I. Current Theme#
This episode of the CLEC Investment and Financial Management Channel adopts the theme of “Easy Chat on Investment,” with the core idea that market chaos is irrelevant to personal investment, and reiterating the correctness of investing in the U.S. market. James emphasized that investors should adhere to their established index fund investment strategies and not pay excessive attention to international political and economic fluctuations. At the same time, he also introduced the new features of YouTube Music Podcast, recommended learning resources, and patiently answered students’ questions about taxation, insurance, asset allocation, and life planning, aiming to help everyone establish a more mature investment mindset and strategy.
II. Briefing Content#
Market and Investment Philosophy#
- Market Situation and Personal Investment: Emphasized that even in the face of international events such as the Wol War and Trump’s election, personal investment decisions should not be changed as a result. These external factors are not directly related to long-term investment goals and should not be overemphasized, but rather focus on the execution of one’s own investment plan.
- Investing in the United States: Reaffirmed that the U.S. economy remains strong in the long term, so investing in the United States is still the right choice. Even if the world situation is turbulent, long-term confidence in the U.S. economy should not be shaken.
- Easy Investment: Advocated a simplified approach to investment, choosing to buy index funds and then reducing attention to short-term market fluctuations, sticking to a long-term hold. This “buy and hold” strategy can reduce anxiety and operational errors.
- Risk Warning: Emphasized the inherent risks of investing, especially the risks associated with leveraged funds and stock pledging. James strongly recommends that new students listen to several episodes of videos and be sure to carefully study the relevant handouts before making any investment operations, especially to understand the operating mechanisms and potential risks of leveraged funds and pledging.
- Non-Profit and Personal Experience Sharing: Re-emphasized that the CLAC channel, as a non-profit organization, does not charge students any fees and will not ask for remittances. All sharing on the channel is based on personal experience and is not professional investment advice. Therefore, students need to think, research, and bear all investment risks on their own. At the same time, students are reminded to beware of external fraudulent information impersonating CLEC.
- Market Volatility is Normal: Pointed out that market volatility is normal, with declines possible every year, 20% declines every three to five years, and 50% declines every ten to fifteen years. Investors should recognize that this is normal and not panic excessively, and they will get used to it by staying in the market long enough.
Learning Resources and Tools#
- Learning Resources: Suggested that new friends start by watching past videos from 2023, and then go back to review content from 2022 and earlier. At the same time, emphasized the importance of the handouts provided on the message board, with relevant links available on YouTube and the Cross House message board.
- Community Resources: Introduced the Taiwan 00662 Endurance Group and thanked the group administrator for their selfless contribution. Students can ask questions within the group, and the administrator will do their best to answer them, but emphasized that the group mainly answers basic questions from the handouts, such as what is 442, what is pledging, etc., to avoid off-topic discussions unrelated to the investment theme within the group. The group may have regional restrictions, and users in Asia may find it easier to join.
- NASDAQ 100 Index Funds: Recommended investing in NASDAQ 100 index funds, and pointed out that there are related products in many places around the world, including the United States, Taiwan, Hong Kong, Canada, Australia, the United Kingdom, Brazil, Japan, Malaysia, South Korea, etc. In Malaysia, it may be necessary to purchase through Phillip Securities.
- Best NASDAQ Document: Strongly recommended consulting the document titled “World’s Best NASDAQ United States NASDAQ 100 Index Fund Investment,” which contains information on NASDAQ funds and leveraged funds in various countries, with links on the message board. The document contains local information provided by friends from various regions, helping investors find suitable investment targets.
- YouTube Music Podcast: Detailed instructions on how to use the YouTube Music Podcast feature. Parts of the CLEC channel content can be transferred to YouTube Music, allowing you to enjoy ad-free listening and offline downloads, and guiding users on how to operate on mobile phones and web pages. Emphasized the difference between YouTube Music and a regular YouTube account, and that after joining a Podcast playlist, it will be displayed in the YouTube Music APP.
- Buffett Shareholder Letter: Emphasized the importance of reading the latest Buffett shareholder letter, especially the part about paying taxes. Shared a YouTube link and encouraged everyone to learn from Buffett’s investment wisdom and values.
- China NASDAQ 100 Index Fund: Introduced that there are already 12 NASDAQ 100 index funds in the Chinese market, and provided links to related ETFs to facilitate local purchases for Chinese investors. Even if there are purchase restrictions or premiums, these locally issued ETFs can be considered.
