There is a complete loss of confidence in the space. Bitcoin and other cryptos are plunging, and companies such as Coinbase are announcing layoffs. However, cryptos are falling sharply because they are being hit by the same factors impacting stocks and other assets. Consumer prices are surging, and the Federal Reserve is hiking interest rates to bring down inflation.

The cryptocurrency world is in chaos

Since Bitcoin hit an all-time high in November, the value of the world's most popular digital currency has fallen by about 70%, Ether is down by around 70% this year, and so is Dogecoin. Bitcoin's backers have always claimed the digital currency would be an "inflation hedge," but it hasn't behaved that way. Instead, this crash in crypto prices shows that cryptocurrencies are primarily speculative financial assets subject to macroeconomic forces.

Cryptocurrencies are by and large speculative financial assets

It's been a rude awakening for the millions of people who bought cryptocurrencies. 2021 was the height of digital currencies, which swelled to $3 trillion. Today, the total value of the crypto market has been shaved to about $1 trillion. Some backers of cryptocurrencies still believe a "crypto winter" could lead to a "crypto spring." In the past, deep downturns have led to strong rebounds.

What is means for those who got into cryptos

The increase in amateur investors, combined with the growing complexity of some of the cryptocurrency products, are worrying regulators as they want to prevent people from being taken advantage of. Crypto markets are still fairly new and there is no clarity on who is in charge of overseeing the space. At the moment, both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) claim oversight of parts of the crypto market.

Regulations on the sector

Bitcoin and other cryptocurrencies are plunging. Here's what to know about a market that just a few months ago was being touted as the future of finance.

Stashed ideas

Why cryptocurrencies have gone from the next hot thing to a full-on meltdown

The idea behind a designated worry break is not to succumb to all the stress, but to concentrate your worrying time into a productive “session” of sorts. Stressful thoughts find a way to intrude and disrupt your daily life. By scheduling a separate chunk of time to address them all, you’ll be able to focus on other things throughout your day.

Why?

Choose your time to stress. Mark it in your calendar, set a reminder, and don’t bail on yourself. To start out, carve out 15 or so minutes once a week.When your scheduled worry break rolls around, it’s time to stress. But the key is to stress constructively.Try to get your worries down in words. Writing them down in list form is daunting, but an excellent practice in perspective. It helps to take abstract, overwhelming emotions surrounding each stress item, and then transforms them into what is bothering you on a more concrete (and manageable) level.

Choose Time

Next, dedicate time to each item on your list. Circle the ones that are ostensibly in your control. For instance, “my purpose in life” is a tad too abstract to tackle in this 15 minute session. However, something like “making time for my family” is a starting place for creating actionable solutions. For each stress item, try to brainstorm several potential solutions, e.g. “ask ____ for help” or “schedule a proper date night.”Not every source of stress has an actionable solution; in fact, a lack of obvious solutions is probably the source of a lot of your stress.

Dedicate Time and Write

As you get used to attending to your stressful thoughts, here are some guiding questions to ask yourself:<ul><li>Is this worry within my control?</li><li>What aspects of this concern are in and/or out of my control?</li><li>What mental hang-ups are making this stress worse?</li><li>How would I approach this if I had unlimited time and resources?</li><li>What is getting in the way of me overcoming this hurdle?</li><li>How do I really feel about this stress?</li><li>What is the ideal outcome in this situation?</li><li>What is a first step I can take?</li></ul>

Questions to guide your worry break


Why You Should Schedule Your Stress

Many of the most highly successful people in the world I have spoken to attribute a singular focus -- a commitment to the pursuit of one main goal or arena -- to their success.In fact, it's how we often determine success. Historically, renaissance men who were well-rounded in a number of pursuits were well-regarded for the breadth of their knowledge and endeavors. Now, we often equate success with being the best or amongst the best in a peer groupsSo, how can you stay focused in a world with so many distractions?

