00543 What to Do When the Market Is Fearful? Market Fear and the Mindset for Getting Rich in the Prison of Real Estate!

I. Topic of the Session

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This session focuses on the mindset and actions investors should adopt amidst optimistic market expectations. The core idea is that the market is on the verge of a significant rally, and investors should enter decisively without hesitation. Teacher James emphasizes that the key to successful investing is “survival first, profit later.” Only by staying in the market for the long term and enduring all volatility can one ultimately enjoy the rich rewards of compounding. Therefore, constructing an asset allocation that allows you to weather any storm is crucial.

II. Briefing Content

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Market Views & Investment Mentality

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• Market Outlook & Capital Flow: The market is poised for a breakout to new highs. A strong rally is expected in December. An important backdrop is that QT (Quantitative Tightening) ended on December 1st. The central bank will now inject about $15 billion into the market weekly, totaling around $50 billion per month. This will create a massive capital flow, driving the market upward.
• The First Principle of Investing: Survive:
  • An annualized return of 15% is predicated on being able to stay invested for over 30 years without being liquidated due to fear or excessive leverage. If you exit midway, even the highest returns are irrelevant to you.
  • It’s better to choose a stable asset allocation that can survive any risk, even if the annualized return is only 7%. The key is to survive for 30 years or even longer.
  • The core of investing is doing the right thing. Regardless of the market’s current state, you should always be buying. Be happy when it goes up, and don’t panic when it goes down.
• Coping with Market Sentiment:
  • The principle of “be greedy when others are fearful, and fearful when others are greedy” is hard to execute. The simplest way to practice it is to resolutely not sell.
  • Investors need to admit that they “know nothing” and cannot predict market highs or lows. This allows them to respect the market and hold for the long term.
  • Teacher James’s channel teaches only one thing: buy bravely and consistently, never sell, and you will succeed.

Investment Tools & Strategy Introduction (QQQI)

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• Background: To provide a new option for retirees who need a stable cash flow.
• Ticker Introduction: QQQI (Nasdaq-100 Enhanced Opt & Growth ETF).
• Features & Advantages:
  1. High Dividend: The dividend yield can reach 12%. For example, an investment of $1 million can generate $120,000 in cash flow per year ($10,000 per month); an investment of $5 million can yield $600,000 per year ($50,000 per month).
  2. Lowers the Retirement Threshold: For retirees who haven’t prepared 25-30 times their annual expenses, investing just 8-10 times their annual expenses in QQQI can generate enough cash flow to cover living costs.
  3. Operational & Tax Advantages: QQQI distributes dividends derived from a portion of capital gains (from selling appreciated stocks) and income from selling covered call options (about 4-5% annually). For Taiwanese investors using a brokerage with QI (Qualified Intermediary) status (like E.Sun, Yuanta, Cathay, SinoPac, etc.), most of the dividend income, being sourced from capital gains, is eligible for a tax refund. Approximately 96% of the dividends can be refunded.

Personal Finance & Life Philosophy

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• Act Decisively: Investors who are still hesitating and haven’t entered the market should stop “daydreaming.” Be “ruthless” in your actions—immediately sell what you shouldn’t hold, buy the correct asset allocation, and then “get on the bus and go to sleep.” Financial freedom won’t be far off.
• A House is a Consumer Good, Not an Investment:
  • If you’ve reached a level of wealth where “buying a house is like buying a pair of slippers,” then buying a luxury home to enjoy life is perfectly fine.
  • But beware of becoming “high-income but exquisitely poor,” where your cash flow is extremely tight just to maintain a lavish home. This is akin to buying yourself a giant “cage.”
  • The Correct Sequence: You should invest first and let your money make money. For example, if you have $1 million now, first invest it to grow into $200 million, and only then take out $100 million to buy a house. This way, you can truly enjoy the pleasure of living without being shackled by your property.
• Subconscious and Manifestation: It is recommended to watch a video in the presentation notes that teaches how to connect your subconscious with universal energy. The core principle is to “believe” first, then meditate in a state of peace, happiness, and love, which makes it easier to manifest your desires.

