00499 Future Wealth Planning: Capital Allocation in the Age of AI. Cash, QQQ, and QLD: Three Steps to Optimal Asset Allocation

I. Episode Theme

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The main theme of this episode is that investing in US indices means holding US assets, not holding US dollars. The discussion revolves around the US balance sheet, the relationship between the US dollar and US stocks, and deeply explores the philosophy of long-term investment and methods of asset allocation. In addition, it shares the impact of AI development on future work, social structures, retirement planning, and national competition, emphasizing the importance of learning and cognition, and asset allocation and balance.

II. Briefing Contents

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Market Volatility and Long-Term Investing

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• Market Volatility Is Irrelevant to Long-Term Investors: Short-term market fluctuations are normal. Long-term investors should adhere to the principle of “buy when you have money, hold long term, and never sell,” and not be swayed by market sentiment. Utilize the power of compound interest to hold quality assets for the long term. For example, even if the market experiences a significant pullback, as long as you hold a Nasdaq 100 index fund for the long term, you will ultimately achieve substantial returns.
• Disclaimer: The COEC Investment and Finance Channel is a non-profit channel aimed at sharing investment experiences and philosophies. All content is for reference only and does not constitute any investment advice. Advertisements on YouTube are not initiated by the channel. Please be wary of any investment schemes online that claim to guarantee returns, especially those using celebrity endorsements or AI-synthesized voiceovers; many are scams. COEC does not charge anyone a fee nor does it recommend any paid investment services.
• Investment Risk Warning: Investing involves risk, and the stock market is highly volatile. Investors should be fully aware of investment risks. For example, investing in stock index funds such as QQQ may face a short-term loss of 50% or even more of their market value.

Learning and Cognition

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• Investing Requires Continuous Learning: James emphasizes the importance of learning and encourages everyone to watch the value investing lecture series videos, recommending episodes 00451, 00398, and 00288. There are also condensed short films in the playlist to help everyone quickly grasp the core content and to share with friends and family. Only through continuous learning can we enhance our investment knowledge and judgment.
• Q&A Only Refines Your Existing Knowledge, Not Establishes It: This means that the Q&A session can only help you further understand what you have already learned, but cannot replace systematic study. For example, concerning how to specifically implement the 433 asset allocation strategy, you need to first watch relevant videos for a systematic understanding.
• Nasdaq 100 Index Funds: James recommends long-term investment in Nasdaq 100 index funds (such as QQQ and TQQQ) and provides a list of Nasdaq 100 index fund options around the world for investors in different regions to reference.
• Investor Optimism: Despite market fluctuations and uncertainties, investors should maintain an extremely optimistic mindset. Market declines should be seen as opportunities to buy quality assets at lower prices. In the long run, the economy and the stock market will always trend upwards.
• Wealth Growth Requires Time: Investing is a long-term process. Wealth growth needs time to realize the effects of compound interest. For example, by investing in a Nasdaq 100 index fund for the long term, waiting for ten or twenty years, assets could potentially grow to a scale of hundreds of millions.
• Advantages of Long-Term Investing:
  • Compound Interest Effect: Long-term investing can fully utilize the effects of compound interest, achieving exponential growth of wealth.
  • Avoid Emotional Trading: Long-term investing can avoid making poor investment decisions due to short-term market fluctuations.
  • Reduce Transaction Costs: Long-term investing can reduce the frequency of trading, thereby lowering transaction costs.

