Tag: financial plan strategies

Decentralized Finance Is on The Rise What You Need To Know in 2021

Few had heard much about decentralized finance (DeFi) in its early days in late 2017 and late 2019, beyond murmurs about Bitcoin and a mysterious new digital technology called blockchain. 

But a pandemic can change everything. 

Since May of this year, the total value locked (TVL)—the amount of any currency locked into tokens, the vehicle of holding and moving assets on blockchain, in smart contracts on a blockchain ecosystem—in decentralized finance projects rose a whopping 2,000 percent, according to DeFi Pulse. Many investors would be hard-pressed to find such an astronomical rise of any assets or expansion of any financial ecosystem, but DeFi app developers seemed to find success. So what’s the rage, and why does it matter going into the new year? 

What is DeFi?

DeFi, many fintech leaders argue, is the world’s answer to the 2008 financial crisis. Thanks to poor decision making and a lack of proper financial regulation, legacy financial institutions brought the world’s economy to its knees in the most major financial crisis since the Great Depression. The knee-jerk reaction was to create an ecosystem dependent on every link in the chain, rather than centralized authorities—hence the term “decentralized finance.”

The concept of blockchain, a decentralized ledger, was designed to ensure financial transactions would be transparent. Moreover, transaction approval would come from network individuals incentivized to approve them by solving complex mathematical equations or by network consensus voting. 

Later, the idea of operating a decentralized financial system on a decentralized ledger, independent of legacy institutions, grew into a thriving, albeit relatively small, ecosystem. Now, users can find financial services on the distributed ledger for loans, insurance, margin trading, exchanges, and yield farming (yielding rewards from staking digital assets on a network to help facilitate network liquidity).

But there is still a way to go. Not enough consumers are comfortable with DeFi quite yet, because platform accessibility and blockchain tribalism remain a problem. Nevertheless, now the world is experiencing another economic crisis brought on by the COVID-19 pandemic, and DeFi is finally getting its day in the sun.

Related: Getting Drawn Into DeFi? Here Are Three Major Considerations

E-wallets are leveling up

For companies and individuals already active in the space, navigating the ecosystem remains impeded by technical limitations. In order to access certain markets and execute transactions on the blockchain—whether it’s borrowing or lending, staking assets in liquidity pools, or trading on an exchange—users need to own an e-wallet that’s properly connected to the ecosystem. 

E-wallets are the backbone of transactions on blockchain. Just as the digital assets they help transact and store, these wallets are secure, transparent, and easily accessible to users. At least, that’s the idea behind them, though there are various degrees of security and transparency. For DeFi to attract more users, the wallets must be compatible with multiple blockchains running financial dApps (decentralized apps that operate on a blockchain system). One of the first wallets, created by Ethereum and called “MyEtherWallet” (MEW), lacked a user-friendly interface and was challenging to grasp for people outside the hardcore crypto crowd.

Since then, a number of blockchain developers have created alternative e-wallet solutions. Most recently, Spielworks, a blockchain gaming startup, reached an agreement with Equilibrium and DeFiBox to integrate its e-wallet “Wombat,” which is currently available on the Telos and EOS blockchain mainnet (a blockchain network that is fully developed, deployed, and operational).

The Wombat wallet provides users with access to several DeFi platforms that offer token exchanges, yield farming, borrowing, and lending. Wombat recently also integrated with Bitfinex’s new EOS exchange, Eosfinex, as well as 8 other DeFi networks. Rather impressively, the wallet also offers free and fast account creation, automatic key backup, and free blockchain resources. 

Related: Cryptocurrency Innovators Need to Simplify User Experience

Developments in blockchain wallets, such as Wombat’s, will be pivotal in the next few years in the growth of DeFi applications and the movement of users toward decentralized finance and away from traditional finance. While wallets are important, so are the underlying mechanisms to piece the entire ecosystem together, because one a DeFi ecosystem is not enough if confined to just one blockchain mainnet.

Piecing it all together

“A house divided against itself cannot stand.” President Lincoln’s famous quote referred to the Civil War that ravaged the United States at the time, but his historically renowned words can apply very well to the blockchain community today. 

Invest $300 to get $2500 in a week completely legit

For DeFi to reach its maximum potential, as a decentralized ecosystem that doesn’t answer to a central authority, blockchain platforms must stand united and interoperate. Could anyone imagine if payment transfers between regular banks were not possible? How could an economy function? This is the sort of technical problem plaguing the DeFi world: Each blockchain platform has its own benefits, but each remains largely separated from the others in its own silo. The root of the problem is attitude, the other part is technical limitations.