- Adlerian Purpose Theory: Strongly recommended watching videos related to Adlerian purpose theory as extracurricular homework to enhance happiness and self-awareness. Emphasized that understanding the purpose and meaning of life helps to maintain a peaceful state of mind in investing.
Asset Allocation and Pledging#
- Asset Allocation Briefing: Mentioned the asset allocation briefing produced by Chen Feng and the 00662 group, mainly for investors participating in stock pledging, covering allocation schemes for different situations, such as different allocations with and without pledging (442, 80/20) and related Excel analysis tables. Recommended watching the relevant videos, and if you have any questions, you can ask them within the group.
- Stock Pledging Information: Shared information on stock pledging from E.SUN Securities, with the current interest rate at approximately 3%, which can be applied for online, and provided contact information for interested students to inquire.
- Leveraged Funds and Pledging: Re-emphasized that leveraged funds should not be used for pledging, and emphasized that U.S. leveraged funds should be placed in a retirement account (Roth IRA) and not pledged.
- Importance of Roth IRA: Emphasized that leveraged funds must be placed in a Roth IRA retirement account, rather than a Block 9 com account, to avoid unnecessary tax burdens and pledging risks.
- Rust IRA’s Importance: Pointed out that even if a Rust IRA account has little initial capital, it should be gradually increased to eventually achieve a 442 allocation. Emphasized the importance of time accumulation and the benefits of long-term compounding.
- Retirement Fund Withdrawal: Discussed fund withdrawal strategies when there is no income after retirement. Emphasized that in the case of non-pledging, in order to cope with market risks, only a conservative 80/20 allocation can be used to avoid over-reliance on leverage.
- Other Income After Retirement: If there are other sources of income after retirement, such as rental income or side hustle income, leveraged funds can be held, and a more aggressive 433 allocation can be considered, but a 442 allocation is not recommended.
- Pledging and Asset Allocation: Whether retired or not, as long as pledging is carried out, it is recommended to use a 433 allocation and cooperate with a smart rebalancing strategy.
- Yuanta Securities Pledging: Reminded friends who pledge stocks at Yuanta Securities in Taiwan to pay attention to the need to renew their contracts every 18 months to avoid forced sale of stocks. Even if there is no borrowing, timely renewal is still required.
Investment Mentality and Insights#
- Individual Stocks and Index Funds: Emphasized the advantages of investing in index funds, pointing out that individual stocks are more volatile than index funds, and cited the stock price fluctuations of NVIDIA and Tesla as examples to illustrate that index funds can avoid affecting the mentality due to large rises and falls in individual stocks.
- Value of Long-Term Investment: Shared a case of a student who started investing in index funds in 2020 and earned eight figures by 2024, emphasizing the huge returns of long-term investment, which is better than short-term operations.
- Avoid Sub-Entrustment: Reminded to avoid investing through sub-entrustment to avoid increasing the complexity of tax filing due to excessive profits.
- Investment Philosophy and Market Cognition: Shared the transformation of a student from initial unfamiliarity with the market to ultimately understanding the concept of long-term investment, emphasizing that the highest realm of investment is to not pay attention to short-term returns, focus on long-term value, and achieve a selfless investment state.
- No Selling Principle: Emphasized the strategy of using stock pledges to borrow money to live on, the core of which is not to sell assets to achieve sustainable wealth. Criticized the idea of needing to sell assets for profit as short-sighted and a lack of financial knowledge.
- Channel Purpose: Re-emphasized that the goal of the CLEC channel is to help everyone achieve financial peace of mind and improve the quality of life.
III. Q&A Session#
Haoqing#
- Share 1: Shared the evolution of the tax system in the United States and views on the current government’s tax cut policy.
- James’s comment: Future tax reforms will not be retroactive, and existing Traditional IRAs will still be taxed. Even if the Trump administration does succeed in implementing large-scale tax cuts, tariff revenues will not be able to fully compensate for the reduction in individual income taxes.
- Question 1: The impact of the new U.S. government’s tax cut policy on investment?
- James’s reply: The world will not achieve a perfect tax-free state. Even if income tax is eliminated in the future, traditional retirement accounts (Traditional IRA) will still be taxed because the government needs alternative tax sources. Alternative tax sources such as tariffs may only be a transfer of the form of taxation, and the final tax burden may be comparable. The current retirement account investment strategy should not be adjusted based on future uncertain tax changes, but should be carried out according to the established plan. Even if there are adjustments in the future, there will be corresponding alternatives, so there is no need to worry too much. Don’t bet on something that may not happen in the future.
