Learning the friendly way

In line with our how-to-budget pieces, today we're looking at how to monitor your spending. There's no good in building an impressive budget without keeping track of whether you're sticking to it or not. Yes, it might sound tedious, but it is always worth it, especially during the festive season when things tend to get a little out of control.

Paving the road from good intentions to excellent outcomes, tracking your spending is imperative.

Why tracking expenses is important (use your bank account to save money)

Before we get started, let's first cover the bases of why this step is so vital. First and foremost, it's essential to hold yourself accountable to your proposed budget. There's no good assigning each dollar you earn to a specific function only to disregard the budget entirely and spend impulsively.

If you're not tracking your expenses you'll land up in square one where you started a month ago. Monitoring your spending habits will show you exactly where your money is really going, and help you to make more informed decisions. The best part is that after a month or two you will get the hang of it and the process will become a lot less tiresome and feel like more of a habit.

Keeping an inventory of your expenses (and income)

First, you'll need to create your budget. Once this is established and the time frame you've set it out for has started, it's time to get tracking. You can do this through a budgeting app, a spreadsheet, or a piece of paper if that makes you most comfortable.

Step 1: track your income

In your income section, confirm all income in the columns provided. If you make money in an unexpected avenue, be sure to add this in too. This step is particularly important for those that earn irregular income through freelancing or side hustles.

Ideally, you would have listed your income avenues as a low estimate, so revel in adding the higher amounts into the columns provided. You can then enjoy reallocating those funds to various items in your expenses column. Don't think you need to be a robot with your finances, you're allowed to enjoy them too.

Step 2: track your expenses

For this step you need to track every single time money leaves your account. For the entire month. From emergency fund allocations to debt payments to monthly expenses, and any payments on a separate spending account. Each time you spend money, record it in the relevant expense categories.

When you buy groceries, add this to your grocery expenses; when you eat out, add this to your entertainment expense. Make sure that your budget is updated to reflect the new total so that you and your checking account are always in the know.

For example, if your grocery budget is $100 and you spend $23, add the $23 as an expense item under the title and ensure that your new grocery total reflects as $77.

There are plenty of expense tracker apps out there if this helps you stay on track. If you are using a budgeting app be sure to check in and review how each category is doing so that you can make informed decisions on what you spend your money on.

Step 3: make it a habit

You might like to do this daily or biweekly at first until you get the hang of it. Make yourself a nice cup of tea and make it a pleasant habit, instead of something you resent and put off. Understanding your cash flow is imperative to understanding your spending patterns and to better manage money. This is where the magic happens (and how financial goals are achieved).

Different methods of tracking your expenses

Below we outline the four most common methods used to track expenses, looking at the advantages and disadvantages of each of them. Whether you prefer paper receipts or accounting software, settle for the expense-tracking method that works for you.

1. Handwritten

There's nothing wrong with the old-school pen and paper option, if this feels right to you then go for it! Make sure you store it in a safe space.

Advantage: studies suggest that writing things down increases your retention of the information and boosts your ability to make more informed decisions. While typing is probably the preferred method, writing is actually more efficient when it comes to learning.

Disadvantage: this option is more time-consuming and will require you to physically remember all your purchases and retain your slips. Alternatively, you could sit with a printout of your bank accounts and manually write out each expense.

2. The cash process

This step requires you to withdraw the cash outlined in each budgeted category and store it in an envelope. Every time you make a transaction, you use the cash from the relevant envelope and replace it with the receipt. For debit orders, you can use your imagination. While the envelope method might be considered an old-school option for money management, if it works for you then go with it.

Advantage: using this method of tracking monthly expenses you can physically see how well your budget is going and how much you have left to spend.

Disadvantage: in these modern times paying with cash isn't always very practical.

3. Spreadsheet

Probably the more common option when it comes to tracking your expenses, using a spreadsheet can be practical and it does the maths for you.

Advantage: with tons of templates, the ability to quickly customize or revise your budget and the automated calculator, spreadsheets are a great option.

Disadvantage: you'll need to physically sit down with your laptop when tracking all your transactions. This will become more challenging the longer you leave it so ideally you;ll need to make this a daily occurrence. Remember, without monitoring your expenses your budget is simply a plan.