Relationship Between US Dollar and US Stocks

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• Analysis of the US Balance Sheet:
  • Detailed Data: James provided detailed US balance sheet data, including:
    • Total US Government and Private Borrowing: This refers to the total domestic debt of all forms in the United States.
    • Total Assets: $202 trillion, representing the total value of all US assets.
    • Deficit: $36 trillion, referring to the US government’s fiscal deficit.
    • Total Liabilities: $101 trillion, including the total debt of the government and the public, which is actually the amount of US currency issued.
    • GDP: $28.57 trillion, representing the total value of all goods and services produced within the US in one year.
    • Federal Tax Revenue: $12 trillion, referring to the US federal government’s tax revenue.
  • Income Estimation: Based on an average tax rate of 15%, it is estimated that the total income of US individuals and companies is about $80 trillion. James pointed out that because corporate tax rates are usually higher than 20%, this estimate may actually underestimate the actual income of the US, and the real number might be close to $100 trillion.
  • Debt-to-Income Ratio: By comparing total liabilities to income, the US debt-to-income ratio was calculated and compared with individual debt-to-income ratios, explaining that the US balance sheet is very healthy and will not experience a debt crisis or bankruptcy as some people fear.
  • Example: The US was compared to an individual with $202 million worth of real estate, owing $100 million, and with an annual income of $80 million, illustrating that its financial situation is very healthy. In comparison, many people have an income far less than $80 million but carry huge mortgage debts, and their personal financial situation is much worse than that of the US.
• Relationship Between the US Dollar and US Stocks:
  • Holding Assets, Not Currency: Investing in US index funds is actually holding a portfolio of assets composed of excellent US companies, rather than holding the US dollar as a currency.
  • Impact of US Dollar Depreciation: Even if the US dollar depreciates, as long as the assets held (such as stocks) have value, the price of assets denominated in US dollars will rise.
  • The US Dollar Is Just a Unit of Account: The US dollar is only a unit for measuring asset value and can be exchanged for assets using any other form of currency or valuable item. For example, real estate can be used to exchange for Apple shares or QQQ assets, without needing to go through the US dollar.
  • US Dollar Credit Backing: The US dollar, as a fiat currency, is backed by national credit. The US government can repay its debt by taxing companies and individuals. Therefore, as long as US companies and individuals can continue to generate income, the US can repay its debts, and the US dollar will not collapse.
  • Borrowing Strategy: Since the US dollar may depreciate, it is advisable to borrow as much US dollars as possible to invest or consume. In the future, debt can be repaid using depreciated US dollars.
• Refuting the Bankruptcy Theory:
  • Cited data and facts to refute the view that “excessive US debt will lead to bankruptcy.”
  • Emphasized that the US has vast assets and a continuous source of income, which is enough to repay its debts.
  • Pointed out that those who spread such statements may have ulterior motives, and investors should think independently and not blindly believe them.
• Long-Term Holding of Quality Assets:
  • Emphasized the importance of long-term holding of high-quality US assets (such as the Nasdaq 100 index fund).
  • Even if the US dollar depreciates, the value of quality assets will continue to grow.
  • Example: If QQQ is currently $500, after a large US dollar depreciation, QQQ may rise to $10,000 because it represents the assets of 100 excellent US technology companies.
• No Need to Worry About the US Dollar:
  • Investors should focus on the value of the assets themselves, rather than fluctuations in the US dollar.
  • US dollar depreciation is actually a good thing for investors holding quality assets because they can buy the same assets with fewer US dollars.

Asset Allocation and Balance

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• 433 Asset Allocation:
  • Definition: The 433 asset allocation is an investment strategy that allocates 40% of total assets to QQQ (Nasdaq 100 index fund), 30% to TQQQ (3x leveraged Nasdaq 100 index fund), and 30% to cash or money market funds.
  • Purpose: By allocating assets with different risk levels, balance risk and return.
  • Operation: Conduct “smart rebalancing” according to market conditions, that is, when the market rises, transfer some of the profits from TQQQ to cash; when the market falls, transfer cash to TQQQ.
• Smart Rebalancing:
  • Mechanism:
    • When the market rises: Convert some of the profits (usually 30%) from leveraged funds (such as TQQQ) into cash.
    • When the market falls: Convert cash into leveraged funds in a certain proportion (usually 20% of the cash portion).
  • Effects:
    • At market highs: The cash level is high, reducing the risk of a high-level pullback.
    • At market lows: The cash level is low, allowing for buying more assets at lower prices, thus achieving greater returns when the market rebounds.
  • Auto-Pilot: The smart rebalancing mechanism can automatically adjust asset allocation according to market conditions without manual intervention.
  • Examples: The internet bubble in 2000 and the financial crisis in 2008 were used to illustrate how the 433 asset allocation and smart rebalancing mechanism protect investors’ assets during significant market volatility.
• Necessity of Long-Term Investment: Citing Howard Marks’s views, it is explained that predicting short-term market trends is almost impossible, and frequent trading will only increase costs and risks. For ordinary investors, holding passive funds (such as QQQ) for the long term is a wiser choice.
• Avoid Frequent Trading: Combining data on the losses of Taiwanese day traders, the risks and harms of short-term trading are explained.

