Read more via Food for thought…
Dealing with Cryptocurrency has its interesting dynamics. There are, however, many hidden facets making it still a mystery to the masses. Not knowing about it makes you prone to, get rich-schemes or outright scams.
We are all by now aware of the mania caused by the soaring prices and then, the subsequent decline that followed early this year.
What we don’t pay attention to, however, is just how complex it is to physically “acquire” and store these Cryptocurrencies.
Mining coins can be described very basically as the process where users “or miners” become part of a Cryptocurrency network. This by making hardware (processors & graphics cards) available to support that specific network’s operations.
As a miner, you contribute towards the working of the Blockchain. The technology requires millions of calculations to validate transactions into what are known as public ledgers.
Click here for more about how the Blockchain works.
There are three main ways to mine these coins but we will not be highlighting them in this post. The matter to be covered here, however, is the business aspect: how the Blockchain has created a new line of commercial entities and ‘profit-takers’.
These modern tech “enterprises” offer you a specific or cluster of altcoins and tokens as a reward for helping them maintain their Blockchain.
Sounds like a win-win situation right? Or is it?
If you have actually looked into the methods of mining, you will discover that only those with high-end hardware are able to produce enough energy to power the Blockchain. This is called “hash power” or “hash rate”. This is kind of like horsepower for cars, but for PC processing.
There are sites that illustrate how to calculate potential profits such as one conveniently called ‘what to mine’.
The opportunity cost of operating the customized computer systems (known as Mining Rigs), will have to be offset with the cost of acquiring hardware such as the Antminer S9i. Then there are energy costs associated with running the rigs for long periods of time.
Your profit would, therefore, be the balance of the costs versus the revenue involved in mining coins.
The mining profit = revenue (quantity multiplied by the price of the coin in local fiat currency). Then subtract the cost of the mining devices + annual electricity costs (measured in local currency per KWh).
The problem with going at it alone is that it is very hard to break even. You are also faced with a conundrum: the more powerful your hardware is, the more electricity it consumes.
It also takes a lot longer to acquire the coins which you are awarded by the respective blockchain network after successful hashing is completed.
To make it worth your while you would hope that the coin you mine’s market value exceeds the costs of the monthly/annual electricity bill.
There a now hundreds of these so-called Crypto/Tech companies spurting up by the day. Their modus operandi: to relieve you of the burden of the high electricity and hardware costs. This in exchange a monthly or once-off fee.
In return, they promise to mine coins and provide you with daily or monthly profits. They can do this because they presumably have more powerful mining setups and therefore, larger economies of scale.
Some of these establishments use big rooms, whole buildings or even warehouses to run thousands of mining rigs throughout the year.
The payments you make supposedly help them with maintenance costs and pay for the said electricity bills. They are also usually stationed in countries where the cost of electricity is very low.
You are likely to, however, run the risk of dealing with the occasional Ponzi-scheme – setup. Such companies dive at the opportunity to swindle those not familiar with Blockchain and Cryptocurrencies.
By dazzling you with the price increases and potential astronomical returns, they take your money and make a run for it!
You can also ponder, it is incredibly difficult and expensive to mine Bitcoin these days. If these setups are actually just people who have already made their millions from acquiring Cryptocurrency.
The acquisition naturally, would have been when they were dirt cheap, and are now offering the residue to make more profit off unknowing investors.
How it would work is: let’s say you owned 100 Bitcoins mined in 2010 for the opportunity cost of $100 each (cost of electricity). You then sold half at the height of the Crypto ‘bull-run’ in January 2018 when they were worth $19 000 each. You would have been $945 000 richer.
So, with almost a million bucks in the kitty and another 50 units of coins (which would be now worth a lot less); the natural inclination would be to look at ways to make the extra coins ‘work for you’.
And what better way than to be your own boss and head a Crypto company! You can with your new setup, sell off the residue of Crypto coins in bits for profits in cash.
This is likely what some of these companies offering you coins for an opportunity to get Bitcoins. This under the false pretence of partaking in a ‘mining operation’. Meanwhile, in reality, the actual mining probably took place almost a decade ago!
Read more via BTC running low on battery?
You can still tap into the pool of 17-odd million Bitcoins that is now in circulation. You can even purchase them in the fiat currency equivalents.
But where do you get them then? After all, Cryptocurrency is this dark and mysterious transaction system used only by criminals and drug addicts.
So you acquiring them would naturally be in a shady place like the dark web – where it is used to acquire illicit things – right?
Not quite and there are publicly accessible marketplaces where one can securely purchase Bitcoins.
