Wednesday, December 13, 2017

Cryptocurrency Update


Back in July, I wrote about how some people are putting their retirement savings into cryptocurrencies like Bitcoin or Ethereum. This is incredibly risky and stupid. However, if you have some extra money you can afford to lose, gambling money, if you will, it might be fun to experiment with cryptocurrencies. As I mentioned in that post, that is what I did.

My Experience With Cryptocurrencies

I initially purchased $200 worth of Ethereum around the time I wrote that previous post. Approximately 3 weeks later, the exchange rate fell and I bought another $200 worth. I used Coinbase as my vendor. I signed up using a referral link like this one, which gave me a free $10 worth of Bitcoin when I bought $100 worth of any cryptocurrency Coinbase supports (which currently is Bitcoin, Ethereum, and LiteCoin). You'll get the same deal if you use that link to open an account.

I opted to buy Ethereum because it was cheaper than Bitcoin and I felt it had more potential for growth. When I bought, I was credited $10 worth of Bitcoin for the referral bonus, which worked out to about 0.003697 Bitcoin. Doing the math, you can see that one Bitcoin was worth $2,704.90 at the time. Today, one Bitcoin is worth about $16,000 (after peaking at over $17,000 today). My $10 had grown to about $60.

I purchased a total of 1.38918114 Ethereum for the sum amount, including the Coinbase commission, of $406. One Ethereum was trading for about $287.94 at the time. As of this writing, one Ethereum is worth $462.07. I sold my coins and received $623.20 after commissions.

To keep the math simple, let's assume I bought all my Ether at the same time - 160 days ago. My ROI then works out to 53.5% in 160 days. That gives an annualized ROI of 122.04%!

My ROI on Bitcoin is infinite, since I got that money for free.

Not too shabby!

I'm Getting Nervous - Time To Exit

As I said, this was gambling money for me. I was prepared to lose it all. I thought about selling just enough Ether to recover my initial investment and letting the rest ride, but in the end, I decided against that, for the following reasons:

I am hearing all sorts of stories now about how Bitcoin is in a bubble. Personally, I think it is, as are all cryptocurrencies. I think they were when I bought some. Nevertheless, I bought some as a gamble to see what would happen. I'm not adverse to bubbles and it is possible to make money in them. The trick is being able to get out before they burst.

Although I believe Etherium is a more stable currency long term (and thus, less susceptible to huge value crashes due to its ability to run programs in the blockchain) right now, its value is closely tied to Bitcoin and they tend to move somewhat in sync. So if Bitcoin crashes, I think Ether will as well.

Over one million dollars worth of Ethereum, approximately 15% of the Ethereum network traffic, is being used to run a Pokemon-like game called CryptokittiesFarmville, anyone?

Bitcoin has reached a level of mass inroads into the general financial markets. Mutual funds that trade cryptocurrencies have been formed. Wall Street  hedge funds are investing in it. The Chicago Board Options Exchange has started selling Bitcoin futures.


The potential for Bitcoin price manipulation seems credible.


Keep in mind, these are virtual currencies. There is NOTHING underlying Bitcoin or Ethereum to give it its value.

To me, all of this adds up to a bubble.

I decided not to be greedy. The run-up may continue for quite some time. However, news of problems, such as hundreds of millions of dollars in lost digital currency, wallet providers getting hacked and closing down,  and cryptocurrency hard forks has made me very nervous. I decided I was happy with my 122% ROI and cashed out.



Note: Two days after I sold my Ether, Coinbase suspended all trades in Ether and Litecoin when a rally caused prices to spike. Ether was trading at over $630 - almost $200 higher than when I sold two days ago - but if you can't trade, the run-up does you no good. This unreliability of the trading platform is another thing that was making me nervous. And it's not just Coinbase. Other virtual currency wallet companies can do the same thing. There is very little regulation of these companies right now.

Wednesday, December 6, 2017

Goal Update: End Of November, 2017

At the end of each month, I post an update of my goals, including a brief discussion of any notable events that might have occurred during the month. The latest month's figures can always be found under the Featured menu in the menu bar at the top of the blog.

Last updated: End of November, 2017
Current value: $37,550
Change from last Month: +1,385
Percent of Goal:  34.53%





Note that the funds in this account are invested in stock, so there will be fluctuations in value that are outside my control. I never withdraw money from this account, so any dips are purely due to stock price changes.


