Category Archives: Finance Tips

A Beginner’s Guide to Investing in Bitcoin and Other Cryptocurrencies

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While you normies were enjoying Thanksgiving, those of us who have pledged loyalty to our new digital deity were losing our collective minds. The entire cryptocurrency market shot up to all-time highs across the board, seemingly thanks to the fact that South Korea’s second largest bank tested bitcoin wallets, an influx of new cryptocurrency investors join the market every day, plus the expectation that a bunch of big money will enter the market when the hedge fund CME and the NASDAQ add bitcoin futures in the coming months. I mean, look at this year-to-date bitcoin chart. This is nuts. We are definitely in a bubble.

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But you can still make money in bubbles. The phrase used by those of us who have jumped in on this supposed rocket ship is “moonward,” and given the angle of that bitcoin chart, it feels like we’re at least in the troposphere. It seems like it’s impossible to lose money in crypto right now, which creates FOMO (fear of missing out) that has surely fueled this astounding rise. There will no doubt be a proportional correction to this wild rally (and some of it has already happened), so buying right now may not be the best move (I am not a financial advisor nor a cryptocurrency expert, so consider this my legal disclaimer that you should obviously not mortgage your house because some guy on the Internet wrote a thing).

Bitcoin is now one of the 30 or so largest currencies in the world, and it looks to be dragging several other cryptocurrencies up along with it. Despite all this progress, cryptocurrency is still in an incredibly early stage. While bitcoin may look expensive at around $10,000 per coin, that’s a bargain compared to the $55,000 per coin that some quants have pegged a 2022 bitcoin price at. Bitcoin is replacing gold as a store of value, and the market for gold is still roughly forty times larger than bitcoin.

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Ari Paul used to run the University of Chicago’s billion-dollar endowment fund, and he left to start a cryptocurrency hedge fund. Paul wrote in Forbes this week that “it’s 1994 in cryptocurrency”—comparing it to the internet revolution which began in the 1990s. This is another giant leap forward in that arena, and it is the entire impetus behind people like me flocking to cryptocurrency. We are at the forefront of another dot com boom. It just isn’t in the stock market because bitcoin was created as a direct response to the crash of 2008 that nearly liquidated the entire global economy.

Coinbase—an exchange which has investment from an array of Silicon Valley titans and the New York Stock Exchange—is adding 125,000 new accounts per day, and it now has more users than Charles freaking Schwab. If you haven’t invested in cryptocurrency yet, you probably know someone who has, and if you are curious about how to get in on the action, I am here to help.

I didn’t know much about cryptocurrency to begin 2017. I had taken an interest in bitcoin over the past decade as a novelty. I liked the thought of having a real challenger to the international monetary system, and conceptually, it made sense to have a decentralized monetary system underlying a software platform—since that’s where more and more commerce is taking place each year. I never thought that the envisioned revolution was possible, and that as soon as the banks wanted to, they would squish bitcoin like a bug. I bought some at $400 and sold it around $500 the day of the Brexit referendum (thinking that they would vote to remain and bitcoin would fall), and watched it shoot up from there. At that point, I assumed I knew nothing about this space and decided to take my money and run.

Fast-forward to early 2017: I have a new job writing at Paste, and my friend who has already invested in this market is badgering me to get into Ethereum at around ten dollars a coin. After a lot of pressure, some luck obtaining unexpected capital, and a report that Microsoft was involved, I invested in Ethereum at $15 per coin. As of this writing, it’s trading around $440. As my initial investment has risen exponentially, I have moved some of it into other coins to reduce my overall risk, and in the process, I have learned a lot about a subject I knew nothing of earlier this year. I believe this puts me in a unique position to simply explain a wildly complex market, and this column is an attempt to provide some basic guidance for those beginners who are in the same spot that I was in ten months ago.

1. Sign Up for an Exchange

Let’s start with the absolute basics. If you want to buy something, you’ve gotta go somewhere to buy it, and the cryptoverse is no different. Sign up for Coinbase first. This is the Wild West, and there is no safety net for any screw-ups.

Regulation is coming, but it’s not here yet, so even though bitcoin was created to avoid centralization—that’s not where it is now—and I believe that it’s actually a good thing thanks to the lack of maturity of this market. There is no other U.S. exchange as trustworthy as Coinbase. Your coins are 100% insured, and when traders lost (at least) millions when Ethereum flash crashed from around $300 to ten cents and jumped back up, they refunded everyone who lost money. They claim to hold $10 billion in the bank for their customers, and by all accounts, are the only exchange with a real safety net for their users (if you’re dumb and you get hacked, that’s on you. There is no one to help you pick up the pieces, that money is just gone—which brings us to number two).

