The math here is extremely misleading.
You used the average figures from a dataset of people making an average of about $55,000 a year for the US figure. That is, the people who spend 37% of their income on housing is from people making about half of the amount you hypothesize someone making. Since you can live in the same apartment, eat the same food, and so forth (with some exceptions depending on locale), that gives you another ~$38,000 in post-tax income in the US. You also ignore benefits (and promotion opportunities) and things like expense accounts, which can be substantial.
You are also comparing unlike people: one is an average American citizen, who probably has kids and a high discount rate, the other is an individual free to travel to another country specifically searching for a high disposable income job. The fact that the average American does worse is largely irrelevant, because the hypothetical person you're advising is already not-average.
It may well be a great idea to work abroad for a few years; it does sound fun and that's a lot of disposable income for limited skill. But if you're going to make a point with numbers, at least make a cursory effort to use plausible numbers and compare relevantly similar people, or at least admit that you're failing to do so.
These costs match my own cost of living when I was working full-time in the US as a highly-paid software engineer. So you could look at both columns as Louie2006 vs Louie2010 if you want to make it an apples-to-apples comparison.
Also, it's an established fact that people spend a constant fraction of their income on housing no matter how much income they have in the US. Look at the reference for my cost data. Groups with wildly different incomes all the way from $25k/yr to $80k/yr all spend between 32-37% of their income on housing. So until I see research showing me otherwise, I stand by my use of fractional income costs of living for housing, transportation, and food budgets.
Groups with wildly different incomes all the way from $25k/yr to $80k/yr all spend between 32-37% of their income on housing.
This simply indicates that as people get richer, they demand better housing. I live in Manhattan. I could get the same apartment if I go on to be an associate at a law firm making $165k a year or a public defender making $50k. However, if I'm doing the former, I'm probably going to spring for a nicer apartment. If my primary goal were saving money, as is implied in your job comparison, I could easily live in the PD's apartment on an associate's salary.
The fact that most people who can save big on housing choose not to is not applicable in your hypothetical; to the extent that it is, more expensive housing implies higher quality of life.
The numbers you quoted are averages for each ten-year demographic between 25 and 75, plus the tails. There's no mention of variance, and I would expect someone employing rationality techniques to manage their finances to be an outlier.
Personal anecdote: My own finances as well as those of six of my friends fall well outside those bands, with housing costs around 13-23% of income. We're all highly-paid software engineers between the ages of 25 and 30, and none of us have families.
Edit: I forgot to include utilities, so my friends in NYC actually edge the housing cost range up to 23% or so.
It must be much higher than the 4% a typical American in your position has left. I'd be curious what the best case real world numbers are for people in your situation who are doing their best to optimize.
Which was on response to:
Personal anecdote: My own finances as well as those of six of my friends fall well outside those bands. (Emphasis added.)
You still seem to be missing the point. Statistical averages, even in percentage form, cannot be blindly projected across the entire income scale. Someone making $1M a year does not spend the same percentage on food as someone making $40k.
And what does it matter if he takes money out of his housing budget and directs it towards an expensive car? The point of disposable income is that you get to spend it on things you want. That includes nicer housing, restaurant meals, and fancy cars, the value of which is ignored in your calculations.
I track my finances directly in a CoffeeScript source code file and use a simple home-brewed software library to compute my net liquid assets and (when necessary) my estimated tax payments and projected tax liabilities. You've reminded me that I really should be using something like Quicken for finer-grained analysis, so I'll look into that and post my numbers later this week (edit: one second thought, it doesn't seem worth the extra friction).
My living costs followed a general upward trend that leveled off in late 2009, but my salary data is extremely messy for several reasons:
It's hard to imagine changing my past since it'd mean giving up several of my current friendships, but the decisions I made in reality were emphatically the wrong ones from a financial perspective: I worked at-cost for six years and left several hundred thousand dollars of...
Also, it's an established fact that people spend a constant fraction of their income on housing no matter how much income they have in the US.
It's an established fact that people who live in the US don't suddenly decide to spend a year in Australia. Therefore, your plan fails, it just doesn't happen.
