Tag Archives: Personal Finances

Doge to the Moon

The lockdown around the World is causing investors to do more online trading as a hobby and this is causing the spike in the price of a ‘joke’ in cryptocurrency! DogeCoin

Dogecoin is a cryptocurrency, a form of digital money that, much like bitcoin, enables peer-to-peer transactions across a decentralized network. One important difference: bitcoin is the original blockchain proof-of-concept. Bitcoin is ground-breaking. Bitcoin is (some believe) world-changing tech with the potential to transform how money works in the 21st century.

Jackson Palmer, an Australian started this craze when he was at a Nascar Race in California and saw this Car with a picture of a Shibu Dog on the bonnet. It was meant to be a MEME! DOGECOIN – Digital Currency and the light bulbs went off!



Palmer registered dogecoin.com domain name and decides to tweet and reach out to anyone who was interested. Billy Markus was interested, and he saw that Bitcoin source code was open source and he decided to take a break from his video games and literally wrote the cryptocurrency code just for ‘sillies’ as some would say.

It too Markus 3 hours to just write the DogeCoin Cryptocurrency code. Why was it so easy? It was a CONTROL+F BITCOIN and replaced Bitcoin with Dogecoin. Of course, there was some changes to few elements like Markus created 100 Billion Dogecoin where as Bitcoin only has 21 million. Oh! and the change in fonts too!

But the doge didn’t hit stardom as there wasn’t any miners and also there was no use of it. It wasn’t even listed in Coinbase or other trading platforms until late 2020 when Elon Musk tweet about ‘Doge to the Moon’. Musk tweets has driven the price of Doge up and it has risen over 6000%



1st January 2021 – Doge was trading at $0.00461 with a market capitalization of $726 million
1st April 2021 – Doge was trading at $0.0536 with a market capitalization of $7billion and today
19th April 2021 – Doge is trading at $0.33 with a market capitalization of $42 billion

I suspect that Doge would hit $1 by the end of the month if the same craze still holds. There are predictions it will fly to $10 once it hits $1.


If you are bored….. try invest into DogeCoin and hold for at least several months.

https://www.coindesk.com/price/dogecoin

How to buy bitcoin

Hello there!

Its been almost 12 months since I last posted anything here and this is largely due to this Covid-19 pandemic that has got me holed up without any significant travel.

I guess that’s an excuse so I’ll just get straight to my post for this evening.

How to buy bitcoin and any other cryptocurrencies!
I must say that I tried to stay away from the subject of cryptocurrency for a while as it just didnt get integrated into the financial system quickly. But having watched bitcoin hit the price of $56,000 and moves taken by major investment funds to start buying bitcoin, I think we about to just make something out of this cryptocurrency.

I am writing this post, to largely target 3rd world countries who still struggle to buy any cryptocurrency and would be subject of scammers who want to take away your investments with bitcoin. So I want to help you as much as possible to make the right decision and be safe with your investments

So here is the good news…
You don’t need a middleman to do your buying of bitcoin or cryptocurrencies. You can do it yourself in 5 easy steps.
Requirements: Visa Debit Card or Master Debit Card (must have money for purchase), email account and phone number

STEP 1: Create an online account with one of the major Platform providers. (I use Coinbase and Kraken)

  • TradeStation – Best Trading Platform.
  • Coinbase – Best Crypto Exchange.
  • eToro – Low Fees.
  • Kraken – Maker-Taker Fee Schedule.
  • Bittrex – Most Altcoins.
  • Gemini – Offers Gemini Dollar.
  • Robinhood – Best Mobile App

STEP 2: Check if they can accept your Visa Debt Card
They may need to do KYC checks and wont accept your VISA which happens alot as you in the 3rd world countries where KYC checks are really difficult for them.
If they accept your Visa Card – go straight to STEP 4

STEP 3: Use a 3rd party website to buy bitcoin before you can transfer to your wallet which you created in STEP 1.
I used to use a site called Virwox and it closed down. Now I used a site call ZenGo

STEP 4: Deposit funds into your Wallet. (Make sure you alert your bank that you are doing online purchase)
You can start as little as K100.00 or as high as K10,000.00 depending on the daily limits on your card

STEP 5: Hold and Pray
The process will take from 5-20mins to be reflected in your wallet. Once you it appears, you are done. You can hold that bitcoin in your wallet for as long as you want. Just monitor the price of bitcoin and pray it rises before you can sell it

Dangers:
Buying and trading bitcoin has some problems as well.
1. Withdrawal, you need to be able to change that into your local currency. This is one of the biggest hurdles for 3rd world countries
2. Loss of Access to your wallet. Many people lose access to their wallet as they lost the 12 word phase code, or they lost their own mobile number or even lost access to their emails. (that’s how I lost my 8 bitcoins)
3. Platforms closed down. Some platforms and wallets gets closed out and you can lose your cryptocurrencies if you dont check your emails for any notifications.