Find out more via A peer-to-peer Crypto marketplace
The first thing to understand is that shares (referred to in the US as stocks) entitle the holder to have part ownership in a company. So, if you own a share in, Amazon, Deutsche Bank, Coca-Cola, Manchester United or a Cryptocurrency company like Ripple – you OWN a part of the company. You are basically co-owning with other stakeholders of the company with the hopes that the people who run it will increase the monetary value of your shareholding by making the company a success.
Now your share/ownership will determine what level of control (decision-making powers) you have when it comes to the company’s operations. Naturally, owning just 10 or even 1000 shares of Amazon (which cost around a hefty $1400 each today), still does not entitle the owner to have a say in how it is run. The majority shareholder – which would probably be the company owner (chairman/founder) or its board of directors, depending on how the company is structured, will still have the overall say.
To gain a majority shareholding and therefore full control of a company, the minimum number of shares one would need would be 51% of the total issued…good luck obtaining that many!
But let’s take a further step back and unravel why shares are issued in the first place. A company has a value and within that context will always keep tags on the capitalistic market and carefully monitors its value to brace for a potential takeover or a consideration to sell.
So, to get listed on a stock exchange a company will decide how much of its equity to publically issue as shares and might even use it to raise more capital to help grow the business.
This form of equity will be backed against its total assets (and its debts) on its balance sheet. So hypothetically, a company with 100 Euros worth of assets and liabilities has 100 Euros worth of (owners) equity – which basically enables one to determine its worth at a given point in time.
The easiest way to remember this is through this basic accountant’s formula:
Total Owners Equity (OE) = Assets (A) + liabilities (L).
The shares are accounted for in the OE and are issued in denominations based on various factors to provide an indication of the relative strength (or weakness), or potential growth of the company. The (snapshot) total value of the company is thus determined by its share price plus number issued and referred to as its market capitalization. There are several other measures and tools to evaluate the general health of a company.
Rising shares, though always good will not always necessarily mean the company is great value for money as share prices can also be under- or overvalued. Shares for large companies are naturally offered in millions and via an initial public offering (IPO) from as little as one cent or more (depending on its valuation upon listing on the market) and rise to what was quoted for Amazon earlier – which along with the price of certain commodities are one of the highest per share currently available in the open market.
The open market of local bourse is where shares can be bought and sold at specific times depending on side of the world it is located – just like in a traditional marketplace.
Obtaining shares may come with an additional cost (brokerage fees, commission, interest payments in cases of leverage buying etc.) depending on the terms and conditions of the market but more specifically, on the company or broker offering access to the shares.
A good company share will also offer its holders in return an annual dividend – which is basically a share of the company’s profits over and above the share price. So, it is a good idea to include dividend-yielding shares in your trading portfolio if you can afford them.
Once you purchase your stake in the company, you will naturally, even if you don’t have a controlling say in how the company is operated, take a keen interest in the company’s activities as everything it does within its operations or outside ops for that matter will have an impact on its valuation, and therefore, the price of the share you own.
Naturally, investors follow the age-long rule of common sense and buy when the price is low. If you missed the IPO and dip in, the price is always a good time to even top-up for the long and eventual rise.
“Unless a company goes belly-up, a share-stock price that is going down is actually going up – in the long run.”
But the price as we know does not always go up and one must be prepared to weather such storms by not continuously focusing on the shares once you have done your due-diligence and purchased for the long haul. Playing blissful ignorance is the best advice you will get as one can become emotionally attached to the performance of the shares and have it affect your mood.
There are also a lot of trading tools to help prevent a total meltdown if the company folds-up due to external factors such as fraudulent scandals or government intervention – so keeping tags now and then is still required. The recent events and scandal faced by Facebook saw it lose a significant amount (billions of dollars within weeks) in it the value of its share price.
Read more about investing here.
There are also ways to “have ones’ bread buttered both ways” and this is where the concept of short-selling comes in. So, while we all would bet on a company’s stock to go up – there are groups of investors who bet the other way with the hopes that the price will rather drop.
This seemingly dubious form of trading is perfectly legit and comes, naturally, with a higher level of risk – that is if the price increases in favour of all ‘normal’ long-term investors – the short starts to lose money and will even have to fork out more for the amount borrowed to make the short-sell in the first place – not for the inexperienced and ill-informed!
So, you “buy” or rather borrow (with leverage) the future value of the share/stock price usually at its apparent peak (or bubble bursting price level) and hope that it will drop for you to profit from the bet by as much as it continues to drop. Earlier in the year, one such investor dubbed “50 Cent” bagged 200-million-dollars in a major shorting maneuver.
