Sorry if you purchased one in 2022. However, I personally was happy when the NFTs market plummeted by 99pc.
First, I don’t have to explain what a Non-fungible Token is again. Answer the question, “Why are they worth anything?” Many aren’t.
Second, it saved me a lot of money by not purchasing one. Here is my 2023 not-to-do list that will make you richer or less poor in the new year.
In March 2021, an NFT of a collage consisting of 500 photos by an artist called Beeple sold for £58m ($69.4m) at a Christie’s New York Auction. An unnamed buyer received a string of numbers and letters that established them as sole owners of the image.
Blockchain is a digital record that stores the string that proves the title. However, nonfungible.com has reported that sales have dropped by 90% from £118 million per day in January 2022 to £18,000 per year. Average prices remain well below £1,000.
Many NFTs have no value. They are often bought by firms for one penny so that owners can offset any gains and reduce their Capital Gains Tax bill. It is not much use in the UK, where only a third of a billion people pay CGT.
The blockchain is also where bitcoin and other cryptocurrencies are stored. They are another thing (I used this word to include the non-corporeal and ephemeral ) that has no real existence or value. As I write, the price of a single bitcoin can be found at £13.875. In theory, that’s the maximum price you can sell bitcoins for.
Even if you could, that’s only a third of the price it was a year ago. An annual loss of more than £20,000
If you’re lucky, it may be possible. A crypto exchange is often used to buy and sell cryptocurrencies. Five of them went bankrupt in 2022. FTX was the largest, losing an estimated £1 billion in client money. The founder of the company, Sam Bankman-Fried, was extradited to face years in prison.
Crypto is considered a gambling game (some say it is speculation, but this is not true) and the casino is run by thieves.
You should also get your feet on the more stable ground like property. Maybe. The homes that are offered to investors may not be on the ground. These homes are often located high up in northern cities, overlooking a river or canal, close to offices and public transport (places where people used to work).
They will at least be there when they are built. The 8pc return promise is only available to those who have paid a large deposit for something that is just an artist’s rendering of an architect’s vision on another’s land. Sometimes, the building is not completed. However, even if it is, the 100 cubic metres of air enclosed by concrete and glass you receive for your £150,000 does not guarantee any rent. After subtracting the agent’s fees, maintenance charges, voids and service charges and cleaning, there is no guarantee the rental property will be rented. You will make money. It won’t be you.
Shares are liquid and well-understood. Managed funds are not worth the money. All research has shown that they lose more in bad times than the market overall. These markets are followed by trackers. The MSCI All-Country World Index stocks revealed that share values around the world were down by £15 trillion (20pc).
However, fund managers can provide solid returns over the long term. Find the lowest fees to maximize what you keep. For twenty years, forget about it.
It is possible that you missed October’s guaranteed 5.05pc five-year cash return. You can still get 4.6pc, which is £3910 per year guaranteed income on £85,000 capital. This is possible because of the Financial Services Compensation Scheme.
Professional, regulated advice is what you should seek out. A chartered or certified independent financial advisor will charge in pounds for the work they do, rather than taking an annual wealth tax off your money.
moneyhelper.org.uk can help you if you don’t have the money to pay an IFA. However, don’t let this stop you from achieving great things.
Make 2023 a year for caution and evidence. Do not despair.
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