GMB Ep #81: There Are Only Three Ways To Make Money In Crypto

The popularity of Bitcoin and other cryptocurrencies has exploded over the last few years, and many investors are asking about the various ways they could make money investing in them. A few months ago in episode 65, we talked about how cryptocurrencies work. In today’s episode, we’re extending that discussion and sharing the only three ways to make money with cryptocurrencies. Throughout the episode, Grant reviews how some of the money-making methods of the gold mining era relate to cryptocurrencies and three methods you can use to make money in the cryptocurrency space.

Show Notes

[02:11] Understanding Cryptocurrency – Grant reviews a framework that he’s been using to shape his understanding of the inner details of cryptocurrency and the ways to make money in the cryptocurrency world.

[06:45] Risks Associated with Crypto – Compared to rare minerals like gold, cryptocurrency does not have a long history yet. Grant explains the risks associated with cryptocurrencies due to their relatively short history and the high volatility.

[07:46] Process of Mining – Grant takes an in-depth look at how a network of computers carry out cryptocurrency mining and transaction tracking.

[12:52] Profitability of Mining – Why the awards for mining go down over time and how it affects the ROI of mining.

[15:45] Speculating – How cryptocurrency investors can make money by speculating cryptocurrency prices.

[18:11] Regulations – Grant reviews some of the regulations that are in effect in Europe due to the highly volatile nature of the cryptocurrency world and some of the instances that prove that cryptocurrencies aren’t completely out of the reach of governments.

[22:47] The Levi’s Approach – How investing in platforms that enable people to interact with cryptocurrencies can become a way to make money in the cryptocurrency arena.

[27:32] Smart Contracts – How smart contracts work, how they’re related to the technology used in crypto, and some of the investment opportunities related to smart contracts.

Resources

Ep# 65 – My Take on Bitcoin & Cryptocurrency:
growmoneybusiness.com/podcast/episode65

GMB Ep #78: Investing Myths Debunked #1: Rising Rates Will Crush Your Bond Portfolio

Recently, we’ve seen quite a few myths and misconceptions about investing circulating in popular media and amongst investors. Today’s episode is the first of several episodes we plan to publish with the focus of debunking these myths. Throughout today’s episode, Grant debunks the misconception of negative effects on bond portfolios caused by increasing interest rates on bonds. Stay tuned until the end of the episode, where Grant shares his take on how to get the best outcomes from bond portfolios.

Show Notes

[01:58] Understanding Bonds – Grant reviews how bonds work and how they’re different from stocks.

[07:30] Interest on Bonds – The structure of interest for bonds and how the concept of duration comes into play.

[10:35] Fluctuation of Prices – Grant shares his thoughts on why fluctuation of bond prices does not have a significant effect on long-term investors.

[13:18] Interest Rates – Grant reviews how increasing interest rates affect long-term portfolios, using an example of a worst-case scenario.

[18:39] Path to Success – Grant shares his thoughts on why consistently applied strategy and long-term focus are the keys to the best outcomes for bond portfolios.

[20:33] Unlikely Outcomes – Why it’s highly unlikely that we’ll see a huge rise in interest rates in the next five to ten years based on how our current monetary system is structured.

Resources

What is the Worst Case Scenario for Bonds? – Cullen Roche:
pragcap.com/what-is-the-worst-case-scenario-for-bonds

Bond Duration:
en.wikipedia.org/wiki/Bond_duration

Don’t Ditch Those Bonds
aarp.org/money/investing/info-09-2013/dont-ditch-those-bonds.html

GMB Ep #77: Investing in an Inflationary Environment

Last week, The Bureau of Labor Statistics released some metrics that indicate we might be experiencing a higher rate of inflation than the federal reserve and other stakeholders have been expecting. We dedicated today’s episode to exploring what inflation is and why we should be concerned about it. Throughout the episode, Grant dives into how inflation occurs, how it influences the economy, how to measure inflation, the role of the federal reserve in keeping the economy stable, and what investors should keep in mind about maintaining a healthy portfolio in an inflationary environment.

Show Notes

[04:45] Understanding Inflation – What inflation is, why it happens and why we should be concerned about it.

[07:25] Measuring Inflation – Grant reviews some of the methodologies and indices that are used for measuring inflation and how these measurements indicate recent changes in the prices of consumer goods and services.

[13:25] Inflation and Deflation – Grant shares his take on why the two extremes of the spectrum can cause adverse effects on the economy and why maintaining a stable rate of inflation is better for the economy.

[16:58] The Federal Reserve – How the federal reserve maintains its policies in order to keep the economy stable.

