SelfWealth Review – Is This Australia’s Best Share Trading Platform?

Welcome to my SelfWealth Review. Today I’ll discuss the popular Australian owned and operated share trading platform. I will be covering the pros and cons of this app to see if it is the right investment platform for you. 

What is SelfWealth?

SelfWealth is a CHESS sponsored, share trading broker that is Australian owned and operated. Downloadable as an app and accessible via desktop, this trading platform is extremely easy to use and access, making it ideal for people looking to invest in the Australian Stock Exchange (ASX). 

Pros of SelfWealth

Cheapest Flat Rate Brokerage Costs in Australia

SelfWealth Review - Flat Rate Brokerage

Currently, SelfWealth offers the cheapest brokerage fees in Australia, with a flat rate brokerage fee of $9.50. Meaning that if you decide to purchase $500 worth of shares or $500,000, you will always be charged $9.50. Other competitors such as the Big 4 banks have brokerage fees starting off around the $14.95 mark, with the majority increasing the fee as your transactions become larger. For this factor alone, SelfWealth can be the most cost-effective investment platform in the Australia.

CHESS Sponsored

SelfWealth Review - What is CHESS Sponsorship?

To make matters even better, SelfWealth offers CHESS Sponsored Shares.

If you join a broker that is CHESS sponsored, you’ll be given a Holder Identification Number (HIN). When you purchase or sell shares that are CHESS sponsored, the Australian Stock Exchange (ASX) keeps a record of it. Under this model, you are the sole owner of those shares.

Subsequently, in the event that SelfWealth or any other investment company that is CHESS sponsored were to liquidate, the shares still remain in your name and therefore won’t be sold or lost.

Backed by ANZ

SelfWealth Review - ANZ Backed

To add to the security of your shares being CHESS sponsored, SelfWealth is also partnered with ANZ bank. As a part of the registration process for SelfWealth, you will receive an ANZ trading account to store your money, purchase shares, receive dividends and actualise capital gains when you sell shares. This means that in the unlikely event of SelfWealth declaring bankruptcy, your funds will remain untouched, due to being held in a closed trust by ANZ. 

For the above reasons, I personally use SelfWealth to invest in ETFs and shares, as the easy to navigate user interface, CHESS sponsorship and cheap flat rate brokerage costs make it unrivalled at this stage. However, there are alternative investment platforms out there that may be more suited to your investing needs. Subsequently, I will go over a few of the things that may make SelfWealth less appealing in your eyes. 

Limitations of SelfWealth

You Have to Use Their Designated Account 

This next point wasn’t an issue for me, but SelfWealth doesn’t allow you to use your own personal bank account to purchase shares, as you automatically create an ANZ account when you join. As a result, you will have to manually transfer money in and out of this account from your main banking account, which can take a few days depending on your banking institution. 

No Interest Rates for Holding Account

The last issue with SelfWealth is that there are no interest rates for cash held in the ANZ holding account. For people who like to hold a lot of cash and try and time the market, this can be detrimental as the lack of interest means that you lose money due to inflation depending on how long you keep it in there. Other investment platforms typically offer some form of interest, meaning that the money depreciates at a slower rate. However, if you simply move funds in and out to purchase shares on a routine basis through dollar-cost averaging then this shouldn’t be much of concern. 

Summary – Pros and Cons of SelfWealth

ProsCons
CHESS Sponsored + Backed by ANZNo interest on cash in your holding account
Cheapest Flat Rate Brokerage Fee in Australia at $9.50 per transaction. You can’t use your banking account to purchase shares
Very easy to set up an account and use the app

SelfWealth ReviewConclusion

In my eyes, SelfWealth is the best share trading platform available in Australia. With the cheapest flat rate brokerage fees, a great user interface, offering CHESS sponsored shares and being backed by ANZ, I highly recommend SelfWealth for people looking to invest in the ASX. However, if you are adamant about keeping your everyday account as your investment account or if you’re looking for a brokerage account with interest rates, there are better options elsewhere.

Added Bonus – 5 Free Shares for the First Month

If after reading this review you have decided to open an account through SelfWealth, you can use my Referral Link to get 5 free shares during your first month. This means that you can save up to $47.50 on brokerage fees, regardless of how little or how much you invest with each transaction.

New members also receive a complimentary 90 day free trial of SelfWealth Premium which is an optional service that provides market depth, stock analysis and live pricing. After the trial ends, you can either elect to continue your subscription to SelfWealth Premium or you can simply use the free version. 

To further help you on your investment journey, please refer to this Investment Frequency Calculator. It will help you determine the optimal investing frequency for your budget, to ensure the highest possible returns with the lowest brokerage fees over a long investment horizon.

Guide on How to Buy and Sell Shares/ETFs on SelfWealth

If you would like a step-by-step process on how to purchase and sell equities through SelfWealth, you can use my easy to follow guide.

Want to Learn About Popular Investment Options offered on SelfWealth?

If you decide that you would like to sign up with SelfWealth, I recommend having a read on these popular investment options. In these guides, I review the common types that exist and cover their pros and cons.

ETFs Explained

LICs Explained

REITs Explained

Spaceship Voyager Review – Is This Australia’s Best Micro-Investing App? (2021)

Welcome to my Spaceship Voyager Review where I discuss the following:

  • What is Spaceship Voyager?
  • What are The Spaceship Portfolio Options?
  • What’s the Best Portfolio Option?
  • What are the Pros and Cons of Spaceship Voyager?
  • My Final Thoughts on Spaceship Voyager
  • How You Can Get an Investment Bonus to Start Off

What is Spaceship Voyager?

Spaceship Voyager is a digital investment platform that offers beginner investors the ability to invest in a range of portfolios. Accessible through their website and app, the design is simple, as are the options for what you can invest in.

Currently, Spaceship Voyager offers three investment portfolios: The Spaceship Origin Portfolio, The Spaceship Universe Portfolio and the Spaceship Earth Portfolio. I’ll break down the difference between these three options below.

The Spaceship Voyager Portfolio Options

The Spaceship Origin Portfolio 

Spaceship Voyager Review - Origin Portfolio

This option is a passive index fund. An index fund is a type of mutual fund that is designed to track the components of a market index. This is achieved by matching a market segment or a portion of the market. For example, the ASX200 tracks the top 200 companies in the Australian market. It does this automatically by aligning with the top 200 ranked companies. When one enters or exits this index, this ETF is updated to reflect this change.

The Spaceship Origin Portfolio consists of 100 listed Australian shares and 100 listed global shares. The 200 companies within this index fund are chosen based on their market capitalisation. Market capitalisation is calculated by multiplying a company’s outstanding shares by the current market price of one share. Currently, the cost to manage this fund is 0.05% per annum for balances above $5,000. If you have less than $5,000 in your account then the fees are $0.

Spaceship Origin has the following asset allocations:

Spaceship Voyager Origin Portfolio Allocation

The Spaceship Universe Portfolio 

Spaceship Voyager Review - Universe Portfolio

This option is an active portfolio consisting of 100 Australian and global securities. These securities have been selected by the Spaceship Voyager investment team under their ‘Where the World is Going (WWG)’ criteria. Unlike the Origin Portfolio, these options are selected as opposed to being derived from a market index.

Subsequently, the potential risks and rewards are elevated as the fund managers are actively trying to beat the market. Due to active management, the fee for the Universe Portfolio are higher at 0.10% per annum for balances over $5,000. If you have less than $5,000 in your account then the fees are $0.

Spaceship Universe has the following asset allocations:

Spaceship Voyager Universe Portfolio Allocation

The Spaceship Earth Portfolio

Spaceship Voyager Review - Earth Portfolio

This option is an active portfolio consisting of 30-50 Australian and global securities. These securities have also been selected by the Spaceship Voyager investment team under their WWG criteria. Spaceship Earth Portfolio also utilises a negative screening process non-environmentally friendly companies. This criteria ns companies involved with things such as fossil fuels, nuclear power and animal cruelty among others.  

The fund aims to generate high returns by investing in environmentally sustainable companies. Spaceship selects these companies on the basis that they are identified as contributors to the advancement of the UN Sustainable Development Goals Agenda. Like the Spaceship Universe Portfolio, this fund is actively managed and incurs the same 0.10% fee on balances over $5,000. Balances under $5,000 incur no fees.

Spaceship Earth has the following asset allocations:

Spaceship Voyager Earth Portfolio Allocation

Portfolio Comparison Chart

PortfolioSpaceship OriginSpaceship UniverseSpaceship Earth
Passive IndexYesNoNo
Actively ManagedNoYesYes
Environmentally Sustainable HoldingsNoNoYes
Number of Holdings 20010030-50
Fees on Balances Below $5,000$0$0$0
Fees on Balances Above $5,0000.05% per year0.10% per year0.10% per year

What’s the Best Spaceship Voyager Portfolio?

The simplest and most annoying answer is “it depends…”. Throughout history, passive portfolios have typically outperformed managed ones. By following the market index, you’re statistically more likely to make better returns over a long duration. For that reason, the Spaceship Origin Portfolio is arguably the safer option out of the three.

Alternatively, the Spaceship Universe Portfolio is carefully selected by experts to align with niche criteria. Subsequently, the potential for greater losses and rewards is elevated. This is also reflected to some extent in the Spaceship Earth Portfolio. However, there is a more niche selection criteria for this portfolio as it precludes non-environmentally friendly companies.

Therefore, it depends entirely on your risk tolerance. If you have a high risk tolerance, then the Spaceship Universe Portfolio may be better aligned to your desires. Alternatively, if you want to take a more passive and safer approach, then the Spaceship Origin Portfolio will be your best bet. Lastly, if you are an ethical investor, then the Spaceship Earth Portfolio is more suited to you.

The thing to keep in mind with all portfolios is that they are growth-oriented. The Spaceship Voyager team, therefore, recommends that you hold all portfolios for at least 7 years to experience growth. This is due to all portfolios containing high amounts of equities. Equities are growth assets, that while susceptible to short term market fluctuations, tend to perform well over long investment horizons.

The Pros and Cons of Spaceship Voyager

Spaceship Voyager Review – The Pros

  1. There are no fees for balances under $5,000, making it perfect for people hoping to dip their toes into investing.
  2. There are only three options, two are picked by experts and the other tracks a market. This means that the margin of error for people new to investing is substantially lower than other investment alternatives.
  3. The app is extremely easy to use and navigate
  4. You have the option of investing weekly, fortnightly, monthly or in one-off instalments
  5. Due to Spaceship Earth, this app offers a convenient way of investing in ethical, sustainable companies.

Spaceship Voyager Review – The Cons

  1. The fees for balances above $5,000 reduce the value you get from the app. This means that there may be better options out there for people who want to invest sums greater than $5,000
  2. There are only three options. While great for beginners, more seasoned investors or people who like to invest in individual companies will dislike this restriction.

Spaceship Voyager Review – Final Verdict: 9/10

A great platform for Aussie beginners who are just getting started

Spaceship Voyager is a great app for people who want to invest small amounts of money. For beginners just starting out on their investing journey, this easy to use app is a fantastic starting point. Similarly, seasoned investors may prefer Spaceship due to its ease of use. It has a user-friendly interface, high performing portfolios and the lowest fees among its competition. For these reasons, Spaceship is my favourite Austrlaian micro-investing app.

For seasoned investors or people with a lot of disposable income, there may be better alternatives out there. These alternatives include SelfWealth and other investment platforms that will provide more investment options. However, Spaceship is still a great starting point for beginners looking to start in the world of investing.

Want a Bonus to Get You Started?

If you are looking to join and would like to receive a $10 deposit bonus, you can use this referral code S8RRRTCZRW.

Click Here to Sign Up and Claim your Free $10 Sign Up Bonus

Alternatively, after creating an account and verifying your details, simply select the following:

  1. Account
  2. Referrals
  3. To see your referrals or enter a code click here
  4. Enter Referral Code option

From there, insert S8BRO19BNJ. After you deposit $5 or more, both you and I will receive $10 each. This gives you a nice bonus on your investing journey and helps support my website.

If you require additional help setting up your account, here is a detailed guide on how to join Spaceship Voyager.

That concludes my Spaceship Voyager Review. If you have any additional questions about Spaceship Voyager feel free to send me a message at aussiefiremovement@gmail.com.

The Ultimate Superannuation Guide Australia – Everything That You Need to Know About Super (2021)

Superannuation Guide Australia – Today I’ll cover everything that you need to know about superannuation. Including what it is, how it works, how you can build it and important considerations when choosing a super provider and investment option.

Superannuation Guide Australia – What is Super?

Superannuation or ‘super’ is money that is set aside by your employer (or yourself if you’re self-employed) during your working life. This money is then managed by a super fund, which invests your money with the intent of growing it over time through the power of compounding returns. This process is in place to help Australians generate enough wealth to be able to live on once they retire.

Superannuation Guide Australia – What is the Purpose of Super?

Superannuation Guide Australia - Retirement

The main purpose of superannuation is to help working Australian’s accumulate enough wealth to supplement the age pension during retirement years. Ideally, super funds can grow your super to a point in which you can solely live off of your super fund after retiring. This reduces strain on the government, as you can support your lifestyle without relying on government pensions. As such, the government incentivises people to invest in their super by providing tax benefits and mandating employers to make regular contributions to their employee’s funds.

Superannuation Guide Australia – How Does it Work?

Typically, your employer will pay money (contributions) into your super account for you. This is referred to as the ‘super guarantee’. These contributions are paid on top of your salary and wages and must be at least 9.5% of your regular pay. If you are over the age of 18 and are paid $450 or more (before tax) in a calendar month, your employer is mandated to pay this super guarantee. These funds are designed to generate returns above inflation so that by the time you retire, you will have accumulated enough wealth to live on.

How Does Super Grow Over Time?

Superannuation Guide Australia

Your super will organically grow over time due to two main reasons: employer contributions and investment returns.

