“Should you earn $1,000 monthly, you could drive a compact car, occasionally treat your family to respectable restaurants, and enjoy outings to places like this during weekends.” This was an unintentional remark from my Nicaraguan guide Pablo while we were at the viewpoint admiring Lake Apoyo, positioned between Managua and Granada. “With that salary, you’re considered middle class here.”
Indeed, Nicaragua is a nation with limited resources, and it’s not a place I wish to reside in currently due to the Ortega regime, yet it exemplifies one among many countries where $1,000 monthly classifies as middle class locally. Therefore, if your income is several thousand a month from a remote position, an online venture, or retirement income/savings, you will instantly elevate from middle class to “wealthy” if you settle in these regions or travel through them as a digital nomad.
Every year, I publish a post and specific overviews on the least expensive locations worldwide, and there’s a singular crucial aspect they share: most residents earn considerably less in their country than the average in yours. This results in your living expenses being halved.
The overarching perspective is genuinely that straightforward. If you come from a nation where the median annual income exceeds $40,000 after taxes, as is the case in the USA, Canada, or Australia, you’ll undoubtedly feel more affluent if you relocate to a region where the median income hovers around $12,000 annually. Even if you subsist solely on Social Security or a pension payment.
Travel further down to an area where individuals make $600 monthly, and you might find yourself among the top 2% of income earners.
These official figures are somewhat clumsy, of course, whether you refer to median income, per-capita GDP or daily consumption per capita. Some “work” isn’t accurately accounted for, bartered commodities are overlooked, and individuals naturally understate their actual income when tax consequences arise. Nevertheless, whether an average worker in Nepal earns $200 yearly or $800 doesn’t significantly alter my argument. In comparison to the Nepalis, you are affluent, even if your income parallels that of a fast-food worker.
Conversely, if you reside in a pricier locale, the earnings from your labor lose value. Your purchasing power diminishes due to the heightened costs of nearly everything. Per-capita GDP could nearly reach six figures in Norway pre-tax, but relocating there means you’ll face exorbitant prices for almost all your expenses. Additionally, income tax is steep (though it comes with significantly better governmental benefits).
While a substantial lunch in Cambodia might set you back $3, the same meal in Norway could run you $20 due to elevated wages, rents, taxes, and ingredient costs. Hence, we must consider overall purchasing power: what individuals can afford relative to the average wage.
In the USA, one must also account for healthcare expenses, which are exorbitant without a corporate health plan. This is often the case for most gig workers and self-employed individuals. This illogical, profit-driven system is absent in most other parts of the globe. Furthermore, the situation is deteriorating as I express this in 2025, with significant reductions in social programs, support for rural medical facilities, and veterans’ benefits.
How Cost Variations Manifest for Expats
Returning to my experiences in Nicaragua from last decade, I was engaged in writing several articles for assignments, hence had an English-speaking guide accompanying me—someone who was raised in Miami before moving back to Nicaragua in high school. He aims to return to the USA at some point, to show his kids Disney World, yet he plans to continue living in his current place. His typical electric bill is around eight or nine dollars. He owns his home. His family enjoys good meals based on his earnings.
Now, envision your circumstances under that cost structure but arriving with thousands of dollars or euros each month. I had coffee with a retired couple residing in Granada during my visit. “My pension is 3-4 times the average Nica’s income,” Jim shared. “We spend about $1,800 monthly, which is lavish by local measures. We occupy a spacious air-conditioned house with a swimming pool and pay $650 monthly in rent. We dine out whenever we wish, at any place we choose.”
“Healthcare is so affordable here that we don’t even have insurance. We simply pay for services as required. I had to visit the best hospital in Managua for surgery, and it was so affordable that I charged it to my credit card,” he remarked.
Another couple I spoke with for my expatriate living book initially resided in Leon, Granada, and later lived