Related: 15 Crazy and Surprising Ways People Are Using Blockchain

Ethereum and EOS are primary examples of this sort of rivalry, both of which have their own technical benefits for dApp developers. If the two ecosystems could be connected to one another, EOS-based and Ethereum-based developers alike, for example, could benefit from each other’s platform’s strengths. Users could also benefit, via financial opportunities without having to sacrifice shifting their base from one blockchain to another.

This is precisely what LiquidApps’s latest development—its DAPP Network bridging—has solved. LiquidApps’s technology provides the technical mechanisms to connect separate blockchain mainnets and recently provided its tools to EOS-based developers to successfully deploy a bridge between EOS and Ethereum.

This was shortly followed by decentralized social media app Yup’s deployment that demonstrated the possibility of moving tokens easily between different once-separate blockchain mainnets. It still remains to be seen how long it will take before blockchain platforms themselves integrate built-in cross-chain technologies, but LiquidApps is starting the next crucial step to DeFi development.

Whether it’s cross-chain technology or the e-wallets that grant access to dApps, tech developments and attitudes in the DeFi space over the next few years will determine its success. The latest developments suggest the future of DeFi looks promising. Time to go decentralized.

By: Ariel Shapira Entrepreneur Leadership Network Contributor

.

.

Paris Fintech Forum

by O. Bussmann, CEO, Bussmann Advisory (CH) Speakers *M. Froehler, CEO, Morpher (AT) *H. Gebbing, Managing Director, Finoa (DE) *U. Shtybel, Vice president, HighCastle (UK) *N. Filali, Head of Blockchain Program, Caisse des Dépôts (FR) more on http://www.parisfintechforum.com/videos2020

99Bitcoins

Start trading Bitcoin and cryptocurrency here: http://bit.ly/2Vptr2X DeFi applications – https://defipulse.com/defi-list/ DeFi is becoming more and more popular as the main use case for cryptocurrencies. This video explains in detail what DeFi is and what you should know about before getting involved. 0:38 Bitcoin and Our Financial System 1:24 Our Centralized Financial System 1:59 What is DeFi? 2:22 DeFi Components 4:16 – DAI explained 5:51 – DEXs explained 6:33 – Decentralized money markets 8:06 Money Legos 8:56 DeFi Advantages and Risks 10:02 Conclusion For the complete text guide visit: https://bit.ly/2R35g6Z Join our 7-day Bitcoin crash course absolutely free: http://bit.ly/2pB4X5B Learn ANYTHING about Bitcoin and cryptocurrencies on our YouTube channel: http://bit.ly/2BVbxeF Get the latest news and prices on your phone: iOS – https://apple.co/2yf02LJ Android – http://bit.ly/2NrMVw2

Your Financial Year-End Checklist

2020 is over, and for many of you, it can’t end soon enough. There will be plenty of time to celebrate the end of one year and to hope for better days in the one ahead. But before we get to that, take these steps to get financially ready for 2021.

1) Review your goals: The end of the year is a great time to review the goals you made at the beginning of the year and set new ones for 2021. How did you do this year? Is there anything you’re proud of accomplishing? I like to start with bright spots because they can guide you toward success as you set new goals. But let’s be realistic, too; 2020 threw us a lot of curveballs.

Was there anything you wish you could have done better? You can also learn from any potential stumbling blocks and figure out how to use them as stepping-stones next year. You may also want to take time now to review your net worth. That’s one way to gauge the progress you’ve made in your financial health this year.

2) Update your budget: Did you save the money that you wanted to? Pay off the debt that you needed to? The end of the year gives you a solid end point to assess whether met the goals you set at the outset of 2020. What if you didn’t have a budget or financial goals? You’ve got a blank slate ahead. Why not create a budget that works? 

PROMOTED SAP BrandVoice | Paid Program The Key To Unlocking Resilience In 2021

3) Create a holiday bucket: Holidays can be budget breakers, so why not incorporate them into your spending goals right from the start? Christmas may look a lot different this year. But you can still create a separate bucket for holiday spending and when that money is gone, stop spending. You’ll thank yourself in January when you don’t have an unusually large credit card bill.

4) Use it or lose it: Some of your benefits—like vacation days or a medical or dependent care flexible spending account (FSA)—expire at the end of the year. Take stock of what you have left and use these benefits to your advantage. MORE FOR YOUPPP Loan Forgiveness Application Guidance For The Self-Employed, Freelancers And ContractorsSBA Approving Economic Injury Disaster Loans (EIDLs): What You Need To KnowWhat You Can Do Now To Maximize Paycheck Protection Loan Forgiveness

5) Make any last charitable contributions: December 31st is the last day your charitable contributions can be deducted on your 2020 tax return. If giving to charity is a part of your spending plan, you can use these questions to help make the most of your charitable giving.