2. Enable Two-Factor Authentication

You should have two-factor authentication on every account that’s important in your life. If you haven’t heard of it, then boy do you have some catching up to do to be secure in the digital age. Hackers are everywhere—especially in the crypto world. This literally is the Wild West, and save for an exchange like Coinbase, if your crypto is gone, it’s gone. Don’t enable the option where they send you a text, because hackers can scrape together enough of your info off the web to call your cell company, impersonate you, get your texts forwarded to a different phone and then you’re completely screwed.

3. Accept What You Don’t Know

I come at all this from an economics perspective. I studied political science in college, and concentrated my studies in international relations. The moment I read about how Argentinians and Venezuelans are parking their wealth in bitcoin to avoid hyperinflation, it all clicked. Bitcoin is the every man’s Swiss bank account.

I’ve made money on Ethereum thanks to an article forwarded to me by a friend, alerting me to the fact that JPMorgan and Microsoft were heading a group of companies that look like it could double as the illuminati. Those two massive firms were all the explanation I needed to see where this tech was headed. The Ethereum Enterprise Alliance is filled with businesses who want to build the next generation of blockchain apps on this platform, and I couldn’t describe their tech to you beyond what you find in the first few sentences on its Wikipedia page, so I generally avoid investing in any of the so-called “alt-coins” that require the more technically literate to truly understand their value. If you’re a coder who could care less about global economics and politics, you may feel the opposite, and your investment strategy should reflect that. Invest in what you know.

4. Are You a Long or Short Trader?

First off: you’re long. The easiest way to look smart is to buy bitcoin, Ethereum, Litecoin and bitcoin cash, then hold them. It’s possible to become a millionaire in this market if you’re patient. Coinbase is the only mainstream exchange, so any coin on it automatically has an advantage of being more stable thanks to consistent demand. I aim to have at least two-thirds of my portfolio consist of bitcoin, bitcoin cash, Ethereum and Litecoin at all times.

The overall goal here is to consolidate your positions around what is effectively gold, silver and bronze in the cryptoverse, while gambling on the smaller “alt-coins” that you find on exchanges like KrakenCEX.IOPoloniexBittrex, or Bitstamp (stay the hell away from Bitfinex for now—there are far too many questions surrounding their viability). It may seem tempting to try to go all in on the next wave of coins at a seemingly cheap price, but sticking to that philosophy is guaranteed to lose you money eventually. Blue chip stocks are blue chips for a reason, and bitcoin, Ethereum, Litecoin and bitcoin cash are the cryptoverse’s version of Amazon, Google, etc…

How you go about making long or short trades depends on your trading skills. I have lost money finding that I am bad at playing the day to day market, so I never make a trade with the intent to make another one shortly thereafter. The shortest amount of time I look at is usually quarter to quarter. I have a friend who always seems to buy and hold the wrong coins, and they have found that they are better at playing the day to day emotions of the market. This strategy is far riskier and much more difficult to master, but there will be some who feel more comfortable looking at short term moves than trying to find long-term entry points into the market. Think about where your strengths lie before you lose your investment finding out.

5. Understand Bitcoin’s Influence on the Market

Bitcoin is to the crypto world what the U.S. dollar is to the global economy. One literally could not exist without the other. Bitcoin is the cryptocurrency that most exchanges make you purchase other cryptocurrencies with, and it is the only cryptocurrency with mainstream branding, so the market’s moves are inextricably linked to bitcoin’s.

Bitcoin cash is a fork of bitcoin (meaning that it has similar tech, but it was tweaked for faster and cheaper payments), Ethereum is kind of a competitor with different tech, and Litecoin is like a poor man’s version of bitcoin. This isn’t a hard and fast rule, but simple market logic has shown that when there is FUD (fear, uncertainty and doubt) in the bitcoin markets, scared money rushes to safe havens. The aforementioned coins are typically where scared money winds up—however, as “alt-coins” have become more popular, you are seeing more of an ebb and flow between those markets and bitcoin. If you’re thinking about making a trade, don’t do anything until you look at bitcoin’s chart versus these others to see if any patterns are developing.

