Next Global Currency

What is money?  Is it gold? Is it is bank notes? Is it even real?

Throughout time currency has taken the form of salt, stone and gold coins eventually leading up to what we now recognise today as an stablished currency.   Although constantly evolving in form, it has always represented our global perception of worth and acts as an intermediary for exchange as a globally recognised store of value.  For more info on how it. has evolved, checkout the video at the end of this blog by OpenLearn.  But what guarantees its robustness and measure of worth? With its evolution overtime, how can we be sure that it has reached its final form?  Surely it is naive depend on our current currency to stick around forever and close out minds to the possibility of another evolution in finance.  We must question what can hold worth, and ask ourselves what is in store for the future of money?

 

The issue with paper money despite being regulated and controlled, it can be reprinted and loose value with inflation.  Credit and other non-physical stores of cash can be hacked, and also loses value with inflation.  This is where bitcoin is differentiated.  It is in categorical limited supply, it is a digitised, decentralised (no one owns or controls price) store of worth.  Arguably it is still subject to a degree of bad behaviour, but nobody can print it or manipulate it.

No one can guarantee what the future will hold, however it is up to each of us to prepare for it. Money is simply worth what we believe it is worth, so we must choose to invest in what we believe to be the strongest, most robust hold of worth.  

I look forward to your future engagement with me on my blogging journey, please feel free to drop a comment below and stay tuned for my updates!

Risk Management

Risk.  In life it really is inevitable, so we best accept it and learn how to minimise it.  Investing can be a good method of making yourself more comfortable taking risks in broader life, and is good practice to help you understand potential costs and benefits of decisions.  Trading can be very daunting, but keeping these three simple precautions in mind will help you manage your risk when investing in volatile markets:

1.    Only invest what you can afford to lose .  

Higher investments can mean higher potential returns, but it also means you have more to lose if things don’t go to plan and so its vital to ensure that you're still financially stable should things go south.

2.    Only take calculated risks.  

This will turn you from a gambler into an investor.  Research your potential investments and their markets or get advice from someone else who does.  Make sure understand all your potential outcomes when making a decision, and ask yourself if the potential payoff is worth the possible costs.  

3.    Manage your FOMO. 

As easy as it is to just throw your money into rising stocks, be patient and find out why they are rising and if/when they are expected to come crashing back down before you start moving any money around.  The same goes if one of your investments is deteriorating in profit.  Understand it can be normal for markets to make small adjustments that don’t always require a reaction before you immediately pull your money out.  Many people fall into a trap of trading with a form of inherent emotion desperate for something to happen rather than trading strategically.

Remember the words of Warren Buffet: “The stock market is a wonderfully efficient mechanism for transferring wealth from the impatient to the patient”.  

I look forward to your future engagement with me on my blogging journey, please feel free to drop a comment below and stay tuned for my updates!