Can Money Literally Disappear?

The theme of this site is getting rid of debt.  Debt is an odd sort of thing.  We know when we have a debt; it’s exactly that debt that we want to punch in the face!  We believe that our debt is denominated in New Zealand dollars or in any other government currency.

By far the most misunderstood aspect of government money is that it represents debt.  Money in the modern sense is not dollars, or Euro, or Pounds; money is debt.  Money may also be measured by the relative value in that currency of any good or service we want to buy or sell.

Here we’ll explain how it is that government money is debt and then we’ll move on to cryptocurrencies, the most famous of which is Bitcoin.

Fiat Currency

The main reason that government money is actually debt is based on the deposit banking system.  Let’s say the government requires banks to keep 10% of all deposits in the bank physically.   That means that for every one hundred dollars people deposit the bank can lend $90.

The person who deposited to $100 and the person who borrowed the $90 both have claim on money totaling $190 but in reality only $100 exists.

The Beat Goes On

The first borrower deposits the money ($90) in her bank so she can write checks on it and her bank lends to another person $81.  The process gets repeated again and again until there are demands on about $600 even though only $100 really exist; the rest is debt.

How Money Disappears

This aspect is quite simple to understand.  What is much harder to wrap our heads around is the notion that if a lot of people paid off their debt, money would simply disappear.

The $90 that the bank lent the first borrower seems to be real money.  That’s why the second bank could use it to lend $81 to the second borrower.  So on, every bank uses money that the first bank created out of nowhere because the bank was still obligated to the full $100 deposited by the original depositor.

All the banks along the way created $500 dollars out of thin air.  This money would disappear if everyone paid off their debts at the same time.

It’s also important to understand that the original $100 was also created out of nowhere sometime in the past.

The modern government regulated banking system is entirely an Emperor’s New Clothes system.  As long as we continue to pretend that our money really exists we can continue to go to the movies, eat in fine restaurants, gamble at online casinos for New Zealanders, take cruises, and attend cricket matches.

The money continues to exist as long as we continue to pretend that it exists.  It all almost came to an abrupt end in 2007-2008 when the international banking crisis came to a head.  The crisis seemed to have begun as Americans walked out on mortgages they could no longer afford to pay off.  The money literally disappeared but it was also “owed” to other people who had deposited the money on which the mortgages were lent out.

The crisis was exacerbated by the realization by bankers that they were up to their eyeballs in debt reduction meaning disappearing money.  So they found all kinds of ways to hide from the impending demise of themselves.  They sold mortgage-backed assets knowing full well that the mortgages themselves weren’t backed by anything.

The banks also sold derivatives which meant that the banks were establishing layers between themselves and the explosive debt.

When the crisis hit, the banks were still in the crosshairs of a major banking meltdown.  Money was about to disappear and the banks would be unable to give money to the people who rightfully would want their own money.  The bailout that President Obama engineered was supposed to stimulate the economy of the Us and through the US to the rest f the world.  It didn’t happen because the banks kept the money in house, adding to their reserves and not making any loan that looked remotely risky.

Along Comes Bitcoin

Because Bitcoin is mined, figuratively not literally, it conjures up an image of gold which was mined literally and provided the physical backing for government money back in the day.  When governments spurned gold, they laid the groundwork for the crisis of 2007-2008 and every crisis to come.

Bitcoin is intended to replace government money when the inevitable government money crashes and burns.

In Venezuela today, the inflation rate is nearing 100,000% annually.  Venezuelan government money is not worth anything.  It is reminiscent of Weimar Germany where the money was so worthless as money, people used it instead of firewood to heat their homes.

In theory, people will flee into crypto-currencies if their country’s currency fails.  But the example of Venezuela is telling: the people there don’t have access to any form of currency so they have reverted to barter.

If Bitcoins or any of the many other crypto-currencies are not allowed to circulate in a major crisis they will prove to be as useless as government money.  The government might adopt a crypto-currency as the country’s new currency.  That would only happen if the government’s people already owned a very large amount of crypto-currencies.

