4 Types of Expenses

Variable Expenses

→Expenses that vary from month to month.

• Electricity bills

• Water bills

• Groceries

  Fixed Expenses

  →Expenses that remain the same.

  • Rent

  • Car payments

Periodic Expenses

→ Expenses that occur at various times throughout the year and tend to be in large amounts.

• Insurance

• Tuition payments

• Car repairs

Discretionary Expenses

→ Expenses for things we don’t need.

• Eating out

• Vacations

It’s not your salary that makes you rich, it’s your spending habits. - Charles A. Jaffe

Cryptocurrency

Cryptocurrency are digital tokens, they are not physical coins or cash, it is a form of currency that exists digitally or virtually. A type of money that allows people to make payments directly to each other through an online system. Cryptocurrency is decentralized digital money, meaning… there is no central authority (bank, government) involved.

Who invented Bitcoin, the first cryptocurrency?

• In 2008, a pseudonymous account named Satoshi Nakamoto unveiled Bitcoin.

• However, no one knows if Satoshi Nakamoto exists.

Different Cryptocurrencies

There are more than 10,000 cryptocurrencies. (Fun fact: if you know blockchain technology, you can create your cryptocurrency.) Because a new cryptocurrency can be made at any time.

Examples of other cryptocurrencies: Ethereum, Ripple, Cardano, Litecoin, Dogecoin, and Bitcoin Cash (Bitcoin is the world’s largest cryptocurrency.)

Short story (and question): What is the most precious thing you ever lost or broke?

Did you feel bad about it? How many minutes, hours, days, weeks, and months did it take you to recover?

And what if I told you a man lost hundreds of millions of dollars just because he lost a hard drive????

Do you know what a hard drive is? Ever heard of a hard drive worth multi-millions? A hard drive is where all your data goes. It’s a storage for everything. What makes this hard drive worth hundreds of millions? We talked about how cryptocurrency is a digital token. It is stored digitally. And James Howells was an early miner of Bitcoin and he had 7500 bitcoins stored in a hard drive. (worth ~265M USD)

He accidentally threw away this hard drive while cleaning. I know. I would mourn over that amount of money for the rest of my life. But what can I say? It is what it is. Better luck next time. Lesson learned. *winks*

Price is what you pay, value is what you get.

Fiat Money

In a broad sense, is all kinds of money that are made legal tender by a government decree or fiat. In simpler words, it’s the money the government print.

Examples: The US Dollar, Philippine Peso, Indian Rupee, The Euro, and The British Pound.

Financial IQ

Financial IQ indicates how much knowledge you know about finance. It’s the ability to obtain and manage one’s wealth by understanding how money works. The people who are good at finance are not made, they are built. You can be built, too. By sticking with me and being with me until the end of this note, you just took the step towards being financially literate.

Financial intelligence is one investment you can never lose.