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Crypto-scams on the rise

Crypto-scams on the rise

Written by R. A. Stewart

A newspaper article appearing in the Christchurch press headlined, “Cyber-scams cost Kiwis $3.7m highlighted the dangers posed by those who are investing in online share market, crypto, or NFT platforms. The $3.7m refers to the amount lost to these types of scams in just the first three months of the year.

The sudden rise in popularity of NFT’s (non-fungible tokens) is a contributing factor in the rise of scams.

Cryptocurrency scams are increasing according to the article but not to the same extent as those scams relating to NFTs.

NFTs are unregulated and expensive and payment was difficult to reverse. 

The fear of missing out has created a demand for crypto and NFTs which has resulted in many investors investing in something which promised a great return only for it to be just a scam.

The article gave this great advice which really is applicable to all kinds of investments whether it is online or offline and that is to do your due diligence. 

As far as cryptocurrency goes, due diligence means searching the name of the investment with the words “scam alert”, or searching the FMA warning and alerts page.

Another important thing is to not feel pressured in anything. If you are told to invest within a short time or you will miss out then don’t bother because the promoters of such a scheme are only trying to take advantage of the “Fear of missing out,” mentality in you.

A phishing scam is the most reported scam. It is when you receive an email from someone posing as a trusted site or business in order to gain your personal details. They ask for your log in details and use it to gain access to your accounts. Different strategies may be used and one is when you receive an email asking you to verify your account. When you register for a site you are asked to verify it within 24 hours of joining. If you receive an email asking you to verify your account months after you registered then be wary and do not click on the link provided.

It is also a good idea when registering with a crypto or NFT site to use an email address which is different from your personal one and certainly do not use the same one you would normally use for your banking or online auctions.

As far as banking goes; do not use your main debit card for crypto trading but rather a separate one because of the risks of hacking. Even with all of your own due diligence, there is also the possibility that the crypto exchange website with all of your banking details will get hacked and that is out of your control. It is up to each investor to do their own homework and take responsibility for their own decisions. That way you have only yourself to blame if you lose your money.

ABOUT THIS ARTICLE

Feel free to share this article. You may use this article as content for your website or ebook. Read my other articles on www.robertastewart.com

DISCLAIMER: Please note, this article is not intended as financial advice but rather the opinion and experience of the writer. Caution is advised when investing in cryptocurrency or NFTs.

www.robertastewart.com

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Three sure ways to lose during the bear market

Three sure ways to lose during the bear market

The sluggish year so far for the money markets has made some investors nervous and questioning how they should react. It is important to maintain the right attitude and stick to your plan or you may regret it later on. If you have invested with the right strategy then it is only a matter of living normally and riding out the storm. 

If you have noticed that your share market portfolio balance is lower than at the start of the year and thought, “I have lost xxx amount of money,” then you are not alone. These are only paper losses. There are three sure ways of losing money during a share market downturn, so here they are:

1-Selling your shares

If you sell your shares during a bear market and then the market rebounds you will miss out on the gains that would have recouped your previous losses. You should bear in mind that they are only losses if you cash up when the markets are down. Any financial advisor will tell you that shares are a long term investment.

2-Transferring to more conservative funds

Transferring your funds from growth to conservative during a downturn is a bad time to do it for the same reason as selling your shares at this time. Once the markets rebound you will miss out on the gains when they eventually come.

3-You stop investing in your retirement fund

This too is a bad move. In fact it may be a good time to invest in the markets because you will receive more units for your money which means your investment will grow. Who knows where the markets will be in 5-10 years time. If you have the luxury of time on your side then you can afford to take on more risk with your money.

Inflation is detrimental to your wealth

Keep in mind that if you invest in conservative funds then inflation will erode the purchasing power of your money, however, that is not so much of an issue if you require the money in the short to medium term. It all depends on your time frame and your goals.

DISCLAIMER: Please note this article is of the opinion of the writer and does not constitute financial advice. If you need financial advice then see your bank.

www.robertastewart.com

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One rule for investing you need to consider

One rule for investing you need to consider

Written by R. A. Stewart

The one question you MUST ask yourself before investing your money is, “Can I afford to lose this money?”