It’s All in the Name

When Bitcoin was first introduced nobody gave it much thought.  As the nominal value of Bitcoins rose people started calling it a crypto-currency. This is meant as a denunciation of Bitcoin; it isn’t a ”real” currency; it’s a “crypto”-currency.

You’ll know something very big is afoot when the government and the big media start dropping the prefix crypto.  When they do, head for the hills!

Bitcoins are limited as opposed to government money which we have seen is functionally unlimited.  Bitcoin represents purchasing power; it is not debt, yet.  So, Bitcoin may replace dollars and other currencies in some transactions.  Eventually, governments will allow fractional banking in Bitcoin and the merry-go-round will start up all over again.

5 Ways to Change Your Finances in 2018

We’ve almost made it through the first two months of 2018—how are those New Year’s resolutions holding up? If you made a commitment to resolving financial issues and setting yourself up for future financial success, assess the steps you’ve taken towards these goals in the past two months. If you find you’ve lost track of your goals, it’s time for a reset. Use these tips to change your finances and make the most of this year—it’s certainly not too late to bring those resolutions to fruition.

  1. Revise Your Budget

If you find you’re still struggling to pay off those credit card bills, it might be time to revise your budget. The following signs also indicate that it might be time to take a look at your monthly expenses again:

  • You’re living paycheck to paycheck
  • You’ve recently experienced a decrease in income
  • You’ve recently had to make larger purchases (new rental rates, car payments, etc.)

If you decide it’s time to update your budget, start by identifying where your cash is going. Track your spending and find areas that can be categorized as frivolous expenses, then highlight the areas that are non-negotiable. This can help you find areas that require you to cut back—helping you fall into that budgeting sweet spot.

  1. Handle Tax Debt As Soon as Possible

If you’re in debt with the IRS, 2018 is the year to begin digging yourself out of that financial hole. Ignoring debt owed to Uncle Sam can result in severe consequences that you’ll feel for years to come, including wage seizures and bank levies. Don’t ignore notices from the government agency; the minute you know you won’t be able to pay what you owe to the IRS, get in contact with an agent and come up with a payment solution as soon as possible.

If you find that you can’t get the solution on your own, make it a priority to seek out professional help with IRS problems. Tax resolution specialists are adept at finding ways to settle overwhelming debt, and while you’ll have to make an investment in these services, the peace of mind and actionable tips you receive are likely more than worth it.

  1. Focus on Bolstering Your Emergency Savings

Financial experts recommend having at least three to six months’ worth of living expenses saved away in an emergency fund—especially important in a volatile economy. In the event of a job loss or arrival of a new little one, an emergency savings fund will become invaluable.  To make it easier to funnel money into an emergency savings account, set up automatic drafts from your paycheck to the account. This way, money will be siphoned without effort—meaning you don’t have to think about it at all.

  1. Supplement Your Income

Working two jobs isn’t realistic for everyone, but there are certain ways to make a supplementary income that won’t completely deprive you of a personal and social life. If you have graphic design or writing skills, you can easily find work on a site like If you’re great with kids, you might seek babysitting gigs on Finding ways to pad your wallet each week can help you afford those recreational expenses—or more importantly, help you start paying down debt. Consider your skillset and look around for odd jobs that might help you put a little more into your bank account each month.

  1. Read Up On Financial Literature

As Michelangelo once said: “I am still learning.” Take this approach when it comes to financial matters. Read up on available literature and stay abreast of financial trends; read books from financial experts, and keep your eye on blogs that can provide new tips and insights. The more you know about appropriate financial strategy, the better off you’ll be.

The year has just begun, and you’ve got 10 months to make it your most financially successful yet. Consider these habits and the ways you might implement them into your money routine, and leave 2018 richer and more financially secure.

How to Live Richer Without Being Rich

Even the most frugal and thrifty among us have dreamt about walking in the shoes of the rich, even if only for a little while. We’d all like to have more money or at least live like we do, without going broke in the process. So how can it be done? There are a few ways we can all live richer without being rich.

