A few years ago, Zhao (some) Wei wanted to buy shares of Wanjia Media with 3.06 billion yuan and become the largest shareholder, of which the principal was only 60 million and the leverage reached 51 times.

In the end, the acquisition was halted and the capital giant was banned from the market. At the beginning, I returned the pearl, but now I have become a capital predator. This turn around really makes people a little unprepared. In fact, after eating melons, if you think about it carefully, you will find that this is a game that a typical boss can play.

For ordinary people to buy a house loan, the down payment is generally 30%, that is, more than 3 times leverage, which may already be the highest leverage ratio that most people can use in their lifetime. If you cash out through credit cards, you can also get more than 10 times leverage. But most people don't dare to play like this, because we'll talk about it later. This is also the most important difference between bosses and ordinary people.

1、Low-cost funds

At present, the interest rates of all countries are very low, the interest rates of the European Union are close to zero, and the interest rates of Japan are also zero, and all countries will issue more money to maintain inflation. Because, a certain rate of inflation is conducive to economic development.

For ordinary people, it doesn't matter as a whole. the main problem is that there is no interest on the money in the bank.

When interest rates are high, you can also put money in the bank to earn interest and buy some insurance to offset inflation. now savings and insurance are tantamount to paying taxes, even less with cash in hand.

AndThe cost of capital for ordinary people is very high.If you want to open a supermarket or restaurant, or if you have a good idea to start a business, it is almost impossible to borrow money from the bank. You can only rely on your own savings, or borrow money from relatives, or harshly rely on venture capital.

但For the bosses, low interest rates are a great thing, which means that there is a lot of money in the market and the cost is extremely low.When you are a big shot and have a lot of high-quality assets to mortgage, you will find that it is quite easy to borrow from the bank and raise funds from the market, and the more high-quality assets you have, the less likely you are to default, the stronger your bargaining power will be. interest rates will be lower than others.

After getting a large amount of money, the bosses can invest in the stock market and come up with all kinds of financial derivatives; they can invest in real estate, raise the price and then sell it to make a difference; they can easily acquire competitors by billions or tens of billions; they can also control a well-run company, speculate on the stock price, and then sell it, still making a difference, and so on.

Buffett may be the most thoroughly analyzed person in recent years, but after thorough analysis, we still can't play like him, why? Cost of funding.No matter how much you know, you can't play with Buffett's tricks.

For example, after the financial crisis in 2008, you don't need to be a stock god to know that the stock market has almost hit bottom, and then it will rebound. If you are retail investors, you will either lose all your money or dare not gamble on your hard-earned money. people like the stock god can copy the bottom.

The problem is that there is no excess, low-cost funds, how to get to the bottom?

Buffett's trick is insurance companies, through which they can get huge amounts of cheap money and then use it to make all kinds of investments. On the whole, there are countless ways to make small money, but there are no fixed routines, but there are obvious ways to make big money:

1. Real estate in the core area of the core city, as long as the city develops, this type of real estate will continue to appreciate, which has been felt by everyone over the years.

2. Stocks of cutting-edge technology companies, which will be very deep if you pay attention to US stocks, and Buffett has long held stakes in Microsoft and Apple.

Chinese people have experienced a free market economy for a short time and do not have much experience, but when you look at the wealth list, you can already see that the people at the top are basically real estate tycoons and tech upstarts.

On the other hand, people in Europe and the United States have experienced a market economy for hundreds of years, and their thinking is very mature, and they are adept at these things. If there is a lot of cheap money, they will take this route without even thinking about it.

And not only the rich play this, ordinary people also play very well and make a fortune. In 2008, I knew a lot of Beijingers who went on a buying spree. Everyone is very sad when we talk about it now. at that time, the house price in Beijing was low and you could buy it as you like. But back then, you didn't think so.

At that time, the house price was not high, but the people didn't have much money, so they had to borrow money if they wanted to buy a house. I have seen the woman cry like that when the couple transfer ownership in the transfer hall. upon inquiry, the family bought a house in Wangjing, with a monthly mortgage of 6,000 yuan, and the couple's monthly income added up to 5,000 yuan. In 2008, their income was not comparable to that of now. As soon as she talked about buying a house, she cried, saying that she could not live, but her husband insisted on buying it.

