Sunday, 17 April 2022

Why is it so difficult talking about money? | Why talking about it can be positive

Are you scared of money? Or uncomfortable talking about how you handle money and allocation of it? I do find some people uncomfortable and scared of talking about money they have and how they are working their money. Being someone who invest which I think is a huge proportion among the millennials as investing is so much more accessible now.

Some people are scared that they are managing their money "wrongly" although there really is no wrong way but a better way. Having too much money or too little money can cause headaches as you need to think of how your allocation of money can affect your funds.

Chrometophobia

Chrometophobia is the fear of money, I know what you are thinking, how can someone be afraid of money. Well, it is not just the fear of money but covers from fear of spending money and the fear of thinking about money, to even the fear of touching money. *Please do not fit yourself to the symptoms and self-diagnose as they are information taken online. Some of the symptoms include, extreme hesitance to think about money, desire to count money constantly, withdrawal from activities that you enjoy. Beside being engrossed thinking about money, on the other spectrum of refusing to touch money and having depressive thought are some symptoms. This is not the main point of today’s video but more about sharing and talking about finances with your loved ones.

Creating a following by talking about finances and money

After being more involved in cryptocurrencies, I created a twitter account and you will find numerous accounts talking about personal finance and mostly crypto as twitter is really a place for us to connect. Many of the crypto big names are on twitter and it is a platform where they can directly communicate with people. Unlike traditional finance where if the CEO has a statement, they will need to release it via a statement which is looked through by the various departments before it finally goes to the shareholders for them to know. You can get instant updates and news on the company direction and focus via a tweet. One best example is definitely Elon Musk. Many individuals also share their finance journey via twitter threads and there are just so many gold nuggets to read.

Time to start talking and sharing about your money thoughts but to the right audience

It is no longer just about earning and saving money, with the volatility and advancement of technology, jobs are no longer as secure hence more people are thinking on how to make their money work for them. There are many individuals who choose to pursue their passion, for that to happen, some require a buffer amount or even a starting capital and building that up requires time and effort. Investing is a way to grow your money or to beat inflation at the very least. With investing, emotions play a huge role in managing our money, having to deal with the volatility which I have to say is huge in the past few years as more individuals start investing due to many factors.

Talking about money and sharing your thoughts are good, of course, find someone you are comfortable with or want to learn from. You can slowly brooch the topic and if the other party seems interested, it is good to share your views and thoughts on the topic of money and how you handle your finances. In Singapore, I think the topic of money and how you manage your finances is not an easy topic to broach or share as your peers might feel like it is a very personal topic and saying that you invest will tend to let people relate it to you being ‘rich’. This is my experience.

It definitely depends on your friends if they are comfortable with the topic and also if they enjoy sharing their knowledge on managing their finances. A lot of individuals do look for get-rich quick schemes when they know you invest and generally I try to avoid those conversations as I do not have any tips for the next meme stock or cryptocurrency. My friends and I do talk about investing and it is great when we bounce ideas off each other and learn from one another too.

One great thing that happened because of me opening up on my investing journey was that my mum shared with me her finances as she prepared for retirement and allocated a small amount for investing (which was surprising to me, considering her risk appetite). We also created a rough cashflow plan so that she is aware how much she has left and when she will receive her relevant payouts. I think it was a good experience taking with her although we do have discussions on how to allocate her money but ultimately, we follow her decision as it is after all, her money.

Even going through her insurance plans and deciding to restructure certain life policies as she has paid for them fully and hence was able to cash them out at a profit and move the funds to better plans to allow some growth for her money. It is important to talk about money as a family as it can give you a better understanding of how each individual deal with it and if they do require any help, it might be brought up while having a chat. Hope you guys enjoy today’s video, do subscribe for more content!

You can also find me on

► How I Protect My Bitcoin using Ledger: Get your ledger from HERE (Using my affiliate link will help me where Ledger will pay a small incentive that's not from you but from them)
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Sunday, 10 April 2022

Stagflation | What it is and why is it coming up so often nowadays?

