Learning the friendly way

Money talks, wealth whispers. In the age of flashy displays of wealth and conspicuous consumption, a new trend has emerged that challenges our conventional notions of showcasing financial success. Stealth wealth, as it is commonly referred to, goes beyond the idea of being frugal and understated. It involves consciously avoiding overt displays of money while still enjoying the benefits of financial prosperity. 

In this article, we'll explore what stealth wealth is, how it manifests itself, and why it has become a growing phenomenon. The idea of stealth wealth can assist you in saving more money, making smarter investments, and cutting down on spending.

What is stealth wealth?

Stealth wealth is essentially the art of living a life of financial prosperity without drawing too much attention to it. It's about keeping a low profile even if you have the means to indulge in extravagant displays of wealth. Picture someone who drives a modest car, lives in a modest house, and dresses in an unassuming manner, despite being financially well-off. It's a deliberate choice to prioritize financial security and freedom over materialistic shows of opulence.

What does stealth wealth look like?

A person practicing stealth wealth focuses on essentials rather than indulging in conspicuous luxury. They lead a simple lifestyle and prioritize experiences and personal growth over material possessions

Stealth wealth enthusiasts carefully manage their finances, prioritizing long-term financial goals such as retirement savings, investments, and building wealth rather than spending lavishly on temporary gratification.

They might enjoy certain luxuries but do so in a discreet manner. For example, they may splurge on a nice vacation, but won't go out of their way to flaunt it on social media or discuss it in conversations.

Instead of trying to impress others with material possessions, stealth wealth embraces the importance of genuine relationships and connections. They focus on building meaningful connections, fostering friendships, and helping others in unique ways.

Why is stealth wealth an up-and-coming trend?

More and more people are recognizing the importance of financial independence. By adopting a stealth wealth lifestyle, individuals can accumulate wealth without the pressure to maintain an extravagant lifestyle, allowing them to have greater control over their financial future.

The rise of social media and the desire for privacy have made people rethink their approach to displaying wealth. Stealth wealth allows individuals to keep a lower profile, avoiding unnecessary attention and potentially increasing security.

As society becomes more conscious of overconsumption, and materialism, many individuals are reevaluating their own values and priorities. Stealth wealth aligns with the desire for a simpler and less materialistic approach to life.

Traditional markers of success, such as fancy cars or designer clothing, are being questioned. People are starting to realize that true success lies in financial security, personal fulfillment, and the ability to live life on one's own terms.

In conclusion

Stealth wealth is a rising trend that challenges our societal norms of displaying wealth. It's about finding a balance between financial prosperity and leading a modest, understated lifestyle. By prioritizing financial independence, privacy, and personal values, individuals embracing stealth wealth are redefining what it means to be successful. 

So, if you find yourself drawn to the idea of a more discreet and restrained approach to wealth, consider joining the ranks of the stealthy and prosperous.

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As we delve deeper into understanding the global financial market and the investment opportunities within it, here we break down the difference between the capital market and the money market. Together, these two markets make up a large portion of what is effectively known as the financial market.

Capital market vs money market

As we break down the money market vs capital market debate, let's first cover the basics of what each entails.

The capital market is where stocks and bonds are traded between financial institutions, professional brokers, and individual investors with a focus on long-term price appreciation.

The money market centers around the exchange of short-term debt between governments, commercial banks, corporations, and other financial institutions. It entails borrowing and lending for a limited amount of time - anything from an overnight transaction to up to a year at maximum.

What is the money market, exactly? 

The money market refers to the market where short-term debt securities are traded among financial institutions, commercial banks and corporations. These securities typically have maturities of one year or less and are considered to be very low-risk investments.

Money market securities include instruments such as Treasury bills, commercial paper, certificates of deposit (CDs), and repurchase agreements (repos). These securities are issued by governments, corporations, and financial institutions as a way to raise capital quickly and at a relatively low cost.

