Unemployment: Moving Forward

Losing one’s job means losing income, and that can be devastating on an emotional level in addition to a financial capacity. No one wants it to happen, few expect it to happen, and yet people are terminated / laid off every day in America. I lost my job earlier this month, which is partially why I have not been writing as often as I probably should be. It’s a frustrating and stressful situation, and it can be easy to be consumed by the anguish that can come from being unemployed. Before you go plunging into your savings to try to maintain your lifestyle however, take some time to read my thoughts on the matter and see if there are things here you can add to your game plan to get back on your feet and resume your journey on the way to financial freedom.

 

Go for a walk / run

Being hit with walking papers either through lay-off, termination, or contract dissolution is definitely not a pleasant experience. In fact, it can be traumatic, induce depression, and there are reported cases of individuals committing suicide after losing their job. Since finance involves mathematics, and mathematics requires a rational thought process, it stands to reason that we want a clear mind when dealing with circumstances that induce very powerful and overwhelming emotional responses to avoid snap judgments that can exacerbate the situation.

I’ve found that going for walks daily as well as running helps burn off steam, and the exercise benefits me by allowing me to clear my mind of the strain that not having consistent income brings. Plus, I get to enjoy the beautiful weather that we are experiencing here in Minnesota lately and have met quite a few new friends in the process.

 

Keep a journal

Writing down your experiences can help you process the emotions you experience, and that is all the more important in my opinion when it comes to losing a job. Putting your thoughts down on paper not only helps with working through the situation, but also it is a powerful tool that can be used to look back on and see patterns of thought along with being able to be referenced when moving forward to avoid any pitfalls such as identifying emotional triggers that can inhibit rational thought.

I write in my journal daily, and also will make side notes of the emotions I experience to identify any potential negative thought patterns to be worked on to use this experience as a means of personal growth. But unemployment doesn’t just impact our minds, it impacts our wallets. As we address the emotions, we must also address the financial side of things.

 

Use your savings sparingly

Personally speaking, I’m not a huge advocate of diving into one’s savings to maintain their lifestyle during times of unemployment as that can lead to adverse spending habits and mitigate the positive savings habits one has worked so hard to build. That being said, one should have money set aside in an emergency fund specifically for this occurrence to tide them over until they have found a new line of work. Now is a good time to take stock of any unnecessary or frivolous expenses and cut them out temporarily (they can be picked up again later if desired) to make one’s savings last as long as possible.

As challenging as it has been, I’ve canceled Netflix and switched to a cheaper phone line as well as quit smoking (very challenging) and going out to eat at sit down restaurants to name a few to make each dollar last. I’ve also done quite a bit of work on my car myself (thanks YouTube!) to save hundreds if not thousands of dollars instead of taking it to the shop. Making savings last is vital to weathering the storm, but we also need to make income in some form or fashion until new employment opportunities arise which brings us closer to ourselves, understanding the power of our creativity.

 

Monetize your skill sets

We all have particular skills and hobbies that we use on a daily basis, but did you know that there are people who are willing to pay to learn something new or receive assistance with a project? There are many avenues for a person to leverage their talents and hobbies for income, Fiverr is a place where people offer services to a pre-made market, Patreon is another that allows donations and monthly subscriptions. If you like to write, you could freelance as an editor or help someone build a resume for a small fee as one example. You can also reach out to friends, family, and neighbors to see if they have odd jobs to do or if they would like to learn something new.

This website is one of my hobbies that I leverage as WordPress and PayPal are free, and free is a beautiful thing! Finances aren’t just numbers, they involve a concept called social capital. That is a valuable resource in times of financial uncertainty.