I have been hearing a lot of this word, “Stagflation” and I do not understand fully the meaning of it although I know that it stems from stagnant and inflation. As I go on this journey to understand more, I know that it is not a positive environment to be in and I hope for the years to come, it doesn’t happen. So let’s dive right into it.

Firstly, stagflation is characterised by slow economic growth and relatively high unemployment—or economic stagnation—which is at the same time accompanied by rising prices (i.e. inflation). It refers to an economy that is experiencing a simultaneous increase in inflation and stagnation of economic output.- Investopedia.com

How it came about?

“Stagflation” came about during a period of economic stress in UK and politician Iain Macleod talked about inflation on one end but stagnation at the same time. It was then used again in the 1970s during the recession following the oil crisis. Economist have some theories on how stagflation can happen or existing theories on how to explains it.

  • Oil Prices

One theory states that stagflation is caused when a sudden increase in the cost of oil reduces an economy's productive capacity. This was seen in October 1973 when OPEC issued an embargo against Western countries which caused a global rise in oil prices which we do also see due to the Russian-Ukraine War. As such, transportation of goods increases causing prices to raise causing inflation.

  • Poor Economic Policies

Poor economic policies can cause inflation to soar even higher or cause the situation to go towards stagflation. It is difficult to explain this as it can be subjective and it is a theory that economist use to explain how stagflation comes about.

  • The Gold Standard/The Oil Standard

Many are aware that the US dollar went off the gold standard in 1971 when Nixon announced cutting off links between the dollar and gold as part of a broad economic plan. This removed commodity backing for the US currency and put the US dollar and most other world currencies on a fiat basis ever since. Although “Petrodollars” came up in 1971 where foreign oil exporters have to use the US dollar for the medium of exchange making it established itself as a global currency. As the US dollar became pegged to a commodity that the world requires.

Japan’s “Lost Decade”

Many know about Japan’s lost decade where from 1991 to 2001, Japan experienced a period of economic stagnation and price deflation. Japan eventually managed to outgrow it but lost out a lot in growth when compared to other industrialised nations. Japan was actually flourishing before the 1990s but the real estate and equity markets burst in 1989 causing huge drops in stock prices as well as land prices which are still evident today on land that are not in the city areas.

The Central Bank of Japan, Bank of Japan, was by and large recognised for some mistakes made for example,

Monetary policy was stop-and-go; concerned about rising prices called inflation and soaring asset prices. The Bank of Japan put the brakes on the money supply in the late 1980s, which may have contributed to the bursting of the equity bubble. As equity values fell, the BoJ continued to raise interest rates because it remained concerned with still-appreciating real estate values. Higher interest rates contributed to the end of rising land prices, but they also pushed the overall economy into a downward spiral. In 1991, as equity and land prices fell, the Bank of Japan dramatically reversed course and cut interest rates. But it was too late, a liquidity trap had already been set, and a credit crunch was setting in. - Taken from Investopedia

I came across this article by TODAY titled,”For one Japanese salaryman, nearly a decade of US$4 annual pay rises” and I found it to be really demoralising especially for someone who has a family to take care of. A rough summary: Masamitsu (50 years old), a Japanese accountant, rarely goes to the cinema or travel the world and also rarely eats out as his annual salary of about US$34,000 which has an increment of US$4 every year is used to support his family of 3. His salary of US$34,000 is inclusive of a bonus of two months' pay twice a year and allowances. His wife works part-time to supplement their income.

He knows he can command a higher remuneration but accepts the current status from the many statements he mentioned as he sees the situation in Japan and knows that he is better off than most:

"Given my age, the base pay actually wasn't too bad, there were other places that were lower,”

"It's kind of unfortunate it doesn't rise more, even though I'm working hard,”

"I'd have liked to have had another child, but the one has taken everything we have,”

Fighting Stagflation

As mentioned earlier, stagflation is a combination of relatively high unemployment, inflation and slow growth. Some people are saying that right now, a recession is impending, however the government reacts differently to a recession and inflation which are both opposite of each other. There are definitely no easy way to fight stagflation but I have done some research.

