Frugal Is Rich

If you have read a number of my posts then you probably know cash is my least favorite savings option because it's very hard to put it to work. What I mean by that is liquid cash earns a very small amount of interest when you compare it with the rise in inflation. Hence, I do not recommend to maintain more cash then what you need in the form of a monthly supplies fund or an emergency fund. There may be other situations, where for example you could be close to buying a home and yes it would make sense to hold the down payment money for the home in cash. For maximizing the value of liquid cash, there aren't a lot of great options, but there are a few where you still get something back to fight inflation. How an average American saves varies by each household, demographics and their income status. In 2019, the U.S. Federal Reserve did a study where they found the median transaction account balance was $5300 and the average transaction account balance was $41,600 . Transaction acc...

 It is very exciting that the Federal Reserve has been thinking deeply about the idea of digital currency. A series of papers released by the Federal Reserve on Stablecoins, the idea of central digital currency this year backs this assertion and hence the excitement about writing this post. In very simple terms Stablecoins are cryptocurrencies whose price is pegged to an external asset like the US Dollar or gold. Examples of such cryptocurrencies are USD Coin (USDC) or Tether USD (USD) that are pegged to the US Dollar and Digix Gold Token (DGX) that is tied to the value of gold. There is a third type of Stablecoin that is cryptocurrency backed, an example being DAI. To simplify how DAI works, it maintains its value through cryptocurrency which is used as collateral. Thinking of it, you may say that the price of cryptocurrencies is volatile and hence the collateral ratio between DAI and Ether is managed to maintain the price stability. This interestingly all happens through smart co...

Metaverse aka the network of 3D virtual worlds or as some some people call it true virtual reality. The whole idea is to allow people to live virtual lives and not hold themselves back in trying out what they might miss out on in the real world.  Looking at some of the trends of how excited this gets people, a search across Google Trends tells the story. If you carefully look, the search term Cryptocurrency and Metaverse are trending really close, given the latter has really picked up in the recent months. Source: Google Trends - Comparison of Metaverse, Cryptocurrency, Bitcoin & Stocks Virtual Reality definitely is an incredible way of doing what you wanted to do in real life and also run a social experiment around it. Oculus, Sony and Microsoft got us excited about virtual reality (VR) by allowing us to play games using VR headsets, but even if you take a step back I feel gaming is virtual reality. Let us take any game, for example Call of Duty that I am a big fan of, it is a...

I have been a firm believer in keeping more money in high interest savings account and skipping the brick and mortar banks. Essentially the rate of interest is way much higher and you have an option to setup high yielding Certificate of Deposits (CD) or No Penalty CDs which is an easy way to grow your money. The best part about No Penalty CDs is you can think long term and get a higher rate of interest for your money but if you absolutely need the money, you have an option to close it and keep the interest without fees. Its a sweet deal because if you rather go with the usual CDs and if you want your money back prior to maturity, you end losing interest earnings plus fees. There are a number of online banks that have started offering this which is great but the challenge has been the rate of interest has been going down with each day/month. The best savings interest rate as of today with a quick internet search has been around 0.45-0.55% APY. How good is that ? Well it basically means...