Firstly, your employer will make regular contributions under the super guarantee. Under this guarantee, you will receive your regular pay in your bank account, in addition to a further 9.5% that gets added to your super fund. This can add up quickly, with approximately 10% of your pay being added to your super fund each time you are paid. Government jobs, in particular, can offer higher contributions, with some offering 15% or greater.

Secondly, super funds are designed for the most part to generate returns that beat inflation (except for defensive investment options). Super funds typically come with management and performance fees, meaning that they can cost people money. To ensure that you don’t lose money to these fees, the super fund manager will select a range of assets that generate returns greater than inflation. These assets are referred to as growth investments and can include but are not limited to equities (shares), real estate, bonds, REITs, LICs, ETFs, cryptocurrencies, precious metals and cash.

Superannuation Guide Australia – How Do I Choose a Super Fund?

The majority of people are allowed to choose the super fund that they want their contributions paid into. You can select your super fund by filling out a Standard Choice Form. If you’re eligible, your employer must give you this form within the first 28 days of you working for them. If you are unable or unwilling to select a fund, your employer will choose one for you. If you are unable to remember your existing super fund’s details, then you can use the myGov service to view your super account/s.

For more information on Standard Choice forms and where to find one, please refer to this guide by the ATO

Superannuation Standard Choice Form  

Superannuation Guide Australia – How Do I Change Super Funds?

If you’re with a default fund or are looking to change funds, then you can open an account with another superannuation provider. Once this is done, fill out another Standard Choice Form to advise your employer to pay contributions to the new fund. Your HR or financial department may be able to help you with this process. Once your employer agrees to begin paying contributions to the new fund, you can log in to myGov and choose to consolidate your super into your new account. This means that any previous funds from your former super fund will be rolled over into your new one.

For more information on how to change super funds, please refer to this useful guide: 

How Do You Change Superannuation Funds? 

What to Look for in a Super Fund

SEO

There are a lot of different factors that need to be weighed up when selecting your ideal super fund. While these factors may seem daunting at first, particularly for people who are just starting their first job, it’s important to research super funds to make sure you get the best return on investment. When selecting a super fund, these are some of the main factors that should be considered.

What to Look For in a Super Fund
Performance
Fees
Insurances
Investment Options
Other/Miscellaneous

Each one of these factors will play a significant role in determining what super fund is best suited for your needs. Each factor is explained in more detail below.

Performance

Choosing the wrong superannuation fund in a new job can cost you

Arguably the most important aspect of any super fund is its performance. Performance refers to annualised returns (how much it makes each year). These returns are typically viewed across 1, 3-, 5-, 7- and 10-year periods. However, to achieve the best estimate of the fund’s overall performance, it is recommended that you look at returns over a 5 year or greater period to assess the average annual returns.  

It is important to note that past returns aren’t always indicative of future returns. However, if a fund is consistently outperforming or underperforming its competitors, then this is worth noting. Additionally, it is important to compare similar investment options between funds. For example, compare two balanced portfolios between companies rather than comparing a balanced investment option from one company against another company’s growth option, as these will naturally yield different results.  

If you would like to compare different super fund’s performances, I recommend this tool by Canstar 

Just make sure that you use the ‘Edit’ feature to input the correct details, such as your age and super balance.  

Fees

Fees are another important factor that should go into picking a super fund. Fees are typically charged in two different ways – a fixed dollar amount or as a percentage. In some instances, you may be charged both a fixed dollar amount and a management expense in the form of a percentage. Additionally, these fees can be taken out as a lump sum once per year or on a more frequent basis such as monthly/semi-annually.  

The two most common fees for super funds are administration fees and performance fees. Administration fees refer to the cost of operating and maintaining your super fund. These fees are generally a flat dollar amount. Performance fees are calculated by taking into account a range of factors such as administration, investment performance, member fees, account size rebates and fee tiering. These are typically calculated on a percentage basis of your overall account balance. 

Of these two common types of fees, the performance fee is often regarded as the more significant fee due to it being percentage-based. For example, a 1% management fee might not be significant if your balance is $10,000 as this is $100 per annum. However, if your fund is $100,000 this fee increases to $1,000 per annum and so on. For this reason, both fees with a particular emphasis on performance/percentage-based fees should be carefully looked into when deciding on the right super fund.  

If you would like to compare different super fund’s fees, I recommend this tool by Ratecity  

This comparison tool highlights the past 5-year performance, administration fees, performance fees (calc fees on 50k) and additional services available, which will become more pertinent in the next topic.  

Insurances

Insurances are another important aspect of super funds. Generally speaking, super funds will typically offer four types of insurances for their members. These insurances are  

When you join a super fund, they may or may not automatically apply these insurances to your fund. As such, it is important to understand what these types of insurances cover, as they may or may not be necessary for your circumstances. 

Life Insurance (Death Cover) Explained

Life Insurance or death cover refers to a lump sum payment that is paid out to your beneficiaries when you die. If you have a partner or a dependent, this lump sum can be used to repay any debts that you owe and to help with living costs. As such, for people with partners or dependents who require you for financial support, this type of insurance is often chosen to ensure that these people are taken care of in the event of your death. Alternatively, if you don’t have any dependents, this type of cover may not be necessary.  

For more information about death cover and whether it is suitable for your circumstances, please refer to this guide: 

How Life Insurance Works – Life Cover 

Total and Permanent Disability (TPD) Insurance

TPD insurance is another lump sum payment that gets paid out if you become totally and permanently disabled as a result of an injury or illness. This can cover you for your occupation when you’re unable to work in the particular job that you were working in before the injury/illness. Alternatively, it may cover any occupation, which occurs when you’re unable to ever work again in any job suited to your education, training or experience.  

This type of insurance can often be recommended in labour-intensive jobs or jobs with high-risk thresholds, as the likelihood of injury for these professions is higher. However, it can be suited to people of all professions depending on their risk tolerance.  

For more information about TPD insurance, whether it’s suitable for you and how to read TPD policies, please refer to this guide: 

How Life Insurance Works – Total and Permanent Disability Insurance  

Income Protection Insurance

Income Protection Insurance pays up to 85% of your pre-tax income for a specified time if you are unable to work as a result of a partial or total disability. This form of insurance is designed to supplement part of your income as a result of partial/total disability to alleviate financial burdens as a result of ceasing work. This particular type of cover is often recommended for sole traders and small business owners, who may not have sick or annual leave. However, it can also be advantageous for people with dependents and/or those who have considerable debt levels such as mortgages.  

For more information on Income Protection Insurance and whether it is suited to you, please refer to this guide: 

How Life Insurance Works – Income Protection Insurance 

Superannuation Guide AustraliaTypes of Investments

Before deciding on a super fund portfolio, it’s important to understand the two types of investments: defensive and growth.

Defensive Investments

Defensive Investments are low-risk investments that aim to provide stable returns. These options are often chosen by people looking to preserve capital and/or mitigate against portfolio volatility. Defensive investment options include cash in the form of high-interest savings accounts and term deposits, as well as fixed-interest investments such as Government and corporate bonds. For these reasons, defensive investments are commonly used by people nearing retirement age, as it mitigates against portfolio volatility and preserves accumulated capital.

Growth Investments

Growth Investments are high risk, high return investments that aim to provide higher returns than defensive assets. These investments typically comprise property, shares, REITs, ETFs, LICs and alternative assets. However, these potential higher returns come at the expense of short-term market volatility. As such, these investments are often chosen by people who are at least 10 years away from retirement age. Investors far from the preservation age are unable to access these funds in the short to mid-term, so can afford downward fluctuations in price movement in pursuit of long-term capital growth.

For more information on the difference between defensive and growth investments, please refer to this guide 

Defensive Investments Versus Growth Investments 

Super Fund Investment Options

Another important aspect of choosing a super fund is their investment options. Typical investment options generally fall under three categories – premixed options, choose your own options and self-managed super funds (DIY). Each one of these options comes with different pros and cons, with some being better suited to certain individuals over others.

Premixed

Premixed Options are pre-determined portfolios selected by the super fund. These options have fixed allocations of certain assets and are designed to suit certain risk appetites. Common pre-mixed investment options include but are not limited to Growth, Balanced, Conservative, Cash and Ethical.

Most Australians will be allocated a premixed investment portfolio when they join a super fund, this is more often than not Balanced. However, a range of factors such as your age and risk tolerance can influence which of these options if any, are better suited to your needs. For this reason, it is important to understand how these portfolios are constructed and the underlying assets that comprise them.

Growth

Growth investment options as the name suggests are portfolios that consist primarily of growth assets. Depending on whether it is a growth or high growth investment option, the portfolio may consist of an 85-100% growth investment allocation. These portfolios are often selected by people far from the preservation age, as they can withstand short-term market volatility in pursuit of higher-than-average growth across a long investment horizon.

Balanced

Balanced investment options have a more neutral ratio of defensive and growth assets. More aggressive balanced options typically consist of a 70/30 ratio of offensive to defensive assets. Whereas other balanced portfolios can contain a more even 50/50 split. These portfolios are typically the default investment option given to people when they sign up for a super fund. The reason for this is that it offers a medium-high risk profile, meaning that it can outperform the more conservative investment options without encountering as much risk/volatility as growth options.

With that being said, members far away from the preservation age will likely benefit more from a growth portfolio due to its higher percentage of annualised returns. Conversely, this option may be considered too risky/volatile for people nearing their preservation age. In this instance, the next two portfolios may be more suited.

Conservative

Conservative investment options are portfolios that contain a higher defensive allocation than growth allocations. These portfolios are generally a 70/30 split, with the majority of the portfolio consisting of fixed interest and cash investments. Conservative investments are chosen to reduce the risk of loss at the expense of receiving lower returns. As such, they are typically chosen by people who are nearing retirement that still want to have some exposure to growth assets to increase their capital.

Cash

Cash investment options are portfolios consisting entirely of defensive assets. These portfolios are not growth-based and as such, are chosen specifically to preserve capital. People who are on the verge of retiring or those who have retired will often choose this investment option. The reason being, that they have already accumulated capital and are looking to preserve it. Additionally, for people who have retired, this investment is optimal as they won’t have to draw down on their capital during years where growth options are performing poorly.

Ethical

Ethical investment options refer to portfolios that screen out growth investments that don’t meet certain environmental, social and governance standards. While the criteria of what constitutes an unethical company vary across super funds, these are often companies associated with stigmatised activities. These activities can include gambling, alcohol, smoking, firearms and coal mining among others.

These portfolios are selected by people who do not wish to support these activities by investing in these companies. As the premise of ethical investing is relatively new, the availability of these investment options varies among super funds. The ratio of growth investments in these funds can also vary, with conservative, balanced and growth-related ethical investments being offered across different funds.

Premixed Options Summary

Investment OptionGrowth Asset Allocation Defensive Asset Allocation Expected Returns Minimum Investment Timeframe  Short Term Risk Estimated Number of Negative Annual Returns Across 20 Years 
Growth75-100%0-25%Very High10+ YearsVery High4-5 Years
Balanced50-70%30-50%High5+ YearsHigh3-5
Conservative30%70%Moderate3+ YearsLow1
Cash0%100%Low1 YearVery Low0

The above table is a rough guide and does not constitute financial advice. Pre-mixed investment options vary significantly between super funds, allocations, expected returns, investment timeframes and risk levels varying across funds, even if they offer similar investment options. As such, do your own research into your super fund’s investment options.  

Choose Your Own  

Some super funds offer the ability to create a custom-mixed investment portfolio. These portfolios differ from custom portfolios as you can select the types of investments and the allocations. For example, if you wanted a 100% growth investment portfolio consisting of equities but the pre-mixed growth portfolio offered by your super fund was only 70% equities, then this is a way of getting your desired allocation.

Similarly, you may be happy with the allocation of growth investments in your portfolio but not with the weighting of the growth options. For example, you may be happy with the 70% growth investment option offered by your provider but you may want the majority of that 70% to be geared towards real-estate over equities or vice versa. In these scenarios, it makes sense to tailor your investment through the choose your own method.

However, these choose your own funds are recommended for seasoned investors and people who have a thorough understanding of the risks associated with particular investments. These types of funds can also encounter different fees to pre-mixed options. For these reasons, I recommend consulting with a qualified financial advisor or at the very least, doing thorough research into different assets before deviating from the pre-mixed options.

Self-Managed Super Funds (SMSF)

SMSFs are funds that are managed by the member. These are external to retail and industry funds and encompass a lot more responsibilities, such as managing investments, insurances, accounting, record keeping.  

According to investment reports, SMSFs have an average operating cost of $6,182 per annum and trustees spend approximately 100 hours per year running them. For these reasons and a plethora of others, SMSFs are only recommended for people with a thorough understanding of investment options who have consulted with financial advisors.  

For more information on SMSFs, please refer to this guide: 

Self-managed Super Funds (SMSFs) 

Comparing Funds – The Best Way to Compare Funds

When comparing funds, it is important to factor in all of the above factors. Variables such as fund performance, admin fees, performance fees and insurance fees should all be carefully examined when deciding on a fund. These details can be found on super fund websites under their product/fund sections.  

If you would like to use an external tool to compare these factors across multiple superannuation providers, I recommend the following two tools: 

RateCity – Compare Super 

Canstar – Compare Super 

Superannuation Guide AustraliaHow to Grow Your Super

There are numerous ways to grow your super. This portion will cover the different methods you can employ to help increase your super balance.

Selecting the Optimal Fund

The simplest method to help grow your super is to optimise your fund. You can optimise your fund through a range of different methods. These methods can include 

  • Choosing the Right Investment Option  
  • Eliminating Unnecessary Expenses (I.E Some Insurances)  
  • Picking a Cheaper Super Fund  
  • Customising Your Portfolio to Invest in High Return Assets (Growth Investments) 

Recover Lost Super

Have you ever worked odd jobs or perhaps had a part time job in high school before beginning your career? If so, it is possible that you have money in one or multiple super accounts that you have forgotten about. If this is the case, you can recover this lost super by clicking the ‘Manage my Super’ button on your MyGov account. Alternatively, you can contact the ‘Lost Super Search Hotline’ on 13 28 65.