 

Tap your Social Capital

Social capital is defined as “the interpersonal relationships, institutions, and other social assets of a society or group that be used to gain advantage”. This encompasses many aspects including the personal relationships we currently have with friends, family, and neighbors as well as former co-workers. We all have people in our lives that fit into one of those categories, and using your social capital to find new employment opportunities or generate temporary income is essential to addressing a loss of employment. When you monetize your skill sets and hobbies for temporary income (that might just turn into a profitable business), you will need a consumer base to build off of. What better place to start than the groups of people in our lives who care about our well-being?

Some of my closest friends are my best clients, and word of mouth about endeavors such as this website spreads. Don’t be afraid to work with those closest to you, they are your strongest allies!

 

I hope this article contains tidbits of information that you can use to help if you recently suffered a job loss, as always thanks for reading and if you would like to contribute to the continuation of this website you can do so by clicking the button below.

 

 

 

 

New Partnership & Book Recommendation

After nearly a month long hiatus from writing due to personal life circumstances, a transition in my own financial opportunities, as well as scraping my face from my computer screen….. I am back!

July has been a month of ups and downs, as well as really bizarre life circumstances though I’m pleased to announce that Deficit Demolition is now partnering with the world’s largest online retailer and soon to be service provider given the quality of their services as well as drive to meet the needs of their consumers.

This decision comes from the vision to expand from merely providing free financial knowledge into the realm of product reviews and services in line with the goal of helping people save money in order to achieve their goals regardless of where they are in their financial journey. Savings is good, but free is better and if you click the Amazon image you will be invited for a free 30-day trial of Amazon prime as a thank you to your continued readership and support (as well as putting up with my random disappearances).

Speaking of increasing one’s financial knowledge, have you read Rich Dad Poor Dad? Authored by Robert T. Kiyosaki who initially had a retail company to make logos, t-shirts, and other merchandise for heavy metal bands prior to it’s bankruptcy. He later founded the Rich Dad Company which provides personal finance and business education to all in the form of videos and books. I remember this book in my teen years, and that had a very influence on my personal endeavors in the stock market as a teen as well as pursuing the goal of owning my own company in the future (though I got side-tracked along the way). Not going to lie, this is a bit of shameless product promotion here, though he has recently created a 20 year anniversary version with side bars that both look into the past as well as touch on how his methods still hold true today. Personally speaking, I’m excited to get my copy in the mail. It’s a classic and ties in well with some concepts in personal finance along with providing a new perspective that may just trigger the proverbial light bulb to light up when working with your money.

Click the book to get your copy today! Thanks for reading, its good to be back!

 

The Basics of Trading & Investing: Cryptocurrency

In a previous article, I stated that it IS possible to trade commodities and cryptocurrencies while on a budget as well as mentioned that future articles would be made to get you started on that path. The framework for this post will be slightly different as this is structured as a walk-through with the option to receive an in-depth training video on how I personally trade cryptocurrencies as well as budgeting methods I use that can be tailored to meet your needs to minimize losses and maximize your profit potential. To do this, we will start off the basics of planning as well as where you need to go to buy and sell various cryptocurrencies. Let’s start with the most obvious, building a budget.

Budget Creation

Like all investment or trading options, there is risk when pursuing profit with cryptocurrency. In fact, it is extremely volatile and can surge yielding double or even triple digit percent returns, or implode just as fast. You need to be ready to handle the high risk potential involved with trading / investing in cryptocurrencies, as well as be aware of the tax laws coming to pass. Personally, I set aside 10% to 15% of my income just for this as my budget allows for that (your numbers may vary). Remember, you should never invest or trade with that which you cannot afford to lose. Once you have your funds together, your next step is to plan your enter and exit strategies.

Entering & Exiting

This is a key part to trading as well as investing, you need to have a game plan for what you buy, at what price you will buy it at, and when you intend to sell. Are you looking to go long term with the buy and hold strategy, or do you want to do short term trading? Your methods will vary depending on what you intend to do, here’s a few ideas for both tactics:

Investing (long term): Buy what you believe to be a profitable cryptocurrency in the long run on or under your target price, and continue to buy at the “dips” or decreases until your risk tolerance is met / exceeded. Sell at a significantly valued record high.