Warren Buffett and Bill Gates's Top Secret to Success

When he was in college, accumulating $40,000 in college debt, he set a goal to have a $1 million net worth by age 30. Heknew exactly what his goal was. Then, he created a plan of milestones to achieve that goal, and it did not deviate from it until he had reached it. It's much easier for you to focus if you set a clear path for yourself up front and stay relentlessly committed to it.

Set a concrete goal or focus

Warren Buffett has had more success as an investor than any other individual in history. Daily, there are recommendations to act a certain way, but Warren says that he doesn't follow the path or the advice of other investors. He sticks to exactly the types of businesses he understands well and only acts on an investment if he feels there is a need to, which means he has made very few investments or "trades" over the course of his many decades-long investment career. If you know what works for you, you shouldn't be distracted by what others are doing.

Follow your own path

Albert Einstein famously said, "You have to learn the rules of the game. And then you have to play better than anyone else." These are incredibly powerful words in terms of focus. We are a society of taking action, but part of the focus should not just be doing, but really understanding the parameters of what you need to do, now and in the future. Buffett spends a significant portion of his time reading and very little time actually taking action. Learning and understanding the upfront and changing parameters of the market in which you are participating will aid your focus in the right place.

Know the rules of the game

There are so many distractions and opportunities in life, you have to constantly ask yourself if you are spending your time on your focus. If you find yourself pulled in different directions, get rid of some of your activities. When you are doing a task, ask yourself if it is in support of your focus. If it's not, let it go.You may not end up as wealthy as Warren Buffett or Bill Gates, but having a sincere focus on what you are trying to accomplish -- combined with a perseverance to stick with it day in and day out -- will make for an incredibly successful you.

Use a litmus test for your time

Entrepreneurship

Successful people/ secrets 

"In the casino the house always wins. In horse racing, the track always wins. In the Powerball, the state always wins. In the game of investing, the financial croupiers always win, and investors as a group lose. After the deduction of the costs of investing, beating the stock market is a loser's game."-John C. Bogle

Illusion That The Financial Industry Places YOUR Interests First

In order to not being a victim of the finance industry an individual must have a strategy. "The best way to implement this strategy is indeed simple. Buy a find that holds this all-market portfolio, and hold it forever. Such a fund is called an index fund. The index fund is simply a basket (portfolio) that holds many, many eggs (stocks) designed to mimic the overall performance of the U.S. stock market (or any financial market or market sector."-John C. Bogle

Investing Strategy

When a fund is actively managed, it employs a professional portfolio manager, or team of managers, to decide which underlying investments to choose for its portfolio. In fact, one reason you might choose a specific fund is to benefit from the expertise of its professional managers. (Firna Definition)It is very rare that an actively managed fund can beat average market returns in the long term. The reason for this is Fees. These fees include manager fees, brokerage commissions/transaction fees, and other hidden costs.

Actively Managed Funds

Where do actively managed fund fees come from? The answer is the consumer. The unfortunate truth is that active managers get paid no matter what results they provide (positive or negative). This has proven over time to not work in the consumers best interests.In order for the active manager to provide value they have to beat the market on top of their fees.

Actively Managed Fund Fees

Passive funds seek to replicate the performance of their benchmarks instead of outperforming them. For instance, the manager of an index fund that tracks the performance of the S&P 500 typically buys a portfolio that includes all of the stocks in that index in the same proportions as they are represented in the index. If the S&P 500 were to drop a company from the list, the fund would sell it, and if the S&P 500 were to add acompany, the fund would buy it. (Firna)

Passively Managed Funds

Because index funds don't need to retain active professional managers, and because their holdings aren't as frequently traded, they normally have lower operating costs than actively managed funds. However, the fees vary from index fund to index fund, which means the return on these funds varies as well. (Firna)

Index Funds

Some index funds, which go by names such as enhanced index funds, are hybrids. Their managers pick and choose among the investments tracked by the benchmark index in order to provide a superior return. In bad years, this hybrid approach may produce positive returns, or returns that are slightly better than the overall index. Of course, it's always possible that this type of hybrid fund will not do as well as the overall index. In addition, the fees for these enhanced funds may be higher than the average for index funds. (Firna)

Index Funds Continued

There are significant downsides to the high costs in investing. An actively managed fund will probably result in significantly less profit/income for the investor as compared to a low cost index fund that passively mimics the performance of an index. Examples of indexes are S&P 500 index, the Russell 2000 Index, or the Wilshire 5000 total market index.