  • Monetary policy can generally try to reduce inflation with higher interest rates or increase economic growth by cutting interest rates. Monetary policy cannot solve both inflation and recession at the same time. We can see this at the recent FOMC meeting that the US Fed is very focused on tackling inflation as the effect of inflation is affecting majority of the US citizens especially those in the working class. I read on Twitter (not verified source) that the Fed will be more aggressive in tackling inflation as numbers show that there are available jobs for the unemployed and that by increasing the interest rate, they want to encourage people to take up the available jobs.
  • Next, one solution to make the economy less vulnerable to stagflation is to reduce the economies dependency on oil. Rising oil prices are the major cause of stagflation. I think this is something that might not be easy to control considering the war and pandemic which worsen supply chain issues.

I am not very knowledgable on this topic and am learning a lot as I research and write this out. Do let me know if there are any feedback. The situation is very uncertain and we can just see it from the stock and crypto markets. In March, my portfolio hit an ATH and entering April, it has dropped back quite significantly. 2022 will be a rocky year and we shall see how it all pans out. Pretty lazy to do a video up and anyway it will be the same content as my article. See you guys next week!

References: https://www.todayonline.com/world/one-japanese-salaryman-nearly-decade-us4-annual-pay-rises-1847766
https://www.economicshelp.org/blog/glossary/stagflation/
https://www.investopedia.com/ask/answers/040615/what-actions-or-policies-can-government-agency-take-counteract-and-end-stagflation-economy.asp
https://www.investopedia.com/terms/s/stagflation.asp
https://twitter.com/biancoresearch/status/1512106368647536649

You can also find me on

► How I Protect My Bitcoin using Ledger: Get your ledger from HERE (Using my affiliate link will help me where Ledger will pay a small incentive that's not from you but from them)
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Sunday, 3 April 2022

Q1 2022 Portfolio Review | On a roller coaster ride

Welp, it’s been a crazy first few month of 2022. I am feeling exhausted following the news and keeping up with the updates of the world. I would like to emphasis that I am in a very privileged position to be talking about my finances and portfolio updates when people at the other side of the world are suffering and living in constant fear as their peaceful lives were robbed from them. Hoping we can all understand each other and help one another through these difficult times. If I were to read back from a few years time, I hope the world would recover and that everyone would be safe and happy 🙂

Q1 2022 was devastating in the beginning for my portfolio although things have picked up towards the end. I think I have not gone through so much volatility in such a short period of time. Portfolio didn’t really have much growth with the monthly DCA as it is a minimal amt being injected in. But the recovery so far has been great for the portfolio. You can also roughly gauge my portfolio value although not huge but we can see quite a growth from 2021. I only started recording the value of my portfolio in mid-2021 so I can’t see how it compares to 2021 until the later part of the year.

Read more: End of Year Portfolio Review & Reflections | Inching real close to $100,000

Stocks

Not much difference in my stock holdings as compared to my end of year portfolio review except a slight increase in Tesla holdings and that I sold off most of my SG stocks. When I mean slight increase in Tesla, it really is slight, just increased it by 2 shares as my monthly DCA amount is minimal so using Syfe Trade has helped me a lot as I can do fractional investing and just make sure that my few hundred is getting invested monthly. Seeing Tesla’s growth as the world starts to be aware that they do need to reduce their reliance on oil and gas but of course, in the short term, it is still very much needed. Giga Berlin also opened and Tesla has high demand in Europe. Giga Berlin is also it’s first manufacturing location in Europe and the most advanced, sustainable and efficient facility yet. In recent quarters, Tesla has been exporting cars from China to customers in Europe. China is a huge provider in terms of exporting of the cars.

Read more: Why I have decided to allocate about 20% of my crypto portfolio to stable coins and earn interest

Recently, it also announced that it will have a vote during this year’s annual general meeting on whether the stockholders would like a stock split. I think it’s a pretty big decision and it has been only a short while since it’s previous stock split in 2020. The share price has gone above $1000 and I think it’s in a really great position as delivery number do look to be climbing as demand increases and new factories are available. So here’s the stocks portfolio proportion accordingly.