This process takes minutes and could help you recover hundreds and even thousands on lost super. For more information on the process of recovering lost super, please refer to this guide:

Searching for Lost Super

Consolidate Your Super

Similar to the above point, if you have super in multiple super funds, you can end up paying excessive amounts on performance and administration fees across these funds. Additionally, you could be paying for multiple, overlapping insurances. These unnecessary expenses can significantly detract from your return on investment. As such, it is important to consolidate super into a singular fund that meets your essential criteria. When selecting this fund, it is important to consider the aforementioned metrics such as fees, performance and insurance options.

If you have multiple super funds and would like to consolidate, this is a useful resource.

Consolidating Super Funds

Pre-Tax Super Contributions – Salary Sacrificing

Some employers offer their employees the option of having part of their pre-tax income paid into their super account. This is known as salary sacrificing or salary packaging. Super payments/concessional contributions are taxed at a rate of 15%.  

For workers earning a taxable income exceeding $45,000, salary sacrificing may be a tax-effective strategy, as it is paid out from your pre-tax income. This can in turn reduce your taxable income by lowering your tax rate, potentially leading to less income tax. However, the combined total of your employer and salary sacrificed contributions must not exceed $25,000 per financial year, meaning that there is a limit to this strategy.  

Salary sacrificing is dependent on a range of factors such as your personal income, whether your employer offers salary sacrificing and if you have any other forms of salary packaging. For more information on salary packaging and tax rates, please refer to the following resources: 

Salary Packaging – How Sacrificing Some of Your Salary Can Reduce Your Tax 

ATO – Individual Income Tax Rates  

After-Tax Contributions (Non-concessional Contributions)

After-Tax contributions are contributions made by you to your super from your taxable income. These are referred to as non-concessional contributions because you have already paid tax on the money. Up to $100,000 in non-concessional contributions can be made each financial year. 

For more information on non-concessional contributions, please refer to this guide: 

Non-Concessional Contributions and Contribution Caps  

Low Income Super Tax Offset (LISTO)

LISTO is a government superannuation payment of up to $500 that is designed to help low-income earners save for retirement. If you earn less than $37,500 per year, you may be eligible for a LISTO payment. The LISTO is 15% of the concessional (before tax) income paid by you or your employer into your super fund. This payment ranges from $10 to a maximum of $500 per financial year. 

If you are eligible for LISTO, it will be determined by the ATO and paid automatically. 

For more information on LISTO and eligibility, please refer to this guide by the ATO 

Low Income Super Tax Offset 

Government Co-Contributions

If you earn less than $52,697 per year (before tax) and make after-tax super contributions, you may be eligible for a matching contribution from the government, called a co-contribution. Low and middle-income earners who make a personal (after-tax) contribution to their super fund may be eligible for a government super co-contribution up to a maximum amount of $500.  

Similar to the LISTO, this is determined by the ATO and is paid automatically to eligible people. For more information on Government Co-Contributions and eligibility, please refer to this guide 

Super Co-contribution  

First Home Super Saver Scheme (FHSS)

The FHSS scheme allows Australians to save money for their first home within their super fund. This was introduced by the Australian government in 2017 to help first home buyers save faster due to the concessional tax treatment of superannuation.  

To be eligible for this scheme, you must be a first home buyer and meet both of the following requirements: 

  • You either live in the premises you are buying, or intend to as soon as practicable. 
  • You intend to live in the property for at least six months within the first 12 months you own it, after it is practical to move in. 

If you are eligible, you can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSS scheme, up to a total of $30,000 contributions across all years. You will also receive an amount of earnings that relate to those contributions. 

For more information on eligibility requirements and whether this is suited to your circumstances, please refer to the following guide 

First Home Super Saver Scheme 

Additional Reading

If you would like to learn more about different types of investment options, I have covered multiple forms of growth investments in previous posts. These can be found here:  

ETFs Explained 

LICs Explained 

REITs Explained 

CryptoTrader.Tax Review Australia – Is This The Best Way to Calculate Crypto Taxes in Australia? (2021)

CryptoTrader.Tax Review Australia

Welcome to my CryptoTrader.Tax Review Australia Edition. Today I’ll cover CryptoTrader.Tax, a DIY crypto software application that lets users calculate their crypto capital gains taxes in under 30 minutes. I’ll cover what crypto tax requirements are required by Australian citizens, how CryptoTrader.Tax works, its cost and its pros and cons.

How are Cryptocurrencies Taxed in Australia?

CryptoTrader.Tax Review Australia - How Are Cryptos Taxed in Australia

Any form of cryptocurrency transaction is deemed a taxable event by the ATO. Cryptocurrency transactions include buying, selling, trading, mining, staking, earning, airdrops, giving and receiving among others. Therefore, if you’ve participated in any of these events as an Australian citizen, it is likely that you have reportable taxable events. For this reason, it is important to stay on top of your cryptocurrency transactions for tax-reporting purposes.

In Australia, whenever a profit is made from cryptocurrency, it is taxed based on the AUD value of the asset when it is exchanged for fiat currency (AUD), another cryptocurrency or when used for goods and services. For example, if you purchase 1 Bitcoin for AUD 10,000 and sell it for AUD 20,000 a month later, you are subject to capital gains tax on the profit made. In this case, it’s AUD 10,000. You will then pay capital gain tax at a rate determined by your tax bracket.

However, numerous variables such as whether you held the asset for one year or longer, exchange rates, fees and market spreads can play a decisive role in determining how much you owe. As this can be complicated, particularly for beginner investors or investors with hundreds/thousands of transactions, crypto software calculators such as CryptoTrader.Tax can be used to simplify your tax reporting obligations.

For more information on how cryptocurrencies are taxed within Australia, I recommend the following guide:

Cryptocurrency Taxes Guide Australia

CryptoTrader.Tax Review Australia – What is CryptoTrader.Tax?

CryptoTrader.Tax is a financial services company that specialises in tax reporting and investment management. It is the signature platform of Coin ledger Inc, a company founded in Kansas City, Missouri in 2017. The platform features a tax reporting software specifically designed for the cryptocurrency market and for calculating capital gains taxes.

Founded during 2017, where Initial Coin Offerings (ICOs) were rampant and the cryptocurrency space consisted primarily of unproven technologies, the company’s mission was to simplify crypto tax reporting for everyone. Since then, the platform has developed over time to ensure that crypto tax reporting remains as simple as possible.

CryptoTrader.Tax Review Australia – How Does it Work?

CryptoTrader.Tax generates crypto-based tax returns in four simple steps. These steps include importing your trades, adding additional crypto income, generating your tax report and filing your tax report. Due to the entire process being digitalised, this can be easily done in under an hour, making it one of the most effective software tools available.

Step 1. Import Crypto Trades

The first step requires you to sync your trading history data from different exchanges and crypto platforms. It is currently compatible with 45+ crypto platforms, including Binance, BlockFi, Celsius and Gemini among others. Additionally, it supports 2,000 + cryptocurrencies, meaning that it will cover most investor’s needs.
When you sign up, you’re given the option of syncing with these platforms, making this process quick and automated.

As a bonus, you can retroactively calculate your returns from as far back as 2009. This can be useful for catching up on previously unfiled tax returns, as well as for determining whether you have any previous capital losses which can offset current or future capital gains.

Step 2. Add Crypto Income

This step refers to any additional forms of crypto income that isn’t the product of trading. These forms of income can include mining, gifts and airdrops. If none of these applies to you, you can skip this step.

Step 3. Generate Your Report

Once you have entered all the relevant data, you will be asked to review your transaction history. If you’re happy that you’ve entered everything and that it’s correct, you can click a link that generates your report.

Step 4. File Your Crypto Taxes

The final stage lets you file your crypto taxes with your generated report. This can be integrated with other online tax software such as TurboTax or TaxAct. Alternatively, you can choose to have your report sent to your accountant for them to file it on your behalf.

CryptoTrader.Tax Review Australia – How Much Does It Cost?

There are four different pricing options for CryptoTrader.Tax. These vary depending on the number of trades that you have executed.

All options come with a free trial and a 14-day money-back guarantee, meaning that if you’re unhappy with the service offered by CryptoTrader.Tax, after the initial trial, then you can get your money back.

CryptoTrader.Tax Review Australia – Pros

Blog – Useful Free Info

One thing that separates CryptoTrader.Tax from its competitors is their free blog feature. This blog covers a range of different topics, such as the best exchanges, wallets, portfolio trackers and mining software. It also provides concise explanations on a range of different cryptocurrencies and products, such as defi, NFTs and popular altcoins. Lastly, they provide useful advice on crypto taxes and how cryptocurrencies are taxed in different countries.

This free information is great for beginners and people who are looking to improve their knowledge of these subjects. It also helps optimise the platform, as this information can make it easier to calculate your crypto taxes and understand the overall process.

Easy to Use – Beginner Friendly

Taxes are notoriously difficult, even more so when you introduce new monetary assets such as cryptocurrencies. As such, perhaps the most important feature of any crypto tax software is its ease of use. Fortunately for CryptoTrader.Tax, it’s an extremely simple platform to use.

With the platform being digitalised, most of the steps are fully automated. You simply need to link your exchanges/wallets with the platform and it will do the rest. Additionally, with only four steps (potentially 3 depending on your circumstances), the relatively esoteric task of calculating your cryptocurrency taxes can be done in under an hour.

Compatible with Other Software

Another thing that I like about this platform is that it’s compatible with other tax software, such as TurboTax and TaxAct. As such, you can use it alongside these platforms to generate a complete tax return. This distinguishes it from competitors which only allow you to generate crypto tax returns, as they require you to compile multiple reports independently, which can be both time consuming and confusing.

Alternatively, there is an option that allows you to forward your report to an accountant. So regardless of whether you want to file your taxes online or through an accountant, CryptoTrader.Tax has you covered.

CryptoTrader.Tax Review Australia – Cons

Pricing

Despite offering competitive pricing, it may be cheaper in some instances to simply calculate your returns yourself. This is particularly true for HODLers and people who don’t make frequent transactions, as these are easy to keep track of. Alternatively, if you know a good cryptocurrency accountant, they may be able to generate your full tax return for a competitive rate.

However, if you have numerous trades or have failed to keep a record of your transactions, the price may be worth it.

CryptoTrader.Tax Review Australia – Pros and Cons Summary

ProsCons
Blog – Good Resource for Free InfoPricing
Easy to Use – Beginner Friendly
Compatible with Other Software

CryptoTrader.Tax Review Australia – Overall Verdict

CryptoTrader.Tax is a great cryptocurrency tax calculator that simplifies crypto tax reporting requirements. With its simple four-step process and fully interoperable user interface, users can generate their cryptocurrency tax reports in under an hour. Additionally, their blog offers plenty of useful articles for people looking to learn more about the cryptocurrency space.

People who infrequently trade, keep a meticulous trading record or have access to a great crypto accountant may be better off submitting their returns or letting their accountant handle it. However, for people who make numerous crypto trades or perhaps don’t keep records of their transactions, this app can be a lifesaver.

Want to Sign Up to CryptoTrader.Tax? Here’s a 10% Discount

If you’d like to sign up to CryptoTrader.Tax to try your free trial, you can do so by clicking this link

Sign Up to CryptoTrader.Tax Here

Once you’ve pressed the ‘Get Started For Free’ button and you have signed up, you can use this code to get 10% off any plan purchase – CRYPTOTAX10

Need Help Signing Up or Want More Information?

If you’d like more information or a visual representation on how CryptoTrader.Tax works, I recommend the following YouTube Video:

Alternatively, these resources are also useful:

CryptoTrader.Tax Blog

CryptoTrader.Tax Help Center

Looking to Learn More About Cryptocurrency as a Whole?

I have written reviews on a range of different cryptocurrency platforms, including exchanges, earn apps and wallets. The following are my recommendations for any Aussie looking to get started or advance in the crypto space.

Binance Review Australia

BlockFi Review

Celsius Network Review  

Crypto.com Review 

Swyftx Review

Lolli Review Australia – Earn Free Bitcoin by Shopping Online (2021)

Welcome to my Lolli Review Australia edition. Today I’ll discuss the free Bitcoin rewards app Lolli. This browser extension allows users to be rewarded with Bitcoin bonuses for shopping with popular online retailers. In this Lolli Review Australia, I’ll cover what it is, how it works, if it’s safe, how to use it and the pros and cons of using Lolli.

Lolli Review Australia – What is Lolli?

Lolli Review Australia - What is Lolli?

Lolli is a Bitcoin (BTC) rewards site and browser extension that rewards users with BTC when they shop at Lolli’s partner merchants. It is currently supported by Google Chrome and Mozilla Firefox, with plans to add it to additional browsers such as Brave in the future.

Lolli Review Australia – How Does Lolli Work?

Lolli Review Australia - How Does Lolli Work

Lolli generates commissions by referring users to their partner merchants. If you are a Lolli user and decide to shop at one of these partner merchants, Lolli will be given a commission of your purchase for referring you to that merchant. The difference between Lolli and other competitors is that they will share this commission with you in the form of a BTC payout.

While there is a comprehensive list of shops and companies that are affiliated with Lolli, the browser extension will automatically detect when you are on a supported partner website. This automated process ensures that you never miss out on your free BTC.  

Lolli Review Australia – Why BTC?

While there are numerous cashback apps, Lolli is the first of its kind for rewarding users with BTC. Despite receiving a poor reputation due to being volatile, BTC has retained a 230% annualised return on investment (ROI) over the last 10 years. When compared to the US Nasdaq 100 which had an annual ROI of 20% during the same time, it makes sense to diversify into BTC and cryptocurrency to some extent.