Trading (short term): Buy low and sell high, personally I like to target cryptos that have a double digit loss and buy at bargain bin prices in anticipation of the buy back / rally for double digit returns. Due to the high volatility involved, it’s important to watch the candle stick charts and trends to back your anticipation with tangible market data. Remember, ICO’s are essentially the same as IPO’s on the stock market. As soon as they go on public exchanges they tend to implode, so wait for the plummet to level out before you hop in. Also, certain cryptocurrencies have tendencies to surge and drop in the double digit range. The ones I have seen do this consistently are:

  • FUEL
  • SALT
  • IOTA
  • DASH
  • TRX
  • ADA

Got your game face on? Good, now let’s get to the necessary accounts you will need to buy and sell cryptocurrency.

Make a Coinbase Account

Coinbase is where you buy Bitcoin, Ethereum, Litecoin, and BitcoinCash. These are the big four that you can hold on to, trade, or send to one of the many exchanges in which to purchase smaller cryptocurrencies or “alt-coins”. Click on the image below to get started.

Setup is very straight forward, just click the sign-up button at the top right of the page and follow the prompts. If you are like me and enjoy a good walk-through, click here to see step by step account registration with photos. Once you have your Coinbase set up, you can begin to buy and sell! Looking for fast paced trading action? Low price alt-coins with the potential for becoming the next Bitcoin? You are going to want to use an exchange. Here’s one of my personal favorites, Binance.

Make a Binance account

I know, I know. You are sick of making accounts, I get it. Like anything, starting off is the most time consuming but once everything is said and done, you are ready to rock. Binance and other exchanges differ slightly from your average brokerage accounts as there are options to buy and sell at multiple prices on the right side of the screen, as opposed to one bid and one ask price you will see on say, Ameritrade. This allows for more leverage and liquidity which will benefit you in your endeavors. Click the image below to get started.

Here are a few additional links to help you transfer funds, learn about fees, and navigate your accounts:

WARNING: DO NOT MIX CRYPTOCURRENCIES WHEN SENDING OR RECEIVING! IF YOU SEND BITCOIN TO AN ETHEREUM ADDRESS OR ANY OTHER VARIATION IT WILL BE LOST! 

Thanks for taking the time to read this article, happy trading!

 

 

Trading Coaches (To look for) Pt. II

In my last article, I addressed several different kinds of trading coaches that one should avoid in their financial journey for their well being. Some are pushy salesmen trying to sell a stock while others are out there for a quick buck but have no actual trading experience. With those groups and the potential dangers outlined, it’s equally important to point out the traits of quality trading coaches you should be looking for if you are in the market for one or are considering referring one. Keep in mind that there are different personality types out there and it’s okay to find the right fit for you, this is a general list of aspects of what you should find in a trading coach prior to paying them for their services.

Let’s begin with the most obvious shall we?

Honest / Transparent

A good trading coach will be open and honest about their experience and methods, as well as conveying their trading styles and what services they provide. While it isn’t required by law that a trading coach be licensed, it IS required that they inform others that their services are comprised of their time and expertise as well as all materials provided being for informational purposes only. Transparency goes hand in hand with honesty as such a person openly demonstrates their skills as well as is forthcoming about what they trade and why. This builds a bond between the coach and client, and shows that they are sincere about their desire to work with individuals to learn to trade and invest on the client’s terms for the benefit of said person seeking their services.

 Be a Motivator

Anyone who has played sports or had a tutor in the past knows that a quality trainer will motivate you and push you to your limits even if the task at hand seems impossible or overwhelming. This is another important trait to look for, because the role of a trading coach is to prepare you for trading on the various markets and push you to succeed even if you take losses (which WILL happen) or slip into the rut of stagnation. The trading coach likewise must be motivated as there will be clients that are struggling to learn the markets, personal life circumstances that occur, or the markets turn bearish as examples. They don’t need to be bouncing off the walls in giddy excitement (and you should probably leave if your coach does), but they should have the ability to keep you rolling and helping you reach attainable goals while nudging for you to exceed them. This ties in with the next trait I recommend you look for.

