5 Discoveries from Our Memphis Geoarbitrage Experiment

by The Darwinian Doctor

Here are 5 major discoveries from our Memphis geoarbitrage experiment in the areas of real estate, private school, gas, restaurants, and services.

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This is a follow up to my original article that introduces the concept of geoarbitrage. You can read that article here: The Amazing Power of Geoarbitrage

Skip the intro and go to the analysis by clicking below:

California is an expensive place to live

The Covid pandemic saw a historic rise in real estate property values all across the country, but this effect was very pronounced in California. In a recent analysis of housing affordability versus median income, the Los Angeles housing market now ranks as the least affordable metro area in the country.

High real estate values translates into increased costs in virtually all areas of society, as my wife and I found over our 12 years in Los Angeles.

As first time homebuyers in LA, we got lucky by buying a home near the bottom of the market in 2010. Along with historically low mortgage rates, this helped keep our housing costs fairly low until we upsized to a “doctor home” a few years ago. Our new, larger home was an amazing upgrade in our quality of life, but it squeezed us in terms of our mortgage payment and property taxes, as well as increased costs of home maintenance.

When I analyzed our spending a few years ago (in 2018), housing related expenses were 28% of our overall spending.

Read more: The Darwinian Doctor’s 13 Monthly Expenditures (with real numbers)

Outside of the home, we felt the pinch of California income taxes. Although we were blessed with high paychecks, this put us in a very high tax bracket. California taxes raised our effective tax rate to about 35% when we combined both state and federal taxes. This was on top of the invisible tax on everything we bought, from gas to eggs at the grocery.

The Memphis Geoarbitrage option

In mid 2022, though, my wife suddenly got an career opportunity that would take our family from Los Angeles to Memphis, TN.

As we considered the move, we had a lot to think about. While the difference in costs related to real estate were definitely top of mind, the first and most important factor was actually my wife’s career.

The move would offer my wife a once-in-a-lifetime opportunity to move her career into a period of exponential growth. I knew also that we had a big opportunity for some major Los Angeles to Memphis geoarbitrage, due to the difference is cost of living.

One big thing that gave us pause was my career, though.

My career would take a back seat

As a urologic surgeon, my job is not really portable. I can’t take my patient population from Southern California and move them with me to Memphis, TN. So for us to move to Memphis, I’d have to quit my job and leave my employer, who had provided me with stability and a six-figure income for the last six years.

While I knew there was a lot of demand for my urologic expertise in Tennessee, I also knew that we’d be making the move without a signed contract at a new practice. And despite a very warm reception from some of the private practice groups in town, anything could happen.

As high earners in Los Angeles, we’d grown accustomed to the dual income of both my wife’s paycheck and my own. This income had put us in the top 1% of earners in California. We used this income to invest into the stock market, pay back my student loans, and invest in rental properties.

Read more: The Darwinian Doctor’s Net Worth and Asset Allocation | Early 2022

While my wife was going to start her job right away, I was facing up to a 6 month delay in earning, due to medical licensing and credentialing. We also knew from past experience that moving can be very expensive. Moving the contents of a large home across the country is quite costly. But the total price of re-establishing a household involves so much more than just movers.

Arrange career continuity if possible

If you’re considering making a move to take advantage of geoarbitrage, I highly recommend lining things up you (and your partner) can minimize any gap of income. The joy of lower living expenses will fade very quickly if you’re making substantially less money. Ideally, you want your expenses to drop relative to your income, not rise.

If you’re a digital nomad who can make money from anywhere, perhaps this doesn’t apply to you. But for the rest of us that depend on office space or some other physical setting for employment, you’ll need to put some effort into timing your move carefully with respect to your job.

While the loss of income my wife and I were facing was quite scary, there were a lot of factors in favor of our move to Memphis.

Factors in favor of the Memphis geoarbitrage experiment

The true power of geoarbitrage gets unlocked if you can keep your income stable (or negotiate a higher income) in conjunction with the move to a lower cost of living.

