The Tragedy of Trading Time For Money

In our twenties, we don’t tend to worry so much about trading our time for money, as we feel it’s a somewhat unlimited commodity but in truth, life is short and unpredictable and the time we have on earth is so precious, indeed, it’s our most valuable commodity yet we give it away, at times, as if it’s worthless.

The challenge with making more money, is that the conventional way is to trade a unit of time for a unit of money, and as we get older (i.e. more experienced) the amount we are able to charge for our money usually increases.  Yet, this is not based on something as linear as age or experience – it’s based on the value you can create a third party, that is willing to pay you in accordance to the value of that unit of time.

The inherent problem, however, is that no matter much you charge for a unit of your time – from the shop assistant being paid very little to the brain surgeon being paid highly, there’s a limit to how many hours there are in each day or week, meaning there’s an inherent cap to your earning potential.

That’s the ultimate problem when it comes to trading your time for money; there’s only so many hours upon which you can trade – and even the brain surgeon has a limit to how much he or she can charge for each unit of their time.

In the alternative, when you shift your mindset to that of the investor or entrepreneur, you activate the concept of leverage – meaning, you start to leverage assets and systems in order to generate revenue that isn’t contingent on the linear path of trading time for money.

We all know how that if we had invested in bitcoin, a few years ago, using a site such as https://buyandtradecrypto.com that we would now be sitting on a small fortune, yet it’s not just investing in stocks, trades, and currencies that can generate passive income for us… there are a whole heap of opportunities to create an income that doesn’t depend on you trading your time for money, you just need to find them, and the only way to do that is to shift your mindset from the linear focus of trading time for money as an employee (or even self employed business owner).

See, school doesn’t teach us to be wealthy, it teaches quite the opposite – to be a cog in the wheel and “get by” as a worker rather than to make it in life as an entrepreneur.  

The book “Rich Dad Poor Dad” by Robert Kiyosaki highlights some of the key differences between how the wealthy utilise their time and resources compared to those that are stuck on the treadmill known as the “rat race” where they are trapped trading their time for money.

The wealthy, on the other hand understand the need to take a longer term view and engage the principle of delayed gratification, in that they would prefer to invest in systems and strategies that are like fruit trees, eventually generating fruit in perpetuity, rather than the immediate term benefit of instant reward.

In summary, whilst trading time for money is not a “tragedy” per se, it is limited in terms of its ability to generate a good lifestyle whereas entrepreneurship and investing pave the way to a different financial destination.

Are You Unknowingly Sabotaging Your Credit Score? Here Are 7 Things That May Be Lowering It Without Your Even Knowing

The credit score that follows your spendings habits follows you for a long time. As BusinessInsider says, “It is used as an indication of trustworthiness by lenders, who use the number as a way to help predict how you’ll treat their credit line based on your financial history.”

That credit score can influence lenders when you apply for a car loan, a home mortgage, a favorable interest rate, and more. You must be making mistakes that affect your score, so are you unknowingly sabotaging your credit score?

Here are 7 things that may be lowering it without your even knowing:

  1. No credit balance. You’d think that having no outstanding balance would be a favorable thing. But, without credit cards, you have no credit background.

If you worry about running up credit card debt that would affect your credit score, you can apply for secured credit card. You must put down some money as collateral for a secured credit card, but it will be convenient for shopping and build a credit record.

  1. Charge-Offs. If you owe money on a credit card and have not made payments for some time, the credit card will decide on a “charge-off” because they have given up on your making your payments.

Your credit score will drop with a charge-off, and the balance after the charge-off remains part of your credit score data.

  1. Co-Signing Loans. When you co-sign a loan for a friend or family member, your credit history is at the mercy of their good payment habits. You would do better to urge them to consider a “bad credit” loan.

Lenders offer “bad credit” loans without the fuss, process, and delays at banks. These type of loans should be taken out only for emergencies. When considering high-interest loans, you must make sure if you can pay back the loan on time.

  1. Nuisance Bills. There are those bills you just don’t think about as debts. For instance, libraries are using credit collection agencies to close in on people who have ignored their late fees.

This is also true of unpaid medical bills and traffic tickets. Any evidence that you do not honor your obligations may affect your credit history.

  1. Credit Card Usage. It’s no surprise that your credit card debt affects the credit record. But, how you use the credit cards and don’t use credit cards can change your score, too.

It might surprise you that trying to rent a car without a credit card will prompt a credit check. And, each credit check affects your score negatively.

Are you unknowingly sabotaging your credit score?

Writing for Forbes, Lauren Gensler says, “You know your credit score is important, but are you clued in on what you might inadvertently be doing to sabotage it?”

Now, everyone has occasionally missed a payment, and most people have been late on payments from time to time. Some people are careless about their obligations, but some simply fall into a credit bind because of unforeseen circumstances and things beyond their control.

Having a low credit score does not mean the end of your world. You can improve it with focus and discipline. But, you should understand what can happen without your even knowing it.

 

Why Early 2018 is a Great Time to Buy Silver

Why buy silver in early 2018? That’s the question we intend to answer in this investigation of the precious metal. We believe right now there are some compelling reasons to buy silver. Read on to learn more about our reasons why we consider silver such a good medium-long term buy.

