Tax Haven Out the Gate, Then Tech/Ecom. An Inverted Path Example

Level 2- Value Investor

Welcome Avatar! We have BowTiedExpat here to walk through his incredible success escaping cubicle max pain (align logo and alt + e + s + [redacted] in excel over and over again).

As usual we estimate it takes around 3 years of max pain to really get traction. While every year there is always some crazy guy who turns $10K into $10M, the reality is that 99.9% will be better with the tried and true: 1) high paying W-2; 2) be politically liked and do the min to barely get promoted and 3) scale up that wifi biz, RE biz, SaaS biz, whatever you are good at on the side.

Here we have the same general strategy but inverted! Hope you enjoy it.

On that note handing it over to BowTiedExpat.

All writing is unedited. None written by us except the comments section for closing.

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Intro - BowTiedExpat

It was all a dream, but now gradually turning into reality.

Beyond grateful that Bull gave me the chance for a guest post. Here to share my journey from Wall Street (Central, to be precise) to crypto/E-com.

Here we go.

Humble beginnings

Looking back at my childhood as a third culture kid, I was always rebellious and loved the thrill of going against the grain and breaking rules along the way. In school and on the playground, I was never the smartest or the dumbest one in the group, but just intelligent enough to know how to exploit retards and normies in smug heaven.

Naturally, I was curious and tried a lot of different things, playing multiple sports, producing music and reselling consumer goods to friends/strangers at healthy markups. Of course, I did just enough in the classroom to do well but not push myself to overachieve. Why do more than you need to for diminishing marginal returns?

Fast forward to high school and college, still exploring and getting involved in a bunch of activities like a borderline ADHD patient, not knowing what path to take next. For those of you who weren't born with a silver spoon in your mouth or had parents working on Wall Street, you very likely stumbled across finance/consulting opportunities after one of the "chads" in college invited you to the undergraduate investment club.

After hearing several alumni working in investment banking come to campus to shill finance and their respective banks, I was instantly hooked. The prospect of working 80 hours a week for the chance of making the newspaper headlines after helping two struggling companies merge into a larger trashy entity was all I ever dreamt about from then on.

Back in those days, all you needed to do was memorize the BIWS guides, grab a coffee with a few analysts/associates at the target banks and have a decent GPA and "proof of interest" in finance to get your shoe in the door. After becoming a recruiter myself years later, I realized how much of this is all a luck-based numbers game, meritocracy non-existent. The dopamine rush from securing a full-time banking offer at one of the Big 5 Canadian banks was unprecedented. Couldn't wait to sign my life away for 2 years and then pivot to the all-elusive PE gig!

Taking risks part 1: moving halfway across the world

But not so fast. After being unhealthily obsessed with potential "comp" right out of undergrad and crunching the numbers, it immediately occurred to me that I was NGMI. Losing close to 40% of earnings to the government was not the way to wealth. In fact, the marginal tax rates ramp up the higher W2 income goes. Realized this horror even before 'Efficiency' by WSPB. Couldn't be me.

Forgot the details, but eventually stumbled upon the idea of "global pay" in a a tax haven that would allow me to multiply my earnings in my early career so I could establish a financial base and get the hell out asap.

Major life decision #1 -> declined full-time IB offer in Canada to re-recruit for a role in Hong Kong. My peers thought I was crazy, taking this huge risk instead of being content with the bird in the hand. At this point, I didn't care about the perceived drop in prestige, just show me the money. Of course, true wealth is only created when you develop strong conviction, take a calculated risk and go all-in.

17% income tax cap, here I come.

Long story short, managed to secure a IBD summer internship at a BB (the penultimate year internship rule is not such a hard requirement in Asia). As mentioned countless times on Wallstreetoasis and word-of-mouth, vanilla IBD in Hong Kong is primarily IPOs, debt offerings and capital markets stuff, M&A few and far between.

By the end of the 10 weeks, I was absolutely turned off by the repetitiveness of working on the nth IPO prospectus and IG bond offering. Couldn't see myself grinding this out full-time for another 2 years. Vibe was also off, as some of the associates could not even build a simple DCF or explain intrinsic value. Couldn't be me.

