Jin Zhao began renting factory buildings, purchasing hydraulic equipment, and scaling up his production. After obtaining the production license, he found himself with almost no money left. Selling the products turned out to be a significant challenge. While the National Construction Committee had clearly mandated replacing unqualified cast iron clamps, it was difficult to immediately phase out such a large number of clamps already in use. Local governments, in the grand scheme of a surging socio-economic world, barely paid attention to such a trivial matter. Jin Zhao's steel clamps were 15% more expensive than the unqualified cast iron ones. Given that substandard products could remain in the market, who would bother buying a product that was 15% pricier? <br><br>Funds dwindled; the product lacked a decent sales channel. Most orders of tens of thousands of units were merely to pass inspections. The company was on the verge of collapse. Jin Zhao attempted to secure loans from banks, but due to various issues, his company was unable to secure bank funding. He turned to loaning companies and guarantor agencies of all sizes. He mortgaged his equipment and production license, managing to obtain a loan of three million yuan through loan sharking, at a monthly interest rate of 5%. The company struggled to stay afloat. Desperately, he racked his brains trying to figure out a way out. <br><br>It was during this time that he suddenly realized he could directly venture into leasing. He could position his standard clamps against unqualified clamps in the rental market, which at the time offered a considerable profit margin of 30% annual returns. Jin Zhao swiftly registered a leasing company, manufacturing the clamps and then leasing them out himself. However, finances remained tight, and the looming monthly high-interest payments on the loan sharks weighed heavily on his shoulders. <br><br>Feeling lost and irritable, he went downstairs and encountered a janitor who had just finished working and was resting in a corner. Jin Zhao stood nearby, wanting to light a cigarette, and borrowed a lighter from the janitor. The janitor asked, "Brother, what kind of business do you run?" <br><br>Instinctively, Jin Zhao began introducing his products, mixing in his dreams and ambitions. The janitor listened for a while and then said, "Such high returns! Can I invest 20,000 yuan in clamps? You help me lease them; I won’t take the goods, and I’ll just collect the monthly rent. That’s 600 yuan a month. How about it?" <br><br>Jin Zhao felt like he had been inexplicably inspired. Yes! Why not sell "paper fasteners”? He could allow ordinary people, who lacked better investment opportunities, to buy his clamps without taking the physical products. He would lease them on their behalf, offering 20% of the rent as returns. Or, he could avoid manufacturing altogether and use the money to lend at high-interest rates. This could effectively resolve the issue of production funding. <br><br>Adopting this model, he began to pay investors returns based on rents of either 2% or 2.5% per month. The company launched a grand promotion campaign, emphasizing how stable and high-return leasing investments were, claiming salvage values were as high as 80%. Even in the case of scrapping after a few years, the resale value of the steel materials would still recover 80% of the funds. It was, quite simply, a perfect investment product. <br><br>Thanks to his promotional efforts and timely payment of interest, funds began pouring in. He even introduced a referral system, offering existing investors an additional 5% profit for bringing in new investors. Suddenly, money flowed to him endlessly. Many even mortgaged their homes and brought him their money, calling it "depositing savings." His company’s finance department became akin to a small bank. <br><br>Jin Zhao said, "This is what I call preparing thoroughly for tough times. The working class truly wields immense power! Now, all we need to do is ramp up production and leasing operations." <br><br>It happened to coincide with a booming real estate market. His business flourished, leasing steel pipes and clamps, becoming a dominant player in the industry. Jin Zhao began envisioning larger ambitions. He wanted to purchase factory buildings, establish production bases, and offer technological licensing. Endless prospects appeared before him, making him feel as though every gamble was a win. <br><br>But in reality, he was merely passing money around. Most of the money was pocketed by those charging high interest rates. Jin Zhao was just playing a pyramid scam. He used incoming funds to pay off earlier investors, relying on new investments to sustain the cycle. Fortunately, during the real estate boom, some of his products were still sold or rented, providing marginal returns. Nevertheless, the products were far from the profitable dream he had painted. <br><br>During this time, Jin Zhao refrained from purchasing luxury items to flaunt. He wore a simple white shirt and dark jacket, driving an ordinary Ford car. He directed all his gathered finances toward building his empire. His desires shifted from materialistic vanity to creating a sustainable enterprise. He longed to establish a business model that could function autonomously, a commercial machine that would immortalize him as a legendary pioneer. The image of a distinguished figure ignited his drive every moment of the day. <br><br>One day, he noticed an advertisement for a factory building for sale. The property, spanning 10,000 square meters with a four-story office building, was located in an area slated for future redevelopment near the West Station. Jin Zhao believed it was time to expand his operations to instill public confidence and attract more "deposits." <br><br>The factory was priced at 40 million yuan. Given its location, he calculated a quick resale could net a profit of 10 million yuan. Jin Zhao only knew the seller was in financial distress and needed to sell urgently. The agent advised against transferring real estate ownership, which would incur significant taxes. Instead, the factory could be acquired as a company asset, effectively avoiding over one million yuan in taxes. <br><br>Without hesitation, Jin Zhao saw this as the reward of hard work paying off. He hurriedly proceeded with the paperwork alongside the agent. However, he was unfamiliar with buying companies and neglected to verify corporate liabilities or conduct a net worth assessment. His scholarly nature harbored a fatal innocence. <br><br>What about insufficient funds? What could he do? <br><br>Borrow. <br><br>When debt piles up, worry fades.")
