All You Need To Know About Payday Loan

Dealing with the financial concerns is not an easy task. You need help when you know that everything depends on you. If you are considering payday loans, read on to know what you should consider to make the right decision.

Payback Time

Remember: the payback time for a payday loan is around two weeks. If you fail to pay back the loan on time, you don’t need to worry as you can contact companies that allow you to roll over the loan. You may have to pay some low fees but that won’t be a big problem.

Research Your Options

Going with the first lender you get in touch with is not a good idea. You will find good rates if you check out different lenders. It may take you some time but will save you a lot on the fees later on. Nowadays, you can compare lenders on the Internet.

Payday Loan

While applying for a payday loan, make sure you keep scammers at arm’s length. For this, you can contact Better Business Bureau. Aside from this, you should borrow as much as you need. By keeping the amount small, you will find it easier to payback the amount later on.

Make Sure You Will Have Enough Funds

Make sure you will have enough funds in your bank account to payback your loan after a couple of weeks. Even if you fail to make the payments, the lender will try to collect the funds. Your bank will figure out the additional fees for making payment to the lender. As a result, it will become even harder for you to pay back the loan.

Consider Direct Deposits

Make sure you choose a lender that will use the direct deposit option only. With this option, the lender will deposit the funds directly into your bank account the following day. This way you won’t have to carry the cash in your pocket.

Cash Advance Loans

Make sure you use the cash advance loans only when you have no other option. If you have some financial problems, you can get in touch with a credit counselor in order to control your finances. In other words, you should consider taking a payday loan only if you have no other options left.

Comparison Shopping

When deciding to take a loan, make sure you take into account the comparison shopping as well. One provider may be offering a lower rate of interest than the other. This way you can get the best deal. What you need to do is keep looking for a better lender.

Don’t Borrow Too Much

You shouldn’t borrow too much. For instance, if you need only $2,000, don’t borrow $3,000. It may be a bit tempting to borrow more, but the interest rates will keeping going up as you borrow more. Therefore, figure out the amount very carefully or you may get into a huge trouble.

This Is A Serious Matter

Applying for a payday loan is a serious matter. If you take this decision without considering all your options, you may get into a serious problem. As a matter of fact, payday cash advances may not be for you if you know that you won’t have enough funds in your bank account a few weeks later. The principal, interest and the additional fees must be paid on time.

Long story short, if you really need money to deal with an emergency, you can consider other options, such as borrowing from a friend or relative. But you should never take out a payday loan unless you absolutely need it. Hope this will help.

Pros and Cons Payday Loans

Living on paycheck can present challenges, especially when instant cash is needed in situations that really can’t wait until the next pay date. Running out of cash is not uncommon, but when an emergency arises, you will need that boost and sometimes it can be hard to get. This is where payday loans come into the picture to rescue the situation. They are quick loans that offer short terms financial support until the next paycheck.

The payday loans come with varying repayment terms depending on the provider you settle for but the truth is that you are most likely to pay back in a as little as two weeks. They of course can be paid in installments and they do attract interest. The total amount you can enjoy from the loans can be determined by your salary and the financial situation you may be in. They have become very popular, but the least you can do before going for one are getting familiar with the benefits and the risks involved when taking them up.

Payday loan benefits

  • These loans come in handy in emergency financial situations and they are quite discreet. You do not have to worry about your close friends and family knowing about your financial crisis when you can easily access the payday loans discreetly.
  • The loans can be enjoyed with any collateral requirement. All you need to do is fill a simple application form for an evaluation and you qualify for a reasonable short term loan. You can actually enjoy no credit check payday loans where the lender does not rely on your credit history to give you the financial assistance you need. As long as you have a salary to repay the loan, you qualify for it.
  • The loan processing is quick and easy so you can access the money when you need it most. You do not have to worry about long loan processing processes when dealing with the short term loans. Sometimes it may only take a few hours for your application to be approved and for the funds to be channeled to you. This is something you really can’t say with bank loans.

Payday loan risks

  • The loans do not offer ideal cover for long term financial issues. They are most suitable for urgent fund shortfalls for working people and relying on them continuously may mean more financial trouble for some.
  • Since the loans do not require any collateral or a good credit history, they tend to come with very high interest rates. If you are not very careful when choosing a lender, you could end up with a loan that is just too challenging to repay.
  • They can affect credit score when you are late on a payment and incur penalties. Some lenders may not require a clean credit history, but these are loans and failing to adhere to repayment can impact your credit score negatively. It is something that can affect access to funding even from banks and other institutions in the long run.