Buy it second-hand

We all want something that’s simply out of our budget whether it be a new home, designer clothes, fancy new car or even a set of luxurious sheets and bedding. Without making more money we think there’s no way to have these things. Some of them are still attainable without making another cent. Simply buy a second-hand fancy car to save thousands, buy those designer clothes used. No one will know that they’re used goods unless you tell them because once something is owned, it’s always used, no matter how much money the owner has.

Ingvar Kamprad, the billionaire behind Ikea is known for only buying second-hand clothes in order to save money. If this is something even the rich do, then you should too. Kamprad credits his thrifty nature for making Ikea the top brand it is today. In a documentary shot in 2016, he stated:

“I don’t think I’m wearing anything that wasn’t bought at a flea market. It means that I want to set a good example.”

In 2006 he was listed as the fourth richest person in the world by American business magazine, Forbes.

Take a lesson from the rich

Just like the second-hand lesson learned from Ingvar Kamprad there are many other successful and rich, thrifty millionaire and billionaires to learn from when it comes to saving and spending money. If you want to live like the rich, then don’t live like you think the rich live.

In 1998, The Millionaire Next Door was published. The book has been updated numerous times over the years, but the findings have always stayed the same. The truth is, wealthy people aren’t who you expect. The typical average rich person is not a celebrity, they don’t drive expensive sports cars, wear the latest designer clothes or have the most expensive house. They might be your next door neighbour and you wouldn’t know it.

According to the JPH Advisory Group most rich people have these 5 things in common:

  1. They invest in themselves and focus on maximising their income
  2. They pay themselves first and automate their savings
  3. They don’t leave money on the table
  4. They live below their means
  5. They hire and follow the advice of good advisors

The number one lesson we can take from that when it comes to living like the rich? The rich don’t actually live like they’re rich. They live below their means. You might even be living like a rich person now. Enjoy it and before you think about buying that brand new luxury automobile or penthouse, remember this quote from Will Rogers:

“Too many people spend money they earned … to buy things they don’t want … to impress people they don’t like.”

How a Vehicle Check Could Save You a Fortune

When shopping in the used car market, motorists will always be looking for ways to save money. This can be a dangerous game, as if you are not careful you could end up making a bad choice and drive away with an unsafe or even illegal car. This could end up costing you a huge sum in the long run, so it is always best to be patient and careful when shopping for used cars.

One of the best ways to protect yourself is with a vehicle history check from HPI. These cost just a small amount and could save you a fortune long-term, so they should always be used as part of your process when browsing for used cars.

Avoid Scams

One of the key ways that a vehicle check will save you money is that it will protect you from used car scams. If you were to buy a stolen car or one with outstanding finance, this could see the car taken away from you and your money gone forever. Scams like this can be hard to spot, but a history check will ensure that the car is legal, that there is no outstanding finance amongst other important factors.


The more that you know about the car’s history the better – how it performed in the past will determine how it performs in the future. These checks will reveal the MOT history – this includes the test date, recorded mileage, previous results, status, due date, refusal notes and advisory notes. All of this information will help to determine if the car has been looked after, if there are any recurring issues and whether or not it is roadworthy. If it is due an MOT, be sure to get the seller to get the vehicle tested before making the purchase as otherwise, you could find that you foot the bill for any costly repairs.

HPI finds that 1 in 3 cars that they check has some kind of hidden issue, so the value of these checks are clear. Without carrying out a thorough check, it is far too easy to purchase what seems like a fine automobile only for its past to quickly catch up with you and cost a fortune. Whether this is the fact that it has outstanding finance or simply a faulty clutch, this would be a nasty surprise and significantly impact your finances (and possibly leave you carless). The checks are quick, easy and affordable, so always carry them out before parting with any cash.