Only you can answer this question, but…

that depends on when you need the money and what the loss of your investment will mean for your other goals.

For example if your goal is to save for a car within the next 18 months or so then this is considered a short to medium term goal which means that investing in something with low risk is imperative. Growth funds on the share market and bitcoin are out of the question because the loss of your investment could mean that you may not be able to purchase that car. It really comes down to how badly you require that car. If it is essential for you to get to and from work then you cannot afford to lose the money that you are saving for a car.

The same is said for money which you are saving for a house deposit but it really depends on how soon you require the money. If you are looking at a 10 year timeframe then investing in growth funds may increase your savings faster but no one can predict when and if the markets will crash so it is really a risk to invest your house deposit money this way but the flip side is that if there is a 1987 style crash then house prices will also tumble so less money will be needed to purchase a house.

Can you afford to lose your retirement fund? The answer is no but…

Where your retirement fund is invested all depends on how soon you need the money. Some financial advisors will tell you to scale back the risk as you are approaching retirement but the problem is that if you start doing that when the markets are down you are taking a loss and missing out on any gains which will happen when the markets rebound. The other thing to remember is that you are not going to just spend all of your retirement funds as soon as you retire. You may live another 20 years and that is ample time to recover from any crash which will occur near your retirement. Of course you may want to tick off as many items off your bucket list as you possibly can so the early stage of your retirement will be when you will want to do as much as you can. You certainly do not want to sit in an old folks home at 90 with any regrets.

The size of your retirement fund when you require it is determined by where you have invested your money. If you just saved your money and just left it in low interest accounts you will lose.

How? 

Because inflation will erode the value of your money. Then there is tax on the interest.

It is important to learn how to invest for a better outcome and where you invest should be determined by your age and how soon you need the money.

Saving up for a house is the biggest single investment in one’s life with a car being the second biggest. Not everyone has ever bought a house or car but have saved money for other things; here is a list of other items which many people are spending their money on:

*Paying off a student loan

*Saving for an overseas holiday

*Saving for a business

*Paying off a medical/dental bill

These are major items. It has to be said that saving for a holiday can be considered discretionary spending and therefore will not cause you a great deal of hardship, just disappointment if you lose this money in the share market.

Setting priorities is an important part of managing your finances and the one question that should be asked is, “Can I afford to lose this money?”

NOTE: You may use this article as content for your website or ebook. Feel free to share this item.

www.robertastewart.com

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3 FINANCIAL MISTAKES TO AVOID

Avoid these three Financial Mistakes

Building an investment portfolio is similar to building a relationship. It takes time and patience but over caution can be just as costly. A lot of tolerance is required because in finance and in life in general you do not always get your own way. Life has its own ups and it is during the downs that we show our true character. It is when our true colors come to the surface.

Human nature or emotion as it is can interfere with one’s better judgment. This applies to relationships and finance.

Here are the biggest mistakes made by investors.

Mistake number one-Greed

“If something is too good to be true then it almost certainly is,” but many people have fallen into this trap by investing in something which was offering above average returns. In doing so they completely ignored another rule in finance and that is to diversify. During the 2008 Global Financial Crisis many investors lost their entire life savings when various finance companies went under. Several people have their entire life savings invested in one company. Whatever has been reported about these companies it is up to investors to do their own due diligence and invest sensibly. Placing all of your eggs in one basket is certainly not investing sensibly. The key word for sensible investors is “diversify.” This minimizes risk. Two things to bear in mind is that when there is an opportunity for a capital gain as there is with shares, there is also the chance for a capital loss. The other thing to remember is that when you hear stories of someone who made a killing on the share market by placing all of their eggs in one basket, you seldom hear of individuals who tried the same thing and lost their money. Greed will eventually get the better of investors who thought they were smart enough to beat the market.

Mistake number two-Timidity

Playing it safe is risky. Being overcautious will mean that you miss out on opportunities which risk takers take advantage of. There is no suggestion that you should be reckless and ignore common sense precautions but in relationships you need to risk getting hurt in order to discover what you are looking for. As far as financial matters are concerned, you have to accept some level of risk but this is manageable by diversifying your portfolio. Managed Funds or Mutual Funds as they are also called is an excellent way for ordinary investors to get involved in the share market. In New Zealand, Kiwisaver, Sharesies, Kernel Wealth, Hatch, and Investnow are excellent platforms for ordinary investors to get involved in shares. If you are from the US you may want to look at Robinhood which operates in much the same way as Sharesies.

Mistake number three-Impatience

“It is time and not timing which is important in the share market,” is a cliche which is worth keeping in mind. Patience is a virtue and this is applicable to relationships and finances. Some people lack patience that they invest their money in abc shares then when their portfolio is stagnant they sell those and invest in def and sod’s law, the shares they sold at a lower price suddenly rises meaning they have missed out on any gains which would have recovered their losses. The share market is a long term gain. If you require the money in the short term then investing in shares may not be the right option. Bank deposit probably is but you have got to do your homework. 

It really is up to your own risk profile.

www.robertastewart.com

 

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FINANCIAL GLOSSARY

Financial language

Written by R. A. Stewart

It is important to familiarise yourself with financial jargon and their meanings. Do your research on the internet for further information on what these terms mean. This increases your financial literacy.

ASSET RICH-CASH POOR

This refers to people whose wealth are tied up with their property but have little cash in the bank.

BAD DEBT

Usually described as consumer debt or dumb debt, bad debt is when one purchases consumer goods on credit. It is bad debt because the item which has been purchased loses it’s value over time.

CAPITAL GAINS.

This is the increase in value of your asset. It is important to keep in mind that if there is a chance for a capital gain there is also a chance for a capital loss.

CASH ASSET

A cash asset is money in the bank, stocks and shares, and any investment invested with a financial institution.

EQUITY

When someone refers to the equity in their property, they mean how much equity is left after deducting the money owed on the property from its value.

DEPRECIATION

Depreciation is the reduced value of any item purchased. A vehicle is a perfect example of something which reduces it’s value over time.

FINANCIAL PLAN

A plan for your money. To address money issues.

GOOD DEBT

Borrowing money for something which increases in value is considered to be “good debt,” however, it needs to be stressed that if something can increase in value then it is just as likely to decrease in value; shares and cryptocurrency are typical examples.

INFLATION

This is based on the average increase of prices of consumer goods. If your investments are earning less than the inflation rate then you are losing money. 

LIABILITY

This is anything which you have bought on credit and pay interest on. It is said to be a liability. A vehicle is a typical example of a liability. A house could be a liability if it is costing you money but it could be said to be an asset especially if its value is increasing per annum.

NON-CASH ASSET

A property is an example of a non-cash asset. 

RISK PROFILE

This is your temperament to risk and is one factor in determining where to invest your money.

www.robertastewart.com

 

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How to gain Financial Literacy

How to gain Financial Literacy

Written by R. A. Stewart

Financial literacy is the ability to handle your money. It is basically the skill to make the most of your money and not fall into the traps of the illiterate. No one is born with financial literacy but some are born with an inability to understand financial matters. This may or may not be due to hereditary conditions. 

For the majority of people, financial literacy can be learned and practiced. You can read all of the books on personal finance in the library but all of this information will do you no good unless you put it all into practice. And it is then and only then will the real you come out.

Being a savvy investor is not all about making the right investments but there is the mental side of it. You need to be able to stay strong when things are not going your way. 

You need to keep a cool head when the markets are sluggish and your portfolio seems to be losing value. It is also the negative comments of others that you need to shut out. Everyone is keen to provide advice of some kind; it is up to you to discern whether it is good or bad advice.

It is therefore important to build up your financial literacy but you do not need to spend an arm and a leg on books on courses when it is all available for free.

Your town’s public library will have books on personal finance. Learn the methods used by these authors and apply them to your circumstances if they fit in with your financial goals.

You may even pick up a few financial books at a charity shop in your town. I have. It is unbelievable to think that when so many people complain about inflation, cost of living, and so forth that few people find it worthwhile to purchase these books for a dollar or two.

The internet has a lot of free financial advice. Just do a google search of any financial question you have and see what comes up. There are videos of a financial matter on youtube if you prefer to watch videos.

