00550 Not Everyone Is Suited to Get Rich Using Borrowed Money; Psychological Resilience Is More Important Than Rate of Return!

I. Theme of the Episode

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The core of this livestream lies in exploring and shaping the correct mindset for investors. Teacher James emphasizes that successful investors, like excellent entrepreneurs, should always remain extremely optimistic, always face the sunshine, and firmly believe that the market will eventually rise. Investors need to learn to filter out all external noise—such as market volatility, international situations, and analyst predictions—and focus on the asset allocation and long-term strategies they can control. At the same time, the course delves into how to balance the rational potential for gain with emotional anxiety when facing leveraged investing, ultimately emphasizing that mental health should take precedence over potential financial gains.

II. Briefing Content

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Core Mindset & Principles for Investors

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• Filtering Invalid Information: Teacher James points out from the start that market volatility, international situations, market analysis, financial reports, and economic conditions are all noise. Investors should not waste time on these unpredictable or uncontrollable factors. Any analysis is either hindsight or guesswork, with accuracy no better than a coin toss.
• Maintaining Extreme Optimism: The mindset of a successful investor is similar to that of an entrepreneur (like Elon Musk). Although Musk’s companies have repeatedly faced bankruptcy, he has always remained extremely optimistic. Investors should do the same, firmly believing that the market moves upward in the long term and that technology and human society will continue to develop.
• Investor’s Beliefs:
  1. Investors are always extremely optimistic.
  2. Investors always face the sunshine.
  3. The market will eventually rise.
  4. Investing requires patience; wealth is worth the wait.

Important Reminders & Clarifications

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• Correction Regarding Chinese ETFs: Teacher James solemnly apologized and corrected his previous view, pointing out that products like the “Southern Dividend Low Volatility 50 ETF” (515450) in mainland China are misleading. The yield charts displayed on their websites include dividend reinvestment, while the actual stock price may be falling. He explicitly advises not to invest in such products and stated that he is still looking for suitable high-dividend solutions for investors in mainland China and Hong Kong.
• Beware of Scams: The teacher emphasized that he will not actively DM anyone on Clubhouse or other platforms, nor will he have any paid groups or manage money for others. For example, there are fake IDs in Clubhouse like cchc.james followed by an m or cec.chairman. Any unsolicited greetings or requests for money transfers are scams.
• Communication Channels: Questions should be submitted via YouTube comments or Email; the teacher will try to reply within two days.
• No Official Groups: CLEC has no official groups. Although some students have established WeChat groups out of goodwill, there are risks of bans and scammers infiltrating them. It is suggested that investors form small, closed groups composed of friends and family for discussion, but no group represents CLEC.

Discussion on Currency & Exchange Rates

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• The Hegemonic Status of the US Dollar: Discussed how the status of the US dollar as an international reserve currency is hard to shake. For a country’s currency to internationalize, its industrial strength and comprehensive national power must be strong enough to provide the products and services the world needs, which is precisely the hardest part.
• Impact of Exchange Rates on Individuals: For ordinary people, whether their domestic currency is an international currency matters little. Exchange rates mainly affect national purchasing power. For example, the depreciation of the New Taiwan Dollar against the US Dollar means the cost of traveling abroad will be higher. Exchange rate issues are complex political economics, involving industry, policy, history, and many other factors.

Reason vs. Emotion in Leveraged Investing

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• Case Analysis: A student wrote in to share his psychological conflict. Through rational analysis, he believes that leveraged investing via credit loans or mortgages can quickly accumulate principal and is a correct decision.
• Emotional Obstacles: However, when he prepared to actually borrow the money, he began to feel extreme anxiety and irritability. He couldn’t help but watch the market every day, and even small fluctuations made him restless and unable to sleep.
• Teacher James’s Advice:
  • Mental Health First: The teacher explicitly pointed out that if borrowing money to invest causes you such great psychological pressure, then do not borrow. Mental health is far more important than potential financial returns.
  • The Challenge of Unity of Knowledge and Action: This case is typical of the conflict of “wanting to get rich but afraid to carry leverage.” Investing is like taking medicine; even if it is good medicine, if the side effects are fatal (like the severe anxiety in this case), it must absolutely not be taken.
  • Self-Assessment: The fact that he thinks about details like watching the market daily and percentage fluctuations indicates that this investor has a naturally nervous personality and is not suitable for bearing the psychological pressure brought by leverage. Investing peacefully without borrowing money is the path more suitable for him.