Real Money, Virtual Money

It was just in the last year, 2017, that most people became unembarrassed to acknowledge the fact that they did not really know what money is. This ignorance was brought about by the surge in prizes and hence the popularity of the Bitcoin.  We would all be hard-pressed to find a normally functional adult who does not know what Bitcoins are. However, the bulk of the people will only be able to tell you that it is a cryptocurrency or virtual money at the best. The majority of the people that will give these correct answers do not even know what the replies mean.

Bitcoins are just one of the many cryptocurrencies that are currently in circulation and can be used for casinos online. The currencies are valued just like national currencies are. This means that one cryptocurrency can have a larger value than another. Bitcoins are the most valuable among all the other currencies.

Is It Real Money

Over the years people have lost the concept of what money is. Instead of progressing to find solutions in future trends we are being rescued by old wisdom. Money is fast deteriorating back to anything that has value. This is the same concept that was used by our ancestors many years ago when they began to batter trade.

This is now the exact same situation that we are in today. Money is no longer defined by the principles that we had all come to know and easily understand. No longer is money defined as a physical representation of value. Due to latest technological trends, money’s lifespan in the physical realm is now shorter.

Finally, money is now anything that easily allows you to transact. By using this definition, the Bitcoin and other cryptocurrencies are more easily recognizable as money than gold and many 2nd and 3rd world country currencies. It is easier to buy and sell things using cryptocurrencies or virtual money than using hard currency. Using Gold, the reserve currency is even more difficult. Imagine trying to fund your online casino gaming with gold bullion, visit for more information. You would only be able to play after the transaction is complete which is several days later. However, with virtual currencies, you are able to play right away. So, we ask again the question, which is the real currency?

Banks Are Your Friends

I’ve worked for two big banks in my life. They, for good reason, are not viewed in the most positive light. Wells Fargo with the account opening scandals. JPMorgan with the ‘London Whale’ who caused a $7 billion loss in one trade. HSBC playing with the Mexican cartel. Oh and of course 2008, when all of them were exposed for taking excessive and reckless risks in the subprime market.

You don’t have to love them. You should take advantage of what they’re offering though. Checking accounts, credit cards, and investment accounts are fresh meat to these guys. They are foaming at the mouth for customer acquisition. Last year, before the promo was cut in half, Chase was offering the Sapphire Reserve with some serious generosity. Spend $1,500 in 3 months and receive 100,000 points, which equates to $1,000 in cash or $1,500 in airfare. They also reimburse your commuting fees, up to $300 a year. It almost seemed too good to be true. Spending $1,500 in 3 months isn’t hard; you can spend it on restaurants, companies that offer web hosting services, or your credit card bill.

Right now, TD Bank is offering $300 if you sign up for a new account online and get a direct deposit of over $2,500 in 60 days to the account. Not everyone has the means to get this done, but it’s almost effortless to complete. A quick google search on checking account offers will get you some of the best offers on the market.

If you have a good credit score, chances are you’ve been solicited by some of the credit card companies or banks to apply for a new card. Almost all of them have some sort of APR promo for balance transfers, and if you’re a new customer chances are they have some type of promotion in regards to spending for a bonus. The APR offers are huge game changers for short term financing or if you have some balances with high interest that you’re trying to pay down. Take advantage of it now while interest rates hover near all time lows, because they won’t be there forever. Citi has a card that’s currently 21 months of 0%! That’s almost a 2 year interest free loan.

The point is that almost all of these banks have something to offer to entice new customers, and if they don’t have one now there’s a solid chance that they will soon. A lot of folks are unnerved when it comes to starting a new relationship with another financial institution. Identity theft, reading through the fine print, or just staying loyal to the bank you’ve been with since you were a kid. Understandable, but is it worth all the money you’re throwing away by staying stuck in your ways?

Last but not least, the brokerage houses like Schwab and Fidelity, have gone to war with each other in efforts to attract investment assets. They’ve knocked down fees across the board, most offering free trades on ETFs. Merrill Lynch is offering up to $600 if you open a new IRA account. Have an old 401k hanging out somewhere? Roll it over to an institution that will pay you for it.

