I told my dad about Zig Forums Zig Forums. My dads been an investment banker and an assistant fund manager and now is a consultant for finance related firms. I told him about high-yielding investments I discovered on Zig Forums Zig Forums and crypto and all that. I showed him all the P/E ratios and companies I analyzed to be safe but paid crazy high dividends. My dad responded, to paraphrase
>Son, the truth is you don't get rich off high-yielding investments, often times that's how you go broke and lose your shirt. You get rich off low-yielding investments, bonds with a yield under 5%.
I told him that was stupid, you'd never get rich compounding your money at 5% or less unless you made millions of dollars every year. He responded
>Son, you don't use your own money to invest in these low-yielding investments. You borrow money on mass through corporate funds at a low interest rate, ideally channeled from the Federal Reserve at very low interest, and buy safe low-yielding bonds in bluechip companies that are sure to pay. When you do this on a major scale, even by keeping a small portion of the profit you can get very rich.
>on mass either you're a deluded LARPer or your dad failed at giving you a decent education
Xavier Clark
You need big investors to trust you to run a firm and for that you need to have a trustworthy record. You need experience in investment banking first, and for that you need to be recruited from an I-bank approved school.
Some examples of these are the American Ivy League's (except Cornell, they don't really recruit from there), University of Chicago school of economics, University of Texas
If you're in Europe then Oxford or Cambridge are your best bet. Frankfurt school is good but they aren't the best for if you want to work in an anglo-speaking country.
If you're Canadian then you have to go to the Ivey School of business at Western.
I'm sure there's more but the point is get into a target school and then beat 60% of the class and you'll probably get hired as an I-banker.
Jason Moore
>Looked it up, it's "en mass"
Yeah I'm TOTALLY an idiot and uneducated because I didn't know the origin of a stupid phrase that sounds exactly like "on mass". Yep, totally the dumbest individual on the planet, I guess I should just tell MENSA that the 138 I scored on my IQ test was a blip and I'm actually mentally retarded. Thank you for enlightening me user.
My grandfather was the actual manager. I haven't spoken to him but he taught my dad as a teenager so I'd assume he'd say the same thing. Although his career was biggest in the 80s when interest rates were like 16% so maybe he had a different strategy.
Jose Watson
Of course, if you can convince other people to give you their money then it's easy to make a shitton of money OP do you want to invest in my hedge fund?
Chase Roberts
This works well until the safe blue chip stocks you're holding go tits up and you're not receiving any cash to pay your creditors. Your dad sounds like a typical boomer; get leveraged up to your eyeballs and 'grow grow grow'. The reason why the world is in a shit state right now is because people are so highly leveraged. Large amounts of debt is not a good thing.
You're better off gambling your pocket money on options, or the casino, and hoping for the best. Instead of racking up large amounts of debt and giving your cash to some company that you know next to nothing about apart from reading some paid for audit report and bullshit accounts which you most likely don't understand. If a company had any faith in its business model it would take on debt itself. Using equity to finance your business means your business doesn't work and doesn't generate any cash. Simple as that
Ryder Wilson
Well then what is Zig Forums doing trading crpytos when they could be working on becoming I-bankers and starting their own funds?
Jeremiah Ortiz
lol I'll pass and sell calls on high yield stocks instead
thanks tho
William Cook
sounds like a lot of work
Kevin Foster
>Well then what is Zig Forums doing trading crpytos when they could be working on becoming I-bankers and starting their own funds?
This has got to be the dumbest shit i've seen on biz in years.
Jonathan Ortiz
>This works well until the safe blue chip stocks you're holding go tits up and you're not receiving any cash to pay your creditors.
That's really only a risk as you're taking on new money and new loans. As the bluechip stocks appreciate faster than the rate of interest you start to build up equity. As your equity builds up your debt/equity ratio goes down and you become less leveraged. If you can manage your fund for about 5 years without a major crash you should have enough reserve funds in T-bills in case that happens.
>You're better off gambling your pocket money on options, or the casino, and hoping for the best. Instead of racking up large amounts of debt and giving your cash to some company that you know next to nothing about apart from reading some paid for audit report and bullshit accounts which you most likely don't understand.
So you're saying my dad, who's assistant fund manager, and my grandfather, who's the CEO of the investment fund, """"knows nothing"""" about the company? Bro are you hearing yourself? How do fund managers not know about their own company?
>If a company had any faith in its business model it would take on debt itself.
Yeah thats exactly what this is, borrowing money from mega-banks who get their money for 0% at the FED and then using that money to earn a higher return.
>Using equity to finance your business means your business doesn't work and doesn't generate any cash. Simple as that
You know you can do both right? Also it's hypocritical how you complain about high-debts and high-leverage and then shit-talk equity finance, when equity finance is the opposite of debt leverage and issuing equity to reduce debt is how companies reduce leverage.