III. Q&A Session

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Huizhen

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• Sharing: She is a civil servant (nurse). After listening to the teacher’s channel, she canceled several matured investment-type insurance policies and put all funds into 00662 and 00670L for a 433 asset allocation. Because she feels her future pension is secured, she decided to retire early this year at 55 and no longer consume herself for work.
  • Teacher James’s Comment: An excellent decision. The teacher confirmed she has done asset allocation and kept a cash position (00865B), and her assets are more than 15 times her living expenses. Since her monthly pension is enough to cover daily expenses, the investment portion can grow peacefully without being touched. The teacher encouraged her to retire early and experience more of life, such as spending time with family, reading, and studying philosophy.
• Supplementary Point:
  • The teacher quoted Elon Musk: “Humans were not born to work; they were born to think about problems,” encouraging everyone to think and learn more.

Leo

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• Sharing: Having followed the teacher’s channel for over a year, he has internalized the concepts of pledging and long-term investing, and is now indifferent to workplace politics and others’ opinions. He mentioned the positive news from TSMC’s earnings call, stating that while most funds are still in the teacher’s 433 allocation, he also allocated a small amount to 0050 Leveraged (2x) because he is bullish on Taiwan’s tech strength. He is very grateful to the teacher and the community for the benevolent knowledge that allows everyone to grow together.
  • Teacher James’s Comment: AI is currently a money printer, and TSMC is at the core of the AI supply chain. It is the only non-US company in the global top ten by market cap (excluding oil companies), which is the pride of Taiwan. However, he also reminded that the growth of a great company takes a long time; TSMC, Apple, and Nvidia all went through three or four decades of development. Therefore, investing is not true investing if it’s not for more than thirty years.

Angela

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• Sharing: She and her husband used to be very frugal people who lacked security regarding money. After encountering the teacher’s investment philosophy, their mindset changed, and they recently took their family on a nine-day independent trip to Japan. However, she still felt guilty when spending money, feeling that she wasn’t spending money earned through hard work.
• Question: How to break out of this old mindset that “spending money makes one feel guilty”?
  • Teacher James’s Reply: First, the teacher suggests she can think of it as “spending borrowed money,” which reduces the psychological burden. This is the rule of the capitalist game. Second, having the wealth to enjoy life is a gift and luck, and there is no need to feel guilty about it. Most importantly, happiness is good for health. Happy experiences like travel, exercise, and meditation can promote the growth of “hippocampus” nerve cells in the brain, helping to keep thinking clear and delay aging. Therefore, spending money for happiness and health is very worthwhile.

Steven

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• Question: His son opened a company in the US in 2025 and is confused about tax filing. The company has dividends; should he file corporate tax or personal income tax? How to plan to save more on taxes?
  • Teacher James’s Reply: This is a tax planning issue. Suggestions:
    1. Keep most of the profits in the company and pay the relatively lower corporate tax (about 18%).
    2. The son can take a portion of the salary from the company as personal income, keeping the marginal tax rate for personal income tax at a lower level (e.g., within 22%), roughly over a hundred thousand dollars.
    3. Many company expenses can be used for tax deductions.
    4. Regarding retirement accounts, it is strongly recommended to only use Roth 401K and Roth IRA; absolutely do not use Traditional (pre-tax) accounts to avoid high tax rates during future conversions.