How to participate in the market

Investors can participate in the money market by purchasing these financial assets directly or through a money market mutual fund. Money market funds invest in a variety of short-term debt instruments and are designed to provide a safe and liquid investment option for individuals and institutions looking to park their cash reserves or earn a modest return while maintaining a high level of liquidity.

What is the capital market, exactly?

The capital market refers to the market where long-term securities, such as stocks, bonds, and other financial instruments, are bought and sold among investors and institutions. Unlike the money market, which deals with short-term debt securities, the capital market deals with longer-term investments that typically have maturities of more than one year.

The primary market and secondary market are two different stages of the capital market where securities are bought and sold.

Stages: primary market and secondary market

The primary market is where securities, such as stocks, bonds, and other financial instruments, are first issued by companies or governments to raise capital. This is often referred to as an initial public offering (IPO) or a new issue. In the primary market, the securities are sold directly to investors through underwriters or investment banks.

The secondary market, on the other hand, is where previously issued securities are bought and sold among investors. This market allows investors to buy and sell securities with other retail investors, rather than directly with the issuing company. Stock exchanges such as the New York Stock Exchange is an example of a secondary market where investors can trade stocks that are listed on the exchange.

Equity market

The capital market can be divided into two main segments: the equity market and the debt market. The equity market, also known as the stock market, is where shares of publicly traded companies are bought and sold. 

Investors can purchase shares of stocks, which represent ownership in a company and entitle the shareholder to a portion of the company's profits, known as dividends. Investors can also profit from capital appreciation, which is the increase in the value of the stock over time.

Debt market

The debt market, on the other hand, is where companies and governments issue bonds to raise capital. Bonds are essentially loans made by investors to the issuer, which promises to pay back the principal amount with interest over a specified period. Bonds are generally considered to be less risky than stocks, but they also offer lower returns.

How to participate in the market

Investors can participate in the capital market through various means, such as buying capital market instruments like stocks or bonds directly, investing in mutual funds or exchange-traded funds (ETFs), or through alternative investment vehicles such as private equity or hedge funds. 

The key differences between the capital market and money markets

The capital market can be more volatile than the money market due to the longer-term nature of investments, but it can also offer the potential for higher returns over time. It is an important component of the global financial system and can play a significant role in economic growth and development.

On the other hand, the money market can be an attractive option for investors who prioritize safety and liquidity over high returns. Because money market securities are short-term and typically low-risk, they offer a lower yield than other investments, such as stocks or corporate bonds.

However, money market instruments can be an important component of a diversified investment portfolio, particularly for those who are looking to minimize risk and maintain a stable source of income in the financial market.

Which is best for you?

Determining which market to engage in will depend on each person’s financial goals, risk management levels, and interest in the markets. Speak to your financial advisor or conduct the research on your own to establish which investment options best align with your needs and goals. Both options present strong pros and cons, the ultimate decision will come down to your unique preferences.

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BAT is now available for trading on the Tap mobile app. You can now Buy, Sell, Trade or hold BAT for any of the other asset supported on the platform without any pair boundaries. Tap is pair agnostic, meaning you can trade any asset for any other asset without having to worries if a "trading pair" is available.

We believe supporting BAT will provide value to our users. We are looking forward to continue supporting new crypto projects with the aim of providing access to financial power and freedom for all.

Basic Attention Token (BAT) is an Ethereum-based utility token integrated into the privacy-focused Brave browser. Launched in 2016, Brave aims to revolutionize the digital advertising industry by promoting fairness and transparency between advertisers, publishers, and users.

Users receive cryptocurrency rewards in the form of BAT for viewing ads, which allows publishers to deliver more impactful advertisements. This empowers advertisers to make better use of their budgets and better target their target audience. Users then have the flexibility to hold, exchange, or use BAT to support their favorite content creators.

