I recently read an interesting book called Check Your Financial Privilege- Alex Gladstein.  This started as a series of posts on Bitcoin Magazine. 

You can read some of the articles below.

Check Your Financial Privilege

 UNCOVERING THE HIDDEN COSTS OF THE PETRODOLLAR. 

FIGHTING MONETARY COLONIALISM WITH OPEN-SOURCE CODE

CAN BITCOIN BE PALESTINE’S CURRENCY OF FREEDOM?

The reason for the book is because they are very long and in depth articles such that many people may not read them on the internet. But if you want to, they are free there. 

Living in the USA it’s very easy to take a US centric view of the world. That view involves a relatively stable currency, at least for the last 40 years. The last time we really saw high inflation was 1982 when it was 6% and the few years before that. Since then it’s been under 5% and some years as low as 1%. Many other countries have not had this privilege. 

In the USA we also have a pretty robust stock market, averaging 9%/year in gains and usually about 6% over inflation.

Because many people are unable to trust their own currency they try to trust the USD to maintain their local purchasing power. This is not always practical as trying to transact in a foreign currency can cause a lot of confusion. Change may also not be available. 

Two countries that I highlight below have had very high inflation over the last year (and years), relative to the USD. Those countries being Argentina and Haiti. They have lost 25% vs USD  for Argentina Peso and 27% for the Hatian Gourde respectively.

Many people complain about Bitcoin’s volatility. For example, if you had bought BTC in the USA 1 year ago you would be down 20% but since these other countries have such high inflation if people in Argentina and Haiti had held BTC instead of their local currency they would have maintained their purchasing power instead of losing 25%.

Even the Euro, which is a relatively stable currency, has only lost 7% relative to BTC over the last year, whereas the USD has lost 20% over the last year. Bitcoin’s performance over the last year relative the the dollar, the strongest currency, which is not widely available, really only highlights the benefits of the dollar being the world reserve currency. 

Compared to many other assets, bitcoin has performed very well, even when measured against the Euro!

This is what is meant when saying we should “Check our Financial Privilege”. A real fear is that perhaps the USA will fall victim to extreme inflation in the future. 

While stocks have historically been an inflation hedge and will likely continue to be the best hedge, the USD as the world reserve currency may have completed its time. The world reserve currency has changed many times in the past. Before WW2 the British Pound was the world reserve currency. Before that it was the Dutch Guilder, which doesn’t exist anymore.

For a very interesting history on that you can read Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail – Ray Dalio.

Here is a short (1 hr) Youtube Video summary of the book, by the author, if you don’t want to read the book.  https://www.youtube.com/watch?v=xguam0TKMw8

In conclusion, when considering if “bitcoin is good for me” you should try to expand your scope a little. While you may not realize the problem of inflation, even low inflation, as it’s been ever present, many people around the world have seen the damage inflation has done and see the potential that bitcoin may provide to hedge against inflation.

USD to BTC –
May 22, 2021 – $37,59610
May 22, 2022 – $29,985.50
20.25% decrease

Hatian Gourde to BTC –
May 22, 2021 – 3,318,494.21
May 22, 2022 – 3,361,197.64
1.29% increase

Argentine Peso to BTC –
May 22, 2021 – 3,541,519.54
May 22, 2022 – 3,549,033.05
0.21% increase

Hatian Gourde to USD
May 22, 2021 – 88.27
May 22, 2022 – 112.09
27% increase

Argentine Peso to USD
May 22, 2021 – 94.20
May 22, 2022 – 118.47
25.7% increase

Euro to USD
May 22, 2021 – $1.22
May 22, 2022 – $1.06
13.1% decrease

Euro to BTC
May 22, 2021 – 30,863.91
May 22, 2022 – 28,415.65
7.93% decrease

Twelve Reasons to Vote for Andrew Yang – Another good post about Yang!

I am going to put my “outro” at the start here in case people don’t get through this whole post!

Outro

I think it is vital to get a forward thinker like Andrew Yang in the White House in 2020. I am writing this to request that anyone who is reading this specifically consider reading about Andrew Yang more via his book, The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future, which as always, I will buy for you if you are willing to read it! The book is even on YouTube if you don’t want to buy it. 

You can also watch many of the podcasts Yang had some such as Joe Rogan or Sam Harris.If you think you can support Yang for president, you can donate to his campaign, and please vote for him in your Primary or Caucus for him in your state!

Start – 

I attended an Andrew Yang event in Waterloo, Iowa recently. I ended up eating with someone who is taking time off their job to work for Yang’s campaign.