However, this is easier said than done, with cryptocurrency being a notoriously difficult asset class to begin investing with. Many apps and platforms have attempted to make mass adoption an easier process by seamlessly integrating cryptocurrency into everyday transactions. One example is Crypto.com which allows users to buy petrol and groceries with a visa card that can be topped up with BTC and Ethereum. Another is Lolli which pays people in BTC for shopping on platforms as they normally would. As such, Lolli is a great way to diversify into cryptocurrency, regardless of your level of knowledge regarding the crypto space.

If you would like to learn more about exactly what BTC is, I have written a more comprehensive guide on it here:

BTC Explained  

Lolli Review Australia – Do I Need a BTC Wallet?

When you sign up, Lolli will create a digital wallet for you. On this wallet, your BTC earnings will be securely stored with the Lolli custodial service. All BTC held in this wallet is yours, meaning that you can send it freely from one wallet to another. Once your BTC balance hits 15 USD or more, you can withdraw it to a bank account.

If you live in Australia and would like to withdraw it in AUD, I recommend signing up for Swyftx which is a low-fee Australian cryptocurrency exchange. You can then transfer your BTC to your Swyftx account and withdraw it in fiat currency (AUD) to your bank account.  

If you’d like to learn more about Swyftx, I have reviewed it in more detail here.  

Lolli Review Australia – Is it Safe?

Lolli uses state of the art software and network security to ensure that your BTC balance is safe. As such, they ensure that the funds in your Lolli wallet remain protected and secure.

Regarding personal data, Lolli does not track which sites you visit. Nor do they sell any personally identifiable data. They have a transparent business model in which they partner with businesses. If a user visits that business, Lolli gets a commission of that sale and then give you a portion of that commission in the form of BTC. As such, they do not need to sell user information to third parties. This separates Lolli from a lot of other cash back apps which utilise this tactic and it in turns makes Lolli one of the safest platforms in this space.

Lolli Review Australia – Pros of Lolli

Easy Way to Diversify into Crypto

Cryptocurrency is a growing asset class, that is slowly becoming more and more mass adopted. However, very few people in Australia have crypto exposure. This is largely due to the barrier of accessing cryptocurrency. People need to sign up to exchanges, learn how to create and operate crypto wallets, understand how market and limit orders work and a plethora of other factors. While this can be learnt for people who are eager to understand this growing space, it can be a bit overwhelming at first.

Lolli overcomes this issue by providing users with a simple and free way of accumulating BTC. By simply shopping online as you normally would, you can slowly begin accumulating BTC on the side. This provides a cost-effective and beginner-friendly way for diversifying into a growing asset class that has appreciated at a rate of 230% per annum across the last 10 years.

Attractive Cashback Rewards

Lolli Review Australia

Lolli offers up to 30% BTC cashback for shopping with partner merchants. With over 1,000 supported stores, this can be a great way to save and invest money simply by shopping. Users can also take advantage of the affiliate program, which will give the affiliate and the referral a $5 BTC bonus once the referred user makes their first eligible purchase. This makes Lolli a pioneer for the BTC space, as users can earn BTC for free without any caveats.

Beginner Friendly

As mentioned previously, purchasing BTC and other cryptocurrencies have traditionally been a relatively esoteric task. This is particularly true for people with limited to no investing experience, as exchanges can be daunting due to their numerous features. Lolli differs from the pack by creating a BTC wallet and storing BTC in this wallet until the user is ready to withdraw it.

As such, users can store their BTC in the Lolli wallet for as long as they please. If you decide later down the line to get into crypto investing and open an account on an exchange, you can move your BTC to this exchange for free. Alternatively, if you decide that crypto isn’t for you, you can withdraw it to your bank account as fiat.

The streamlined process of automatically receiving BTC for shopping at popular retailers makes Lolli one of the best apps for beginners, as it seamlessly integrates crypto investing with regular, everyday activities. As such, Lolli is a fantastic first step for people who are curious about investing in cryptocurrency. It’s also a free, risk-free way of gaining exposure to BTC.

Safe and Secure

Lolli doesn’t sell or store any of your data. Whereas other cashback rewards programs track and sell user data to third parties for profits, Lolli has a transparent business model. Simply by having the app installed, if you shop at a Lolli approved partner business, Lolli gets paid a commission of your transaction. They then split part of this commission with you in the form of BTC.

For this reason, Lolli is a safe, secure and free platform that gives you attractive rewards, making it a win-win.

Lolli Review Australia – Cons of Lolli

Long Waiting Time

While it’s hard to fault a free app, there is one main con when it comes to using Lolli – The waiting time. To remain secure, Lolli has to verify every purchase with their retail partners. While this ensures smooth and accurate payments, it can be a time-consuming process. This verification process takes anywhere from 30-90 days, meaning that you may need to wait 3 months before receiving your BTC reward. While this may seem annoying, it is essential for ensuring that your BTC balance remains safe and secured. However, for people looking to quickly cash out their rewards, this can be frustrating.

Unable to Withdraw as AUD

Once your balance reaches the equivalent of 15 USD or more, you can withdraw the funds as USD to a USD bank account. However, if you live in another country such as Australia, you are unable to withdraw your funds as AUD. There is a way around this, you can sign up for an Australian exchange such as Swyftx, transfer your BTC to this address and then utilise their fiat withdrawal feature to deposit the AUD into your bank account. However, these additional steps can be off-putting for non-US residents.  

Lolli Review Australia – Pros and Cons Summary

ProsCons
Easy Way to Diversify into CryptoLong Waiting Time
Attractive Cashback Rewards (30%)Unable to Withdraw as AUD
Beginner Friendly
Safe and Secure

Lolli Review Australia – Overall Verdict

Lolli is a free, safe and secure platform that offers a beginner-friendly way of diversifying into Bitcoin. Simply by installing the free browser extension or by downloading the mobile app, users can be rewarded in BTC by shopping at thousands of popular retails. These retailers include eBay, Adidas, Nike, Cotton On and Groupon among others.

With this extension seamlessly integrating into your everyday purchases, it is perhaps the simplest way for Aussie investors to gain exposure to BTC and cryptocurrency. The lengthy waiting time for BTC verification and difficulty in withdrawing BTC as AUD may put off some users. However, these potential cons are significantly outweighed by the numerous pros that come with Lolli. It is free, beginner-friendly, secure and offers high payouts in the most appreciating asset in recent history. For this reason, I recommend Lolli to anyone seeking to gain exposure to BTC, regardless of their level of experience in the crypto space.

Want to Sign Up and Earn a $5 BTC Bonus?

By using this link, you’ll receive a $5 BTC bonus on your first eligible purchase. This will give you a small boost on your BTC journey and help me fund my website.

Sign Up Here

Want to Learn More About Cryptocurrency?

If you’d like to learn more about Bitcoin and other cryptocurrency apps and exchanges, you may find the following guides and reviews useful:

Best Crypto Earn Apps 
Binance Australia Review 
Celsius Network Review  
Crypto.com Review 
Swyftx Review 

Passive Income Australia – The 3 Best Ways to Make Passive Income in Australia

Welcome to my Passive Income Australia guide. Today, I’ll cover 3 methods that I have successfully employed to generate truly passive income. Unlike side hustles and secondary jobs, these require minimal effort on your behalf and provide consistent revenue streams that accumulate while you sleep. So whether you’re a full-time worker looking to increase your income or simply looking to get started on your wealth accumulation journey, these are all great options.

Passive Income Australia – Crypto Earn Apps

Passive Income Australia - Crypto

What Are They?

While less popular than stock investing, cryptocurrency investing is gaining traction in Australia due to its high returns. Cryptocurrencies or cryptos are digital assets that act as mediums of exchange. Popular cryptocurrencies include Bitcoin, Ethereum and Litecoin. Traditionally, coins like Bitcoin and Litecoin were unable to generate interest, meaning that profits came from selling the assets (capital gains). However, crypto earn apps that operate similar to traditional savings accounts have made it possible to receive passive income from these coins without selling them.

How Does it Work?

When you store crypto on these crypto earn apps, you are essentially lending your cryptos to other investors. This is similar to what banks do when people are looking for loans. By cutting out the middle man and acting as the lender, you can earn generous interest rates ranging from 3-20% depending on the app. Different apps allow you to earn interest in a range of cryptocurrencies, including Bitcoin, Ethereum, Polkadot and Uniswap. This can be a great way to accumulate more of these growth-based assets. However, if you aren’t particularly interested in holding these popular cryptos or don’t believe in the technology, you can still capitalise by utilising stable coins.

Popular crypto earn apps such as Celsius Network, Crypto.com and BlockFi offer rates on stable coins such as TrueAUD and Tether between 8-12%. For Celsius and Crypto.com, this interest is paid out weekly. Whereas BlockFi pays out this interest at the beginning of each month. Compared to regular ‘high interest’ savings accounts (HISAs) that offer 0.1-3%, this is a much more lucrative way of putting your savings to work.

Alternatively, you can earn this interest in speculative growth assets such as ETH and DOT which have both experienced returns above 1,000% in the last 12 months at the time of writing this article. With that being said, there are inherent risks to these assets and they are extremely volatile, so due diligence is required if you plan on investing in these cryptos.

Pros of Crypto Earn Apps – Passive Income Australia

As previously mentioned, cryptocurrencies can experience monumental returns. They are highly volatile, growth-based assets and it is not uncommon for people to experience 10-100x returns on their investments during a bull run. Conversely, stable coins despite not offering capital growth prospects, are providing stable and consistent yields that in some instances, exceed that of ETFs and LICs. The ability to earn consistent interest payments on your savings makes these apps worthy of consideration for anyone looking to generate passive income in Australia.

Cons of Crypto Earn Apps – Passive Income Australia

For people looking to invest in non-stable coins, there is extreme volatility in the market. While this can work in your favour during periods of growth, you can also experience significant drops in the value of your crypto. Drops above 20% aren’t particularly uncommon in the crypto space and if you aren’t ready to withstand these drops, you can end up panic selling at a significant loss.

This can offset any passive income that you’ve made. Additionally, there are minimum deposits for cryptos on these apps and exchange fees and withdrawal fees can further add to the start-up needed. For this reason, you need a moderate amount of start-up capital. However, this is still much lower than the amount of capital needed to invest in stocks, ETFs and LICs.

Crypto Earn Apps Pros and Cons Summary

ProsCons
Truly Passive (Set and Forget)Requires Some Starting Capital
Significant Potential for Capital Gains (During Bull Market)Extremely Volatile (Can Drop Significantly in Bear Market)
Constant Returns and Rates for Stable CoinsCan be Difficult for Beginners to Navigate

How Can I Get Started?

Passive Income Australia - BlockFi

If you would like to invest in cryptocurrency and generate passive income with this asset class, you will need to sign up to a cryptocurrency exchange. I recommend using either Binance Australia or Swyftx, as they are both Australian-based platforms that provide great utility. You can learn more about these exchanges with the following reviews.

Binance Australia Review
Swyftx Review

Once you are set up on a crypto exchange, you can then purchase crypto and lend it to receive passive income. BlockFi and Crypto.com are all great platforms that offer a range of different crypto products, including interest accounts. For more information on these platforms and other popular competitors, check out the following resources:

BlockFi Review
Crypto.com Review

Passive Income Australia – ETFs and LICs

What Are They?

One of the most popular methods to generate passive income in Australia is to invest in Exchange Traded Funds (ETFs) and Listed Investment Companies (LICs). ETFs are diverse funds that typically track market indexes such as VAS which seeks to track the top 300 Australian companies by market cap. Alternatively, LICs are investment companies that pick a variety of different stocks to invest in. While ETFs are predominantly passive and LICs are actively managed, they both cost-efficient methods for obtaining a diversified portfolio of multiple assets.

Popular ETFs include: DHHF, VDHG, IOZ, VAS and VGS
Popular LICs include: AFIC, ARGO, MLT and WHF

For more information on ETFs and LICs, please refer to the following guides:

ETFs Explained

LICs Explained

How Does it Work?

Passive Income Australia - ETFs

LICs and ETFs (particularly Australian-based ETFs) generally offer moderately high dividends around the range of 4-7%. These dividends are typically paid out either quarterly or semi-annually, providing a somewhat reliable stream of passive income that well-exceeds inflation. Additionally, some ETFs and LICs offer partial or fully franked dividends, which have some unique tax advantages. This can also occur in conjunction with capital growth (increase in value of the ETF/LIC), resulting in another method for generated added income.

Pros of ETF and LIC Investing – Passive Income Australia

ETFs and LICs are great for passive investing because they are truly set and forget investments. This means that once you have bought them, you don’t have to do any further work to reap profits. Additionally, both ETFs and LICs tend to appreciate over time. This can result in added dividend income and capital gains should you decide to sell your units at a later date. Lastly, they are easy to invest in., If you have a phone and data, you can open a brokerage account or utilise a micro-investing app to begin earning passive income with these investment vehicles.

Cons of ETF and LIC Investing – Passive Income Australia

As with all investments, ETFs and LICs are not without their downsides. Firstly, these investment vehicles require initial capital to invest with. Meaning that you generally need to save a substantial amount to make purchases ($2,500 – $5,000 are common investment sums). While micro-investing apps can offset this and make investing accessible to people with low capital, they also have inherent flaws. Micro-investing apps limit your assets and typically encounter ongoing fees once balances reach a certain level.

ETF and LIC Investing – Pros and Cons Summary

ProsCons
Truly Passive (Set and Forget)Requires Moderate Starting Capital ($2,500 – $5,000)
Easy to Get StartedLimited Investment Options (For Micro-Investing Apps)
Capital Growth (Long Term)Subject to Market Volatility (Short Term)

How Can I Get Started?