6) Pump up your 529: Just like charitable contributions, contributions to your 529 college savings plan must be made by December 31st to count for this tax year. Find out if your state is one of over 30 that allow you to deduct your contribution. You can find the specific deduction here. If your state is one of the four that allow an unlimited deduction, keep in mind the yearly gift-tax and super-funding rules.

7) Max out your 401k: While you have until April to make contributions to your traditional IRA, Roth IRA and HSA, you can only contribute to your 401k through December 31st. So, if you have extra cash and are looking to boost your savings, consider contributing your last couple of checks entirely to your 401k. Business owners can do the same with the employee portion of your Solo 401k contributions.

8) Find your tax return: You’ll be doing your taxes before you know it, so use this time to get prepared. Review last year’s return and make a mental list of records you’ll need to assemble. Year-end is also a good time to decide whether a Roth conversion makes sense for you.

9) Review your business structure: Evaluate your business structure and the QBI deduction to identify any changes you need to make to your business. You might want to set up a solo 401k, for instance, and if so, you’ll have to act before December 31st (although you can make employer/profit sharing contributions up to the business tax filing deadline).

10) Defer income and incur expenses: If you’re a business owner, you may also want to look at ways to defer income into 2021 or pay for business expenses you anticipate for early next year. This is any easy way to reduce your tax liability for 2020. However, remember not to spend money on business expenses that you wouldn’t otherwise incur just for a tax deduction. Spending a $1 to save 24 cents still costs you 76 cents.

 11) Will and trust review: The end of the year is a good time to take stock of changes in your life—like getting married or divorced, having children, starting a business or retiring.  Your estate plan should reflect these changes. Get out your will, documentation for trusts you’ve established and powers of attorney and make sure they match your current situation.

12) Insurance documents: Insurance documents also need to cover your current situation. Take a look at your life and disability insurance policies to make sure they protect your current income and those dependent on it. Your renters or homeowners insurance should cover any additional big purchases you made during the year. And lastly, you should review your health insurance policy for any upcoming changes for 2020. For those of you enrolling in the Market Place, you have until December 15th to pick your plan.

genesis-2-1

My last bonus task is to enjoy this holiday season. I love the holidays because you can reflect and appreciate what you have. We’ve been tested a lot this year, living our lives through a pandemic, racial unrest and a contentious election. I hope the end of the year brings you comfort and peace. Follow me on Twitter or LinkedIn. Check out my website. 

Brian Thompson

Brian Thompson

As both a tax attorney and a CERTIFIED FINANCIAL PLANNER™, I provide comprehensive financial planning to LGBTQ entrepreneurs who run mission-driven businesses. I hold a special place in my heart for small-business owners. I spent a decade defending them against the IRS as a tax attorney and have become one as a financial advisor. It’s a position filled with hope and opportunity. It gives you the most flexibility to create the life that you want. I also understand the added stresses of running a business while being a person of color and a part of the LGBTQ community. You may feel like you don’t have access to the knowledge that others do. I’m here to help lift some of that weight from your shoulders.

.

Critics:

A personal budget or home budget is a finance plan that allocates future personal income towards expenses, savings and debt repayment. Past spending and personal debt are considered when creating a personal budget. There are several methods and tools available for creating, using and adjusting a personal budget. For example, jobs are an income source, while bills and rent payments are expenses.

Contents

Here’s Why This 44-Year-Old’s Happiness Grew After She Abandoned Early Retirement

When Lisa first learned about the financial independence, retire early (FIRE) movement she was stunned that so many people, often younger than her, could possibly save enough to retire. Reading the blogs and first-person stories invigorated her. She wanted to follow suit. It changed the way she and her husband spent money. They cut out restaurants, wore old clothes and avoided coffee shops, funneling all the extra cash into paying down debt and building retirement funds.

“It really did motivate us,” Lisa said.

But as someone who has worked in the pharmaceutical industry for a number of years, she never had a huge problem with her job. The more Lisa saved, though, the more she felt annoyed at going to work. The more she saved, the more she wanted to watch HGTV before bed. The more she saved, the more she couldn’t understand why she should walk around in a coat with holes in it simply to prove that she was good with money.

The whole effort “made me unhappy,” said Lisa, who asked to only use her first name since she’s still working full-time. That’s why, four years after starting her FIRE goal of retiring young, Lisa and her husband decided to abandon the ‘retire early’ portion of their savings plan. Instead, she’s decided to focus on financial independence, but also not worry if they want to eat out on a Friday night.