6. If Something Sounds Too Good to Be True, It Probably Is

This one seems obvious, but it’s really not. In any investment market, people are susceptible to snake oil salesmen selling them on something they don’t understand, and I’m not being hyperbolic when I say that crypto is the Wild West. No one is around to help you if you get bamboozled, so be extremely careful with your money, and be prepared to lose some. These are the very early days of this movement, and a lot of creative destruction lies ahead of us. The wrong move could wind up costing you thousands or even millions down the road. I am in a Slack group with other crypto investors, and one of our friends who invests in the traditional market for a living wrote this when I asked for his input:

Key takeaways are very simply: don’t worry about the price of the coin. Worry only about getting your percentage gain that day. Don’t be greedy. And the best part? All you need is to find a coin that will go up 2% in the time you hold it. Could be a day, could be an hour. In 365 days, with a $1k initial investment, you can make over 1 million dollars.

Patience is the key to doing well in this market. There will be wild swings, and in order to maintain a profitable portfolio, you must endure the inevitable crashes without panicking.

7. Listen to Smart People

With all the madness in the markets, it’s best to lean on expert advice to help wade through the FUD. I have been following various crypto investors, day traders and software developers on Twitter, and most of what you have read so far has been informed by the people on this list that I put together. News outlets like Coindesk are helpful to keep up with the day to day happenings in this space.

8. Don’t Forget About Taxes

The IRS classifies cryptocurrency as a property, so that is how taxes on it are paid. If you cash out your investment for dollars, it becomes subject to taxes, and if it is less than one year since the initial purchase, you will pay much higher taxes on it. I still haven’t hit my one-year mark, so all of my trades have been crypto for crypto. As soon as the figure has a dollar sign next to it, the IRS gets involved.

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Investing in these tokens is philosophically the same thing as investing in the stock market. These are companies providing a service—so ask yourself questions about the viability of the business, the market, etc… Just because someone has a good idea doesn’t mean that it fixes a problem that people want fixed. If you can’t wrap your head around the tech, it’s OK to walk away. You’ll definitely be wrong sometimes, but in the long-run, that’s a winning play. It’s easy to overthink something that’s this new, but cryptocurrency is quite simple when you boil it down to its elemental principles:

 Crypto is the gas that runs the next generation of software (blockchain tech).
 Our world is built on software.

Meaning that you are investing in the oil propelling the next iteration of the Internet. No one really saw the value of things like e-mail in the early 1990s before they became intrinsic to our lives, and blockchain technology will function the same way. We’re quite a ways away from all of this hitting the mainstream market (meaning you have time to build up your investment, don’t feel the need to rush everything in to the markets right now), and it’s still incredibly speculative—so that’s a knife that cuts both ways.

On one hand, it creates more volatility—meaning that you can lose a whole lot of money very quickly. But on the other, it creates more volatility—meaning that you can also make a whole lot of money very quickly. Profiting in this market just comes down to timing, discipline, knowledge and more luck than any of us want to admit.

Consult A Financial Planner To Plan For Your Retirement

Credit counseling is not the same as a debt-management program.

If you’re like many other people, you make decent money, but still don’t have enough and can’t understand why. Credit counseling can help you create a budget, make steady payments and offers education. A debt-management program (DMP) actually handles the payments for you. All you have to do is pay one monthly bill, but these only benefit 35% of people who call counselors.

Credit counselors don’t cut your bill in half.

If you missed the last two monthly $200 bills, you’re going to owe $600 next month. A DMP agent can re-age that boll back down to $200, but you didn’t save anything. If you’ve never missed a payment, you’ll save on interest, but by no means will you save 50%.  

If an interest rate looks too good to be true, it is.

The best home equity lines are quoted in the range between the prime interest rate minus 75 basis points and plus 2 percent. Lower rates are just advertised to top search engine lists.  

If an agency claims to negotiate lower payments than others, they’re damaging your credit.

DMPs do not negotiate lower payments; their strategy is to hold your money until creditors agree to accept pennies on the dollar. They make a profit while your credit score takes a beating.  Debt-consolidation is not always going to save you money.

Financing without out-of-pocket expenses is not necessarily a better option because those fees are just being rolled into your monthly payments.

When deciding if debt-consolidation is for you, compare your existing minimum payments to what they would be for the same debt under the DMP, including fees and contributions. If you are not saving 5-10%, it’s the wrong choice.  

Debt-management programs will not always help your credit.

Explore a home equity line of credit as an alternative to a DMP if you have great credit. Conversely, if you’ve already missed payments, credit counseling might not make your credit worse, in which case it can only help. This is when DMPs are most beneficial.  

Planning for your retirement

The bottom line is that there are a ton of programs out there that will peak your interest and will be presented as ways for you to protect your investments, but in order to know which one is right for you, you need someone who understands what all of these programs are about. Financial planners are experts in the retirement planning process and we know how to navigate these difficult waters so that you can make the right choices to secure your financial future. So consult a local financial planner for more information on how they can help guide you towards your retirement.