With another stroke of good fortune, managed to secure a full-time restructuring (RX) offer at an EB (the usual suspects) in Hong Kong. Definitely an upgrade skillset wise. I was told that I could be a banker and also a lawyer at the same time. Could you just imagine the exit opps I could get in just a few years time?

IB days: hell with valuable learnings along the way

IB is IB everywhere, but HK is really a different beast. Asian culture is all about hard work, and the workplace is essentially an extension of their school days (sweaty if you didn't already know). Think constant zero-sum thinking, backstabbing and extra booty-licking just to fall in the middle bucket (yes, you likely will need to be well-connected to reach the highest echelons, aka top bucket). They are so accustomed and good at gaming the system, as they have had to navigate a resource-scarce environment their whole lives. Not for the faint of heart.

Remember, this is the typical dynamic under a normal market environment. What happens when you add a black swan event to the mix?

Covid life in HK

What seemed like an eternity ago was easily the toughest 2-3 years of my life. When covid hit, any resemblance of a personal life went completely down the drain. It quickly became all work, all the time.

• Consistent 90-hour work weeks (9AM to midnight M-F, 10-15 hours on weekend): check

• Small team so no regard for social distancing, so no WFH: check

• Absurd quarantine regulations and complete closure of restaurants/public venue: check

I remember taking my first "vacation" after nearly 2 years as an analyst to visit my family back in the West. The associates and MDs didn't care, had to work Asia time (12hr difference) and vividly remember pulling all-nighters on Christmas and New Year’s Eve that year. Worse yet, none of these work-streams were as urgent as they were made out to be (lesson in there). Icing on the cake was having to stay at a quarantine hotel for 21 consecutive days upon my return to HK, paid for out-of-pocket. My associate even demanded to personally send over a monitor so I could get the excel and powerpoints done quicker. You really couldn't make some of this stuff up.

Back in HK, work ended up taking 95% of my time during these 3 analyst years. Dating life mediocre, social networking forget about it. Even with the rare free time I had, none of this was really possible. Did go to a few private parties, pretty lame though overall.

The one silver lining and what BTB has mentioned countless times here is the importance of health. Nothing matters more than this and I was conscious enough to optimize this area of my life, despite the circumstances.

Look, as an "investment banker", there is a big trilemma. Choose work + only one of exercise/social/side hustle. Social and side hustle was something I could park for later, but I was uncompromising when it came to health. Spent most of my free time meal prepping, counting calories, lifting and other activities that would make BT Ox proud. Still amazed I was so resolute with this habit in my 5-6 years of banking.

Most of my former colleagues are out of shape with a myriad of health problems on the wrong side of 30. There is also always that balding VP at every single bank, big or small, that refuses to go home and will want to walk over urgent edits at 9AM on Saturday. MDs never around and funneling all the work until it lands on the analyst's desk seemingly at 10PM every night.

In fact, would appreciate if anyone in restructuring could confirm what MDs really do. Feels like less wine-and-dining compared to capital markets bankers, so what in the actual world are they working on?! They also seemed very discontent with their personal lives. The signs were all there. This would be the best case scenario if I stayed to climb the corporate ladder. What a nightmare.

Quick overview of RX in Asia and lessons

This is not WSO and Bull has covered the day in the life of a banker ad nauseam, so I'll keep this section short. There are a few differences between RX in Asia compared to what you read about in the US.

Comp:

• Global base, analyst bonus 6-12 months, 17% capped tax rate. Same ballpark figures for associate. Post-tax comp as a result is much higher than in NYC. Could probably compound net worth at 2-3x the speed (all things equal) over here. $250k all-in for analyst and $450k for associates at 17% tax is actually life-changing money in your 20s

• Financial services, law and medicine are the only high paying careers here. Buyside pays at a sizable discount to IBD at a global bank (with greater layoff risk) so it's very normal to become a career banker. Buyside deals are also China-heavy so when deal flow dries up there, max pain for PE/HF guys

• Pay for seniors is much more variable, but the trend is always the same. They entice you with good comp as a junior, and once they get you on career track, they underpay you. Same song same dance