Events Of Note Last Month:

My SQL courses on Udemy generated $96.64 of income. One of my courses was selected to be part of the Udemy for Business program. This means Udemy will be including the course in a package of courses that they sell to businesses. I will earn income based on minutes viewed for courses in this program rather than earning a flat fee per course sold. There seems to be great potential for a large number of students with this program.

And speaking of getting paid per minute viewed, I received my first payment from SkillShare. I made $11.14. Not bad considering I only have 5 students there and they have only watched about 200 minutes of my courses so far. Next month is looking better: I'm up to 11 students and 300 (additional) minutes already.

Cash Backed Naked Put Update

As I mentioned last month, Realty Income stock took a bit of a dip and I was able to sell some cash backed puts at what I felt was a very safe strike price. I received $231 for selling puts with a strike price of $52.50. Sure enough, the price rebounded and when the options expired, the stock was trading at $56.48. This means I keep the $231 I received and was not forced to buy any stock. This three week investment netted me a 10% annualized ROI.

I turned around and made pretty much exactly the same trade on November 22 - I sold 6 puts for $0.40 for a net income of $231. This time, the strike price was $55 with an expiration date of Dec. 15. I have a feeling my options might be exercised when that date rolls around and I'll have to buy the shares. As of this writing, the stock is trading at $55.55. It has to stay above $55 for 2 more weeks for the options to expire worthless (which I want). My mistake, if you can call it that, was that I miscounted the weeks remaining in this option when I sold it. I normally like to only have about 2-3 weeks until the option expires but this time, I sold options 4 weeks out. That gives me a little more exposure than I like.

Assuming the options don't get called, I'll have made a 9.11% annualized ROI. If the stock closes on Dec. 12 below $55, I'll have to buy 600 shares at $55 each. I'm not opposed to that. I like the stock and have no problem owning it at that price. It's just that then I'd be earning a 4.66% ROI from the monthly dividend instead of roughly double that by selling options each month. We'll have to wait and see how this one turns out.

In other news, I've changed jobs! Starting yesterday, I'm now working for a new company based in the Washington area. Although not the reason for the change, the new position did come with a 28% salary increase, plus a significant signing bonus. There was one drawback, but I'll get into that next week. Once I know what my regular paycheck will be, I'll be re-figuring my budget. I expect I'll be able to up the amount I put in the Tesla fund each month!


Net Worth Update

Our net worth increased by $9,922 over last month. This is more or less just a reporting adjustment. Mint finally resolved their issue with accessing my 401(k) account, so that figure finally got updated after a couple of months. (Note there is no more red dot next to the Investments" category.) I did pay about $10,000 in a repair bill for the new house, but the check has not cleared the bank yet, so that's not reflected in this month's numbers.


October 2017
November 2017

























If you have any questions or suggestions for topics, please drop me a line in the comments section!

Wednesday, November 29, 2017

Equifax Gives Free Credit Monitoring To Pretty Much Everyone In The U.S.


In July, Equifax discovered its security systems had been compromised and the financial data of up to 143 million Americans had been stolen. Compromised data included names, addresses, social security numbers, drivers license numbers, birth dates, and credit card numbers. It was, quite frankly, a colossal screw up.

Equifax has a website you can use to see if your data was part of the compromised information. Visit https://trustedidpremier.com/eligibility/eligibility.html and enter your last name and the last 6 digits of your social security number.

If your data was affected, I would strongly suggest signing up for the TrustedID Premier service Equifax is providing for free. Do this by visiting https://www.equifaxsecurity2017.com/ and clicking the Enroll Now button. Enrollment is offered for free through January 31, 2018.

And here's a bonus - even if your data was not affected, you can still sign up for one year of this free service. Yes, anyone and everyone in America can sign up for this for free before January 31! Note that when signing up, you will be asked certain questions from your credit history - things like what street have you lived on, who you've had a mortgage with, etc. These are multiple choice questions and should be fairly easy to answer.

This is 100% free. There is no auto-renewal after 1 year where you have to pay. You don't have to provide any payment information to sign up.

The Benefits

By signing up for TrustedID Premier, you get:

  • Identity Theft Monitoring - Your credit report at all three major credit bureaus will be monitored for suspicious activity.
  • Free copy of your Equifax Credit report - This is in addtion to your yearly free copy you can get from annualcreditreport.com
  • Ability to lock your Equifax credit report - This will prevent unauthorized third parties from accessing you credit. This is slightly different than a credit report freeze (more on that later).
  • Social Security Number Monitoring - They will monitor the internet for appearances of your social security number of sites that sell such information.
  • $1 Million Dollars Of Identity Theft Insurance - This will pay for certain out of pocket expenses if you are affected by identity theft.