Vladimir was being sarcastic, because Louie dismissed the possibility of optimizing one's expenditures.
Louis is contrasting his personal experience with both his personal experience and demographic averages. What Louis did is not average; and there are other outliers who are not spending 32-37% of their income on housing. In fact, when he suggests moving to the outback he is simply rephrasing a suggestion of "spend less on housing". Moving to the outback and getting a job as he describes is one way of doing that. Living under a bridge and showering at your gym every morning might be another.
He is attempting to equate the micromanagement of optimal spending practices within a US city environment and culture with the big leap to go ahead and move to the Australian outback. Neither or these things tend to happen so he claims the right to say 'you too' on your 'fail by default' point.
Unfortunately this obscures or ignores the critical insight into human psychology that you allude to here with respect to setting up 'succeed by default' scenarios, particularly with respect to choosing critical culture and environmental factors.
I had a fairly similar response. I spent $900/mo. on rent when I was making $33k, and I am now spending $600/mo. while making $92k. Obviously whether or not someone spends a constant fraction of their income on housing is an individual decision, just as whether or not someone heads to Australia is.
I'm actually really shocked that you spent more than 95% of a $100k+ income. Even on a $24k student salary I managed to save around $6k/yr., and indulging in all the luxuries I care for I spend less than 35% of my current after-tax pay. I don't feel like I've ever had to "micromanage" my finances or spend more than a few extra minutes a week to do this.
Given that I'm an American currently living (and working) in the Outback, well there's some flaws in your argument.
There is a lot of employment opportunities here (Alice) because LOTS of people leave after a couple years here. They do that for a reason.
There are basically two economic drivers in this area--tourism and The Base (I'm neither a gardener nor a cleaner, I'm a sprinkler head technician). The Base mostly brings in Americans with very high clearances to do gardening and cleaning, and spends a significant amount of money in Alice for related goods and services.
Tourism is largely due to it's proximity to Uluru/Ayers Rock, and, well, being the only sizable "city" for, well, Darwin is about 1500k north of here, and Adelaide 1500k south.
Alice is a town of about 26k residents. Small town. Very small.
EVERYTHING here, except (oddly enough) pecans, is more expensive than I was paying back in St. Louis MO.
Gas is something like 1.30 a liter. A case of Strongbow is ~50 AUD. A 700ml of Makers Mark is about 40 AUD. Some of the costs are hard to map because GST is 10% and included you don't notice it, you just see it's more expensive, so you really have to keep that in mi...
I honestly think that this is a very good reality check. I don't think that most people should do it, as I think that there are many better options in the US, but I definitely think that anyone who doesn't feel that they have better options than the one Louie is describing, for instance, anyone who thinks that they are trying to make money but doesn't find that they can save $20K in a year, really should do it or ask themselves some serious questions about why they don't.
I don't expect anyone to do this, because I think people including people here have almost no tendency to actually act in ways that are theoretically more rational. I hope that rather than confabulating reasons whey they don't though, people reading this can at least acknowledge the size of the gulf between their actual motivational structure and their story about it.
I think that there are many better options in the US,
Anything that will subsidise or cover your living costs while paying you a non-paltry wage (so something like the Army, or oil-rigs, or work in a remote area - surveying?) should be on the same order of magnitude as this idea. And it may be easier to get such a job in America rather than moving to Australia.
I think people including people here have almost no tendency to actually act in ways that are theoretically more rational
Truthful over basically every non-trivial situation I can think of. Once EY's book is published this website should focus more heavily on instrumental rationality. Developing at least sequence-quality posts on that topic would be valuable.
You're not writing my book, so why not start posting on it now? (As indeed many are already doing.)
I don't think that most people should do it, as I think that there are many better options in the US...
What, for example?
Police or fire fighter in the San Francisco Bay Area is a low barrier to entry high salary high status job and not very dangerous.
I think small retail is an even better deal than that. Terribly run stores in SF stay in business and well run ones prosper ridiculously.