BAT acts as a settlement currency for publishers within the Brave browser ecosystem, facilitating transactions between advertisers, publishers, and users based on their web activity. This token streamlines business between the three parties

Get to know more about Basic Attention Token (BAT) in our dedicated article here.

When trading, market liquidity offers a measure of how quickly an asset can be converted to cash. The more market liquidity an asset has, the more easily it can be traded for cash. This comes into play when looking at its price point: the more tradable an asset, the less impact the trade will have on the asset's price. 

Other factors to look out for include trading volume, technical indicators, and volatility. Liquidity is important for everything across the stock market and digital asset market to a company's liquidity, with liquid assets always being preferable. Let's first take a look at what liquidity is, the most liquid assets and the key takeaways liquidity refers to.

What does liquidity mean, exactly?

In its simplest form, liquidity looks at how easily and quickly an asset can be converted to another asset (bought or sold) without affecting its price. Liquidity can also sometimes be referred to as a cash ratio or marketable securities. A liquidity ratio helps investors determine whether something is a liquid asset or not and how easy it will be to convert assets.

When an asset has good market liquidity, this means that it can easily be traded for cash or other assets with no effect on the asset's market price. Referred to as liquid assets, these would include currencies, marketable securities, and money market instruments. This provides peace of mind to investors that have other financial obligations.

On the other hand, low liquidity means that the asset cannot be as easily bought or sold and any transaction that takes place will affect the asset's trading price. Real estate, rare items, and exotic cars present examples of illiquid assets, meaning that they may take longer to be sold, and not necessarily at the price the seller is expecting to receive. 

What is the most liquid asset?

In terms of financial liquidity, cash is considered to be the most liquid asset.

Think of liquidity as a spectrum - on the one hand, you have cash (highly liquid) and on the other, you have rare items. Consider where on the spectrum an asset might fall to get an idea of its liquidity. 

Types of liquidity

In a general sense, there are two types of liquidity: market liquidity and accounting liquidity used to measure the current ratio of an asset or company.

What is market liquidity?

The first of the two types of liquidity is market liquidity, defined as the ease with which a financial asset may be bought and sold at fair prices. These are the prices that are most similar to the assets' actual value, known as their intrinsic value. 

Intrinsic value in this case refers to the lowest price a seller is willing to accept (ask) and the highest price a buyer is willing to pay for it (bid). The bid-ask spread, also known as the trading spread, is the difference between these two values. The lower the bid-ask, the greater the liquid asset.

What is accounting liquidity?

Accounting liquidity describes a company's ability to pay its short-term debts and liabilities with its current assets and cash flow. In other words, it reflects the company's financial health: the higher the company's accounting liquidity the more liquid the company's capital.

Most commonly, you'll hear accounting liquidity mentioned in relation to businesses and their balance sheet. This has less to do with liquid assets and more to do with businesses, and the company's financial health, as a whole.

What is a bid-ask spread?

The bid-ask spread refers to the difference between the highest bid and the lowest ask price. As you would expect, a low bid-ask spread is preferred in liquid marketplaces. It implies that the market has sufficient liquidity since traders continuously bring the high and low prices back into balance.

A wide bid-ask spread, on the other hand, generally indicates illiquidity in an asset and a substantial gap between what buyers are willing to pay and what sellers are willing to accept. 

The bid-ask spread plays a valuable role for arbitrage traders as they attempt to take advantage of minor disparities in the bid-ask spread over and over again.

While they make money, their activities help to support the market as they reduce the bid-ask spread, and other traders will have better trade execution as a result of their activity.

Arbitrage traders also make sure that the same market pairs do not have significant price disparities on various exchanges. Have you ever seen how the Bitcoin price is roughly similar across the most liquid markets? This is due in large part to arbitrage traders who exploit small variances between prices on different exchanges to profit.

Why liquidity plays an important role in the markets

Bigger stocks and digital currencies tend to have more liquid markets due to their higher trading volume and market efficiency. 