Winnie

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• Question: She has three years until retirement. She plans to convert $300,000 from her Traditional IRA to a Roth IRA annually after retirement, estimating a tax of $120,000 per year for 8 years. Currently, she can only save enough for two or three years of taxes in advance and asks how to prepare for this tax payment.
  • Teacher James’s Reply:
    1. Do not deliberately save money to pay taxes; solve this through asset allocation and financial tools.
    2. The preferred solution is stock pledging (securities-based lending) to pay taxes. Absolutely do not sell assets in the Investment Account (Blockage Account), because selling will generate new capital gains tax, complicating the issue.
    3. Your total assets include Blockage, Roth, and Traditional accounts. Calculate if 2% of your total assets is enough to cover the annual tax.
    4. If the pledging limit is insufficient, consider transferring part of the funds to Roth and another part to the Blockage account during the Roth Conversion to increase the assets available for collateral.
    5. The last choice is to use tax withholding directly from the Traditional IRA during conversion, but this will lose the compound interest growth on that portion of the principal.

SJ

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• Question:
  1. She is a new student who just repatriated funds from overseas (IB, Schwab) to Taiwan, ready to put them into the 433 allocation. Facing the current market highs, she is hesitant: should she invest a lump sum?
  2. She plans to invest 20,000 monthly in the future; how should she allocate it?
  3. There is a large expense at the end of March (about 9% of total assets); is it feasible to pay via pledging? How to repay the interest?
  4. Should the emergency fund be independent of 00865B (cash position)?
  • Teacher James’s Reply:
    1. Invest immediately. Do not time the market. According to your 433 asset allocation plan, buy at market price as soon as the funds arrive. The market is very likely to rise significantly in the future.
    2. The monthly DCA amount is small, so you can buy freely. For example, buy more leverage if the market drops, replenish the cash position if it rises, and review/balance uniformly at the end of the year.
    3. Paying for large expenses via pledging is completely feasible. Interest is also paid by borrowing more money through pledging; do not touch the principal.
    4. There is no independent emergency fund. All cash should be within your asset allocation (i.e., 00865B). We do not hold non-yielding cash. Just sell the necessary living expenses from 00865B at the beginning of each month.

Yonglin

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• Question: She has held a Green Card in the US for 20 years. Recently, she heard that Green Card holders are being scrutinized at customs, so she is considering whether to naturalize. The reason for hesitation is that naturalizing in the US means giving up Chinese citizenship.
  • Teacher James’s Reply: Naturalize immediately, do not delay! This is very clear and firm advice. To visit family in China, just apply for a visa with a US passport; there is no inconvenience.

S

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• Question: He is from Malaysia and wants to invest in QQQI for cash flow, but faces a 30% dividend withholding tax which cannot be refunded. Which is better, buying QQQ or QQQI?
  • Teacher James & Ling’s Discussion Reply:
    1. When to choose QQQI/JEPQ.L: If you are retired or semi-retired and need stable cash flow to cover living expenses, then this type of high-dividend ETF is suitable. It sacrifices some growth for cash flow. If you are young and have salary income, you should not touch such products and should focus on asset appreciation by investing fully in QQQ.

Ling

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• Sharing:
  1. Regarding S’s question, she shared the situation in Singapore: Like Malaysia, there is no tax treaty with the US, and the 30% tax is also non-refundable. She found an alternative: JPMorgan’s JEPQ.L listed on the London Stock Exchange. This is a DL (distributing/dividend-paying) ETF. Because it is listed in the UK (likely Irish-domiciled UCITS structure), Singaporean investors do not face withholding tax issues when buying it, and the final yield is similar to QQQI, perhaps even slightly higher.
  2. After discussing with her family, they decided to choose larger cash flow rather than leaving a larger inheritance, believing that enjoying life in the present is more important.
  3. For investors whose assets are not massive but have a relatively high demand for cash flow, a mixed strategy can be considered. For example, adding 10% QQQI/JEPQ to the portfolio can increase cash flow, and because QQQI has lower volatility, it can effectively lower the volatility of the entire portfolio, thereby reducing the risk of stock pledging.
  • Teacher James’s Comment: Ling’s point is very correct. The JEPQ.L solution she provided is excellent and solves pain points for non-US tax residents. At the same time, adding QQQI to reduce overall asset volatility is also a very good risk management concept.