Part of the retirement planning process is making sure that you have a sound tax strategy which is critical to ensuring that your income will last throughout your retirement years. A financial planner should understand how important this process is. Let them show you how carried interest can become a sound piece of your retirement plan.

About the author


If you live in the Seattle, Washington area are are looking to find out more about planning for your retirement, then consult a Seattle, WA financial planner.

Techniques to Streamline Your Business Financial Management

Financial management is essential for long-term wealth creation and stability. One of the biggest business killers is cash-flow degradation. A lack of capital and monthly cash-flow will create an environment of pressure and lower product quality, ultimately crashing sales and customer loyalty. Therefore, it is essential to keep on top of finances throughout your business structure, both on a project basis and overall liquidity standpoint.

There are hundreds of financial management software systems available for different businesses, usually focusing on accounting and tax organization. On the other hand, companies like Scoro provide software systems that manage finances as a function of daily activities, linking accounting and taxes to project management. Billing and expenses are made simple through credit invoices and sales issuing, budget control and forecasting, and overall system integration.

If you are interested in streamlining your business finances so you can concentrate on the project at hand here are a few simple techniques to successful make the transition.

Streamlining your Money Management

Invest in Time Management Software – Time is money and money takes time to accumulate. If money was stagnant and cash-flows were always predictable, most executives would be out of a job. With an ever-changing world with ever-changing external factors, organization is key to effective financial management. Linking time management by breaking down labor and material costs per job then funneling each part into an overall viewing whole is imperative for financial management. As projects change, whether costs increase or budgets alter, businesses must track the changes daily through time management software that integrates accounting and business expenses. Scoro is an application that synchronizes financial information with your current accounting software to your calendar and task management tools, keeping all of the information per job in front of your manager and personnel.

Keep It Simple – Find accounting software that also calculates taxes and employee benefits. The essential functionality of the software must be integration ability, keeping the programming simple and cohesive. For example, mixing ERP software like SAP with Microsoft Dynamics provides great cohesiveness and functionality. Usually working with more commercial software products in the beginning will help with integration, as compatibility is most prominent with multiple businesses using the same software. As a company grows, researching more customized management software systems will be productive, but keep the user interface simple and efficient so all employees within various departments can understand most functions.

Tracking and Bill Pay – Money used to be slow, with checks coming in the mail from clients or business partners every couple of days. These days money moves with the click of a button, and if your business does not have fast account receivable and payable systems, your financial management will become more strenuous and time-consuming. Bill Pay for businesses is just one example of fast money. Your managers can have fixed monthly expenses deducted from the company account automatically with filters available for various expenses and payable accounts. In addition, simple software systems like Evernote keep receipt storage and purchase tracking simple. My advice would be to find an accounting system that provides all the functionalities of automatic bill pay and direct deposit that stores transactions with your bank and tracks data for internal management purposes.

Research Investor Mistakes – The best way to learn about efficiency is to analyze other mistakes and avoid them yourself. Warren Buffet always says, “The key to investing is never lose money.” One of the best ways to accomplish this is through current product research. Find out what competitors are using for enterprise resource planning systems and determine whether your business could also benefit. Less is often more with business finances – too many software systems cause a lack of control and over-analyzing can bog down daily operations vital to your company’s success.

Help Your Money Plan With These Personal Finance Tips

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It is becoming more important with each passing day to become actively involved in your personal finances. Although it may seem overwhelming at times with the wealth of information available on-line, you should still make an effort to gain the basic knowledge necessary to make your personal finance decisions wisely. This article is meant to provide you with advice that will get you started on your journey toward financial knowledge.

Repairing your credit can lead to paying less money in interest. A lower credit score means higher interest rate on your credit cards and other loans, which means you end up paying more in finance charges and interest. Repair your score and drop these rates in order to save more money.

Personal Finance Tips You Would Benefit From Knowing

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Knowing how to start planning and organizing anything to do with personal finance can be daunting at first, however it can pay off in the long run. It takes patience and a wealth of knowledge to get started on the right foot. This article will provide specific tips and hints on how to make the most out of anything regarding personal finance.

Save money on your cell phone plan by choosing the right options. A contract-free plan requires you to buy your phone up front, but you’ll save on monthly costs. If you want your phone at a discount, you’ll likely be locked into a plan for a couple of years. A contract option can also make more sense if you want to add other people on a family plan.