Shorting a stock is a complex, risky but highly lucrative method of balancing out a portfolio. A seasoned trader will, therefore, have several positions including some “buy” and “sell” positions on their shares for long and short terms with the various mechanisms set in place to execute their trades based on those positions.
One wouldn’t just short a stock if one didn’t know something about what was to come or what factors were to lead to a sharp and large drop in the share price. But getting this right is often an exercise that straddles a fine line between being well-informed and intuitive and blatant insider trading.
So, in summary, shareholding happens naturally when you acquire a stake in a business through ownership of its intellectual capital, founding rights, or status as a funder or initial investor to help start the business.
So why do companies issue out shares to the public again you might still ask… think of share listing as a way for a company to hold itself publicly accountable and thus is the ultimate branding weaponry in its arsenal and quest to exponentially increase its profits.
It is only fair to, therefore, delve in and break it down by discussing not just the way to trade, but the whole point of it.
While trading may seem like something only smart people engage in, this is, however, not the case.
The first thing to understand is that shares (referred to as stocks) entitle the holder to have part ownership in a company.
So, if you own a share in, Amazon, Manchester United, or a Cryptocurrency company like Ripple – you literally OWN a part of that company.
You are basically co-owning with other stakeholders of the company. This with the hopes that the people who run it will increase the monetary value of your shareholding by making the company a success.
Now your share will determine what level of control (decision-making) you have when it comes to the company’s operations.
Naturally, owning just one, ten, or even 1000 shares of Amazon (a hefty $1400 each today), still does not entitle you to have a say in how it is run.
As the majority shareholder, you would probably be the company owner (chairman/founder) or one of its board of directors. To gain such a majority shareholding and full control of a company, the minimum number of shares you would need would be 51% of all shares issued. Good luck obtaining that many!
But let’s take a further step back and unravel why shares are issued in the first place. Your company (hopefully) has value because of its ability to generate revenue. This makes it a constant target for investors in a capitalistic market. Wealthy individuals carefully monitor its value to brace for a potential takeover or for just a piece of the pie.
To get listed on a stock exchange your company will decide how much of its equity to publicly issue as shares. You can even issue shares to raise more capital to help grow your business.
This form of equity will be backed against your total assets (and its debts) on the balance sheet. So hypothetically, a company with 100 Euros worth of assets and liabilities has 100 Euros worth of (owners) equity.
This basically enables you to determine its net worth at a given point in time.
The easiest way to remember this is through this basic accountant’s formula:
Total Owner’s Equity (OE) = Assets (A) + liabilities (L).
The shares are accounted for in the OE and are issued in denominations based on various factors. This helps to provide you with an indication of the relative strength (or weakness), or potential growth rate of the company.
The (snapshot) total value of the company is thus determined by its share price multiplied by total number issued. This is referred to as its market capitalization. There are several other measures and tools to evaluate the general health of a company.
Rising share prices, though always good, does not always necessarily mean that the company is great value for money. This is because share prices can also be undervalued or overvalued.
Shares for large companies are naturally offered in millions and via an initial public offering (IPO) from as little as one cent (penny stock), or much more (depending on its valuation). Thereon, it can rise astronomically to what was quoted for Amazon earlier.
The open market or local bourse is where you can buy and sell shares at specific times depending on side of the world it is located.
Obtaining shares come with additional costs (brokerage fees, commission, interest payments in cases of leverage buying, etc.). Depending on the terms and conditions in the overall market (regulations), but more specifically, on the company or broker offering you access to shares.
A good company share will also give you a return on an annual dividend. This is basically a share of the company’s profits over and above its share price.
It is a good idea to include high dividend-yielding shares like Coca-Cola, in your trading portfolio – if you can afford them.
Once you purchase your stake in the company, you will naturally, even if you don’t have a controlling say in how the company is operated, take a keen interest in the company’s activities.
Everything it does whether internal operations or outside for that matter, will have an impact on its valuation.
Naturally, investors follow the age-long rule of common sense: buy when the price is low. If you missed the IPO and the price dips, you can always get in at a good (low) price. The stock market runs like a rollercoaster – you just need the right time to hop on!
“Unless a company goes belly-up, a share-stock price that is going down is actually going up – in the long run.”
Obviously, the price (trend) is not always upward and one must be prepared to weather such storms. You shouldn’t have to be continuously focusing on the price after thorough due diligence on your chosen company.
Read more about Due Diligence here
Choosing a good stock and leaving it to work is the best advice you will get. This is because you can become emotionally attached to the performance of the shares and that can affect your mood.