While we were facing a temporary loss of income, I was confident that I’d get back to earning a surgeon level of income with time. Tennessee also offered the one-two-punch of no state income tax plus a lower cost of living. With this knowledge, we decided that in the long run, the move to Memphis could speed our journey to financial freedom.

Luckily, we are already well on our way to financial independence. My wife and I have also been very busy over the past few years building up a sizeable rental real estate portfolio. While it feels like we’ve had negative returns for quite a while due to renovation costs, we project that we should start producing an increasing amount of rental income in 2023.

Read more:

Income stability is important for successful geoarbitrage

Finally, we knew that my wife’s income would likely stay the same or increase, and that urologic surgeons were compensated even better in the mid-south than in Los Angeles. So by the principles of geoarbitrage, we felt that the move to Memphis was a tolerable financial risk in the short term, and a great financial bet in the long term.

So we did it! In late 2022, we packed up our Los Angeles life and shipped it across the country to Memphis, TN.

We’ve been here for about three months, and it’s time for a report on a few discoveries about the differences in prices between Los Angeles and Memphis. Overall, we’ve found it to be significantly less expensive than Los Angeles.

5 Discoveries from Our Memphis Geoarbitrage Experiment

I’ll divide the report into five areas:

(This isn’t meant to be an exhaustive list of the differences between our two cities. These are just the differences that have jumped out to me the most over the past few months.)

Real Estate Prices

Los Angeles is one of the most expensive cities for real estate in the United States. In mid 2022, it ranked as the #4 most expensive large markets for home buying, with only New York city, San Francisco, and San Jose beating Los Angeles.

Home prices are one of the main reasons why someone might consider turning into a geoarbitrage. While this may vary in different countries, home ownership is an integral part of the “American Dream.” This is one of the reasons why the housing crisis is such a big deal. With the national housing inventory shortage, it’s been a fairly difficult time in our nation’s history to buy a home. (The Federal Reserve is temporarily making things worse, too.)

When it comes to real estate prices, Memphis and Los Angeles are on two different ends of the spectrum. Redfin reported the average sale prices in late 2022:

  • Memphis: $163,000
  • Los Angeles: $918,000

This means that average home prices in Memphis are 18% of Los Angeles prices! I’m actually surprised it’s this marked, and I suppose it depends on the types of houses you’re hoping to purchase. For the higher end housing market, I found the differences still marked, but not quite as extreme.

The lush backyard we left behind in Los Angeles

The luxury market is different

Based on our home search, I feel that the luxury market in Memphis has home prices that are about 30% of similar luxury homes in Los Angeles.

My wife and I purchased a new home in Memphis, and it’s actually quite similar to our home in Los Angeles. It is approximately the same square feet and was made in the same time of frenzied home building in our country (the 1920s). It’s in one of the nice areas of Memphis called Midtown, which is geographically very similar to where we lived in Los Angeles (Mid-City). We are looking at about $50,000 of minor renovation and painting, but we spent about five times that amount to renovate our Los Angeles home as well.

Our home in Memphis is worth about $900,000, which is a third of the value of the Los Angeles home that we left behind. So when it comes to primary real estate, our experience is that Memphis offers a 70% savings compared to Los Angeles. When it comes to real estate, the Memphis geoarbitrage experiment seems to be a huge success.

Lower home values translate into dramatically lower mortgage payments and also lower property tax.

Real estate prices affect your ability to buy a primary home, but it also makes a difference in your ability to buy local investment properties. As my wife and I are real estate investors, I’ve been actively researching the Memphis market to plan out the next phase of our real estate empire.

Read more: $325k Annual Gross Income | Anno Darwinii 3.25

Private School

My wife and I have argued for years about the value of private school over public school. My wife is a big believer in the value of private school, as this reflects her educational experience. In Los Angeles, the cost of tuition for my kids was between $25k a child. With various extra costs and recommended donations, this cost was about $55,000 a year for both of our kids.