Flexible

 

As with all forms of mentoring, you should be motivated and pushed to reach new heights. But you should never be run into the ground or pushed beyond that which you can handle for ANY reason whatsoever. Look for a flexible coach that is capable of going at your pace and helping you set goals to attain and exceed, but trust your gut instincts and inform the coach if a topic is too large to digest. They will also take into consideration any family / employment obligations or emergencies. This trait also plays into the ability to adapt to the ever-changing factors in the markets as share prices rise and fall, cryptocurrencies come and go, and initial public / coin offerings (IPO’s / ICO’s) typically implode due to sell offs. Your coach should be able to handle any personal or market changes with a reasonable response, as well as be able to incorporate that trait into their services to help you adapt with the changing times.

Reliable / Consistent

The kinds of coaches you should be looking for must also be those you can count on to deliver on their services and give you the particular results you seek. They need to be someone you can look to when you have questions as well as can walk alongside you on your financial journey. Reliability is a vital aspect of any service provider and shows clients that the coach is consistent not only financial matters, but also with personal matters. They are punctual, stick to the agreed upon services, and don’t lose focus of your objectives. Even when you are struggling to learn a subject or when the markets take a hit, a reliable coach will see you through it and be your guide to implementing beneficial trading and investing habits through it all. From the mentor’s side, they will be able to deliver quality services despite any personal issues they are experiencing and can stay focused for the well-being of the client. A reliable coach can set aside personal matters that may be troubling them and consistently generate glowing testimonials regardless.

Ethical

Everyone has different beliefs and values, and everyone wants them to be respected. Your desired coach should work within your ethical values as well as adhere to the general ethics we would expect from anyone in the professional environment. If you have religious beliefs or ethical practices that may come into play in trading (such as avoiding investing in particular companies for such reasons), your coach will respect them and help you work with stocks and cryptocurrencies that conform to your ideals. As a trading coach myself, it’s also important to look at their track record of being able to deliver on their claims regardless of what they are. For instance, a coach might say that he can teach you to consistently turn double digit returns on trades with minimal losses. But do the financial reports of his clients confirm that? Does his/her personal trades verify that? The beautiful thing about being ethical is that others take notice and as I have said before, satisfied clients are talkative clients.

Last but certainly not in the least, there is one more trait (out of many) you should look for in a trading coach.

Effective Communicator

In the world of finance, there is jargon and overwhelming amounts of it. There are also concepts like “hedging” and “shorting”that the average Joe hasn’t heard before or if they have, don’t understand what it means let alone how to use it. Your coach should be able to take complex topics or terms and making them easy to understand. Outside of their services, they should also be capable of explaining what their services entail, related fees for services, and answer any questions you may have in a direct and simple fashion to ensure you understand what that coach can provide you. You shouldn’t have to guess or fly blind with your coach, and doing so can make your portfolio implode. Effective communication is another base trait that every coach needs to have, for the sake of their clients as well as their own business operations.

There are many more traits that a good trading coach should have, this list should give you a basic framework in which to start your search for one if you are seeking to learn how to trade and invest on your terms. As always, it is a privilege to write this article and I thank you for taking the time to read it. If you would like to support Deficit Demolition and the continued passion of providing financial articles, click the button below.

 

Trading Coaches (To avoid) Pt.I

At some point during research on your financial journey, you probably have seen countless advertisements for trading coaches, trading academies, as well as “gurus” with the (supposedly) next hot stock pick. Everyone and their grandmother claims to have some personal system to building wealth, and many claim that you can make obscene amounts of money easily with no effort such as the image below depicts.

