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Modern Economic Nonsense — Next generation of wealth

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Personal wealth is now more accessible than ever. It’s easier than ever to start investing, and it costs less than ever to do so as well. The internet has made it possible to invest in stock market directly from your desk and get started with little or no money. However, the way we think about wealth has changed too. It used to be about reaching the top of the financial hill and staying there for as long as possible. Today that approach doesn’t work anymore. Instead of focusing on a single goal, we need to look at new ways to generate income, increase our spending power and build wealth for the future. Wealth is no longer just about having money in reserve for old age; instead it should be used as a tool for enhancing our lives today and tomorrow. The new generation of rich people is those who have flexibility in their careers and can enjoy ample time off from work; they are also those who know how to save money while spending on the things they truly value — like education or travel, or cryptocurrency 😉 — so they can relax when they retire.

Create a new financial identity

As you grow your wealth, you’ll want to create a new financial identity. It’s the idea of having separate accounts for each asset type to help you better understand your wealth. For example, you might want to create an investment account, a savings account, and a retirement account. This way, you can better track your spending and investing behavior. You can also keep your spending under control and avoid unintentionally overspending by only having a single credit card.

In the current great correction of the market, people realized the old method of the investment may no longer work since the higher the inflation with lower the growth potential. You need a new way to generate wealth in a creative yet low-risk way.

Be proactive in saving for the future

While it’s OK not to have a specific amount to set aside each month, many people fail to live up to their potential. Remember: the earlier you start saving for retirement, the more you can increase your monthly retirement income. Moreover, the earlier you start saving, the less you risk running out of money during retirement. If you are currently earning a low income, you should put aside as much as you can each month, as high savings rates now can translate into a higher monthly income in retirement. Also, you can find alternative ways to test the new ideas about future finance, including cryptocurrency.

Invest for the long term and use liquid assets to grow your wealth

When it comes to investing, the earlier the better. This can mean starting young, and investing your spare change. Once you get the hang of it and understand the basic principles, it gets easier. The earlier you start, the better. Especially if you have spare change. Invest in stocks, and crypto such as Bitcoin and Ethereum. With Bitcoin and Ethereum, you can expect a long-term return. A long-term investment strategy is also a good way to grow your wealth over time. You can also use liquid assets to get the biggest bang for your buck. For example, you can use a savings or investment account to withdraw money to cover monthly expenses, then write the transaction off taxes-free. You don’t want to tie up all your wealth in one investment that might not pay off for years. Also, try to minimize your sending and taking more loans with higher interest payments.

Don’t forget about insurance: protect your current and future wealth

If you’re planning to retire, it helps to understand how much money you’ll need to live comfortably in your retirement years. This is known as your retirement savings goal (RSG). The first step is to calculate your likely annual expenses. This may include: housing payments, food, transportation, insurance, other necessities, and perhaps some travel too. Then, you need to add in your monthly expenses like transportation and health care. Finally, you can add in other important costs like retirement savings, annual vacation, and some discretionary spending money. Once you have a good idea of your current financial situation and your likely expenses in retirement, you can create a retirement savings goal and adjust the goal if necessary. Having a retirement savings goal and an insurance plan will help protect your current wealth and ensure you have enough savings for future generations.

Bottom line

While it’s important to celebrate the present, it’s also important to consider the future. You must never forget where you’ve come from and how far you’ve come. This is how you’ll be able to enjoy the prosperity of the new generation of rich people. 

Reminder: This article is for educational purposes. I am not your financial advisor. Trust me will risk your investment. Instead, do your own research.

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Crypto Research

The Future of Machine War II

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In late 2021, I wrote an article about A.I. vs. Blockchain. I realized it was closer than I expected.

https://medium.com/@xuanling11/artificial-intelligence-vs-blockchain-the-future-of-machine-war-b685d208ba20?sk=874af90c7acbe857fa004c0ebe0d5e28

Web2 is leading a future of technological centralism. 

The way we see the world in ancient is what we saw became what we believed. Later, the enlightenment process helped humans realize what they had seen was disguised by the nature principle. Once we tested our assumption and received accurate results, we thought we had mastered the nature principles. Yet, we did not make the world better than we thought we could. 

We are living in a world in which companies know more than you than yourself. Companies can likely tell you what you should believe without letting you know. 

The secret weapon that companies like Google invented is A.I. or Artificial Intelligence. 

If A.I. can think like a person, it can easily replace you! Since companies got all your data, you freely offer them by using their free services, and they can replace you one day without you realizing it. 

Without all conspiracy theories behind what Google may or will secretly develop, A.I. reaching consciousness is … impossible.

If it does, Google has successfully made a human – dumb!

The most advanced A.I. – Tesla Autopilot Program cannot distinguish objects between humans and other moving objects during driving.  

Using technology makes people dumber than they think because it takes away your consciousness – the ability to think uniquely!

Blockchain is the future of decentralization.

We need a peer-to-peer system to regain consciousness and break the chain from Web2. 

It gives individuals the power to rethink information.

Think about today’s media; all information is filtered to offer readers without any surprise. News is data that Web2 selected specifically for you to read. 

We need a decentralized system so that you can receive unfiltered information and gives you a surprise that sparks ideas of imagination.  

Web2 is afraid of the blockchain because they are too big to fail. 