The amount of money traded per day, otherwise known as liquidity, varies depending on the market. For example, some markets may only have a few thousand dollars of trading volume while others have billions.

Assets from large companies or establishments don't usually have issues with liquidity since there are many buyers and sellers in their respective markets. However, this isn't the case for less traded assets which often lack significant liquidity.

When building your portfolio ensure that you incorporate (or stick to) liquid markets so that you can always know that should you wish to liquidate the asset you will get a good price. Sometimes with smaller assets, you might not be able to exit the market at your desired price leaving you with an invaluable asset or one traded at a significantly lower price.

This is known as slippage and can result from trying to fill a large order in an illiquid market. Slippage is the difference between the price you intended to sell at and at what price your trade is actually executed. 

High slippage indicates that your transaction was completed at a significantly different price than you intended. This usually occurs because there aren't enough orders in the order book near to where you wanted to execute them. This can be avoided by only using limit orders, but this runs the risk that your order may not be filled.

The market conditions significantly affect liquidity. For example, in a financial crisis, different traders might respond by either selling their assets or withdrawing cash.

Final thoughts

When it comes to the markets, liquidity refers to the ease of trading in a market. Traders often favor liquid markets because they provide convenient access for entering and exiting positions. The level of liquidity can influence the efficiency and effectiveness of trading strategies. Depending on your preferences, you might consider including highly liquid assets in your portfolio, which can have benefits in terms of flexibility.

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Porter’s 5 forces is a model that helps to identify the weaknesses and strengths of an industry, empowering the potential investor with insights. In fact, the model is used by more than just investors, companies and analysts also make use of its structure, allowing them to analyze the competitive forces in an environment and build an appropriate business strategy.

Below we outline how the Porter’s five forces model works, where it came from, and how you can use it to your advantage. 

What is the Porter's Five Forces model?

Porter’s Five Forces focuses on identifying and analyzing five competitive forces within an industry that can be used to establish what the industry’s strengths and weaknesses are. The five forces analysis can be applied to any segment of the economy and can determine a company’s business strategy, level of competition, or long-term industry profitability. 

The Five Forces are:

• Competitive forces in the industry
• Potential of new entrants into the industry
• Power of suppliers
• Power of customers
• The threat of substitute products

This model is designed to help analysts and managers comprehend the competitive landscape that a particular company faces and how the company is positioned within it.

Where did Porter’s Five Forces model come from? 

The five forces analysis model was created by and named after Michael E. Porter, an established Harvard Business School professor. The model was introduced in Porter’s book, Competitive Strategy: Techniques for Analyzing Industries and Competitors.

Developed in 1979, the five forces analysis model was created to provide industry outsiders with insight and knowledge into the positioning and competitive strength of an organization. The business analysis model has become an important tool in the financial sector and is still widely used today, over 40 years later.

Breaking down Porter’s Five Forces

Below is a breakdown of the Five Forces analysis model which is universal across almost every market and industry in the world. The model looks at the company’s positioning within the market to determine how much power it holds. 

1. The competition in the industry

The first of Porter's Five Forces analysis model focuses on the number of competitors a company has and its ability to undercut them. The more existing competitors and competitive rivalry a company has, along with the number of similar products and services they offer, the less power the company holds. 

When the company has a high level of competitive rivalry, suppliers and buyers will gravitate toward the lower prices, while when competition is low, companies have more control over the prices they charge and the terms of their deals.

More power equates to a competitive advantage which typically equates to more sales and profits. Hence, why industry competition and competitive forces shape strategy.

2. The potential of new entrants into an industry

Of course, new entrants into the market also pose a threat to a company’s power. This can be measured by looking at the amount of time and cost it would take to be a potential competitor. The more resources needed, the more established the company’s position. 

The stronger the barriers to entry, the better for companies already positioned in the market. 