Many LW readers are coders who could be Google quality if they worked at it a bit, though the outback might be a good place to get practice without distractions.
PUA enthusiasts can obviously make money selling instruction in Game, and should be able to make money in sales in general.
I'd like to raise a "dark arts" objection here. This article is written with a lot of presuppositions, strawman attacks, appeals to character, and other interpersonal but non-rational attempts to convince social humans.
For example, the article leads with "You're young, smart, and hoping to have a positive impact on the world." While that may be true of the majority of less wrong readers, the article does not discuss why these qualities are relevant. In fact, the article suggests ways to have less impact on the world - working through a service position - than other careers (such as existential risk reduction). This leads me to believe that this opening line is nothing more than a compliment intended to endear the reader.
The following wording reads like a sales pitch and is highly suspect: "And it is possible to find easily obtained, low-stress jobs with flexible hours that allow you to save as much money as someone in the USA making $100,000/yr... if you leave the USA to look for them."
A classic promise - easy money, with a small catch. Can you rewrite this is as a description of the work you personally experienced, rather than an ambiguous promise?
You...
For example, the article leads with "You're young, smart, and hoping to have a positive impact on the world."
Writing in a conversational tone attempting to empathize, establish rapport and maintain interest. That barely even qualifies as grey arts. It is more 'not pretending to be a Vulcan so as to prevent dark arts accusation".
I'm not advocating everything in the original post - it is a good post but far from perfect. But this objection was an (ironic) abuse of the 'dark arts' label and something that I would wish to discourage.
This doesn't pattern-match to a sales-pitch at all. What does Louie stand to gain by you following his advice?
As your post stands, you make six whole paragraphs out of cherry-picked quotes and "this sounds persuasive". Most egregious of all is your conclusion:
There are many ways to optimize one's income and savings rates.
As if this is somehow a point against Louie!
I went to an ivy league college, learned an economically scarce skill (IT security), found contract positions that paid a high hourly wage with no clause to continue the work. I was otherwise frugal.
I am not conventionally attractive or charismatic. Louie is. He will find it easier to find work as a bartender without a resume or reference than I will.
we'll call the remaining portion of your income - 4.2% - your discretionary income. 4.2% of $100,000 is $4,200.
You optimized spending in the Australia option, but didn't in USA option. Instead, you used typical spending, which is misleading. I wonder how much less one can spend if that is set as a goal, and if you take into account the apparent single/no kids/lives in apartment assumptions of the Australia option.
Short explanation:
This is not me being misleading in how I present data. I'm presenting what happens by default in both options, not one optimized and one non-optimized option. What you discovered here is that, the plan to save money in the outback is robust and succeeds by default, while the plan to save money in the US is fragile and fails by default.
The longer explanation:
The Australian outback option isn't optimized. It's an off-the-shelf option that is heavily subsidized and in a bizarrely awesome economic climate... something I don't think many people here knew existed.
I think it's fair to compare a typical US job to a typical outback job because this is what you get when you don't put much effort into optimizing your budget in both cases.
The difference is that the outback is already incredible without you having to do anything.
It's actually pretty unfair to compare an outback working budget to the best-case US scenario where you spend tons of time in the US managing your money well to get the cheapest rent, best car prices, lowest food costs, and execute convoluted tax dodging strategies that most people couldn't figure out. It's a very tricky plan that requires lots of thi...
What you discovered here is that, the plan to save money in the outback is robust and succeeds by default, while the plan to save money in the US is fragile and fails by default.
But as you noted above, there is a lot of resistance by default to exercising the Australia option. So the Australia plan fails by default too.
Once you've opened the door to considering those rare Americans who might decide to uproot and move to unfamiliar lands across the globe, you might also consider those rare Americans who can manage their money and don't consistently make irrational decisions. In the context of here, I wouldn't doubt they're the same people.
But as you noted above, there is a lot of resistance by default to exercising the Australia option.
Every plan has the problem that if you don't execute it, it fails. In this respect, the two are exactly equal. (And in degree, they may not be too far apart - given all one would have to do to carry out the American plan.)