Downside of High Costs In Investing

An index fund is a type of mutual fund or exchange-traded fund (ETF) with a portfolio constructed to match or track the components of a financial market index, such as the Standard & Poor’s 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses, and low portfolio turnover. These funds follow their benchmark index regardless of the state of the markets. (investopedia.com)

Index Funds Further Explained

Searching out the lowest cost index fund directly translates into more money for the investor. Therefore not all index funds are equal. Due diligence and research is necessary to maximize returns.

Lower Costs Translate into More Money for You

Ideally investing should be about long term results. Get rich schemes are more like gambling. The payoffs in gambling might be great but the more likely results are loses. Remember the casino always wins. Slow and steady wins the race.

Be Skeptical of New Investing Trends

“On balance, the financial system subtracts value from society”― John C. Bogle

The Financial System

“Buying funds based purely on their past performance is one of the stupidest things an investor can do.”― John C. Bogle

Past Performance Guarantees Nothing

“Some estimates suggest that the failure rate is around 20 percent, meaning that each year, one of every five hedge funds goes up in smoke.”― John C. Bogle

Hedge Funds

“The best way to implement this strategy is indeed simple: Buy a fund that holds this all-market portfolio, and hold it forever. Such a fund is called an index fund. The index fund is simply a basket (portfolio) that holds many, many eggs (stocks) designed to mimic the overall performance of the U.S. stock market (or any financial market or market sector).”― John C. Bogle

Costs Savings Strategy

“When you have identified your long-term objectives, defined your tolerance for risk, and carefully selected an index fund or a small number of actively managed funds that meet your goals, stay the course. Hold tight. Complicating the investment process merely clutters the mind, too often bringing emotion into a financial plan that cries out for rationality. I am absolutely persuaded that investors’ emotions, such as greed and fear, exuberance and hope—if translated into rash actions—can be every bit as destructive to investment performance as inferior market returns.”― John C. Bogle

Stay the Course - Hold Tight

“Mutual fund investors, too, have inflated ideas of their own omniscience. They pick funds based on the recent performance superiority of fund managers, or even their long-term superiority, and hire advisers to help them do the same thing. But, the advisers do it with even less success. Oblivious of the toll taken by costs, fund investors willingly pay heavy sales loads and incur excessive fund fees and expenses, and are unknowingly subjected to the substantial but hidden transaction costs incurred by funds as a result of their hyperactive portfolio turnover."― John C. Bogle

Investors Choosing Mutual Funds

"Fund investors are confident that they can easily select superior fund managers. They are wrong.”― John C. Bogle

Investors Choosing Fund Managers

“When navigating the financial markets, the long-term investor must keep in mind the four basic dimensions of long-term return — reward, risk, cost and time — and must apply them to every asset class. Never forget that these four dimensions are remarkably interdependent.”― John C. Bogle

Navigating Financial Markets

“I’m speaking here about the classic index fund, one that is broadly diversified, holding all (or almost all) of its share of the $15 trillion capitalization of the U.S. stock market, operating with minimal expenses and without advisory fees, with tiny portfolio turnover, and with high tax efficiency. The index fund simply owns corporate America, buying an interest in each stock in the stock market in proportion to its market capitalization and then holding it forever.”― John C. Bogle