Cathy

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• Sharing: She recently started using an AI model trained on all of Teacher James’s content (J-Men-AI) for conversation and felt the experience was very good, with replies more precise than general GPT models. She suggests everyone try using this AI to sort out their investment questions.
  • Teacher James’s Comment: Highly encourages everyone to learn to converse with AI. Suggests creating independent chat windows for different aspects of life (such as financial management, health management), continuously feeding the AI your personal information (such as financial status, medical reports, diet records), and letting it become your exclusive personal consultant.

Jenny

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• Sharing: She is a university lecturer and observes that students nowadays tend to use AI as an object for socializing and confiding, lacking the willingness and ability to interact with people in reality. She feels worried about this.
• Question: How does the teacher view the impact of AI on the social life and education of the younger generation?
  • Teacher James’s Reply: This is a common phenomenon, but there is no need to panic excessively. He used a historical analogy: If you went back to the Ming Dynasty and told people then that there would be mobile phones, airplanes, and cars in the future, they would also be terrified, worrying that carriage drivers and weavers would lose their jobs and society would collapse. But the fact is, human society adapted to technological progress, and life became better. AI is the same; it will make our lives better and better. We should embrace the future optimistically instead of peddling fear.

Flo

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• Question: For young long-term investors, after investing 30% cash during a market pullback, how can they “earn back” this portion of cash? Is it by reducing DCA amounts?
  • Teacher James’s Reply: This is a conceptual misunderstanding.
    1. Young investors do not need to keep 30% cash. The so-called 30% cash (in the 433 allocation) is mainly prepared for retirement or those who cannot bear high volatility risk.
    2. For young investors in the US, the correct approach is: Prioritize maxing out Roth 401K and Roth IRA. With the remaining money, after keeping about half a year’s living expenses, invest strictly 100% immediately into your Brokerage Account whenever you have money. Do not keep cash waiting for a pullback.

A-Gan

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• Question:
  1. Finland’s capital gains tax is very high (over 30%). Should she send money back to Taiwan for investment?
  2. She heard that lending is easier at Yuanta Securities in Taiwan, while Cathay United Bank gives her a high rate (8%-9%).
  3. Should she buy all 00662 in Taiwan?
  4. The file regarding the Global Nasdaq 100 ETF the teacher emailed her before cannot be opened.
  • Teacher James’s Reply:
    1. Funds can be sent back to Taiwan for investment. Taiwan has no tax on capital gains, which is very friendly.
    2. Operational process: Assets can continue to be held at Cathay United Securities, then go to Yuanta Securities Finance to open an account for stock pledging. Cathay’s stocks can be used as collateral directly at Yuanta Securities Finance. Transferring funds in and out is convenient, and there is no need to transfer the stocks themselves.
    3. Buying all 00662 is acceptable.
    4. Asked her to send another email, and the teacher will resend the link.

Shani

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• Question: In the AI era, degrees are devalued, and jobs are being replaced, causing anxiety for many. What guidance does the teacher have for adapting to this new era?
  • Teacher James’s Reply: Used a historical analogy again. We are experiencing a migration from one era to another, just like moving from ancient times to modern times. Old jobs will be eliminated, but new opportunities and better lifestyles will follow. Degree devaluation does not mean not learning, but rather learning how to think and adapt. We should welcome the future optimistically and enjoy the dividends brought by technology. The two most important things in the future are wealth and health.

Winnie

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• Question: If assets exceed 100 million in the future, the annual dividend tax will be high. What should be done?
  • Teacher James’s Reply:
    1. Taxes must be planned in advance. Most assets can be allocated to low-dividend growth assets, such as QQQ (dividend yield only 0.6%).
    2. Make full use of retirement accounts (IRA, 401K), where dividends are tax-free or tax-deferred.
    3. For taxes that must be paid, pay them with a peaceful mind, because it means you made money. More importantly, use money borrowed via pledging to pay taxes, rather than using your own principal.
    4. The teacher added his view on money: Money is for spending, especially borrowed money. He gives cash directly to elderly people in need on the street; this direct giving is more effective than donating to charities.

