🐧 How I took advantage of 3 arbitrage strategies

‍Today, in 10 minutes or less, you’ll learn:

• 🗺️ How my geographic move impacted my take-home pay
• 🚀 The secret to getting a 42% base salary increase in just one year
• ☀️ How to leverage your peak energy hours for maximum productivity

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🛠️ How I took advantage of 3 arbitrage strategies

In 2008, the biggest trading arbitrage ever documented occurred.

The US TIPs vs Treasury Bonds arbitrage — worth $56B of mispricing — led to Barnegat Fund to seize the opportunity, making a killing.

Everyone talks about arbitrage in financial trading.

These are the larger-than-life accounts you hear about in books and news.

But no one talks about the arbitrages hidden in plain sight.

The ones that you and I come across every single day…

… which can help you save tens of thousands of dollars.

In this newsletter, I deep dive into 3 arbitrage strategies that I have taken advantage of over the past few years to save and make money—and how you can too.

First up, one of my favorites:

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Strategy 1: Geographic

In 2020, when I moved from San Francisco to Singapore, I made a lower salary in Singapore than if I worked in a comparable role in the US.

But I ended up roughly over 50% higher in take home pay (after taxes) due to lower cost-of-living and taxes.

This enabled me to save and invest a higher amount.

Then, when we stayed in Vietnam for a few months, our housing costs shrunk by 60%:

• $4,800 SGD (~$3,570 USD) for a 1-Bedroom 1-Bath Condo in Singapore’s Robertson Quay
• $1,400 USD for half of a 3-Bedroom 3-Bath Luxury Serviced Apartment in Saigon’s District 2 (shared with another couple)

What’s the game here? Increasing your take-home earning power, then saving and investing more.

And I think this game is still accessible if you can find the right job (or run a business).

But there’s a couple other methods of executing this strategy too:

How to use geographic arbitrage:

• Move from a high cost-of-living to low cost-of-living city. Explained above.
• Work remotely for a global employer in a low-pay country. I’ve seen high-performing tech workers ask global companies to benchmark their salary based on a more competitive market (e.g. instead of Indonesia, use Singapore). Note: This only works for global companies - see chart below.
• Move from a low-pay to high-pay country. This is the classic immigration strategy my parents tried to employ. Move from China to Canada, and later the US, for more high-income career opportunities.

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Strategy 2: Time

In my work, I generally prioritize activities that produce the highest hourly rate based on my skills, knowledge, network, and capital.

For example, my product advising charges 5x my FT PM hourly rate given it’s highly leveraged. So I spend my time here.

Then I can delegate out admin and operational tasks like my bookkeeping for On the extreme end, I can delegate basically any activity under my hourly rate. (I don’t do this, but realize I can delegate more.)

What’s the game here? I’m allocating my time intentionally on the highest leveraged activities. While I spend on delegating other tasks.

How to use time arbitrage:

• Doing high-hourly-rate work and delegating low-hourly-rate tasks. Explained above.
• Leveraging your most productive hours for the most complex tasks. Every 24-hour day, you feel peak energized, awake, and creative during certain hours. While you may be tired and less motivated during other hours. Find your peak energy hours and get most leverage out of this hour. Then enjoy the other hours with other activities. By doing this, you may be able to design what Khe Hy describes as an Octopus Day.

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Strategy 3: Skills

When I started my tech career, I doubled down on developing my product management skillset because I observed that great PMs were a rare breed in the industry.

They had outsized impact in both startups and FAANG alike.

As a result, they were compensated accordingly.

For example:

• In 2013, I started off in the industry as an acquisition marketing manager at a Series A startup getting paid a $57,500 base salary.
• Then 1 year later, when I made an internal transfer to become a product manager, I got bumped up to $82,000.

That’s a 43% salary increase.

While this is my anecdote, here’s industry data according to BuiltinSF:

• $111,231 - Digital Marketing Manager in SF Avg Base Salary
• $160,261 - Product Manager in SF Avg Base Salary

The latter has a 44% higher salary.

It’s uncanny how similar is the relative difference in salary.

How to use skills arbitrage:

• Learning high-priced, scarce skills when starting your career. Explained above.
• Moving from an industry where your skill is abundant to an industry where it’s scarce. In our interview with Ines Lee, Head of Content for Ali Abdaal, she described how her skills from academia as a professor transferred well over to the creator economy. And how there was an opportunity for other professionals with rare skills in the creator world, e.g. tech and finance, to stand out.
• Fractionalizing your skill to increase demand within new segments. We have spoken with several fractional execs recently like Karina Mikhli, Fractional COO; Taylor Crane, Fractional Head of Product; and Gabriel Tudela & Pedro Marin, Co-Founders of Landa Club. They took advantage of fractionalizing their skills to make it more affordable to startups and mid-sized businesses.

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In Summary

I used:

• Geographic arbitrage
• Time arbitrage
• Skills arbitrage

… to save and make money. You can too.

Arbitrage opportunities are accessible to many people.

Look for them hidden in plain sight in your day-to-day life.

🌐 Beyond your borders

💼 Welcome to a new era of work: The portfolio career (BI)

🔥 What’s a FIRE number for Singapore? (Reddit)

✂️ Where to Put Your Money After the Fed Rate Cut (WSJ)

🧠 Social snippets

Sergio Pereira went from software engineer to fractional CTO, earning $300k in half the time.

Jennifer Ong went from BlackRock VP to career change coach.

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