He is going door to door, talking with people about if they will support Yang in the Iowa Democratic Presidential Caucus February 3rd, 2020, not necessarily if they would vote for him in the Presidential race in November 2020. The caucus, along with Primaries in many other states helps determine who the Democratic candidate for president in November 2020 will be. 

Why is he talking to people about the caucus specifically? There are many people who will vote straight ticket in the general election, regardless of who is their party’s candidate is. I had that realization after talking with some people at the restaurant after the event. “I would vote for a piece of poo instead of Trump.” was the person’s exact words. 

I can understand that sentiment. But I don’t necessarily feel that way. I am tired of voting for the lesser of 2 evils. That’s is how Trump won in the first place. Hillary was a bad choice for a candidate.

Andrew Yang acknowledges that there are a lot of issues in the country right now, which some Democratic Candidates do not, and was one of the main issues of Hillary’s campaign. She said things were fine! Many other Democratic candidates think the only problem is Trump. Yang recognizes that Trump is not the problem but a symptom. Trump recognized a lot of the correct problems. The difference between Trump and Yang is Trump is looking backwards, while Yang is the candidate of the future. Many of the other democratic candidates are just making noise.

Yang is the data candidate. He looks at what the data is saying, for example, life expectancy is going down in America, due to suicides and drug overdoses. That’s a problem, but it’s a result of people feeling down, losing jobs, losing economic power, etc.

Although the “Freedom Dividend” (Basic Income), is a policy of Yang’s that gets a ton of attention, I think a more important one is “Human Centered Capitalism”.

There is a saying that goes something like this “You get what you measure.” Since we measure GDP and the Stock Market, we are certainly maximizing those things. But only 20% of people are participating in any meaningful way in the stock market and no one makes money directly from GDP. 

We need to think about people, not just GDP. That’s where Human Centered Capitalism comes in. In Human Centered Capitalism, people come first. If all jobs were 100% automated (a possibility in the future and something that should be a goal) we would have a great GDP and high returns on investment, but how would individual people be doing? With no income, likely not well! We are already somewhat in this situation now. 78% of  people are living paycheck to paycheck, you might even be one of them!
Many people I talk to about this blame the people in this situation. I think that’s a form of victim blaming. 

There are so many factors in each person’s individual journey from child to productive adult. There are many barriers in front of people and very different barriers. We need to help each other achieve our potentials. 

There are many programs available to help people reach their potential, but there is a better way, the Freedom Dividend. This will allow each person some money to help pick a direction to take in life and if it happens they took the wrong direction, they will be able to reevaluate and picka  new direction. The issue with today is if you are stuck in a job, you likely have no way to leave. 78% of people can not leave their job without extreme hardship, due to living paycheck to paycheck. 

Because the government has a vastly larger budget compared to any company, $4 trillion dollars a year, the government has to be a part of solving problems.

People who have a problem with the government being involved in things need to read “23 Things They Don’t Tell You About Capitalism”. That book cured me from thinking about the government as an evil entity trying to take away everyone’s rights. 

Another on Andrew Yang’s policies, Democracy Dollars, will help get more people into politics via funding, and help lower income people contribute to candidates they like. 

Because of all these things, I think it is vital to get a forward thinker like Andrew Yang in the White House in 2020. I am writing this to request that anyone who is reading this specifically consider reading about Andrew Yang more via his book, The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future, which as always, I will buy for you if you are willing to read it! The book is even on YouTube if you don’t want to buy it. 

You can also watch many of the podcasts Yang had some such as Joe Rogan or Sam Harris.If you think you can support Yang for president, you can donate to his campaign, and please vote for him in your Primary or Caucus for him in your state!

It’s been almost a year since my last post and I didn’t do an end of 02017 or  02018 post. Since the start of a year is a relatively arbitrary time in our trips around the sun and happens at different times in certain countries I think a minor update could be appropriate. 

A few big things happened this year. 
I started a financial advising business.
I bought a duplex.
I started funding a chicken farm in Haiti. 

In August 2018 I started Highland Wealth Management. I met Mike Finley 4 or 5 years ago. He teaches classes at the college in town about personal finances. I learned a lot from him and continued on from there. I started this business because I saw how inefficient most people’s finances are. My main goal with this business is to save people hundreds of thousands of dollars over their life. This means keeping more money with the investor and having less go to the advisor. If you look at how much most financial advisors take, it’s a lot 1% to 2.5% a year, of your money! The actual value being provided is very very little. With a few hours of time investment with a fiduciary financial advisor, most people can save more money over their life than they will make in years of working.

