To what extent is the value of Coinbase tied to the value of Bitcoin?

Not much as their revenues are made of commission (in the form of buy/sell spread on the actual market price) on the transactions made on their exchange.

In this respect, Coinbase is basically like a traditional Bank operating in the FX market: regardless of a certain market movement in price, the Bank will always buy at a little below the market price and sell at a little above market price, thus always making a profit.

For this reason, Coinbase value is more tied to the average number of daily transactions effected on its exchange rather than to the value of Bitcoin.

If DuckDuckGo does not track us, how come it is not as successful as Google?

For the following reasons:

A. Both are free for the user but Google provides consistently better quality results. DuckDuckGo is the underdog in this field and it is difficult for it to become more popular than Google given that the results it provides are less efficient than Google’s. This is the same problem that Yahoo and Bing are facing: they are not able to match Google’s quality of results and for this reasons users — always in a hurry and hating wasting time on useless pages — keep using what they know works best.

B. People tend to underestimate how bad is the influence of these websites tracking everything we do online thanks to Google’s cookies system. Until our eyes are not opened, this is considered an irrelevant issue, so DuckDuckGo seems to have no advantages (its non tracking feature being irrelevant in this phase) and only disadvantages (lower quality results). Once we open our eyes, it becomes horrific what these website like Google and Facebook are able to do (and actually actively do!). But this eye-opening moment happened only very recently (with the Brexit referendum or Donald Trump’s election for example) and people have only very recently been made aware of how these companies exploit the pervasive tracking of their users.

The advantage of DuckDuckGo (its non-tracking features) has thus only recently come to surface and we will need to see if people are willing to change their deeply ingrained habits for the sake of protecting their privacy.

A big big change would be triggered if Apple would remove Google standard search feature from their iPhones and iPad (knowing that for this feature alone Google, quite understandably, pays Apple 1bn USD a year).

Will the $185k fine against the Airbnb host in NY make people afraid of using Airbnb?

I doubt so.

This is an example of what in political science goes under the name of “the authoritarian illusion of the powerful” whereby those in power pretend to prohibit something by simply out-lawing it and issuing a fine or penalty against a behaviour which is believed by a critical mass of the people in the community to be a legitimate and/or un-harmful service or exploit of resources.

Whenever the authorities tried the “draconian penalty” route in the attempt to prohibit something (lessons can be learned from (a) the war on drugs, (b) the prohibition of alcohol, (c) outlawing sex workers, (d) outlawing of abortion rights) — instead of working out a way to regulate the matter and finding a way to balance the different interests at stake — they have consistently failed and failed again (as we know very well by now, outlawing drugs did not had any effect on drug usage, ditto for prohibition of alcohol or prostitution).

This does not mean that the authority will not go to extraordinary great lengths to (even severely) punish the behaviour of those contravening it: we know, for example, that in US, approximately 20% of the people in jail are there because of crimes related to the sale and consumption of marijuana (which is by now considered perfectly legitimate and un-harmful by the vast majority of the people).

Coming back to the Airbnb case in New York City: obviously the fine against Airbnb hosts is issued exclusively as a deterrent to protect the healthy profits of the “Hotel owners” interest groups. With different luck, the same route has been tried — for example — in Berlin (de facto killing the temporary rent market in the German capital) or Hong Kong (with no effect on the Airbnb market which remains prosperous).

The Municipality of New York, instead of trying to find a way to regulate the opposing interests of 1) the Hotel owners (who do not want further competition in the hospitality market) and 2) the Airbnb hosts (who want to offer a legitimate service, exploiting resources which would remain otherwise unused), preferred to bend to the Hotel owners desires and simply outlawed Airbnb hosts altogether.

This may de facto kill the Airbnb market in NYC or temporarily reduce its usage, but once the genie is out of bottle (i.e.: this behaviour has been tried-and-tested worldwide and it has been considered legitimate and un-harmful by millions of people worldwide), it is only a matter of time until these same people will find a new way to provide this kind of service and to exploit these resources, against the (illusory) authoritarian order of the political class.

Thanks Jonathan Brill for the A2A.

Do you think someone that makes USD 900k a year is rich? What kind of lifestyle can this person afford?