While I had no real complaint about the school that my kids attended in Los Angeles, I don’t have any shame admitting that it wasn’t the best private school in town. The handful of best private schools in Los Angeles were like catnip for the entertainment industry, and my wife found it impossible to get our kids even an interview at some of these schools. (The best private schools charged considerably more for elementary school, about $37,000 a child.)

In Memphis, my kids are enrolled at one of the top private schools in town. My wife and I are very impressed at the curriculum, teacher to child ratios, facilities, and resources at the new school.

In terms of tuition, it’s about $20,500 per child. We project that our total costs for private school will be about $45,000 for the year.

Therefore, our geoarbitrage savings for private school tuition in Memphis will be about 19 percent. If you compare it more apples to apples and look at the best private schools in Los Angeles compared to Memphis, the difference is more stark. The best Memphis private schools represent a 45% savings compared to the best Los Angeles schools.

Gas prices

California has high gas prices for a few major reasons: high state taxes, special clean burning blends, and in-state production. This is one of the major reasons why I bought an electric car a few years ago. Combined with my long commute, the gas prices made the decision to buy a Tesla Model 3 a no-brainer. I became a much safer driver due to the autopilot, and the cheaper electric fuel majorly subsidized the higher cost of the automobile.

Read more: Why I bought a Tesla Model 3

Tennessee has much lower costs for gas, and on one recent survey had the 45th lowest gas prices in the nation.

When you compare the average gas prices head to head, AAA states current gas prices are $3.285 for Tennessee and $4.544 for California. That translates to a savings of 28% for gas in Tennessee compared to California.


If you drive a lot, this can make a big difference in your transportation costs.

Personally, our transportation costs shrunk dramatically when we moved to Memphis. This is in large part because I’m still on my job-transition sabbatical, but I don’t expect it to ever come close to my California costs.

In Southern California, I drove about 2 hours a day to commute to my hospital. The mileage was significant, but the California traffic was a big factor too. In Memphis, there is very little traffic, even at rush hour. You can drive almost everywhere in 10-20 minutes. Therefore, even if I get a job in the suburbs, I just don’t expect that I’ll regularly be spending much time (or costs) due to transportation here.


My wife and I are big believers in date night, so we’re fairly attuned to the cost of restaurants. I still remember that in college, we went to a restaurant in New Haven called Hot Tomatoes and spent $70 for an appetizer, two entrees, and a bottle of Prosecco. A decade later in Los Angeles, the cost of that same meal was roughly double (when we brought our own wine and only paid corkage).

In Memphis, there is certainly a lot fewer choices for fine dining. But pound for pound, we find that good restaurants here charge around 20% less than what we’d see in Los Angeles.

$12 cocktails at the Memphian Hotel bar

This is roughly the same that you will find if you search online for cost of living differences, though you always have to wonder about the methodology on sites like this. Overall, I’d say that when it comes to restaurants, Memphis is objectively a geoarbitrage win.

Subjectively, I think food critics would find a lot to disparage about Memphis dining due to the sheer difference in dining options and variety. But these are two things that you’re definitely going to sacrifice when you move to a smaller city.


When I talk about services, these are mainly related to home maintenance and renovation. This is one area that I’ve been surprised to find is actually more expensive than Los Angeles.

When it comes to house cleaning, for example, we had a lovely cleaner in Los Angeles who cleaned our home for $120 a visit. In Memphis, we found a cleaner who asked for $150 a visit. Our houses are roughly the same size and the services we requested are the same, so this is a clear inflation of 25% versus prices in Los Angeles.

When it comes to lawn care, our gardener in Los Angeles charges $200 a month for weekly care. In Memphis, we pay $135 a week, or $540 a month. This difference is a bit harder to tease out, as our Los Angeles property was very low maintenance. Aside from grass, there just wasn’t much to do there, since all of the trees were evergreen in the warm Los Angeles climate. In Memphis, our home is surrounded by enormous trees that drop tons of leaves and branches all the time. This entails a lot more work to keep our property clean and presentable. Still, I found the 270% increase in costs very surprising.

