When people say that cryptocurrencies are hot right now, this sounds exciting, intriguing and tempting. But do we really know what this means? Why are cryptocurrencies a hot topic and why are they so popular?
In reality, they are constantly changing the world around us, whether it’s finance, global economy or local changes, and changes in people’s mindsets. The way we perceive financial institutions and governmental organizations such as banks, but also the impact crypto has on the way we do business and the way we invest in our future and our present, is also something that has changed.
What do we mean by this? 10 or 20-years ago, it was desirable, advisable – moreover, a good idea to save your money and increase your savings over time. Saving your money meant saving cash in the bank, in your bank account.
However, this could be one of the worst things you can do today. According to many financial advisers, inflation and many other factors are actually eating your money and this is not the right thing to do if you want to make smart investment choices and decisions. Read more here.
Instead of saving your money (or in other words your fiat currency) you should diversify your assets and invest a bit in stocks, a bit in cryptocurrency, a bit in gold or silver and this is how your money will be safe over time. Simply put, chances that it is going to lose its value, if you manage it this way, are way lower compared to the traditional mindset people used to have about saving and investing.
Why is all this important to mention? We know that cryptocurrencies are decentralised money. Decentralized means that there are no institutions or third parties that could control or supervise transactions that are being made and basically anything that one is doing with their money.
Instead of that, every transaction a crypto user is making is being recorded on the blockchain and therefore visible to all the other participants. This is, as you can see, a self regulated system that is much safer when it comes to hackers and other intruders (compared to traditional systems) that may access either your money or your personal information.
Also, knowing that you don’t have anyone above you, who needs to approve your transactions or allow you to do something is fantastic news for the majority of crypto holders. But more importantly, when it comes to Financial planning, cryptocurrencies are a huge trend right now. What does this mean in reality? Let’s dive into it.
The Rise of modern technologies (including cryptocurrencies) in business, has brought some changes in our thinking and in businesses in general – no matter what fields we are talking about. Since Financial Planning is such a crucial process, whether it’s about individuals or businesses that include many people it has to somehow get in touch with cryptocurrencies of any kind, especially bitcoin, because it’s the biggest currency out there right now.
We all know that Financial Planning means planning your financial future, whether it’s making a short term, a long-term financial plan or something in between. When making a thorough plan, you need to take several factors into consideration. Some of the Essential factors are logically: your income and your financial tools that can be used, as well as your expenses, your needs etc.
There are multiple strategies and methods for Financial Planning and it all depends on the person or the business type. You might be planning your retirement, you might be planning your taxes, your real estate investments, your insurance, and so on. But something that is quite new (although bitcoin is older than a decade) is financial planning that includes cryptocurrencies.
Not only is it crucial for you to plan and monitor your financial progress, but you need to constantly update your plans in order to meet your financial goals. Crypto can help you with that and this is exactly why it is such a big thing, when Bitcoin, Litecoin, Dogecoin or any other cryptocurrency is a part of your Financial Planning.
It doesn’t matter if you only want to make a good retirement plan, or you want to grow your business, financial advisors and financial experts should be telling the same thing: allocate a certain percentage of your current wealth and your current income into cryptocurrencies.
As long as you don’t have paper hands – which in the crypto world means that you are trading your cryptocurrencies fast, you are both buying and selling them fast, as soon as you notice the changes on the very volatile market – you will be able to plan your financial future and gain a lot of wealth by owning cryptocurrencies.
But except for including cryptocurrencies in your financial plans, one thing is also completely new. You don’t need a financial advisor to decide what’s the best option for yourself. Instead, you can simply follow what’s called robo-advisors. This is actually a term that explains how modern investors think. They simply follow the trends and they rely on the internet, blockchain technology and other modern Technologies that seem to to be a better thing to follow, than listening to any person’s advice.
This is why it doesn’t come as a surprise why crypto investors are usually so young. They are mainly younger than 40 and they already own a huge amount of wealth. Since Financial Planning could easily be intertwined with cryptocurrency, this is a fantastic opportunity for all the financial advisers out there.
Simply put, this means that if they update their mindset and they start advising both younger and elderly investors how to invest in modern technologies such as cryptocurrency, this might be a thing that could bring wealth to both investors and advisors. Still, it seems like this trend is going to wait for a while, because financial advisers are usually playing it safe.
In other words, they don’t advise the investors they collaborate with to invest in such a volatile market. ut aren’t stocks volatile as well they most certainly are it’s only a matter of how you manage your money and how you make smart decisions. If everybody has joined the club of the most successful people on the planet, then does it sound like a good idea to do the same? Time will tell.