Finance – Page 2 – Aspiring Nirvana

Valuable lesson from recent Cryptocurrency crash

A Cryptocurrency is a digital asset that can serve as a medium of exchange between people.

What is Cryptocurrency

A cryptocurrency (crypto) is a digital asset that is created by “mining” a digital coin on a computer. It’s ownership can be transferred and verified using technology called Blockchain. It can serve as a medium of exchange of digital assets between two parties.

Hard lesson in learning difference between investing and speculating

One of the most famous crypto currency in the world is Bitcoin. Bitcoin recently went from being valued ~$60,000 to ~$30,000 within a matter of days. Along with Bitcoin, almost every other crypto coin fell off the cliff.

Big crashes devaluing more than 50% of the crypto values have occurred regularly. The crypto world is full of extreme volatility. It would be nice if you have a time machine to get in and out at the right time, but you don’t.

Folks, this is what an unregulated (free) market truly looks like. There are no government bailouts, no central banks pumping money into the system, no circuit breakers, and no tax-loss harvesting. Scary!

Crashes are common in stock market also, which serves valuable lessons to differentiate between investors and speculators. But in crypto world, I am not sure how many are true investors, unless they got in when Bitcoin was below $5000. But again, was that being smart or plain lucky?

Do not put your life savings in crypto, don’t depend on it for your retirement and don’t consider it as an “asset”. Think of it like you are going to a casino to have fun. If you double your money, all good, but don’t fret over if you lose all of it. Treat it as “play money.

Prepare to be humbled! Investing is as much a mental game as financial. If your ego is hurt, you have no business trading cryptos. This is high-risk/high-reward game. Proceed accordingly!

Final Verdict

If you do decide to buy crypto, make sure you truly understand what you are getting into. Are you speculating, doing it for fun or serious about owning digital coins. Perform your own due diligence before venturing into the Crypto world!

We hope the information in this post will be helpful in your journey of aspiring nirvana!

NFT: What it is, why is it gaining popularity and how to buy

NFT is a digital equivalent of a physical collectible item.

What is NFT

NFT is a digital equivalent of a physical collectible item that can be a sports card or an artwork. It represents a unique digital asset whose identity including: original creator, selling/payment information and buyer (current owner), can be authenticated and stored on a blockchain technology platform.

NFT is abbreviation for “non fungible token”. Fungible means the item can be exchanged like-for-like. For example, if you have five $20 bills, you can go to a bank and exchange those for $100 bill. Conversely, non-fungible means that item is unique. An example of such unique items can be a sports card or an artwork.

Famous NFT cases

There have been some high profile NFT cases: Lebron James dunking video sold for $208,000, Beeple sold his digital artwork for $70 million and Twitter CEO Dorsey 1st tweet sold for about $3 million.

Why is it gaining popularity

NFT has grown in popularity lately for variety of reasons. People genuinely supporting artists, art collectors who wants to own digital artwork, crypto bulls advancing crypto currency eco-system, or maybe some people having too much money and thus using it for pure speculation. Additionally, a physical artwork may get damaged or stolen, but digital artwork is preserved on internet forever.

Skepticism about NFT

Despite all the recent euphoria, there is healthy skepticism about NFT. When you buy a digital artwork as an NFT, you cannot physically keep it or touch it as it is stored digitally on internet. You may not necessarily “own” it, as you may have to pay royalty to the original creator if you sell it. You may “own” the asset but that does not prevent other people from copying them. Additionally, you may have to trade an NFT using crypto currencies with potential hidden fees.

How do I trade NFTs

If you want to buy or sell NFTs, you can do that by creating account on NFT marketplaces like NBA Top Shot, Mintable or OpenSea. Remember that you may have to trade using cryptocurrency, bid in an online auction and pay transaction fees.

Final Verdict

If you do decide to buy NFT, make sure you truly understand what you are getting into. Are you speculating, doing it for fun or serious about owning digital artwork. Perform your own due diligence before venturing in the NFT world!

We hope the information in this post will be helpful in your journey of aspiring nirvana!

What is a 403(b) Plan?

A 403b is a retirement plan offered by non-profit companies in which the employees contribute part of their salary with employers usually offering matching contribution.

Introduction

A 403(b) is a retirement plan offered by non-profit companies to their employees. Employees can contribute part of their salary to the plan, invest in various investing options, and let it grow tax-free until withdrawal time. Contributions to 403(b) are tax-free (up to an annual limit) which will lower your taxes. On top of that, most companies provide matching contribution.

403(b) plans are usually available for public schools, government offices, healthcare agencies, and religious organizations.

Difference between 403(b) plan and 401(k) plan

For all practical purposes a 403(b) plan is very similar to a 401(k) plan. You can invest in a basket of mutual funds or bonds. However, there are some unique differences between the two as noted below:

Benefits of 403(b) over 401(k)

Shorter vesting periods
Option for additional contributions after 15 years of service

Drawbacks of 403(b) over 401(k)

Less choices of investment options
Less protection from creditors
Annuities and other insurance products may not be optimal choices for some

Final Verdict

For salaried people working in non-profit companies, contributing money to 403(b) account is one of the best way to save for retirement, get free-money from employers, reduce taxes and comfortably save for retirement.

The key is to start early, contribute regularly and let your money grow over time!

We hope the information in this post will be helpful in your journey of aspiring nirvana!