Winners and Losers: a cashless society

In Sweden, cash retail transactions have fallen 80%

Digital transactions in China have risen from 4% in the past 20 years to 34% in 2017.

A cashless society provides many benefits to society

Countries spend roughly 0.5% of their GDP managing physical cash

Consumers have better tracking of their money in digital forms, more convenience, and quicker and easier access to payments

Black market transactions dealt in cash will be strapped down

But consumers who value data privacy will also lose, as governments will likely use digital transactions as data

The poor and unbanked will lose out if cash is phased out

And society may become less democratic, with more power funneling towards institutions, governments, and financial corporations who control the digital system

 

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Money

Modern money has no intrinsic value

and I think that makes it the most fascinating case study ever

The USD is the global reserve currency and 60% of world transactions are dealt in USD

That’s crazy

The USD is backed by US.

But if the country’s economy fails, like Venezuela, Ecuador, or Zimbabwe, then the currency also fails. Zimbabwe now uses the USD after their currency fell to a value of zero. Now you can get 100 trillion dollar Zimbabwe bills on eBay for roughly $80

Money has value not intrinsically, but universally is accepted as valuable because of a universal trust

This is the reason a lot of things in our world exists

Communities, religions, brands, Bitcoin and all cryptocurrencies

Even the local bar you go to, which might not intrinsically be better than the pub two doors over, will garner more people if there is a higher perceived trust of value

Certain parts of India don’t accept the 10 rupee coin because it is perceived as non-legit, despite being fully and legitimately backed by the Central Bank of India

psychologically, we want to tag along on what everyone else uses

and that’s why money is valuable: because we all deem it to be

But what if one day we don’t?

That is why money is so interesting. It is a platform for power, but also a platform subject to collapse

why your college doesn’t matter. AT ALL

What college you attend is almost Not important at all.

Instead, you should be the type of person who could attend a prestigious college.

In fact, it was two professors, one from Princeton, who actually released a paper in 2002 that detailed why attending super-selective colleges had no impact on future career salaries (economic benefits)

How did the study work?

Well, it tracked students who 1) went to prestigious colleges

And then for the control group, 2) students who were admitted but did not attend top prestigious colleges (either due to $$$ or personal reasons, which is not apparently important in this study).

After extensive research, there showed absolutely no difference in the economic long-term benefits of attending a top college.

The salary boost was “generally indistinguishable from zero”

Top universities are not so good at developing students’ potential as they are at spotting future potential and offering spots to these bright students.

That’s not to say that prestigious colleges don’t offer much better resources and networking. They do and will surely add a kickstart to your career. But in the long-run, it doesn’t matter so much as where you went as a student as much as what type of hard-working student you are.

Also, I need to note that salary is definitively not the best measure of future success; however, when you ask most college students these days why they are attending college, the most common response you’ll receive is “for a job/money.” So, I am sure this answer should offer a lot of solace to students who are still worried about not attending Harvard.

Good Luck.


Source: Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables

Living expenses

Personal finance is a topic I’ve always enjoyed studying.

How can people, individuals, manage their finances in the most efficient way while also satisfying the economical unlimited wants and desires of being human?

How about we do some incredibly rudimentary examples of personal finance:

$1000 apartment or $800 shared with your college friends

$15 UBER ride or walking OR $2 subway train

$15 lunch at Pret a Manger OR making your own lunch for $5

$5 Starbucks coffee vs. no coffee

And the biggest one that I’ve been trying to cut out for my living expenses:

Haircuts.

Yes.

I get a haircut quite regularly, around every 3-weeks.

Nothing fancy. I’ve been trying to grow out the top of my hair so I’ve just been asking for my sides and back to be shaved and cleaned up. It takes less than 10-minutes, really, and it’s really not worth my money.

The opportunity cost of getting my sides fixed is roughly $30. $20 for the haircut, $10 for my time spent commuting to and from.

Now, because of how simple of a haircut I need every 3 weeks, I can very much do it myself.

$30 shaver on Amazon and learn how to be self-sufficient.

That’s 17 fewer haircuts I’d need every year, 17*25=$425 minus the initial $30 for the shaver = I’d save $395 in the first year, and then $425 every year after.

It doesn’t seem like much at first, but it adds up.

Invest that $395 into the stock market, and expect even just an average of 7% annual interest compounded over 20 years, I’d have $16,193

Do it for 40 years and I’d have $78,855.

Just by cutting my own hair.

How’s that for self-sufficient?

Read more finance stuff on my Down to Finance website:

www.downtofinancedtf.com

 

 

 

Loving what you do

I hope that all of us are able to find something we love to do in life.

For me, I love finances. I love the idea of money. I also like having money.

But in reality, I dream of a world where no one has to be burdened with the concept of finances. Poverty doesn’t exist, and premature deaths are reduced. The global economy has a long way to go, but together, it’s possible.

When we love what we do, we become more passionate, we become more driven and motivated, and we feel like we have a “stake” in life.

Like we own something. Like what we do actually matters.

And I guess that’s all we can really ask for: do what we love and do what matters.

Good Luck.

[Book Review] The Wealthy Barber Returns – David Chilton

wealthy barber returns

David Chilton sounds like me, but trapped in a 40-year-old body.

His writing style is extremely informal, and he often uses sarcasm, puns, and incredibly badly timed & cringe-worthy jokes…

Basically me!

Either way, his books, The Wealthy Barber & The Wealthy Barber Returns are both great finance books.

As the name suggests, the book teaches you how to be wealthy, even if you were a barber.

The concepts are basic and fundamental; great for anyone!

Save more, spend less, invest and compound, and don’t get yourself in debt.

But Chilton not only provides great examples and humorous tips on how to do all those things, but he also understands that although the theory is simple, it is hard to execute.

The chapters are short (often 2-4 chapters each).

The book is broken down into many segments so it feels like actually a really short read.

I aspire to be a financial advisor or someone who helps the general population with financial advice…and although I do think that I know a good amount of information on finance, it seems awkward to take the advice for an 18-year old, doesn’t it?

I hope for a world where everyone, my friends, family, and the general population is financially literate and is not burdened by the concept of money. And I think a great way to spread financial knowledge is through reading.

And that’s why you need to read his book…Read this book if you want to be a Wealthy Barber.

Good Luck and always reach out! I am always free to share my investment journey