Other

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• Essence of the Financial Industry: The goal of the financial industry is to maximize its own interests and may “empty” investors’ pockets through various means. Investors must improve their financial literacy to recognize and resist the traps and temptations of the financial industry. For example, long-term bond products may appear stable in name, but still have the potential to lose 30% or more.
• Information Filter Bubble Effect: The development of the internet and social media makes it easier for people to access information that matches their own views, thus forming information filter bubbles and making it difficult to hear different opinions. This leads to biases in people’s understanding of the world and even conflicting emotions.
• Australian 2x Leveraged Fund GNDQ: Introduced an Australian market 2x leveraged fund called GNDQ, for Australian investors to reference.
• International Situation and Investment: Although we may know nothing about the international situation, this does not affect our long-term investments. The important thing is to choose the right investment targets and stick to them for the long term.
• Allocation Strategies for Roth IRA and Traditional IRA: It is recommended to invest all the funds in Roth IRA in TQQQ to maximize tax-free returns. Traditional IRA can allocate a portion to cash and a portion to QQQ, with the specific ratio depending on individual circumstances.
• Risks of Labor and Real Estate: Labor is facing the risk of unemployment, especially with the rapid development of artificial intelligence. Real estate also has risks, such as natural disasters and market volatility.
• Impact of AI on the Future: The development of AI will have a huge impact on the job market, with a large number of jobs being replaced by AI. In the future, society may only be left with a small number of capitalists and people who can control AI, while others may become “useless” laborers. Therefore, one should no longer learn coding but should use AI to serve oneself.
• Predictions on Future High-Tech Returns: Some finance professionals predict that future high-tech returns will decrease. James refuted this view, believing that these predictions are baseless and pointed out that the investment performance of these predictors is also poor.
• Encourage Learning and Sharing: Encourage everyone to watch the short films of the investment lectures and share them with more people to help them build correct investment philosophies.

III. Q&A Session

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Cat

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• Sharing:
  1. The annualized return rate of long-term investment does not mean that fixed returns can be obtained every year. If the investment period is too short, the desired results may not be achieved due to market fluctuations. She cited a chart from a book called “The Long View,” which shows the highest and lowest returns for different investment periods. For example, investing for one year, the highest return might be 66%, but it could also result in a loss of 38%; investing for two years, the highest return is 39.4%, but it could also lead to a loss of 31.7%; investing for five years, the highest return is 27.3%, but it could also result in a loss of 11.9%. Only when the investment period is more than 20 years is it possible to obtain a return ranging from a minimum of 6% to a maximum of 17%. In summary, the longer the investment period, the more the return rate tends to approach the long-term average.
  • James’s Comment: The longer the investment period, the closer the return is to the average. For example, if you invest for 25 years, the return will increasingly approach 10%. This explains the significance of the 433 asset allocation: short-term cash needs can be met with the cash position, while long-term investment is not affected. For example, if an investment portfolio has 10 million in long-term investments and 1 million for school tuition, the 1 million can be combined with the 10 million for 433 allocation. This would mean 300,000 in cash, and even if the market declines, the 300,000 cash can cover tuition needs. It was also emphasized that stock pledging can further reduce risk, because low-interest funds can be borrowed to meet emergency needs.