It depends. Being rich is one of the most subjective things that exist.

I have a friend who is a lawyer in his late 40s and makes sensibly above the 900K USD yearly threshold (let’s say approximately 80k USD a month) and he surely does not believe to be poor but he pointed out to me the following details attached to that figure:

A. Slightly less than half of that sum goes away in taxes (40k USD). There is no way around it as he works in a big law firm which does not allow any room for tax avoidance schemes or under-reporting of revenues, which are quite common for solo practitioners and smaller firms;

B. 10% more of his gross revenues go in pension contribution (8K USD, which he is mandatorily required to pay and he cannot avoid);

C. 10K a month go in alimony to his non-employed ex-wife and teenager kids;

D. 10K a month go in various unavoidable monthly fixed payments (mortgages, rents, top of the line health insurance, BMW & Porsche installments, two parking spaces fee, gym and personal trainer fee);

The final available income is approximately 15k USD a month: which is not a small sum by any means but do not allow a particularly extravagant lifestyle (far from it). He changes cars every 5–7 years. Goes to holiday in expensive hotels. Flies business class in intercontinental flights. Occasionally buys some Italian modern art paintings. Eats only at restaurants as he doesn’t cook at home.

In fact, he works approximately 2,500 billable hours a year, so he only takes 10 days of holiday at the beach in Summer to stay with the kids and 1 week at Christmas and New Year’s Eve. He once told me that skiing is his favorite sport but has not had time to go skiing in the last 20 years.

All the rest of the year (50 weeks) he is buried in his office, commanding a team of approximately 20 associates and reporting to his boss almost on a daily basis.

How did you lose your wealth?

My uncle (the brother of my father) never got married. He was born in 1950 and always lived the good life: he never had kids, not one Euro of debt, drove fast German cars, had amazing girlfriends (women literally adore him), made exotic travels, had tailor-made suits, knew literally most of the Bel Paese best restaurants in big and small cities alike, etc.

He started working in the Italian branch of a British company (at the time based in Naples) at 21 as a clerk and became a top manager in his late 40s. He was suddenly fired in the late 90s because of a restructuring and since he was already in his late 40s it was impossible for him to find a similar job at a competitor. Actually he could not find any job at all. Once out of the job market for a few years he basically gave up on looking for even a low-level job.

Nevertheless, he had saved enough money to make a (very good) living without any job: in particular his wealth consisted of 4 flats in the city center where he was living. Normally, he would sell one flat and make a living for the next 10 years. He calculated that his flats would allow him plenty of money for the rest of his life.

In 2004 he was driving on the highway late at night when a truck driver crashed on his sporty car (police ascertained that it was not my uncle’s fault).

The accident was very serious: my uncle was taken to hospital in critical conditions, had a few surgeries and eventually had a heart valve replaced during a very risky operation.

When he was still at the hospital, the insurance very ably tricked him into quickly signing an amicable settlement for 70k Euro: this seemed a lot of money right after the accident but soon revealed to be “peanuts” given the kind of injuries he suffered and the expenses he would have subsequently incurred in order to fully recover.

He got the insurance money immediately.

The surgery, rehabilitation and other expenses of the next 5 years basically cost him one of his flats (i.e. instead of lasting him 10 years, it lasted only 4-5).

Most importantly, after his heart was fixed he was not allowed to drive a car for some time and was very lonely (old friends disappeared quickly), slipped into depression and his lifestyle changed: he was buying a myriad of useless stuff like (admittedly majestic) Iranian carpets and expensive furniture, he was traveling continuously to some exotic locations with some new fake friends, had a few high-maintenance girlfriends scattered across Europe, etc.

The money from the second flat he sold lasted him only 4 years.

After he sold that second flat, he remained with only 2 more flats (and he was living in one of them).

He finished the money of his third flat in 3 years. He gradually started selling, one by one, all the useless stuff he bought (often times for very little money).

He then went into “panic mode” since he had no money, no other income and only his flat where he was living.

Also, because of the recent economic downturn in Italy and lack of expensive refurbishment works, his last flat was rapidly decaying and had dropped in value almost 40% in just a few years: to sell it would have been a disastrous decision.