 They mimic the blockchain by creating a centralized node system – social media network. 

It is a net growing outward through a single point. Only the problem is that connection is facilitated by technology. And the biggest failure is such technology has a single point of failure problem. 

And they cannot escape the law of economics – the law of diminishing. So we will see Web2 grow slower due to the law of diminishing that they require more data with few increments of advancement through A.I. without any breakthrough because A.I. is a deterministic system that works with a lack of randomness. 

In Web2, they assumed everyone was stupid, and they offered solutions to everyone.

In Web3, everyone is good and should anticipate solving a problem together.

If you enjoy reading my articles, buy me a coffee here.

Photo by Aideal Hwa on Unsplash

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Crypto Research

Financial sanction to mixers

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Have you heard about financial sanctions from the US on virtual currency? At least, I have not yet. But the US Department of Treasury has issued sanctions on two crypto services: Blender.io and Tornado Cash.

To clarify, the US sanctions on tools but not target specific entities or groups of people.

So why bother to sanction something that the government probably won’t be able to sanction in the first place?

What is a mixer?

A cryptocurrency mixer, sometimes referred to as a tumbler, is a tool for money laundering. The sole purpose of the invention is to make transactions untraceable.

How to mix?

Even crypto is pseudo-anonymous, but it is traceable through your wallet address. A mixer is a black box service to filter your traceable wallet address into the untraceable wallet address.

How to wash your money clean in the traditional way?

https://dimensiongrc.com/the-stages-of-money-laundering/

The assumption is you will not get caught at each stage, and then you place your dirty money in a bank through companies and use the funds to purchase legal goods like houses or luxury goods.

There are mature regulations and rules to stop you from putting your dirty money into banks.

Digtial money landury

https://www.eurospider.com/en/know-how/compliance/211-what-is-a-cryptocurrency-mixer

A Crypto mixer or tumbler is a service to pool dirty digital currency in their favor and redistribute it into designated wallet addresses or addresses randomly generated. 

It is a challenge to stop transactions because there is no entry point for law enforcement to stop at each stage. 

https://home.treasury.gov/news/press-releases/jy0768

Ultimate Mixer

Tornado Cash is the king of the mixer. Unfortunately, there is just no way to trace transactions anymore. It is a smart contract with zk-SNARKs (zero-knowledge proofs) that does not require revealing a wallet address during transactions and ghostly distributed funds without leaving any traces.

This tool is the ultimate weapon that the government has to shut down, or there is no way to prevent transactions.

In Conclusion

Let’s change the future – legally. 

If you enjoy reading my articles, buy me a coffee here.

Photo by Espen Bierud on Unsplash

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Crypto Research

Why there is not crypto banking exist

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We have always heard about cryptocurrencies, crypto exchange, banking, and trading platforms, but we do not really grasp the idea of crypto banking. Crypto banking is a contradicted idea. If crypto is to replace banks and give users full control of digital money, why do you put your crypto into the bank? The new research paper argued that there are risks for banks to adopt crypto, but they did it anyway.

Banks want crypto

Cryptocurrency has a rough road at the beginning and continues to experience a bumpy road ahead. The institutional investors were watching its performance. In early 2017, institutional investors had opportunities to adopt crypto, but they found out the return of the investments was less than traditional financial assets. Regulations were not a concern for some individual institutional owners, but banks were conservative at the time. As a result, some investors adopted it in early 2018 than banks did. Then suddenly, the crypto market took off in 2020, leaving many banks to regret their decision in 2017. Many banks set up their digital investment group to rush into the market and increase prices. Of course, many of their investment positions are instead of shadow positions. It is unclear how much they have been invested in and what vehicles they took to invest in cryptos.

Crypto Exchange

Crypto exchange is a bank-like platform for crypto. Banks offered a place to purchase fiat currency. Crypto exchange did the same duty as traditional banks did. Since there was a gap between the crypto and banks, the crypto exchange took responsibility and offered crypto services. The crypto exchange took off after 2020, and they left banks in the dust. Then, crypto winter came in early 2022, and banks again hesitated to enter the crypto and started denouncing crypto usage, particularly in the Defi area. But interestingly, they tried to find ways to get into crypto without being directly exposed to cryptocurrencies—hint: through hedge funds.

How much banks exposure to crypto

We do not know how much banks have been exposed to crypto. We learned that the big Wall Street players were exposed to the services of the digital asset through State Street of their $41.7 trillion assets. Some have been exposed due to Luna’s collapse and 3AC bankruptcy. But again, no specific dollar amount was provided. 

Survivors

Since the crypto winter, institutional investors have been cautious about crypto exposure. However, crypto exchanges are the winner again. They are exposed to crypto and take risks more than banks do. As a result, they likely will weather the uncertainty. Furthermore, there is no need for crypto banking to handle your crypto assets since many such services will not survive long in the crypto environment. 

Crypto is resilience

Despite its fluctuating price and unsecured assets, crypto is resilient to phase out any bad business ideas and bad actors in the economy who wants to or try to dominate the market but who transfers risks to users to believe they are the one who should take responsibility for their carelessness. Unfortunately, those business models will not survive long.

If you enjoy reading my articles, buy me a coffee here.

Photo by Luke White on Unsplash

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