 Stocks are pretty standard for me unlike crypto where all the action is and so for stocks, mostly into Tesla and occasionally ETFs. That’s all, pretty boring but happy to keep it that way as cryptocurrencies do keep me busy with all the news and new protocols. Although mostly I am lurking on Twitter and just reading.

Cryptocurrencies

For cryptocurrencies, I have done a clean up on my portfolio and focused a lot more on ETH and LUNA. The Terra ecosystem has been really interesting as I learn about arbitrage opportunities, delta neutral strategies using Mirror and just being able to utilise the Anchor borrowing platform and looping it to get more LUNA is so fun! I was previously holding a lot of small positions (Algorand and FTM), FTM still has a lot of growth potential but I do want to instead concentrate my positions and so I sold it off and focus mainly on ETH and LUNA.

The recent run up of Bitcoin and ETH has bumped up my portfolio value. I also deployed a substantial amount of stablecoins to ETH when it was around USD2900 - USD3000. I will still continue to DCA and might take profits along the way depending how it is. Here is the portfolio of my cryptocurrencies.


 I know that there are many opportunities to grow your money in crypto and usually those who are looking for the next 10X do not buy the top 10 as their market cap is already of a certain size and I don’t think anyone is expecting BTC or ETH to 10X from here haha. But I know that there will need to be certain amount of research or you need to know where the momentum is whether people are buying in to the alt coins that you are intiating a position in. There are many great projects but with nobody buying them = no price action. I am ok to continue building on ETH and LUNA position as I went in both at a relatively lower price (not as low as you think but lower than the price now).

But of course, in crypto, the movement and narrative changes rapidly and new things keep popping out. You can’t be in everything unless you have huge capital on hand. We will review again at the end of Q2 2022 on whether it has worked out for the better or worse.

Moving forward

I haven’t reached my goal of having $100,000 in my investments but I am really really close. If it continues being such a upward market for the rest of 2022, I am confident I will be able to reach it. Otherwise, moving forward, I will DCA in, it takes time to see the results but so far so good (crosses fingers). I am also travelling overseas and so will need to not invest too aggressively as I save a bit more for air tickets, accommodation and overseas expenses will be high due to inflation and I will be off for more than half a month which is considerably long. There are still a lot of unknown factors (eg ART/PCR test results) to ensure that I can fly and also not sure whether rules will change. Staying both excited but cautious as well.

An articles I read this week that I thought was interesting: https://vitalik.ca/general/2022/04/01/maximalist.html

You can also find me on

► How I Protect My Bitcoin using Ledger: Get your ledger from HERE (Using my affiliate link will help me where Ledger will pay a small incentive that's not from you but from them)
► How I earn interest on my Crypto (Hodlnaut): https://app.hodlnaut.com/signup?r=_JF037Nb0 Get USD20 equivalent for your initial deposit of at least USD1000 on any of the supported asset by using my referral link
►Join Celsius Network using my referral code 1169038ddc when signing up and earn $50 in BTC with your first transfer of $400 or more! https://celsiusnetwork.app.link/1169038ddc
► Where I Buy my Cryptocurrencies: Gemini (Receive $10 of bitcoin after you buy or sell $100 after signing up using https://www.gemini.com/share/558gylyhg)
►FTX: https://ftx.com/#a=41877278
►Use my referral link https://crypto.com/app/evwynu4g57 or code: evwynu4g57 to sign up for Crypto.com and we both get $25 USD :)
► Where I buy my stocks
FSMone Referral: P0364886
Tiger Brokers (Free stock and commission free trades, check out more here
Interactive Brokers (Open an account today and start earning up to $1000 of IBKR Stock for free!*Terms and Conditions apply)
► Google Pay: v89ph61
►Syfe Trade Referral Code (get $10 cash credit): SRPSL8MGX
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