At that point he was basically broke as he had one asset — the last flat — but had literally no cash.

He sold his last “substantial” asset (a Toyota Yaris he bought used just a year earlier) for 3k euro.

With this money he managed to live 3 more months when he received a letter confirming that the State will finally start issuing a pension.

This was summer last year: since September last year he is a happy – albeit very frugal – pensioner.

What are the 10 or fewer good habits for a 24 year old to make life better?

My top 8 suggestions are the following:

  1. Sleep 8 hours a day, consistently.
  2. Save money: after you have set up a good emergency fund in cash, invest everything else in one or more low-commission, index-tracking, ETF funds, as soon as possible. The Vanguard 500 ETF is a good starting point. This must be a priority. Because compound interest takes time to produce its amazing results, the younger you start, the better. (I also recommend to Google: compound interest + dollar cost averaging).
  3. Stop eating outside: learn to cook your own meals and eat at home most of the times. Cooking at home will naturally push you to learn new recipes from different countries: many of these new recipes that I learnt turned out to be new “classics” at home. Delicious!
  4. Reduce Social Media: remove the Facebook, Instagram, Twitter, Pinterest apps from your iPhone so that you can only access them via your desktop computer (you will automatically reduce your wasted time by at least 90%).
  5. Stop shopping to impress or please other people. It doesn’t work.
  6. Stop being a cheapskate: show the fewpeople that matter to you how much you care about them. Bring flowers to your girl/wife/ mum/ grandma. Make a nice wedding gift to your best friend. Offer discreetly to pay a dinner out if your friend cannot afford. Be a gentleman for all people you interact with. Write a thank you card to a colleague who was helpful in a difficult situation. Be grateful, very grateful, for these good people that touch your life kindly. Do not be afraid to spend money for those who are important for you and deserve your attention, kindness and generosity.
  7. Learn how to take (calculated) risks: with time we all get lazy and tend to accept the current status quo: our job, our boss, our colleagues, our commuting, etc. This translates into fantastic opportunities being lost because we are too scared to abandon what we consider our current safe harbour (which most of the times is not much more than a habit). Learn to try new things. Acquire the mindset to re-evalute your past decisions. Try new way to do the same old thing. You will be surprised by the discoveries you will make.
  8. Stop taking new debt. Ditch your credit cards. Pay all the new stuff you want to buy upfront. No exceptions. If you cannot afford something upfront, simply do not buy it (most likely you will not need it anyway).

What are some interesting facts about diamonds?

Nobody wants to buy a diamond.

The price of these stones is artificially inflated by De Beers and a small set of other diamond extractors, by artificially creating scarcity.

For decades, they had the marketing firepower and patience to invest in advertisement in order to induce people to believe that a diamond is the gift to make in order to celebrate a wedding or other joyful occurrences. In reality, the whole market is a scam artificially inflated by the astute players who rig it.

If you buy the best diamond jewelry and try to sell it afterwards you will recover peanuts compared to the original purchase price, no matter what your dealer from the poshest neighborhood in your city had told you to the contrary: there is simply no appetite for this kind of inflated products, it is just a marketing exercise to extract profit from the willingness of people to spend money in anticipation of weddings or other joyful occurrences.

How can I improve myself in 6 months?

Self-improvement is a marathon which involves following a path different for each of us and my advice is as follows:

