It’s an enviable record no other listed company can match. For more than 120 years, through major conflicts and economic upheaval, this diversified investment house has always kept shareholders top of mind, not missing a beat on the dividend front since listing in 1903.
APRA-regulated funds, especially profit-for-member funds, have had a good innings during the accumulation phase. It’s proving a different story in the decumulation phase with a growing number of members demanding a far more nuanced service.
Crypto – A closer look for DIY investors
In a world gone crypto mad, those that didn’t buy during Bitcoin’s early days feel like they’ve missed out. Some buy because they feel ‘FOMO’ and others simply can’t make sense of any of it. Either way, the good news is that there will always be opportunities. You haven’t missed out.
What about the 100,000 who have made over $1 million in Bitcoin?
And there will always be those that are lucky. These are your rags to riches stories. Bob borrowed $1,000 from his grandmother and decided to spend it all on Bitcoin when it was worth $3 per coin in 2011. Fast forward to today and of course, he’s a millionaire. It’s great news for people who held on, but that in itself is a herculean task. Try holding onto a speculative investment until it rises by 16,000 per cent. Common sense says to sell out and take your profit once its doubled or tripled. It’s not very easy at all.
The truth is, the sector has been going bananas because everyone wants to get rich quick. So, is it an investment or gamble? Investments are long-term, while gambling is short-term. It’s up for debate as to whether cryptocurrency could be either an investment or a gamble.
It all depends on whether it’s being bought for the sole purpose of trying to get rich quick. Then it falls into gambling. In any case, the sector is booming, fuelled by success stories, and the fact that no one hears about the people who lost money.
For the purposes of this article, we won’t delve into the mechanics of cryptocurrency, but will rather show you how to get started and where to invest.
Firstly, “What is Cryptocurrency?”
Throughout history, man has used a medium of exchange used as payment for goods and services. It’s come in many forms such as grain, cattle, pigs, shells, gold, metal coins and paper currency of today. In 2009, cryptocurrency: Bitcoin was born. A new type of digital money that uses cryptography to encode information to ensure transactions are secure.
There is a case for cryptocurrency because of its ability to make transacting easier, cheaper, quicker and more secure than the traditional way. According to Cointree, “With third party supervision of transactions unnecessary, cryptocurrency eliminates many of the fees common to traditional transactions. Cryptocurrency takes the ‘middleman’ out of online transactions.”
It’s also very secure. “The decentralised, public nature of the cryptocurrency software and systems means that anyone can check the validity of transactions at any point in time. This makes the system extremely secure,” says Cointree.
For the moment, that’s sufficient to get you started on the background. The team at Inside Network will be publishing an article a week on more detailed topics such as Blockchain and Cryptocurrency mining.
How do I get started?
Firstly, you will need to open an account with a ‘cryptocurrency exchange.’ There are numerous exchanges who are ultimately the gatekeepers to the cryptocurrency world in the same way stockbrokers are the gatekeepers to the sharemarket.
“Cryptocurrency exchanges are online platforms that match buyers with sellers. Given their high volumes of trade, exchanges are widely considered the leading indicators of cryptocurrency value and performance and offer the most competitive rates of trade,” says Cointree.
How does an exchange work?
Let’s say Mary wants to buy some bitcoin.
“She deposits her fiat currency (AUD/USD) — together with her ‘buy’ request, to a reputable exchange. The exchange then matches Mary’s ‘buy’ request with a ‘sell’ request for the same amount. Once a match is found, the exchange completes the trade on behalf of the contracting parties. The exchange collects a small fee or commission for their work to secure the trade.”
The benefits of using an exchange include things such as, competitive buy and sell rates, on the spot payment methods, credit card, debit card and PayPal can be used, built-in wallet services and security for cryptocurrency transactions.
Once an account has been opened, you’re ready to trade. The next topic will cover the various types of cryptocurrencies.