The offers are out there. The banks want your money, and it’s never been easier to get started. They are your friend. Take advantage!

6 ways to save money for your small business

In today’s economy, all successful small businesses are looking for any and every way to lower costs for the business.  Many small business owners fail to dedicate enough attention to this because they are spending the majority of their time doing what they do best, which is run their business.  If you are a business owner who is like this, it may be wise of you to assign an employee to examine all expenditures at your business.  There are many ways in which a business can save money.  Here are 6 ways most business owners can save money for their cherished investment.

Hire smart, inexperienced people.

That is right I said hire inexperienced people.  Experience is not the only thing of value someone can bring to your organization.  Experience certainly costs more. One way to do this is the next time you put up a job ad, eliminate any mention of how many year’s experience someone must have to apply for this job.  Replace it with “Recent graduates welcome to apply.” Some businesses have used this approach to success and hired candidates fresh out of college or graduate school.  This allows your business to gain a monetary advantage by providing an entry-level salary and can benefit you by having employees who are up-to-date on the latest technology.

Make sure your business is classified properly.

This is most important for purposes of Workers Compensation Insurance. Many industries have several different classification codes because the industries have several different types of businesses with different levels of risk.  The different levels of risk are reflected in the price businesses pay in premium.  Landscaping is a great example of an industry with many classification codes. Some companies simply mow lawns, other companies plant and maintain sod, others climb into trees with chainsaws to cut limbs and branches.  Each type of business has a different classification code and each level of risk pays a different price in premium.  Taking a little time to speak with your insurance agent about what exactly it is that your business does and does not do can save your business significantly in premium paid for workers’ comp insurance.

Try bartering with other businesses

Bartering is one thing successful small businesses are usually great at.  Especially bartering with other businesses.  Bartering might seem old-school but it can definitely be effective. Catering companies and coffee shops frequently work with companies, especially start-ups.  If you have something of value to provide them they may be willing to cater an event of yours for free or at an extremely discounted rate.  Actually, the possibilities are endless as long as you proactively establish relationships with other local businesses who can benefit from your services.

Switch banks

It should be no surprise that banks are looking to squeeze more revenue any way in which they can.  Banks after all are a business too and they need to turn a profit.  There is one fact many people and business owners fail to realize in relation to financial institutions: they are a business as well and they have to pay turn a profit in order to continue providing you the services they provide.   partner.  The industry is necessary for success in both your personal and professional life.  Switching financial institutions frequently is not a great idea, but shopping around to ensure your bank is competitive with other banks in your area is in the best interest of your small business.  If you can cut significant costs by switching to another bank, then it may be just what you need to do to save your company money.

Invest in a safety and return to work program. 

You might be wondering why I am telling you to invest in something as a way to save your business money.  Especially investing in something like a safety program. Healthy employees are happy employees and happy employees are productive employees.  Investing just a little time in an effective safety program can save your business immensely in lost productivity and insurance premium.  A return to work program is an essential part of any safety program.  The quicker an injured employee gets back on the job and in the routine of going to work, the more likely they are to return to regular employment.    This will prevent your workers compensation insurance premium from increasing from having too many to too severe claims at your business.

Embrace telecommuting.

Telecommuting isn’t possible for all businesses, but you might be surprised how many people can effectively do their jobs from a remote location.  If you can find ways to allow employees to telecommute it can be a huge money-saver for your business. It can cut down on wear and tear to your office space as well as your electronics.  Meaning you will have to replace these devices less frequently.  Many employees appreciate the opportunity to work from home and it may be a benefit you can and to their compensation package instead of a higher salary.


Walt Capell is the President/Owner of Workers Compensation Shop. Walt started Workers Compensation Shop in 2005. Workers Compensation Shop is a rapidly growing national insurance agency with a strong reputation for forward-thinking, out-of-the-box products and solutions for business owners. Walt would like to use his experience in insurance and as a small business owner to benefit the small business community.