Passive Income Australia - Stocks

You can purchase ETFs and LICs by opening a brokerage account. I recommend SelfWealth, due to it being CHESS-sponsored and offering low flat-rate fees. Once you have your account set up, you can purchase the previously mentioned ETFs and LICs and begin earning passive income. For beginners, VDHG and DHHF are great set and forget options if you have a long investment horizon, as these are diversified ETFs consisting of thousands of assets across multiple markets. If you are interested in pursuing this form of investment, the following guides may help:

SelfWealth Review

How to Purchase Shares on the ASX

If you don’t have much disposable income or aren’t comfortable with opening a brokerage account and picking ETFs and LICs, you can get started with micro-investing apps. These are tailored for beginners and offer a limited range of LICs and ETFs to choose from. Raiz and Spaceship Voyager are the two most popular micro-investing apps in Australia. While both are good, I prefer Spaceship due to its lower fees and better performing portfolios. If you are interested in micro-investing, the following guides may be beneficial:

Micro-Investing Explained

Spaceship Voyager Review

Passive Income Australia – Affiliate Marketing

Passive Income Australia - Affiliate Marketing

What is It?

Affiliate marketing occurs when an affiliate receives a commission from a company for marketing that company’s product/s. In Australia, these most often come in the form of referral bonuses or sign up bonuses. These bonuses are offered by companies to people in exchange for them referring another person to use their service. Such incentives come in the form of credits, discounts and in some instances, actual monetary bonuses. If you genuinely enjoy these apps and companies, it is worth checking whether or not they offer referral bonuses. You can then get financially rewarded either by receiving money from the company or discounts which in turn saves you money.

How Does it Work?

Most apps in the financial space offer incentives for referring your friends and family to their platform. Crypto apps can reward you with BTC, micro-investing apps can reward you with free deposits to your investments and brokerage accounts may offer credits to offset future brokerage costs. Similarly, banks and discount apps can provide cash payments for referring people to their platforms.

This can also work on the inverse, by looking for attractive signup bonuses to services you aren’t currently affiliated with. For example, a bank offering a $50 sign up bonus for new users can be a great way to net $50 if you’re able to meet their selection criteria.

Pros of Affiliate Marketing – Passive Income Australia

While being less lucrative than the other options, this approach requires no start-up capital. This makes it accessible for anyone to do. Additionally, this approach can provide both you and your friends and family with financial incentives, which deviates from traditional passive income streams that only benefit the investor. Lastly, as you already use these products, the referral bonuses can often enhance your experience on something that you regularly use. For example, if you sign up a friend to Spaceship Voyager, the company will reward both you and your friend with a deposit bonus to your portfolio. This can increase your portfolio and compound your growth further.

Cons of Affiliate Marketing – Passive Income Australia

While inputting your code on Ozbargain is relatively passive, this approach can require a lot more active engagement than the previous methods. This is particularly true if you have to walk people through how to sign up or if you plan on making a review-based website such as what I’ve done. Codes can also change and promotions can end, meaning that this income is a lot less reliable than other methods. Lastly, people are natural sceptics when it comes to products, particularly when someone is trying to ‘sell it’ to them. For this reason, you should approach the topic sensitively with friends and family, as some might mistake your intentions.

Affiliate Marketing – Pros and Cons

ProsCons
No or Minimal Start Up Capital RequiredLess Passive Than Other Options
Can Reward You and The Referral (Mutually Beneficial)Inconsistent Returns
Optimises Your Experience on the App/PlatformSome People Aren’t Receptive to Referrals

How Can I Get Started?

The simplest way to check to see whether these platforms offer referral and sign up bonuses is to check on Ozbargain.com.au under their ‘Deals’ section. Once you find an app that you use that provides referral bonuses, you can then input your referral code. Whenever someone clicks on the referral page for that app, a list of randomly generated codes will pop up. Despite there being a lot of active users, your code can remain on the website as long as the deal stays active, providing numerous chances for users to sign up with your code.

Once you find a deal that you like on a website or app that you genuinely like, you can begin by telling your friends and family about the platform. As most referral bonuses reward both the referring customer and the new customer, this can be mutually beneficial for you and your friends/family.

Lastly, you can further optimise your earning potential by starting a website and reviewing products that you enjoy or use. This is an approach that I use, which is why I provide sign up links in most of my reviews. They allow me to monetise my website without relying on traditional means such as ads and they provide my readers with a benefit for reading my blog. However, it should be noted that this is a lot less ‘passive’, as there are ongoing costs and time devotion required to upkeep a website and write reviews.

If you would like to start seeing what referral deals you’re eligible for, I recommend starting here:

OzBargain – Deals

Swyftx Review – Exploring One of Australia’s Best Crypto Exchanges

Welcome to my Swyftx Review, where I explore this growing Australian cryptocurrency exchange. I’ll cover what it is, its features, whether it’s safe, its pros and cons and how to join.

Swyftx Review – What is Swyftx?

Swyftx Review

Swyftx is an Australian Cryptocurrency Exchange that was founded in 2019 by Aussie crypto enthusiasts Alex Harper and Angus Goldman. Feeling that they could deliver a better product than pre-existing Australian crypto platforms, they founded Swyftx. The core vision of Swyftx is to deliver a modern, low-fee crypto trading platform that provides exceptional customer service. Designed for Australians, by Australians, this platform delivers a range of unique products and features tailored for Aussie investors.

Swyftx Review – Is Swyftx Safe?

As far as cryptocurrency exchanges go, Swyftx is one of the safest platforms in Australia. Registered under the trading name SWYFTX Pty Ltd, Swyftx is regulated by the governing body AUSTRAC. As such, it complies with AML/KYC obligations. For more information on these obligations, please refer to:

AUSTRAC 

AML Obligations 

KYC Obligations  

Additionally, Swyftx provides multiple security layers to protect client funds. This includes a partnership with Auth0. Auth0 is a cloud-security based platform that secures and maintains password integrity and account safety.  

Swyftx also applies a verification process, allows for 2-factor authentication (2FA) and routinely scans for data breaches. For these reasons, Swyftx is trusted by more than 30,000 Australians.  

If you’re still looking to increase security, Swyftx is compatible with hardware wallets. A hardware wallet is a device, specifically designed to hold your private keys. It is another example of ‘cold storage’ meaning that it does not connect to the internet. You only have to plug it to confirm transactions, the private keys never leave the device, making it the most secure way to store your crypto.

If you’re interested in purchasing a hardware wallet, I recommend Ledger or Trezor, as they are the most reputable wallets available. You can purchase them here:

Ledger  

Trezor  

Swyftx Review – What are the Fees?

Swyftx Review - Fees

Fiat Deposits and Withdrawals

The good news for Aussies is that Swyftx makes it cheap and easy to remove and deposit AUD. There is a flat-rate $2 fee for deposits and withdrawals below $200 AUD. For any deposits or withdrawals above $200, there are no fees. As such, for Aussies looking to enter or exit the crypto markets, this is a viable option.

Trading Fees

Swyftx charges a trading fee of 0.6% with no trading limits. While some competitors may offer lower trading fees, a key distinction that separates Swyft from its competition is its spreads. According to the Swyftx Team: 

“Spread is the difference in price between the buy and sell prices of a tradable asset and in most cases can exceed the advertised “trade fee”. Australian banks charge up to 11% spreads when converting AUD to foreign currency, yet still advertise zero currency conversion fees. Many crypto trading platforms do not make this information readily available and will even advertise “low fees” or even “zero fees” yet fleece you several per cent in artificial spreads.”  

For More Information on Swyftx’s Fees and Spreads Click Here

Swyftx Review – Pros

Credit/Debit Card Deposits

Swyftx offers multiple ways for depositing AUD. These include bank transfers (Osko), Pay ID, Poli and Credit Card/Debit Card deposits. While all of these deposit methods are instant, it is worth noting that Swyftx doesn’t charge any fees for depositing AUD or buying Crypto with your debit card.

As such, Swyftx is a great platform for facilitating fast, feeless payments for purchasing cryptocurrency. This gives it the edge over its competition who while offering the same services, often charge hefty fees for using credit and debit cards.

Feeless Withdrawal

Another significant issue encountered by Australians is being able to cash out their crypto and withdraw it in AUD. Previously, crypto exchanges have had significant limits on the amount of fiat (AUD) that users can withdraw. They also have historically charged significant % fees that greatly decreased overall profits.

Swyftx on the other hand offers a low-cost withdrawal fee of $2 for transactions under $200. If you wish to withdraw a sum greater than $200, there are no fees attached. As such, this is perhaps one of the best platforms for being able to cash out of crypto and take profits. The maximum withdrawal size is $50,000 per day. However, users can contact Swyftx Support to increase this limit.

Bundles

Swyftx Review - Defi Bundles

A unique feature that Swyftx offers is ‘Bundles’. The Bundles feature acts as a diversification mechanism, similar to an ETF where the investor can choose a pre-selected basket of crypto assets or create their own. Swyftx users can choose from popular bundles such as the Swyftx Big Two Bundle which consists of a 50/50 split of Bitcoin and Ethereum. Swyftx also offers an altcoin bundle, a Defi bundle, a top 5 by market cap bundle and a staking coin bundle. These are great for beginner investors or people who want to diversify quickly and easily with one transaction.

Alternatively, users also have the option of adding or removing different cryptocurrencies from these bundles. For example, someone can change the Big Two Bundle to be 90% BTC and 10% ETH. Additionally, users can create their own custom bundle consisting of their favourite crypto projects at their own pre-determined ratios.

This feature which is unique to Swyftx is a great method for adding diversification to a profile and simplifying the crypto space for beginner investors. Users also have the option of doing a one-time purchase ‘Instant Buy’ or a Recurring Purchase. The addition of ‘Recurring Purchase’ helps introduce two key tenets of investing: Dollar Cost Averaging (DCA) and Diversification.

Great Customer Service

Swyftx is a smaller exchange that was founded by two friends who are passionate about the crypto space. As such, there is a greater emphasis on customer service that is hard to come by on major exchanges.

Users can navigate to the ‘Help Centre’ to view frequently asked questions and access free tutorials that explain to users the fundamentals of cryptocurrency and how to use the app correctly. Additionally, Swyftx also offers a live chat feature and a ‘call back’ feature where users can communicate with Swyftx staff online or on the phone. This service separates Swyftx from other major exchanges and makes it a more user-friendly platform, particularly for beginner investors.

SMSF

Similar to Bundles, Swyftx also offers a unique service in the form of Self-Managed Super Funds (SMSF). People who believe that cryptocurrencies are a growing industry can now invest in crypto through their SMSF.

While it is worth consulting with a financial advisor before making any decisions regarding superannuation, there are potentially unique benefits to investing in crypto via SMSF. This includes generous tax rates and hedging against traditional assets.

Swyftx Review – Cons

Fewer Assets than Competitors

Swyftx offers a wide range of cryptos, exceeding 240+ assets. As such, Swyftx will likely be able to accommodate the needs of most investors. However, it is worth noting that some competitors offer a wider range of cryptocurrencies. For this reason, investors who are after less common altcoins may need to utilise a secondary or other exchange. However, for investors who want to buy large-cap coins, Swyftx should be able to facilitate.

Only Available to Australians

Another drawback of Swyftx is that it is only available to Australian residents. While not an issue for Aussie investors, international investors who may benefit from the unique features of Swyftx (namely Bundles) will need to look elsewhere.

If you are a non-Australian who is looking to join a crypto exchange, Crypto.com is a viable option. For more information, please refer to my review below: 

Crypto.com Review  

No Staking/Earn Features

Perhaps one of the main drawbacks of Swyftx is that it doesn’t offer any staking/earn features on its app. Alternative exchanges such as Binance Australia and Crypto.com for example offer attractive staking and earn benefits, where users can earn interest on their holdings.

As such, those looking to earn additional passive income may need to download these apps or rely on an interest-earning wallet or app. If this applies to you, you may find these additional reviews to be of use:

Best Crypto Earn Apps 

Binance Australia Review 

Celsius Network Review 

Crypto.com Review 

Swyftx Review – Pros and Cons Summary

ProsCons
Credit/Debit Card DepositsFewer Assets Than Competitors
Feeless WithdrawalsOnly Available to Australians
Bundles FeatureNo Staking/Earn Features
Great Customer Service
SMSF Option

Swyftx Review – The Final Verdict

Swyftx is a great Australian exchange that is designed for Australians by Australians. They offer exceptional customer service, low spread rates, feeless deposits and withdrawals, the ability to invest in crypto via super and their unique Bundle service. For these reasons, Swyftx is great for beginner investors and Aussies wanting to have a simple trading experience. However, for non-Australian l investors, people who want to invest in lesser-known altcoins and those who wish to stake/lend their assets, other platforms may be more suited.

All-in-all, I’m happy with Swyftx and the services they provide. Particularly with their Bundle option, which helps enable diversification and dollar-cost averaging in a way that has previously not been seen. If you live in Australia and would like to join Swyftx, you can join up by clicking the following link:

Want to Join Swyftx? Click Here to Sign Up

Want to Increase Your Security with a Crypto Hardware Wallet?

If you’d like to increase your crypto security by purchasing a hardware wallet, I recommend using Ledger and Trezor. These are two of the most reputable hardware wallet providers.

Buy Ledger Wallet Here

Buy Trezor Hardware Wallet Here

Hardware Wallets Explained

Additional Reading:

If you would like to learn more about cryptocurrencies and other exchanges, check out these additional reviews:

Best Crypto Earn Apps 

Binance Australia Review 

Bitcoin Explained 

BlockFi Review

Celsius Network Review 

Crypto.com Review 


Celsius Network Review – Is This Revolutionary App The Future of Banking?

Welcome to my Celsius Network Review Australia. Today I’ll discuss what Celsius is, how it works, whether it is safe, what its products are and its limitations.  

Celsius Network Review – What is Celsius?

Celsius Network Review - What is it?

Celsius is an online platform that is aiming to disrupt the financial industry. It offers similar products to banking institutions, such as earning interest on assets, the ability to pay and transfer finances, feeless deposits and withdrawals and the ability to borrow money. However, it differs from traditional financial institutions in one distinct way.