  1. Stop keeping cash in your bank account: start saving money and, after you have set up a good emergency fund in cash, invest everything else in one or more low-commission, index-tracking, ETF funds, as soon as possible. The Vanguard 500 ETF is a good starting point (also Vanguard’s VIG is very good). This must be a priority. Because compound interest takes time (like a decade or more) to produce its amazing results, the younger you start, the better. (Since many asked in the comments, I also recommend to Google: compound interest+ dollar cost averaging in order to understand the benefits of this double-pronged strategy). In this way, money in your bank account will grow steadily during the years and give you an invaluable peace of mind in case of emergencies and allowing you to take new opportunities down the road.
  2. Stop smoking, doing drugs, drinking alcohol for the sake of having fun: these things do not add anything to your life, and only subtract cash from your bank account (that you should rather invest in ETFs). We live in a society that for marketing purposes has almost inextricably attached the idea of fun to the act of smoking cigarettes, getting drunk from alcohol or stoned by drugs. This is purposely done exclusively for the benefit of the people selling cigarettes, alcohol or drugs: in reality there is no reason to think this way. Respect your body and your bank account by eradicating yourself from this mental layer as soon as possible.
  3. Stop watching TV: same as alcohol, TV does not add anything to your life. By not watching TV, you can spend more time reading interesting non-fiction books to educate yourself about the most different topics. Knowledge has a powerful compound effect: as you progress putting different knowledge eggs into your basket, your analytical firepower will gradually increase and the benefit that you will derive will be exponential. TV does not add anything to your knowledge basket. Sell it, and invest the money (either by buying ETFs or by buying many interesting books) instead. After 6 months without watching TV, if occasionally your eyes will happen to look at it you will be amazed to think that people spend hours every day watching that crap.
  4. Stop eating outside too often: learn to cook your own meals. Cooking at home will naturally push you to learn new recipes from different countries: many of these new recipes that I learnt turned out to be new “classics” at home which you cannot even find at the restaurant downstairs. Delicious! Also in order to save money and be healthy: limit red meat if possible (as it has many bad implications both for your health and the environment), and prefer beans and vegetables instead. Do not buy sugar-based snacks & sugary drinks (we are becoming addicted to sugar in the last 30 years with direct impact on the rates of people getting diabetes later in life) and bottled water (a big scam) at the supermarket.
  5. Stop Facebook and other social media: remove the Facebook, Instagram, Twitter, Pinterest apps from your iPhone so that you can only access them via your desktop computer (you will automatically reduce your wasted time by at least 90%). Social media are monitoring everything you do & even think throughout the day, thus allowing advertisers to haunt you wherever you go online. Also, many social media outlets (like Instagram, Facebook, etc.) allow by design infinite scrolling, so that they trap you into scrolling and scrolling with no end for an immense waste of time and impact on your productivity.
  6. Stop sitting on the couch playing PS4: it’s probably as bad as Facebook. Every time you want to play a game, go for a run outside instead.
  7. Stop surrounding yourself with all these fake friends you don’t care about: they don’t care about you either and they will dump you at the first time you will be in need. It is better for you to be prepared not to count on them (or on anyone, actually). Choose your friends extremely carefully and text/call/see your parents/grandparents more, instead.
  8. Stop shopping to impress or please other people. It doesn’t work. They will still hate you even if you have a new car or some ridiculous Gucci shoes. The rare, true friends will like you and be at your side regardless of what you own. Once you will start doing this you will learn that you are not what you own. We do not need99% of the stuff for sale out there anyway. Acquiring this mindset will free you from a thousand mental layers that cloud many of our life choices. It feels amazing.
  9. Stop being a cheapskate: show the fewpeople that matter to you how much you care about them. Bring flowers to your girl/wife/mum/grandma. Make a nice wedding gift to your best friend. Offer discreetly to pay a dinner out if your friend cannot afford. Be a gentleman for all people you interact with. Write a thank you card to a colleague who was helpful in a difficult situation (I still remember the “thank you” card that one of my first bosses left to me — a young and inexperienced trainee at the time — 19 years ago just saying: “You are a star!”) . Be grateful, very grateful, for these good people that touch your life kindly. Do not be afraid to spend money for those who are important for you and deserve your attention, kindness and generosity. The sky will not fall if you spend money and give them your attention and, most importantly, they deserve it. I have seen countless of truly good persons being hurt, friendships broken-up in horrible ways, just because of people being outright stingy. Also, remember to give a part of your profits to a charity that is important for you: the good these people do to this world is invaluable.
  10. Stop taking new debt. Ditch your credit cards. Pay all the new stuff you want to buy upfront. No exceptions. If you cannot afford something upfront, simply do not buy it (most likely you will not need it anyway). Same for the “mortgage” (from the French “death pledge”): rent / share a cheap place and invest your savings in stocks instead. If you already took debt, repay it as soon as possible: sell stuff & work double shifts if necessary.

Where and how do you invest your monthly salary?

This is how I have been doing since 2008 and how I highly recommend you to do.

