00506 Using Stock Financing to Borrow Against Stocks

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(Main China)

The secret behind never selling.

Jason Choufan.

Origin: Lao Chai, Teacher James, and Nasdaq Planet

• On May 29, 2024, snowball dolls found 100 gold eggs in the basket " The Bull's Basket ", which automatically changes blood each year and is weak and strong. Full-cut fingers, the most economical, the most comfortable.

• On May 30, 2024, we shared the 100 million-dollar James Master Investment Lecture video 00451 is gifted and happiness is human rights!

Capitalistic keys to wealth: long-term investment in the United States index fund, buy if you have money, invest in the long term, kill if you don't sell it, just as landlords never sell their land.

The 100 is a fixed asset that will never be sold, shares will be loaned for a living and will never be repaid until the money is repaid.

Markets are always on the rise: investing in the Nasdaq index fund is to believe in technology, in the United States and in human beings. Coexistence with the United States and humans.

All in minus 100 June 3rd, buy a stamp and go to bed.

• Entering the planet on 8 June 2024 was short and yielded significant results.

Nasdaq Planet Salon, Session 10.

Make good use of stock financing.

The secret behind never selling.

Qiufan 2024-7-19

Cost of funds: interest rate and loan constant

Interest rate on domestic loans

1. Bank credit loans after interest (3 years) 3%

2. Bank mortgages, after interest (10 years) 2.4%

3. 4 % (minimum 3.6 %)

Loan constant

• Loan constant = cash flow expenditure/loan amount

• The loan constant, which is not an interest rate, is an indicator of annual cash outflows

• Interest rates and loan constants for financing must be below the return on investment

• Price differentials generate passive cash flows. We need to maximize the current. Kim. Stream

• Equities financing loan constant = 0

Coordinate the regular account and credit account

Equities financing borrowing requirements

• Choose a friendly broker

• Knowledge of financing rules

• Regular accounts and credit accounts match

• It's perfect.

Specific Operations

• With more than 500,000 yuan, the ETF will be able to finance the voucher business of the issuer; once it is opened, the equity account will have two: a general account and a credit account, with a transfer of collateral (stock) between the two accounts.

• Transfer of an ETF from the general account to a credit account.

• The purchase of 10% of the money in credit account financing refers to ETF (4 % interest rate), which is then transferred to an ordinary account and can be sold into cash.

• The financing can be continuously renewed (half-yearly) without repayment of interest.

• This results in borrowing for consumption without using assets.

Choosing a friendly broker (fees and how interest is charged)

• 1 Interest calculation: Some brokers have interest at the end of the count, but some brokers have double interest at the end of the count, which leads to an extra day of interest charged.

• 2- Interest-related default: some brokerages charge defaults on monthly overdrafts (e.g., a low percentage of customer guarantees, corporate claims for interest, and customers remain open, resulting in default), while others charge only interest on financing or the cost of the voucher.

• 3. Whether or not outstanding interest is included in the liability: while some brokers ' outstanding interest will be directly included in the liability and charged interest, others will end up at the beginning of each month and interest will be transferred to overdue interest, which will not be transferred to the financing liability and will not be charged interest.

• Friendly brokers: Interest is recorded at a single interest, and interest outstanding is transferred to overdue interest, which is not transferred to financing liabilities and is not charged.

• There are more than 100 domestic brokers, which are highly competitive, and who need to find a friendly voucher provider to finance them in order to be able to reach out to Ethan.

Transfer requirement: equities with a guaranteed ratio of over 300 % may be transferred to the general account

Knowledge of financing rules

• Proportion of security: Total assets (including financing) of credit accounts divided by financial assets. For example, the N1 million is a buy-in index of $500,000 in financing, with a total of 1.5 million assets and a guarantee ratio of = 1.5 million/5 million = 300 %.

• Transfer requirement: Equities with a guaranteed ratio of over 300 % may be transferred to the general account.

• Early warning lines are 150 % and warehouse lines 130 %.

• The sum of one million is the sum of 100,000 (100,000 transferred to the general account) and the guarantee rate is 900 %. A drop of 85 % leaves 150,000, a guarantee of 150 % gives early warning; a drop of 87 % leaves 130,000, and a guarantee of 130 % makes it mandatory.