Don't burn out, Louie. This is Less Wrong, of course there's going to be some pretty intense criticism. It's only worth getting angry if you think you're right but your posts/comments are negative on net.
It seems to me more like folks are pointing out that things aren't all that nightmarish in actuality, and your analysis to show otherwise is flawed. If you would rather make fun than improve your analysis, there are other places on the Internet where that sort of thing is more welcome.
"the plan that lets you save money in the US is a life-engulfing minefield of time-consuming bargin-hunting, self-denial, and tax evasion."
I work as a software developer in the US, have never made a 'budget' for myself or tried to analyze my finaces before now, I pay taxes normally, eat out often, and have no trouble saving lots of money. I'm going to substitute my expenses and pretend I only make 100k and see how much I'd still be able to save (living in Seattle).
Rent: 16.8k instead of 23.2k Utilities: 2k instead of 7k (how can you spend 7k on utilities if you're a single person in an apartment?) Misc house expenses: 0.5k instead of 6.8k (what are these misc expenses that other people supposedly spend so much on?) Food: The estimate of 13.3k is reasonable for food, although it's easy to spend a lot less without hardship. Transportation: 4.6k instead of 16.5k (who spends 16.5k per year on transportation? Just don't buy a new BMW every 5 years and you should be set. I bought my car for $9k, 5 years ago).
Apparently it's pretty easy live well in a large US city and save 33.9k per year without really paying attention to your finances. If you're a good software developer you should be able to make a lot more than 100k and therefore save much more per year.
Spending less than 37% on housing doesn't require
tons of time in the US managing your money well
It requires you make a correct decision once a year or so about renewing the lease. The reason people have little discretionary income is that they habitually commit themselves to spending plans such as five years of a car payment - but that spending plan itself is a choice.
You may have an excellent point about the costs/benefits of your perception of working in the US. I don't think you have much of a point about actually working in the US, and that's what all these comments are getting at. Even at much lower salaries, it isn't that hard to save a lot of money if you care to. (I'll throw in my own data point: my last serious job before law school gave me about 50k a year in disposable income, working 20 hours a week.)
While I'm at it, "time consuming bargain hunting, self-denial, and tax evasion" are all rather prominent parts of your own plan. You're moving across the globe to find cheap living. You're living in the middle of nowhere, with undoubtedly limited access to goods and services. And you're evading paying US taxes (or maybe you actually have to pay them on your return; I don't know). Plus, you're working in a job that has no real benefit for your future career, away from friends and family. I laud the suggestion for people to do something different and potentially lucrative, but methinks you're weighing options on less-than-accurate scales here.
I think a large contingent on LW would be more interested in what an optimal employment scenario looks like after graduating with a high-value degree. I know I am.
Most people fail at Steps 0 or 2. I think Step 1's the easiest, although in another comment my friend Luke explained an innovative way to fail at it.
Warning: the rest of this comment contains hard numbers. If you're averse to hearing/sharing financial data, stop reading now.
"High-paying" doesn't have to be zillions of dollars, although that would help. I graduated with self-taught C++, a bachelor's degree in computer science, and an accepted job offer. I'm now 27 years old and I've been working for 6.5 years. My income has increased from 74k to 112k. (I'm very lucky - this is more than my father ever made after 25 years of continuous employment.)
I achieved Steps 0 and 1 by luck (I never thought about becoming a programmer before I went to college, and until I was hired I was planning on going to grad school). Step 2, I think, requires the most rationality.
The income effect is your enemy: the more you make, the more you're likely to spend. In my amateur opinion, this has two mai...
this is my current plan, and I think the step 2 has a variety of methods to it that people fail to use.
If anyone has anything to add to this list please comment.
Upvoted. This is really interesting.
I'd very likely not do this myself, though. I've noticed there are two kinds of attitudes toward jobs (and I've seen rationalists of both stripes). Some people really want their career to be an extension of their interests and identity and perhaps their prestige: "I'm a scientist," "I'm an artist," "I'm a programmer," "I'm a doctor," "I'm a teacher," etc. They wouldn't want to make the same money in less time by a different route, they want to work in that particular field.