Today In: Money

There’s a fine line between frugality and feeling guilty over every dime that you spend in order to save a little bit more. Those that enter FIRE often ignore that line during the accumulation phase, saving as much as possible without regard to how it makes them feel today while sometimes sacrificing their health or well being. But it’s not a feat for everyone. For Lisa, this excessive frugality only became a hindrance to life.

It doesn’t mean she’s giving up saving. Or now, suddenly, going to rack up credit card debt. Instead, Lisa, who blogs about her experience at Mad Money Monster, is reevaluating her life again, figuring out what to keep and what to ignore when it comes to her financial independence (FI) strategy.

Abandoning Her Great Health Care Wasn’t An Option

As they saved, one factor that grew increasingly concerning was the health and welfare of her mom. “My mother depends on us for help for basic living expenses,” Lisa said. She expects to care for her mother as she grows older. While Lisa was making strides paying back debt under the FIRE plan, she had to spend $2,000 on her mother’s dental expenses.

Usually that cost comes out of pocket, and they expect to have to do the same with vision care and some other wellness needs.

This unknown complicated their financial picture. But also Lisa sees her mom’s situation, and then recognizes her luck with her current health care plan, which she describes as “really good.” The idea that she would walk away from that plan, simply so she could retire early – she’s about 60% of the way to her original FIRE mark – she now views as “selfish.” And she’s not comfortable with some of the other options out there for health care coverage, including the public markets or health shares.

“For me to walk away from that [healthcare] would be kind of dumb,” Lisa added.

Keeping A High Savings Rate

Despite rejecting the idea of early retirement at this point in her mid-40s, she’s made great strides in reshaping her financial situation.

When she learned about FIRE, her and her husband had just walked away from buying a large, expensive home that would have put them in a tricky financial predicament. They thought they needed the big house because that’s what people did after getting married. Instead of getting the house, she’s paid off her student loans, two cars and some credit card debt. The family has also invested in two single-family hoes, which they rent out, covering the mortgages.

At the peak of their saving they stashed away about 70% of their income. Now it’s closer to 50%. Still a strong level, but not with early retirement as the goal.

Lisa’s realization that there’s little desire to retire before traditional age has given her the freedom to build wealth for other purposes. She has the financial knowledge now and she’s using it to provide a large inheritance for her daughter one day.

“I want to build legacy wealth for my family,” she said. She has no problem staying at her job to grow that wealth.

But she’s also in a much more secure position, whenever her job does go away.

She’s Not Deprived Of Time

Often when people say they want to retire in their 30s or 40s they have dreams of traveling across the world, seeing new sights and meeting new people. That’s not the case for Lisa. “I’m so content with and entrenched in the adult family life,” she said.

She doesn’t demand much more travel than the summer vacation her family already goes on. Meanwhile, her husband, who works in the film industry, never wants to retire because he’s already found a job he would do even if he didn’t have to work.

“I feel like [we’re] not being deprived of time,” said Lisa.

And now that she has clarified her goals, it makes going into work much easier.

Follow me on LinkedIn. Check out my website.

Ryan Derousseau

I’ve written about personal finance for Fortune, MONEY, CNBC and many others. I also authored The Everything Guide to Investing in Cryptocurrencies.

Source: Here’s Why This 44-Year-Old’s Happiness Grew After She Abandoned Early Retirement

21.4M subscribers
‘Time poor’ is the catch-cry of our era, and yet end-of-life retirement means we have an average of two decades of feeling time rich to look forward to… when we’re old. In this talk, Lacey shares how combining financial independence and mini-retirements is one way to bring that time rich feeling into our youth.  Lacey Filipich started her entrepreneurial journey with a hair wrap stall at 10 years old. Today, she is the co-founder and director of two successful businesses; Money School and Maker Kids Club. Between hair wraps and start-ups, Lacey graduated as valedictorian from the The University of Queensland with an Honours degree in Chemical Engineering. She moved to Australia’s ‘wild west’ to begin her career in mining, rising quickly through the ranks. A health scare and her sister’s suicide opened Lacey’s eyes to the world beyond work, leading her to redesign her life and take five mini-retirements in the next five years. This was achievable because of Lacey’s financial position: she started investing at 19 and now earns a passive income. Lacey considers herself time rich: able to choose if, when, where, how, on what and with whom she works. Her story is one of many in the Financially Independent Retiring Early (FIRE) movement supporting the idea that end-of-life retirement is optional. This talk was given at a TEDx event using the TED conference format but independently organized by a local community. Learn more at https://www.ted.com/tedx

Free Money for Everyone Sounds Great, But Finland Proves Basic Income is a Bust

Universal basic income experiments and other plans that seek to distribute free money seem wonderful considering so many people struggle to make ends meet because of their limited incomes. In the U.S., many legislators have called for federal and or/state governments to trial these economic policies. One recent proposal actually calls for people to receive money from the government even if they are unwilling to work……….

