Take a bite of pudding

Chapter 952 The Shining Internet Thinking

"It's not a management fee? What fee is that?" Hao Jianguo was stunned for a moment, then instinctively asked.

"Of course, it's this!" Little Swift's finger tapped lightly on the list, finally landing on a fee called 'Transaction Commission'.

"Transaction Commission? How can that earn money?" Hao Jianguo was first taken aback. Transaction commission is a common fee charged by all funds, and it's a fee that users must pay when buying funds.

The transaction commission itself is not high, only 3‰ of the total transaction amount. Moreover, this transaction commission is not entirely earned by the brokerage firm. In fact, a large portion of this money is used to pay the stock market stamp duty, the securities regulatory fee, the stock exchange transaction fee, and in special cases, the transfer fee, and so on.

Of this 3‰ transaction commission, only about half or even 1/3 might eventually go to the fund company. This has never been a project for fund companies to make money. What fund companies truly make money from is the management fee and the custody fee, which together can collect about 2% of the fees, a figure far exceeding this 3‰.

This has always been a fee item that fund companies do not value. Hao Jianguo never thought it would be the most profitable item at first. However, after Little Swift pointed it out, Hao Jianguo thought about it for a moment and immediately realized that this was indeed the most profitable item in the entire process.

The reason why it was previously thought that this fee item was not profitable was because there was only one opportunity to collect the fee each year, so it naturally wasn't very profitable.

But what if users trade frequently? Without saying anything else, assuming a user only trades once a month, then in a year they would receive transaction commissions equivalent to 3%. If it were 100 billion US dollars, then this would be a fee of 3 billion US dollars, which is not much lower than simply collecting management fees daily.

But does a user really only trade once a month?

That's not necessarily the case. Under normal circumstances, users cannot manage their fund status and can only patiently wait for the annual income settlement. They have no way to trade.

But if they could actually see the fund data every day, would they still be able to hold onto their funds and not move them?

No, when they see that the fund's return yesterday was a loss, they will immediately panic. Many people will choose to sell their funds today, wanting to stop the loss in time.

And if they see that the fund's return yesterday was a sharp increase, then many people will want to buy the fund back. This is the foolish thing that normal people do, called chasing highs and killing lows.

In fact, for an ordinary person, giving them free trading and choices is a very bad thing, because it will always lead them to push away all the hard-earned money step by step according to the design of the smart people. It's not that they are stupid, but their knowledge is far inferior to those who are operating behind the scenes, so they can only walk step by step towards the abyss and lose all their money.

This can be fully seen in the stock market. What do those retail investors who stare at the market every day and look at the prices of their stocks on their phones do? That's exactly what these people will do with funds, and then the transaction commission, which seems small but is 3‰ every time, is freely given to the fund company.

And if you think about it more carefully, you will find that these transaction commissions are actually without cost for the Western Wild Horse Fund.

As mentioned before, most of the transaction commission actually needs to be used to pay various handling fees. Fund companies can only earn a small portion of it, and some fund companies even don't make money.

But it's not the case for the Western Wild Horse Fund. Little Swift stated directly that the daily transactions of these users do not actually cause the Western Coastal Fund to sell its securities to repay money.

Instead, it is paid from the reserves of the Western Research Fund. These reserves are kept in bank accounts throughout the entire process, and there are almost no fees for money entering and exiting. However, they are still charged at a transaction commission of 3‰. Then this 3‰ transaction commission is pure profit.

Therefore, Little Swift said that this transaction commission is the biggest source of profit for this plan, and the Western Wild Horse Fund Company is the ultimate big winner. Relying solely on various transaction and management fees, it is conservatively estimated that they can earn about 10% of the fund's total as pure profit each year.

Moreover, they can pass on all risks to the customers. The Western Wild Horse Fund itself has no risk of loss. With the current status of the Western Wild Horse Fund in the eyes of stockholders and Little Swift's title as the Black Financial God, hundreds of billions of dollars in stable profits are guaranteed every year!

"Too t

Goldman Sachs has over 30,000 professionals worldwide.

Yet, with so many professionals, not a single one could come up with a genius-like fund management plan like the one in Little Swift's hands. This naturally made the elder feel deeply ashamed.

Of course, this is not to say that Goldman Sachs is too stupid, but rather that Goldman Sachs has always been immersed in traditional projects and lacks internet thinking. And Little Swift's plan absolutely cannot be completed without the internet.

After all, frequent trading like this, involving a large amount of calculation work, would require Goldman Sachs to hire 100,000 people solely responsible for these transactions if it were to rely entirely on Goldman Sachs' offline staff. Moreover, they would also need to provide these 100,000 people with dedicated street-facing office space. This cost would be enough to completely overwhelm all transaction profits.

Therefore, without the internet, such a thing is impossible.

But with the internet, everything is different. All operations can be automatically completed by internet programs. Only a dozen programmers are needed to monitor in the background to support this entire business, which gives the plan the feasibility to be implemented.

Goldman Sachs is still a traditional financial enterprise, and its mind is completely devoid of internet thinking. Naturally, it could not be the first to develop such an internet financial solution, which has become commonplace in the later market.

"Sir! Are you going to help Huang He or not?" After the elder finished his praise, Hao Jianguo quietly asked.

"That is naturally impossible. How could I let Huang He steadily earn billions of dollars in pure profit every year!" the elder said matter-of-factly. However, after a few seconds, his expression changed slightly.

This seems... like I can't refuse.