There are also a lot of trading tools to help prevent a total meltdown if the company folds-up. This can be due to external factors like fraudulent scandals or government intervention. Keep tags now and then – this is important.
The recent events and scandal faced by Facebook saw it lose a significant amount (billions of dollars) in it the value of its share price.
Read more about investing here.
There are also ways to “have your bread buttered both ways” in investing. This is where the concept of short-selling comes in.
So, while we all inclined to bet on a company’s stock to go up – there are groups of investors who bet the other way. They have the hopes (based on indicators) that the price will rather drop.
This seemingly dubious form of trading is perfectly legit but comes, naturally, with an even higher level of risk. If the price increases in favour of all ‘normal’ long-term investors – the short position starts losing money. You may even have to fork out more to cover the amount borrowed to make the short-sell in the first place.
Short-selling is, therefore, if you are inexperienced and ill-informed!
So, you “buy” or rather borrow (leverage) the future value of the share/stock price usually at its apparent peak and hope that it will drop. You will continue to profit from the bet by as much as the share price continues to drop.
Earlier in the year, one such investor dubbed “50 Cent” bagged 200-million-dollars in a major shorting stint.
Shorting a stock is a complex, risky but highly lucrative method of balancing out a portfolio. A seasoned trader will, therefore, have several positions including some “buy” and “sell” positions on their chosen shares.
You should have various mechanisms (take profits and stop losses) set in place to execute their trades based on those positions.
Naturally, you wouldn’t just short a stock if you didn’t know something about what factors were to lead to a sharp/large drop in the share price.
But getting this right is often an exercise that straddles a fine line between being well-informed and intuitive and blatant insider trading.
So, in summary, shareholding generally occurs when you acquire a stake in a business. You can own intellectual capital, founding rights, or be s a funder/seed investor to help start the business.
So why do companies issue out shares to the public again you might still ask?
Think of share listing as a way for your company to hold itself publicly accountable. is the ultimate branding weaponry in its arsenal and quest to exponentially increase its profits.
With all the negative and positive commotion surrounding the Crypto market – it still begs the question, for those still curious. What does it take to engage in the trading of Cryptocurrency?
And by trading, we are not referring to the price speculation in a portfolio as one would with the price of a company’s shares or even CFDs.
We are rather referring to trading it as a commodity against other ‘Cryptos’ in a properly regulated online market setting. Similar to how a Foreign Exchange (Forex) market operates.
As with trading traditional fiat currencies, the price is purely determined by good old supply and demand for the currency and monitored by the availability versus volume traded.
It is therefore just a medium between traders where they can set limit orders to buy/sell Bitcoins for a certain price.
So, in the true approach of Debunqed, we will decipher crypto-exchange trading by looking at what you need to do to get into it, and what you stand to gain.
The first step would be to open a secure Crypto wallet to physically purchase (own) some altcoins. Bitcoin, Ethereum, and Litecoin are the main coins offered by Crypto wallet providers.
They hold the most value and can thus be broken down into smaller denominations (Altcoins). The same way the dollar is used as the main exchange for other fiat currencies. This example helps to put things into perspective.
Make sure you do your research into which wallet you will use. Obviously, if you are mining a certain Cryptocurrency you would naturally purchase them directly from that software provider of the Altcoin.
Using Ripple mining as an example, the platform is supplied by RippleNet and naturally, it follows that the Ripple company mines all the volume and controls its supply.
Getting the digital currency into a wallet can be a quick exercise.
It can take as quickly as between 5 – 20 minutes via a peer-to-peer Bitcoin marketplace connecting buyers with sellers like at Paxful.
Make sure you deal with reputable sellers. This wallet provider rates suppliers based on how reliable they are so only deal with sellers of the highest ratings.
The actual purchase (mostly conducted via online chat) can be made via a Credit/Debit Card, online banking or convenient money transfer facilities like (Europe-based) N26 Bank, Skrill or PayPal.
You can even purchase and send gift cards from Amazon for instance, to the seller (to the value of the currency being purchased) for the seller to release the Altcoins.
The actual coins are stored as an alpha-numeric key code – with the currency value in the wallet once acquired.
This after the wallet-broker takes a small fee for the transaction. This code/key needs to be kept secure – backed up online and offline (highly recommended). This is possible on special flash-drive (Crypto wallet) like the Trezor or a Ledger Nano. The device would hold the deposit key if you were transferring it to another wallet or to an exchange to trade.
The next step would be then to source a robust and user-friendly platform to trade your newly acquired currency on.
