00506 Nasdaq Planet Salon, Session 10: Using Stock Financing Well

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• Previous presentation: 00506 Using Stock Financing to Borrow Against Stocks

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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

Practical

Equity financing

• Bottom Logic

• Practical

• Theory results

The bottom logic begins with an understanding of the bottom logic.

I have great problems, for me, and for me not.

• One, do you want to borrow money?

• Two, what kind of money? Financial cost loan interest rate loan constant

Parents are resistant to debt, they can't sleep well, they can't eat well, they're more of a sense of security without debt.

Do you want to borrow money?

• Parents are incompetent with their debts, and they are unable to sleep well and eat well. More often than not, they seek a sense of security free from debt.

• Mr. James said that people make money, two legs; money, four legs; money, eight legs.

Ordinary people make money from labour, investors make money from money, and real rich people make money from other people.

• If you use chicken farming as a metaphor, you have two chickens that give birth to two eggs a year and if you eat two chickens a year, you'll always have two chickens.

Let's say two chickens to eat. Just two eggs a year. Never pay back. Four chickens in the next year, eight chickens in the third year, and 40 years later you'll have 100 million chickens, and you'll owe only a few hundred chickens and eggs.

That's why they make eggs, eggs, chickens, and money.

Does everyone deserve to borrow money?

• Opportunities cost

• Cost of funds

We're all on the planet, and 100 is our investment, so our long-term opportunity cost is almost 14%.

Opportunities cost

1. One million dollars in cash, locked in a safe at home, given the number of things you have to do, the pressure is depressed, the weather is good for the sun, and it's not bad for a year.

2. One million banks are held periodically, or 1,015 million a year later.

3. Investments were on the scale of 500, with an average return of 9 % for nearly 100 years and 1.09 million a year later.

4. Investments are in the range of 100, with an average return of 14% for nearly 40 years and 1.14 million a year later.

We're all on the planet, and 100 is our investment, so our long-term opportunity cost is almost 14%.

Cost of funds: interest rate and loan constant

Interest rate on loans

1. Private lending 12%

2. Credit equity 7.2%

3. Bank equivalent 3.2%

4. Mortgage management loan advance, 3%.

5. Equities finance 4%

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

30% balance between loan interest rates and loan constants

23%

5%

8%

5 years of private borrowing 12%, 5 years of credit equity 7.2%, 5 years of bank interest equity 3.2%, 5 years of mortgage mortgage advance 3%, 5 years of equity finance 4%

Loan interest rate loan constant

Practical

How to borrow? Achieving the loan constant of 0

• If you want to be good, you have to be good.

• Knowledge Planet - Domestic stock financing strategy (update)

• Non-payment of technical loans, accrued interest

• It's perfect.

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

• 1. Method of calculation of interest

Some brokers have interest at the end of the count, but some brokers have double interest at the end of the count, such as CICA and CICA, which leads to an extra day of interest.

• 2. Defaults arising from interest

Some brokerages charge default interest on monthly unpaid interest, while others charge only financing interest or stock-borrowing fees.

• 3. Whether outstanding interest is included in the liability

Outstanding interest such as Chinese mail, offerr, Shinwan, wide circulation, Galaxy will be directly included in the liability and charged interest, while some brokers are monthly

Interest will be converted to overdue interest, which will not be transferred to financing liabilities and will not be charged.

Knowledge Planet - Domestic stock financing strategy (update)

• One sentence:

• With more than half a million ETFs, it is possible to finance the voucher business. Ten % of the financing's money buys the ETF (at an interest rate of 4.5 %) and then sells it through a credit account to an ordinary account and converts it into cash, which buys “current baby” (R1 risk level product) that can be used at any time.

• This would allow borrowing to be consumed, free of assets, and the interest rate for actual borrowing would be 2.3 % (4.5-2.2) and financing could be continuously extended (half-year or one-year extension) without repayment of interest.

Knowledge Planet - Domestic stock financing strategy (update)

• 1. In order to be converted to cash, the sub-mean of the financing component 100 must be transferred from a credit account to an ordinary account. 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.

• As long as the conditions for renewal are met, they can be extended indefinitely and never: more than 150 % of the guarantee is maintained and the concentration of a single stock does not exceed 80 % (e.g. 513100, 513,300 and 50 %).

• 10% financing, 85% market decline, 150% guarantees

• 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.

Rich is a gift. Happy is a human right.

Choufan, 19 July 2024