Source: Free Money for Everyone Sounds Great, But Finland Proves Basic Income is a Bust

Financial Advice For Young People Isn’t Always Right – Erik Carter

1.jpg

One of the things I most often hear from people about personal finance is how much they wish they had learned about it when they were younger. In talking to younger people, I do see a lot of awareness about the importance of financial wellness. Unfortunately, there are also a lot of myths and generalities circulating around about how young people should manage their money. Here are three of the most common:

1) Focus on paying off your student loans early.

I get it. No one likes paying student loans and we’d all like the day to come as soon as possible when we no longer have to make those payments. However, student loans typically have relatively low interest rates (at least for undergrads) so any extra cash you have would probably be better off used to pay down higher interest debt like credit cards or invested for a greater expected rate of return (especially if you can get matching contributions in your employer’s retirement plan).

A good rule of thumb I suggest is to pay down debts early if the interest rate is above 6% since you may not earn as much by investing extra savings instead. If the interest rate is below 4%, you should probably just make the minimum payments since you can likely earn more by investing the extra money. If it’s between 4-6%, you can go either way depending on how comfortable you feel with debt vs. your risk tolerance with investing. (The more conservative you are, the more it makes sense to pay down debt vs investing.)

So, what should you do with your student loans? First, see if you can refinance your debt to get a lower interest rate. (Just be careful about switching from government to private loans since you lose a number of benefits.) If the rate is low, you might even want to switch to an extended payment plan since the lower payments will free up savings you can use for other goals like saving for emergencies, buying a home or retirement. If the rate is high, try to pay it down early after building up an emergency fund, getting the full match in your retirement plan and paying down any higher interest debt.

2) Roth accounts are better for young people.

Unlike traditional pre-tax accounts, Roth accounts don’t give you any tax break now, but the earnings can grow to be withdrawn tax-free after age 59 ½ as long as you have the account at least 5 years. The argument here is that young people have more time to grow those tax-free earnings. They’re also early in their careers so they may be in a higher tax bracket in retirement.

However, if you’re trying to save for emergencies or a home purchase and are just contributing to your retirement plan to get the match, you may want to make pre-tax contributions and use the tax savings for your other goals. Even if you’re focused on retirement rather than more immediate goals, a traditional pre-tax account may still be better for you if you’ll end up paying a lower tax rate in retirement.

If you plan to go back to school full-time, you can also convert those pre-tax dollars to Roth at a time when you’re in a fairly low tax bracket. If you’re not sure which makes sense, you can split your contributions between pre-tax and Roth or contribute to your employer’s plan pre-tax (it may even be the only option) and to a Roth IRA (which has additional benefits).

3)  Invest aggressively while you’re young.

There is some truth in this. The longer your time frame, the more aggressively you can generally afford to invest your money and young people tend to have long time horizons before retirement. There are a couple of important caveats here though.

The first is that not all of your money has a long time frame. For example, financial planners generally recommend that one of your first goals should be to accumulate enough emergency savings to cover at least 3-6 months of necessary expenses. This is especially important for young people who are more likely to change jobs and haven’t had as much time to accumulate other assets like home equity or retirement plan balances to tap into.

You may have other short term goals to save for like a vacation or home purchase. Any money you may need in the next 5 years should be someplace safe like a savings account or money market fund since you won’t have much time to recover from a downturn in the market.

Speaking of downturns, the second problem is that this advice ignores risk tolerance. Many young people are new to investing and may panic and sell at the next significant market decline. If this sounds like you, consider a more conservative portfolio (but not TOO conservative). If you have access to target date funds, you may want to pick a fund with a year earlier than your planned retirement date. You can also see if your retirement plan or investment firm offers free online tools to help you design a portfolio customized to your personal risk tolerance.

Of course, there are plenty of young people who should pay down their student loans early, contribute to Roth accounts and invest aggressively. The key is to figure out what makes the most sense for your situation. If you want help, see if your employer offers free access to unbiased financial planners as an employee benefit or consider hiring an advisor who charges a flat fee for advice rather than someone who sells investments for a commission or requires a high asset minimum that you may not be able to  meet. In any case, you don’t want to make the wrong choice now, and regret it when you’re older.

 

 

Your kindly Donations would be so effective in order to fulfill our future research and endeavors – Thank you
https://www.paypal.me/ahamidian

 

 

%d bloggers like this: