A New Place for Short-term Cash, World Economic Forum, Solana Collapse

Nate Crosby |
Categories

For those of you that listen to the podcast (vs just reading our summaries), notice anything new this week? Maybe the intro music! We thought it was time to change it up a little – hope you like it! 

Today we’re sharing predictions from the recent World Economic Forum, Derek gives the latest updates on Crypto, and Nate discusses an interesting new investment opportunity. 

In the most recent World Economic Forum (a group of delegates that discuss the global economy and where it’s headed), the following predictions were made – by the year 2030: 

  • People have free access to transportation, accommodation, things for their daily life 
  • People will own nothing – meaning goods are free of charge or they are property of the state and lent to you when you need it 
  • No private property ownership – think of a scenario where someone else will use free space when it’s not being used – like your living room when you leave the house  

These predictions don’t seem the most viable in our opinion and certainly would have the ability to create some challenges. Would you continue to work if you can’t own private property? How about where is the food coming from if it’s free? We’ll continue to watch the predictions of the Forum and dare we say *hope* they don’t come true. 

Not all Crypto is created equally

It’s been a few weeks since we talked Crypto! This information was up to date on June 2, 2022, when this podcast was recorded. 

Cryptos tend to get lumped together but in actuality they are created and operate differently from each other. One of the major differences is the structure of their payment processing. If you picture a triangle and think of it as you can’t optimize for all three, so you develop based on one-two of the options. 

Payment processing options: 

  1. Decentralized
  2. Process a lot of transactions 
  3. Reliability (it works all the time)  

Bitcoin developers, for example, optimized for security and decentralization – not necessarily speed. That’s where the lightning network comes into play. On the other hand, Solana (who you may remember from their major growth in 2021) focused on transaction speed and not reliability. When the network is up, it can process a whopping 65,000 transactions per second (for context, Visa/Mastercard is around 2,000/second) – the argument, however, is if you can’t rely on a network what good is transaction speed? 

Market forces behind crypto 

Historically, we’ve put our money in a bank, and we feel safe because it’s insured. If you recall from the World Economic Forum predictions, it’s possible to conclude that not having ownership of things can cause some uncertainty. A driver for owning Bitcoin is the self-custody of it. You are in control of the asset. It’s in your possession on your cold storage device. Gold is another example of self-custody. Ownership and safety play a huge role in how someone invests their savings, so we aren’t surprised people are educating themselves about alternate investment strategies. 

A new investment strategy 

The market is off to a shaky start, and we have lots of clients asking how they can safely grow their money right now. We’ve been reviewing our offering portfolio and have a great option from Midland National. It’s called single premium indexed universal life insurance – yes, life insurance but stick with us for a minute to hear about it. 

Here’s how it works: 

  • You put a lump sum in (not a recurring premium) – general rule of thumb you need the amount of your age to get started (40-year-old needs $40,000) 
  • You have access to this money and can take it out anytime 
  • It’s indexed so it’s linked to an underlying instrument like the S&P 500 or DOW
  • Your money grows at 2.5-8.9% (aligned with how the market performs within this range) 
  • Because it’s life insurance, you also have a tax-free death benefit (minimum of $100,000) 

If you have some “never money” sitting in cash and there’s no real plan for it, give us a call and we’ll review this option with you!