The best cryptocurrency exchanges would allow you to swap fiat currency such as dollar/euro for the digital currency directly. Naturally, you can trade one digital currency for another as well.
There are quite a few to choose from so it is good to read the reviews. You should then select one based on the number of deposit/withdrawal methods, the fee structure level, number of countries served, availability of security tools and features.
The last aspect is a huge determining factor: exchanges can be prone to hacking, or loss from outages. Lastly, their margins and exchange trading functions are good to observe too.
For serious and equally secure trading, you will likely need to use an exchange like Binance that requires the user to verify their ID before being opening an account. Make sure you have all your documents ready and up to date!
When it comes to the actual trading, let’s take a scenario where two people want to sell an altcoin but not for the market price. One sets a limit order for lower and the other for a slightly higher price. So, the best price to purchase Bitcoins, in this case, would be the median of the two prices.
If the buyer wants to purchase more than one altcoin, they will continually take the lowest price available. By doing this, the “price” of the altcoin will increase as the lower-price sell orders are no longer available.
You will then, as with Forex, purchase pairs of where you think your digital currency will be stronger against another e.g. BTC (Bitcoin) vs XRP (Ripple).
This combo would look like this on the exchange: BTC/ XRP – 0.00011960. What this means is that one Ripple coin is worth that much Bitcoin for instance.
This type of trading, like commodities or forex, requires constant attention and the monitoring of prices. But there are tools that can also help you set prices and have the trades auto-execute.
So, a platform which provides such tools conveniently allows you the time to do other important things. Like paying attention to your spouse, formal job or family and friends. That would be ideal.
If you have the cash, time, expertise and financial clout, it is even possible to run your own Crypto Exchange!
This is another benefit of a decentralized currency system that will allow you to earn some cash by charging for the usage of your robust platform.
Well, this may be until the fiscal authorities’ crackdown on all of the platforms with restrictive legislation.
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As an Arsenal Football Club fan, one has the natural tendency to follow the progress of both present and past players of the revered North London title-winning institution.
The prestige of playing for the club comes along with all the bell and whistles required to make life living in the small yet expensive hub city often dubbed to be the centre of modern Europe, a breeze.
It was rather sad to read about the unfortunate fortune of a former player who had a big heart and passion for the beautiful game. He was, however, a bit aloof and care-free on the pitch. It turns out this was a character trait that perhaps extended to his financial affairs.
He was recently reported as sleeping on the couch of a friend without a penny to his name. How can that happen, you might ask?
His weekly wages were a reported 50 000 Great Britain Pounds! So how did he go from earning that figure, to being dead broke?
Such a bad turn of fortune is not uncommon for celebrities, qualified professionals, and lottery winners. This can be explained by a simple lack of ‘investor mentality’.
This mindset can be instilled in us from a relatively young age if you have had the luxury of growing up with parents, teachers or a mentor who imparts this knowledge to you. It can also be learned later in life – often the hard way.
Similar to starting a business, the biggest barrier to entry into any form of investment is always the initial capital. Once you have it, coupled with the investor mentality, it’s hard to fail financially in life: just ask the current sitting American president!
Now as obvious as this sounds, you need to put in money to make money. That is why investing, for instance, is mainly carried out on a large scale by banks – with your money!
What you do with the money when you inherit it, win it, or save up from a weekly or monthly project-based income is more important than just having it in the first place.
Wouldn’t you agree that money comes then often goes faster than you realize? Having a grasp on why it leaves so fast is what we should be paying attention to.
Let’s firstly be sensible about this – investing is always a long-term project. A desire to reap short-term gains or having such a mentality is paramount to risky gambling or betting against the odds.
“Patience is an investor’s game – if you don’t have any, don’t bother with the mechanisms that don’t lock you in for a few months to enable you to realize a return.”
Enough of the rhetorical questions and statements. Let’s briefly look at a few investment vehicles in the true fashion of Debunqed.
This is the least risky investing vehicle and tends to suit patient investors. Usually, it is for you if yo are the kind that loves to watch paint dry. 🙂
Your only risk would be using a non-government backed bank for it. The higher the amount you invest, the better the interest rate you get. So this basically benefits the already wealthy. Some savings accounts are even known to offer you 0% or fractional decimal interest rates which are calculated nominally.
So it begs the question – why would you even consider putting your money in savings? Well, using this investment strategy helps with a good credit score. That comes in handy when you apply for loans or obtaining financial backing to start your new business. So they do have some use.
Risk level: Little to none.
This is the golden nest egg of investing – that is if you can raise the bond for property or inherit one.