- Question 2: Views on the U.S. health insurance system and the impact of future tax systems and AI development on investment strategies?
- James’s reply: The U.S. health insurance system does have shortcomings, such as rejection of claims and delays, but health is very important and should not be sacrificed for the sake of saving money. Encourage everyone to have the ability to distinguish between minor and serious illnesses, and not to turn minor illnesses into major illnesses. Minor illnesses and pains can be observed on your own, but you must have the knowledge to judge major illnesses, and you must go to the hospital when necessary, and you cannot sacrifice your life in order to save money. Rich people can not rely on insurance and cover medical expenses through wealth. In the future, even if AI develops and the tax system changes, it will not have much impact on the current retirement account investment strategy, so there is no need to worry too much. Encourage looking at government taxation from a business perspective and understanding the logic of increasing revenue and reducing expenditure. If a zero tax rate is really implemented, then consider how the government can increase revenue, such as selling gold card immigration.
Summer#
- Question 1: A non-U.S. resident (NR) in mainland China, holding a U.S. dollar account, has purchased QQQM and QLD. Considering the risk of estate tax, wants to switch to EQQQ issued in Europe. Inquired about the reasons for the price difference between European and American market ETFs and suggestions for operation?
- James’s reply: It is strongly not recommended to open an account with a brokerage firm outside the United States because there is a risk of estate tax. It is recommended to close the U.S. account as soon as possible and consider opening an account with a Hong Kong brokerage firm to purchase NASDAQ index funds listed in Hong Kong, such as 7261 (double leverage), 7266 (Southern NASDAQ). Emphasized that it is also feasible to purchase U.S. dollar-denominated funds in Hong Kong. You shouldn’t care about the U.S. situation.
- Question 2: Regarding the understanding of whether holding non-U.S.-issued ETFs in a U.S. brokerage account can avoid estate tax?
- James’s reply: Estate tax is related to where the brokerage account is located, not where the ETF is issued. As long as you open an account with a U.S. brokerage firm and fill out the W-8BEN form, you are subject to U.S. estate tax. Even if you purchase ETFs issued outside the United States, you still need to pay estate tax. U.S. tax residents have estate tax, and if they need to fill out a W-8BEN, they have to pay estate tax. It is recommended to consult IBKR to confirm specific tax issues, or consider brokers in other regions such as Phillip Securities in Singapore to avoid U.S. estate tax.
Brian#
- Share 1: Shared that he has been under a lot of work pressure recently and feels slightly depressed, but feels comforted when spending time with his children, and said that CLEC content has been helpful to him.
- James’s comment: Recommended watching videos related to Adlerian purpose theory, the focus should not only be on work, but should be shifted, work is not everything in life. Money will not bring happiness, it can only reduce worries and increase choices. The meaning of life lies in love and being loved, and success lies in how many people remember and love you after you pass away. Emphasized finding comfort in Lao Zhuang philosophy. It is common to run into walls at work, the important thing is to shift your focus away.
Sophia#
- Question 1: Retired, using an 80/20 allocation, QQQ holdings are less than 80%, some funds are in cash, considering converting some QQQ to QLD for long-term holding, is it feasible? Some of the money wants to be left to her grandchildren.
- James’s reply: It is not recommended to transfer funds from a retirement account to QLD. QLD still needs to be converted back to QQQ in the end, which is suitable for young people or children’s accounts with a long-term tax-free period. If your child is 5 years old, and has a hundred or two dollars, it is no problem to buy QLD. For retirement accounts, just maintain an 80/20 allocation, and don’t pursue high risk. Emphasized that you must calculate clearly whether you can file your own taxes at age 18, and that children have $50,000 of long-term tax-free funds. For the money that is to be left to grandchildren, if the funds have reached more than 55 times the annual expenditure, the excess part can be considered to set up a custodial account for the grandchildren, and donate a certain amount each year, which can avoid estate tax and allow the grandchildren to get in touch with investment and financial management as early as possible. The key is that you must first be financially free.
Shufen#
- Share 1: Shared the comparison between her mother’s hospitalization experience in Taiwan and her friend’s father’s experience in a nursing home in the United States, reflecting on Taiwan’s national health insurance and the U.S.养老体系 (pension system/care system), hesitant about where to spend the future, and not knowing where home is.