[22:25] Inflation and Investments – How inflation affects investments and how different asset classes perform in inflationary environments.

[25:14] Pricing Power – Why companies that offer products and services with higher pricing power can adapt better to inflation.

[28:00] Diversification – Grant reviews some of the ways you can diversify your portfolio by taking advantage of assets that are less affected by inflation in the United States.

[35:48] Real Assets – Grant shares his take on how real assets, including real estate, perform in an inflationary environment and what investors should keep in mind about investing in hard assets.

Resources

Consumer Price Index – U.S. Bureau of Labor Statistics:
www.bls.gov/news.release/cpi.toc.htm

GMB Ep #75: The Biden Proposal to Raise Long Term Capital Gains Rates & Eliminate the Step Up In Basis

“Animal spirits” is a term coined by the celebrated economist John Maynard Keynes, which describes the financial decision-making behaviors of people in times of uncertainty. The behavior of animal spirits has a clear relationship with consumer confidence. In today’s episode, Grant dives into how we can measure animal spirits and consumer confidence and what these concepts mean for the financial markets, our lifestyles, and portfolios.

Show Notes

[01:26] New Tax Plan – Grant reviews some of the key goals of President Biden’s new tax plan and what they mean for the general public and investors.

[05:32] Long-term Capital Gains – How long-term capital gains work, how they’re different from their short-term counterparts, and how taxation comes into play.

[08:53] Proposed Rates – Grant reviews the new tax rates proposed in President Biden’s tax plan and new planning opportunities that come with the new changes.

[13:48] Selling a Business – Selling a business is one of the instances where a business owner can end up paying substantial amounts in tax according to the proposed tax rates. Grant shares his take on How business owners can work around this.

[18:30] Step Up in Basis – Step up in basis is a tool widely used by financial planners to minimize the tax impact, and President Biden’s new proposal substantially limits this opportunity. Grant shares his thoughts on how we can adapt to these proposed changes.

[25:47] Estate Planning – How the elimination of step up in basis affects estate planning and how to minimize the tax impact for people who inherit assets.

Resources

Reviewing the Biden Tax Plan
www.abovethecanopy.us/reviewing-the-biden-tax-plan/

GMB Ep #74: Animal Spirits & Consumer Confidence

Show Notes

[01:03] Background – Grant reviews how the term “animal spirits” was coined, the historical background of it, and what constitutes the concept of animal spirits.

[05:19] Consumer Confidence Index – How consumer confidence can be quantified with an index, how it reflects the economic impact of global events, and what it can tell us about the status of the economy.

[10:00] Mergers & Acquisitions – In the last few months, there’s been a big surge in mergers and acquisitions. Grant shares his thoughts on the reason for this surge and how this trend relates to animal spirits.

[15:52] Other Examples – Grant reviews some of the other trends in the economy that relates to animal spirits, such as non-fungible tokens and cryptocurrencies.

[18:15] Consumer Confidence and Predictions – High consumer confidence is a clear indicator of good economic growth. Grant shares his thoughts on what the current status of consumer confidence tells us about the next few months.

[22:22] Negative Possibilities – Grant shares his take on what challenges we may have to face if the economic rebound does not go as expected.

Resources

Understanding the Consumer Confidence Index:
investopedia.com/insights/understanding-consumer-confidence-index

Animal Spirits:
investopedia.com/terms/a/animal-spirits.asp

Market Update: Q2 2021

Even though the global stock and bond markets feel relatively calm as I write this, there’s been a whole heck of a lot that happened in Q1. In no particular order, we saw:

A mob breach the capitol building
The entire GameStop saga
Virtually all crypto currencies post massive gains
A $1.9 trillion stimulus package passed
U.S. interest rates spike
An NFT (piece of digital artwork) sell for over $69 million

Perhaps my senses have dulled a bit over the last year, because that’s a whopper of a list for feeling relatively calm.

We are at a crossroads in the financial markets right now. Stock prices continue to climb higher and break records, as investors have priced in a substantial economic recovery over the coming 18-24 months. If the global economy is able to deliver that rebound the march upward should continue. But any misstep or hiccup could send us into correction territory at the drop of a hat.

Here’s this quarter’s market review.

Continue reading→

GMB Ep #73: The Few Circumstances Where Variable Annuities Make a Lot of Sense

Variable annuities are a set of commonly offered insurance products that promise consumers a consistent income stream. In general, these products tend to become more beneficial to insurance companies and representatives who sell these products rather than consumers buying them. However, in recent years insurance companies have started to offer products that may be more consumer friendly. Throughout today’s episode, we dive deep into what variable annuities are, how they’re structured, and some of the scenarios where you might want to consider them.