So when it comes to services, Memphis doesn’t seem great for geoarbitrage compared to Los Angeles. I am not exactly certain why the services I’ve encountered in Memphis are more expensive than Los Angeles, but I have some theories. First of all, my sample size is low, so I might have just stumbled upon expensive service providers. Another better theory is that there are many fewer undocumented immigrants in Memphis versus Los Angeles. In Los Angeles, this might drive down the overall price of services due to supply and demand.


We’ve found significant savings from our Memphis geoarbitrage experiment in a number of big ticket areas of our life. The move from Los Angeles to Memphis has unlocked an exciting career trajectory for my wife, and I have had a much needed sabbatical from medicine. I’ve spent my free time settling our young kids into their new school and overseeing the renovations of both our primary home and our rental portfolio.

While our net worth is taking a definite hit due to our temporary drop in taxable income and the costs of the move, our long term prospects are bright. Geoarbitrage is helping us significantly reduce major costs in our life like private school tuition and real estate costs for our home.

Extra tips and thoughts

If you’re trying to calculate how much money you’ll save when you are considering geoarbitrage, I recommend making a Google Sheet with the major expenditures you expect to have in your new city. Then you can compare this to what you’re spending in your current location to make an informed decision.

Overall, we are finding that Memphis is seriously underrated in the national discourse. Although it certainly has some issues with income inequality, crime, and recent police brutality, we’ve found that there are incredible things happening here. There are powerful forces reshaping this city in so many ways and I firmly believe it’s a great place to live. I’ll provide some more insight into the city in the future.

If you’re interested in getting on the path to financial freedom or early retirement, geoarbitrage can be a great way to cut years off of your journey.

Good luck!

— The Darwinian Doctor

What do you think about our Memphis geoarbitrage experiment? Make sure to subscribe to the free newsletter so you get access to all the content here on the blog!

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Paul Clein
Paul Clein
1 year ago

Very interesting read, Daniel. We have also found Memphis a wonderful place to live and raise our kids. The national media always seems to focus on the negative events that take place in our city, and these issues must be addressed. We deserve the scrutiny, but all mid-sized-to-big cities have serious issues that cause concern. But there are great people in Memphis and wonderful things are happening in our historic neck of the woods. I’m glad you’ve recognized these very positive vibes and I’m happy that your transition is going well!
Paul Clein, M.D.

1 year ago

So you can sell the Tesla now right?

Brent Hardin
1 year ago

Hey Daniel! Welcome to the Midsouth! Also a Urologist, I practice in Oxford, MS about an hour south of you. I’d love to introduce you to folks in the area if need be and have some thoughts regarding jobs if you haven’t made a decision. Shoot me a text or email if need be.

Brent Hardin, MD

Rob B
Rob B
1 year ago

We lived in Memphis for five years before moving to Denver last year (much closer to family).

We’ve lived all over the country and absolutely love Memphis, if it weren’t for family we’d likely live there. Email me for my list of great food places!

1 year ago

Good article. Wanted to let you know we did this in the late 1990s. We are not doctors, but spouse is an engineer. We found many of the same things you did. In the long run, it was the best thing we could have done. Part of the reason we moved (besides cost of living) was to be closer to our families. I hope the same for you. Financially, it gave us quite a bit of traction, and the career opportunities were good also.

Philip Napolitan
Philip Napolitan
1 year ago

We moved from Los Angeles to Kansas City in 2017. We experienced much of the same benefits that you pointed out. The drop in home prices was significant. There are a few things that have a bit higher cost, like yard upkeep, buying more winter gear, etc., but overall a great financial decision for our family. As a hospitalist, I interviewed in both cities before moving, and am annually making $75k more here in Kansas City than I would have in Los Angeles. So making more money and having to spend less of it. We love living in the Midwest, we feel like we’ve sacrificed very little (we weren’t going to the beach or downtown that often anyway when in LA) and have come to love our exciting and vibrant midsize city.

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