets Money Podcast

Episode Title: FI Faster by Making More and Spending Less Using "Geo-Arbitrage"
Hosts: Mindy Jensen and Scott Trench
Guest: Daniel Mills
Date: September 16, 2025

Episode Overview

In this episode, Mindy and Scott welcome back Daniel Mills, an American university professor who reached financial independence (FI) while living abroad in Japan. The conversation centers on the concept of "geo-arbitrage": leveraging geographic differences in cost of living to boost savings rates, accelerate FI, and improve quality of life. Daniel shares his post-FI journey, portfolio strategy, details on living in Japan, intricate tax considerations as an expat, and ethical considerations around geo-arbitrage.

Key Discussion Points & Insights

1. Daniel's Updated FI Journey & Portfolio Snapshot

(01:16 – 05:09)

• Daniel now considers himself financially independent, especially by Japanese standards.
• Portfolio breakdown:
  • ~$2.1 million total net worth.
  • 3% in cash.
  • 44% in equities, bonds, and a small amount of cryptocurrency.
  • Paid-off condo in Japan (~8-9% of net worth).
  • U.S. residential real estate (now 4 of 10 properties paid off), all in Alabama, Idaho, and Tennessee.
  • University pension (paid as a lump sum on departure).
• Simplified and less-leveraged portfolio since his last appearance.
• Cash flow: ~$45,000/year from real estate, ~$36,000/year via the 4% rule on equities.
• Quote:

  "Here in Japan, that's living like a king." — Daniel (04:57)

2. Cost of Living in Japan: Debunking Myths

(05:09 – 08:22)

• Japan, once famous for its bubble-era excesses, is now much cheaper than the U.S. for locals.
• Examples:
  • Brand new cars under $10,000.
  • Student apartments for $250–$300/month.
  • Eating out is inexpensive (no tipping), daily expenses lower.
  • Major cities like Tokyo can be exceptions.
• Tourism gives a skewed perspective; living costs are much lower than tourist experiences.
• Quote:

  "Japan is usually seen as about 50% cheaper in general than the U.S." — Daniel (05:49)

  "This sort of inconvenience [living small] actually makes your life better." — Daniel (06:33)

3. Transportation & Healthcare in Japan

(08:03 – 10:29)

• Japan’s infrastructure allows for a car-free lifestyle.
• Socialized healthcare — quarterly premiums based on previous year's income, copays capped.
• Typical doctor visit is <$10; medications are cheap.
• Strict annual out-of-pocket caps for severe illnesses (~$500/month).
• Quote:

  "I love the system...this covers your medical insurance and your long-term care." — Daniel (09:23)

4. Moving to Japan: Immigration & Visa Options

(13:43 – 17:34)

• Japan is challenging for long-term immigration.
• Easiest path is marriage; otherwise, student visas, English teaching jobs, or business manager visas (now require $200–300K+ investment).
• Recent political shifts have made immigration stricter.
• Culture is a significant barrier; only about 3% of residents are non-Japanese.
• Quote:

  "Japan is notoriously...not very open to immigration. Right. It's been like that for a long time." — Daniel (14:07)

5. Spending Patterns & The “Geo-Arbitrage Trap”

(17:34 – 19:21)

• Even in FI, Daniel and his wife spend mainly on travel and food.
• Cautions about “geo-arbitrage trap”: being FI in a low-cost country but unable to afford returning to a more expensive homeland.
• Their strategy: maintain savings/investments for future flexibility.
• Quote:

  "While we're FI in Japan, we're not quite FI in other parts of the world...We want to have optionality in retirement." — Daniel (17:57)

6. Investing from Abroad: The Japan vs. U.S. Dynamic

(19:21 – 22:10)

• Daniel invests primarily in U.S. assets for appreciation, while Japan’s economy and real estate are more stagnant.
• Japanese markets and properties usually do not appreciate; newness is prized, old properties depreciate.
• U.S. real estate and index funds allowed much greater wealth-building.
• Quote:

  "You can kind of get the best of both worlds. Even if you're not living in that American house, you can build equity that you wouldn't build here in Japan." — Daniel (21:16)

7. Other Geo-Arbitrage Destinations & Cultural Fit

(22:10 – 25:48)

• Portugal, Spain, and parts of Latin America are easier for visas but now face some anti-immigrant/tourist sentiment.
• Culture fit is crucial — don’t overlook everyday customs.
• Emphasizes on-the-ground research and integration (language, customs).
• Quote:

  "Start with the culture. None of the money and visa stuff is going to matter if you can't fit into the culture." — Daniel (23:10)

  "Learning the language, learning some of the basics of the culture, trying to be polite about that...goes a long way." — Daniel (25:37)

8. Ethical Considerations of Geo-Arbitrage

(25:48 – 26:34)