3. The power of suppliers

This point in Porter's five forces analysis model looks at the power the suppliers hold in terms of driving up the costs of resources. This can be determined by looking at the number of suppliers available, how unique their products are, and the cost of a company switching to another supplier. 

The fewer the number of suppliers, the more a company depends on them in turn driving up the supplier’s power. The supplier then has more control over their input costs which can result in lower profits for the company. 

4. The power of customers

The power of customers looks at how much control the consumer has to drive a company’s prices down. This looks at the number of customers a company has, the impact of each customer, and the cost of finding new customers or markets to sell to. 

The smaller the customer base, the more power they have to negotiate lower prices. While a larger customer base with many smaller clients is able to charge higher prices and in turn increase profitability. 

5. The threat of substitutes

The final of Porter’s Five Forces analysis model is the threat of substitutes and looks at the threat that substitutes goods and services can pose to a company. The more unique and more difficult a product or service is to substitute, the better the company’s positioning. As consumers will have little else to turn to, the company automatically accumulates more power. 

These Five Forces analysis can assist a company in building a strategy that ensures well-utilized resources and boosted profits, however, this strategy will need to be consistently visited to ensure that any changes in the external environment are factored in. 

What are the downsides of Porter’s Five Forces?

The most pressing downside of the Five Forces model is that it was designed to look at an individual company, as opposed to the wider industry. Additionally, this proves difficult when the company falls into two or more industries, making the framework less impactful. 

The final downside is that the model is designed to measure all five aspects equally against each other which isn’t always the case. Some factors might be more prevalent in one industry but less relevant in another. 

Porter's Five Forces Model vs SWOT analysis

Another tool used in the business sector is SWOT analysis, which looks at the strengths, weaknesses, opportunities, and threats of existing companies. When comparing the two the most prominent differentiation is that Porter’s Five Forces model tends to examine the external environment and competitive strategy of a company while SWOT looks at the internal aspects of an organization. 

In conclusion

This business analysis model aids in assessing the competitive landscape within a company's industry. The level of influence a company wields across these factors could potentially shape future profitability.

Porter’s Five Forces forces company’s to look beyond their organization and at the greater industry structure in order to map out future plans and strategies. While this framework still plays a valuable role in the business sector, it should not be the only tool used by a company to determine its strategy. 

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We are delighted to announce the listing and support of Loopring (LRC) on Tap!

LRC is now available for trading on the Tap mobile app. You can now Buy, Sell, Trade or hold LRC for any of the other asset supported on the platform without any pair boundaries. Tap is pair agnostic, meaning you can trade any asset for any other asset without having to worries if a "trading pair" is available.

We believe supporting LRC will provide value to our users. We are looking forward to continue supporting new crypto projects with the aim of providing access to financial power and freedom for all.

Addressing the speed and cost concerns associated with the Ethereum platform and decentralized cryptocurrency exchanges, Loopring delivers a new layer to the DeFi space. Describing itself as “an open-source, audited, and non-custodial exchange protocol,” Loopring is bringing something new and innovative to the space.

The Loopring Exchange aims to offer a hybrid platform combining the best features of centralized exchanges and decentralized exchanges, addressing issues like structural limitations and transparency. The platform combines centralized order matching with decentralized blockchain order settlement, using zero-knowledge proofs (ZKPs) for enhanced privacy, reduced costs, and high speeds.

The Loopring cryptocurrency, LRC, plays a crucial role in the operations of the protocol.
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To operate a decentralized exchange on Loopring, a minimum of 250,000 LRC needs to be locked up. This allows the exchange operator to utilize on-chain data proofs. Alternatively, an operator can stake 1 million LRC to run an exchange without this feature.

LRC serves as an incentive for the proper utilization of the Loopring network. Exchange operators who deposit LRC may face confiscation of their deposits by the protocol if they operate exchanges poorly. These confiscated funds are then distributed to users who choose to lock up LRC.

Get to know more about Loopring (LRC) in our dedicated article here.