How is the aspiring trader or average Joe to know which program or coach is right for them when the internet is swarming with so many “gurus” and sadly, scams? After all, most people don’t have the time to teach themselves the jargon and various forms of analytical algorithms and even if they can make the time, it can be extremely overwhelming. Especially with everyone virtually screaming conflicting information of what to trade and when to trade along with how to trade it. Being a trader and investor myself (as well as a huge math nerd), I get it. When I go hunting for information online about stocks I may want to trade, I’m bombarded with images of some guy I have never heard of with a photo-shopped white smile trying to get me to click the picture and sign up for some ongoing program which will supposedly let me quit my day job (Chief Executive Officer of the start up company Cryptexx Consulting LLC) and trade on a beach somewhere.

Let me give you several pointers on what kind of coach you need to be looking for as well as those you should be avoiding should you be in the market for a trading coach, starting off with the aspect that will save you the most money, things you need to avoid should you encounter them.

Avoid the “Guru”

 

The term guru is overused to the point of practically everyone is a guru at something. Traditionally, the guru is a spiritual teacher in Hinduism but that term has expanded in modern times to encompass the titles of teacher, master, and expert. The thing about the guru is that in many cases (but not all), they aren’t actually traders but rather those who study concepts and then teach them for outrageous sums of money in comparison to other individuals and entities. At best, it’s a poorly thought out and regurgitated marketing strategy that doesn’t separate the individual and their talents from the crowd, making them look silly. At worst, it’s a ploy used to convince the average Joe that they are something they are not. If they have free information on a website for you to poke at, demo videos of their trade, screenshots, or actual satisfied clients that’s one thing. If not, avoid like the plague.

Avoid the secretive coach

 

Perhaps secretive isn’t the correct term I’m looking for, but I have seen some trading coaches who refuse to let their clients interact with each other (or try to control those interactions) as well as withhold information of what their services entail until after they receive payment as a couple examples. This should strike you as odd especially if they seek to manage your money given their alleged services are so remarkable, yet they don’t want the results of their clients getting out there. Of course, they can’t legally release private information. But satisfied clients are the most talkative clients and if you encounter a coach who is keeping (or attempting to keep) clients from exchanging notes, you from your money, or hides information about their services, it’s a reasonable conclusion that something fishy is going on. Call it secretive, vague, or whatever you please, if you encounter such a coach then save yourself time and money by moving on.

Avoid the disorganized / distracted coach 

This is probably one of my biggest pet peeves, but a trading coach or entity that is disorganized gets under my skin faster than splinters from a decaying porch. There are people out there with capital they wish to trade and invest with, and they need assurance that their coach or trading entity has their best interests at heart. Signs of a disorganized coach can include:

  • Consistently late to / cancels meetings
  • Lack of vision / direction
  • Lack of preparation
  • Inability to answer basic questions
  • No trade exit strategy
  • Little to no consistency in trading patterns
  • Difficulty in adapting to market changes

These are a few indications that your prospective trading coach is disorganized which can be devastating to your portfolio (as well as your sanity), especially if they are constantly late or cancelling meetings. We all know life happens and things come up and have at one point or another, canceled or postponed a meeting for real emergencies. But as the potential client, you should be their sole focus when they are with you. If you catch wind through the grapevine of everyday conversation that a particular coach exhibits these tendencies or other related ones, don’t bother working with them. They aren’t worth your time.

Avoid the “pushy salesman” coach

The pushy salesman isn’t someone who sends out one or two follow up emails or phone calls at most when communication stalls temporarily, nor is this a person that reaches out to you out of genuine concern for any emergencies or troubling life circumstances you may be facing. This kind of “coach” really isn’t a coach at all, they are product pushers. They persistently try to convince you to sign up and buy their “services” for one of two reasons:

  • They are looking for fast cash from those inexperienced with finances and the markets.
  • They hold stock they are ready to charge you for to hear about and then get you to sink your hard earned money into that stock so they profit on both ends.