All of this will assist you in making the right choices but, keep in mind that mistakes will be made and the main contributors to financial mistakes are greed, fear, and a lack of knowledge, These can easily be overcome by financial wisdom. Having the discernment to know bad advice from good advice is a good quality to have.

There really is no excuse for financial ignorance because it is more widely available than ever before.

Obtaining head knowledge is one thing but putting it all into practice is another and that is where your real knowledge develops. What you read and hear is information but it only becomes real knowledge once you use that information.

There is no greater teacher than real life experience. 

Your mistakes will be your most expensive lessons but you do not need to make the same mistakes as others have made. Just keep your eyes and ears open to whatever is in the news and you will learn of occasions where investors have lost considerable sums of money. Try to figure out the lessons in these situations in order to avoid making the same mistakes.

Studying history can be useful if you can learn from the mistakes of previous generations in years gone by. The 1987 stock market crash (Black Monday) has plenty of sad stories. Many people never recovered from that while others were more cautious with their money. Same as with the 2007/08 Global Financial Crisis (GFC). A number of retired folk lost all their life savings when several finance companies fell over. Again you will learn some valuable lessons from some of the mistakes these investors made. 

Wisdom comes from life experiences; if you are young you will hear stories from the older generation. Keep your mouth closed and listen because you will learn valuable lessons.

www.robertastewart.com/internet-income

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Dating dangers of older men 

Dating dangers of older men 

The internet provides older people who may be single for one reason or another to connect with others without leaving their home. However, there are traps which older people need to be aware of. The main being scammers, people who try to separate you from your money.

So, what are the tell tale signs of a scammer?

First and foremost, if you are a man then gold diggers are waiting to get their hooks into you and your money, but that is not the only thing you should be concerned about if you are using any of the dating sites on the internet. Scammers are using dating sites, however, it is not romance that they are after but your money.

There are several red flags to beware of with the most obvious one being that you, as an older gentleman will be contacted by a young lady half your age. It is easy for some men to be taken in by the sweet talk of a young lady. It feeds the ego and what man does not feel good about a much younger lady showing interest in him.

Discernment and commonsense are soon ignored and in a short time the talk of a relationship soon develops.

So what are the red flags to look out for?

The first and most obvious one is the huge age difference.

Lets face it, do you honestly believe that someone half your age will contact you in the hope of beginning a romantic relationship with you without having their own agenda?

Older people are seen as easy targets by scammers because by the time they have reach 50+ they have built up plenty of assets which includes savings.

So what are the tell tale signs of an internet scammer?

1 You are contacted by someone half your age who claims that age is no barrier.

2 She comes from an African country (but not necessarily)

3 There is always a reason why she cannot meet you down for a coffee.

4 She attempts to hasten the relationship before you have ever met

5 Make note of any giveaways to her location.

For example if she ends the conversation with, “I must have some dinner now.” and it is 10 PM your time then you need to ask, “What timezone is she at?”

6 She asks for money

If she asks for money then you are definitely dealing with a scammer. 

What should you do or not do?

1 DO NOT send her any money.

2 DO NOT give out your phone number

3 DO NOT give out personal details about yourself.

4 Use a separate email address for signing up to a dating site, not your main one.

It has often been said, “If something is too good to be true then you can almost guarantee that it is.” 

As has been said earlier, if you are an older man who is using internet dating services then you are going to be a target for internet scammers so you need to be careful what information you give out and to whom.

www.robertastewart.com

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Living with Covid

How to be Covid careful when traveling

Those traveling, whether domestically or internationally need to have a plan in place in the event or you or anyone traveling with you catches covid. The first question you need to ask of accommodation providers is, “What are their covid protocols if  you or someone who is a close contact has covid?”

Everyone in New Zealand who has tested positive for covid is required to self-isolate for 7 days. In the case of some accomodation suppliers, that may be that you are required to upgrade from a dorm/shared room to a single room for a week. This can be expensive so keep this in mind.

As for making your travel plans abroad. It is important to have travel insurance but just as important to know what your insurance covers.

You can take out insurance against the possibility of disruption to your travel plans if you catch covid just prior to your departure date.