Personally, I do BUY & HOLD strategy on cryptocurrencies. I dont have an intention to ‘SORT’ it out like what most ‘day-traders’ do.

Happy Trading!

Debt Trap – How loans trap us

The financial crisis is one inseparable part of a person’s life, and it may come in anyone’s life, without any notice. There are situations when the most financially stable person would seek support. Any they come at any time of our lives without notice.

That need for financial support is complemented by a loan, which could be a formal arrangement with the banks, financial institutions or informal money markets with individuals. The loans are either business loans, housing loans and the widely use loans are the personal loans.

When the credit is availed by the banks, other financial agencies and informal money markets for the personal use, it is called Personal Loans. This Personal Loan has come to the rescue of the many people, with the instant availability of funds. These Personal Loans have always been the helping hands during the urgent needs of the people and have solved various unavoidable circumstances in a person’s life.

But at the same time, the Personal Loan has been a cause of worry for many. Even, if the Personal Loans have been the lifesavers many times, they are the ones, which come with some hidden traps too


Informal Debt-Trap

In Papua New Guinea, the desire for fast personal loans to patch the gap before the next payday has forced many people to turn to INFORMAL MONEY MARKETS. The main reason for this is the CONVENIENCE, quick turnaround and the ZERO paperwork that comes with the requests for a loan.

As always, convenience comes with a price, and the price for this informal money market is very high. The interest charge for these loans are usually between 30-60 percent and only for a short period usually within 1-2 weeks.

The formula used for this interest calculation is the SIMPLE FORMULA.
You borrow K1, 000.00 at rate of 40% for 2 weeks; you pay K1, 400.00 at the end of the 2 weeks. If you do not pay at the end of the 2nd week, they charge another 40% on that K1, 400.00 and you end up paying K1, 960.00 after a month.

These informal money markets has sadly been a DEBT-TRAPPED for many Papua New Guineans who were not able to pay their loan when the loan sharks come calling.


Formal Debt-Trap

Then there is the Banks and the Financial Institutions who also offer personal loans aside from housing loans and business loans.

The requirements for personal loans, housing loans and business loans varies from each Bank and financial institutions. However, the calculation of the interest charge is the same across all those different requirements.

I will discuss the Housing Loan and how interest are charge, it is no different to a personal loan and business loan.

Personal loans have higher interest rates, Kina Bank charges about 20% p.a and BSP charges at about 27% per annum.  Home Loans have lower interest rates. Kina Bank Charges 6.5% interest on home loans whilst BSP Bank charges 6%, however BSP has a special of 4% per annum for the First Home Ownership Scheme over a period of 40 years.

Let’s use the FHOS of BSP to do a calculation of K400,000 for period of 40 years at 4% per annum interest

These Banks and financial institutions use COMPOUNDING FORMULA to calculate interest payable and additional charge interest on any outstanding loans which the called CAPITALISATION.  There 2 calculations, the first is for the repayment amount for the duration of the loan and the other is the interest charge on any outstanding loans. The interest is calculated daily and charge monthly.

Formula:

Mortgage Calculation Formula

Calculation:

  • 4% annual interest rate needs to be change into an effective monthly rate. Therefore we divide 4%/12 months = 0.3% effective interest rate
  • Number of repayments would be 40 years multiple by 12 months, therefore 40 x 12 = 480
  • Calculating the Monthly repayment using the formula above gives you K1, 573.64 which is monthly repayment
  • Aside of the fixed repayment, there is also an interest charged for loan outstanding. This interest is calculated daily and charged monthly, this charge is called CAPITALISATION.

A simple spreadsheet of repayment looks like this after calculations are done, it is done using a compounding formula

The BIGGEST TRAP in this Formal Loan is that the loan interest is charged daily and added to the loan amount monthly. This interest on loan increases the loan amount each month, and whilst we pay fixed amount monthly, the repayment would not seem to make any difference as CAPITALISATION costs keeps adding up.

The only way to get out of this formal debt-trap is that you find ways to pay more than then monthly repayment, any lump sum amount or extra repayments would assist in getting out of this, otherwise, it would take more than 40 years to completely pay of your debt.