Property is one asset class that tends to only appreciate and relatively well over the years depending on what is happening in the area/town or economy.
Getting in is the difference between having a spender or an investor’s mentality.
What do we mean by this? Well, if you can save up for a deposit to buy a brand-new luxury car, you could and should do the same for a house.
That way each “monthly rent” payment goes towards something you will eventually own. You could also buy-to-rent. The income generated from the tenant (rent) will help you pay off the bond.
Consider the appreciation value of property in your local area over the years. But like anything valuable, you must be prepared to maintain its upkeep – the costs will be more than your weekly carwash.
In the long-run when you realize the greater future value, you could even downgrade to have some extra cash to spend. You could then get that car of your dreams or travel and see the world.
Risk level: Low to moderate.
The days of stockbrokers are numbered. Trading firms and hedge fund companies are slowly being replaced by AI computers. These days, you can take full charge of a portfolio of equities, CFDs, Futures, Commodities, Options, Forex and Cryptocurrency directly from your laptop.
There are a number of online trading platforms out there so it is a good idea to go with the accredited ones.
One of the key benefits is that they all offer a free trial – which often gives you a mock .account. That’s a great way to learn about the tools and the above-mentioned markets.
There are aspects you need to pay attention to. One of them is leverage trading . It is essentially borrowing money to trade (payable with interest) – a double whammy if or when things go south for you.
Risk level: High to Excessive.
As the name suggests it is derived from a pool of funds from a specific institution or industry. Mutual funds are offered by institutions as a supplement to retirement plans (pensions and annuities).
They offer you a return (often a stable monthly or quarterly pay-out) based on a fixed term that you agree on with your portfolio manager.
The offering institution would then apply your pooled monthly contributions into a diverse portfolio to spread your risk exposure.
This, however, requires the attention of a (paid) portfolio manager and is thus susceptible to the principal-agent problem.
Risk level: Low to moderate.
If you have some spare cash and don’t want to bear the risk and burden of running a business yourself, you can fund other people you believe will be successful.
In this arrangement, confidence is placed by you on the owner and the offering. You can then state the terms for the release of your funds such as a quarterly return on investment or a larger stake in the business and its profits.
Rapper Nas is known for his investment in Silicon Valley start-ups as a Venture Capitalist – which gives him a share in the companies he backs with the hope of it growing exponentially to increase that shareholding’s worth.
Celebrities and sports stars usually have the capital to diversify their portfolio by investing in or starting up a new business. One such notable venture was the one where Rapper/Producer Dre’s Beats brand got bought by Apple for three billion USD.
Risk level: Moderate to high.
Though not an easy commodity to come by because often the initial value can be quite high (unless of course, you are lucky to find an item at a junk sale or low-key auction), rare commodities can also form part of your future financial security.
Rare coins tend to take a long time to mature in value. Likewise, a painting can appreciate quickly in value if the artist’s “interesting” background comes to light in the press for good or bad reasons.
As an example, a rare Nelson Mandela coin once sold for 100 000 USD while he was still living. So, one can only imagine what the few in circulation are worth now.
Read more about rare coins here.
A rummage around old antique shops and secondhand sales can reap rewards if you know what you’re looking for.
Risk level: Low to moderate.
These are long-term interest-bearing certificates issued primarily by governments (via monetary policy) but also by certain large public institutions.
Bonds give you a guarantee of a future value using a specially controlled interest rate. They are usually issued with fixed terms and can only be accessed after 3 to 10 years.
This locks you in, to hold the bond for the agreed period regardless of which way the interest rates are going.
Naturally the higher the rates the better for you. As a cautionary note, you will be subjected to the regulatory activities and monetary policies of the country in which you hold the bonds. Choose where you buy very wisely.
and research your product.
Accessing bond markets is also not easy and you may be subject to complex rules pertaining to the country, residence status and your credit score, and so on.
It is really for the long-term investor and can be used in the same way mutual funds tend to be applied, to supplement one’s retirement annuity package.
Risk level: Moderate to high.
You need to remember the importance of imparting this knowledge to our youth, friends, and family so as to continue the cycle.
The simple answer being: Education. The lack of it is one of the fundamental causes of poverty.
A number of celebrities and sports stars have overlooked it’s true importance so as to follow their true passion and skill. This is not necessarily a bad thing. If you have the right people around you to help you manage your finances.
It was reported he signed documents without knowing the full content and liability of what was being presented to him. It was also said that she would even bring paperwork to the football club’s training ground for him to sign.
Let’s be honest, we don’t know the full facts but there is a lesson. This “wife” character could be anyone that you entrust with managing your finances so, be wise as to who you choose to oversee your accounts.