Some people, on the other hand, basically see their job as a source of income, which they can use to pursue their interests elsewhere. They're optimizing for money and free time, which means they look at a much wider range of money-making possibilities. (The most extreme example would be The 4-Hour Workweek, in which the money comes from a passive income stream, not a "career" at all.)
Your advice is geared more to people in the second category. I'm in the first. That doesn't mean it's not good advice -- if you want money and free time to pursue an interest, then hospitality jobs in the outback sound like a great idea, given your evidence.
I'm curious, though -- does anyone think that one attitude is better than the other? Or is it just a matter of individual preference? Job-as-income-stream, or career-as-personal-identity?
Related to: Best career models for doing research?, (Virtual) Employment Open Thread
In the spirit of offering some practical real world advice, let's talk about employment rationality. Let’s talk about optimal employment.1
You're young, smart, and hoping to have a positive impact on the world. Maybe you finished college, maybe you didn't. You want to pay your bills but also have time to pursue your intellectual goals. You want a low-stress job that doesn't leave you drained at the end of the day. And it would be nice to earn lots of extra money, because whatever you value, money tends to be a good way to get it.
And it is possible to find easily obtained, low-stress jobs with flexible hours that allow you to save as much money as someone in the USA making $100,000/yr... if you leave the USA to look for them.
Your instinctive reaction is probably that there’s no free lunch, so I must be mistaken or dishonest. And while you may have the right prior, I hope to persuade you that these jobs exist and tell you how to get one if you're interested.
This, I think, is a special opportunity for rationalists, an illustration that we can get better life outcomes from our investment in rationality - better outcomes such as low-stress jobs that leave us with ample discretionary income and enough free time to pursue whatever else we're interested in, obtained by being willing to break habits and think in numbers.
Employment Biases
First, consider some cognitive biases that may be leading people away from optimal employment.
So the literature on biases is telling us that the ideal job would be something that few Americans are doing, has high purchasing power at the expense of a high nominal salary, will be taxed less than a US-based job, avoids a commute, and minimizes the costs that eat up a typical American's salary.
Welcome to Australia
The USA is not the best place to earn money.2 My own experience suggests that at least Japan, New Zealand, and Australia can all be better. This may be shocking, but young professionals with advanced degrees can earn more discretionary income as a receptionist or a bartender in the Australian outback than as, say, a software engineer in the USA.
Now I’ll detail how to work abroad in Australia because (1) I did it myself (here's my first paycheck), and because (2) I've met hundreds of people working less desirable jobs in several other countries so I have some basis for recommending Australia in particular.
Quick facts:
So let’s compare and contrast Australia with the US:
-7.65% of your income into Social Security
good luck getting that back
+9% extra income paid by employer on top of wages
refundable when you leave the country!
Optimal Employment and Less Wrong
This may be of special interest to Less Wrong because most non-rationalists simply can’t reliably take advantage of this opportunity. They will see it as "too good to be true" or "some sketchy advice from the internet" and move on with their lives. You, on the other hand, can evaluate the evidence and make a decision. This kind of problem, where you must assess probabilities and come to a sound conclusion because immediate feedback is unavailable, is exactly the kind of problem that rationality is good for.
Let's compare the discretionary income you're likely to earn with a stressful $100,000/yr salaried job in the USA to the discretionary income you're likely to earn with a laid-back $39,000/yr job in Australia. Our time frame will be one year.
USA: In a $100,000/yr position, your top end tax braket is 28%, but after taking the "standard deduction" and accounting for the tiered tax structure, your effective income tax rate is only 21.25%. In our target age range of 25-34, you're likely to spend 37.1% of your income on housing (breakdown: 23.3% on rent, 7% on utilities, 6.8% on misc housing expenses), 13.3% on food, 16.5% on transportation, and 7.65% on social security payroll taxes. For convenience sake, we'll call the remaining portion of your income - 4.2% - your discretionary income. 4.2% of $100,000 is $4,200.
