Building Wealth

For the first 30 or so years of working, saving and investing, you’ll be first in the mode of getting out of the hole (paying down debt), and then building your net worth (that’s wealth accumulation.). But don’t forget, wealth accumulation isn’t the ultimate goal. Decumulation is! (a separate category here at the Hub).

How to stay safe while trading Cryptocurrencies

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Collection from different coins of crypto currency: ethereum, litecoin, bitcoin, monero, ripple.

By Emily Roberts

For the Financial Independence Hub

When you’re doing any kind of business online, we don’t need to tell you that security is paramount. While the security measures that software creators and the makers of our computers, tablets and phones are getting more sophisticated with each passing day, the techniques and scams used by cybercriminals are only matching them every step of the way.

Over the course of the last twelve months, we have all had to be even more careful as the crooks have taken advantage of the fact that people all over the world have had to conduct all their business online, and the cybercrime figures have skyrocketed.

Trading cryptocurrency is just like any other online activity involving money: you need to be extremely careful about the security measures you’re taking and any potential risks that you’re incurring. Here are a few tips to help you stay safe:

Make sure you have a Cold Wallet

If you are just getting into trading crypto then you may not be familiar with the phrases “hot wallet” or “cold wallet.” Simply put, a cold wallet is a place where you can store your currency offline, such as a drive or USB that you can disconnect. We do understand that this may seem like a slight case of overkill if you’re confident in the security measures installed on your device, but it’s always better to be safe than sorry, isn’t it?

Make sure you research and double check your leads

Things can move awfully fast in crypto, and just as in any other online trading, it can be tempting to jump on what seems like a good thing before anyone else gets there. However, you need to remember that this is an incredibly volatile market and if something seems like it’s too good to be true, then it may well be. Continue Reading…

Investing in Bitcoin is a no-brainer

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By Dale Roberts, Cutthecrapinvesting

Special to the Financial Independence Hub

In the Fall of 2020 I initiated a position in bitcoin by way of a closed end fund from 3iQ Digital Asset Management. The initial purchase created a 2.5% portfolio weighting. The explosive price increase quickly took me above my target of a 5% portfolio weighting. I am embracing bitcoin as a core portfolio asset. It is one of the portfolio risk managers. This post will demonstrate why investing in bitcoin is a no-brainer.

To my eye, bitcoin is digital gold. It is a store of value. What makes bitcoin a store of value is due to the fact that it is a currency (digital) and it is scarce. There are only 18,500,000 million coins in circulation (it’s less than that as a few million coins were lost due to owners losing their keys) and the total creation of bitcoin will be capped at 21,000,000 coins. It is the opposite of inflationary.

It is scarce and it will be finite in supply.

Many will say that it is “the hardest currency on earth.”

On the flipside, central banks around the world are printing and borrowing monies at a historic rate. Those fiat currencies will be devalued. This also creates the threat of inflation.

What is bitcoin?

For the go-to post that will help you on your journey to understanding bitcoin, please have a read of should you invest in cryptocurrency?

That post was the result of hundreds of hours of research. In the process I consulted with individuals and firms that had put in thousands of hours of research and due diligence.

One such individual is Arthur Salzer, the CEO of Northland Wealth Management. Northland was the recent winner in North America in the category of Best Family Office Under $2 billion.

A family office firm will manage and protect the wealth of more affluent families. They will typically embrace the same style and financial management techniques employed by pension funds, sovereign wealth funds and endowments such as Yale and Harvard. ​

Protect and grow assets over generations

Given that generational goal I was more than surprised to know that Northland was using bitcoin as a core portfolio asset even more than two years ago. They were early adopters to say the least. And that confidence in bitcoin as a portfolio asset was the result of extensive due diligence.

Clients have benefitted tremendously.

According to a new generation in the financial industry, unless something gets in the way, crypto is on the path to even greater credibility and increased adoption. We’re at the foothills of this long trend of financialization and institutional adoption.

I asked Arthur Salzer of Northland Wealth Management to describe his extensive bitcoin educational journey, and why he has the confidence to use bitcoin as a portfolio asset for Northland family clients.

From Arthur …

The bitcoin journey

Of all my 30 years of professional experience, researching and investing in asset classes such as real estate, stocks, distressed debt, hedge funds and private equity, my journey and due diligence into Bitcoin has been the most interesting. What I discovered was that there are many facets to Bitcoin – as money, as an asset class, as a technology, as a digital payment system, as a store of value, as speech, a belief system, and potentially as a new form of life. Bitcoin are all of these and so much more.

My first exposure bitcoin was in May 2017 and I had just finished a TV interview at the SALT Conference (the world’s largest hedge fund conference) held at the Bellagio in Las Vegas. Two of the staff approached me and asked, “What do you think about bitcoin? We are thinking about buying some.” At the time, the price of BTC was in the US$2,000 range, but there were some eerie parallels with the dot-com bubble around the turn of the century.

I told them, “While I have not invested any of my own or client capital into this sector, some of my friends who have been in since the $100 range, have been selling on a regular basis to reduce the position size recently. I can’t give you more advice than that.” As an investor it’s imperative that you do your own research and as a professional investor, to only comment on what you really know. And at that point in time, I knew I didn’t know about bitcoin.