When looking for a payday loan, it is important to first evaluate the financial crisis you are in to determine whether the short term loan is what you really need to fix it. Sometimes you may need some serious expense changes to fix your need for funding. It is most advisable that you stick to the loans only when it is absolutely necessary to get one and when it is the only reasonable financial solution at that present moment. Take time to compare lenders to get yourself better loan and repayment terms that suit your financial status.

All About Payday Claims

Payday loans have without doubt become very popular especially because they are easy and quick to get. Whereas they are short term loans that are supposed to save individuals from difficult financial situations that can’t wait, they do attract a very high interest rates. With so many lenders now offering the loans, if you are not careful with the loans you could end up with debts that spiral out of control. A good number of people find themselves in more financial difficulties when they get hooked to the payday loans.

Luckily, if you feel your payday loan is not yielding the kind of results you expected because of one issue of another, it is possible to apply for a refund. The refunds are usually based on mis-selling by the lender or the payday loan providers and they can work on saving you from an agonizing financial situation. You can claim a refund if:

  • You feel the payday loan costs are ever increasing and sending you into more debt, thus making living a struggle for you. If you can hardly maintain your household bills and daily expenses because of repayments then you can claim for refund.
  • Repayments are automatically deducted from your credit card or bank account by your lender leaving you with insufficient funds to survive on.
  • You qualified for the payday loan even though you were suffering ill health or while you were on low incomes and benefits. All lenders are required to go through an evaluation process wisely to ensure that you can actually repay the loan as indicated.
  • The payday loan proved unaffordable and you really cannot repay without being subjected to undue difficulties. Whereas the loans come with high interests, some lenders charge hefty rates and attach other fees to the loans making them quite unaffordable in some circumstances.
  • The lender encouraged you rolling over the loan, thus resulting in more fees on your side. The lending terms should be clear for you and no lender should offer solutions just so they can reap you off in the end when you thought they were actually helping you out.
  • You have to borrow more funds to pay important bills like utility bills, rent and council tax just because you are servicing a payday loan.

Making the complaint First, you would need to write a letter to the lender as a way of trying to sort out the issues at hand. Let the lender know where they have failed as per best practice charter and the set rules for such loans and express how you wish to resolve the problem. You can review repayments plans so you are able to pay what you can afford at convenient times.

If the lender fails to respond or sort out the problem as requested, you can take the complaint further to the financial ombudsman service. The office will look into the complaint and offer advice to sort it out and final decisions made binds the lender.

In case you still are not satisfied with the decision by the ombudsman service, you can take lender to court. It however should be your very last resort when making a claim because court cases can be long and tedious and they also come with charges. It helps to seek professional advice first before making it a court case.

There are very good claims management companies that can help you get the compensation you want without any court proceedings. If you decide to settle for such a provider, ensure that they have impressive success rates and their services are affordable and reasonable enough for you.

Tricks To Have Payday Loan

In tough circumstances, it’s difficult to make both ends meet for most people. As a matter of fact, unfavorable economic climate forces many people to take a loan. If your current job doesn’t pay you enough, we suggest that you give a go to a payday loan. If you don’t know whether you should reduce your expenses or apply for a payday loan, we suggest that you check the tips given below. These tips may help you make a wise decision based on your circumstances.

Consider your needs

First of all, make sure you know how much money can meet your needs. While it is tempting to apply for an amount that is a lot higher than what you currently need, you should never go this route. The reason is that the high rate of interest will kill you down the road. So, if you want to be on the safe side, you should only apply for a loan that will jus meet your needs. Don’t be greedy. Some people don’t need as much money as they borrow. As a result, they find it really hard to repay the loan. Paying the higher rate of interest becomes a headache for them and their life becomes a hell. So, always go for what you need, not what you want.

Repayment method

Now, this factor is the most important. When applying for a loan, make sure you choose the best repayment method based on your circumstances. For instance, you can give a post dated check to your lender so he could get the payment on a certain date. Or your lender may ask you to give you the account number of your checking account. In this case, the lender will just deduct the payment amount from that account. Based on your needs, make sure you ask the lender to use the right payment method.