Work dynamics:

• RX (maybe Levfin) is the only group where you get US-style financial modeling and legal training. Good luck running actual LBOs in M&A or developing any technical skills in IPO roles. RX was actually intellectually stimulating and one of the better parts of the job personally

• Fortunate to have worked on some high-profile restructurings (won't dox myself here) during the covid period, where traditional capital markets activity dried up and China real estate imploded. Average deal length is 2-3 years for non-exchange offer, simple amend-and-extend restructurings. Comprehensive balance sheet restructurings are very resource-intensive, and with a lean deal team structure, an analyst/associate could not work on more than 2 debtor-side deals at the same time

• Asian conglomerates do not value restructurings in the same way and try to avoid them at all costs unless absolutely necessary (usually triggered by a creditor winding-up petition). Most have never done one before, so lots of handholding and random blowups on WeChat (compliance is super weak at EBs here). Analysts usually working directly with CFO/management on execution, so overall good exposure

• Yes, it's true that everyone is generally stressed and on tight timelines to push milestones through. International restructuring frameworks are used, but there is still a level of uncertainty involved in every deal as it's usually the first time someone has went down a certain execution path. A career in restructuring is honestly reserved for a special type of personality. If you know, you know. Definitely not suitable for most

• Networking and expanding relationships is not particularly encouraged. As long as you are a PPT/excel workhorse, all is fine. We all know how important networks are in real life, so this is definitely a EV- thing long term

Exit opps (any?)

• As mentioned above, being a career banker is the typical move. I did banking for money, I'm sure 95% of my peers also did the same. There is much less of a IBD -> PE/HF -> MBA path here. With that said, your typical corp dev or strategy jobs are much harder to land after banking. In fact, corporates prefer Big 4 and FP&A type of backgrounds. Bankers are viewed as disloyal, too expensive, and not even as qualified as a Big 4 type in terms of transferrable skillset. Really unfortunate dynamic, but I have seen too many peers struggle to land anything outside of high finance, even those willing to take a serious pay cut. What better way to lock yourself into the silver handcuffs. You have no other choice!

Lessons/reflections:

• Quit after 5-6 years as a senior associate A2A. I came out of banking with a healthy net-worth due to low tax and good personal finance habits (was only passively dabbling in crypto before ramping up post-FTX, so didn't really hit it big there). Also stayed fit and kept my health intact. Without my health, don't think would have the energy/drive to venture out on my own

• Would have started building E-com biz on the side as early as possible. No regrets of course given circumstances, but even slow progress would have been better than starting from zero after leaving banking -> once you get the rock hammer, get digging out of Shawshank asap anon

• Developed insane work habits and execution skillset that have helped me in the next chapter of my life

• Hopefully you've noticed that despite the solid W2 earnings in a tax haven, I made the conscious decision to pull the plug before VP (you should know already this is where you become a career corpo). Over time, you begin to realize that the opportunity cost of staying in banking makes the W2 earnings look much less attractive. I asked myself a simple question: do I see myself in the shoes of my bosses 5-10 years from now?

  • Answer was a resounding no, so quitting was obvious. After all, the paycheck could get cut any time, and you could never sell your career at a multiple like you can with a biz

Taking risks part 2: transition point and crypto

Funny enough, one of my former associates left to join a startup in the Solana ecosystem back in 2021 during peak mania (pretty sure he roundtripped last cycle sadly), which got me passively interested/involved in crypto. I was always interested in assets cryptographically-secured on blockchains, but simply too busy to deep dive. Started DCA'ing into BTC and ETH in 2023 as part of a set-it-and-forget it strategy.

One weekend, I ploughed through the Bitcoin Standard and Broken Money cover-to-cover and developed a newfound conviction for the space. Most people get orange-pilled eventually, this was my rite of passage. Went down the rabbit hole and explored the possibility of being a full-time degen.

2 weeks after getting my associate bonus, quit without anything lined up. Folks thought I was crazy, especially in the current hiring environment. What they didn't understand was that leaving the corporate world was the least risky thing I could do. Didn't have it figured out, but grinding in banking was no longer it for me. One thing led to another, and I ended up full-porting into crypto (pretty degen thinking about it!)