Four Five

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• Question 1: The company’s 401K plan can deposit 30% of income, which is far more than the IRS limit. The extra funds are put into an after-tax account. If the principal of this part is transferred to Roth IRA, and the appreciated part is transferred to Regular IRA, are there any tax issues with such operations?
  • James’s Response: The after-tax 401K plan you mentioned is actually a tax-deferred account, which allows investors to put their after-tax income into it and conduct tax-free trading, but still have to pay taxes when finally withdrawn. For short-term operators, this type of account can avoid tax liabilities caused by frequent trading. However, for long-term investors like us, we do not make frequent buying and selling transactions, so this type of account does not have much appeal to us. The disadvantage of participating in this plan is that it actually increases the size of your Traditional IRA, and we generally advise against having too large a Traditional IRA because you will have to pay income tax when you withdraw in the future. Therefore, I do not recommend that you continue to participate and put money into this after-tax 401K plan.
• Question 2: I am 60 years old, and my current asset allocation is 70% of my money in Traditional IRA, 10% in Roth IRA, and 15% in Regular IRA. How should I allocate my assets?
  • James’s Response: Given that your Roth IRA ratio is low, it is recommended to invest all the funds in your Roth IRA into TQQQ (3x leveraged Nasdaq 100 index fund) to maximize its potential for tax-free growth. For your Traditional IRA, it is recommended to allocate 20% to cash and 80% to QQQ (Nasdaq 100 index fund). This will make your overall asset allocation closer to the target of 433 (40% QQQ, 30% TQQQ, 30% cash).
• Question 3: I am already using asset-backed loans, borrowing about 1% of the funds each year for use. According to the asset allocation ratio recommended by the teacher, my current cash ratio is insufficient. What should I do?
  • James’s Response: In this case, you don’t need to specifically increase your cash ratio. You only need to allocate 20% of the cash in your Traditional IRA and the remaining 80% to QQQ, and all the money in your Roth IRA to TQQQ. Use asset-backed loans to meet your daily expenses and tax payments, so that you do not need to use your investment principal. Continue to maintain the annual borrowing and use the loan to cover some expenses, so that your investment portfolio can continue to grow.

Ling

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• Sharing 1: The US government has a very complete retirement plan. In contrast, Taiwan has a big gap in guaranteeing its people’s retirement. Taiwan’s labor insurance retirement account requires employers to set aside 6% of employees’ salaries in accordance with the law, and employees can choose to self-allocate 0% to 6% of their salaries. When Ling first started working, there was only the 6% set aside by the employer. Later, following the advice of colleagues, she chose to self-allocate 6% to increase retirement savings and deduct income tax.
  • James’s Comment: There is no need to participate, because Taiwan’s securities accounts are tax-free.
• Sharing 2: After listening to James’s concept of investing in QQQ in November last year, Ling decided to change the self-allocated portion to 0% and use all the funds for investing in QQQ. In addition, Ling’s company provides two options, “employee stock trust” and “employee savings trust,” aimed at helping employees increase retirement funds. Previously, she did not know enough and chose the “employee stock trust” investing in company stocks, but the return in the past six years was only about 38%. If she had followed James’s QQQ investment philosophy, the performance might be higher. Therefore, she has recently made adjustments and has chosen the “employee savings trust” starting this year. However, the investment targets of this “employee savings trust” are limited and cannot be directly invested in QQQ. Only funds can be chosen. Currently, Ling plans to invest the company’s portion in US technology funds and the self-allocated portion in Taiwan stock funds. Although the monthly investment amount is not large, Ling believes it still needs to be further optimized.
  • James’s Comment: Taiwan’s securities accounts are tax-free, which is equivalent to the US Roth IRA, and there is no contribution limit, which is a very big advantage. Therefore, Taiwanese investors can directly use their own securities accounts for investments, especially in index funds such as QQQ, and do not need to participate in any retirement plans of the government or companies. These plans often have various restrictions, and the performance may not be good either. Taiwanese investors should take full advantage of this and invest funds directly into their securities accounts to enjoy tax-free investment income.
• Sharing 3: Since November last year, Ling has watched all of James’s videos before 2024 and continues to learn from the following videos. Ling compares investing in QQQ to a “big pool.” As soon as funds become available, she immediately puts them in, and regards it as her “real estate.” This “big pool” will continue to grow over time and is safer than traditional real estate. There is no need to worry about risks such as earthquakes, windstorms, or floods. When money is needed, she borrows through asset pledging to obtain funds instead of selling assets.
  • James’s Comment: Taiwan’s financial environment is very friendly. In addition to tax-free securities accounts, the interest on asset-backed loans is also very low, which is an advantage that other regions cannot compare. Taiwanese investors should take full advantage of these “free bullets” and “sophisticated weapons,” do a good job in asset allocation, and the future wealth growth potential is huge. Regarding pledging, there is no need to wait until assets reach 10 million TWD to start. It can be decided based on your own circumstances and knowledge of assets. Even with only 2 million TWD of assets, you can try pledging to borrow a small amount of money each year (for example, 40,000 TWD) for use. As experience accumulates and assets grow, the borrowing amount can gradually be increased.

