Jeremy Harbour explains fixed coupon notes, investment products that pay 10-13% annual returns while waiting for underlying stocks to drop 20%. He rarely ends up owning the shares. Harbour argues that understanding just 4% of business knowledge beats 99% of entrepreneurs, and that most never learn wealth management.
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I do take the income, so I live off the income. But I mean, again, with stocks, so when— again, it's a private wealth banking thing. They have something called fixed coupon notes. So fixed coupon notes are like an option agreement that you can use, but it's over a longer term. Normally options expire every month. This is like an option agreement you do over a longer term based on a basket of stocks. So you'd make your list of all the things that you want to own, and they can include ETFs like the ones that you've just you mentioned. You make your list of your model portfolio, if you like. You then, instead of buying them directly, you take these fixed coupon notes against these different stocks. Effectively, what they say is that if it drops by 20%, you buy it. If it doesn't drop by 20%, you get paid to wait. Basically, it's like build your portfolio every time there's a massive dip in the market. The rest of the time, you are being paid to wait, but the amount you get paid to wait is quite high. I literally— I am just doing one that will execute tomorrow. One of them pays 13% a year, and the other one pays 10% per year while I am waiting to own these stocks that I will own if they go down by a significant amount. It is quite nice income generator. Yeah, very rarely end up owning the underlying stocks. Gotcha. Yeah. So, yeah, it's an interesting game. It's a huge education in its own right. I mean, once you think you've figured out business and you never really, you know, if you understand 4% of business, you understand 3% more than everybody else. And then you figure out M&A. And again, if you know, once you understand 10% of M&A, you understand 9% more than everybody else. Then you've got to learn about wealth. And, you know, I mean, most entrepreneurs don't actually get get to that stage where you actually have to learn how you manage money and how you look after all of this kind of stuff. It is a whole new area. It is massive.
