My life skills in Daming Liver

Coming out of Yu Zongyuan's house, Lin An said to Ren Fu:

"I used to think that the success of this shabby match factory relied on my own ability, but now it seems that it all relies on the big tree of Mr. Yu."

Ren Fu also sighed: "Master Yu is still far-sighted. Nowadays, the price of special steel that can be used to make steam engines will definitely rise."

"If we go by the current order price, we may lose money on the steam engine delivered a year later."

"If Mr. Yu hadn't reminded me that I only saw the advantage of paying a deposit in advance, my steam engine factory would really have closed down!"

Lin An asked doubtfully: "Is it really that exaggerated?"

Ren Fu and Lin An found a private room in a tea shop. After sitting down, Ren Fu said:

"It's not an exaggeration. Brother Lin is not in this business. You don't know how fast the price of steel is rising."

"Nowadays, steel is used everywhere in our southeast. Steel is needed to lay railways, build houses, and make cannons and muskets. Steam engines require high-quality steel that can withstand steam pressure. The demand is the greatest."

"The price of steel that can be used to build steam engines is rising three times a day. If Mr. Yu hadn't reminded me that according to the current rising trend of steel, the steam engines delivered in one year would be at a loss."

"There is still a chance to make amends. According to Mr. Yu, I can cancel the reservation and leave a good reputation for selling only spot goods. As expected, Mr. Yu is a business wizard and wants to be more thoughtful than us!"

Lin An suddenly said: "Do you mean that the price of steel will keep rising, especially the price of special steel?"

"yes."

"Wouldn't it increase production? I heard that many steel mills are being built in the southeast of our country."

Speaking of his professional field, Ren Fu said:

"There are many steelmaking plants, but there are not many steelmaking plants that can produce special steel."

"Steel for steam engines must be able to withstand pressure and must also be used in gun barrels and gun barrels. There has always been a huge demand."

"A steam engine requires a lot of steel, and what's more, building a steel plant also requires high-quality steel."

Lin An asked: "Why is this?"

Ren Fu said: "This is not simple, because to make high-quality steel, we need to remove as much carbon from the iron as possible. This is the latest research result of several doctors from Tiangong Academy."

"To get rid of the charcoal, you need to increase the temperature of the furnace fire."

"There are two ways to increase the temperature of the stove."

"The first is to increase the temperature of the flame, which requires pipes to send air to the combustion chamber so that the air and fuel can be fully burned. This is equivalent to increasing the air inlet of the blower."

“The second is to add a reflective cover to allow the steel furnace to run hotter.”

Ren Fu has always paid close attention to the technical development of steel, and his workshop ordered the journal "Gewu" published by Tiangong Academy.

"Another way is to let the carbon in the molten iron react as much as possible."

"The Nanjing Steelmaking Plant invented a new technology that injects air into the molten iron and uses the principle of combustion reaction between carbon and air to remove impurities. The effect is very good."

"Look, these all require pressure-resistant pipes, and the demand for special steel is even greater."

"Now there are new craftsmen in various places developing steam engines. In fact, the principles of steam engines have been explained very clearly by the doctors from Tiangong Academy. The Grand Governor even exhibited at the World Expo. Based on the industrial level of the Southeast, he copied them and made them It’s not difficult.”

Ren Fu sighed and said, "Young Master Yu is right. If you want to stand out in the fiercely competitive Southeast, it is right to put service first and give priority to quality."

Lin An suddenly said: "In other words, the production of special steel cannot be increased quickly due to technical investment and other reasons."

"Yes, the current investment in steelmaking plants that can produce special steel is too high. Only the government can afford the investment, and the technical threshold is very high."

"But the demand for special steel has been increasing, will this gap get bigger and bigger?"

Ren Fu nodded and said, "That's true."

Lin An suddenly said: "The conversation Master Yu just had with us was very profound!"

"It is indeed Mr. Yu. No wonder he is called the Living God of Wealth by the people of Hangzhou!"

Ren Fu looked at his friend with some confusion.

I only heard Lin An ask:

"How much special steel is there in the factory? How many silver dollars do you have in your account?"

Ren Fu made an estimate, reported the amount of silver dollars in his account after returning the deposit, and reported the figure to Lin An.

"So much?" Lin An took a breath. This is the number after the deposit is returned.