Know what you are covered for if you catch covid while overseas. You may have medical bills if you are not covered and you fall ill overseas.

If you are traveling with others and one of your traveling companions test positive for covid which disrupts your own travel plans then you can be covered for that.

You may not be covered if your travel plans are disrupted by State covid mandates and border closures.

It is important to think of all different kinds of scenarios which can arise before embarking on your overseas journey.

www.robertastewart.com

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How high will bitcoin go?

How high will bitcoin go?

That is the question on the minds of many speculators who either have money tied up in bitcoin or are contemplating purchasing bitcoin, perhaps for the first time.

I am reluctant to use the word “investing” when writing about bitcoin because bitcoin can be volatile with its ups and downs not unlike a rollercoaster. 

There are predictions on which direction bitcoin is heading but I think you have to realize that this is based on opinions rather than fact. Past performance is no guarantee of the future and something is only worth what others are prepared to pay for.

Then there is the question of what credentials does the person making predictions have. What is their track record? Do they own bitcoin themselves?

There is a lot of advice out there from various people and much of the advice is just opinions and we all know that opinions can be wrong. 

It is really up to individuals to make up their own minds and USE ONLY DISCRETIONARY SPENDING MONEY TO PURCHASE BITCOIN.

Investors need to keep their eye on the ball and not be lured in any scheme with promises of quick riches. If something seems too good to be true then it almost certainly is.

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KIWISAVER CHANGES IMMINENT

INTRODUCTION

It is important to keep up to date with changes to government policies because it could have some impact on your financial situation and the New Zealand retirement savings scheme Kiwisaver is a perfect example. Even if you are not from New Zealand, your own country will change policies on various issues and these may or may not affect you.

Kiwisaver changes maybe on the horizon

New Zealand’s superannuation scheme called “Kiwisaver,” was introduced in 2007 as a way for all New Zealanders to squirrel away money for when they reach the retirement age of 65. The scheme is voluntary but incentives were put in place to encourage people to join and to contribute to the scheme.

The incentives which were in place when kiwisaver was introduced were:

  1. $1,000 kickstart on joining the scheme
  2. A maximum of $1,040 tax credits per annum. To qualify one had to contribute $1,040
  3. Employer contributions which are at present 3% of your gross earnings.
  4. Deductions were made from your account at the rate of 4% or 8% of your gross income and deposited into your kiwisaver account..

It seems that governments have looked at kiwisaver as an easy form of revenue when trying to balance the books. Because National became the government in 2008 just at the beginning of the Global Financial Crisis and removed the $1,000 kiwisaver kickstart and reduced the tax credit to $520 per annum but one still had to invest at least $1,040 to receive this amount.

This never made any impact on the National party’s popularity. The public understood that the books needed to be balanced.

Fast forward to 2022 and New Zealand has a huge debt to repay as a result of the covid lockdowns. This current government just like the previous one is expected to make cut backs to the kiwisaver incentives as a first step towards balancing the books. The $520 annual tax credit is expected to be removed. The 3% employer contribution is seen as an incentive enough for wage and salary earners to sign up with kiwisaver. Instead, the $520 annual tax credit will still be available but only for voluntary contributions. What this means is that investors need to make voluntary contributions of $1040 per annum to receive the $520 government money. Whatever is deducted from your wages and deposited into your kiwisaver account is not considered to be voluntary. This is expected to incentivise savers into making extra contributions to their kiwisaver account above what they would normally make.

Someone on 50k per annum would receive $1,500 of employer contributions per annum toward their kiwisaver which is a nice top up towards their retirement savings, but the desire to make life more comfortable during one’s latter years should be incentive enough to get most people to have some financial plan in place.

This change is likely to be part of the May Budget.

Since it is Labour voters who are likely to be most impacted by this kiwisaver change it will be interesting to see how this affects Labour’s popularity.

These changes which are part of a government review in kiwisaver are not the only ones. It was also recommended that beneficiaries be enrolled in kiwisaver and that payments be made for them. The other was to pay “care credit” Kiwisaver contributions for people who take time out to raise children, or care for sick or disabled relatives.

The review was ordered by David Clarke, the Minister of Commerce and Consumer Affairs.

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