4. Budgeting apps

There are several budgeting apps available (for free) that can link to your bank account and automatically track all your expenses.

Advantage: It's all done for you, in real-time. Some apps might require you to assign the transaction to a category while others might automatically categorize it for you, either way, it requires minimal effort and can be regularly updated.

Disadvantage: You still need to monitor your spending, even if you're not physically putting it in. If you've reached your grocery budget, you need to be aware as the app is not going to cut your spending for you.

In conclusion

Whichever method you opt for, tracking your expenses is imperative to sticking to your budget and getting you one step closer to your financial goals.

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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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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.

Public and private keys are integral to the use of cryptocurrencies. They not only allow people to send and receive cryptocurrencies but also to maintain the security and ownership of the funds. Private and public keys are generated when one creates a digital wallet.

What is a private key?

Every cryptocurrency wallet consists of a public key and a private key. Anyone can deposit cryptocurrency into a public address (public key), but no one except the owner of the corresponding private key can remove funds from that same account.

A private key, also known as a secret key, is a random string of numbers and/or letters used to protect one's cryptocurrency wallet and receive crypto transactions, similar to a pin code for a bank account. Private keys prove ownership of one's wallet address, protect it from unauthorized access and theft, and are used to sign transactions on the blockchain. 

Private keys are used in conjunction with an algorithm to encrypt or decrypt data. The holder of the private key should be the only one who knows it, as this secrecy is what gives the private key its power. The golden rule is to keep your private key safe.

Private key vs public key

Public and private keys are mathematically linked to each other and relevant to only one blockchain wallet. A public key can be compared to your traditional bank account while the private key is akin to the pin code to access this account. 

Users would share the public key with anyone looking to transfer funds to their crypto wallet, however, under no circumstances should your unique private key ever be shared with anyone. It is also strongly recommended that one stores their private key offline in a safe space, and not on a desktop or accessible location (in the event of a hack).

When one loses their private key, whether lost or maliciously taken, they will lose access to their crypto funds. Due to the decentralized nature of cryptocurrencies, there is no support line or central authority that can access that information.

This is where exchange wallets come in handy as the account is created using an identity that once verified can gain access to the funds. This is known as a custodial wallet where the platform holds the private keys for you and allows you to access the funds through a user-generated password. When it comes to storing private keys, this is the most convenient option, however, if you use an untrustworthy platform that increases your risks greatly. It is strongly recommended to enable two-factor authentication when using this option.

How do private keys work?

A public key is generated using complicated mathematics by your private key, ensuring they form a matched pair. These digital keys are created when one creates their crypto wallet on a particular blockchain. 

After being generated, a private key must be stored in a secure location, ideally offline. Furthermore, private keys can have an extra layer of security by being password-protected, encrypted or hashed, ideally all three.

The owner of the public key will use the private key to encrypt the digital signature when making a transaction. 

A transaction is encrypted using a public key and can only be decrypted by using the matching private key. Therefore, when someone sends a transaction they will need their private key to decrypt and prove they own the funds being used in this transaction. 

The private key is used to sign the transaction, which verifies that the transaction hasn't been modified. A digital signature is created when someone combines their private key with the data that's being sent as part of a transaction. 

Once the transaction has been executed the nodes on the network will check and authenticate the details of the transaction and if any information is incorrect the transaction will be rejected. Once executed transactions cannot be reversed. 

Where should you store your private key?

Your private keys are essentially your passwords, so it's of utmost importance that you keep them safe.  Your best bet is to store them offline somewhere safe. This might mean written on a piece of paper, stored on an offline device, or kept in a password manager.  As mentioned above, public keys can be stored anywhere and shared with anyone.

To avoid the hassle and stress of ensuring the safety of your private keys at all times, you can use a hot wallet supplied through a reputable exchange. If you choose to take this route ensure that the crypto platform is regulated and adheres to stringent security measures. The Tap app ticks these regulatory boxes and ensures that customers have full access to their funds at all times, without the risk of losing them if they lose their private keys. 

In conclusion

Private keys are digital passwords used to establish one's ownership in a crypto wallet and are created in conjunction with the public key of the same wallet. One should never share their private keys with anyone. 

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