Welcome to our #89 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, I write about why money printing is driving up money supply (M2) or the money in circulation and what this means for your money and future wealth.
For women especially, there has never been a more important time to invest. Quite simply, to not invest is risky. Once you’re clear on the returns you need to make per year (minimum), choosing the assets to invest in will be easier.
And remember, you can start small, even with £20 or £100 a month. Just do the research.
You can review the news in brief so you stay on top of global financial, economic and investing trends.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
Women: why NOT investing is risky
The pandemic and money printing: why you need to invest in the right assets
When it comes to money, women are not risk averse despite the money myths the media likes to perpetuate.
And whilst we see less women (overall) investing in the equity markets and in cryptocurrencies than men, this is changing. Fast.
Women invest.
According to financial expert Barbara Stewart, the majority of women are risk aware meaning they like to take in more information before making an investing decision. A high percentage of women however, are risk takers and risk seekers.
This is important.
Women are money managers
We know that women make up 85% of all household decisions. And nine out of ten women will be responsible for the household finances, at one point in their life.
A key part of that is knowing how to generate wealth and grow your net worth. Especially as women tend to take more career breaks, earn less over time and have less saved for their retirement as a result.
And understanding how the pandemic has affected the economy and therefore your money and your net worth is fundamental to thinking through how you need to invest.
There has never been a more urgent time to invest. And there has never been a more urgent time to invest in the right assets.
What are the right assets? Assets which generate 11-15%+ per annum, at a minimum (depending on where you live).
Let’s put this in context: money printing
The pandemic has been a disaster for the global economy. We have seen the central banks and governments around the world step in and print money.
Otherwise referred to as quantitative easing (QE), this is simply where the central banks buy government and corporate bonds from financial companies and pension funds.
This pumps liquidity into the markets which has helped avert a financial crisis and buffered the economy from total collapse.
Global currency debasement
As more money is printed, the supply of money or the money in circulation goes up. This means that the value of the money you earn is being devalued (because there is simply more of it).
In other words, global currency is being debased.
In the US, the annual increase in M2 or money supply is estimated at 13%-15%. And in the UK, money supply is going up at 11% per annum.
Therefore, depending on where you live, you now need to earn an additional 11%+ just to stand still. Or, you need to invest in assets which grow in value by at least 11%+ every year.
Every year you do not earn 11%+ more or your assets do not generate this return, means that your net worth is going down. And financially speaking, you are losing ground.
So whilst there is lots of discussion about rising inflation (think rising food and energy prices), the key metric to focus on is the increase in money supply or M2.
Not investing in assets is risky
The only way to protect your hard-earned money and future wealth, is if you invest in assets.
Assets is essentially deferred expenditure which goes up in value over a given time frame. The aim is to generate returns which outpace inflation and the expanding money supply, every year.
But also knowing which assets to invest in, and how much, is key.
For example, ONS data revealed that UK average house prices increased by 10.6% over the year to August, up from 8.5% in July.
According to Cointelegraph, European stocks are only up 10.3% over the last year but commodities are up 35%+.
But the best performing macro asset worldwide in 2021 is bitcoin.
If you had invested in bitcoin via a crypto exchange 12 months ago, your investment would have appreciated by 400%.
And that’s not even taking into account how high bitcoin and other crypto assets like ethereum are likely to go up in price in this bull run. (Please note: the crypto can drop as much as 65-85%+ in a bear market).
Keep learning and invest in what you know
Women are keen learners. We like to understand the context and have all the information at our fingertips before we invest.
This is smart.
What next?
Read (again) Women: why invest in crypto?
Read up on investment platforms and open an account
Disclaimer: I invest in BTC, ETH, and DeFi protocols. Please do your own research. This article is for informational purposes only, we do not provide investment advice or recommend products.
News in Brief
Financial news
On Friday, the S&P 500 ended a 7 day streak, the Dow Jones managed to close at a record high, in part driven by financial stocks.
US Federal Reserve Chairman Jerome Powell said that supply chain constraints have gotten worse, which could lead to an extended period of rising inflation.
US jobless claims hit pandemic low. Just 290,000 Americans filed new claims for unemployment insurance last week, a 6,000 fall on the previous week.
The latest signal from the Bank of England (BoE) that tighter monetary policy is on the way sparked a sell-off on Monday in short-dated UK government debt (and a spike in yields). Markets are now fully pricing in a rise in interest rates to 0.25% at the BoE’s next meeting on November 3.
UK inflation dipped to 3.1% in September (from 3.2% in August), but many believe this is ‘the calm before the storm’. Inflation could top 5% in early 2022.
UK borrowing falls in September to £21.8bn, a drop of around £7bn compared with September 2020, and less than economists forecast.
CBI worries that UK shortages ie in raw materials, parts and workers are the highest since the 1970s.
Crypto: bitcoin, ethereum & DeFi
First bitcoin futures ETF (US) rose more than 4% in trading debut on the NYSE. The fund tracks CME bitcoin futures, or contracts speculating on the future price of bitcoin, rather than the crypto itself. It was the fastest ETF to get $1bn in 2 days.
On Wednesday, Bitcoin hit a new all-time high at $66,500+ after bitcoin future ETF launch. Bitcoin could even reach $150,000+ by the end of the year because of the new ETF. (See today’s price).
Ether surged past $4000+ in a new all-time high (Monday). It has a total market value of approximately $480bn, less than half bitcoin’s $1.09tn. (See today’s price).
Goldman Sachs says DeFi has its advantages over traditional finance. DeFi is easier to access for underbanked populations and provides faster settlements for users, but it’s still a work in progress, the report stated.
Billionaire investor, Paul Tudor Jones says that he views crypto as a better hedge against inflation than gold. He also said that inflation is not ‘transitory’.
Twitter and Square CEO, Jack Dorsey says that hyperinflation will happen soon in the US and around the world.
Coffee Break? Read This
Research: women leaders took on even more invisible work during the pandemic
A marriage researcher’s favourite books and podcasts for better relationships
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and @janicka.
The Purse Ltd. Copyright 2021 & All Rights Reserved.
The Purse provides content for informational purposes only, we do not recommend products or services or provide investment advice. Please do your own research or speak to a financial advisor.
Women: why NOT investing is risky