What did the people who bought the house think at that time? where did they get the money? Many of them have been to the United States and Hong Kong and so on, knowing that house prices in mainland China were ridiculously low at that time, borrowing money to buy houses, taking on huge leverage and debt, and then the first World War for the rest of their lives.

But,If we can go back to 2008, many people still can't play.On the one hand, they are uncertain about the future, on the other hand, ordinary people can't borrow that much money.The most depressing thing in the world is to start all over again or lose.This is not shameful, the results of most games are related to the initial conditions.

2、Ultra high leverage

With a large amount of low-interest funds, bosses can leverage to do a lot of things, greatly improve the efficiency of making money, how to understand this?

For example, if you buy a small house for 2 million yuan in Beijing and sell it when it rises to 3 million, you will earn 1 million or 50 percent.

If you still have the same apartment, you don't buy it in full, but you pay 30% down, that is, you only take out 600000 of the principal and the rest of the loan, which is equivalent to three times the leverage. When it rises to 3 million, the profit is 150%. This is the power of leverage.

But how does the boss use the lever?

If you know a little about the stock market, you will know that there are dazzling financial derivatives.In fact, financial derivatives are leverage.

At present, financial bosses have created a market of 705 trillion euros with financial derivatives, and people may not feel much about this figure.

What is the real economic value of the world? 75 trillion .

What is the market capitalization of Bill Gates? 65 billion .

The KKR fund in the United States, the "barbarian at the door" himself, bought a German company with 66 times leverage and 660 million euros, and sold it four years later at 2.5 times the original price. the interest and principal of the previous leverage were repaid with this money, and the return reached 800% after repaying the principal and interest. After reading the efficiency of this arbitrage, you may also understand why Zhao's trading was stopped at the beginning of the article.

In addition, it is no secret that a well-known Ka-shing also follows this process: a large part of their huge income comes from monopoly assets, manipulates the market through monopolies, and engages in insider trading.

You go to carefully analyze the most critical transactions of Lao Li, and the financial resources of HSBC are behind them. And not only money, HSBC bosses personally use their own relationship to promote low-cost acquisitions, those big chaebol have a common in-laws, sworn brothers, adoptive father-son relationship.

In other words, they have a lot of means to get low-cost capital and then use high leverage to make a profit.

The essence of capitalism is relationship. Let's have a good understanding of this sentence. The key to the life of the bosses isRelationships, cheap money, inside information.These three elements play a role in the cycle and promote each other to form positive feedback.

It's a bit like you know a great person who can lend you money, give you inside information, make you rich, and when you get rich, you can feed him back. If you expand this relationship into a circle, they will have unique resources and opportunities.

And there is one thing that is very important. everyone likes to say the word "release water", that is, the overissue of money. In fact, the overissue of money mainly means that banks issue more money to the private sector through loans, that is to say,The money is borrowed, not handed out.

Here comes the concept of "borrowing" again. When it comes to borrowing money or loans, everyone's first reaction must be adjusted to "boss first". The boss first gets the money to buy things that have the potential for appreciation. By the time other people get the money to buy, those things have gone up to the sky.

Of course, we don't want to advocate leverage when we talk about this topic. when that thing earns a lot of profits, the risk explodes at the same time, and the principal may be gone, and the bosses all take huge risks, which we can't imagine. In fact, modern economics believes that the ability to take risks is also part of the ability of entrepreneurs, and bosses gain more because others take more risks, of course. It may also be that other people are well-connected and well-informed. You think it's a risk, but they don't think so. So leverage is a tool for bosses and a problem for others.

In addition, bosses have plenty of other tools to isolate risks and prevent themselves from being blown up, including "limited liability companies".

What is this thing that we talk about every day? To put it simply, that is to say, if you set up a company with 100,000 yuan, if the company goes bankrupt in the future, you will pay at most 100,000 yuan, which will not affect your other capital. So people often hear that a boss has gone bankrupt for many times and think that he is finished. In fact, it is a bunch of companies under his name that have gone bankrupt, which does not affect others, such as the one in our picture below:

In addition, when it comes to the big golden hair, I have to add that this product makes so much money, but basically does not pay taxes, so it has always been a difficult problem in the world for the really rich to pay taxes. Buffett was very confused and said that he wanted to pay more taxes. but the company's lawyers and accountants always refuse to pay taxes in accordance with the law, and he is helpless and too difficult.