The turning point

Fast forward to 2021, (and thousands of hours or research later) despite bitcoin’s headline-worthy returns and volatility, many investors still don’t understand it, especially when it comes to valuing it. Many in the financial industry, including Warren Buffett, focus on intrinsic value: an economic good produces cash flow or has overt utility such as stocks, bonds, real estate and consumable commodities. But bitcoin has monetary value, which exists despite an economic good not having intrinsic value. Monetary value usually arises from objects that are scarce, durable and relatively easy to divide.

Since the dawn of civilization, societies have used rare seashells, wampum, glass beads and stones as money or a form of record keeping. Gold is an ideal example since it can be made into jewelry, coins and bars, but bitcoin is unique in today’s digital world since it is scarce, durable, has strong privacy characteristics.

Bitcoin momentum and adoption

Elsewhere, Fidelity Digital Assets, a subsidiary of the namesake giant U.S.-based asset manager that oversees and manages in excess of US $5 trillion in assets, is offering a trading and custody platform for bitcoin. It has also had bitcoin mining operations since 2014, and the Fidelity Center for Applied Technology is a customer of Victoria-based Blockstream, which mines bitcoin in Quebec and Georgia. Not to be outdone, Microsoft is taking advantage of the Bitcoin system’s trust-minimized features and security and building a decentralized identity platform aptly named Identity Overlay Network. Continue Reading…

A complete B2B SEO strategy for 2021

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Photo courtesy of Pixabay.com

By Mike Khorev

Special to the Financial Independence Hub

What exactly is B2B SEO?

B2B SEO strategy comprises digital marketing tactics that aim to help B2B [Business To Business] websites to rank high for certain keywords and terms in search engines like Bing and Google. Unlike optimization for B2C [Business To Consumer], B2B optimization strategies focus on phrases and terms that key decision-makers in a company actively search for at work. This can include managers, team leads, CEOs, CTO, etc.

Why Does It Matter in 2021?

B2B SEO matters in 2021 because it’s the only form of marketing that yields compounded traffic over time coupled with long-term results. 

Here’s why: Any page holding top 10 rankings in Google carries an average age of over 2 years. It’s hard to think of any other distribution and marketing channel that can generate traffic for multiple years.

Here’s another reason: Over 53% of all website traffic across different industries is organic. For the B2B industry, the figures are even promising. Organic searches generate twice the revenue than social media or email marketing for B2B businesses. 

How B2B SEO actually works

At the heart of B2B SEO lies keyword research and understanding customer problems. After that, you have to understand 3 different parts of SEO for B2B industries: 

  • The first one is on-page SEO, which includes optimization of the site page with useful content. It also includes adding headings, title tags, meta descriptions, URLs, alt text, etc.
  • Off-page SEO focuses on link building and securing website authority.
  • Technical SEO helps with the crawling and indexing of a site by search engines. It works on the architecture of the website.

B2B SEO Strategy in 2021

Proper Keyword Research

At this point, you have to figure different queries across different stages of the sales process that people at managerial positions are using to search for similar businesses like yours. 

To get help with keyword research, you can use SEMrush. It will give you information about your target buyer persona and what kind of keywords they are using to find solutions to their pain points.

You must work on finding the most important keywords that align perfectly with different phases of a sales funnel.

In case you have trouble finding the right set of keywords to act as a starting point for your B2B research, asking these questions might help you: 

  • What problems are my target personas facing?
  • Where are they looking for the solution to their pain points?
  • How can you come up with a viable solution?
  • What are the key features of your service/product?
  • Which keywords are your competitors for organic traffic generation?

Find Top-of-the-Funnel Topics

The top-of-the-funnel topics are the most general topics that a broad range of users are searching for. As you reach the narrow end of the sales funnel, the range of topics also keeps getting smaller and narrower.

If you’re doing B2B digital marketing, it’s important that you strategically pick and write about the top of the funnel topics. These topics and keywords get several-fold search traffic than the bottom-of-the-funnel topics. If you write about the latter your outreach will be limited. Continue Reading…

SPACs, NFTs and another Tech-inspired Silly Season

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LowrieFinancial.com: TechDaily/Unsplash

By Steve Lowrie, CFA

Special to the Financial Independence Hub

Is it just our imagination or has there been an uptick lately in exciting “new” trading tactics for seizing riches from exotic new markets?

After a year of sitting at home, an excitable generation of do-it-yourself traders has replaced traditional leisure-time activities with online pursuits: including aggressive, Tweet-worthy trading for fun and profit.

The result? Waves of volatile financial feeding frenzies and overnight sensations, egged on by a brood of freshly hatched social media stars and a spate of flashy new trading platforms with captivating names like Robinhood.

All this might seem new and different, if I hadn’t already seen such eerily similar circumstances so often before, with so many unhappy endings. I suppose that puts me in the same curmudgeonly camp as 97-year-old billionaire Charlie Munger (Warren Buffett’s long-time Berkshire Hathaway partner). He pulled no punches in this recent interview about Robinhood:

“[Some] may call it investing,” he said, “but that’s all bulls**t. It’s really just wild speculation, like casino gambling or racetrack betting. There’s a long history of destructive capitalism, these trading orgies whooped up by the people who profit from them.”