Warm Heart

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• Sharing 1: He began learning James’s investment courses in 2022 and created an investment discussion group on Line in Taiwan in 2023. He emphasized that this group is self-organized, has no affiliation with the CLEC official, and has not received authorization or any form of assistance from James. The original intention of creating this group was to find more like-minded people to discuss investments, especially about 00662 (Yuanta Baoshu Shenzhen) and James’s investment philosophy. Currently, this group has developed into a learning community of more than 500 people.
• Sharing 2: He mentioned that he is also facing a situation where his family does not understand his investment methods. For example, his father would question why he doesn’t sell at high points but chooses to hold for the long term. In order to make his family better understand his investment philosophy, he invited his family to join the Line group he created, hoping that through the discussions within the group, his family could understand the advantages and value of long-term investment and reduce their concerns.
• Sharing 3: He particularly thanked several core members of the group, including Brother Chen, Mark, Chris, and QQM, for their contributions to the group’s development.
• Sharing 4: He revealed that Brother Chen in the group will be sharing his experiences from 2 PM to 7 PM tomorrow (January 19th) and provided a link for everyone to participate.
  • James’s Comment: James expressed support and encouragement for this kind of self-organized learning community, believing that this form can help more people learn and spread the correct investment philosophy. He also emphasized that he himself does not privately provide any special resources or guidance to anyone or any group. All sharing will be done on public platforms to ensure transparency and fairness of information. He also reminded everyone that although these self-organized groups are usually made with good intentions, they should be vigilant and pay attention to potential risks. He himself and CLEC will not be responsible for the operation and management of these groups.

Mike

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• Sharing: He went hiking with a friend, who is also a member of CLEC. The two talked about the recent layoffs at Google due to AI development. This triggered their thinking about the future development of AI, especially whether AI will threaten humans due to its own “rationality,” for example, whether AI will deliberately leave bugs in its programs to avoid being shut down by humans.
• Question: What is the future development direction of AI? What impact will it have on human work? In particular, will AI develop self-awareness and threaten humans?
  • James’s Response: The development of AI will have a huge impact on the job market. In the future, most people will face the risk of unemployment, and only a few capitalists and those who can control AI will be able to survive. Therefore, everyone should start learning and mastering AI tools now, and use them as assistants to improve work efficiency. At the same time, every country should pay attention to the development of AI, especially a comprehensive AI strategy. Currently, the United States and China are at the forefront in this area, while Europe and Taiwan are relatively lagging behind. If Taiwan wants to remain competitive in the AI era, it needs to significantly increase the salary levels of engineers and increase the TWD exchange rate to attract top talent from around the world. As for whether AI will develop self-awareness and threaten humans, this is indeed a concern. In the future, there may be a confrontation between “righteous AI” and “villainous AI,” just like in the movie “The Matrix.” This is also one of the reasons why Elon Musk is committed to developing more powerful AI and trying to guide it toward goodness.
• Question: How does James view the practice of restricting certain countries from accessing certain advanced technologies (such as AI)? Is this a form of discrimination?
  • James’s Response: This is a complex issue that can be discussed publicly, but it is necessary to avoid political stances and remain objective and rational. Efforts should be made to make information public and transparent.
• Question: What is China’s current asset situation? In addition, what impact does AI have on the stock markets of various countries?
  • James’s Response: Every country has its own problems. China’s data is not completely transparent, and it is difficult to obtain accurate information. Currently, AI has the most significant impact on the stock markets of the United States and Taiwan, while other countries are relatively less affected.