I bought a duplex in May 2019. As part of my own personal financial journey I thought getting into owning a rental property might be a good idea. I am living in one side of the duplex and renting the other side. Below are the calculations i used to justify this purchase. I assume the return of the stock market is about 9%-10% a year. A duplex has to return above that for me to even consider it. The below also does not take into account the equity build up for the mortgage pay off. 

Many of my friends are into rental properties. I had been living in an apartment for about 7 years so I thought it was time for a change. I think this will help me in my advising business also if people have rental properties I can help them determine if it’s really a good fit for them or not. While some places are good, I have also seen many cases, for example of inherited properties, that people should just sell.

On purchasing/financing the property. I ended with a 30 year loan at 4.25%. At the time if I’d bought a house the rate was 4%. They were able to raise the rate .25% on a duplex “just because”. That being said, since I was owner occupying the property, I was able to get a 30 year loan with a lower rate than if I was buying it commercially. At the time a commercial loan was 5% and the term was only 20 years, instead of 30. I like the lower rate and longer timeline because it allows a better, more sure, cash flow. For me, cash flow is a key thing for a rental property. I also purchased a place that needed very little as far as work done to make it livable, actually no work. While there are a few cosmetic things I could fix such as a few holes in the siding or other little things like that, this property did not require any major renovations. For me, that was a good first choice.It even came with tenants in one side. That was also nice as when I signed the mortgage the old owners signed a $250 prorated check for the rest of that months rent! The next day as I was moving in the tenants paid me for the next month. So while this has all worked out well for me so far (4 months in, through summer), I still can not say it’s for everyone. There are many other blogs and sources of information on rental properties if you are interested. Or ask me any questions you might have!

If you recall from my 02016 year end review, I had bought into a solar field at the power company at my old apartment. When I moved I had to sell those back to the company. I recooped about $880 from that investment that was $1080. In the end it was about a wash as far as money goes. But the environmental impacts were a positive that were not directly measured, at least not by me. 

I took the money from that sale and bought an electric lawn mower for my new house! I bought an Ego 21” deck, self propelled (push) lawn mower for $500 at Home Depot. While I could have gotten a cheap gas powered push mower for as low as $100, a self propelled Honda gas mower can be as much as $500 also so purchase price was not really more expensive than a comparable gas mower for the Ego electric mower. This was my first foray into electric vehicles (after my self build electric bike, which used a kit, and was a bit of a failure, in execution. The concept of electric bikes is still good. There are many good electric bikes built by manufacturers. I would recommend one of those over a kit). (I also have an electric coffee mug which I really like.) I am very happy with the electric lawn mower. I use the self-propelled all the time as well as the mulching, using as much energy as possible, which leads to the shortest battery life. It usually mows my whole lawn, which takes about 30 minutes. In the off chance it doesn’t I just plug the battery in, which fully charges in 1 hr, and finish up the last 10 minutes of mowing. Not having to deal with gas or oil or spark plugs is fantastic and one reason I expect electric to take over for most gas application in the near future. 

I started a chicken egg business/farm in Haiti with Jhon. I have mentioned Jhon before as far as helping him via paying for his schooling. Jhon told me of an idea he had for a chicken farm. He believed he would be able to sell eggs to local stores. I was hesitant but provided enough money to buy 30 chickens ($15/chicken) as well as to build out a coop, a few hundred dollars. Jhon set up all the business as far as having someone take care of the chickens, his cousin, someone deliver the eggs to business, a neighbor, as well as a different person to collect the money. Jhon is actually studying in a different city than the chickens are. This is a great hands off business, as far as the day to day running. Jhon said the alternative for eggs is they are shipped in from the Dominician Republic. The price of a chicken is $15 and the monthly return is $2/chicken. In less than 1 year a chicken has paid for itself! If the chicken lives 2 years it’s provided a 220% return! After about 3 months of seeing the business work with 30 chickens I decided to purchase 70 more to get the business up to the full size Jhon initially envisioned. The farm now has 100 chickens.

Jhon is using this money to fund the rest of his college himself. I am no longer paying for his college directly! This is very exciting for me for 2 reasons.

1. I don’t have to continually put money in with no direct return to myself.
2. Jhon is creating a self sufficient business. He will learn and earn through this business.

I recently finished a book called “The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty”. Along with other books I’ve read like “Toxic Charity” and “When Helping Hurts” I think that investing in business, teaching a man to fish, is much more valuable in the long term than just giving money. I am hoping to continue to support Jhon in his various entrepreneurial ideas going forward.