Australia: In a $39,000/yr position as a bartender or receptionist in the Australian outback, you'll pay 13% in taxes but immediately gain back 9% by cashing in your employer-provided retirement benefits upon leaving the country. Because room and board is heavily subsidized in the outback, you'll pay only 5% for housing and 5% for three excellent meals a day. You'll be commuting on foot because you'll live by the hotel or resort that you work at so the only transportation you'll need is a couple airplane tickets and legal documents, which will cost about 4% of the $39,000 yearly salary. That leaves you with a stagering 83% of your income as true discretionary income, or $32,370!
So working in Australia at a laid-back job with no responsibilities will likely earn you significantly more discretionary income than working at a hard-to-get, stressful, "high-paying" US job. In addition to the personal enjoyment of traveling to Australia, working at a resort in the outback will provide you with a comfortable living situation where all your bills are paid for, all your housing and meals are provided for you, you have no commute and you can enjoy 83% of your $39k salary as discretionary income.
On the other hand, a typical year working a stressful $100k/yr job in the US, if you’re highly-qualified and fortunate enough to land one, will mostly create value for the US government, real estate owners via your rent payments, oil producing nations whenever you fill up your car to commute to work, and retailers such as WalMart who provide household necessities from overseas suppliers. You definitely "create value" by earning that $100k and then immediately blowing it all back out into these giant economic sectors, but are you really executing your own values, or just the values of those around you? Assuming you're not a tax, rent, and car payment enthusiast, this arrangement is probably sub-optimal. That's why you need to learn...
How to Work in Australia
In six steps:
Though you may want to "play it safe," most of the jobs available in the Australian outback will not be listed online. My own recommendation is to skip step 1 and don't get a job lined up ahead of time. Fly to Alice Springs in May when the high season for hospitality jobs is starting to pick up, check into a hostel for a few nights, and look through the physical job boards. The person at the front desk of any hostel will be able to tell you where they are. That's what everyone I met working in Australia actually did to land jobs.
Or, if this sounds too overwhelming, have someone else do the planning for you. The site Oz Work Visa was founded by a fellow LWer (who went to Australia after reading this post) to help other optimal philanthropists and rationalists have a smoother time planning their working holiday abroad in Australia. I definitely recommend the services.
Conclusion
Of course, each person must assess the expected utility of this opportunity for themselves. Maybe you have a child or significant other you can't leave behind. Maybe you live with your parents, so you aren't spending much on housing or food in the US, and therefore staying in the US is the quickest way to build up discretionary income. Maybe the math above doesn't work for your particular situation. The USA's financial incentive system is extremely complex and, in the words of Kotlikoff & Rapson, "bizarre."
I don't mean to say that this opportunity will be best for the average Less Wrong reader who is single and in his or her 20s. But I do want to present one particular opportunity that may offer more optimal employment than whatever you're currently doing for a paycheck. I'd also like to suggest that in general, optimal employment might not be found in your home country.
Here's me enjoying some optimal employment in Australia:
Common Concerns
Q: This sounds too good to be true. How could there be this wage and cost of living imbalance? Shouldn’t the efficient market conspire to eliminate this huge pile of "free profit"?
A: The efficient market hypothesis assumes that humans collectively converge on rational beliefs. But most humans aren’t strategic enough to take advantage of an opportunity like this. They’re on a treadmill from high school to college to a nominally "high-paying" USA-based job + spouse + 1.5 children + dog. The thought of working outside their own country or outside of the field they got a degree in never seriously occurs to them, no matter how smart they are. Also, many people currently believe that working abroad is a bad idea simply because the best opportunities that existed 5 years ago (teaching English, peace corps) actually were bad economic opportunities.
Q: So how come all my smart friends aren't doing this?
A: Americans couldn't get these work visas until 2007. Since then, less than 8,000 Americans have taken advantage of the program. Your odds of knowing an American aged 18-30 who went to Australia and did this are very low. By comparison, over 170,000 British citizens aged 18-30 went to Australia just in the last 5 years via a nearly identical visa program. Basically, if you're living in the UK, or lots of other countries in Europe or Asia, the evidence is already beating you upside the head that working in Australia is a great way to save money. You already know several people in real life who can stand in front of you and tell you how great it was for them. I predict that working in Australia after college will be a trendy option for Americans in a few more years, but until it's completely obvious to everyone, you'll actually have to look at the evidence and be rational enough to process it without immediately rejecting the idea just because it sounds amazing.