Having a grasp of your assets (if any) less your liabilities is the first place to start. Once you know what you have or don’t have, you can then set goals.
Think about what you need to do to achieve a net worth that will sustain you for the long term.
Granted we all must pay bills. We will write down that part of our income but we need to focus on what is being done with the money that is left once your overheads are met.
Educate yourself (skip a binge session on Netflix). Take a deeper dive into the investment vehicles briefly spoken about. The resources page will provide more comprehensive details about all seven vehicles discussed.
It will also guide you on where to go to find out more once you have decided and which vehicle or combo would fit your investment type and appetite for risk.
I’m not quite sure if anyone has given some careful thought – in the heat of this ‘Crypto mania’. More specifically, have you ever considered the ramifications of the blockchain and its impact on the global economy?
This is an attempt to perform a calculated prophecy, based on the conversations we’ve had with like-minded visionaries.
An introspection into this ‘much-talked-about technology’ has led to endless possibilities.
Presently, every Tom, Anastasia, and Patel are pursuing short-term gains. You are all probably investigating ways in which they too can “cash in” by investing in new digital currencies.
This frenzy is mainly driven by how some of the altcoins are performing in value. Some digital coins are rising as much as 1000% in a ‘Crypto bull-run’. But the real appeal for digital “currencies” comes from the security, speed, and cost of transactions they facilitate.
Most of you are understandably looking at it solely from an investment point of view – after all, greed never sleeps.
Also, let’s not forget the anonymity it affords one – great for criminals and money launderers. Because of the increased risk, monetary authorities and regulatory bodies will make a case for tighter controls.
They may even push for the outright banning of this new currency altogether.
Retail banks, are currently entrusted with the movement of your funds (electronic transfers) and are governed by economic monetary policy. This happens under the watchful eye of big brother – the Reserve Bank.
These commercial banks are the “primary targets” so to say of the blockchain. They were, therefore, the first to react by investing or attempting to start up their own blockchains.
Such projects, however, prove to be expensive and still risky ventures given that no-one knows the source and destination of the blockchain.
Banks are nevertheless having to either make quick decisions about whether they get on board or partner with developers of Cryptos such as Ripple).
We also look at other financial institutions such as credit lending facilities and money transfer institutions. They are also are naturally in partnerships with the banks. They, however, stand to get wiped out by the blockchain if you think about it.
Really, who would want to cough up a 10% commission or a transfer fee for money sent abroad to your family? You could simply use something like IOTA which, by the way, is as a Crypto hovering around 3-5 USD (at time of publishing) per unit.
It is capable of transacting very quickly and securely with no transaction fees!
And how so you may ask? Those details are listed clearly on their respective websites.
It is the belief that the plan for Cryptos’ was to enable anyone to have access to a shared (decentralized) peer-to-peer type service that enables the secure transacting of literally – anything!
You can look at the blockchain working in the same manner as BitTorrent or E-Mule (for those who remember that far back). In the way, that data, albeit mostly bootlegged music, videos, and software, was distributed and downloaded on the web.
“Blockchain is essentially a quick peer-to-peer transaction of digital currency”
The value of Cryptocurrencies is now driven by how well it works as a system. You must look more closely at the added value it can offer society from a functional, practical, convenient, and of course, cost-saving perspective.
So, what does that then mean for companies like Visa, Mastercard, or even a digital banking app like PayPal?
You can also imagine the implications for investment banks and their traders. That is if markets such as the very volatile foreign exchange (Forex) are completely abandoned and substituted by Cryptos.
The purpose of ‘Cryptos’ running on the blockchain is, therefore, to change the way we transact and pay for goods and services.
The aim was to make it a ‘form of exchange’ but also to provide the resources for you to “mine” and own them. This can be an alternative income generator alleviating the need for job creation. It can also be a substitute vocation for those you who were perhaps made redundant by automation and AI.
So, once you mine the currency (provided you have the infrastructure and pay the overheads), you can use it to get the things you need or must pay for.
Your electricity bill, for example, can then be processed and paid for directly from an IOTA-holding wallet.
Speaking of electricity, we came across a very insightful article (referenced in the resource section) focusing on the impact of energy consumption that global rampant mining will cause the price of electricity and the environment.
Coupled with the switch to electric cars this could surely force you to invest in better ways to generate electricity. That is if we are to maintain sensible levels of sustainability.
Whether the price of electricity goes up or down will be determined by how quickly energy providers globally will be able to meet this surging demand.
