From Berlin to Seoul to Tallinn: Navigating Life’s Big Decisions Through Arbitrage

As a teenager growing up in Berlin, I was fascinated by the idea of living in a different country. My cousin was studying in Beijing at the time, and I remember being captivated by his stories of life in a foreign land.

But I never imagined how seemingly small choices, saying yes to random opportunities, would lead me to live and work in South Korea for almost a decade. And now, in my 30s, I’m settling down in Estonia—an opportunity that was similarly serendipitous but made with a bit more calculation.

Reflecting on my journey, I’ve realized that all these life choices have a curious connection to a concept from finance: arbitrage.

Contents

1. Arbitrage Beyond Finance
2. Studying and Exploring in Your Early Years
3. Working and Professional Growth
4. Settling Down
5. Elements of Arbitrage
6. Final Thoughts

Arbitrage Beyond Finance

In finance, arbitrage is when an investor capitalizes on price differences in different markets to make a profit without taking any risk. It’s about recognizing and exploiting imbalances to one’s advantage.

For example, for some time in 2018, the price of Bitcoin in South Korea was around 50% higher than in the US. If you simultaneously bought Bitcoin in the US and sold it in Korea, you could make a risk-free profit.¹

But financial markets aren’t the only places where arbitrage can happen.

In our globalized world, countries and even cities within a country compete with each other to attract financial and human capital. Different places have different advantages in terms of cost of living, quality of life, career opportunities, and so on. People can, and increasingly do, vote with their feet² for the best place to live or do business.

Where in the world does the “value” (income, safety, quality of life etc.) you receive maximally exceed the “cost” you invest (money, time, emotional effort)? If we think about our life choices like this, we think like arbitrageurs. This choice can be temporary, like choosing to study abroad, or more permanent, like choosing a place to settle down and start a family. And, obviously, what you personally value most will change over the course of your live.

Studying and Exploring in Your Early Years

Since childhood I’ve had a huge interest in East Asia thanks to anime and video games. I was a huge Pokémon fan. In 1999, my uncle brought me a CoroCoro magazine from Tokyo. At the time, before having immediate access to all the world’s news on the internet, it was a rare window to another world. I studied the printed screenshots of upcoming Pokémon Gold and Silver games and was dazzled by the magazine’s aesthetics.

After finishing high school, my cousin invited me on a trip to Korea. I knew next to nothing about the country but had no better plans for the summer. It was an amazing trip, and afterwards I thought it would be a great idea to study there. That’s how I ended up first going on an exchange program to Seoul National University, and then later enrolling in a full degree program at KAIST.

In 2013 (and still today), Korea was far ahead of Germany in terms of technology and digitalization. Internet speeds were 50% faster, and you could already do many things online that are still paper-based in Germany in 2024. Koreans are also hard-working and hungry for innovation and success—a great environment for a 20-something-year-old tech nerd.

Leaving your cultural background behind can be incredibly freeing no matter where you go. It’s great to be outside of the confines of things at home. Both your family and society as a whole has influenced how you live your whole life in many ways, both subtle and direct. But far away from that, you can dare to be a bit weird, do things a bit differently. You soak up bits of the local culture. But most importantly, you learn to be yourself.

Compared to your later choices in life, studying abroad is easy. You just have to go for it and apply. From there on, most practical matters are taken care of for you, like accommodation, visa, and schedules. I recommend everyone to take advantage of this opportunity—it’s way harder to move countries by yourself later.

Looking back, in choosing to study in South Korea, I unknowingly engaged in educational arbitrage. While immersing myself in cutting-edge technology and a rich culture very different from my own, I accessed world-class education and gained unique experiences that enriched my personal and professional life.

Working and Professional Growth

After graduating, it’s time to decide where to start your career. For me it was an easy choice to stay in Korea. By now, I had learned the language and made some connections. Local businesses appreciated my degree from a Korean university more than elsewhere. Salaries adjusted for cost of living were also comparable to those in Germany.