Extension

Due to one reason or the other, you may fail to repay the loan on the due date. In this case, you can ask for an extension. Your lender may give you a 48-hour extension based on your history. However, keep in mind that you will have to pay the fees for the extension.

It’s important that you make all the payments until you have gotten rid of the loan. In case of late payments, you will have to face penalties, which you don’t want at any cost.

Valuable items

If you want to enjoy a lower rate of interest, you can apply for a loan with a valuable item, such as jewelry. Usually, a secured loan will save you a lot of money because of the lower interest rate. So, if you can, take something valuable with you to the lender.

Credit history

As far as payday loans are concerned, your credit history plays a great role. Even if your credit history is bad, you can apply for a loan but the rate of interest will be a lot higher. On the other hand, if you have good credit rating, the lender may offer lower rate of interest and better repayment options. Therefore, we suggest that you keep a good credit history in order to prevent higher rate of interest. And for this paying the loan back on time is the way to go.

So, if you are thinking about getting a payday loan, we suggest that you consider your circumstances and use these tips to be on the safe side. Keep in mind that payday loans are not for everyone. You should get this loan only if you are sure that you will be able to pay it back on the due date.

Sign Your Financial is Healthy

“Never spend your money before you have it” Thomas Jefferson

From the moment you wake up to when you go to sleep, you make constant choices. Should I eat the salad instead of the burger? Should I go jogging after work? And much much more. Over time we form habits, good and bad ones. Every day, we constantly try to implement more good habits in our daily routine. “Running on Tuesday, Friday, and Sunday; High-Intensity Interval Training (HIIT) on Monday and Thursday”, those are mine with few “Should I go and grab a coffee with a friend and skip the HIIT for today?”. Of course, the better your lifestyle is the better your physical fitness will be.
Financial fitness, like physical fitness, is mostly about good habits. Here are the 6 habits to adopt for better financial health.

Know how much you make and how much you spend
Knowing how much you make every month is where you should start. If you have a fixed salary, it is easy. More difficult if your salary depends on commission. Even harder if it is purely based on them. If you work in a cyclical business, then you will probably have highs and lows throughout the year. You should average your last two to three years income, excluding special bonuses.

“A penny saved is a penny earned” Benjamin Franklin

Spend less than you earn
This habit is at the core of all good financial management. It is how rich people get rich. When you spend less than you earn, you save. And what you save becomes wealth. First, you need to know how much you spend. You need to start to register all your expenses. Starbucks, Movie ticket, Milk,… , everything goes into it. The first three months should be taken as “survey months”, I am sure you will be surprised on how much you actually spend on certain things. If you carefully register each of your expenditure without intervention, it will be easier for you to take actions.

“Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earngs to create an estate for his future and that of his family” The Richest Man In Babylon

The first law of gold in the amazing book “The Richest Man in Babylon” Says to save 10% of your income. The 50/20/30 rule for minimalistic budgeting is a proportional guideline that can help you keep your spending in alignment with your saving goals. This rule allocates 50% to your essential spending, 30% to your personal spending. The remaining 20% is for saving. More “extreme” and frugal people will save up to 80% of their income. Your personal situation and commitment play a role in your saving percentage, however, do not go below 20%. To achieve it, follow this simple rule: “Play Yourself First”. As you receive your salary set aside 20% and do not use it.

Stay Insured
A study done at Harvard University indicates that Medical Expenses are the biggest cause of bankruptcy, representing 62% of all personal bankruptcies in the States. A good health insurance can protect you. However, one of the interesting caveats of the study I just mentioned, shows that 78% of filers had some form of health insurance. My own take is that you need to select an insurance that is personalized to your needs. If you have dependents you would need a different insurance compared to your single friend.

Be prepared for the unexpected
One year ago I lost my job, my monthly salary went from five figures to zero within two weeks. With today’s mind, I can say that being laid off was probably one of the best events for my career. When that happened I was emotionally devastated. Before I started a new adventure in the special place I am right now, I spent few months without any income. I was able to sustain my previous lifestyle with few adjustments, thanks to the money I had saved. Most will call this “rainy fund”. I much rather call it “Opportunity fund”. Rainy fund brings the memory of scarcity, whether opportunity fund is something full of optimism. I had to use some of my funds during my unemployed days, and having a positive mindset helped me go through that difficult time.