We can surely be in a position to observe the upcoming impact on electricity consumption from next year.
More and more of the global population are beginning to mine altcoins for themselves.
As we head into the festive season and bonuses are being paid out, be responsible for how you splash out. Do your research first – even if it means waiting a year to see how it all plays out.
Creative destruction has become our new favourite buzzword. It also aptly describes this new wave or phenomenon of Crypto-mania driven by the blockchain and its shining star – the Bitcoin.
Suddenly, people who normally would not bat an eye at trading are now asking how to invest in Crypto.
We must note that anything that goes up very abruptly and abnormally – eventually comes tumbling down. The same way the big dot.com bubble burst and left many in dire straits after they over-indulged in overvalued tech companies.
Bitcoin will eventually find its peak and there will be a mass sell-out and a ‘crash’ at some point.
We even had the likes of an ironical skeptic – the dubious Ponzi-scammer dubbed ‘the Wolf of Wall Street’ Joel Belmont. He attempted to pre-empt a crash of Bitcoin.
The funny thing is, however, most of the critics are people who have not invested themselves. Perhaps they suffer from a case of ‘sour grapes’ or they simply don’t understand how it works to even get involved.
Doubt is prompted by fear of an unknown. Most investors themselves don’t understand the complex algorithms that went into designing the blockchain. However, it is proving to be resilient and gaining intrinsic value by the day.
Bitcoin (at the time of writing), which was hovering around $17000 after breaking its latest resistance level, and poised to reach the $20000-mark.
Creative destruction does not result in the reinventing of the wheel. It does, however, make the previous version look ancient very quickly. So while Bitcoins may not even last long, it has brought about its add-ons or spill-over effects.
There are now hundreds of cryptocurrencies. While not all and most will not experience huge price surges like that of Bitcoin, Ethereum, or recently Dash, they are still in circulation.
One of the spill-over effect includes the creation of jobs for new entrepreneurs, gamers, and developers across the globe.
Though it might be too late for investors to delve into the above-mentioned ‘big boys of crypto’, institutions are constantly developing blockchain solutions.
The fact of the matter is that the use and process of a blockchain makes sense and will, and is in the process of removing the old currency system.
Now, this may take a while before it completely phases out fiat money. This will also hopefully, much to the delight of governments and fiscal authorities, help eradicate the scourge of counterfeiting.
Think about the big picture, the blockchain technology will allow you or any institution smart enough to copy or modify a part of the anonymously written code. Blockchain is open-source, so anyone smart enough can create their own.
We can now have Crypto for shopping, for buying cars; getting your salary paid by a multi-national company irrespective of where you are based; or paying for using Internet services (IoT).
The latter already exists and is called IOTA – read more about it on the resources page.
This technology can enable one to find creative ways to monetize a cryptocurrency to serve any purpose. This while providing a secure and lightning-quick means to transfer funds.
Litecoin and Dash boast amazing speeds of under 10 seconds to complete international money transfers.
It would be interesting to observe any bank try and beat that without charging an arm and leg for that type of service!
The critics, who thought Elon Musk was crazy for inventing electrically powered battery motors to run engines and now trucks – are now eating their shorts.
Not only did Tesla´s market capitalization beat that of Ford and recently BMW, but it also outperformed petro/diesel-powered vehicle companies. Outdoing them in speed and performance, attractive looks, and practicality – Tesla is changing the motor industry.
Manufacturers like Volvo, Porsche have now rolled out their own hybrids cars. They are looking to go the route of fully electric motors within a short matter of years.
Such notable paradigm shifts in the way we do things embody the beautiful concept of creative destruction. Those that shun it get left behind.
And while it is not all about the monetary gains, you can own the coins to use for transactions rather than for investment.
It will serve you better, in the long run, to get in the know of what is out there.
Be wary and vigilant, as like with money and investment, there are sharks out there (offering deals). The aim is to exploit you and many other unknowing technophobes looking to make a quick buck or two from Crypto.
Mining Cryptocurrencies (is particularly conducive for gaming enthusiasts) and using them to benefit you quickly and securely in the way of a new digitized future.
Some Internet pirates in desperation use anonymous digital currency such as Monero. They now use java-scripted mining devices (hidden behind ads) to drain hash power unsuspecting from your web-page browsers.
Everyone is trying to get a piece of the action! There are also legitimate paid commission-based add-ons for trading as well – opening up a new world of digital earning online.
Don’t get left behind. But as with any investment, and a caution to the wise: Cryptocurrencies are highly volatile, and should not substitute any investment portfolio. They should only and always account for a fraction of your overall investment.
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