Other Supplements & Reminders

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• Fraud Prevention: A reminder that there are many impersonators and scams on Clubhouse and other platforms. Scammer IDs (like clecchman) are very similar to the teacher’s ID (clecchirman) and use GPT to mimic his tone in private messages. Please be sure to verify by checking follower counts (the teacher has 4.3K followers) and other means.
• Book Commentary: Mentioned that “Dr. Huang Pei-Yuan’s Bible of Financial Management” is a good book, but its sequel, “Financial EQ,” was likely a cash grab by the publisher with mostly filler content. Reading the first book is sufficient.
• Canadian Tax Update:
  • 2025: 50% of capital gains will be included in the year’s income.
  • Starting 2026: For capital gains exceeding C$250,000, 67% of the excess amount will be included in the year’s income.
  • As long as you don’t sell, no capital gains tax will be incurred.

III. Q&A Session

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Celine

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• Sharing:
  1. Regarding QQQI Tax Refund: Taiwanese investors need to confirm if their brokerage has “QI status.” If so, they can get a tax refund on their QQQI investment. The method may vary; some brokerages don’t withhold tax upfront, while others withhold and then refund it. Most medium to large brokerages have QI status.
  2. The Ease and Persistence of Investing: Any diligent investment method can make money, but Teacher James’s method is the most effortless and worry-free. However, “buy whenever you have money, and never sell” is easier said than done. It requires personally experiencing severe market volatility (like in 2022) to truly test one’s mentality.

Haiwai Guzhong

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• Question: With the development of AI, will countries like Vietnam and Indonesia lose the opportunity to transition from labor-intensive to tech-based economies, as Taiwan and South Korea did, and thus be permanently locked at the bottom of the value chain?
  • Teacher James’s Reply: This issue is more severe than imagined. The impact of AI is global, not just limited to developing countries. Taiwan’s semiconductor industry could also be replaced by fully automated AI factories. The future society will be divided into a tiny minority of capitalists (about 0.1%) and a vast majority of ordinary people (99.9%) dependent on social welfare. The only way out is to become a capitalist—get on board (invest) as soon as possible to enjoy the dividends of this technological revolution. Otherwise, everyone could be left behind by the times.

Zhihong

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• Question: I am 45, my father has cancer. After selling a house, we have NT$8 million in cash, but annual expenses are NT$1.1 million. I want to take out a NT$6 million loan against my mortgage-free house to invest in QQQI, using the cash flow to support my father. I also hope my father will invest, but it’s hard to convince him. What is your advice?
  • Teacher James’s Reply: You are very filial, but you don’t need to worry excessively about your father’s finances. Right now, companionship and care are far more important to your father than investment advice. You should spend more time with him and cherish this period. You can use the NT$6 million loan to invest for yourself, and the returns can be used to support your mother in the future. You don’t need to spend excessively on talent classes for your children; playing with them is the best education.

Yue Feng

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• Question: Fubon in Taiwan recently launched a Nasdaq-100 index fund with an “automatic dip-buying” feature. Can I buy this instead of 00662?
  • Teacher James’s Reply: Don’t buy it. It’s a mutual fund with extra custodian fees. And you don’t need a “dip-buying” feature; the market is about to rally strongly. If you have money, you should buy 00662 immediately. Don’t play around with those complicated, esoteric products.

Sherry

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• Question 1: I have initial capital and a monthly salary. Should I DCA monthly, or accumulate for a year and then rebalance according to the 433 strategy?
  • Teacher James’s Reply: Buy whenever you have money each month. Don’t wait a year.
• Question 2: Using the 433 allocation, what should I do with the money borrowed from a stock pledge if I don’t need it immediately?
  • Teacher James’s Reply: (Extremely Important Warning!) If you are in the United States, money borrowed from a pledge absolutely cannot be put back into a securities account. The fund flow must be clearly for consumption. A friend has already been asked by Schwab to close their pledge account for this reason, or face a forced sale of stocks to repay the loan. The consequences are severe. If you are not in the US, this amount (at most 2% of assets borrowed annually) is small, so reinvesting it won’t have a major impact.