“Make all you can, Save all you can, Give all you can” John Wesley

Develop a long-term financial plan
If you do not know where you are going, you will probably end up somewhere else. Your financial future is much more important than your next holiday. My work colleagues are always busy planning their holidays, if you do the same, channel some of that energy and focus on what your long term plans are. Write them down.

Earn more
Your income matters. Saving 20% of 1,000 is different than saving 20% of 10,000. Everyone has the opportunity to tap into their free time and find something that could produce extra income. Baby-sitting, tuition, music lessons,… The only limit is your imagination. It may be awkward and difficult at first, but with time and persistence you can succeed in developing one or more sources of extra income

Time To Review Your Insurance Portfolio

Consumers of insurance are often unaware that their insurance needs are constantly changing. While there may be numerous circumstances and events that may lead to this. It is only logical to conclude that you should reevaluate your insurance coverage as years roll by. As a rule of thumb, you should revisit your insurance portfolio annually to keep up with ever-changing predicament and dynamism of life.

There are many reasons why you should revisit your insurance portfolio from time to time. Here is a checklist of what you should look for when reviewing your insurance portfolio:

• You just moved into a new home, condo, or apartment
• You bought a new car or additional one
• You just got married, divorced, birth or adopt a child
• Some relatives moved in with you
• You or your spouse changed job or one of you lost his/her job.
• You become self-employed or start your own business

This is not an exhaustive list and there are lots more but anytime there is a change in your family or lifestyle it can impact your insurance needs tremendously. It is known fact that financial commitment increases with time or when a new member joins your family.

You may need to adjust your insurance policies to fit your current circumstances, for instance, if you are single with no children your insurance need will not be much. Couples with kids should consider some form of permanent insurance which is useful for providing a death benefit to survivors but this type of insurance is expensive and not every couple need this type of coverage.

It doesn’t matter what your circumstances are you need to rethink your insurance needs. Your current coverage may not be sufficient to cover your insurance needs in a year or two. As every year presents its own challenges, you must adjust your coverage accordingly. To better prepare for all these, at the beginning of each policy year, it is advisable that you reevaluate your insurance needs. You can also purchase a new policy to complement those already in your portfolio.

Eliminate what you don’t need anymore, for instance when your kids are grown and the mortgage is paid off, then your insurance policy may have outlived its purpose. So it’s either you let it lapse, cash it in or purpose it for a new coverage.

All these factors and changes are the reasons why you should always review your policy at least once a year and making sure that you on a safe side. You don’t know what life may throw at you tomorrow, so you have to be prepared and get your insurance in other.

Why you should always consult your insurance broker

Your insurance broker is in the best position to advise you on a wide range of products available on the market. Once your broker assessed your individual needs he/she can find you the right coverage at a competitive price.

Assessing your insurance coverage frequently is one the smartest financial move you can make to help you eliminate the possibility of staying under-insured.

How To Win Financial Freedom

You can think of financial freedom like a video game. You’ve got to get through 7 levels to make it to financial freedom. What does financial freedom mean? It’s when your income is higher than your expenses. When you can get your money to make enough money to cover your expenses, you’ve reached financial freedom. It’s like running a gauntlet, but it can be accomplished! So let’s first outlay what the seven levels are and how to make it to your goal of financial freedom.

The 7 levels of financial health and freedom:

1. Level I – Handle all bad debt

Bad debt is distinguished by it being used for consumption rather than production. Bad debt typically does not have beneficial tax treatment like good debt does. By getting rid of all bad debt, you’ve established you can budget and you can produce more than you consume. These habits are critical to achieve financial success. In addition, these habits must be learned before anything else can be accomplished.

2. Level II – Start a Retirement Account and add 10% per year

Retirement is the first goal you should tackle after handling your bad debt because you want to add small amounts of money over a long period of time. You need your money to have a chance to compound over time. So, you need to start a retirement account as early as you can, preferably in your 20’s. I like the automatic investing approach provided by “robo-advisors” such as Wealthfront, Betterment and Personal Capital. The earlier you start, the more time your money has to compound and the easier it will be to retire with enough money.

3. Level III – Create a Savings Account with three months of expenses

This is an important step and many people try and skip this step. I did. Everything goes fine with your investment account (#4) until it doesn’t. Inevitably, something comes up in life. If you don’t have a cushion built up, all your investments come crashing down at the worst time possible when you have to cash out. Needing to cash out investments early, with bad timing and losses, destroys wealth. Before you can invest, you need a savings cushion of ~three months of expenses, minimum.