Show Notes

[01:07] Background – How professionals in the financial planning and insurance industries view variable annuities and why there are different perspectives on the integrity of the insurance-based investment solutions.

[05:23] Annuities – Different configurations of annuities and how the returns vary according to the type of investment.

[11:23] Understanding Variable Annuities – Grant reviews what variable annuities are, how they work, and why Grant isn’t a big fan of variable annuities.

[16:45] Features and Fees – Over the years, Grant has reviewed lots of annuity policies. He dives into the most common types of fees insurance companies charge their customers in exchange for various features in the policies and some of the issues associated with the fees and commissions.

[22:13] New Developments – In recent years insurance companies have started making adjustments and improvements to their products. Grant talks about some of these updates and how they address the issues from older policies.

[25:36] Reasonable Options – Grant dives into some of the scenarios where obtaining a variable annuities policy may make sense to a consumer.

Resources:

How to Analyze a Variable Annuity

GMB Ep #71: Why Robinhood Needs More Oversight

In recent years, the online trading platform Robinhood has been gaining popularity among typically younger and novice investors, mainly because they have no minimums or commissions. However, there are some things about the way Robinhood operates that are not always in the best interests of the users. In this episode, Grant reviews how this brokerage firm is set up, how they make money, and what you should keep in mind if you’re trading on Robinhood.

Show Notes

[01:37] Background – Robinhood’s origin story and how it forced many other brokerage firms to drop commissions to zero.

[04:39] Day Trading Mishaps – Grant reviews one of the horror stories related to day trading on Robinhood, where one investor ended up getting a massive tax bill because they didn’t understand the rules around trading.

[08:09] Wash-Sale Rule – The IRS has set up a rule related to wash sales that get triggered when you trade frequently. Grant dives into how this rule can lead to massive tax bills for day traders on Robinhood.

[12:24] How Robinhood Makes Money – Grant reviews how Robinhood’s commission-free business model works, how it differs from a traditional brokerage firm, and one revenue source that put Robinhood under scrutiny in the investor community.

[22:56] Unnecessary Trading – Some of Robinhood’s features are designed to encourage users to make more transactions. Grant explains why this practice does not work in the best interests of Robinhood users.

[29:47] Strategies for Robinhood Users – Grant shares his take on some of the strategies Robinhood users could implement to build a robust investment portfolio.

Resources

Episode #63 – Anatomy of a Short Squeeze: GameStop FAQs

GMB Ep #70: Real Estate Syndication With Anthony Scandariato

A real estate syndication is essentially a partnership between a set of limited partners who pool their money together to purchase a piece of real estate they cannot afford on their own. This week on Grow Money Business we have a distinguished guest who has been working on real estate syndications for quite a while. Anthony Scandariato, co-founder and managing principal of Red Knight Properties, joins us today to talk about what you need to know before investing in a real estate syndication.

Show Notes

[02:42] Introduction – What real estate syndication is, how it differs from property management, and available opportunities for investors.

[07:02] Legal Background – Rules, regulations, limitations, and liabilities associated with real estate syndicates.

[10:33] Lifecycle of Investment – The process of setting up a real estate syndication and getting into deals with investors.

[14:54] Sourcing Properties – Anthony talks about his process of finding properties, acquiring them, and preparing for business.

[20:35] Managing Properties – Anthony shares his thoughts on the ideal way to manage the properties and working with tenants to make smooth rent adjustments.

[24:02] Communication with Investors – How general partners maintain the relationship with investors in terms of cash flow, reporting, and profit-sharing.

[27:31] 1031 Exchange – Anthony shares his take on the purpose of the 1031 exchange and why it should not be repealed.

Resources

Discovering Multifamily Podcast – Real Estate For Medical Professionals With Grant Bledsoe

Connect with Anthony

Episode #69: Interest Rates Are Rising….Does That Mean You Should Adjust Your Bond Allocation?

The Federal Reserve recently announced that they are going to maintain very low short-term interest rates for bonds over the next couple of years. On the other hand, long-term interest rates seem to be rising in recent weeks. We dedicated this week’s episode to reviewing how a savvy investor may respond to these developments. Throughout the episode, we discuss how bonds work, the risks associated with bonds, interest rates, why bonds are a crucial element of a healthy portfolio, and more. Stay tuned until the end of the episode, where Grant talks about why having non-US-denominated bonds could be beneficial to you.Continue reading→