How To Become a Staggering Money Expert

Among all disruptive innovations, money is what will radically change its matrix

If you have your money in a savings account or in bonds, you’re losing 15% a year to inflation.

Yet, you can scream out loud that you don’t understand what is happening. Or you can say that everything is in a bubble.

But one thing is for sure. If you don’t understand who money works, especially these days, you’ll lose half of your purchasing power in a decade.

So, give it a try. Start reading something. Youtube is full of good stuff to hear. Podcasts are rocking. You have no excuse for not knowing what’s going on.

I know, debts are rising like hell. Everything seems to be burning out. But it isn’t. The rules simply changed.

Bonds are not a safe haven anymore; stocks are.

Gold is a safe asset, but you can lose money to inflation.

Bitcoin is the new alternative.

Commodities may be one step away from a bull market.

However, the question remains. How are we going to pay our debts?

According to Ray Dalio, there are 4 levels governments can pull to escape debt crises.

1- Austerity: spending less;

2- Debt defaults/restructuring;

3- The central bank printing money or other guarantees;

4- Transfer of money from those who have more than they need to those who have less (much higher taxes for the rich).

Paradoxically, the world’s debt is already so high that it’s not just austerity that would set off an unwind of asset prices and a vicious feedback cycle. Slowing growth alone could set off this chain reaction since the debt becomes unserviceable without fast-enough growth.- Jeff Booth in The Price of Tomorrow

The reality is that we are heading towards negative interest rates. Ironically, the believers of the free-markets are the ones that are inflating the system.

People who don’t know what they’re talking about say it will drive inflation. Many doomsdayers say the trillions of dollars the US government is printing will even create hyperinflation, similar to what we saw in Venezuela. There is a lot of truth missing from this discussion. (…) What’s really going on? Money can be created out of thin air. But it doesn’t create inflation until it is circulated in the economy. The concept called “the velocity of money” helps you see whether money is being transferred from one person to another. The velocity of money has been low for a while. Where is all the money being created going then? Into financial markets. That’s why assets like homes and stocks are going up in price. The velocity of money in a society is driven by psychology. — Tim Denning

There’s one problem with this monetary policy of negative interest rates and printing money. In the short term, it juices the economy. But you’ll be always pushing the real problems with the belly.

The rich are getting richer. The poor are being subsidized with printed money to keep surviving.

On top of that, we will face a brutal deflationary environment provoked by disruptive innovations. Tech industry services will get cheaper and cheaper.

So, what’s the perfect solution?

There isn’t a perfect solution. But you can protect yourself from the future.

Bitcoin for Dummies

This is a test of critical thinking. We need people who have authority in the future that have deep critical thinking skills.

Everybody is saying things about Bitcoin or the monetary system without really knowing what they’re talking about.

This week I read an article from a writer I admire, explaining why she isn’t buying Bitcoin. And its reasoning was that BTC was very expensive.

My mind exploded.

Bitcoin is too expensive? You can buy $10 of BTC. You can buy $1 of BTC. A Bitcoin can be divided down to 8 decimal places. So, 1 BTC is at $45 087,80. If you buy $10 of BTC, you’ll buy 0,00022178 of it.

What irritates me is finding so many educated people talking about money without studying money. If you don’t understand Bitcoin or the blockchain, try to pass the critical thinking test. Pick a f*#$ book and study.

Don’t reproduce, like a parrot, what ignorant people say. At least be responsible and curious.

1+1=2

In the present time, it’s more vital for you to understand what Bitcoin is than to know how a credit card works.

So, what is Bitcoin?

Bitcoin is decentralized digital money. Unlike the dollar centralized in a central bank, BTC is in the blockchain. It’s a decentralized digital system built to sustain infinite protocols between two parts. The blockchain basically it’s a set of millions of computers distributed all over the world. Behind each computer is a programmer building code protocols. And like money, if two parts agree on the protocol, the “transaction” happens.