  1. Open a Stock Account with your bank and every month save 20%/30%/40%/50% of your net income and invest it in a low commission S&P500 ETF by Vanguard (like “VOO” or “VIG”: google them).
  2. Google: “dollar cost average” + “compound interest” in order to understand the benefits of this double-pronged strategy (in short: you will beat 90% of all the professional Fund Managers out there).
  3. Set up (both mentally and practically) a bare minimum that you must invest every month and deposit it into your stock account at the beginning of each month so you will not be able to spend it to buy useless stuff.
  4. This will do marvel to your sleep and to your income as long as you will be consistent, patient and NOT touch your investments for a decade or so.
  5. As soon as your career will progress and you will earn more, this strategy will also prevent you to fall into the “increased lifestyle” trap (where you spend more money on useless items just to show your status to your peers or because you become lazy).

If Brexit already seems a failure before birth, why aren’t the UK citizens taking to the streets to reverse it?

I obviously agree that Brexit is un unecessary self-inflicted damage and I have also been surprised by the lack of protest by people in the UK (especially people from the large British upper-middle class whom I believe will have the most to lose from Brexit).

When I inquired about this with people in London (all with very good jobs, families, some are even (long time) immigrants from other EU countries, none of them is even remotely of the hidden-racist, nostalgic/exceptionalist, British upper class that we read so frequently about on the internet and social media), this is what they explained me and made them reluctant to protest against Brexit:

First: what we must keep in mind is that in the last 20–30 years London proved to be an Eldorado… a city where hundreds of thousands of people and families from all over Europe have been made millionaires just by flipping real-estate, with little to zero risk, just pure time-based speculation financed by super-easy-to-get mortgages. The market has been going up and up and up for decades at rates anywhere to be seen in Europe (except maybe for Central Paris).

Families who bought a three bedroom flat in London Zone 1 or 2 in the 80s could easily double the capital every 4-5 years, sell their flat, buy an identical flat in Zone-2 and have money to buy even a smaller flat in Zone-3.

Rinse and repeat: after 2000s a simple family with a clerk job could have millions in the bank and a steady inflow of cash from their tenants.

In short: London has been a godsend for all Europeans living there and these people owe everything they have (millions of pounds!) to London: for this reason, it is extremely difficult for them to imagine that things will change for the worse.

The numbers in their bank account scream way louder than any possible prediction they may hear on the street or read on The Guardian. As far as they are concerned, they cannot be bothered by Brexit and they have been repeatedly assured by the Government that almost nothing will change except that there will be less immigrants on the streets and competing for jobs at home. Why protesting then?

Second: I spoke about Brexit with a nice guy who works in Venture Capital in London. He relocated there a few years ago, got married and settled there. I obviously wanted to know his opinion about Brexit, knowing that he is sensitive to the business and political environment and that he was heavily invested (both financially and personally) into the whole British ecosystem. To my surprise, his reasoning was along the following points:

  1. London was predicted to be destroyed many times in the past and look where we are now? A city of millionaires. Maseratis everywhere. Don’t believe what you hear from Bruxelles: look around, there has never been a better place to live”.
  2. The weaker pound will allow UK to attract even more investments. I will work even more and gain even more money. Rich foreigners will buy even more real estate. EU countries already stopped investing here a decade ago and nothing bad happened”.
  3. I just made 100k pounds profit selling the tiny flat in Victoria that I bought just 2 years ago: where is the crisis everybody is talking about? A small, 1 bedroom, flat in Maida Vale costs 1m pounds, same price of a 4 bedrooms Villa on Lake Como!”
  4. London attracts investments from all over the world: Marble Arch is a Lebanese enclave. Knightsbridge is a Saudi protectorate. All Italian and Greek tax dodgers that had money to invest already came here 5 years ago: Brexit cannot change that”.
  5. Europe is a bureaucratic hell and Euro is a failure”.
  6. My salary is almost double what I would get in Europe. Even my wife who is an accountant here in London gets more money than what I would get in Europe. Salaries in Europe are simply too low and taxes too high”.

My impression is that when things go well (and they have been going well for decades) it is very difficult to think that the wind may change.