3. There is no domestic capital gains tax, and selling the Nasdaq index fund does not require paying tax

Annotations

• The finance component refers to ETFs that must be transferred from credit accounts to general accounts for sale in order to be converted into cash. If sold directly in a credit account, they can only be repaid and cannot be converted into cash.

• The transfer from the credit account to the ordinary account requires a date of trade; the general account sells the shares and the cash is not transferred to the bank card until the next transaction date.

• 3. There is no domestic capital gains tax, and selling the Nasdaq index fund does not require paying tax.
• 4. Most importantly, the process is fully compliant.

• Given the risks, it is strongly recommended that the proportion of financing should not exceed 10%. Up to 10% could be called “security levers”.

Technical borrowing without repayment; principal and interest stay on the books

• The credit account was always in cash and no interest was paid.

• The stocks purchased by the financing will never be sold and the sale will automatically pay off the financing and interest.

• The additional cash is transferred to the credit account through the purchase of stock re-guarantees in the general account to increase the percentage of guarantees.

• The extension period is open-ended, and will never be repaid, as long as the conditions for renewal are met (more than 150 % of the guarantee is maintained and the concentration of a single stock is not more than 80 %, such as 513100 and 513,300, respectively).

• As long as our stock mortgage assets are high and our debt is secure, the securities firm wants us to borrow as much as we can, and better not pay it back. If you don't sell the assets and repay the principal, it's his high-quality customer, his high-quality asset, and not lose it to another voucher, so that its balance sheet looks better.

Keep the credit account at zero cash so no interest is paid

0 cash in credit accounts

Principal and interest will be added to total liabilities, but only principal interest, which is not part of interest

Interest on current-month financing

Historical interest accrued to overdue interest rates

This is perfect

• You make a lot of money when you borrow money and invest it in a single dollar.

• Over time, assets are added much faster than the interest we pay. (Book interest)

• Leveraging leverage to maximize our net assets is the beauty of using fixed-payment leverage to invest in assets that are profitable, with huge results.

• The net refers to the compounding of assets, the single-rate recording of equity financing and the doubling of happiness. - Cheifan.

• In order to be rich, you need to put yourself in a "low risk, big space."

Charlie Munger.

Imitate Buffett: defer income tax and let the snowball roll

Theory results

• Monoly&Running

• Total assets and liabilities after 30 years

• Imitate Buffett: defer income tax and let the snowball roll

Single: interest per period is calculated on the basis of the original principal amount of $1 million

Monoly&Running

• Single: interest per period is calculated on the basis of the original principal amount of $1 million

• Year 1 = 100 + 100 x 4 % = 1.04 million

• 2nd year: 100+100x4% +100x4% = 1.08 million

• Year n principal and: 100 + 100 x 4 % xn only principal is giving rise to interest

• (b) Retributive interest: the basis for calculating the assets for each period is the original principal + accumulated proceeds

• Assets in year 1 and: 100+100x14% = $1.44 million roller portion

• Assets for year 2 and: 100+100x14%+100x14%x14%

• Year-n assets and: 100x (1+14%)^ new assets are also generating assets

Cash outflows: 0

Total Assets & after 30 Years; Liabilities

• If in 30 years:

• Liabilities: 100+100X4% X30 = 2.2 million Single Lee.

• Total assets: 100X (1+14%) ^30=50.95 million It's back. Lee.

• Net assets: 5095-220 = $4.87 million

• 30 years of cost

• Cash outflows: 0

• Loan constant: 0

• Unique task: Practice signature, write a note.

Imitate Buffett: defer income tax and let the snowball roll

Buffet: “Bockhill has two low-cost, risk-free sources of financial leverage, one deferred income tax and one insurance float. It's not like we're going anywhere.

• First, long-held equity investments create a large deferred income tax liability.

• Second, this large deferred income tax liability represents zero-cost funds that Buffet has been able to apply over the long term.

• This deferred income tax liability is like an interest-free loan from the United States Treasury to Buffet, with a maturity date chosen by Buffet.

• The accumulated interest-free interest-rate accumulation of our stock financing is a Buffet-like deferred income tax liability, with a growing amount of zero-cost financing over a long period of time, and, if it is zero-cost, of course, never-for-all, never-for-all. The snowball of wealth will roll forever.