What I'm doing now

Two things I'm focused on: crypto and E-com biz

Crypto: joined a well-funded crypto startup (don't want to dox here but you can probably find it on my Twitter), completely WFH but also have office workspace for full productivity and flexibility. Look at strategy, investments, BD and product development, whatever we need to push the needle. I am by no means a Defi expert, just learning as I go, moving fast and making tons of mistakes. BTB and Defi Ed are phenomenal resources.

My team is working on some very primitive and exciting products - my focus is on the CeDefi narrative. Those in crypto know that retail and crypto native liquidity is no longer enough to pump our coins. We are working full-speed to connect crypto native yield products with tradfi/institutional capital to unlock full liquidity destiny. In other words, laser-focused on RWA and crypto banking products to really drive mass adoption. Common theme here? WE ARE LOOKING TO SELL TO THE RICH AND WEALTHY. This is the gwei.

E-com biz: still testing demand and setting up all the logistics in a niche that has been covered by BTB (one of the megatrends). WFH setup is perfect - no more useless meetings, commuting or forced work events (colleagues are not your friends anon). Big shoutout also to BT Opossum, Fawn, Gator, guy doing Ramp and Presleep and the other cartoon characters that have made their mark in ecom. Guess I have an advantage being based in HK as close to China manufacturing. Still got a long way to go and expecting failures along the way. Can't wait to make my first sale. Will give updates on my journey on my Twitter but I primarily use it as a journal to document my crypto journey.

Couldn't be happier and more fulfilled dedicating my time to two pursuits which allow me to further cultivate my entrepreneurial side. As an entrepreneur, who knew only 2 pages of an 80-page deck matter in a pitchdeck! Who knew AI could take better meeting minutes in 1/10^th of the time?! No way can return to corp ever again.

Concluding thoughts and how to contact me

Thanks for making it through this wall of text, hope I was able to provide some cool insights, especially into how banking/RX works in Asia.

I firmly believe that everything works out in the end if you keep putting in consistent work and embrace uncertainty. Looking at all the risks I took in my life, I could say that I've been doing just fine. I intend to keep moving fast and making mistakes, in both crypto and E-com. Progress is never linear, and experience has taught me that one day, things will suddenly click. Just keep digging!

Anyway, if the jungle has any follow-ups or would like to chat about potential opportunities to work together in crypto, feel free to DM me on Twitter. I am the BowTiedExpat and my handle is: expatdogowner. Happy to share more details and horror stories of banking in HK, as people usually enjoy hearing.

Stay toon'd!

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BTB Notes - Main Themes

This is an extraordinarily different path than most. Unsurprisingly, without extreme moves, you can’t expect extreme results. When people say you’re extreme, that’s 100x better than being called “NPC” or “Corporate” if your plan is to truly make it.

Rent and Tax: This has been discussed on X recently. When you really look at life the two main drains on your accumulation of wealth are typically two fold: 1) income taxes and 2) rent/mortgage. If you can somehow make one of those go down 50% or more, you’re going to have enough money to make a pivot.

In this case he pivoted to tech/crypto but for others (most we’re guessing) it’ll be some form of e-com/online sales.

Never Give Up Health: Each situation is different but the majority can do E-com plus stay in shape *if* they don’t choose a sweat shop. We’ve already stated that the vast majority should do Enterprise sales/tech sales/Tech. If Wall St. we still recommend doing a more middle tier if it has chill hours.

The difference? In this case it *did* make sense. We have no problem showing stories like this that are tangental to what we’re recommending. If you can go and earn $250K but you are going to drop your tax rate to 17%, that *does* make logical sense. The thought process is essentially the same. Instead of doing the standard W-2, E-Com, tax haven strategy, he went W-2 *tax haven*, then tech/e-com. The direction ends up being the same.

Hope you enjoyed this post and as always.

RUN THE NUMBERS!

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Disclaimer: None of this is to be deemed legal or financial advice of any kind. These are *opinions* written by an anonymous group of Ex-Wall Street Tech Bankers and software engineers who moved into affiliate marketing and e-commerce.

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