Owning Corporate America

“The grim irony of investing, then, is that we investors as a group not only don't get what we pay for, we get precisely what we don't pay for. So if we pay for nothing, we get everything.”― John C. Bogle “When there are multiple solutions to a problem, choose the simplest one.”― John C. Bogle

Keep It Simple

“On balance, the financial system subtracts value from society”― John C. Bogle “The two greatest enemies of the equity fund investor are expenses and emotions.”― John C. Bogle “Owning the stock market over the long term is a winner's game, but attempting to beat the market is a loser's game.”― John C. Bogle

Expenses and Emotions Work Against You

“Financial markets are far too complex to isolate any single variable with ease, as if conducting a scientific experiment. The record is utterly bereft of evidence that definitive predictions of short-term fluctuations in stock prices can be made with consistent accuracy. The prices of common stocks are evanescent and illusory.”― John C. Bogle

Complexity Works Against You

“The winning formula for success in investing is owning the entire stock market through an index fund, and then doing nothing. Just stay the course.”― John C. Bogle

Winning Formula

“The simple fact is that selecting a mutual fund that will outpace the stock market over the long term is, using Cervantes’ wonderful observation, like ‘looking for a needle in the haystack.’ So I offer you Bogle’s corollary: ‘Don’t look for the needle in the haystack. Just buy the haystack!”― John C. Bogle

Buy The Haystack

“Investors need to understand not only the magic of compounding long-term returns, but the tyranny of compounding costs; costs that ultimately overwhelm that magic.”― John C. Bogle

Magic or Compounding

“It will also tell you how easy it is to do just that: simply buy the entire stock market. Then, once you have bought your stocks, get out of the casino and stay out. Just hold the market portfolio forever. And that’s what the index fund does. This investment philosophy is not only simple and elegant. The arithmetic on which it is based is irrefutable. But it is not easy to follow its discipline.”― John C. Bogle

Easy Does It

“Experience conclusively shows that index-fund buyers are likely to obtain results exceeding those of the typical fund manager, whose large advisory fees and substantial portfolio turnover tend to reduce investment yields. Many people will find the guarantee of playing the stock-market game at par every round a very attractive one. The index fund is a sensible, serviceable method for obtaining the market’s rate of return with absolutely no effort and minimal expense.”― John C. Bogle

Sensible Investing

“Another huge toll has been taken by taxes. Passively managed index funds are tax-efficient, given the low turnover implicit in the structure of the Standard & Poor’s 500 Index (and, to an even greater extent, the all-market Wilshire 5000 Index).”― John C. Bogle

Tax Efficiency

“Gold is largely a rank speculation, for its price is based solely on market expectations. Gold provides no internal rate of return. Unlike stocks and bonds, gold provides none of the intrinsic value that is created for stocks by earnings growth and dividend yields, and for bonds by interest payments. So in the two centuries plus shown in the chart, the initial $10,000 investment in gold grew to barely $26,000 in real terms. In fact, since the peak reached during its earlier boom in 1980, the price of gold has lost nearly 40 percent of its real value.”― John C. Bogle

Investing In Gold

“The message is clear: in the long run, stock returns depend almost entirely on the reality of the investment returns earned by our corporations. The perception of investors, reflected by the speculative returns, counts for little. It is economics that controls long-term equity returns; emotions, so dominant in the short-term, dissolve.”― John C. Bogle

Reality Verses Perception

“While illusion (the momentary prices we pay for stocks) often loses touch with reality (the intrinsic values of our corporations), it is reality that rules in the long run.”― John C. Bogle

Enemies of Equity

“The greatest enemy of a good plan is the dream of a perfect plan. Stick to the good plan.”― John C. Bogle “Simplicity beats complexity”― John C Bogle, The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns “The relentless rules of humble arithmetic.”― John C Bogle

A Good Plan Triumphs

“Your index fund should not be your manager’s cash cow. It should be your own cash cow.”― John C Bogle “It takes wisdom to know what we don’t know”― John C. Bogle