Unlike banks and other financial institutions that retain the majority of their revenue, Celsius distributes 80% of its revenue to its users. This aligns with the Celsius Team’s vision, which is to allow every-day investors to succeed financially. For these reasons, anyone seeking financial independence or the ability to generate passive income through cryptocurrencies may benefit significantly from this platform.

Celsius Network Review – How Does it Work?

Celsius Network Review - How Does it Work?

The majority of banks typically receive 14-25% return on their capital, yet typically offer their paying customers around 1% interest on their deposits. Subsequently, these banks are keeping over 80% of their profits. These profits are then distributed to shareholders, typically in the form of dividends.

Alternatively, the Celsius business model operates in reverse, by giving 80% of the total revenue back to the community. This occurs weekly in the form of earned interest. Celsius still retains profits by issuing asset-backed loans to hedge funds, exchanges and institutional traders at an average rate of 9% interest.

Celsius also has its native cryptocurrency – CEL Token. This utility token offers higher interest rates on holdings and lower interest rates on loans. This incentivises institutional and retail investors to invest in the token, increasing the market cap of Celsius Network and allowing them to continue offering such attractive interest rates.

Celsius Network Review – Is it Safe?

Celsius takes security very seriously, by integrating a range of cybersecurity defence measures. They also provide a 24/7 Security Operations Center, an immutable audit trail and provide disaster recovery controls and insurance. If losses or damages occur to the user’s funds; they will use their balance sheet to cover damages. If the losses exceed their balance sheet, they will then use Eligible Digital Assets to absorb the remaining losses. Therefore, it is one of the safest platforms for storing crypto assets.

To enhance security measures from a user perspective, you can also implement these additional security protocols to further protect your crypto.

Celsius Network Review – What Products do They Offer?

Celsius Network offers a range of products that traditional banks and financial institutions offer. However, due to the unique structure of Celsius, these products have much higher incentives for investors.

Celsius Earn

Celsius Network Review - Celsius Earn

Users who deposit any of the 30+ supported cryptocurrencies into the Celsius Wallet can earn attractive interest rates on their assets. These interest rates range from 2.05% to 18.55% and they are paid out weekly.

Rewards can be received in that particular cryptocurrency or they can be received in CEL tokens, the native cryptocurrency of Celsius Network. A range of popular cryptocurrencies is supported such as Bitcoin, Ethereum, Chainlink, Uniswap and Stellar among others. Alternatively, users can choose to earn interest on their stable coins. USDT, USDC, DAI and TUSD are supported.

For Australian, British, Canadian and Hong Kong residents, they also offer stable coins in these native currencies. For users who choose this approach, they can receive weekly interest rates above 10% for their native currency. Making it a much better interest platform than traditional banks which offer rates from 0.1-2%.

Celsius Borrow

A unique feature of Celsius Network is the option to borrow both cryptocurrencies and cash at an Annual Percentage Rate (APR) of just 1%. That’s right, depending on the amount of collateral that you deposit and the duration of your loan, you can borrow fiat currency and cryptocurrencies with an interest rate of 1%.

‘Being decentralised, users can apply for these loans in minutes without any credit checks being required. This allows investors to borrow money without having to sell their assets. Additionally, this can provide tax advantages by deferring capital gains tax, as you aren’t selling your assets.

CelPay

CelPay is a feature that enables users to send and receive cryptocurrencies from one another without encountering fees. These feeless transactions occur within seconds and enable a fast and cost-effective method of spending and receiving tokens.

The process for utilising CelPay is simple. Just add or select a recipient, choose the currency and the amount that you wish to send and then you can add a note or send the currency. The process takes seconds to complete and the transaction is processed in a similar time frame. This enables fast, feeless and borderless payments.

CELToken

Like all Cryptocurrency platforms, Celsius Network has its own native cryptocurrency. However, unlike many platform tokens, the CEL token offers unique utility incentives. Users who hold CEL are rewarded with increased earn rates and lower borrowing rates. These are dictated by CEL holding percentages which put users in particular tiers. The higher your CEL holding percentage, the higher your loyalty tier and subsequently, your benefits.

Celsius Network Review – Limitations

As per all platforms, Celsius comes with some limitations. These come in the form of other competitors, namely those that offer better interest rates.

Coin Selection

Celsius offers more than 30 crypto products that users can earn interest on. This is only a fraction of the crypto market. Fortunately, Celsius provides interest rates on some of the most popular altcoins and stable coins, so this may not be considered an issue for macro-investors.

However, for users who like to hold smaller, less common altcoins, they may not be able to earn interest on their assets on the Celsius Network. Instead, other wallets, exchanges and liquidity providers may be more suited.

Better Interest Rates Elsewhere

Despite offering competitive interest rates on a range of assets, there may very well be better rewards elsewhere. DEFI projects can typically yield returns over 100% APR through yield farming and by providing liquidity. While this comes with its form of inherent risks, people with a high-risk tolerance may prefer these options to maximise potential profits.

Alternatively, other products offer a similar service to Celsius Network. These include BlockFI, Avalanche, Binance and Crypto.Com among others. For people interested in learning more about these competitor projects, I cover Binance and Crypto.Com in these reviews:

Binance Australia Review 
Crypto.Com Review  

Earning as Opposed to Staking

When it comes to generating passive income with cryptocurrencies, there are two main methods. These are lending/earning and staking. With Celsius Network, you are lending your tokens to other investors and earning a % cut for providing that service. This differs from Staking which occurs when you lock up your assets in a wallet or delegate them.  

When you lend cryptocurrencies to other users, they are borrowing said currencies at an interest rate. You receive a commission of that interest rate which gives you an incentive to lend. This differs from staking which occurs when you delegate your cryptocurrency to verify transactions on the network and provide an additional layer of support to the network. Under the Proof of Stake (PoS) system, users receive a portion of the blockchain rewards in the form of interest. 

Subsequently, users who actively want to get involved in strengthening their cryptocurrency’s eco-system may choose to prefer staking over lending their crypto to other investors. As such, staking wallets such as AtomicWallet or TrustWallet will be better options.  

For more information on the difference between Lending and Staking, this is a useful article: 

Staking vs Lending on PoS Blockchains 

Celsius Network Review – The Final Verdict

Celsius Network has lived up to its vision of helping the poor and middle class reach financial independence. By giving 80% of their profits to the users, people who take advantage of the Earn, Borrow and CelPay features can reap rewards that have traditionally been reserved for financial institutions.

With loan rates as low as 1% APR, earn rates as high as 18.55% that are paid out weekly and the ability to transfer and receive cryptocurrencies instantaneously and without fees, Celsius offers a revolutionary platform. For anyone in the crypto space who wants to generate passive income or receive tax advantages through the borrow feature, Celsius Network is a great option.

For investors who hold lower market cap altcoins and those who would rather yield farm or stake their cryptos, other platforms will be more useful. However, for the majority of investors, Celsius offers an easy, cost-efficient method for earning passive income on their assets.

Want to receive a $40 BTC Sign Up Bonus?

If you would like to sign up to Celsius Network and earn passive income on your cryptocurrencies, you can use my referral link to receive a Bitcoin Bonus valued at $30 USD.

Alternatively, you can download the app and once prompted for a referral code, you can enter the following code to be eligible for your bonus:

108967da7c

Need Help Signing Up?

If you’re having difficulty signing up or would like a guide to view the registration process, this resource will be of use:

How Do I Create/Register a Celsius Account

Binance Australia Review – Is This Australia’s Best Crypto Exchange?

Welcome to my Binance Australia Review. Today I’ll be covering everything that you need to know about the popular cryptocurrency exchange Binance. I’ll explore its key features, whether it’s safe, the pros and cons and help you determine whether it’s the best crypto exchange for your needs.  

Binance Australia Review – What is Binance?  

Binance Australia Review - Ecosystem

Binance is one of the most popular and well-trusted cryptocurrency exchanges in the world. Operating as a complete crypto ecosystem, Binance offers a range of unique features. These features include an exchange consisting of 100+ popular cryptocurrencies, staking, fiat deposits and withdrawals, crypto savings accounts, margin trading and crypto loans.  

Why Invest in Cryptocurrencies?  

Cryptocurrencies are an immensely unique asset class. With deflationary, finite supplies, extremely high liquidity, unique use-cases, advanced technological applications and extreme volatility, crypto can be a useful asset class to invest in. With popular cryptocurrencies such as Bitcoin and Ethereum challenging the traditional financial system, these assets can also be a good hedge against traditional financial assets such as stocks and ETFs.  

Similar to brokerage platforms with stocks, crypto exchanges such as Binance allow you to purchase cryptocurrencies. A key difference is that unlike the stock market, crypto exchanges never close. This in part allows for cryptocurrencies to fluctuate significantly in prices. If utilised correctly, returns in the range of 100s and 1000s of % can be attained. Due to this volatility, some traditional investors prefer to allocate a small portion of their overall portfolio to these assets such as Bitcoin. Whereas more modern investors with high-risk tolerances may choose to allocate all of their portfolios to cryptocurrencies to maximise on returns. Regardless of your crypto-allocation, Binance allows users to gain their desired level of exposure.  

Is Binance Safe?  

StaySAFU with Binance's Security Campaign | Binance Blog

As far as exchanges go, Binance offers one of, if not the safest exchange due to their extensive security measures. Users are asked to set up two-factor authentication (2FA) which provides an additional layer of security to the exchange. Similar security features also include address whitelisting, anti-phishing codes and google authentication among others.  

Regarding funds, Binance uses the CryptoCurrency Security Standard (CCSS) to protect accounts. The CCSS is an open standard designed to augment standard information security practices and is the standard for major-exchanges. Additionally, Binance also has the Secure Asset Fund for Users (SAFU) to protect investors. SAFU is an emergency insurance fund set up by Binance to reimburse users in the unlikely event of a hacking. Lastly, Binance Australia is operated by InvestByBit Pty Ltd (ABN 98 621 652 579) – a digital currency exchange registered with AUSTRAC. Binance Australia is therefore regulated to the same extent as other Australian cryptocurrency exchanges. 

 For these reasons, Binance is widely regarded as setting the industry standard for exchange security. As such, it is a great platform for storing and trading cryptocurrencies. 

If you’re still looking to increase security, you can store coins purchased on Binance on a hardware wallet. A hardware wallet is a device, specifically designed to hold your private keys. It is another example of ‘cold storage’ meaning that it does not connect to the internet. You only have to plug it to confirm transactions, the private keys never leave the device, making it the most secure way to store your crypto.

If you’re interested in purchasing a hardware wallet, I recommend Ledger or Trezor, as they are the most reputable wallets available. You can purchase them here:

Ledger  

Trezor  

Binance Australia Review – Pros  

Premium Vector | Thumbs up with board bitcoin gold character cartoon

Fast, Feeless Fiat Deposits and Withdrawals

Binance Australia Review - Zero-Fee AUD

A common fault among many popular exchanges is their inability to quickly deposit and withdraw fiat currencies. This can make buying crypto problematic, as well as preventing people from capitalising on their returns. Of the exchanges that have traditionally offered deposits and withdrawals, they have often charged astronomical fees for this service. Binance counters these issues by offering feeless Osko deposits and feeless bank transfer withdrawals.  
 
Osko deposits allow users to transfer funds from their bank account to Binance in one day. Sometimes, these payments can process in a matter of minutes. This fast liquidity allows users to quickly capitalise on market dips, making it a useful service. Additionally, fiat withdrawals are also feeless, allowing Binance users to maximise their profits.

Attractive Staking and Savings Rates  

Earn passive income with cryptocurrencies - Binance

Binance offers 30 locked staking cryptocurrencies, with 15, 30 and 60-day locking durations. Estimated APY ranges from 1.49% to an insane 43.2%, making this the highest yielding platform on this list for staking purposes. Furthermore, Binance offers a flexible savings account, that returns much lower interest rates, yet allows users to withdraw at any time.  

 Binance Flexible Savings allows users to earn passive income that is calculated daily. This allows users to keep their assets liquid, while also receiving additional interest in that particular asset class. As such, this unique feature gives Binance a competitive edge over the competition.

Security 

Another common issue among other popular exchanges such as KuCoin is security-risks. Currently, Binance offers some of the best security among any crypto exchange. When users sign up to Binance, they are first required to verify their identity. Once their identity is verified, they then are then asked to enable two-factor authentication (2FA). This serves as an added layer of security that sends a special code to your mobile phone every time you want to log into your Binance account. Additionally, features such as passwords, facial recognition, fingerprint identification, Google Authentication, Security Key activation, anti-phishing codes and Address Whitelisting exist.  
 
While this may sound over-the-top at first, crypto-security is essential to protect your assets. There are thousands of stories of people who have lost hundreds of thousands in crypto assets due to hacking attacks. For these reasons, I trust Binance above other popular competitors in this regard, due to their extensive security precautions.  

High-Volume Trading

Another important but often overlooked aspect of exchanges is their trading volume. Exchanges can have all the features in the world, but without a high trading volume, it can be difficult to buy and sell cryptos. This can be disastrous for people looking to quickly buy assets during dips, as they may not have been updated to reflect the price decline. Alternatively, unpopular exchanges with low-volume trading can make selling out their positions difficult. Subsequently, this can impede on the ability to purchase and sell cryptos at the best prices available. However, Binance doesn’t have this issue, due to its extensive global userbase.  

Being one of the most popular exchanges in the world, Binance offers some of the highest trading volumes. This enables users to buy cryptos at their most competitive prices. More importantly, however, it enables traders to sell their assets at a faster rate. This ability to sell quickly is imperative for maximising profit-taking. Particularly during a bull market, where many people may be looking to purchase/sell at the same time.  
 