Personally speaking, I would equate these people and entities as nothing more than sharks seeking prey. They aren’t interested in helping you learn the basics and fundamentals of trading, and they certainly don’t care that you will lose money on both ends if they are prepping to dump a stock they intend to “encourage” you to purchase. They very rarely have free information readily available for you to look at, and don’t often respond well to in-depth questions.

Avoid the novice / one size fits all trading coach

I put these two attributes together since they often go hand in hand. While there are universal basics to trading such as buying low and selling high, there will be varying needs that different clients have that these coaches struggle with addressing. Here are some of those differences an experienced coach can handle more adeptly:

  • Debt to income (DTI) ratio
  • Risk tolerance
  • Available funds for trading
  • Personality / trading styles
  • Short term / long term goals
  • Ethical differences
  • Learning speeds / styles
  • Stress relief tactics

Some clients learn more quickly than other clients, and there are those that may find learning to trade more overwhelming or confusing. An experienced trader can not only adapt to the differences of their client’s portfolios, goals and strategies, but they can also meet the needs of each client more efficiently when it comes to their personality or level of understanding. That’s not to say that the novice or OSFA coach are malicious or scams, all traders were novices at one point in the past (including yours truly). Rather, it would be best to pursue a more experienced and open-minded trader to work with so that your individual needs are met on your terms.

If you are reading this and are a novice trading coach starting off, that’s okay! I am excited to watch you grow! Start talking with and working with family and friends to get some experience under your belt, then add friends of your friends before finally going public. If you aren’t sure what to say or how to present it, practice in front of a mirror or trusted person to hone your skills. Trust me, you will have your time and client base. Just takes work and persistence. Who knows? One day you may land one of my readers as a client.

And last but certainly not the least, be sure to avoid the…

“Guaranteed profits” coach

This should be obvious, but it never ceases to amaze me how many people succumb to this kind of tomfoolery. Nothing is ever guaranteed outside of death and taxes that is. Needless to say, there is still a large amount of these goofballs roaming about with snazzy images like the one at the beginning of this article that try to get people to work with them. You can do quite well with trading, in fact my main client has now made a total of three trades on his own with double digit returns on each one after commissions. As happy as I am for him, his future trades are not guaranteed to be profitable. Neither are my personal trades, nor are yours. Don’t let some guy in a fancy suit tell you that he can guarantee you profits if you give him money because that is an outright lie. An experienced trading coach can certainly help you earn profit, as well as mitigate risk as much as humanly possible. But no one can guarantee profits on any trade regardless of experience or skill level.

Thanks for taking the time to read this article! Stay tuned for part two in this mini-series about what you SHOULD look for in a trading coach. As always, it’s been a fun article to write. Enjoy your weekend!

 

Invest in Your Future by Trading to Build Savings

After a slight respite from writing, I am back in action to address the commonly discussed (and often debated) topic of trading and investing. This topic tends to emphasize the gap in generations as baby boomers often will have a large percentage of stocks in their portfolio while millennials tend to be more hesitant to invest in the stock market. Instead, millennials are more focused on investing in cryptocurrencies for purposes such as retirement given their affinity for technology and it’s advances. While there are a plethora of investment styles between as well as within both generations, one key component that is often overlooked by both groups is the use of trading within their financial strategies. Here are a few differences to take note of when deciding when to trade and when to invest.

Trading

  • Held for a short period of time
  • Capitalizes on volatility (buying low / selling high)
  • Requires more attention (timing / execution)
  • Higher risk / reward
  • Works better with stocks / cryptocurrency with a low share price (penny stocks, as an example)
  • Requires less startup capital 

Investing

  • Held for a long period of time
  • Capitalizes on stability / consistent dividend yields
  • Dividends can be used in DRIP programs for compound interest
  • Less risk / reward
  • Requires more startup capital
  • Requires portfolio diversity

Like investing, trading involves risk and typically a higher level of risk than long term investing due to volatility as well as the length of time a stock or cryptocurrency is held. Therefore it is prudent that one takes precautions to mitigate the various risks out there, here are a few ways you can prepare before you begin trading.