I felt like I had a good chance to get a job here–I felt "unique" in many ways. It’s way easier to feel that way when you’re away from home. There weren’t (and probably still aren’t) many software engineers from Germany with a degree from KAIST who can speak Korean.

So I used my uniqueness to my advantage and got a job at a small startup using a hot new technology, blockchain.³

This was professional arbitrage in action. By staying in South Korea, I tapped into an up and coming tech scene. The ‘market’ in Korea valued my unique skill set more than perhaps in Germany, allowing me to pick my job, accelerate my career, and work on cutting-edge technology. Also, by working for a small company rather than a big conglomerate, I was able to take on more individual responsibility and grow faster.

If you’re working in a dead-end job or looking for inspiration for a new venture, exposure to new environments can give you new ideas and uncover unique problems worth solving. Traveling and living in different places will broaden your perspective, challenge your assumptions, and ignite creativity. Many startup ideas have been born from solving problems someone discovered while doing exactly that.

Settling Down

I had been living in Korea for eight years when I met my wife. We both were ready to move on from Korea for many reasons.

A big one was that both of our families were really far away from Korea. We wanted to be closer to them.

Also, despite all its many advantages, Korea can be a tough place to live long-term. Even though I spoke Korean fairly fluently and had a number of Korean friends, I still felt like an outsider. Foreigners don’t benefit from the same social safety nets and government supports as Koreans do. In Germany, for example, every resident can receive 250 euros per month per child and free daycare. You get none of that in Korea if the child doesn’t have Korean citizenship.

Salaries in Korea are not bad, but the cost of living is not low either, especially for families in Seoul: larger apartments and children’s education come with a hefty price tag, a fact that is driving many Korean families to not have children at all.

So we were looking for a place that offered a high quality of life and a supportive environment for starting a family. But of course, with all our experience, we still wanted to be close to an international community and have access to what’s hot in the world.

Not many people would have guessed where we ended up: Estonia. Once more, it was a random opportunity that brought us here. An opportunity that aligned with out goals.

While still in Korea, I got a remote job offer from a company in Tallinn. They invited us to visit, and both my wife and I fell in love with the city.

Tallinn is a lovely place: walkable, green, and full of history. Small but vibrant, dense with cultural venues and tech companies. And only a few hours of travel away from our families, not a whole day like Korea.

Estonia is known for its advanced digital infrastructure, progressive policies, and vibrant startup scene. There are many expats, and almost all Estonians speak a second language (English or Russian). Estonia also offers a lower cost of living compared to many Western European countries, along with excellent public services.

By moving to Estonia, we engaged in lifestyle arbitrage. This time, the ‘value’ we were looking for was quality of life, economic opportunities, and societal benefits. We’ve only been here for about a year, but so far, Estonia seems to be the ideal setting for both our personal and professional fulfillment.

Elements of Arbitrage

In finance, arbitrage involves three key elements:

1. Identifying Discrepancies: Spotting a price difference for the same asset in different markets.
2. Swift Action: Acting quickly before the market corrects itself.
3. Risk-Free Profit: Earning a profit without additional risk or investment.

Translating this to life decisions:

1. Recognizing Opportunities: Finding places where your goals and needs are better met.
2. Embracing Change: Being willing to make a move or take action when the opportunity arises.
3. Maximizing Benefit: Enhancing your quality of life without disproportionate sacrifice.

Think about what is important for you. Are you seeking career advancement, higher salaries, or entry into a specific industry? Do you prioritize a bustling city life or a peaceful rural setting? What about climate preferences, hours of daylight? Are you aiming to save money or invest in property?

But don’t forget to include your "investment" in the calculation: cultural adjustment, language barriers, distance from family and friends, moving costs and mental stress all play a role in the equation.

Often, opportunities come unexpectedly. Be prepared to embrace them even if they weren’t part of your original plan. Luck favors the prepared.⁴

Final Thoughts

Arbitrage teaches us to look beyond the obvious and seek value where others might not see it, taking full advantage of everything the world has to offer. This can lead to more informed and rewarding life choices.

So, are you ready to embark on your own journey of life arbitrage?