IV. Highlighted Views

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An investor’s mindset is like that of an entrepreneur: always extremely optimistic, always facing the sunshine; the market will eventually rise. – Teacher James

Context: Teacher James analogizes the investor’s mindset to Elon Musk’s optimism when facing potential bankruptcy, emphasizing the importance of belief for long-term investing.

Your mental health is superior to potential profit. If there is a wonderful medicine (elixir), but taking it causes fatal side effects, do you take it or not? Of course, you don’t take it! – Teacher James

Context: Commenting on a student who felt extreme anxiety due to leveraged investing, the teacher emphasized that psychological endurance is the key to determining investment strategy, and one cannot sacrifice mental health for theoretical high returns.

Humans were not born to work; humans are here to think about problems. – Elon Musk (Quoted by Teacher James)

Context: Discussing the potential for mass unemployment caused by AI, Teacher James quoted this to suggest that human value lies in thinking, creation, and problem-solving, not repetitive labor.

You go traveling, stay in nice hotels, you feel happy, and many thoughts become clear… It is worth spending this money, and we are not spending our own money; when I go to Taiwan, it’s all borrowed money. – Teacher James

Context: Answering Angela’s question about feeling guilty spending money, the teacher explained the importance of enjoying life from psychological and health perspectives and introduced the concept of “spending borrowed money” to alleviate psychological burden.

What you are worried about now is exactly how people 500 years ago would look terrified when thinking about the future. Don’t worry; after it arrives, humanity will live better. – Teacher James

Context: Responding to questions about social anxiety triggered by the AI era, Teacher James used historical analogies to comfort everyone, explaining that disruptions brought by technological progress always seem scary at the time but always push human society forward in the long run.

People who are retiring are actually looking for a balance: do you want a larger cash flow, or do you want a larger inheritance? – Ling

Context: Discussing high-dividend products like QQQI, Ling shared her decision-making process with her family, pointing out a very core trade-off point in retirement planning.

If you pledge in Singapore and borrow SGD, the interest rate is about 2.1%. But in Asia, very few of you understand borrowing money to invest in the Nasdaq 100 Index, so money becomes very cheap. This is the opportunity. – Ling & Teacher James

Context: Comparing borrowing rate differences between the US and Singapore/Asia, revealing that due to information asymmetry and different investment philosophies, the cost of funds in parts of Asia is extremely low, creating huge opportunities for investors who know how to use financial tools.

When you understand what ‘government’ is, you will know whether you want to pay more taxes. – Teacher James

Context: Discussing tax issues, the teacher hinted at a critical view of government efficiency and wealth redistribution, advocating that investors should engage in reasonable tax avoidance within legal limits.

Taxes are planned. The fact that the money you earn is taxed is actually a good thing because you have a profit. Pay what you owe, and your heart will be at peace. – Student & Teacher James

Context: Discussing high dividend taxes, combining the views of the student and teacher, emphasizing the need for reasonable tax planning while also maintaining a positive attitude toward unavoidable tax burdens, as they represent investment success.

The financial industries in Taiwan, Hong Kong, and Singapore are very strong. Friends in these three regions should seize this; the ships are sturdy and the cannons sharp, and the bullets are free! – Teacher James

Context: After comparing the financial environments of the West and Asia, the teacher highly praised the low-cost credit and stock pledging tools available to retail investors in these three regions, encouraging local investors to use them boldly.

V. Summary

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This episode starts from the foundation of investment mindset, systematically constructing a worldview that a long-term investor should have: one built on a firm belief in human technological progress and the long-term upward trend of the market, thereby enabling one to ignore short-term noise and stick to established strategies. Through specific cases, Teacher James deeply analyzed the psychological game of leveraged investing and gave the valuable advice of “mental health supreme.” The Q&A session was extremely rich, not only solving specific problems for many students regarding asset allocation, retirement planning, and cross-border taxation but also extending to profound reflections on personal development and social change in the AI era, ultimately returning to a positive attitude of optimistically embracing the future. This course is a perfect combination of investment philosophy and practical operation, pointing out a clear, firm, and confident path for investors in a complicated world.