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In most cases, renting beats owning though we can find a few exceptions to this and in this article we look at these exceptions. We assume that people do the sensible thing and buy more land than home, as large homes waste more resources, cost more, and are energy inefficient over smaller homes. In addition, the median US family size in 1970 was larger than today, yet the median size of a home in 1970 was 50-60% smaller. People should complain less about the rising price of homes and spend more time complaining about their rising sense of entitlement.

Some Exceptions

1. If we plan to live in our area for the rest of our life. In most cases, a person who plans to live in his area for more than a decade should buy a home because the cost of owning versus renting favors owning after a significant period of time. Be careful here! All areas differ by size, so a major city is not “one” city, but often an aggregate of multiple cities. If the person’s job changes, then his commute may add an additional cost.

2. We are in a stable career; most paths are not stable. Only medicine is stable. With the exception of medicine, this doesn’t apply for most careers anymore. Only medicine is currently experiencing a labor shortage; other career paths have too little future potential with too much labor entering them currently. It should be of note that this will become clearer in 10 years, but won’t appear to be the case for now.

3. If we’ll be living in an area for an extended period of time. This is similar to the first one, but we may plan on living in a different area when we’re older. The example to consider here is a person living in San Francisco for twenty years, but planning to retire in Omaha. In this case, buying a home makes the most sense, as a longer time scale favors owning over renting.

4. We want to own a house and we’re completely uninterested in selling the house. Some people buy homes because they want to turn the house into a cash flow asset. If we intend to do this, owning a home is our only option. Because the house becomes a cash flow asset, we can generally use the cash to pay for the house and offset the costs.

5. The rent to own ratio favors owning and at minimum one of the above applies to you. Sometimes rents in an area become unsustainable and begin favoring homeowners. When this occurs, we should consider owning a home, provided that one of the above items applies to us.

Time-Based Exception

Solomon wrote that “there’s a time and place for everything under the sun” and this holds true for everything. This requires understanding the time and we’ll see times in which owning will be a better choice than renting.


What do we think were the hottest topics of the week? What were the most interesting topics? What have you missed on FinTekNeeks in the past? Every Friday, we review some of the stories that we find interesting, which may or may not be related to finance. In addition, we feature some of our past content that you may have missed. Finally, we preview our podcast for the week. Always remember, the early bird gets the worm – not every podcast is available indefinitely.

Articles and Videos

Very cool idea that was crowdfunded and lives up to its hype.

China continues to accumulate real resources. In resource accumulation, China knows the time it lives in; in demographics, however, it does not. In the long run, demographics will have a bigger impact regardless of how many resources it accumulates.

Speaking of demographics, if the United States hadn’t wasted high school and college years weakening its youth, it would actually be one of the top countries to invest in since it has one of the best demographic profiles. However, US Millennials and iGens have spent their youth learning weakness, even if they come in great numbers.

Goldman Sachs sees the death of value investing. I don’t agree, but I highly respect their view here and I see why they come to this view. True value investors have changed form and this is what they miss. Still, their thoughts are A+.

Notes This Week

What a powerful vision and talk about building something that lasts. Embrace and pursue your vision.

Podcast Changes

We are about to release a podcast platform for podcasts to make it easy to subscribe to our podcasts. Expect this change to come in the next two weeks. The podcast platform will feature all podcasts and related yearly specials and will offer subscribers the best way to get access to the content. If this is popular, we will continue it in 2018; if not, we will terminate it. If piracy of content is discovered, we will terminate future podcasts and bonuses.

Blast From the Past

In 4 Financial Lessons From Alexander Suvorov we learned about finance from the context of history’s greatest general. Alexander Suvorov was never defeated in battle and was almost always the underdog. In addition to ending the Russian-Ottoman War, he also defeated Napoleon’s top commanders. In practices, his favorite virtues were discipline, courage, humility, and urgency. History has no other general equal to Suvorov.

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Posts This Week on FinTekNeeks

SteemIt Evolves – Can It Win Advertisers

3 Pricing Strategies for Selling

What is an Old Cryptocurrency? TAG

All images courtesy Pixabay.


Initially, I had thought TagCoin was something along the lines of the children’s game, where we tag each other as we run around. It turns out this is built mainly for the Philippines market, providing electronic payments and rewards. TagCoin is derived from the national language, Tagalog. Relatively, this is an old cryptocurrency. I consider more than three years in the cryptosphere as very mature. Let’s take a look at a random cryptocurrency –
TagCoin (TAG).

TAG is the cryptocurrency that is being used on Tagcash. TagCash is an electric payment system, and has the ability to create rewards, i.e. TAG through proof of stake. Creation of proof of stake blocks reward at 5% yearly, but must stake coins for 30 days prior to gaining interest. Also, TAG allows mining capabilities.