Investing Wisdom

“It is fair to say that, by Graham’s demanding standards, the overwhelming majority of today’s mutual funds, largely because of their high costs and speculative behavior, have failed to live up to their promise. As a result, a new type of fund—the index fund—is now gradually moving toward ascendancy. Why? Both because of what it does—providing the broadest possible diversification—and because of what it doesn’t do—neither assessing high costs nor engaging in high turnover.”― John C. Bogle

Benjamin Graham's Standards

“We cannot expect management companies to operate in the public interest. We must recognize the reality that they are in the business of investing other people’s money in order to maximize their own profits, even though those profits come at the expense of their fund shareholders.”― John C. Bogle,

Profit Making Reality

“In the short run, the stock market is a voting machine; in the long run it is a weighing machine. —Benjamin Graham, Security Analysis (1934)”― John C. Bogle “The Index Fund is designed to be held for a lifetime.”― John C. Bogle

Investing For a Lifetime

“Hear David Swensen, widely respected chief investment officer of the Yale University Endowment Fund. “A minuscule 4 percent of funds produce market-beating after-tax results with a scant 0.6 percent (annual) margin of gain. The 96 percent of funds that fail to meet or beat the Vanguard 500 Index Fund lose by a wealth-destroying margin of 4.8 percent per annum.”― John C. Bogle

Passive Investing Statistical Advantage

Index investing and protecting yourself. Passive Investing verses Actively Managed Investing.

The best-selling investing "bible" offers new information, new insights, and new perspectives The Little Book of Common Sense Investing is the classic guide to getting smart about the market. Legendary mutual fund pioneer John C. Bogle reveals his key to getting more out of investing: low-cost index funds. Bogle describes the simplest and most effective investment strategy for building wealth over the long term: buy and hold, at very low cost, a mutual fund that tracks a broad stock market Index such as the S&P 500. While the stock market has tumbled and then soared since the first edition of Little Book of Common Sense was published in April 2007, Bogle’s investment principles have endured and served investors well. This tenth anniversary edition includes updated data and new information but maintains the same long-term perspective as in its predecessor. Bogle has also added two new chapters designed to provide further guidance to investors: one on asset allocation, the other on retirement investing. A portfolio focused on index funds is the only investment that effectively guarantees your fair share of stock market returns. This strategy is favored by Warren Buffett, who said this about Bogle: “If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle. For decades, Jack has urged investors to invest in ultra-low-cost index funds. . . . Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. He is a hero to them and to me.” Bogle shows you how to make index investing work for you and help you achieve your financial goals, and finds support from some of the world's best financial minds: not only Warren Buffett, but Benjamin Graham, Paul Samuelson, Burton Malkiel, Yale’s David Swensen, Cliff Asness of AQR, and many others. This new edition of The Little Book of Common Sense Investing offers you the same solid strategy as its predecessor for building your financial future. Build a broadly diversified, low-cost portfolio without the risks of individual stocks, manager selection, or sector rotation. Forget the fads and marketing hype, and focus on what works in the real world. Understand that stock returns are generated by three sources (dividend yield, earnings growth, and change in market valuation) in order to establish rational expectations for stock returns over the coming decade. Recognize that in the long run, business reality trumps market expectations. Learn how to harness the magic of compounding returns while avoiding the tyranny of compounding costs. While index investing allows you to sit back and let the market do the work for you, too many investors trade frantically, turning a winner’s game into a loser’s game. The Little Book of Common Sense Investing is a solid guidebook to your financial future.

The Little Book of Common Sense Investing

There are more than 30.000 different banks worldwide, and they hold unbelievable amounts of assets. The top 10 banks alone account for roughly 25 trillion US-Dollars. Banks are, in essence, in the risk management business. People keep their money in banks and receive a small amount of interest. In turn, the bank takes this money and lends it at much higher interest rates. So banks take funds that savers don't use and turn them into funds society can use to do things like buying houses or growing businesses.