- James’s comment: The United States has a safety net of social security systems such as Medicare and Medicaid, which provide basic medical and pension security for low-income people, and the country will support those over 65 who have no money. Nursing home services in the United States are luxurious but expensive, while Taiwan’s national health insurance benefits are good but may not be luxurious. The choice of where to spend your time should take into account personal financial status, comfort of life, and relationships with relatives and friends. If you don’t have money, you can get Medicare. Emphasized that the meaning of life lies in connection, and encouraged young people to have children as early as possible to establish family connections. Wherever the children are, that is where the home is, and you should have children as soon as possible. Emphasized the importance of connections in old age, and encouraged having children even if you are not married.
IAM#
- Question 1: Regarding wealth awakening, early earning goals are easy to achieve, but larger wealth goals create doubt, how to understand this change in mentality?
- James’s reply: After the early material desires are satisfied, a sense of emptiness will follow, and the happiness brought by material consumption is short-lived, and you should turn to spiritual consumption. The real happiness lies in having the ability to buy but choosing not to buy, and using money to improve your spiritual life, such as family gatherings, travel, etc. Material things should be reduced as much as possible. Wealth accumulation should look to the future and see the potential of long-term compounding. For example, the current 7 million assets may grow to hundreds of millions under long-term investment. You should not look at 7 million, but at 300 million. You see the present, he sees the future.
Jimmy#
- Share 1: Supplemented the view on境界提升 (jingjie tisheng - elevation of one’s spiritual state), citing Zhuangzi philosophy, emphasizing the importance of mind state, and how to improve cognitive境界 (jingjie - realm/state) through practice. Emphasized the Tao Te Ching, and the view of all things in the world.
- James’s comment: Knowledge itself is simple, but it is not easy to improve cognitive境界 (jingjie - realm/state). Practice is the key to improving境界 (jingjie - realm/state), and encouraged everyone to try operations such as stock pledging, so that they can truly understand after experiencing it personally.
IV. Highlighted Quotes#
The market situation has nothing to do with us anymore. – James
This view emphasizes that personal investment decisions should be independent of external market noise and focus on the execution of long-term investment strategies.
Investing in the United States is absolutely correct. – James
Reiterated confidence in the U.S. economy and market, encouraging investors to stick to investing in the United States.
Investing in index funds is so simple, just buy them and don’t pay attention to them. – James
Emphasized simplifying the investment process, holding index funds for the long term, and reducing unnecessary market attention and operations.
The highest realm of investment is the view of no reward. – James
Pointed out that true investment should transcend the obsession with short-term returns and focus on long-term value and asset accumulation.
Borrowing money and never selling, borrowing money to live on will never run out. – James
Summarized the core idea of the stock pledging strategy, emphasizing the sustainability of assets and the liquidity of funds.
Money really won’t bring you happiness, remember this thing forever, don’t say that if I have money, I have everything, no, having money just eliminates a lot of worries or troubles, or adds more choices. – James
Emphasized the limitations of money, true happiness comes from the spiritual level and interpersonal relationships, not material wealth itself.
We can’t please everyone, nor do we need to, but we shouldn’t become someone who is annoying. – James
Provided a guideline for interpersonal communication, not to deliberately please, but to avoid becoming an obnoxious person.
What is悟 (wu - enlightenment)? It’s no past, no future. – James
Explained the realm of “悟 (wu - enlightenment)”, emphasizing the importance of living in the present and reducing worries about the past and future.
The world exists only in our hearts. – James
Emphasized the importance of subjective consciousness, the impact of external things on individuals depends on inner cognition and attitude.
People are selfish, I am here today to talk to you a lot, you think you have benefited, in fact I am selfish, I am satisfying my sense of accomplishment. – James
Frankly shared the motivation for personal behavior, emphasizing that altruistic behavior also includes selfish elements, and encouraging treating yourself well.
V. Summary#
This episode of the CLEC Investment and Financial Management Channel once again conveyed the core concepts of easy investing and long-term holding. James explained the index fund investment strategy in a simple and understandable way, and combined practical cases and philosophies of life to answer the questions of students in investment and life. He emphasized that investors should stick to long-term investment and not be shaken by short-term market fluctuations. At the same time, they should also pay attention to the spiritual level in life and pursue both financial and spiritual freedom. Through this exchange, students not only gained knowledge of investment and financial management, but also had a deeper understanding of the true meaning of life value and happiness.
Disclaimer: This article is for personal study notes only and does not constitute any investment advice.