4. Level IV – Start an Investment account (taxable brokerage account)

Your first goal may be to build income for a home payment. Setting up an investment account could go several ways. You could set up a Wealthfront account and use passive index investments like retirement. Or you could open a TD Ameritrade account and invest in particular stocks or ETFs that usually generate a higher return. What determines this is how much time you’re willing to spend on active investment. It’s important to be able to generate consistent returns based on outlined risk.

5. Level V – Buy a house

Once you are able to generate some return from your investment account and you saved up enough money, the next goal is to buy a house. Buying a house allows anybody to fix the second highest expense, rent as well as creating a forced savings plan. The house is an asset and has the chance for capital appreciation. An additional benefit of real estate is that you can use leverage, in the form of a mortgage, to help boost your returns. Mortgage interest can also be tax-deductible, which makes it favored tax treatment and a good path to increasing annual net income by reducing taxes. A home is an important part of successful financial plans.

6. Level VI – Build multiple streams of income

Start building income-generating assets. These could include REITs (real estate investment trusts), LPs (limited partnerships), Equity Income Accounts and Fixed Income Accounts, such as municipal bonds and annuities. Now that you’ve finished Level 5 and you’re on Level 6, you’re onto the more advanced aspects of the game. Deferred annuities can be one method. Real estate, in the form of REITs, can be another method. The goal is to invest in income generating assets and start to pay attention to the income and cash flow they generate more than the principal value. There is an investing shift that’s going on where you are less interested in capital appreciation and more interested in cash flow. Buying partial businesses in the form of stocks for equity income, or REITs to invest in real estate, and generate yield, all represent early stage vehicles for cash flow investing. The goal is to build this up to a semi significant amount so that a portion of your expenses are now offset by your newly found cash flow income.

7. Level VII – Buy cash flow businesses or income-generating real estate

This is the critical level to work on until you can passively produce more income than expenses. OR, build your own growth start-up company you can sell for millions. I distinguish this final stage from the previous stage in that you’re buying “whole” businesses or real estate investments. At the previous stage, you’re buying “portions” of investments in the form of stocks, units of companies or limited partnerships. The final step in the financial game of life is to be able to buy cash flow businesses or income generating real estate in enough quantity that your income is higher than your monthly living expenses. Once you can do that you have won the financial game of life. You are financially free.

This is the basic financial life plan. For me, I’ve made it to Level VII, but was cast back down to Level V, where I’m currently playing the game of Financial Freedom. Where are you in the current Financial Game of Life? What are your next moves?

Why Saving is Necessary

It can be easy to overlook the importance of saving for retirement, especially when you’re focused on shorter-term financial priorities such as buying a new car or saving for college. However, it’s crucial to consider your long-term financial security and make saving for retirement a priority. If you start early and save regularly, even small sums can grow into significant retirement savings. Additional money you save today may have years – or even decades – to grow before you need it for retirement.

Consider the following two examples to see how saving a dollar a day or an additional one percent could make a big difference in helping you retire with confidence.

Set aside one extra dollar per day

To start, set a goal of saving the equivalent of one dollar per day. Or if you’re already saving, strive to save one dollar more per day. If you invest this $365 over 30 years, earning an average annual return of seven percent a year, your dollar-a-day commitment would grow to nearly $34,500. If you extend this commitment to 40 years, the total accumulated more than doubles to just shy of $73,000. That’s a meaningful amount of money when you consider the minimal effort needed to save one dollar per day.

Boost savings by one percent

You can also consider boosting your savings by one percent. Let’s say you are committed to setting aside five percent of your income for retirement. For this example, we’ll assume you began saving when you earned a salary of $30,000 per year in 1987 and your salary rose by three percent per year for 30 years. If you continued to save five percent of your income and earned a seven percent average annual return, you would accumulate approximately $208,000 over those three decades.

But what if you choose to boost your savings to six percent of your income? Over that 30-year period, you would increase your nest egg to nearly $250,000. One percent of additional annual savings could add up to 20 percent more in accumulated savings at the end of 30 years.

It pays to get started

No matter how small the dollar amount or how modest any additional savings may be, your diligence and patience can be rewarded. You don’t need a lump sum of money to start saving. Whether it’s one dollar more or a one percent increase, any amount can help you get closer to achieving your financial goals. Now, the most important part is getting started.

Between Goldcoin and Bitcoin

Bitcoin… Monetary Nirvana?