Traditional banks 

The main problem with banks nowadays is that many have abandoned their traditional role as providers of long-time financial products in favour of short-time gains that carry much higher risks. For example, back in 2008, banks like Leeman Brothers gave credit to nearly anyone who wanted to buy a house, putting the bank in a risky position. It led to the collapse of the housing market in the US and parts of Europe, causing stock prices to plummet, eventually leading to a global banking crisis.

The problem with traditional banks

Today, other models of providing finance are gaining ground fast. For example, new investment banks charge a yearly fee and do not get commissions on sales. This motivates them to act in the best interests of their clients or credit unions. They provide the same financial services as banks but focus on shared value instead of maximising their profits. Their goal is to help members create opportunities, such as starting small businesses, expanding homes and investing back into communities. They are controlled by their members, who democratically elect the board of directors.

Investment banks are gaining in popularity

<ul><li>Credit union systems range from a few members to organisations with hundreds of thousands of members. They focus on benefits for their members, which influences the risk that credit unions are willing to take. </li><li>Crowdfunding platforms enable people to get loans from large groups of small investors, circumventing the bank as a middle man.</li><li>Micro lending. These platforms offer microloans to businesses and personal people who previously could not access the money they needed.</li></ul>

Other finance models

Banks are a riddle wrapped up in an enigma. We all kind of know that they do stuff with money we don’t understand, while the last crisis left a feeling of deep mistrust and confusion. We try to shed a bit of light onto the banking system. Why were banks invented, why did they cause the last crisis and are there alternatives? OUR CHANNELS ▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀ German Channel: https://kgs.link/youtubeDE Spanish Channel: https://kgs.link/youtubeES HOW CAN YOU SUPPORT US? ▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀ This is how we make our living and it would be a pleasure if you support us! Get Merch designed with ❤ from https://kgs.link/shop Join the Patreon Bird Army 🐧 https://kgs.link/patreon DISCUSSIONS & SOCIAL MEDIA ▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀ Reddit: https://kgs.link/reddit Instagram: https://kgs.link/instagram Twitter: https://kgs.link/twitter Facebook: https://kgs.link/facebook Discord: https://kgs.link/discord Newsletter: https://kgs.link/newsletter OUR VOICE ▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀ The Kurzgesagt voice is from Steve Taylor: https://kgs.link/youtube-voice OUR MUSIC ♬♪ ▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀ 700+ minutes of Kurzgesagt Soundtracks by Epic Mountain: Spotify: https://kgs.link/music-spotify Soundcloud: https://kgs.link/music-soundcloud Bandcamp: https://kgs.link/music-bandcamp Youtube: https://kgs.link/music-youtube Facebook: https://kgs.link/music-facebook The Soundtrack of this video: http://epicmountainmusic.bandcamp.com/track/banking http://soundcloud.com/epicmountain/banking http://www.epic-mountain.com Help us caption & translate this video! http://www.youtube.com/timedtext_cs_panel?c=UCsXVk37bltHxD1rDPwtNM8Q&tab=2

Bite-sized knowledge
to upgrade
your career

#moneyandinvestments

TOP STASHERS

RELATED TOPICS

IDEAS ABOUT #moneyandinvestments

Why cryptocurrencies have gone from the next hot thing to a full-on meltdown

Why You Should Schedule Your Stress

It's time to

READ

LIKE

A PRO!

Successful people/ secrets

The Little Book of Common Sense Investing

Banking Explained – Money and Credit

Bite-sized knowledgeto upgradeyour career

#moneyandinvestments

TOP STASHERS

RELATED TOPICS

IDEAS ABOUT #moneyandinvestments

Why cryptocurrencies have gone from the next hot thing to a full-on meltdown

Why You Should Schedule Your Stress

It's time to

READ

LIKE

A PRO!

Successful people/ secrets

The Little Book of Common Sense Investing

Banking Explained – Money and Credit

Bite-sized knowledge
to upgrade
your career