Jenny

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• Question 1: James previously suggested keeping cash in an IRA account rather than a Brokerage Account. Why is that?
  • James’s Response: Because the capital gains in the SEP IRA account also needs to be taxed, in order to avoid its rapid growth, it is recommended to keep your existing funds in your SEP IRA account as is and no longer contribute to it. The funds in the Brokerage Account can be used for asset-backed loans. You can continue to use the annual quota to deposit funds into your SEP IRA and then transfer it to a ROTH IRA.
• Question 2: Do I need to keep some cash in my Brokerage Account?
  • James’s Response: No, you do not. You can obtain emergency funds through asset-backed loans. For example, if you have $5 million in Brokerage Account assets, you can obtain a credit line of approximately $3.5 million, which is sufficient to deal with most emergencies. You can first apply to open the asset-backed loan function, even if you don’t use it for the time being. When you need money, you can borrow from it at any time, for example, occasionally borrowing $100,000 to pay taxes.
• Question 3: You always emphasize that QQQ should “never be sold.” So should QLD or TQQQ in a Roth IRA account also “never be sold?” But doesn’t TQQQ have various fees and losses?
  • James’s Response: Yes, even QLD and TQQQ should be held for the long term and not bought and sold frequently. Although TQQQ has some management fees and fluctuation losses, these losses are acceptable in the long term considering its huge growth potential. We should focus on long-term results rather than short-term fluctuations. For example, if QQQ increases 200 times in 40 years, then TQQQ may increase 600 times, which is a very substantial return.
• Question 4: In a Roth IRA account, if I don’t buy QLD, can I buy TQQQ?
  • James’s Response: I don’t give specific investment advice. Whether to buy TQQQ is your own choice. I can only tell you that the data we use for backtesting is based on QQQ. If you change the volatility, I will not be able to answer the questions you may encounter.
• Question 5: For a child’s Roth IRA account, do you recommend buying QLD or QQQ?
  • James’s Response: For children’s accounts, regardless of the account type, as long as the investment period is long enough, for example, 40 years, it is okay to consider investing in QLD as much as possible to maximize tax-free gains.

Brian

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• Sharing: He used James’s 433 asset allocation simulator to verify his investment logic and made adjustments according to his own circumstances. His current asset allocation is 80/20 (80% QQQ, 20% TQQQ). He plans to gradually transition to 40/30 (40% QQQ, 30% TQQQ, 30% cash) after retirement. He also shared his work experience in the AI field, mainly responsible for AI applications in power systems. He agrees with James’s view that AI will eventually replace most human jobs, but some jobs are still difficult to replace in the short term, such as the construction industry. He also mentioned that the degree of demand for AI varies from region to region due to differences in labor costs. Finally, he shared that he would choose to stay in better hotels when he travels for business to enjoy life, rather than just saving money.
  • James’s Response: In the process of market uptrend, your cash ratio must be greater than your liabilities. This is the most important principle. The 433 asset allocation has been verified by backtesting and can cope with the worst market conditions. If you cannot achieve the 433 allocation for the time being, you must at least ensure that the cash ratio is higher than your liabilities. At the same time, you can re-allocate your new capital each month. Regarding AI, although AI will eventually replace most jobs, some jobs are still difficult to replace in the short term. For example, the construction industry still requires a lot of physical labor, and AI cannot completely replace it in the short term.