So there has been a lot of quarrel about Beichuan paying taxes all the time in the United States. Of course, we are not going to make moral criticism, which is not necessary.

3、Global layout

You might say that bosses invest so much money in real estate and the stock market, and such high leverage is bound to create a lot of bubbles. Aren't they afraid of the bubble bursting?

They're really not worried. Bosses can spread their asset allocation around the world. London's financial industry is developed, house prices are high and profitable, so the bosses go to London to invest in real estate and sell it after the price goes up, and the whole process can remain anonymous.

There is a street in London that is typical of this type of asset, the house is so expensive that people doubt life, and that street is almost empty, full of Russian tycoons. Russians fell in love with Britain after the upheaval in Eastern Europe. Russian tycoons want to move to London and Manchester. Even if the housing bubble in London bursts and house prices plummet, it will be only a small part of their portfolio that has been damaged, with London falling, as well as Japan and Rio. Real estate decline, and stock investment, and then find the next investment target.

If these all fall, there is gold, and if there is something wrong with these assets, it means that there is already a systemic risk, then the "safe haven" gold will be effective.

On the contrary, if you look at ordinary people, I will not say much, and you all know it.

This is asymmetric risk. If success is a profit and failure is only a loss of a small part of their investment, the temptation of highly leveraged speculation is that the gains far outweigh the losses of failure.

A study by Thomas piketty, a French economist, found that over the past 50 years, the incomes of the poorest 50 per cent of Americans have not increased by even 1 per cent, while those of the richest 1 per cent have increased by 300 per cent. As for the pattern of making money, it is nothing more than what we call leverage to make money, global risk aversion.

And it is the same economist who, through complex mathematical calculations, found that the rate of return on capital investment in developed countries is higher than the growth rate of GDP. What does it mean? In other words, most of the money earned by society is earned by capital, while the income from labor is lower. The result of his calculation also confirms the hypothesis that the bosses are getting richer.

4、It is said that at the end,

The aforementioned inflation, low interest rates, high leverage and debt have accelerated the accumulation of wealth to the top, but these tools themselves are not all bad things, as our country's development over the past few decades has proved.Financial instruments themselves are conducive to the cross-regional and cross-spatial allocation of resources.

The experience of the United States further illustrates this point. during the American Civil War, both the North and the South frantically consumed their reserve funds, and the North issued treasury bonds to the people through Wall Street. Although they owed a lot of money, prices were relatively stable throughout the war, and a large amount of war materials were thrown into the battlefield. Although there are more defeats than victories, the more you fight, the more energetic you get.

There is no financial market in the south, in the face of this situation can only be solved by issuing paper money, and then inflation is as high as 1000%, and finally completely unable to fight, surrender and admit defeat. We often say that the war was a war of national luck for the United States, and if the North lost, there was no doubt that the United States would become Latin America and world history would be completely rewritten.

This proves,Wall Street's wide variety of financial derivatives is the root of the financial strength of the United States.Strong finance enables the American market to make full use of the value of every penny, which makes it very easy for American enterprises to finance. When starting a business in the United States, small and medium-sized enterprises not only have relatively low financing difficulties, but also have relatively low financing interest rates.

The American TV series Silicon Valley is about a group of nerds looking for venture capital everywhere with their own ideas, thanks to the developed financial system of the United States. I believe we all know that reducing the difficulty of financing for small and medium-sized enterprises and the good effect of financing interest rates on the economy.

But,The richer financial derivatives, the more developed financial markets, and the rapid upward flow of wealth, as we have been talking about above.Perhaps what the state can do is to strengthen supervision and prevent looting.

Or what happened in 2008, when the elite turned rotten apples into juice and sold them to everyone, causing the world to have diarrhea.

When we look back on the subprime crisis, it is clear that what happened in 2008 could have been avoided by tighter regulation. However, judging from the current situation, Americans have not learned their lessons, and they are brewing a new crisis.

I still want to share with you what I know. I don't want to criticize anyone, but to tell you how they play, in case you have some inspiration. Of course, it is impossible to say all of them in the article, and we can slowly add them in the future.