• Debate around expats’ impact on local communities and economies.
• Daniel’s stance: “You have to make your own decisions” but integrate and contribute meaningfully.
• Quote:

  "There's probably an ethical dilemma to almost everything we do...I can't solve all the world's problems." — Daniel (25:56)

9. Expat Tax Complexity: U.S./Japan

(31:51 – 36:30)

• U.S. citizens must file taxes wherever they live; Japan taxes residents on worldwide income after 5 of 10 years.
• No double-taxation, but always pay higher rate (often Japan).
• Significant tax-prep costs ($8,000/year for both U.S. and Japanese CPAs).
• Recent Japanese law closed a major real estate depreciation loophole for expats.
• Quote:

  "You have to report everything. Your U.S. properties, the Japanese government know who my tenants are and see the lease agreements." — Daniel (34:05)

10. Deleveraging Portfolio, Currency Risks, & Retirement Optionality

(36:30 – 41:11)

• Daniel and his wife are paying down debt, reducing headaches, and increasing cash flow stability.
• They manage exposure to currency fluctuations by keeping assets and accounts in both countries (“almost like two economies”).
• Considering future real estate in Japan for further flexibility.
• Quote:

  "We're sort of test running what retirement might look like...We'd love to, in the future...have a couple of paid-off rentals here in Japan as well." — Daniel (38:01)

11. Banking & Financial Infrastructure As an Expat

(41:11 – 43:27)

• Keeps separate U.S. and Japanese bank/brokerage accounts.
• Uses Interactive Brokers to access U.S. ETFs from Japan.
• Navigates restrictions on tax-advantaged accounts (e.g., NISA in Japan not accessible as a U.S. citizen).
• Quote:

  "We kind of have, as I said, almost like two economies...in both countries that are completely separated but also have some connection." — Daniel (43:15)

12. Expat Life: Partial Geo-Arbitrage & Community Resources

(45:45 – 47:14)

• Highlights that many expats “split time” (e.g., three months in Japan as a tourist) to get many of the benefits without full relocation.
• Recommends the ChooseFI Expats Facebook group (17,000+ members) for peer insights.

13. Looking Forward: Will Daniel Stay in Japan?

(47:14 – 48:05)

• Plans to maintain roots in Japan due to family ties but looks forward to splitting time in the U.S. in retirement.

14. Resources & Where to Find Daniel

(48:32 – 48:56)

• Daniel’s website: thefiprof.com — Geared toward U.S. expats in Japan, with broad lessons for anyone interested in geo-arbitrage.

Notable Quotes

• "Here in Japan, that's living like a king." — Daniel (04:57)
• "Japan is usually seen as about 50% cheaper in general than the U.S." — Daniel (05:49)
• "Start with the culture. None of the money and visa stuff is going to matter if you can't fit into the culture." — Daniel (23:10)
• "There's probably an ethical dilemma to almost everything we do...I can't solve all the world's problems." — Daniel (25:56)
• "Learning the language, learning some of the basics of the culture, trying to be polite about that...goes a long way." — Daniel (25:37)
• "You have to report everything. Your U.S. properties, the Japanese government know who my tenants are and see the lease agreements." — Daniel (34:05)
• "We're sort of test running what retirement might look like...We'd love to, in the future...have a couple of paid-off rentals here in Japan as well." — Daniel (38:01)
• "We kind of have, as I said, almost like two economies...in both countries that are completely separated but also have some connection." — Daniel (43:15)

Timestamps for Key Segments

• Daniel’s portfolio update: 01:16–05:09
• Japan’s true cost of living: 05:09–08:22
• Healthcare in Japan: 08:22–10:29
• Immigration/visa discussion: 13:43–17:34
• Spending after FI / the geo-arbitrage trap: 17:34–19:21
• U.S. vs. Japan investing: 19:21–22:10
• Cultural fit advice: 22:10–25:48
• Ethics of geo-arbitrage: 25:48–26:34
• Expat tax challenges: 31:51–36:30
• Portfolio strategy and currency: 36:30–41:11
• Banking as an expat: 41:11–43:27
• Expats/community groups: 45:45–47:14
• Future plans: 47:14–48:05
• Where to find Daniel: 48:32–48:56

Episode Tone & Final Thoughts

The episode is candid and practical, with humor and warmth. Daniel combines numbers-driven strategy with deep cultural appreciation. Hosts Mindy and Scott create space for real talk about the trade-offs, privileges, and responsibilities of living internationally. Both the hosts and Daniel emphasize that geo-arbitrage, while powerful, is about far more than just saving money—it’s about intentionality, adaptability, and contributing to your new community.

For more on geo-arbitrage or Daniel's expat strategies, visit:
thefiprof.com