By using the blockchain as the basis of the platform for payment systems, the ability to transact into pesos,
the local currency is advantageous. Usage is highly localized, and it may not be pragmatic for Tagcash to migrate to other currencies besides pesos. With the details of the blockchain is hidden, users do not have to understand how it works, but simply use it like any other electronic payment.

Here are some stats on TAG (as of 6/8/17)
-------------------------------------------
TAG is based on Scrypt cryptography, PoW and PoS hybrid
TAG was started in November of 2013
ICO None was conducted
TAG in circulation - 5.5 million
TAG total supply - unknown
TAG premined - None
TAG market cap of TAG in circulation (@$0.19) - $1.045 million
TAG to reduce PoW coin rewards by 1% every 3 months, until minimum of 3 coins is reached
TAG supported by btc38 exchange

Interesting Notes

This is one of the older cryptocurrencies that we have seen which still exists today.

It initially followed the path of Bitcoin prices in 2014. It spiked above $3 USD per TAG as Bitcoin prices spiked. Then it was a period of long three years of minimal price movements until volume of trading has spiked up the price and market cap.

Because this was really early, it missed out on recent money-grabbing of new cryptocurrencies launching ICOs. It was not even premined, so the system was relatively fair for miners and stake-holders.

It seems like it is only traded on btc38.com, and can be bought with the Chinese Yuan.

Warning

This article covers a token or element in the cryptosphere. The cryptosphere is new and exciting, but changes rapidly and often in ways that do not benefit users. By the time this article is published, changes may have already occurred. Most tokens in the cryptosphere are complete scams that are get-rich-quick-schemes for insiders. Often, we cannot know this beforehand and only later discover this. A person should only trade with money that they’re willing to lose because losses are guaranteed. If you choose to participate in purchasing a token in the cryptosphere, you should do so with the full expectation of a loss and you should also expect it to change in a manner that does not benefit you. There are very few good ideas in the cryptosphere. Finally, by reading this post, you agree that you’ve read our disclosure.


Recently, I have been selling some stuff that has been collecting dust. I have been using phone apps that sell directly to other local buyers and sellers. It has been fairly successful using the app because of the direct communication and ease of use. I highly recommend using these phone apps to sell some stuff you don’t need. Instead of throwing it out into a landfill or donating it, try to sell and make some pocket change. It will take a little bit of effort, but is very satisfying that it has gone to someone who will value it and use it.

Pricing is Important

The world is revolved around people selling stuff and people buying stuff. Stuff is denominated in currency, and marked by price. Every year in the U.S., the day after Thanksgiving holiday is marked by excessive buying of consumer goods. Stuff that people really don’t need, and the need to buy things for others due to a sense of obligation, guilt, or tradition. This is also the time when one will see deep discounts from retailers and manufacturers, as they try to prime their revenues for a big Q4. Shoppers anticipate these deals, and they also buy because of the perceived value.

People will buy a product because of the perceived value. They will buy a more expensive computer, because of the perceived value in the performance of either the CPU, the graphics card, memory, hard-drive, or screen resolution. When two identical objects are priced differently, studies have shown that people prefer to choose the more expensive item. The perceived value of a more expensive item is higher!

Three Strategies for Pricing Your Items

  1. Do your research first. I generally tend to do a quick search online to determine what I am selling is worth any value. One may decide that it is only a couple of bucks and it is not worth the time to sell. However, you may consider try grouping some items, to aggregate them to a higher price. Like a set of different hand tools. This will give one the range of pricing that will be the starting point. Even small items can be worth a lot. There is a small figurine of a defunct web application that I had gotten for free. I thought would be worth maybe $5 USD. However, after looking online, it turns out to a be a collectible. Surprisingly, some are being sold on eBay for more than $200 USD. There can be some hidden gems hidden, so it is best to do a quick check.
  2. Have a higher offer price than the selling price. Usually, it is said that the one who says the price first actually loses. Since these apps require a price to be entered, it is always at a disadvantage for the seller. However, one can determine two prices. Price that they are willing to sell at, and the offer price. The offer price will be higher than the selling price. This will become the starting point of the negotiation. It is interesting that majority of other cultures outside the U.S. that finds it acceptable to haggle in price. Most would not try to negotiate in price, especially in retail stores. When selling your items, one should expect people to offer to buy at a lower price. If they actually do commit to my offer price, great! Now, I have sold the product for more money than I was willing to sell. No need to negotiate further. Agreed and done.
  3. Price the item higher than what you think it should sell. Our perception of value is different than others. There may be some sellers who think the item is more valuable that what is worth, e.g. some cryptocurrencies or “shamcoins”. If you want to sell it quickly, consider lowering it below the prices researched. Otherwise, the offer price should be always a bit higher than your perceived value of the item. One can always lower the price of the item to sell. Rarely, one can raise the price after the buyer has been found.

I hope this helps you to maximize your profits. Happy selling!


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