If you don’t know what Bitcoin is, do a bit of research on the internet, and you will get plenty… but the short story is that Bitcoin was created as a medium of exchange, without a central bank or bank of issue being involved. Furthermore, Bitcoin transactions are supposed to be private, that is anonymous. Most interestingly, Bitcoins have no real world existence; they exist only in computer software, as a kind of virtual reality.

The general idea is that Bitcoins are ‘mined’… interesting term here… by solving an increasingly difficult mathematical formula -more difficult as more Bitcoins are ‘mined’ into existence; again interesting- on a computer. Once created, the new Bitcoin is put into an electronic ‘wallet’. It is then possible to trade real goods or Fiat currency for Bitcoins… and vice versa. Furthermore, as there is no central issuer of Bitcoins, it is all highly distributed, thus resistant to being ‘managed’ by authority.

Naturally proponents of Bitcoin, those who benefit from the growth of Bitcoin, insist rather loudly that ‘for sure, Bitcoin is money’… and not only that, but ‘it is the best money ever, the money of the future’, etc… Well, the proponents of Fiat shout just as loudly that paper currency is money… and we all know that Fiat paper is not money by any means, as it lacks the most important attributes of real money. The question then is does Bitcoin even qualify as money… never mind it being the money of the future, or the best money ever.

To find out, let’s look at the attributes that define money, and see if Bitcoin qualifies. The three essential attributes of money are;

1) money is a stable store of value; the most essential attribute, as without stability of value the function of numeraire, or unit of measure of value, fails.

2) money is the numeraire, the unit of account.

3) money is a medium of exchange… but other things can also fulfill this function ie direct barter, the ‘netting out’ of goods exchanged. Also ‘trade goods’ (chits) that hold value temporarily; and finally exchange of mutual credit; ie netting out the value of promises fulfilled by exchanging bills or IOU’s.

Compared to Fiat, Bitcoin does not do too badly as a medium of exchange. Fiat is only accepted in the geographic domain of its issuer. Dollars are no good in Europe etc. Bitcoin is accepted internationally. On the other hand, very few retailers currently accept payment in Bitcoin. Unless the acceptance grows geometrically, Fiat wins… although at the cost of exchange between countries.

The first condition is a lot tougher; money must be a stable store of value… now Bitcoins have gone from a ‘value’ of $3.00 to around $1,000, in just a few years. This is about as far from being a ‘stable store of value’; as you can get! Indeed, such gains are a perfect example of a speculative boom… like Dutch tulip bulbs, or junior mining companies, or Nortel stocks.

Of course, Fiat fails here as well; for example, the US Dollar, the ‘main’ Fiat, has lost over 95% of its value in a few decades… neither fiat nor Bitcoin qualify in the most important measure of money; the capacity to store value and preserve value through time. Real money, that is Gold, has shown the ability to hold value not just for centuries, but for eons. Neither Fiat nor Bitcoin has this crucial capacity… both fail as money.

Finally, we come to the second attribute; that of being the numeraire. Now this is really interesting, and we can see why both Bitcoin and Fiat fail as money, by looking closely at the question of the ‘numeraire’. Numeraire refers to the use of money to not only store value, but to in a sense measure, or compare value. In Austrian economics, it is considered impossible to actually measure value; after all, value resides only in human consciousness… and how can anything in consciousness actually be measured? Nevertheless, through the principle of Mengerian market action, that is interaction between bid and offer, market prices can be established… if only momentarily… and this market price is expressed in terms of the numeraire, the most marketable good, that is money.

So how do we establish the value of Fiat… ? Through the concept of ‘purchasing power’… that is, the value of Fiat is determined by what it can be traded for… a so called ‘basket of goods’. But his clearly implies that Fiat has no value of its own, rather value flows from the value of the goods and services it may be traded for. Causality flows from the goods ‘bought’ to the Fiat number. After all, what difference is there between a one Dollar bill and a hundred Dollar bill, except the number printed on it… and the purchasing power of the number?

Gold, on the other hand, is not measured by what it trades for; rather, uniquely, it is measured by another physical standard; by its weight, or mass. A gram of Gold is a gram of gold, and an ounce of Gold is an ounce of Gold… no matter what number is engraved on its surface, ‘face value’ or otherwise. Causality is the opposite to that of Fiat; Gold is measured by weight, an intrinsic quality… not by purchasing power. Now, have you any idea of the value of an ounce of Dollars? No such thing. Fiat is only ‘measured’ by an ephemeral quantity… the number printed on it, the ‘face value’.