Binance Australia Review – Cons 

Conroy's OPEL decision gets thumbs down from Liberal's Billson - Telco/ISP  - iTnews

Some Altcoins May be Unavailable

There are currently over 6,000 altcoins in circulation. While Binance offers a relatively large number of alts (100+), it is still missing a significant amount of this large supply. As such, for users who wish to purchase specific altcoins, namely those with niche use cases or low market caps, Binance is unlikely to offer that coin. Subsequently, users may find other exchanges that deal with these particular coins more useful, if they particularly like to trade in them.  
 
However, for users who wish to purchase large cap coins such as Bitcoin, Ethereum and Polkadot among others, Binance offers the vast majority of these coins. Therefore, there’s no reason that users can’t have Binance in addition to other exchanges to get a more comprehensive portfolio

Complex (Not Seen as Beginner Friendly) 

Binance offers an extensive range of coins, products, services and features. As such, it can often be overwhelming for beginner investors who are just looking to start. For people who have previously invested in stocks, they may pick it up quicker than others. Yet for investing novices, the comprehensive Binance ecosystem may be viewed as complex and hard to navigate.  

Binance offers a free online service called the Binance Academy which is designed to help beginner investors learn more about cryptocurrencies and how they work. For people just starting off, they recommend this introductory guide.  

There are also several YouTube guides that provide a step-by-step process on how to set up and use Binance.  

Binance Australia Review – Pros and Cons Summary  

ProsCons
Fast, Feeless Fiat Deposits and WithdrawalsSome Altcoins May be Unavailable
High Staking and Interest RatesComplex for Beginners
Security
High-Volume Trading (Liquidity)

Binance Australia Review – The Final Verdict

In my opinion, Binance is the best cryptocurrency platform available to Australians at this time. Regarding trading, it provides high-volume trading, fast, feeless fiat deposits and withdrawals and one of the highest degrees of security. For long-term holders, the interest rates associated with the savings account and staking options are second to none. Additionally, high-risk traders have access to margin trading and crypto-backed loans. Subsequently, the comprehensive service offered by Binance to Australians and international investors alike makes it a great exchange for a variety of investors.  
 
Conversely, for complete beginners with little knowledge of the space, people without high-risk tolerances and those who want to trade in micro-cap altcoins, there may be better alternatives. However, these can be overcome by utilising the resources provided by Binance Academy of through utilising other crypto exchanges such as Binance Dex. Barring those who fall into those categories, I highly recommend Binance for anyone looking to invest in cryptocurrencies and simultaneously earn interest on their investments.  

Want to Receive a Sign-Up Bonus?

By signing up with this referral link, we will both be entitled to a 10% reimbursement on all of your trading fees henceforth. This will help you save money on your investments, while also supporting my website.  

10% Discount on Trading Fees for Life

Need Help Signing Up?

Step 1.  

Click This Link to Sign Up  

Step 2.  

Follow the instructions and insert the email address and password you’ll use for your account. After reading carefully the Terms of Use (TOU), click on [Register]

NOTE:  

  • Your password must contain at least 8 characters, including one uppercase letter and one number. 

Step 3.

After clicking on [Register], you’ll see a sliding jigsaw verification code. Please, drag the slider to complete it. 

mceclip2.png

Step 4.

Once you have completed the jigsaw, we’ll send a confirmation email to the address you’ve specified. Please check your inbox to confirm your registration within 10 minutes. 

Binance Australia Review - Sign Up

Notice: 
For your own account security, we highly recommend you to enable the two-factor authentication (2FA) after your first login. (Google 2FA or SMS 2FA) 
*Before starting P2P trading, you may need to complete KYC and 2FA authentication. 

Want to Increase Your Security with a Crypto Hardware Wallet?

If you’d like to increase your crypto security by purchasing a hardware wallet, I recommend using Ledger and Trezor. These are two of the most reputable hardware wallet providers.

Buy Ledger Wallet Here

Buy Trezor Hardware Wallet Here

Hardware Wallets Explained

Want to Read More About Cryptocurrency? 

If you’d like to read more about cryptocurrency, I have written the following guides: 
 
Bitcoin Explained 

BlockFi Review

Celsius Network Review

Crypto.com Review 

How to Earn Passive Income with Cryptocurrency 

Swyftx Exchange Review
 

How to Earn Passive Income with Crypto – The Best 5 Crypto Earn Platforms

Today I will be discussing 5 of the best digital cryptocurrency platforms and wallets to store and earn passive income with cryptocurrencies. Available both in Australia and internationally, these wallets and platforms are a great way to store your crypto while putting it to work to earn passive income.

Celsius Network  

The Celsius Network is one of the largest crypto lending platforms on the market. Acting as a decentralised bank, this platform allows you to lend crypto and earn interest on it. They also offer low-interest rate loans by using crypto as collateral.  

With over 30 supported cryptocurrencies, this is one of largest and most comprehensive ways to earn passive income with cryptocurrencies. Earning rates range from 2.53% to 16.6% APY if receiving interest in the staked cryptocurrency. If you select to earn in Celsius Network’s native cryptocurrency CELS, these rates range from 3.3% to 21.49% APY.

Earn passive income with cryptocurrencies - Celsius Network



Celsius Network is available both on desktop and mobile devices. With so many supported cryptocurrencies and such high-interest rates, this is my personal favourite platform to earn passive income with cryptocurrencies.

Binance

Binance is a complete crypto ecosystem, which offers a range of features, including locked and flexible staking. Additionally, Binance offers staking on products that CdC does not cover and vice versa, making both platforms useful for maximising your earning potential.

Binance offers 30 locked staking cryptocurrencies, with 15, 30 and 60-day locking durations. Estimated APY ranges from 1.49% to an insane 43.2%, making this the potentially highest yielding platform on this list. Furthermore, Binance offers a flexible savings account, that returns much lower interest rates, yet allows users to withdraw at any time.

Earn passive income with cryptocurrencies - Binance


Available on both desktop and mobile devices, Binance is one of the best crypto-investing ecosystems and provides some of the best ways to earn passive income with cryptocurrencies.

BlockFi

BlockFi is a banking alternative that offers the ability to earn interest on several popular cryptocurrencies. These coins include Bitcoin, Ethereum, Chainlink and Litecoin, among others.

There are currently 10 supported cryptocurrencies for earning interest. Earn rates range from 3%-9.3% depending on the coin. Another benefit of using BlockFi is that it has a unique feature that enables users to be paid in the currency of their choice. This means that you can pool together multiple assets to earn interest in a single crypto such as stable coins or BTC.

Available for both desktop and mobile devices, this is one of the most well-rounded and respected platforms to earn passive income with cryptocurrencies.

Click Here to Sign Up for BlockFi and Earn a $10 BTC Bonus when you Deposit $100 or More 

Crypto.com

Like Binance, Crypto.com (CdC) is a full cryptocurrency ecosystem. Offering portfolio tracking, coin storage, an exchange, lending and crypto-based debit cards, it is the most comprehensive offering on this list.

While CdC does not offer staking, it does offer an earn feature like Celsius Network. For users who have staked 25,000 or more of the native token (CRO), rewards range up to 6.5% p.a. for supported coins and up to 12% p.a. for stable coins. Without staking 25,000 or more CRO, rewards range from up to 4.5% p.a. for supported coins and up to 10% p.a. for stable coins.

Earn passive income with cryptocurrencies - Crypto.com


Available as an app, CdC is a unique platform for buying, spending and earning passive income with cryptocurrencies. If you are eager to learn more, here is my in-depth review on Crypto.com

Lolli

Lolli is a free browser extension that rewards users with BTC cashback for shopping at popular online retailers such as eBay, Cotton On and Apple.


When you shop online using the Lolli browser extension, it will notify you if you’re on one of its partner sites. If you enable Lolli on these sites, they will receive a commission from that site in exchange for Lolli directing you to make a purchase. Lolli then gives you a portion of this reward in the cryptocurrency Bitcoin as an incentive for using their extension, resulting in a win/win for both you and Lolli.

Lolli is available on the Chrome Browser. If you use the link below, you will receive a $5 BTC bonus on your first eligible spend.

Get Lolli Here

How to Earn Passive Income With Cryptocurrencies – Summary

In the continuously developing world of cryptocurrencies, there are ample opportunities to generate passive income. This new asset class provides interest rates up to 40%, far exceeding traditional investments such as term deposits and bonds. Whether you decide on a wallet, exchange, ecosystem or utilise all of the above, these platforms and many more can be a great way to earn passive income with cryptocurrencies and ultimately, help you attain financial independence.

Want to Learn more about Cryptocurrencies?

If you’re still not fully convinced on cryptocurrencies or would like to learn more about them, I highly recommend reading my review on Bitcoin, the most prominent cryptocurrency in circulation. In this review, I cover what it is, what the role of cryptocurrency is in modern society and how it is being used to improve upon traditional currencies and stores of value.

Want to Increase Your Security with a Crypto Hardware Wallet?

If you’d like to increase your crypto security by purchasing a hardware wallet, I recommend using Ledger and Trezor. These are two of the most reputable hardware wallet providers.

Buy Ledger Wallet Here

Trezor 

Hardware Wallets Explained

Bitcoin Explained – Exploring Bitcoin and its Promising Potential

Bitcoin Explained – Exploring Bitcoin and Its Promising Potential

Welcome to Bitcoin Explained. Today I’m going to cover Bitcoin and explain its role in the monetary system. I’ll explain what Bitcoin is, what its role is as a monetary unit and how it has and continues to be used as a store of value. I’ll compare it to fiat currencies (government-issued money) and gold to highlight its financial use-cases and potentiality for adding upon or even replacing these mediums of exchange in the future.

Bitcoin Explained – What is Bitcoin?

Bitcoin is a digital currency that was created to address problems related to centralised currencies. Most modern currencies such as fiat currency are centralised to banks and regulated by the government. As such, banks and governments can heavily influence these currencies’ values through things such as inflation and taxes. Bitcoin was created to be a decentralised currency, where there is no bank or central authority to govern them. Instead, Bitcoin relies on a network of users who verify the monetary transactions. The result is an easier, cheaper and quicker way to spend money.

How Does Bitcoin Differ from Traditional Forms of Money?

Many transactions that occur with fiat currencies are processed digitally. Wages are issued electronically; bills are paid digitally and online shopping is becoming more prevalent. However, these digital transactions are known as intermediated payments. Intermediated payments require a trusted third party to handle the money transfer between two parties. Cheques, credit cards, debit cards, bank wire transfers and apps such as PayPal are all utilise intermediated payments.

Bitcoin alternatively, is decentralised and doesn’t rely on a centralised third party such as these traditional monetary systems. Instead, Bitcoin relies on a peer-to-peer network where every member on the network can verify Bitcoin transactions. As such, Bitcoin is the first example of true digital cash that doesn’t rely on a trusted third-party intermediary.

Why Do People Not Want a Trusted Third-Party?

By their nature, a third party adds security weaknesses. By involving an extra party into the transaction, there are inherently more possibilities for theft and technical failure. Intermediaries also increase vulnerability to surveillance and bans by political authorities. For example, political authorities can stop payments under pretexts of security or money laundering.

Additionally, there is a heightened risk of fraud which in turn increases transaction costs and can delay settlements of payments. For these reasons, many people naturally prefer decentralised digital currencies. As the Proof of Work (PoW) system eliminates this need for trust, Bitcoin is a faster, more efficient and more trustworthy digital cash.

How Can Bitcoin Operate Without a Trusted Third-Party?

With Bitcoin, all transactions can be recorded by every member on the network. This is done so that they all share a common ledger of balances and transactions. When a member of the network transfers to another member, all members of that network can then verify that the sender has a sufficient balance. Nodes then compete to be the first to update the ledger with the new block of transactions. This occurs every 10 minutes.

This involves processing power and electricity on behalf of the node, as it needs to solve a complicated mathematical problem. The problem is difficult to solve, but the correct solution is easy to verify. This is what is known as the PoW system. For the PoW system to work, a correct solution must be committed and verified by all participating network members. The node that commits a valid block of transactions receives a block reward in the form of new bitcoins which has been added to the supply along with transaction fees. This is known as ‘mining’ as it requires physical time and resources (electricity) to extract the resource (Bitcoin).

The nature of having a difficult problem to solve that is easily verifiable has been chosen for specific reasons. Firstly, by making it hard to solve the problem, nodes have to compete to solve it promptly. This requires a lot of processing power and electricity on behalf of the node. It is this processing power that gives Bitcoin an intrinsic value, as it is linked to the time and processing output required to mine the new Bitcoin.

Secondly, under the PoW system, all participating nodes on the network verify that the correct solution has been committed. PoW makes the cost of writing a block extremely high, yet the cost of verifying its validity is extremely low. This in turn eliminates the incentive for anyone to try and create invalid transactions. If someone were to try, they would be wasting electricity and processing power without receiving the block reward. As such, Bitcoin can be understood as a technology that converts electricity into truthful records of transactions through the expenditure of processing power.

Is Bitcoin a Replacement for Traditional Forms of Money?

Bitcoin shows a lot of promise in replacing traditional forms of money. It has been used extensively in countries whose fiat currencies have failed or continue to be hyper-inflated such as Venezuela and Nigeria. However, in recent years, Bitcoin has shown a greater potentiality for being used as a store of value, due to its strict scarcity.

Nevertheless, Bitcoin was introduced as an alternative to traditional forms of money and continues to be used as one to this day. To truly understand Bitcoin and how it fits in the world of money, it’s important to explore the history and role of money.

What is the Role of Money?

The quintessential function of money is its ability to be a medium of exchange. A medium of exchange is an intermediary instrument that is used to facilitate the purchase, sale or trade of goods between parties. To enable a medium of exchange to be successful, it needs to represent a standard of value that is accepted by both parties.

Throughout history, many mediums of exchange have been utilised to facilitate trade. These include seashells, stones, beads, salt, silver, gold, gold-backed government money and government-provided legal tender (fiat currency). Each one of these mediums of exchange at some point in time possessed the key property that leads to a good being adopted as money – salability.