Speaking of Warren Buffett, a recent Financial Post article asked the question: “What would Warren Buffett make of this stock market silly season?”  The answer was that he already has weighed in on the matter many times before, including one of my favourite “Buffettisms”:

“The stock market is a device for transferring money from the impatient to the patient.”

Impatience in Action

But maybe this time is different after all? Let’s take a closer look. The current wave of “get rich quick” mentality launched in January 2021, when a Reddit-driven rally abruptly sent the prices of several unloved stocks like GameStop through the roof.

More recently, special purpose acquisition companies (SPACs) have captured a lot of attention. “When SPAC-Man Chamath Palihapitiya Speaks, Reddit and Wall Street Listen,” observed a recent Wall Street Journal column. “Amateur traders hang on [Palihapitiya’s] every word for clues about his next target: and for the insults he hurls at the high-finance elite.”

Non-fungible tokens (NFTs) have also been taking the trading world by storm. If you think of an NFT as being like a collectible — say, an autographed baseball card — but in digital format, you’re getting close to envisioning its worth. Similar to playing cards, people are collecting these pieces of code, typically exchanging them in cryptocurrency such as bitcoin.

How much can an NFT be worth if the collectible attached to it is in high demand?  However much the market decides.  In this recent extreme case, “NFT Mania” garnered $69 million for a piece of digital artwork.

Innovations vs. Investments

At least on paper, some have amassed rapid fortunes by trading into these sorts of innovations to catch a wave of risk-laden opportunity. But will these brave speculators manage to convert their good fortune into lasting wealth once today’s trends fizzle or fly? Continue Reading…

An overview of Investment Real Estate

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By Matt Guenther

Special to the Financial Independence Hub

Real estate investment is the process of buying properties as an asset. The goal is to generate income rather than use it for living purposes. Typical examples of real estate investments are: office building, a commercial plot, a house for rental purposes, or an office building for running and managing businesses.

In this post by Cash for Homes Arizona, we look at different types of real estate investments and best ways to invest in them.

Different Categories of Real Estate

Real estate investments have three main categories: residential, industrial, and commercial. Each one then further has sub-categories.

Commercial Real Estate 

  • Office
  • Retail
  • Industrial

Residential Real Estate

  • House flipping
  • Vacation rentals
  • Section 8 rentals
  • Single-family rental homes
  • Small multi-family homes

Industrial Real Estate

  • Land for mining
  • Residential development
  • Commercial development

How to obtain Real Estate Investment Financing

Hard Money

It’s called hard money for the reason that the lenders would use some kind of hard assets such as property as collateral to secure the loan. These loans are typically short-term so mostly borrowers who plan on house flipping generally seek it.

As a rule of thumb, hard money covers anywhere between 70 and 80% of the property’s purchase value before it goes through any kind of renovation or construction work.

That is why it’s important that the property is worth more than the loan’s value and that in case you default, the property should be able to liquidate the cost of the loan.

Attention must be paid to the fact that hard-money lenders generally charge high interest rates, so choose wisely.

Microloans

Microloans are mostly meant to help small businesses: typically startups that need capital to fuel initial growth. Because they are ‘microloans,’ the amount up for a loan is typically smaller than what you would get via a traditional financing route from banks. Because the amount disbursed is generally lower, terms of qualifications are usually less strict in terms of credit score, etc.

Therefore, microloans are ideal for those who have limited borrowing capacities. But it’s important to consider the overhead costs involved with microloans. Also, interest rates can be higher than those imposed by standard loan programs.

Real Estate Crowdfunding

Crowdfunding is a relatively new concept that allows people to raise money from the general public for any cause they support and believe in. While popular sites like Kickstarter and GoFundMe will allow you to raise money for any cause, some sites are designed for real estate crowd funding only. Sites like Feather The Nest and Hatch My House allow raising of funds for homebuyers and investors.

Best ways to invest in Real Estate

REITs (Real Estate Investment Trusts)

You can think of REITs as companies that own, operate, and derive money from the management of real estate assets. Most REITs are tradeable on stock exchanges so if you want you can also buy stocks of one of the companies online. Real estate ETFs and real estate mutual funds are also in this category.

Note that not all stocks related to real estate are classified as REITs. Also, some of these may only be accessible to eligible investors.

Use an Online Real Estate Investing Platform

There are many real estate investment platforms available for those who want to join hands with others who want to be part of a big commercial or residential property deal. Most investments are done online through real estate platforms. The capital investment requirement is less than is needed to complete the purchase.

The upside of online real estate platforms is that interested investors can diversify their portfolios by investing in multiple projects. It also has room for geographic diversification.

The downside is that the management fees can be high sometimes with overhead costs. Also, liquidation can be difficult due to high due to lockup periods.

Rent out a room on platforms like Airbnb

Today to rent out a property you don’t need to buy one separately. Continue Reading…