Malaysia is probably your best bet for somewhere in between if you are looking for a balance between the developed world and stretching your savings. KL is a pretty laid back place to be with awesome food! And with AirAsia being based in Malaysia, you could pretty much travel anywhere in Asia for cheaps. And if you ever decide you are running out of money or are bored, there are a multitude of companies/startups you can start consulting for!
Btw, bearwithclaws, how did your friend end up with more money than when he started? I'm curious.
Let me put it this way. A 1000$ rental gets you much more luxury than the same amount would get you in the west. But a 500$ monthly budget is pretty poor lifestyle in the long run even in South-East Asia, though I agree not quite as desolate and impoverished as you'd be in Europe or America :))
One of the more interesting ones...
http://richerd.com/2011/09/03/sleeping-on-the-streets-of-kua...
So yeah we're definitely in agreement. You can survive for $500 easily -- if you find a 'bed' that costs $0 ;P
I moved to Singapore from Britain last year.
Savings that lasts 5-10 years in the states would lasts you at least 20-30 years here. Most people here speaks English fluently, and the startups/hackers culture here are vibrant and growing.
My good friend quit his cozy programming job in Canada and spent a year travelling and hacking in Malaysia + Singapore. He left with more money than when he started (took very very few consulting jobs in between). Oh, and tons of great (food) memories: http://malaysianfoodporn.com/