Bitcoin is farther away from being the numeraire; not only is it simply a number, much as Fiat… but its value is measured in Fiat! Even if Bitcoin becomes internationally accepted as a medium of exchange, and even if it manages to replace the Dollar as the accepted ‘numeraire’, it can never have an intrinsic measure like Gold has. Gold is unique in being measured by a true, unchanging physical quantity. Gold is unique in storing value for thousands of years. Nothing else in reach of humanity has this unique combination of qualities.

In conclusion, while Bitcoin has some advantages over Fiat, namely anonymity and decentralization, it fails in its claim to being money. Its advantages are also questionable; the intent is to limit the ‘mining’ of Bitcoins to 26,000,000 units; that is, the ‘mining’ algorithm gets harder and harder to solve, then impossible after the 26 million Bitcoins are mined. Unfortunately, this announcement could very well be the death knell of Bitcoin; already, some central banks have announced that Bitcoins may become a ‘reservable’ currency.

Wow, sounds like a major step for Bitcoin, does it not? After all, the ‘big banks’ seem to be accepting the true value of the Bitcoin, no? What this actually means is banks recognize that they could trade Fiat for Bitcoins… and to actually buy up the 26 million Bitcoins planned would cost a meagre 26 Billion Fiat Dollars. Twenty six billion Dollars is not even small change to the Fiat printers; it is about a week’s worth of printing by the US Fed alone. And, once the Bitcoins bought up and locked up in the Fed’s ‘wallet’… what useful purpose could they serve?

There would be no Bitcoins left in circulation; a perfect corner. If there are no Bitcoins in circulation, how on Earth could they be used as a medium of exchange? And, what could the issuers of Bitcoin possibly do to defend against such a fate? Change the algorithm and increase the 26 million to… 52 million? To 104 million? Join the Fiat printing parade? But then, by the quantity theory of money, Bitcoin would start to lose value, just as Fiat supposedly loses value through ‘over-printing’…

We come to the key issue; why search for a ‘new money’ when we already have the very best money, Gold? Fear of Gold confiscation? Lack of anonymity from an intrusive government? Brutal taxation? Fiat money legal tender laws? All of the above. The answer is not in a new form of money, but in a new social structure, one without Fiat, without Government spying, without drones and swat teams… without IRS, border guards, TSA thugs… on and on. A world of liberty not tyranny. Once this is accomplished, Gold will resume its ancient and vital role as honest money… and not a moment before.

All About Digital Money

Would we be better off without paper money and coin? Some say yes, and some say no and the debate rages on. Government tax collectors would prefer only electronic or digital money – it’s easier to control and easier to keep taxpayers honest – but are those gains worth the drawbacks? I mean what’s wrong with cash – you can spend it anywhere, you can pay your babysitter, go to a garage sale, or stop at a lemonade stand – all of which are part of our underground economy by definition and harmless uses of transferring money.

Then there are the illegal things, no one uses digital money because it leaves a trace, so you cannot use it to buy things you are not allowed to buy or that someone else is not allowed to sell. Does it thus, make sense to get rid of the money that allows illegal transactions, shut down the entire underground economy and if we do, will our society and civilization be better or worse off for that solution? Let’s discuss this shall we?

Yes, a digital currency would be similar to regular currency and really we are almost there already anyway. If we go to “digital units” and change the paradigm to cover the needs of people who contribute who are not rewarded fairly now, then we will get more of what we reward, as is the famous axiom. A technocrat would enjoy this conversation and the thought of micro-managing the exact worth of every job, but technocrats are not so good at considering their own created unforeseen consequences as they pave the road to hell.

The reason humans use money now is simply because things and choices are more complicated than they were in the past when our species were only hunters, gatherers and traders. Let me explain; you see, if I make hammers and you need one, but you only have cattle, then you cannot cut off the tail of your cow to buy my hammer, so instead you give me $11 and you can sell your cow in the future for $1100 and give me the one-percent of it so you can build a new barn.

Money and currency is nothing more than units of trade thus, make things easier, that’s why it exists, but I do not like the bashing of currency, digital or otherwise, where many believe it is the root of all evil. I respectfully disagree. Please consider all this and think on it, as this topic does affect your life.