Ren Fu said: "Steam engines are like this. Unlike matches, they are products with high R\u0026D investment but high profits."

Lin An immediately said: "Can the money be used?"

"Yes, it was originally intended to be used to develop the next generation steam engine, but after the deposit is refunded, it can only be used as a reserve fund for production."

"Why do you ask?"

Lin An said: "Old Ren, you still don't understand what Young Master Lin means!"

"This is the first huge opportunity to make money!"

Ren Fu looked at his friend in confusion.

Lin An said: "Since the price of steel has been rising, we can pre-order steel!"

"We can find those big steel mills and pre-purchase their next steel products at the current price, or even at a higher price than the current price."

"When steel prices rise in the future, we can sell these steels at market prices!"

Ren Fu suddenly realized and said: "Are you talking about railway bonds!?"

Lin An said excitedly: "It's not public debt, this is more profitable than public debt!"

"The interest paid on public bonds is fixed, so the maximum increase in public bonds will not exceed the final public bond interest rate, but this is different!"

"According to your statement, the increase in special steel prices in the future will be entirely due to market influence, and the increase will not be the interest on public bonds."

Ren Fu somewhat understood, and he added: "But the transportation cost of steel is very high. The steel still needs to be stored and will rust. Even if there is profit, it may not be high."

Lin An said: "Who asked you to buy steel directly?"

Ren Fu thought for a long time and said: "Don't buy steel? Are you talking about a pre-order?"

Lin An immediately said: "Yes! Can the steel mill pay in advance? We can sell prepaid bills directly then, and those who buy prepaid bills from us can just go directly to the steel mill to pick up the goods."

"In this way, our cost is the prepaid deposit, and there are no other costs at all. As long as the price of steel really keeps rising as you said, then this business will make a profit!"

Ren Fu's eyes also lit up.

In the past, Ren Fu was a weirdo who was proud of his talent. He only worked on his own machine and was rarely interested in making money.

But after accepting Yu Zongyuan's investment, he changed his mind.

It turns out that research and development is not just about making machines, but also requires silver coins.

After having the silver dollar, Ren Fu's research and development work progressed a lot. Without this investment, Ren Fu would not have been able to complete the trials and errors and finally develop the steam engine.

After understanding this, Ren Fu's attitude towards money also changed.

Research and development requires money, and investment can greatly promote the development of technology. Obtaining more money can provide a larger stage for more talented technicians like Ren Fu.

Ren Fu did not resist making money and even began to regard Yu Gongzi as his idol.

Lin An's suggestion is not difficult to implement.

Ren Fu came from Tiangong Academy and had business dealings with many large steel plants. However, the field of special steel is not actually a very large circle. Ren Fu quickly rushed to several large steel plants in Nanjing and Zhejiang, and The steel mills struck a deal.

Lin An and Ren Fu both reported to Yu Zongyuan, hoping that no dividends would be paid for the time being.

After hearing the news, Mr. Yu was naturally overjoyed.

After hearing about what project the two people were working on, Mr. Yu was even more generous. Not only did he not need any dividends, he also took the initiative to ask them if they needed financial help.

Ren Fu thought about it for a while, but accepted Mr. Yu's funds. He and Lin An agreed that Mr. Yu's funds would be regarded as investments and shares, and any money earned in the future would be distributed to Yu Zongyuan.

He accepted the future production capacity orders of these steel plants at a 20% premium to the current market price.

The steel factory was not surprised that Ren Fu ordered special steel. Everyone in the industry knew that Ren Fu had a factory that produced steam engines.

Several steel mills even proposed to Ren Fu that he only needed to pay a 30% deposit in advance to get the steel spot in a few months.

Ren Fu and Lin An thought about it for a while, and finally took the risk and accepted the order.

With a 30% deposit, they only need to make up the balance in the current month, which means that they only need to use 30% of the money to buy futures in a few months.

This also means that they can use 30% of their funds to enjoy the 100% premium on this batch of steel in the next few months!

High risk means high reward. Ren Fu firmly believes that the production capacity of special steel in the next six months will definitely not keep up with the demand, and the price of steel will definitely increase in the future.

After searching for future orders from several large steel plants, Ren Fu and Lin An rented a shop in Nanjing, where they posted their reservation orders.

Ren Fu began to contact his colleagues and nervously stared at the market situation of special steel.