According to Numbeo’s Cost of Living Plus Rent Index (COLPRI), although living in Switzerland is around 12% cheaper than in New York City, the Alpine state still topped the list in 2020. Iceland, Norway, Luxembourg and Ireland also join the top five, making Europe one of the most expensive continents. When it comes to pure cost of living without considering the rent, Switzerland scores around 122 points, while Norway and Iceland are close to the values of New York City, considered the base value (100). Hong Kong and Singapore, in second and fourth place respectively, lead the rental index with 79.5 and 63.3 points, making them among the most expensive states and cities in the world. Numbeo’s Cost of Living Index takes into account the best assumptions on average expenses for a family of four, ranging from clothing, food and meals outside the home, to transportation, recreation and public services.
Now in the past year or so, Tel Aviv was just recently named as the most expensive city in the world to live in, jumping from 5th place a year ago. According to The Economist Intelligence Unit, it’s followed by Paris and Singapore (tied for second), Zurich, Hong Kong, New York, Geneva, Copenhagen, Los Angeles, and Osaka.
Although it may be true that Tel Aviv is the most expensive city, in our opinion the only REAL reason why that’s the case is due to the abnormally high value of the Sheckel. Living costs in Switzerland are abnormally high for the same reason – abnormally high exchange rates relative to other currencies, especially the US Dollar. 1 CHF Swiss Franc in 1950 was worth $0.25 cents in US Dollar terms. Now as of 2020, 1 Swiss Franc is worth over $1 US Dollar, with an exchange rate of about $0.94 cents to $1 US Dollar. In other words, 1 Swiss Franc is worth more than 1 Dollar, and it now requires more than 1 Dollar if you want to buy 1 Franc. Do you see the problem with what happened to the Dollar over the 70 years from 1950-2020? This contributes in a big way to high living costs in countries like Switzerland.
We have a colleague currently that’s been in Buenos Aires, Argentina throughout the duration of the pandemic who reports to be experiencing prices arguably lower than anywhere in the world:
“Not for the locals, but for foreigners – if you use Euros or the black market ‘Blue Dollar’ rate). Good scotch under $1 a bottle, same for wine or beer; any fruits or vegetables for only pennies for a week’s supply… 1st class steaks or scallops in the grocery stores, a couple bucks a pound. Even a 250oz bag of coffee is a single buck–$1. Locally produced stuff is 10% of Swiss or USA prices. Imported stuff may be more than double the cost in the country where it is produced (aside from Mercasur, the South American Common Market)
Why? Because Argentina has super high import duties. Inflation here is worse than Turkey. Local prices on many things in local pesos can double in a month. The locals have a hard time coping. Many have moved to Florida, USA or Spain. The local government is hopelessly inept.”
Sound like opportunity to you? The key to freedom in a rapidly-changing world is to embrace an open mind and be willing to try different places and lifestyles that best suit your needs. Geopolitical instability or overbearing lockdown measures aren’t necessary for entrepreneurs and investors who prepare ahead of time, and see the entire world as a place that’s full of opportunity.