According to Carl Menger, the father of the Austrian school of economics, salability refers to the ease with which a good can be sold on the market whenever its holder desires, with the least loss in its price. However, three key components enable optimal salability. These components are salability across scales, across space and across time.

What Makes Money Work?

Bitcoin Explained - What is Salability?

Salability Across Scales

A good that is salable across scales can be conveniently divided into smaller units or grouped into larger units. This alteration of units enables the holder to sell it for whichever quantity is desired. This is why fiat currency consists of coins and notes, as it would be unfeasible to pay for something such as a house using coins. As such, salability across scales is essential in ensuring that the good can be used for all transactions, regardless of their size.

Salability Across Space

A good that is salable across space is one that can be easily transported or carried by the possessor. This is why good monetary media typically have a high value relative to their unit of weight. For example, paper currency holds high value despite weighing virtually nothing. Salability across space has been further enhanced through money becoming digitalised in recent years. Instead of freighting money internationally (a costly and time-consuming practice), billions of fiat currency can be digitally sent at the click of a button.

Salability Across Time

A good that is salable across time is one that retains its value into the future. These goods need to be immune to rot, corrosion and other types of deterioration. Therefore, should a good not deteriorate over time, it can be used as a store of value. By being a store of value, the holder is incentivised to hold onto or save the asset. This ensures that the good remain valuable over time and enables it to continue being a viable form of money. The previous two components of salability can be relatively easy to implement. However, salability across time remains an issue for most stores of value, including fiat currency.

The Transition from Other Forms of Money to Fiat Currency

Fiat currency is essentially paper money, as it is not backed or guaranteed by a commodity. Traditionally, government currencies were backed by gold (the Gold Standard) and as such, that currencies’ value was inextricably linked to gold. Under the gold standard, citizens of that country were able to exchange paper money for gold, which was kept in banks. This gave paper money an intrinsic value, as it enabled the direct exchange of gold at a rate set by that country’s government. The Gold Standard era ended during the first world war. As governments were printing money at astronomical rates to fund war efforts. These conditions made it impossible to maintain gold convertibility and over time, countries abandoned gold-back government currencies.

Fiat currency gradually overtook traditional forms of money such as cattle, seashells, rocks, gold-backed government tender and precious metals due to its salability. Being easily divisible (notes and coins) and able to be transported electronically, it possesses high salability across scales and space. Although, an issue lies in fiat currency’s salability across time. While it is true that paper currency can rip and deteriorate over time, it’s not the physical integrity of fiat that results in its loss in value over time. Instead, it is the government’s ability to generate endless supplies of fiat that damages its salability across time.

The Issue with Fiat Currency

For a good to maintain its value, it can’t increase too rapidly during a set period. As such, it has been a common characteristic throughout time for money to have some mechanism of restraint on the production of new units. Such a restraint helps maintain the value of existing units. For example, gold cannot be printed or created out of thin air (alchemists may disagree). Instead, there is a finite supply in circulation and a finite supply that can be mined. While the supply can increase over time through mining, it is an expensive and time-consuming process. This is what has enabled gold to maintain its store of value for thousands of years.

Contrastingly, it is extremely easy for governments to simply have more money printed. It is an automated and inexpensive process that can be done indefinitely. This process of printing money can result in hyperinflation. The real cost isn’t the direct cost of running the printing presses. Instead, it comes at the foregone economic activity that would have occurred through the exchange of goods to acquire the fiat. Additionally, the sudden influx in the supply of a nation’s fiat currency devalues that currency in relation to foreign currencies.

This has catastrophic consequences for that nation’s economy, as import costs rise significantly, resulting in diminished business returns and higher rates of unemployment. As such, hyperinflation constitutes a complete breakdown of the economic structure and production built by a society over centuries and millennia.

Examples of Fiat Currency Failing

German Papiermark

Following WW1, Germany discovered that it was unable to pay its war reparations set forth by the Treaty of Versailles. With Belgian and French armies occupying the most productive, industrialised areas of Germany, the German government resorted to mass printing their fiat currency, the Papiermark. They then exchanged the Papiermark for foreign currencies to cover their war reparations.

This severely damaged the value of the Papiermark. Before 1923, the largest denomination was $50,000 but this later climbed to 1 Trillion by 1923. The Papiermark became so devalued due to hyperinflation that people began using it to heat furnaces. As it was considered more efficient to burn the currency for warmth than it was to use it for trade.

Zimbabwe Dollar

Between 2008-2009, it is estimated that Zimbabwe had a monthly inflation rate of around 80 billion per cent. This resulted in workers being unable to afford basic goods, as prices rose faster than wages. Subsequently, the term ‘poverty billionaires’ was termed, as workers may have had a one-billion-dollar salary yet couldn’t afford a two-billion-dollar loaf of bread.

Hyperinflation devalued the Zimbabwe dollar to such an extent that bartering became common practice for the first time in centuries. In 2015, the Zimbabwe 100-Trillion-Dollar Note was worth approximately USD 0.40, causing potentially irreversible damage to the Zimbabwean economy.

List of Other Failed Fiat Currencies

Chinese Yuan
Roman Denarius
Greek Drachma
Belorussian Ruble
Yugoslavian Dinar
Angolan Kwanza
Peruvian Sol and Inti
Argentine Peso
Chilean Escudo
Austro-Hungarian Pengo

Countries Currently Experiencing High Annual Inflation

InflationChart
Image via Reserve Protocol

What Makes Bitcoin the Best Medium of Exchange?

Bitcoin Explained - Bitcoin Salability

Bitcoin Explained – Salability Across Scales 

Each Bitcoin contains 100 million Satoshi’s. This high degree of divisibility makes Bitcoin the most scalable medium of exchange in recorded history. As such, even if the value of Bitcoin were to hit astronomically high prices, it can still be used for day-to-day transactions. For this reason, Bitcoin has immensely high salability across scales.

Bitcoin Explained – Salability Across Space

Bitcoin and all cryptocurrencies are exceedingly salable across space as well, due to being digitalised. While it can take weeks to transport gold internationally and days to transfer fiat electronically, Bitcoin can be sent anywhere across the globe. This is usually achieved within a 10–20-minute time period, as that is how long it takes to validate the blockchain. Smaller transactions have been processed in a manner of seconds, making it one of the most salable mediums of exchange across space.

Bitcoin Explained Salability Across Time

The Difference Maker

Salability across time has always been an issue for various forms of money. In some instances, such as with food, salability across time is impossible due to rot and deterioration. Sometimes, salability across time is unachievable due to the ease in which new monetary units can be produced. Forms of money that require minimal effort and resources to produce such as fiat currencies are prone to hyperinflation. To combat this, a mechanism of restraining new units is imperative to prevent an over-abundance of that monetary asset.

A form of money that is hard to produce is referred to as ‘hard money’. Money’s hardness can be understood through the stock-to-flow-ratio. Stock in this instance refers to the existing supply which consists of everything produced in the past minus what has been consumed or destroyed. Flow refers to the extra production that will be made available in a given period.

Image by Sabrina Jiang © Investopedia 2020 
 

Stock-to-Flow-Ratio – What Makes Bitcoin Hard Money?

Bitcoin has a finite supply of 21 million. This means that no matter how much the demand for Bitcoin grows, there can only ever be a total amount of 21 million in existence. Of that figure, there is a black area of missing Bitcoins that are no longer in circulation. There are numerous reasons as to why the actual Bitcoin supply is lower than 21 million.

These include: incorrect transactions to the wrong address, owners who died without passing on Bitcoin, seized Bitcoin by government entities/law enforcement and wallet owners who lost their seed phrases among others. For this reason, the actual supply of Bitcoin may be much lower than 21 million. This creates scarcity, which aids Bitcoin in retaining and even growing its value over time. However, perhaps the most useful feature of Bitcoin for preserving its salability across time is the difficulty associated with creating new units.

Bitcoin Mining – What Gives Bitcoin its Production Value?

Bitcoin Explained - Mining

All Bitcoin transactions are recorded by members of the network to ensure that everyone shares a common ledger of balances and transactions. Whenever a member of the network transfers a sum to another member, every member of the network can verify that the sender has a sufficient balance. Nodes then compete to be the first to update the ledger with this new block of transactions. This is what is known as proof-of-work (PoW) and it is crucial for ensuring that Bitcoin remains a legitimate and accountable medium of exchange.

PoW involves network members competing with one another to solve mathematical problems. These mathematical problems require time and electricity, which gives Bitcoin its inherent production value. The first node to produce the correct solution broadcasts it to network members, who then verify its legitimacy.

Once verified, the transactions are then committed to the new block and the node that commits the valid block of transactions receives a block award consisting of new bitcoins added to the supply in addition to the transaction fees paid by the people who are transacting. This PoW system is akin to mining, as it rewards miners (network members) with Bitcoin (gold) as compensation for the resources they committed to PoW.

Subsequently, Bitcoin mining helps ensure that Bitcoin remains hard money, as expenditure of electricity and processing power is quintessential for producing new coins. The high expenditure of these resources also incentivises nodes to not include invalid transactions, as it is far cheaper to verify transactions through PoW than it is to solve the PoW.

As such, nodes that enter invalid transactions are almost guaranteed to be rejected, resulting in no rewards for the expended processing power and electricity. For these reasons, Bitcoin mining is one of the fundamental drivers for ensuring that Bitcoin remains hard money and that it stays salable over time. However, there is an additional component of mining that enhances salability over time – the halving.

Bitcoin Explained – The Halving

Bitcoin Explained - The Halving

The following is an exert from The Bitcoin Standard by Saifedean Ammous

Bitcoin blocks are added to the shared ledger roughly every ten minutes. At the birth of the network, the block reward was programmed to be 50 bitcoins per block. Every four years, roughly, or after 210,000 blocks have been issued, the block reward drops by half. The first halving happened on November 28, 2012, after which the issuance of new bitcoins dropped to 25 per block. On July 9, 2016, it dropped again to 12.5 coins per block and will drop to 6.25 in 2020. According to this schedule, the supply will continue to increase at a decreasing rate, asymptotically approaching 21 million coins sometime around the year 2140, at which point there will be no more bitcoins issued.

To put this into perspective, imagine if the rate in which gold could be mined halved every four years. There would be a higher demand for it due to its new relative scarcity. Bitcoin halving is a similar phenomenon that has traditionally resulted in parabolic price increases. With each halving, Bitcoin becomes harder to mine which in turn increase its value. Due to an increase in value, more miners compete for a smaller Bitcoin yield. The increase in competition for a scarcer resource, drives up value, as more electricity and processing power is needed. Additionally, the added number of miners results in a more efficient PoW system, as more people can verify transactions.

Bitcoin Explained – What is it’s Role as a Store of Value

Due to the unique features that make Bitcoin salable across time, namely, it’s finite total supply, the cost and effort required to mine it and the halving, Bitcoin has the potential to retain its value almost indefinitely. As such, it is currently the most salable currency in human history and its most promising store of value.

Until Bitcoin’s invention, all forms of money were unlimited and thus, were unable to effectively store value across time. Bitcoin’s finite supply combined with its continuously diminishing mining rate makes it have an exceptionally high stock-to-flow ratio. It is this stock-to-flow ratio that ensures that Bitcoin remains hard money and organically grows over time. Bitcoin is designed to not only retain value over time but to increase in it. As such, Bitcoin is perhaps the cheapest way to buy the future, due to its unmanipulated, organic growth throughout history.

Bitcoin Explained Summary – A Way to Invest in the Future

Before the inception of Bitcoin, numerous issues plagued various forms of money and other stores of value. Things like hyperinflation, a lack of salability, physical deterioration, counterfeiting, security and centralisation have proven fundamental flaws in these various mediums of exchange. However, Bitcoin solves all of these problems and more due to its well thought out design.

It is decentralised and operates under a PoW system that not only gives Bitcoin an organic, inherent value but incentivises network members to increase its security by verifying correct transactions. Being digital and divisible into a hundred-million units, it is the most salable medium of exchange across space and scale. However, what particularly separates Bitcoin from traditional stores of value is its immense salability across time.

Bitcoin is finite, its stock-to-flow ratio is immensely high, it is hard money and over time it gets more expensive and harder to produce. These unique features such as mining, halving and decentralisation make Bitcoin the first true form of digital cash and the most promising store of value in human history. For these reasons, Bitcoin is perhaps one of, if not the greatest way to invest in the future.

Want to Buy Bitcoin or Other Cryptocurrencies?

How to Buy Bitcoin on Coinbase, Step by Step (With Photos) - Bitcoin Market  Journal

My personal favourite place to buy Bitcoin and other cryptocurrencies in Australia is Swyftx. Swyftx is an Australian exchange that offers low trading fees, access to 179+ cryptocurrencies including popular ones such as Bitcoin and Ethereum and it allows users to deposit and withdraw AUD.

Binance is another popular exchange that is used more commonly by the global market. It has no deposit or withdrawal fees, has low trading fees and supports Osko transfers. Binance is also a great place to earn passive income on your cryptocurrencies through their staking and earn features.

Sign Up for Swyftx (Australian Exchange)

Sign up for Binance (International Exchange)

Want to Learn More About Bitcoin and Cryptocurrency?

The Bitcoin Standard by Saifedean Ammous is a great resource to learn about the fundamentals surrounding Bitcoin. It was the main resource used when compiling this post and I highly recommend it for anyone trying to learn more about Bitcoin.

You can buy the book as a Hardcover, Kindle or Audio Book here

Want to Increase Your Security with a Crypto Hardware Wallet?

If you’d like to securely store your Bitcoin, it is advisable to use a hardware wallet, I recommend using Ledger and Trezor as these are two of the most reputable and reliable hardware wallet providers.

Buy Ledger Wallet Here

Buy Trezor Hardware Wallet Here

Hardware Wallets Explained