IM

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• Sharing: He didn’t quite understand what James meant by “always being optimistic” and the relationship between “risk control” before, nor did he fully understand the advice on consumption behaviors such as buying houses and cars. After a period of reflection, he gradually understood the logic behind these concepts.
  • James’s Response: At this stage, you can spend more money appropriately and enjoy life. The key is to learn to borrow money for consumption, rather than spending your own money. Investing and consumption are not contradictory; the important thing is to master the methods. For example, you can choose to take a taxi instead of spending time waiting for a bus. You can choose to spend money to buy a better car and enjoy a better driving experience, as long as you don’t spend your own money but pay through loans or other means. In 40 years, you will have 80 billion. Now, what you should be thinking about is how to spend money, not how to save money.

IV. Key Quotes

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Investing in US indices means holding US assets, not holding US currency. – James

Investing in US stock index funds is about holding the assets of excellent US companies. The value of these assets is not highly correlated with the value of the US dollar. Even if the US dollar depreciates, the value of quality assets will continue to increase.

The market always goes up. Investing requires patience. Wealth is worth the wait. – James

In the long run, the market always goes up, and investors need to be patient and wait for wealth to grow. Short-term market fluctuations are normal and should not be overemphasized.

The financial industry wants to empty your pockets. – James

The goal of the financial industry is to maximize its own interests and may use various methods to “empty” investors’ pockets. For example, they will design various complex financial products and use information asymmetry to induce investors to buy. Investors must improve their financial literacy to recognize and resist the traps and temptations of the financial industry.

There are many walls in the world, but people inside the walls don’t know they are within the walls, because everyone thinks they are free and open-minded. Many who think they are outside the walls don’t know that they are inside the walls. – James

The information filter bubble effect in the online world should make us realize that the world we perceive may not be the real world, and we should maintain an open mind. Everyone and every country has its own information barriers.

The least guaranteed are laborers, and the second least guaranteed is real estate. – James

Laborers face the risk of unemployment, especially in the current era of rapid AI development. Real estate also has risks, such as natural disasters and market fluctuations. In comparison, the risk of long-term investing in quality stock assets (such as QQQ) is lower.

All laborers, regardless of whether you are young or old, remember that now artificial intelligence is sweeping the world, you will face unemployment. – James

The development of AI will have a huge impact on the job market, and a large number of jobs will be replaced by AI. This is both a challenge and an opportunity.

In the future, the future will be left with very few capitalists and very few people who know how to control AI; the rest will be useless laborers. – James

The social structure of the future will undergo tremendous changes, and you must become a capitalist or someone who can control AI. This means we need to continuously learn and master new skills in order to stand firm in the future society.

We don’t need to have a purpose in life, we don’t need to do anything in life, we just need to be happy. – James

Encourage everyone to enjoy life and not set too many goals and pressures for themselves. The meaning of life lies in experiencing and feeling, rather than pursuing material wealth or social status.

We don’t necessarily have to like capitalist society, but we need to know how it makes money. We must stand on the same side as it, and then we can make a lot of money. – Cat

We don’t need to like capitalism, but we need to understand the rules of capitalism in order to profit from it. Only by understanding how capitalism works can we better use it to achieve our wealth goals.

If I still criticize, it means I still care. – James

The criticism of Taiwan is because of the love for this land and the hope that it will become better.

V. Summary

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This episode is full of information and covers many aspects such as investment philosophy, market analysis, asset allocation, and future outlook. James explained the underlying logic of investing in US index funds in an easy-to-understand way, emphasized the importance of long-term investment and holding high-quality assets, and provided an in-depth analysis of hot topics such as the relationship between the US dollar and US stocks, and the impact of AI on the future, in conjunction with the current economic situation and technological development trends. In addition, James also shared many practical investment tips and operational methods, such as the 433 asset allocation, smart rebalancing, and how to use asset-backed loans.

In conclusion, this episode is of great value to listeners who want to improve their investment knowledge and practice, helping them to better understand the essence of investment, master scientific investment methods, and become more stable and forward-looking on their future investment journey.