Opportunities

Blockchain and Cryptocurrency Made Simple

what the heck is blockchain.png

I first heard about Bitcoin many years ago, way before it took off. Unfortunately, I was busy with other projects and didn’t have the time to fully research the subject and thus missed the boat. Given how money works in this society, it’s no surprise that Bitcoin and other crypto coins took off, as they bypass the central banking system.

But I don’t regret it missing the boat. For those who remember the dot.com boom at the turn of the century, the frenzy that rocketed share prices sky high was followed by a massive dive. Well, that event marked the beginning of the internet revolution. Once the frenzy was over, only companies that offered true value where the ones that flourished—companies like Google, Amazon and Apple. Life changing technologies such as the iPhone and Facebook came after the frenzy.

That’s why I have no regrets about “missing the boat” on Bitcoin because in my opinion (based on history) we’ve only just begun.

What is Blockchain?

Let’s keep this very simple.

Blockchain is like a spreadsheet. It’s a place to record a transaction.

Imagine each row in the spreadsheet is a single transaction between two people, such as Bob gave $10 to Alex.

Blockchain is like a spreadsheet

blockchain simpl example.png

What makes Blockchain special is that each transaction is verified many times, by different members of the community.

A spreadsheet can be used for many things. And so too can Blockchain. Bitcoin is just one application of blockchain, just like Angry Birds is just one app available in Apple’s iTune Store.

In that sense, think of blockchain as a platform and the cryptocurrency as an app.

blockchain is a platform - coins are apps.png

Yes, you read that right. Cryptocurrency is just an “app.”  And money is only one use of blockchain.

So while there is a lot of talk about Bitcoin, what’s far more exciting is blockchain—that’s what makes Bitcoin work.

The possibilities of blockchain are endless. Ten years from now we’ll be using blockchain technology in ways we never dreamed of. Just like we never dreamed we’d all be connected via Facebook sharing videos with our friends from our phones.

One company that is putting the power of blockchain to work is USA based Sterling Consolidated (Stock Code: STCC - note they are a client of Melvin.Media so be sure to read this compensation disclosure.)

Sterling is a 50-year-old company that specializes in importing and distributing of o-rings—those tiny little rubber rings that you’ll find in all cars, hydraulics, aeroplanes, rockets, swimming pools and more.  

O-rings

It’s an industry where most of the materials are manufactured in China. While this is cheaper than manufacturing in the USA, it presents other business burdens, such as long delivery times and high transaction costs. To find out how Sterling plans to solve some of these problems, visit investor.sterlingconsolidated.com

And for further reading of Blockchain I recommend The Internet of Money by Andreas M. Antonopoulos.

If you have any questions, feedback or want more articles on this subject, comment below or contact me.

tm sign blog.png

Property Investors: The Difference Between USA and Australia

0_ajDTkVnVZ3Lzjtf9.png

I’ve been studying the USA property market for some time now; there are lots of amazing opportunities with rental returns ranging from 10% to 20% of the total property value (e.g. between $50k to $100k rental income on a $500,000 property.)

For Australian property investors this is something new. The usual reaction from my American friends, whenever I tell them that Australians lose money on an investment property to get tax breaks, is “ That’s crazy!”

Of course, the Aussie market has a steady capital growth and unlike the USA, didn’t crash after the subprime fallout in 2007.

But still, the yanks think it’s a crazy system to lose cash flow and wait for capital growth.

However, the Aussie investor can get in on the USA market and use the positive cash flow to help ease the burden of the income loss created by negative gearing.

Research Results

Here’s what I’ve discovered from my research:

  1. Single family home can generate rental income of 10% to 15% per year of the property value (so it’s more if you use leverage).
  2. Multi-family homes (a block of apartments) can generate upwards of 20% annual income (of property value).
  3. Renovated or rehabbed properties can generate 30% increase in value (after costs), plus the 10% to 15% ongoing rental income (of the increased value).

Key points of difference

The main differences between the USA market and Australia is this:

  1. Australian landlords rely on capital growth to increase wealth, whereas in the USA, capital growth is secondary to rental returns.
  2. Debt reduction is easier in the USA. The added cash flow helps reduce debt creating equity and the ability to purchase more property, faster.
  3. In Australia, apartments are sold individually, some are owned by investors and others are owner occupied. In the USA, apartment blocks are called multi-family homes and the entire block is owned by an investor, with all apartments rented. (Note: the term condo is used when the apartment is owned by an individual, not by an investor.)
  4. Finance is cheaper in the USA and easier to obtain.
  5. Raising of capital has less restrictions in the USA.

With these differences, creating a portfolio of cash flow positive property in the USA is an easier task than it is in Australia. This doesn’t make Australian property investing ineffective, it’s simply means the strategy is different.

Using USA cash flow positive properties to ease the burden of your negatively geared Australian properties is something worth considering.

My Strategy

My plan is to build a very large USA portfolio that is a mix of all 3 methods above (single, multi and renos/rehabs).

If you’d like to invest with me, register your details below and I’ll send you the documentation once it is ready. In the meantime, feel free to reach out and ask any questions in the comments below or privately here.

And you don’t have to worry about any tenant issues, after all I’m an Aussie, all I have to say is, “that’s not a knife…”

0_cCBaOaIbaFbCJ9V6.png

Tony “Dundee” Melvin 😃

Tony Blog Signature.png

Complete the form below to register your interest

Name *
Name
Phone *
Phone