Lock Versus Freeze

The old way to stop people from accessing your credit report was to put a freeze on it. You can unfreeze your report by phone, mail, or online by using a PIN you set up when your placed the freeze. Placing or removing a freeze can cost money, depending on the state you reside in.

I've done this in the past and it was a pain in the ass. This was probably because I forgot my PIN and had to jump through all kinds of hoops to prove my identity.

A lock is a more modern process and can be readily turned on and off with mobile devices. This can be done immediately and on demand.

Both locks and freezes must be done for each credit bureau separately.

The Bottom Line

The Equifax data breach was huge and its full effect might not be felt for some time. Your stolen data may be sitting dormant for months before it gets sold. Be proactive and protect yourself from identity theft by enrolling for a year of free coverage with TrustedID Premier.

Wednesday, November 22, 2017

I Reached A Passive Income Milestone! Let Me Show You How You Can Do It Too.


I’ve written before about passive income and why it is great. It’s the underlying basis for this blog – I plan on paying for my Tesla with passive income.

Sometimes, passive income can be boring. Actually, I prefer it to be boring. When I talk about passive income, I want the same, predictable amount coming to me each month (or, even better, an increasing amount). I’m not looking for huge gains one month and losses another. Slow and steady wins the race. But then, there's boring and there's boring.

Boring Boring

The most boring type of passive income is bank account savings. If you have an account that pays you any interest at all, it’s probably under a buck a month. *Yawn* That’s boring and even I will admit it’s probably a little too boring.

Run-Of-The-Mill-Boring

If you own a dividend paying stock, that can be boring too, but it’s a bit closer to the type of boring I like. Hopefully, the company you’ve invested in regularly increases the dividend and rarely, if ever, reduces it. If you are reinvesting the dividends, you end up buying more shares of the stock each time the dividend is paid. Because the stock price varies, the amount of the stock you get when reinvesting will vary. This is my kind of boring. Still, unless you own a good chunk of shares, it’s probably a small amount you get each time the dividend is paid.

Exciting Boring!

My favorite kind of boring, the exciting boring, if you will, is royalties. Royalties are the income you receive for something you created. You spend some time once creating something and then you can sell that something over and over, making money each time, with no further effort on your part. Royalties can be really small – check out some of my monthly updates and you’ll find sometimes I receive a penny for my ebook royalties – but they can be larger as well.

Source Of Passive Income Excitement

With royalties, the excitement comes from two components: volume and time.

The more of something you sell, the more money you make. Even if it’s a small amount on each item individually, if you sell enough of something, those little amounts join forces and become large amounts.

Time is the other big component. You’ve already invested your time creating whatever it is you are selling. If you can keep selling that item for years, your income will add up.

This really hit home for me this month because my online courses just crossed a major milestone:

That's a lot of smackaroos!

This month, I crossed the $10,000 threshold for income from my online courses! I created and sold my first course in August 2013. My total monetary cost was $149 for a microphone. I spent several hours developing and recording my first course. The subsequent three courses were made more quickly, as I had gained a lot of experience with my first one.

After that initial work, I have done next to nothing. I’ve had a spend a few minutes here and there answering questions from a student or two, but for the most part, once I published the courses, my work was done.

Four years later, those courses have made me over ten thousand dollars! They are still generating income. Furthermore, I recently posted them on another training site and they have started earning me money over there as well.

Small incomes over a long time period. That’s the type of boring I like.

You Can Do It Too

There are many ways to create a royalty stream and you should pick the one that best suits your skills and knowledge. I chose to create computer-related courses, but you can make courses about almost anything. See my post here about this type of side hustle.

If you are musically inclined, try writing, performing, or producing music. Create some songs and sell those.

Do you prefer words to music? Write stories.

Paint.

Take photographs.

The internet makes it very easy for anyone to create content and sell it. If your content can be delivered electronically, you have no ongoing production costs, no shipping charges, no assembly. You can sell your creation over and over, automatically. Just sit back and collect the income.

I know that is making it sound easy. You do need to be able to produce something that people want or have a need for. It helps greatly if you are knowledgeable in your subject. But if you really enjoying doing something, you probably already are knowledgeable about it anyway.

The costs of entry are so low, there is really no excuse to not try. Look what my investment of $149 and a couple of weekends has returned so far!

Get out there and create your own passive income stream!