 

Gold to Silver Ratio

An important gauge of the value in silver price is the gold to silver ratio. This is simply the price of gold / price of silver. So, for example in early April 2018 the prices per oz. were:

  • Gold – $1341
  • Silver – $16.62
  • Gold/Silver Ratio ($1341/$16.62) = 80.69

The current gold to silver ratio is therefore just over 80. When you consider that the average gold to silver ratio throughout the 20th century was 47:1 (see graph below) on this factor alone silver seems undervalued. For example, for silver to return to a 47:1 ratio the price of silver would need to rise to $28.53 if gold stayed at $1341. This represents a rise of $11.91 or 72%.

The gold to silver ratio plotted over 100 years from January 1915 – Source: www.macrotrends.net

 

Global demand exceeding global supply

According to figures supplied from The Silver Institute’s World Silver Survey for 2017 the global demand for silver continues to exceed global supply. In 2016 global silver supply was 1007.1 million ounces, whereas global silver demand was 1027.8 million ounces. This represents a deficit of 20.7 million ounces in 2017 alone.

Whilst a one-year deficit doesn’t suggest a trend when you consider the fact that 7 of the last 10 years have seen silver demand exceed silver supply and we definitely do have a trend. Infact over the last 10 years there has been a demand excess of 500 million ounces or an average of 50 million per year. It seems unlikely that silver prices can remain at their current levels when demand exceeds supply each year.

Factors positively stimulating demand for silver include the photovoltaic industry (an energy which converts sunlight directly into electricity). Silver is used in both solar panels and solar cells, industries which are set for future explosive growth. The Silver Institute projects that photovoltaic demand for silver will rise 75% between 2015 to 2018. Gartner the research company estimates that 5.75 billion cells phones will be sold between 2017 and 2019, these will require 57.5 million ounces of silver.

Silver is an integral element used in every solar panel installed worldwide

 

According to a different report by the Silver Institute, when referring to silver mines production, “We estimate that mine supply peaked in 2015 and will trend lower in the foreseeable future. Declining total supply is expected to be a key driver of annual deficits in

the silver market going forward.” Therefore, moving into the future silver production is likely to decline further and create even stronger prices for silver.

10  other reasons to own silver

If all of the above isn’t enough for you here are 10 other reasons to invest in silver:

  • Affordable – trading currently at only $17 per oz it’s easy to buy and sell even small amounts of silver. It’s much easier than gold for example, which currently sells at $1341 per oz. If you wanted to buy/sell $500 of silver or gold – it’s much easier with silver!
  • Balanced portfolio / spread risk – silver and precious metals (gold, platinum, etc.) in general should feature in any balanced investment portfolio. They are low-risk, highly liquid and whilst offering no yield, history would suggest offer medium-long term capital gain opportunities
  • Collectable – silver in its coin form can be very interesting and collectable. Buying coins from your own country may have certain advantages too. Silver coins from around the world such as the American Eagle, Silver Britannia and Silver Krugerrand are literally worth their weight in silver plus a collector’s premium. A coin collection is an ideal way to create a family heirloom to transfer wealth across the generations

Silver coins are highly collectable and add some fun to silver investment

 

  • Geopolitical pressures and concerns – Whenever tensions arise around the world investors flock to precious metals. With tensions with Trump’s administration, Putin’s Russia and North Korea the time seems right to have a proportion of wealth in a safe haven such as silver. If a global/regional war broke out, silver values would hold well.
  • Inflationary hedge – analysis by BMG Group, showed that for every 1% rise in inflation, silver rose 2% over a 46-year period to 2013. That is a very good inflationary hedge and certainly better than keeping your wealth in a low interest bank account with no chance of a capital gain!
  • Liquid asset – silver like all precious metals is a liquid asset. In times of need the owner can quickly sell for a known published silver spot price. Silver is more liquid than certain other assets e.g. property and owning a business, which both take time to sell
  • No counterparty risk – silver is not like other asset classes which require performance by third parties, e.g. stocks/shares, ETFs, etc. Silver in its physical form has no counterparty risk
  • Real money / currency – silver for thousands of years has been used as a currency. In the event of a financial systems collapse, those owning silver will be protected
  • Tactile – silver is a tangible asset that can be touched, many investors like this. Digital assets can potentially be stolen through cyber-crime and are generally less trusted
  • Tax efficiency – depending on the taxation policies of a country investing in silver can have certain tax advantages. Silver coins are often classed as legal tender in their country of origin so avoid certain taxes. Silver ownership can also be beneficial in areas such as inheritance planning, etc.

For more information, UK based gold and silver dealers Physical Gold have created an infographic titled The Benefits of Silver which provides  lots of useful information on the value of silver and reasons to invest in this precious metal.

Conclusions

For the reasons we have said why not add some silver to your investment portfolio now? Whether you buy bars or coins doesn’t really matter, but adding some silver is likely to reap very positive medium-long term gains. Silver is also a useful way of adding some diversity to an investment portfolio