Blake Morris
Your dad sounds like a normie boomer who trusts authority figures who don't deserve that trust, like most normies. He will do fine right up until the system dumps its bags on his head. Trying to explain this to most normies will just upset them.
Essentially he's saying that the low yielding assets have a lopsided risk/return ratio, to the point that it is sensible for you to use leverage to invest in them, and this is logical.
...unless of course, the system is lying about and manipulating key variables you use for your analysis such as inflation (to know your real return), as well as the sustainability and stability of the system (to know your real risk)
IOW, the risk to low yielding assets isn't low at all, because the yield is forced by irresponsible monetary policy (fed) due to fiscal policy (congress) priorities, and this is unsustainable, hence far riskier than you may realize and prone to sudden shocks beyond a critical threshold. Even worse, their return is lower than believed due to misconceptions around inflation as stated. Most of them are in truth barely positive.
Julian Flores
No im serious. If you spent all the time you spent here working to become an I-banker you probably could.
I'm under the assumption you're here like 10 hours a day, I know you probably aren't, but a lot of people spend all day here. Why not devote it to high-finance?
Isaiah Gutierrez
1 iq larp
Matthew Peterson
>Your dad sounds like a normie boomer who trusts authority figures who don't deserve that trust, like most normies. He will do fine right up until the system dumps its bags on his head. Trying to explain this to most normies will just upset them.
My dad is the authority figure. He's an executive at a consulting firm and been a fund manager. I don't know what you mean by "trust authority figures". He's the authority figure you are supposed to trust
>Essentially he's saying that the low yielding assets have a lopsided risk/return ratio, to the point that it is sensible for you to use leverage to invest in them, and this is logical.
It's true and that's simply because the money to invest in these companies does not exist yet as it has not been made by the FED, and therefore isn't priced in. When you live in a growth world the market can't price everything in because the money to buy the things doesn't exist yet.
For example, when Europe discovered America and announced plans to build a civilization, there was a gold-mine of opportunity. The risk/reward ratio was clearly slanted in favor of investors because growth was going to happen, and the resources to reinvest in the growth didn't exist until the expansion and thus could not have been priced in. You could guarantee a great return if you bought an ETF in the United States growth index in 1700 (if such a thing existed).
That's like the current economy now. We know we're going to grow for another 100 years but the market hasn't priced it in because it can't.
>because the yield is forced by irresponsible monetary policy (fed) due to fiscal policy (congress) priorities
Nonsense, the FED knows what its doing and has for years. It's keeping inflation below 2% and growth stable. the Fed is literally doing nothing wrong.
Angel Powell
>You borrow money on mass through corporate funds Great thanks for the advice user let me just check my corporate fund oh they say FUCK OFF so I guess it's back to shitcoins for me. Good talking to you.
Zachary Hughes
You're clearly trolling, speak again and you're getting banned.
Blake Hughes
When my dad says corporate funds he meant starting your own investment fund, not borrowing form one.
Joshua Martin
>en mass En masse
Ryan Collins
You need to be over 18 to post on this board
Aiden Walker
This is Zig Forums not /lit/ bro.
Nicholas Myers
I just turned 18 today actually.
Parker Cruz
> the Fed is literally doing nothing wrong.
You're being just a touch too obv with that one.
Alexander Anderson
He is smart and you're lucky to be in a situation with such a father, my dad thinks the earth is flat and refuses to get a pension.
Yes he is right, the issue is most people can't get access to that amount if money in a low interest fashion.
Adam Allen
>Preventing an economic depression is bad
The mods are going to remove your post. I'd rather you not respond then troll me when I'm trying to help the board.
Dominic Smith
That's why he's saying not to invest my money in anything other than bonds or bluechip, wait until I become a fund manager or have considerable access to capital as a broker and then really get into investing.
Jace Johnson
Actually i just realized your not even criticizing the FED you're full blown conspiracy theorist. Yeah you're getting blocked.
Jack Davis
Oh yeah? What time?
Chase Price
I was born at 10 A.M
Nicholas Thompson
Oops looks like you're still 17. Jannies remove this thread thanks.
Ryder Williams
As usual the biggest lesson is, the most important attribute for a fund manager is to convince people to give you their money. Actual results don’t matter though they often help. Hedge fund types get rich off fees and jewery and when they DO beat the market it’s through luck or, again, jewery, not any special skill or insight. It all comes down to marketing and inside connections.
Luis Jones
Your Dad is right if you can manage to get those low interest loans. The truth is those low interest loans are only available to a select few. When you are just an average middle to low class wagie your only hope of escaping slavery is moonshots. Then when you are rich you can make low yielding investments.