Q: Won’t working in Australia prevent me from gaining experience in my narrow professional sub-field, thus reducing my total lifetime earning power?
A: This is almost certainly not the case for anyone under 30. Companies pay professionals more based on their abilities and their age as opposed to their actual years of experience. And, they pay more for older professionals than young ones just starting out cause they know these people really do have higher expenses and are less likely to quit. So taking a year off in your 20s to work abroad is only exchanging a year in which you would have earned the lowest salary you’ll ever have during your career for a year of higher earning power in Australia. You can always come back to your career in a year and pick up where you left off. Besides; who follows a straight-up-the-ladder career path anymore? Almost nobody.
Q: What about Australian culture? Will I like it over there?
A: Australia is a highly educated, robustly secular, extremely developed country. If you have any questions about the desirability of Australia, just ask Less Wrong! A disproportionate number of Less Wrongers are Australian.10
Q: I'm really bad at following instructions. What are the biggest mistakes I could make?
A: Don't make the mistake of settling down to work in Sydney, Melbourne or any other major Australian city. Those places all have exceptionally high costs of living, fewer job opportunities, no housing and meal benefits, and predictably lower pay. Make sure you travel to a remote area of Australia like I suggest. Go to the outback near Alice Springs or at least outside Darwin or Perth if you read up on it yourself and know what you're doing. Also, I recommend going to Australia in May when hiring is strongest. April can work too. June and July will work also. Just don't go in February or March when people aren't hiring yet. One last tip: it's very expensive to be a tourist in Australia (how do you think you're being paid so much?) so I recommend that if you want to combine this opportunity with a vacation for yourself, fly to Bali or somewhere else in Southeast Asia where your money will go 10x further.
Q: It says the $295 Visa application fee is non-refundable. What if I apply for the Work and Holiday Visa and then I don't get it?
A: Did you read through the eligibility requirements to make sure you qualify? If you meet their requirements, you'll get it. Australia rubber-stamps American Visa applications. They're working hard to admit as many of us as possible since so few Americans apply to vacation or work in Australia and they want us to be better represented. The application is painless and I was issued my visa in less than 24 hours.
Notes
1 Many thanks to lukeprog for his help in writing this article.
2 Note to international readers living outside the US: Although I write much of this from the perspective of an American considering the possibility of working abroad, you can easily substitute “the UK” or any other first-world nation wherever I say “America” or “the US”.
3 Australian minimum wage is $15/hr AUD. Right now, the exchange rate between AUD and USD is basically equal.
4 Approximate, based on the third tax bracket in the year 2011. See the USA rates here, but note that these are nominal tax rates. The actual tax rate is lower due to the standard deductions.
5 An estimate, assuming you file as a resident for tax purposes and earn between $6,000 and $37,000. You are taxed at 0% for the first $6,000 earned, and at 15% for your earnings between $6,000 and $37,000. See here for the details.
6 See the 25-34 year-old age bracket from the latest Consumer Expenditure Survey.
7 Of course, this depends on how much you make, and is assuming you use the highly subsidized room and board offered to you in the Australian outback.
8 My real world costs of going to/from Australia:
$1166 round-trip ticket SFO - MEL (skyscanner.com)
$196 MEL - ASP (tigerairways.com)
$235 Work and Holiday visa
This might look like a lot of money if you’re not currently working or if you’re a broke college grad, but it only takes about 2 weeks on the job in Australia to earn back the cost of emigration, repatriation, and valid work papers.
9 Australian “Work and Holiday” visas are only available to those 18-30. If you’re almost 31, you can still apply for the visa now, have it issued before you turn 31, and then travel to Australia after you turn 31.
10 Based on traffic data for Less Wrong.