Open a separate bank account

Keeping a separate account for specifically funding trading accounts will keep your finances organized so your bills do not get caught up with your ACH transfers to begin trading. If you don’t you risk overdrafting which can lead to fees (usually around $35 per overdraft) and that can be costly. Another reason is to reduce the risk of fraud or the account being hacked. Should that particular account be compromised, your checking and savings accounts will be safe as it will be standalone and thus not tied to any other of your personal banking accounts.

Plan according to your budget

You don’t need hundreds of thousands of dollars to begin trading, I have several clients who started with $1,000 and are learning to trade consistently using anywhere from $100 to $300 per trade. That being said, you still need to account for these funds in your budget and should not break your budget or take away funds from necessities to trade. Another way of saying this is don’t invest or trade any amount that you cannot afford to lose. If you can only afford to put $100 a month into your trading account, that’s perfectly fine. Also factor in trading commissions, a fee that is deducted from your cash on hand to both buy and sell (Ameritrade is $6.95 to place trades yourself).

Realize you (almost certainly) won’t be a millionaire overnight

Many people thing that trading stocks or cryptocurrencies will make you very rich, very quickly and that is complete *@#$*@$&.  Trading takes time, some homework, and analysis along with having an exit strategy for when you buy your desired security. It’s work, and should be treated with care and attention. As one who has been trading for over ten years now (since 2008), I can say with complete honesty that it is enjoyable and can be very profitable. However the goal isn’t to become filthy rich overnight, rather the goal is to achieve financial freedom by using trading as a tool in conjunction with other mediums in finance. Consistency is the name of the game, which brings me to my next point.

Take a percentage of your profits and put it into your savings

 

The point of a savings account is to be prepared for foreseeable as well as “surprise” expenses (fellow parents will know what I mean), and stuffing away as much as possible is a good thing. Personally, I take 50% of profits from each trade and move it around until it settles nicely in my savings. Your number may be different and that is perfectly okay as we all are on different points on our financial journeys. Even if you make $30 in profit after commissions, stuffing $15 in your savings never hurts and you have the other half to cover commissions on your next trade!

Seek out an experienced trader

Learning the financial jargon and navigating your trading account is time consuming and can be overwhelming to those new to trading. Getting assistance from an experienced trader is something that should be considered to avoid unnecessary losses as well as to get a stronger grasp on concepts used in trading both basic and advanced. Keep in mind, that experienced traders such as myself do charge for their time and knowledge so be prepared to factor that into your budget. The nice thing about those fees is that they are tax deductible and can be used to reduce your tax liability. Remember, it’s your money so make sure you take the time to chat with that trader about your trading  needs and questions before you agree to anything to stay on the same page.

I do offer training and coaching on trading strategies and related budgeting methods via webcam or in person and have a crash course available for $199.99 that addresses the following:

  • Account creation / navigation
  • Goal & budget setting
  • Fundamental analysis / Technical analysis / Market tone analysis (fancy terms for looking at “the numbers” of the stock, reading charts, and gauging volatility aka the buyers versus the sellers)
  • Strategies I use to pick out securities to trade
  • Stock / Cryptocurrency picks for you to choose from
  • Assistance in placing your first trade

Use the contact form below to reach out with me either to snag a crash course with me, or if you have any questions about trading in general. I always enjoy hearing from my readers and would like to thank you for taking the time to check out this article!