Frank

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• Question: I am 40, with a NT$5.5 million personal loan and NT$7 million in my own funds. Can I use the most aggressive “442” asset allocation?
  • Teacher James’s Reply: Absolutely not recommended. The risk is too high; even I wouldn’t do that. Use the “433” allocation at most. As long as there is debt, there is risk. You cannot be overly aggressive.

Luu

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• Sharing: Sending greetings from Bali, complimenting the teacher for looking like Chow Yun-fat with sunglasses on in a group photo, saying he looked very charming.

Lily

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• Sharing:
  1. Stocks vs. Real Estate: After some thought, she concluded that stocks grow through compounding, while real estate’s advantage is leverage. However, due to the growth rate difference between stocks (~10%) and real estate (~6%), plus loan interest, the leverage advantage of real estate is depleted after about 7-8 years. After that, the growth curve of stocks will far surpass that of real estate.
  2. Cash Management in China: In the Chinese stock market, unused cash can earn interest through “government bond reverse repos,” which can be selected on a daily basis and are very flexible. The interest rates can sometimes be very high before public holidays.
• Question:
  1. Which Nasdaq-100 ETF should I invest in in China?
  2. My personal financial situation is very good, and I hope to maximize long-term returns. How should I allocate my assets?
  3. My current small brokerage in the US charges commissions as high as 1.5-2%. Should I move to Schwab?
  4. How can I join the LINE group?
• Teacher James’s Reply:
  1. The 159509 she bought before is a technology fund, not a Nasdaq-100 index. It’s recommended to choose the tickers we suggest.
  2. Since you can tolerate high volatility, you can use a very aggressive allocation: 85% QQQ + 10% QLD + 5% TQQQ, and rebalance once a year.
  3. Transfer immediately! Your brokerage’s fees are extremely high and it’s not safe. Schwab is the best choice—it’s secure and commission-free.
  4. The LINE group has regional restrictions; US numbers might not be able to join, but you can try.

Susan (AV)

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• Sharing: She is a Buddhist. After listening to the teacher’s class, she felt like the “God of Wealth had arrived,” and she was finally liberated from the “samsara” of daily market-watching, chasing highs and lows, and constant anxiety. She converted all her stocks to 00662, feels an unprecedented sense of peace, and has started teaching her children to invest so they can all be wealthy in the future. She also strongly agrees with the teacher’s educational philosophy, sharing her own experience of supporting her son’s dream to pursue photography instead of going to university, and how he ultimately lived a wonderful life.

Danken

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• Question: I just arrived in the US. The best option in my 401K is an S&P 500 fund. My Roth IRA is allocated to QLD, and I have cash (in BOX) in my personal brokerage account. In the long run, the proportion of the S&P 500 will become too high. How should I adjust?
  • Teacher James’s Reply: Your setup is fine. Max out your 401K with the S&P 500 and max out your Roth IRA with QLD. In your personal brokerage account, keep six months of living expenses in BOX (don’t buy SGOV, as the dividends are taxable), and invest the rest of the funds entirely in QQQ.

Chris

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• Sharing: He helped his mother get a home equity line of credit for investment purposes. In the process, he discovered that a “villa” his mother was proud of was actually built on agricultural and pastoral land, which the bank would not appraise, making its value very low. This experience made his mother realize that the value of real estate is not as stable as she thought, and she began to accept the idea of investing in 00662.

Washing, W

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• Question: I am 62 and a half. Should I start collecting my own Social Security now, or collect half of my ex-husband’s first and wait until I’m 71 to collect my own?
  • Teacher James’s Reply: Don’t wait. Compare which amount is higher right now and start collecting that one immediately. The returns from investing the money you receive will far exceed the increase from waiting.

Paiqing

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• Sharing: Responding to a previous member whose family member has lung cancer, she shared her own experience of her father passing away from the same illness 10 years ago. She comforted the member, saying that health insurance covers a lot of the costs, so money is not the biggest issue. What’s more important is to cherish the time with your father. Take him out more, because in the later stages of lung cancer, bone metastasis can affect mobility. You will have money in the future, but the time for companionship is finite.