One example: If you agree with your neighbor to change one old computer in your garage to an old bicycle that your neighbor has, the protocol you two agreed is done. And the transaction can be made.

Every transaction has its unique code. And all the transactions are public and shared between all the computers from the bitcoin net. Therefore, the system is virtually indestructible (unless you shut down the Internet all over the planet.)

Here’s an example of a bitcoin address: 174tWbd9S1K4vQ8Rd3thnL0aPgf841T

How can I buy Bitcoin?

There are hundreds of digital platforms (digital banks) that change currencies for BTCs. Some of the most popular crypto exchanges are CoinBase, Cash App, Binance, and Bisq.

Bitcoin’s security is based on cryptographic algorithms: ECDSA and SHA256. These algorithms are unanimously considered the most secure and are also used by the larger banks.

Some BTC exchanges were hacked in the early stage, being stolen personal data from BTC owners. But also PlayStation accounts were hacked in 2012, and Uber in 2016. This is a problem for all private companies.

Yet, if you buy a physical wallet, you can download your Bitcoin and keep your wallet in a safe place.

Be a Long-Term Thinker

Recently we assisted to another novel with WallStreetBets Redditors.

If you ask me what I think about it, I’ll probably say I don’t give a damn!

I’m not a short-seller. I don’t buy options, derivatives, and all the casino orgies available in the market.

I invest in real companies. I deeply analyze and believe in those companies.

Ok, Nuno, so why do you invest in Bitcoin?

I have 10% of my portfolio allocated in BTC. It’s a high stake, I know. If I had a more conservator profile, I would buy gold. But that’s not on my genes.

I love disruptive technologies. That’s why I’m an early investor of Tesla, and for God’s sake, I’ve been fortunate to believe in someone like Elon Musk. Yes, the crazy Elon. The guy that wants to put cars driving themselves and the same guy who wants to die on Mars.

By reading thousands of words a day, I realized that we are in a profound disruptive technology era. In the 1900s, the internal combustion engine, the telephone, and electricity emerged. In 2020 was year zero on another innovational disruption.

5 platforms will radically transform the entire world’s economy. Artificial intelligence, robotics, battery storage, DNA sequencing, and blockchain technology.

If you want to be like Warren Buffett and think of investment as a long marathonist, you must learn about these platforms. Whatever you’re going to do in your life, they will be there, helping you in your savings, in your health, and at your home.

Final Thought

You don’t have to be an expert. But you also shouldn’t be a moron.

The market is not in a bubble. It merely changed the rules. Central banks are the new sheriff in town. They print money as needed. Debts rise, but everyone is playing the same game all over the world.

When will it blow? We don’t know if it will ever blow because of printing money, my friend.

Maybe it will blow up because of another black swan event in a shy little town on the other side of planet Earth.

So, stop suffering. One thing is for sure. If you’re not in the market, you’ll lose money — a lot of it.

I think of Bitcoin as a haven. If the monetary system blows up, BTC will be a safe haven. As Gold, those two hard assets will be the counterweight to any global financial model’s eventual failure.

Being an investor is like being a priest. You have to have faith.

Nobody can predict the future, not even the best investors in the world. But they do adjust their portfolios while environments change. And the top hedge funds have started to allocate a small portion of their portfolio in Bitcoin.

I have faith in technology innovation. Yet, of course, I have my S&P500 index shares. I also have cash. I’m not a Japanese kamikaze.

You should at least take a little time to study these things. You should have your deeply thinking about who you are, what you want to do with your life and your money and act accordingly.

I’m not a financial adviser. But I genuinely love to share my thoughts, strategies, and what I think is an excellent opportunity.

Like a good athlete, you should do the same exercise.

Don’t be obese in your brainpower. Exercise your brain, and you’ll see things more clearly. You’ll find out new things you didn’t know before.

Money is time. And time is money.

If you don’t spend time understanding money, you’ll lose both.

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