Cryptocurrency Decrypted

You may have heard of cryptocurrency, if not then at the very least the word “Bitcoin” should ring a bell. Bitcoin has been all the rage for quite some time now, and competitors have come out with alternative forms of cryptocurrency known as “alt-coins” available to buy, sell, and trade. In fact, countries like Japan has recognized Bitcoin as a form of legal tender and thus has become a virtually cashless society. Israel as another example, is considering launching it’s own cryptocurrency on a national level to enter in the global markets.  But what exactly is cryptocurrency? How does it possess and maintain monetary value? Perhaps most important of all, how can you profit from it or add it to your portfolio?

According to CoinTelegraph, cryptocurrency is defined as the following:

A cryptocurrency is a digital or virtual currency designed to work as a medium of exchange. It uses cryptography to secure and verify transactions as well as to control the creation of new units of a particular cryptocurrency. Essentially, cryptocurrencies are limited entries in a database that no one can change unless specific conditions are fulfilled.

In a sense, it’s similar to using your credit or debit card with some key differences such as the increments valued in “coins” as opposed to dollars despite having a dollar amount. While there are not many establishments that accept such a payment method, it is more common among individuals seeking a medium that is decentralized. It is a well known fact however that a medium of exchange without value is useless, so how do cryptocurrencies possess any form of value? Here are a few examples:

Supply / Demand

It goes with out saying, that one element that determines value in any cryptocurrency is basic supply and demand. The more “coins” that are available to buy would indicate a low demand, which in turn would result in a low value. Inversely, a coin that is in high demand due to other factors listed below will have a limited supply and drive the price up. What influences the supply and demand for cryptocurrency? I’m glad you asked!

Utility

How usable, useful, or practical such a medium of exchange is plays a significant role in whether or not it is deemed valuable. Would you use a bank with exorbitantly slow wire times? High fees? Cumbersome processes to do anything? Of course not. In finance money is constantly moving around, and we need things to function smoothly and as quickly as possible with as little cost involved as possible. One cryptocurrency known for this is TRX, more commonly known as TRON as it boasts a transaction speed faster than Bitcoin and its rivals. It also can support and maintain a substantial number of users and is used to facilitate the transfer of money instantly, which makes it a significant player in the cryptocurrency markets. Definitely one of my picks for trading and investing, it certainly has potential. Why isn’t it as valuable as Bitcoin? Here is another aspect involved with the monetary value of this means of exchange:

Media coverage

Part of the reason why Tron isn’t as valuable as Bitcoin is the lack of media coverage. Bitcoin has been on the radar for a few years now and made waves when it become possible to trade on the futures market. It also had a substantial user base prior to becoming mainstream as people who sought a medium of exchange without government regulation for goods and services both illegal and otherwise utilized it. Tron? Not so much, in fact it’s a relatively new cryptocurrency in the grand scheme of things. The media plays a significant role in both informing the public such things exist, it also provides potential investors and traders insight into the “market tone” (how the general populace reacts to said thing) which influences the demand and thus, the available supply.

Pumping groups

These groups are common in low price, high volume trading and can be found tearing up the penny stock market and have now moved to trading cryptocurrencies. They operate by coordinating the timing of the trades by having several people invest thousands or tens of thousands of dollars into a low value stock or cryptocurrency which cause the price to spike, and then dumping said commodity for substantial gains. Doing this consistently will the the overall effect of an inflated price higher than it’s true value but on a base level, the price will be higher. This candlestick chart demonstrates a pumping group in action, and if you know how to read candle sticks you can see the indicators of when to buy prior to the pump and when to sell before the dump.

The bottom line…

Cryptocurrency is volatile and should be considered as an extremely investment in the long term. In the short term however, it’s volatility makes for some wonderful trading in a similar fashion to building wealth through penny stocks (buying low and selling high). You should never under any circumstances invest or trade that which would break your budget, or that which will lead to a loss you cannot handle, period. I have seen people take loans out on homes prior to the cryptocurrency bubble and have now lost everything, know your limits and what you can handle to trade or invest prior to starting off. Remember to factor in all potential trades and investments into your budget and focus on a reasonable approach to building wealth on terms that benefit you.