Li Xianhong

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• Question: The teacher said not to buy insurance. Does that include term life insurance?
  • Teacher James’s Reply: If you still have young children to support, buying term life insurance is acceptable.

YKY

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• Sharing and Questions:
  1. Sharing: From mainland China, he just discovered the channel last week and felt a sense of “sudden enlightenment,” with hope for his future. He and his wife had followed the traditional path of buying a house and taking on a mortgage, leading to immense pressure. After listening to the teacher’s classes, his mindset completely changed. He no longer frets over grievances at work because he knows he will be wealthy in the future.
  2. Question 1: I have a mortgage (covered by the Housing Provident Fund) and a personal loan. How should I handle them?
  3. Question 2: I have 100,000 RMB available for investment (after setting aside six months of living expenses). Should I allocate it as 80% index / 20% cash?
  4. Question 3: I’ve opened a Schwab account and plan to open an account in Hong Kong in the future for pledging. Is this plan feasible?
• Teacher James’s Reply:
  1. Continue to use the Provident Fund for the mortgage. For the personal loan, don’t rush to pay off the principal; just pay the interest and use it as a revolving line of credit.
  2. Yes, apply an 80/20 allocation to all your investable assets. The 20% cash can be put into a money market fund.
  3. The plan is excellent. Start transferring some funds to Hong Kong annually now. Once the capital reaches a certain size, you can start pledging. This is a correct ten-year plan. Also, don’t be afraid to have a second child because of financial pressure. You will be very wealthy in the future, and having more children will make your family happier.

IV. Insightful Quotes

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You only have a tomorrow in the market if you survive; only then can you talk about a rate of return. – Teacher James

This quote emphasizes that the prerequisite for long-term investment success is the ability to withstand any market fluctuation without being forced out. Survival is the first element of profit.

If you can buy a house like you buy a pair of slippers—just get another pair if you don’t like them—then you can buy one. If you can’t be that magnanimous, then a house is just a big cage. – Teacher James

This quote vividly defines a house as a consumer good rather than an investment, advising people not to be shackled by property and become “exquisitely poor.”

Only the capitalists can enjoy the greatest dividends of human transformation… otherwise, everyone will perish. – Teacher James

In response to the impact of AI on future social structures, the teacher points out that in the face of disruptive technological change, becoming a capitalist (an investor) is the only way out for ordinary people.

After I learned about the teacher, I felt as if the God of Wealth had arrived. I am about to escape that cycle of samsara. – Susan

A student shares her feeling of liberation from the “samsara” of chasing highs and lows and daily anxiety after learning the investment philosophy, expressing her hope for the future.

When I saw the teacher’s video on Saturday, I had a sudden enlightenment. I feel there is still hope for my future. – YKY

A young student from mainland China, who was feeling suffocated by the “buy a house, pay off the mortgage” model, felt his life was illuminated and his hope was renewed after being exposed to the investment philosophy.

Money is actually the least of your worries. What matters is how you accompany your father to the end… cherish the time you have with him. – Paiqing

A student uses her personal experience to comfort another member whose family member has cancer, reminding everyone that in the face of life’s ultimate challenges, money is far less important than love and companionship.

V. Summary

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This session began with a very optimistic market forecast (end of QT, influx of capital) and reinforced CLEC’s core investment philosophy: simple, persistent, and brave. Teacher James not only gave clear instructions—“keep buying, don’t sell”—but also built a solid theoretical foundation from both psychological and strategic standpoints. Whether it was emphasizing the importance of “survival,” introducing the powerful retirement cash flow tool QQQI, or subverting the traditional concept that “a house is a cage,” the goal was to help investors establish a correct view of wealth, break free from anxiety, and embark on a relaxed yet firm path to financial freedom. The enthusiastic sharing and questions from the students also provided vivid interpretations and applications of these concepts in real-life situations.